<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 8, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
SEMCO ENERGY, INC. SEMCO CAPITAL TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CERTIFICATE OF
TRUST)
MICHIGAN DELAWARE
(STATE OF INCORPORATION) (STATE OF ORGANIZATION)
38-2144267 PENDING
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
405 WATER STREET
PORT HURON, MICHIGAN 48060
(810) 987-2200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
------------------------
ROBERT J. DIGAN, II
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
SEMCO ENERGY, INC.
405 WATER STREET
PORT HURON, MICHIGAN 48060
(810) 987-2200
(NAME, ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF
AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
JEFFREY S. RUPRICH E.N. ELLIS, IV
DICKINSON WRIGHT PLLC DEWEY BALLANTINE LLP
500 WOODWARD, SUITE 4000 1301 AVENUE OF THE AMERICAS
DETROIT, MICHIGAN 48226 NEW YORK, NEW YORK 10019
(313) 223-3500 (212) 259-8000
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED
AMOUNT MAXIMUM OFFERING PROPOSED
TITLE OF EACH CLASS OF TO BE PRICE PER MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) SHARE(1)(2)(3) OFFERING PRICE(1)(2)(3) REGISTRATION FEE(1)
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<S> <C> <C> <C> <C>
Trust Preferred Securities of SEMCO
Capital Trust..........................
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Debt Securities of SEMCO Energy, Inc.
("SEMCO Energy")(3)....................
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SEMCO Energy Guarantee with respect to
Trust Preferred Securities(4)..........
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Common Stock of SEMCO Energy.............
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Total.................................... $200,000,000 100% $200,000,000 $59,000
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</TABLE>
(1) Subject to the following, there is being registered hereunder an
indeterminate number of Trust Preferred Securities of SEMCO Capital Trust
(the "Trust"), an indeterminate principal amount of SEMCO Energy
Subordinated Debentures and SEMCO Energy Medium Term Notes (the Medium Term
Notes together with the Subordinated Debentures, the "Debt Securities"), and
an indeterminate number of shares of SEMCO Energy Common Stock. The
aggregate initial public offering price of all securities issued under this
Registration Statement will not exceed $200,000,000, exclusive of accrued
interest and dividends (if any). Subordinated Debentures issued to the Trust
may later be distributed for no additional consideration to holders of Trust
Preferred Securities upon dissolution of the Trust and distribution of its
assets. The maximum aggregate offering price is used to calculate the
registration fee pursuant to Rule 457(o) under the Securities Act of 1933.
(2) The proposed maximum offering price will be determined from time to time in
connection with the issuance of the securities and is estimated solely for
purposes of calculating the registration fee.
(3) Exclusive of accrued interest and dividends.
(4) No separate consideration will be received for the SEMCO Energy Guarantee
(the "Trust Guarantee"). Pursuant to Rule 457(n), no separate fee is payable
in respect of the Trust Guarantee.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
This Registration Statement includes a base prospectus for use with a
prospectus supplement or supplements relating to a particular offering of Common
Stock, offering of Medium Term Notes or offering of Trust Preferred Securities.
A prospectus supplement relating to the proposed offering of Trust Preferred
Securities is included with this Registration Statement. A prospectus supplement
relating to an offering of Common Stock or an offering of Medium Term Notes or
any additional or revised prospectus supplement relating to an offering of Trust
Preferred Securities would be filed with the Commission pursuant to Rule 424.
i
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
jurisdiction.
SUBJECT TO COMPLETION, DATED JULY 8, 1998
PROSPECTUS SUPPLEMENT
- ----------------------------------
(TO PROSPECTUS DATED , 1998)
TRUST PREFERRED SECURITIES
SEMCO CAPITAL TRUST
% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER TRUST PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS SET FORTH HEREIN, BY
SEMCO ENERGY, INC.
------------------------
The % Cumulative Trust Preferred Securities (the "Trust Preferred
Securities") offered hereby will evidence preferred undivided beneficial
interests, representing 97% undivided beneficial interests in the assets of
SEMCO Capital Trust, a statutory business trust created under the laws of the
State of Delaware (the "Trust"). SEMCO Energy, Inc., a Michigan corporation (the
"Company"), will own all the common securities (the "Trust Common Securities"
and, together with the Trust Preferred Securities, the "Trust Securities")
representing the remaining 3% undivided beneficial interests in the assets of
the Trust. The Trust exists for the sole purpose of issuing the Trust Preferred
Securities and the Trust Common Securities and investing the proceeds thereof in
an equivalent amount of the Company's unsecured subordinated deferrable-interest
debentures (the "Subordinated Debentures").
(continued on next page)
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE S-8 OF THIS PROSPECTUS SUPPLEMENT FOR
CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE TRUST PREFERRED SECURITIES,
INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF
DISTRIBUTIONS ON THE TRUST PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
------------------------
Application will be made to list the Trust Preferred Securities on NASDAQ.
If so approved, trading of the Trust Preferred Securities on the NASDAQ is
expected to commence within a 30 day period after the initial delivery of the
Trust Preferred Securities. See "Underwriting."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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INITIAL PUBLIC UNDERWRITING PROCEEDS
OFFERING PRICE DISCOUNTS(1) TO TRUST(2)(3)
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<S> <C> <C> <C>
Per Trust Preferred Security................ $-- (2) $--
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Total....................................... $-- (2) $--
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</TABLE>
(1) The Company and the Trust have agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(2) In view of the fact that the entire proceeds of the sale of the Trust
Preferred Securities will be invested in the Subordinated Debentures, the
Company has agreed to pay to the Underwriters as compensation (the
"Underwriters' Compensation") for their arranging the investment therein of
such proceeds $ per Trust Preferred Security (or $ in the
aggregate); provided, that such compensation for sales of 10,000 or more
Trust Preferred Securities to a single purchaser will be $ per Trust
Preferred Security. Therefore, to the extent of such sales, the actual
amount of Underwriters' Compensation will be less than the aggregate amount
specified in the preceding sentence. See "Underwriting."
(3) Expenses of the offering to be paid by the Company are estimated to be
approximately $ .
------------------------
The Trust Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that delivery of the Trust Preferred Securities will be made only in book-entry
form through the facilities of The Depository Trust Company, on or about
(the "Issue Date") against payment therefor in immediately
available funds.
------------------------
------------------------
The date of this Prospectus Supplement is , .
<PAGE> 4
(continued from previous page)
The Subordinated Debentures will be unsecured obligations of the Company
and will be subordinate and junior in right of payment to Senior Indebtedness of
the Company, as described herein. See "Description of Debt
Securities-Subordination" in the accompanying Prospectus. Holders of the Trust
Preferred Securities will be entitled to receive cumulative cash distributions
at the rate of % per annum (the "Securities Rate"), accruing from the date
of original issuance and payable, unless deferred, quarterly in arrears on March
31, June 30, September 30 and December 31 of each year (each, a "Distribution
Date"), commencing on . The Securities Rate and the Distribution
Dates for the Trust Preferred Securities will correspond to the interest rate
and interest payment dates on the Subordinated Debentures, which will constitute
substantially all the assets of the Trust. As a result, if principal or interest
is not paid on the Subordinated Debentures, no amounts will be paid on the Trust
Preferred Securities. THE COMPANY HAS THE RIGHT TO DEFER PAYMENTS OF INTEREST ON
THE SUBORDINATED DEBENTURES BY EXTENDING THE INTEREST PAYMENT PERIOD ON THE
SUBORDINATED DEBENTURES, AT ANY TIME AND FROM TIME TO TIME, FOR UP TO 20
CONSECUTIVE QUARTERS (EACH, AN "EXTENSION PERIOD"). If interest payments are so
deferred, distributions on the Trust Preferred Securities also will be deferred
and the Company will not be permitted, subject to certain exceptions described
herein, (a) to declare or pay any dividend on, or make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, and (b) to make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company which rank pari passu with or junior to the
Subordinated Debentures. During any Extension Period, holders of Trust Preferred
Securities will be required to include income in the form of original issue
discount in their gross income for United States federal income tax purposes in
advance of the receipt of the cash payments attributable to such deferred
interest. See "Description of the Subordinated Debentures -- Option to Extend
Interest Payment Period," "Risk Factors -- Option to Extend Interest Payment
Period" and "Material Federal Income Tax Considerations -- Original Issue
Discount." Deferred installments of interest on the Subordinated Debentures will
bear interest at a rate per annum equal to the Securities Rate, compounded
quarterly, to the date of payment to the extent permitted by applicable law. The
payment of such deferred interest, together with interest thereon, will be
distributed to the holders of the Trust Preferred Securities at the end of any
Extension Period as received on the Subordinated Debentures.
The Trust Securities will be subject to mandatory redemption upon repayment
of the Subordinated Debentures at maturity or their earlier redemption. The
Subordinated Debentures will be redeemable at the option of the Company, in
whole or in part, from time to time, on or after , or at any
time, in whole, within 90 days following the occurrence of a Tax Event or
Investment Company Act Event (either, a "Special Event"). See "Description of
the Trust Preferred Securities -- Special Event Redemption." The Company will
have the right at any time to terminate the Trust and cause the Subordinated
Debentures to be distributed to the holders of the Trust Preferred Securities in
liquidation of the Trust. See "Description of the Trust Preferred Securities --
Distribution of Subordinated Debentures Upon Termination of the Trust." The
Subordinated Debentures will be subordinate and junior in right of payment to
all Senior Indebtedness (as defined herein) of the Company. See "Description of
Debt Securities -- Subordination" in the accompanying Prospectus. As of March
31, 1998, Senior Indebtedness of the Company aggregated approximately
$195,359,000. If the Subordinated Debentures are distributed to the holders of
the Trust Securities, the Company will use its best efforts to have the
Subordinated Debentures listed on NASDAQ or on such other exchange as the Trust
Preferred Securities are then listed. See "Description of the Trust Preferred
Securities -- Distribution of Subordinated Debentures Upon Termination of
Trust."
The payment of distributions on the Trust Preferred Securities will be
guaranteed by the Company, but only to the extent that the Trust has funds
legally and immediately available to make such distributions (the "Trust
Guarantee"). Accordingly, if the Company fails to make required payments on the
Subordinated Debentures, the Trust will not have sufficient funds to make the
related distributions, and the Trust Guarantee does not apply to the payment of
distributions when the Trust does not have sufficient funds legally and
immediately available therefor. In such event, to the extent permitted by
applicable law, the remedy of a holder of Trust Preferred Securities is to
enforce the Property Trustee's rights under the Subordinated
S-2
<PAGE> 5
Debentures. See "Description of the Trust Preferred Securities -- Events of
Default" and "Relationship Among the Trust Preferred Securities, the
Subordinated Debentures and the Trust Guarantee." The Company's obligations
under the Trust Guarantee are subordinate and junior in right of payment to all
of its other liabilities and will rank pari passu with the most senior preferred
stock that may now or hereafter be issued by the Company. See "Description of
the Trust Guarantee" in the accompanying Prospectus. The Company has, through
the Trust Guarantee, the Subordinated Indenture, the Subordinated Debentures,
the Trust Agreement and the Agreement as to Expenses and Liabilities, fully and
unconditionally guaranteed, subject to certain subordination provisions, all the
Trust's obligations with respect to the Trust Preferred Securities.
In the event of the redemption of the Subordinated Debentures or the
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the holders of the Trust Preferred Securities will be entitled to receive, for
each Trust Preferred Security, after satisfaction of liabilities of creditors of
the Trust (in the case of dissolution, winding-up or termination of the Trust),
a liquidation amount of $25 plus accrued and unpaid distributions thereon to the
date of payment (the "Redemption Price"), unless in connection with such
dissolution, winding-up or termination, the Subordinated Debentures are
distributed to the holders of the Trust Preferred Securities. See "Description
of the Trust Preferred Securities -- Liquidation Distribution Upon Dissolution."
The Trust Preferred Securities initially will be represented by a global
certificate or certificates registered in the name of The Depository Trust
Company ("DTC") or its nominee. Beneficial interests in the Trust Preferred
Securities will be shown on, and transfers thereof will be effected only
through, records maintained by Participants (as defined herein) in DTC. Except
as described herein, Trust Preferred Securities in certificated form will not be
issued in exchange for the global certificate or certificates. See "Description
of the Trust Preferred Securities-Book-Entry Only Issuance -- The Depository
Trust Company."
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE TRUST PREFERRED
SECURITIES. SUCH TRANSACTIONS MAY INCLUDE ENTERING STABILIZING BIDS, THE
PURCHASE OF TRUST PREFERRED SECURITIES TO COVER SYNDICATE SHORT POSITIONS AND
THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING.
S-3
<PAGE> 6
SUMMARY OF OFFERING
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus Supplement and in
the accompanying Prospectus. Capitalized terms not otherwise defined shall have
the meanings assigned in the Glossary.
THE COMPANY................... SEMCO Energy, Inc. (the "Company") is an
energy-focused holding company and is the
parent company to three direct subsidiaries,
SEMCO Energy Gas Company, SEMCO Energy
Services, Inc., and SEMCO Energy Ventures, Inc.
A substantial portion of Company's direct
subsidiaries' assets are invested in natural
gas operations regulated by various regulatory
bodies including the Michigan Public Service
Commission. Weather has a significant impact on
the Company's revenues.
THE TRUST..................... SEMCO Capital Trust (the "Trust") is a
statutory business trust created under Delaware
law solely for the purpose of holding the
Company's Subordinated Debentures and issuing
Trust Preferred Securities and Trust Common
Securities evidencing the entire beneficial
interest therein (and engaging in activities
necessary, appropriate, convenient or
incidental thereto).
THE TRUSTEES.................. NBD Bank will act as property trustee (the
"Property Trustee") of the Trust. Two officers
of the Company also will act as trustees (the
"Administrative Trustees") of the Trust. First
Chicago Delaware Inc. will act as an additional
trustee (the "Delaware Trustee") under the
Subordinated Indenture pursuant to which the
Subordinated Debentures will be issued. The
Property Trustee will also act as trustee under
the Trust Guarantee (the "Trust Guarantee
Trustee").
The Property Trustee, Delaware Trustee and
Administrative Trustees are sometimes
collectively referred to as the "Trustees."
TRUST PREFERRED SECURITIES
OFFERED....................... The Trust will offer Trust Preferred Securities
evidencing preferred undivided beneficial
interests in the assets of the Trust. Holders
of the Trust Preferred Securities are entitled
to receive cumulative cash distributions at the
Securities Rate, accruing from the date of
original issuance and payable quarterly in
arrears on March 31, June 30, September 30 and
December 31 of each year (each, a "Distribution
Date"), commencing on ,
. The Securities Rate and the
Distribution Dates for the Trust Preferred
Securities will correspond to the interest rate
and interest payment dates on the Subordinated
Debentures, which will constitute substantially
all the assets of the Trust. As a result, if
principal or interest is not paid on the
Subordinated Debentures, no amounts will be
paid on the Trust Preferred Securities. See
"Description of the Trust Preferred Securities"
and "Relationship Among the Trust Preferred
Securities, The Subordinated Debentures and
Trust Guarantee" herein.
RECORD DATE................... The record date for each Distribution Date will
be the close of business on the 15th calendar
day prior to such Distribution Date ("Record
Date").
SUBORDINATED DEBENTURES....... The Trust will invest the proceeds from the
issuance of the Trust Securities in an
equivalent amount of Subordinated Debentures
S-4
<PAGE> 7
due . The Subordinated
Debentures will be subordinate and junior in
right of payment to all indebtedness for
borrowed money and other obligations of the
Company included in the definition of Senior
Indebtedness. See "Description of Debt
Securities -- Subordination" in the
accompanying Prospectus.
TRUST GUARANTEE............... The payment of distributions on the Trust
Preferred Securities is guaranteed by the
Company under the Trust Guarantee, but only to
the extent the Trust has funds legally and
immediately available to make such
distributions. Accordingly, if the Company does
not make required payments on the Subordinated
Debentures, the Trust will not have sufficient
funds to make distributions on the Trust
Preferred Securities, and the Trust Guarantee
will not apply to such distributions until the
Trust has sufficient funds legally and
immediately available therefor. The obligations
of the Company under the Trust Guarantee will
be subordinate and junior in right of payment
to all other liabilities of the Company and
will rank pari passu with the most senior
preferred stock that may now or hereafter be
issued by the Company. See "Risk Factors --
Ranking of and Rights under the Trust
Guarantee" herein and "Description of Trust
Guarantee" in the accompanying Prospectus. The
Company has, through the Trust Guarantee, the
Subordinated Indenture, the Subordinated
Debentures, the Trust Agreement and the
Agreement as to Expenses and Liabilities, fully
and unconditionally guaranteed, subject to
certain subordination provisions, all the
Trust's obligations with respect to the Trust
Preferred Securities. See "Risk Factors --
Ranking of and Rights under the Trust
Guarantee."
INTEREST DEFERRAL............. The Company has the right to defer payments of
interest on the Subordinated Debentures by
extending the interest payment period on the
Subordinated Debentures, at any time and from
time to time, for up to 20 consecutive quarters
(each, an "Extension Period"), but not beyond
the stated maturity of the Subordinated
Debentures. The only restrictions on the
Company's ability to defer payments of interest
are that during the Extension Period the
Company may not, with certain exceptions, (a)
declare or pay any dividend on, or make any
distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment
with respect to, any of its capital stock, and
(b) make any payment of interest, principal or
premium, if any, on or repay, repurchase or
redeem any debt securities issued by the
Company which rank pari passu with or junior to
the Subordinated Debentures. There could be
multiple Extension Periods of varying lengths
throughout the term of the Subordinated
Debentures.
If interest payments on the Subordinated
Debentures are deferred, distributions on the
Trust Preferred Securities will also be
deferred. During an Extension Period, holders
of Trust Preferred Securities will be required
to include income in the form of original issue
discount ("OID") in their gross income for
federal income tax purposes in advance of the
receipt of the cash payments attributable to
such deferred interest. See "Description of the
Subordinated Debentures -- Option to Extend
Interest Payment Period" and
S-5
<PAGE> 8
"Material Federal Income Tax Considerations --
Original Issue Discount." Deferred installments
of interest will bear interest at a rate per
annum equal to the Securities Rate, compounded
quarterly, to the date of payment to the extent
permitted by applicable law.
REDEMPTION; DISTRIBUTION...... The Trust Preferred Securities are subject to
mandatory redemption upon repayment of the
Subordinated Debentures at maturity or their
earlier redemption. The Subordinated Debentures
are redeemable by the Company, in whole or in
part, from time to time on or after
, , or at any
time, in whole, within 90 days following the
occurrence of a Special Event. If a partial
redemption of the Subordinated Debentures would
result in the delisting of the Trust Preferred
Securities, the Company may redeem the
Subordinated Debentures only in whole. Any
partial redemption of the Subordinated
Debentures will be effected by the redemption
of an equivalent liquidation amount of Trust
Securities, to be allocated approximately 97%
to the Trust Preferred Securities and 3% to the
Trust Common Securities. See "Description of
the Trust Preferred Securities -- Redemption"
and "-- Special Event Redemption."
The Company will have the right at any time to
terminate the Trust and cause the Subordinated
Debentures to be distributed to the holders of
the Trust Preferred Securities in liquidation
of the Trust. This right is optional and wholly
within the discretion of the Company.
Circumstances under which the Company may
determine to exercise such right could include
the occurrence of an Investment Company Act
Event or a Tax Event, adverse tax consequences
to the Company or the Trust that are not within
the definition of a Tax Event because they do
not result from an amendment or change
described in such definition, and changes in
the accounting requirements applicable to the
Trust Preferred Securities. See "Description of
the Trust Preferred Securities -- Special Event
Redemption."
SPECIAL EVENT................. A "Special Event" means a Tax Event or an
Investment Company Act Event. A "Tax Event"
means that the Administrative Trustees and the
Company shall have received an opinion of
counsel experienced in such matters (which may
be counsel to the Company) to the effect that,
as a result of (a) any amendment to, or change
(including any announced prospective change)
in, the laws (or any regulations thereunder) of
the United States or any political subdivision
or taxing authority thereof or therein or (b)
any amendment to, or change in, an
interpretation or application of such laws or
regulations, there is more than an
insubstantial risk that (i) the Trust would be
subject to United States federal income tax
with respect to income accrued or received on
the Subordinated Debentures, (ii) interest
payable on the Subordinated Debentures would
not be deductible by the Company for United
States federal income tax purposes, or (iii)
the Trust would be subject to more than a de
minimis amount of other taxes, duties or other
governmental charges, which change or amendment
becomes effective on or after the Issue Date.
An "Investment
S-6
<PAGE> 9
Company Act Event" means that the
Administrative Trustees and the Company shall
have received an opinion of counsel experienced
in such matters (which may be counsel to the
Company) to the effect that, as a result of the
occurrence of a change in law or regulation or
a written change in interpretation or
application of law or regulation by any
legislative body, court, governmental agency or
regulatory authority on or after the Issue
Date, there is more than an insubstantial risk
that the Trust is or will be considered an
"investment company" that is required to be
registered under the Investment Company Act of
1940, as amended (the "1940 Act"). See "Risk
Factors -- Special Event Redemption or
Distribution."
REDEMPTION PRICE.............. In the event of the redemption of the Trust
Securities or other termination of the Trust
without distribution of the Subordinated
Debentures, each holder of a Trust Preferred
Security shall be entitled to receive a
liquidation amount of $25 plus accrued and
unpaid distributions thereon (including any
interest thereon) to the date of payment.
S-7
<PAGE> 10
RISK FACTORS
Prospective purchasers of Trust Preferred Securities should carefully
review the information contained elsewhere in this Prospectus Supplement and in
the accompanying Prospectus and should consider particularly the following
matters:
RANKING OF AND RIGHTS UNDER THE SUBORDINATED DEBENTURES
No amounts will be available to make payments on the Trust Preferred
Securities except from payments made on the Subordinated Debentures. The
obligations of the Company under the Subordinated Debentures are subordinate and
junior in right of payment to all present and future Senior Indebtedness of the
Company. As of March 31, 1998, Senior Indebtedness of the Company aggregated
approximately $195,359,000.
The Company conducts its business through subsidiaries. Accordingly, the
ability of the Company to meet its obligations under the Subordinated Debentures
will be dependent on the earnings and cash flows of its subsidiaries and the
ability of its subsidiaries to pay dividends or to advance or repay funds to the
Company. In addition, the rights of the Company and its creditors to participate
in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of such subsidiaries'
creditors. There are no terms in the Trust Agreement, the Subordinated
Debentures or the Trust Guarantee that limit the Company's ability to incur
additional indebtedness, including Senior Indebtedness or that limit the ability
of the Company's subsidiaries to issue debt. See "Description of Trust
Guarantee" and "Description of Debt Securities -- Subordination" in the
accompanying Prospectus.
RANKING OF AND RIGHTS UNDER THE TRUST GUARANTEE
The Company's obligations under the Trust Guarantee are subordinate and
junior in right of payment to all liabilities of the Company and will be pari
passu with the most senior preferred stock that may be issued by the Company. If
the Company were to default in its obligation to make payments on the
Subordinated Debentures, the Trust would lack available funds for payment of
distributions or amounts payable on redemption of the Trust Preferred Securities
or otherwise, and in such event holders of the Trust Preferred Securities would
not be able to rely upon the Trust Guarantee for payment of such amounts.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company has the right under the Subordinated Indenture, at any time,
and from time to time, to defer payments of interest on the Subordinated
Debentures for a period of up to 20 consecutive quarters (each, an "Extension
Period"), but not beyond the stated maturity of the Subordinated Debentures.
Prior to the termination of any Extension Period, the Company may further defer
payments of interest; provided that such Extension Period, together with all
such previous and further extensions thereof, may not exceed 20 consecutive
quarters. During an Extension Period, the Company will have the right to make
partial payments of interest on any Interest Payment Date. Upon the termination
of any Extension Period and the payment of all amounts then due, the Company may
select a new Extension Period, subject to the above requirements. There could be
multiple Extension Periods of varying lengths throughout the term of the
Subordinated Debentures. Deferred installments of interest on the Subordinated
Debentures will bear interest at a rate per annum equal to the Securities Rate,
compounded quarterly, to the date of payment to the extent permitted by
applicable law. The payment of such deferred interest, together with any
interest thereon, will be passed through to the holders of the Trust Preferred
Securities as received at the end of any Extension Period.
The only restrictions on the Company's ability to defer payments of
interest are that during any Extension Period the Company may not, with certain
exceptions, (a) declare or pay any dividend on, or make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, and (b) to make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company which rank pari passu with or junior to the
Subordinated Debentures. See "Description of the Trust Preferred Securities --
Distributions" and "Description of the Subordinated Debentures -- Option to
Extend Interest Payment Period" and "-- Certain Covenants."
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Should the Company exercise its right to defer payments of interest, each
holder of Trust Preferred Securities will be required to include income in the
form of OID in its gross income for United States federal income tax purposes in
respect of the deferred interest allocable to its Trust Preferred Securities. As
a result, holders of Trust Preferred Securities will recognize income for United
States federal income tax purposes in advance of the receipt of cash and will
not receive the cash from the Trust related to such income if such holders
dispose of their Trust Preferred Securities prior to the record date for the
date on which distributions of such amounts are made. See "Material Federal
Income Tax Considerations -- Original Issue Discount" and "-- Sale of Trust
Preferred Securities." INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES OF AN INVESTMENT IN THE TRUST PREFERRED
SECURITIES.
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures. However, should the Company determine to exercise such
right in the future, the market price of the Trust Preferred Securities is
likely to be affected. A holder that disposes of its Trust Preferred Securities
during an Extension Period, therefore, might receive a different return on its
investment than a holder that continues to hold its Trust Preferred Securities.
In addition, as a result of the existence of the Company's right to defer
interest payments, the market price of the Trust Preferred Securities (which
represent an undivided beneficial interest in the Subordinated Debentures) may
be more volatile than other similar securities that do not have such rights.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Special Event, the Company will have the option,
within 90 days following the occurrence thereof, to redeem the Subordinated
Debentures in cash (with the result that the Trust Securities will be redeemed).
In addition, the Company will have the right at any time to terminate the Trust
and cause the Subordinated Debentures to be distributed to the holders of the
Trust Preferred Securities in liquidation of the Trust. See "Description of the
Trust Preferred Securities -- Special Event Redemption" and "Distribution of
Subordinated Debentures Upon Termination of the Trust."
There can be no assurance as to the market price for the Subordinated
Debentures that may be distributed in exchange for Trust Preferred Securities if
a termination or liquidation of the Trust were to occur. Accordingly, the
Subordinated Debentures that the investor may receive on termination and
liquidation of the Trust may trade at a discount to the price that the investor
paid to purchase the Trust Preferred Securities offered hereby. See "Description
of the Trust Preferred Securities -- Distribution of Subordinated Debentures
Upon Termination of the Trust."
LIMITED VOTING RIGHTS
Holders of Trust Preferred Securities will have limited voting rights and,
except for the rights of holders of Trust Preferred Securities to appoint a
substitute Property Trustee or Delaware Trustee under certain circumstances,
will not be entitled to vote to appoint, remove or replace any of the Trustees,
which voting rights are vested exclusively in the holder of the Trust Common
Securities. See "Description of the Trust Preferred Securities -- Voting
Rights."
TRADING CHARACTERISTICS OF TRUST PREFERRED SECURITIES
The Trust Preferred Securities are expected to be listed on NASDAQ, subject
to official notice of issuance. The Trust Preferred Securities are expected to
trade at a price that takes into account the value, if any, of accrued but
unpaid distributions; thus, purchasers will not pay and sellers will not receive
any accrued and unpaid interest with respect to the Trust Preferred Securities
that is not included in the trading price thereof. If a Trust Preferred Security
is disposed of prior to the occurrence of an Extension Period, any portion of
the amount received that is attributable to accrued interest will be treated as
interest income to a U.S. holder for tax purposes and will not be treated as
part of the amount realized for purposes of determining gain or loss on the
disposition of the Preferred Security. If an Extension Period occurs, interest
on the Subordinated Debentures will be included in the gross income of U.S.
holders of Trust Preferred Securities as it accrues
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rather than when it is paid. Should an Extension Period occur, a holder who
disposes of his Trust Preferred Securities between record dates for payments of
distributions thereon would be required to include accrued but unpaid interest
on the Subordinated Debentures through the date of disposition in income as OID,
and to add such amount to his adjusted tax basis in his pro rata share of the
related Subordinated Debentures deemed disposed of. To the extent the selling
price is less than the holder's adjusted tax basis, a holder generally will
recognize a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income tax
purposes. See "Material Federal Income Tax Considerations -- Original Issue
Discount" and "-- Sale of Trust Preferred Securities."
The trading price of the Trust Preferred Securities is likely to be
sensitive to the level of interest rates generally. If interest rates rise in
general, the trading price of the Trust Preferred Securities may decline to
reflect the additional yield requirements of the purchasers. Conversely, a
decline in interest rates may increase the trading price of the Trust Preferred
Securities, although any increase will be moderated by the Company's ability to
redeem the Subordinated Debentures, in whole or in part, at any time on or after
, at a redemption price equal to 100% of the principal amount to
be redeemed plus accrued but unpaid interest. In addition, because holders of
Trust Preferred Securities will be paid only from payments on the Subordinated
Debentures and may receive Subordinated Debentures upon the termination of the
Trust, prospective purchasers of Trust Preferred Securities are making an
investment decision with regard to the Subordinated Debentures and should
carefully review all the information regarding the Subordinated Debentures
contained herein. See "Description of the Trust Preferred Securities --
Distribution of Subordinated Debentures Upon Termination of the Trust" and
"Description of the Subordinated Debentures."
Prior to this offering, there has been no public market for the Trust
Preferred Securities, and there can be no assurance that an active public market
for the Trust Preferred Securities will develop or, if one does develop, that it
will be sustained after this offering. See "Plan of Distribution" in the
accompanying Prospectus.
In connection with this offering and in compliance with applicable law and
industry practice, the Underwriters may overallot or effect transactions which
stabilize, maintain or otherwise affect the market price of the Trust Preferred
Securities at levels above those which might otherwise prevail in the open
market, including entering stabilizing bids. A stabilizing bid means the placing
of any bid, or the effecting of any purchase, for the purpose of pegging, fixing
or maintaining the price of a security. In general, purchases of a security for
the purpose of stabilization could cause the price of the security to be higher
than it might be in the absence of such purchases. See "Underwriting."
RISKS OF INVESTMENT IN TRUST
The Trust is not organized as a corporation and is subject to the separate
and different rules applicable to entities organized as a business trust. See
"SEMCO Capital Trust." However, as with an investment in the Company, an
investment in the Trust involves risks associated with operating conditions,
competitive factors, economic conditions, industry conditions and equity market
conditions.
CONSEQUENCES OF HIGHLY LEVERAGED TRANSACTION
The Subordinated Indenture does not contain provisions that afford holders
of the Subordinated Debentures protection in the event of a highly leveraged
transaction involving the Company.
SEMCO CAPITAL TRUST
The Trust is a statutory business trust created under Delaware law pursuant
to the filing of a certificate of trust with the Delaware Secretary of State on
July 7, 1998. The business of the Trust is set forth in a trust agreement dated
July 7, 1998 and executed by the Company, as Depositor, the Administrative
Trustees and the Delaware Trustee thereunder. This trust agreement will be
amended and restated in its entirety on the Issue Date substantially in the form
filed as an exhibit to the Registration Statement of which this Prospectus
Supplement and the accompanying Prospectus form a part (as amended and restated
the "Trust
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<PAGE> 13
Agreement"). The Trust Agreement will be qualified as an indenture under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Trust
exists for the exclusive purposes of (i) issuing and selling the Trust
Securities representing undivided beneficial interests in the assets of the
Trust, (ii) investing the gross proceeds of the Trust Securities in the
Subordinated Debentures, and (iii) engaging in only those other activities
necessary, appropriate, convenient or incidental thereto. The Trust has a term
of 50 years from its creation, but may terminate earlier as provided in the
Trust Agreement.
Upon issuance of the Trust Preferred Securities, the purchasers thereof
will own all of the Trust Preferred Securities. The Company will acquire all of
the Trust Common Securities, which will have an aggregate liquidation amount
equal to approximately 3% of the total capital of the Trust. The Trust Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Trust Preferred Securities, except that upon the occurrence and
continuance of a Subordinated Indenture Event of Default, the rights of the
holders of Trust Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise will be subordinated to the
rights of the holders of the Trust Preferred Securities as provided in the Trust
Agreement.
The Trust's business and affairs will be conducted by the Trustees, which
shall be appointed by the Company as the holder of the Trust Common Securities.
Two officers of the Company will initially serve as Administrative Trustees. NBD
Bank will serve as Property Trustee and will hold legal title to the
Subordinated Debentures issued by the Company on behalf of the Trust and the
holders of the Trust Securities. First Chicago Delaware Inc. will serve as
Delaware Trustee. In certain circumstances, the holders of a majority in
liquidation amount of the Trust Preferred Securities will be entitled to appoint
a substitute Property Trustee or Delaware Trustee. See "Description of the Trust
Preferred Securities -- Events of Default."
The Property Trustee will hold legal title to the Subordinated Debentures
for the benefit of the Trust and the holders of the Trust Securities and will
have the power, with certain exceptions, to exercise all rights, powers and
privileges under the Subordinated Indenture as the holder of the Subordinated
Debentures. To the extent payments in respect of the Subordinated Debentures are
made to the Property Trustee, the Property Trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of the Trust Securities. Subject to the right of the holders of the
Trust Preferred Securities to appoint a substitute Property Trustee or Delaware
Trustee under certain circumstances, the Company, as the holder of all the Trust
Common Securities, will have the right to appoint, remove or replace any of the
Trustees.
The Subordinated Debentures will constitute substantially all of the assets
of the Trust. Other assets that may constitute "Trust Property" (as that term is
defined in the Trust Agreement) include any cash on deposit in, or owing to, the
payment account as established under the Trust Agreement, as well as any other
property or assets held by the Property Trustee pursuant to the Trust Agreement.
In addition, the Trust may, from time to time, receive cash from the Company
pursuant to the Agreement as to Expenses and Liabilities.
The rights of the holders of the Trust Preferred Securities, including
economic rights, rights to information and voting rights, are as set forth in
the Trust Agreement, the Delaware Business Trust Act, and the Trust Indenture
Act. See "Description of the Trust Preferred Securities."
The Trust's office in the State of Delaware is c/o First Chicago Delaware
Inc., 300 King Street, Wilmington, Delaware 19801. The principal place of
business of the Trust shall be c/o the Company, 405 Water Street, Port Huron,
Michigan 48060, telephone number (810) 987-2200.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES
The Trust Preferred Securities will be issued pursuant to the terms of the
Trust Agreement. The Trust Agreement will be qualified as an indenture under the
Trust Indenture Act. The Property Trustee will act as the indenture trustee with
respect to the Trust Agreement, as well as the Trust Guarantee, for purposes of
compliance with the provisions of the Trust Indenture Act. The terms of the
Trust Preferred Securities will include those stated in the Trust Agreement, the
Delaware Business Trust Act, and those made part of the Trust Agreement by the
Trust Indenture Act. The following summary of the principal terms and provisions
of
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the Trust Preferred Securities does not purport to be complete and is subject
to, and qualified in its entirety by reference to, the Trust Agreement, the form
of which is filed as an exhibit to the Registration Statement of which this
Prospectus Supplement and the accompanying Prospectus are a part, as well as the
Trust Indenture Act.
GENERAL
The Trust Agreement authorizes the Administrative Trustees, on behalf of
the Trust, to issue the Trust Preferred Securities, which represent preferred
undivided beneficial interests in the assets of the Trust, and the Trust Common
Securities, which represent common undivided beneficial interests in the assets
of the Trust. All of the Trust Common Securities will be owned by the Company.
The Trust Common Securities rank pari passu, and payments will be made thereon
on a pro rata basis, with the Trust Preferred Securities, except that upon the
occurrence of a Subordinated Indenture Event of Default, the rights of the
holders of the Trust Common Securities to receive payment of periodic
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the Trust Preferred Securities. The
Trust Agreement does not permit the issuance by the Trust of any securities
other than the Trust Securities or the incurrence of any indebtedness for
borrowed money by the Trust. Pursuant to the Trust Agreement, the Property
Trustee will own and hold the Subordinated Debentures for the benefit of the
Trust and the holders of the Trust Securities. The payment of distributions out
of money held by the Trust, and payments upon redemption of the Trust Preferred
Securities or liquidation of the Trust, are guaranteed by the Company on a
subordinated basis as and to the extent described under "Description of the
Trust Guarantee" in the accompanying Prospectus. The Trust Guarantee does not
cover payment of distributions or amounts payable on redemption of the Trust
Preferred Securities or otherwise in respect of the Trust Preferred Securities
when the Trust does not have legally and immediately available funds sufficient
to make such distributions or payments. In such event, the holders of a majority
in aggregate liquidation amount of the Trust Preferred Securities may direct the
Property Trustee to enforce its rights under the Subordinated Debentures. In
addition, a holder of Trust Preferred Securities may institute a legal
proceeding directly against the Company, without first instituting a legal
proceeding against the Property Trustee or any other person or entity, for
enforcement of payment to such holder of principal of or interest on the
Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Trust Preferred Securities of such holder on or after
the due dates specified or provided for in the Subordinated Debentures. The
above mechanisms and obligations, together with the Company's obligations under
the Agreement as to Expenses and Liabilities, provide a full and unconditional
guarantee, subject to certain subordination provisions, by the Company of the
payments due on the Trust Preferred Securities.
DISTRIBUTIONS
Distributions on the Trust Preferred Securities will be fixed at the
Securities Rate, will be cumulative and will accrue from the Issue Date and,
except in the event of an Extension Period, will be payable quarterly in arrears
on March 31, June 30, September 30 and December 31 of each year, commencing on
, . In the event that any date on which distributions are
to be made on the Trust Preferred Securities is not a Business Day, then payment
of the distributions payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date the
payment was originally payable. A "Business Day" shall mean any day other than a
Saturday or Sunday, a day on which banks in New York City are authorized or
obligated by law or executive order to remain closed or a day on which the
principal corporate trust office of the Property Trustee in New York, New York
or the Subordinated Indenture Trustee is closed for business.
Distributions payable on any Distribution Date will be payable to the
holders of record on the Record Date for such Distribution Date, which is the
close of business on the fifteenth calendar day preceding such Distribution
Date. Subject to any applicable laws and regulations and the provisions of the
Trust Agreement, each such payment will be made as described under "--
Book-Entry Only Issuance -- The Depository Trust
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<PAGE> 15
Company" below. The amount of distributions payable for any period will be
computed on the basis of a 360 day year of twelve 30-day months.
The Company has the right under the Subordinated Indenture to defer
payments of interest on the Subordinated Debentures by extending the interest
payment period from time to time on the Subordinated Debentures (each, an
"Extension Period") which, if exercised, would defer quarterly distributions on
the Trust Preferred Securities during any such extended interest payment period.
Deferred installments of interest on the Subordinated Debentures will bear
interest at a rate per annum equal to the Securities Rate, compounded quarterly,
to the date of payment to the extent permitted by applicable law. During an
Extension Period, the Company will have the right to make partial payments of
interest on any Interest Payment Date. If distributions are deferred, the
deferred distributions and accrued interest thereon shall be paid, if funds are
legally available therefor, to holders of record of the Trust Preferred
Securities as they appear on the books and records of the Trust on the Record
Date next following the termination of such Extension Period. See "Description
of the Subordinated Debentures -- Interest" and "-- Option to Extend Interest
Payment Period."
Distributions on the Trust Preferred Securities must be paid on the
Distribution Dates to the extent that the Trust has funds legally and
immediately available for the payment of such distributions. The Trust's funds
available for distribution to the holders of the Trust Preferred Securities will
be limited to payments received under the Subordinated Debentures. See
"Description of the Subordinated Debentures."
REDEMPTION
The Trust Preferred Securities are subject to mandatory redemption upon
repayment of the Subordinated Debentures at maturity or their earlier
redemption. The Subordinated Debentures will mature on ,
and may be redeemed, in whole or in part, at the option of the Company, at any
time on or after , or at any time in whole within 90 days
following the occurrence of a Special Event, in each case at a Redemption Price
equal to 100% of the principal amount to be redeemed plus accrued but unpaid
interest (including any Additional Interest) to the Redemption Date. Upon the
repayment of the Subordinated Debentures, whether at maturity or upon
redemption, the proceeds from such repayment or payment shall simultaneously be
applied to redeem a like liquidation amount of Trust Preferred Securities upon
not less than 30 nor more than 60 days' notice, at the Redemption Price. See
"Description of the Subordinated Debentures -- Optional Redemption." If a
partial redemption of the Subordinated Debentures would result in the delisting
of the Trust Preferred Securities, the Company may redeem the Subordinated
Debentures only in whole. In the event that fewer than all of the outstanding
Trust Preferred Securities are to be redeemed, the Trust Preferred Securities to
be redeemed will be selected as described under "Book-Entry Only Issuance -- The
Depository Trust Company" below. If the Trust Preferred Securities are no longer
in book-entry only form, the Trust Preferred Securities to be redeemed will be
selected by such method as the Property Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions (equal to $25
or integral multiples thereof) of the aggregate liquidation amount of Trust
Preferred Securities of a denomination larger than $25 provided, however, that
before undertaking the redemption of the Trust Preferred Securities on other
than a pro rata basis, the Property Trustee shall have received an opinion of
counsel that the status of the Trust as a grantor trust for United States
federal income tax purposes would not be adversely affected.
The Redemption Price for each Trust Preferred Security shall equal the
liquidation amount of $25 plus accrued and unpaid distributions thereon to the
date of payment.
SPECIAL EVENT REDEMPTION
Upon the occurrence of a Special Event at any time, the Company will have
the option to redeem, within 90 days following the occurrence thereof, the
Subordinated Debentures in whole (and thus cause the redemption of the Trust
Preferred Securities in whole) (see "Description of the Subordinated Debentures
- --Optional Redemption"). A Special Event is either a Tax Event or an Investment
Company Act Event.
A "Tax Event" means that the Administrative Trustees and the Company shall
have received an opinion of counsel experienced in such matters (which may be
counsel to the Company) to the effect that, as a result
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of (a) any amendment to, or change (including any announced prospective change)
in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein or (b) any
amendment to, or change in, an interpretation or application of such laws or
regulations, there is more than an insubstantial risk that (i) the Trust would
be subject to United States federal income tax with respect to income accrued or
received on the Subordinated Debentures, (ii) interest payable on the
Subordinated Debentures would not be deductible by the Company for United States
federal income tax purposes, or (iii) the Trust would be subject to more than a
de minimis amount of other taxes, duties or other governmental charges, which
change or amendment becomes effective on or after the Issue Date.
An "Investment Company Act Event" means that the Administrative Trustees
and the Company shall have received an opinion of counsel experienced in such
matters (which may be counsel to the Company) to the effect that, as a result of
the occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority on or after the Issue Date,
there is more than an insubstantial risk that the Trust is or will be considered
an "investment company" under the 1940 Act, which change becomes effective on or
after the Issue Date.
DISTRIBUTION OF SUBORDINATED DEBENTURES UPON TERMINATION OF TRUST
The Company will have the right at any time to terminate the Trust and,
after satisfaction of liabilities to creditors of the Trust, cause the
Subordinated Debentures to be distributed to the holders of the Trust Preferred
Securities in liquidation of the Trust. See "Liquidation Distribution Upon
Dissolution" below. This right is optional and wholly within the discretion of
the Company. Circumstances under which the Company may determine to exercise
such right could include the occurrence of an Investment Company Act Event or a
Tax Event, adverse tax consequences to the Company or the Trust that are not
within the definition of a Tax Event because they do not result from an
amendment or change described in the applicable definition under the
Subordinated Debenture Indenture, or changes in the accounting requirements
applicable to the Trust Preferred Securities.
If Subordinated Debentures are distributed to the holders of the Trust
Preferred Securities, the Company will use its best efforts to have the
Subordinated Debentures listed on NASDAQ or on such other exchange as the Trust
Preferred Securities are then listed. After the date for any distribution of
Subordinated Debentures upon termination of the Trust, (i) the Trust Preferred
Securities and the Trust Guarantee will no longer be deemed to be outstanding,
(ii) the depositary or its nominee, as the record holder of the Trust Preferred
Securities, will receive a registered global certificate or certificates
representing the Subordinated Debentures to be delivered upon such distribution
and (iii) any certificates representing Trust Preferred Securities not held by
the depositary or its nominee will be deemed to represent Subordinated
Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of, with an interest rate identical to the Securities Rate
of, and accrued and unpaid interest equal to accrued and unpaid distributions
on, such Trust Preferred Securities, until such certificates are presented to
the Company or its agent for transfer or reissuance.
There can be no assurance as to the market prices for the Trust Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for the Trust Preferred Securities if a termination and liquidation of the Trust
were to occur. Accordingly, the Trust Preferred Securities that an investor may
purchase, or the Subordinated Debentures that the investor may receive on
termination and liquidation of the Trust, may trade at a discount to the price
that the investor paid to purchase the Trust Preferred Securities.
REDEMPTION PROCEDURES
In the event that fewer than all of the Trust Securities are to be
redeemed, then the aggregate liquidation amount of the Trust Securities to be
redeemed shall be allocated 97% to the Trust Preferred Securities and 3% to the
Trust Common Securities.
The Trust Preferred Securities redeemed on each redemption date shall be
redeemed at the Redemption Price as defined in the Trust Agreement with the
proceeds from the contemporaneous redemption of the
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Subordinated Debentures. The Redemption Price of Trust Preferred Securities
shall be deemed payable on each redemption date only to the extent that the
Trust has funds legally and immediately available for payment of such Redemption
Price.
If the Property Trustee gives a notice of redemption in respect of Trust
Preferred Securities (which notice will be irrevocable), then, by 2:00 P.M., New
York City time, on the redemption date, subject to the immediately preceding
paragraph, the Property Trustee will irrevocably deposit with the securities
depositary, so long as the Trust Preferred Securities are in book-entry only
form, sufficient funds to pay the applicable Redemption Price. See "Book-Entry
Only Issuance -- The Depository Trust Company" below. If the Trust Preferred
Securities are not in book-entry only form, the Property Trustee, subject to the
immediately preceding paragraph, will irrevocably deposit with the Paying Agent
funds sufficient to pay the applicable Redemption Price and will give the Paying
Agent irrevocable instructions to pay the Redemption Price to the holders
thereof upon surrender of their Trust Preferred Securities certificates. If
notice of redemption shall have been given and funds deposited as required, then
immediately prior to the close of business on the date of such deposit,
distributions will cease to accrue and all rights of holders of such Trust
Preferred Securities so called for redemption will cease, except the right of
the holders of such Trust Preferred Securities to receive the Redemption Price,
but without interest on such Redemption Price. In the event that any date fixed
for redemption of Trust Preferred Securities is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately preceding Business
Day. In the event that payment of the Redemption Price in respect of Trust
Preferred Securities is improperly withheld or refused and not paid either by
the Trust or by the Company pursuant to the Trust Guarantee, distributions on
such Trust Preferred Securities will continue to accrue at the then applicable
rate, from such redemption date originally established by the Trust for such
Trust Preferred Securities to the date such Redemption Price is actually paid.
See "-- Events of Default" below, "Relationship Among the Trust Preferred
Securities, the Subordinated Debentures and the Trust Guarantee" herein and
"Description of Trust Guarantee -- Events of Default" in the accompanying
Prospectus.
Subject to the foregoing and to applicable law (including, without
limitation, United States federal securities laws), the Company or any of its
affiliates may, at any time and from time to time, purchase outstanding Trust
Preferred Securities by tender, in the open market or by private agreement.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
DTC will act as the initial securities depositary for the Trust Preferred
Securities. The Trust Preferred Securities will be issued only as fully
registered securities registered in the name of Cede & Co., DTC's nominee. One
or more fully registered global Trust Preferred Securities certificates will be
issued, representing in the aggregate the total number of Trust Preferred
Securities, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing company" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC holds
securities that its participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
companies and certain other organizations ("Direct Participants"). DTC is owned
by a number of its Direct Participants and by the NYSE, the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
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Purchases of Trust Preferred Securities within the DTC system must be made
by or through Direct Participants, which will receive a credit for the Trust
Preferred Securities on DTC's records. The ownership interest of each actual
purchaser of Trust Preferred Securities ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Direct or Indirect Participants through which the Beneficial Owners
purchased Trust Preferred Securities. Transfers of ownership interests in the
Trust Preferred Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Trust
Preferred Securities, except in the event that use of the book-entry system for
the Trust Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Trust Preferred
Securities. DTC's records reflect only the identity of the Direct Participants
to whose accounts such Trust Preferred Securities are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices with respect to Trust Preferred Securities registered in
book-entry only form shall be sent to Cede & Co. as DTC's nominee. If less than
all of the Trust Preferred Securities are being redeemed, DTC will reduce the
amount of the interest of each Direct Participant in the Trust Preferred
Securities in accordance with its procedures.
Although voting with respect to the Trust Preferred Securities is limited,
in those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Trust Preferred Securities. Under its usual
procedures, DTC would mail an "Omnibus Proxy" to the Trust as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the Trust Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Distributions, redemption proceeds and other payments in respect of the
Trust Preferred Securities will be made to Cede & Co., as the nominee of DTC.
DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the account of customers registered in "street name," and will be the
responsibility of each such Participant and not of DTC, the Trust, any Trustee
or the Company, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of distributions, redemption proceeds and
other amounts to Cede & Co., as nominee of DTC is the responsibility of the
Trust, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of each of the Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner in a global Trust Preferred
Security will not be entitled to receive physical delivery of Trust Preferred
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Trust Preferred Securities. The laws of
some jurisdictions require that certain purchasers of securities take physical
delivery of securities in definitive form. Such laws may impair the ability to
transfer beneficial interests in a global Trust Preferred Security.
DTC may discontinue providing its services as securities depositary with
respect to the Trust Preferred Securities at any time by giving reasonable
notice to the Trust. Under such circumstances, in the event that a successor
securities depositary is not obtained within 90 days, Trust Preferred Securities
certificates will be printed and delivered to the holders of record.
Additionally, the Company may decide to discontinue use of the
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system of book-entry transfers through DTC (or a successor depositary) with
respect to the Trust Preferred Securities. In that event, certificates for the
Trust Preferred Securities will be printed and delivered to the holders of
record.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company and the Trust believe to be
reliable, but the Company and the Trust take no responsibility for the accuracy
thereof. The Trust has no responsibility for the performance by DTC or its
Participants of their respective obligations as described herein or under the
rules and procedures governing their respective operations.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to the Trust Agreement, the Trust shall terminate on
, or earlier upon (i) the occurrence of a Bankruptcy Event
(as defined in the Trust Agreement) in respect of the Company, dissolution or
liquidation of the Company, or dissolution of the Trust pursuant to a judicial
decree; (ii) the delivery of written direction to the Property Trustee by the
Company, as Depositor, at any time (which direction is optional and wholly
within the discretion of the Company, as Depositor) to terminate the Trust and
distribute the Subordinated Debentures to the holders of the Trust Preferred
Securities and the Trust Common Securities in liquidation of the Trust (See
"--Special Event Redemption" above); or (iii) the payment at maturity or
redemption of all of the Subordinated Debentures, and the consequent payment of
the Trust Common Securities.
If an early termination occurs as described in clause (i) or (ii) above,
the Trust shall be liquidated, and the Property Trustee shall distribute to each
holder of Trust Preferred Securities and Trust Common Securities, after the
satisfaction of liabilities to creditors of the Trust, a like principal amount
of Subordinated Debentures, unless in the case of an event described in clause
(i) such distribution is determined by the Administrative Trustees not to be
practical, in which event such holders will be entitled to receive, out of the
assets of the Trust available for distribution to holders, after satisfaction of
liabilities to creditors, an amount equal to the aggregate of the liquidation
amount of $25 per Trust Security plus accrued and unpaid distributions thereon
to the date of payment (such amount being the "Liquidation Distribution"). If
such Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then subject to the next succeeding sentence, the amounts payable
by the Trust on the Trust Securities shall be paid on a pro rata basis. The
holder of the Trust Common Securities will be entitled to receive payments upon
any such dissolution pro rata with the holders of the Trust Preferred
Securities, except that if a Subordinated Indenture Event of Default has
occurred and is continuing, the Trust Preferred Securities shall have a
preference over the Trust Common Securities.
EVENTS OF DEFAULT
Any one of the following events constitutes an "Event of Default" under the
Trust Agreement ("Trust Agreement Event of Default") with respect to the Trust
Securities issued thereunder (whatever the reason for such Trust Agreement Event
of Default, and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of an "Event of Default," as defined in the
Subordinated Indenture, with respect to the Subordinated Debentures
("Subordinated Indenture Event of Default") (See "Description of Debt
Securities -- Events of Default, Notice and Waiver" and "Additional
Description of Subordinated Debentures to be Issued to Trust --
Subordinated Indenture Additional Events of Default" in the accompanying
Prospectus); or
(ii) default by the Trust in the payment of any Distribution (as
defined in the Trust Agreement) when it becomes due and payable, and the
continuation of such default for a period of 30 days; or
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(iii) default by the Trust in the payment of any Redemption Price (as
defined in the Trust Agreement) of any Trust Preferred Security or Trust
Common Security when it becomes due and payable; or
(iv) default in the performance, or breach, of any covenant or
warranty of the Trustees in the Trust Agreement (other than a covenant or
warranty a default in the performance of which or the breach of which is
dealt with in clause (ii) or (iii) above), and continuation of such default
or breach for a period of 60 days after there has been given, by registered
or certified mail, to the Trustees by the holders of at least 25% in
liquidation amount of the outstanding Trust Preferred Securities a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" under the Trust
Agreement; or
(v) the occurrence of a Bankruptcy Event (as defined in the Trust
Agreement) with respect to the Trust.
Within 90 days after the occurrence of any default under the Trust
Agreement known to the Property Trustee, the Property Trustee shall transmit
notice of any such default to the holders of Trust Securities, the
Administrative Trustees and the Company, unless such default shall have been
cured or waived. For such purpose, the term "default" means any event which is,
or after notice or lapse of time or both would become, a Trust Agreement Event
of Default.
If a Subordinated Indenture Event of Default occurs and is continuing,
then, pursuant to the Trust Agreement, (i) the holders of Trust Preferred
Securities will rely on the enforcement by the Property Trustee of its rights
against the Company as the holder of the Subordinated Debentures and (ii) the
holders of a majority in aggregate liquidation amount of the Trust Preferred
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee
under the Trust Agreement, including the right to direct the Property Trustee to
exercise the remedies available to it as a holder of the Subordinated Debentures
subject to limited exceptions specified in the Trust Agreement. If the Property
Trustee fails to enforce its rights under the Subordinated Debentures, a holder
of Trust Preferred Securities may, to the extent permitted by applicable law and
as provided in the Trust Agreement, institute a legal proceeding against the
Company to enforce its rights under the Trust Agreement without first
instituting any legal proceeding against the Property Trustee or any other
person or entity, including the Trust. Notwithstanding the foregoing, a holder
of Trust Preferred Securities may institute a legal proceeding directly against
the Company, without first instituting a legal proceeding against the Property
Trustee or any other person or entity, for enforcement of payment to such holder
of principal of or interest on the Subordinated Debentures having a principal
amount equal to the aggregate liquidation amount of the Trust Preferred
Securities of such holder on or after the due dates specified in the
Subordinated Debentures. See "Relationship Among the Trust Preferred Securities,
the Subordinated Debentures and the Trust Guarantee" herein and "Description of
Trust Guarantee -- Events of Default" in the accompanying Prospectus.
Unless a Subordinated Indenture Event of Default shall have occurred and be
continuing, the Trustees may be removed at any time by act of the holder of the
Trust Common Securities. If a Subordinated Indenture Event of Default has
occurred and is continuing, the Property Trustee and the Delaware Trustee may be
removed at such time by act of the holders of a majority in liquidation amount
of the Trust Preferred Securities, delivered to the appropriate Trustee (in its
individual capacity and on behalf of the Trust). No resignation or removal of
any Trustee and no appointment of a successor shall be effective until the
acceptance of appointment by the successor Trustee in accordance with the
requirements of the Trust Agreement.
If a Subordinated Indenture Event of Default has occurred and is
continuing, the holders of Trust Preferred Securities shall have a preference
over the holders of Trust Common Securities upon dissolution of the Trust as
described above. See "-- Liquidation Distribution Upon Dissolution."
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VOTING RIGHTS
Except as described in "Amendment of the Trust Agreement" herein, in
"Description of Trust Guarantee -- Amendment of Trust Guarantee; Assignment" in
the accompanying Prospectus and in the immediately succeeding paragraphs and
except as otherwise required by law and the Trust Agreement, the holders of the
Trust Preferred Securities will have no voting rights.
So long as any Subordinated Debentures are held by the Property Trustee,
the Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Subordinated Indenture Trustee (as
defined herein), or executing any trust or power conferred on the Subordinated
Indenture Trustee with respect to the Subordinated Debentures, (ii) consent to
waive any past default which is waivable under Section 513 of the Subordinated
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of the Subordinated Debentures shall be due and payable, or (iv)
consent to any amendment, modification or termination of the Subordinated
Indenture or the Subordinated Debentures, where such consent shall be required,
or to any other action, as the holder of the Subordinated Debentures, under the
Subordinated Indenture, without, in each case, obtaining the prior approval of
the holders of at least 66 2/3% in liquidation amount of the outstanding Trust
Preferred Securities; provided, however, that where a consent under the
Subordinated Indenture would require the consent of each holder of Subordinated
Debentures affected thereby, no such consent shall be given by the Trustees
without the prior consent of each holder of Trust Preferred Securities. The
Trustees shall not revoke any action previously authorized or approved by a vote
of the holders of the Trust Preferred Securities, except pursuant to a
subsequent vote of such holders. The Property Trustee shall notify all holders
of the Trust Preferred Securities of any notice of default received from the
Subordinated Indenture Trustee with respect to the Subordinated Debentures.
If any proposed amendment to the Trust Agreement provides for, or the
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Trust Preferred Securities,
whether by way of amendment to the Trust Agreement or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than pursuant to the
Trust Agreement, then the holders of outstanding Trust Preferred Securities will
be entitled to vote as a class on such amendment or proposal, and such amendment
or proposal shall not be effective except with the approval of the holders of at
least 66 2/3% in liquidation amount of the outstanding Trust Preferred
Securities.
Any required approval of holders of Trust Preferred Securities may be given
at a separate meeting of holders of Trust Preferred Securities convened for such
purpose or pursuant to written consents satisfying the requirements of the Trust
Agreement. The Administrative Trustees are required to cause a notice of any
meeting at which holders of Trust Preferred Securities are entitled to vote to
be given to each holder of record of Trust Preferred Securities in the manner
set forth in the Trust Agreement.
Notwithstanding that holders of Trust Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the Trust
Preferred Securities that are owned (whether of record or beneficially) by the
Company, the Administrative Trustees or any affiliate of the Company or any
Administrative Trustee shall, for purposes of such vote or consent, be treated
as if they were not outstanding.
CO-PROPERTY TRUSTEES AND SEPARATE PROPERTY TRUSTEE
At any time or times, for the purpose of meeting the legal requirements of
the Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property (as defined in the Trust Agreement) may at the time be located, the
holder of the Trust Common Securities and the Property Trustee shall have power
to appoint, and upon the written request of the Property Trustee, the Company,
as Depositor, shall for such purpose join with the Property Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more persons approved by the Property Trustee
either to act as co-property trustee, jointly with the Property Trustee, of all
or any part of such Trust Property, or to act as separate trustee of any such
property, in either case subject to the provisions of the Trust Agreement and
with such powers as may be provided in the instrument of appointment, and to
vest in such person or persons in such capacity, any property, title, right or
power deemed necessary or desirable. If the Company, as Depositor,
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does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case a Subordinated Indenture Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to make
such appointment.
AMENDMENT OF THE TRUST AGREEMENT
The Trust Agreement may be amended from time to time by the Company and the
Trustees without the consent of the holders of the Trust Securities (i) to cure
any ambiguity, correct or supplement any provision therein which may be
inconsistent with any other provision therein, or to make any other provisions
with respect to matters or questions arising under the Trust Agreement, which
shall not be inconsistent with the other provisions of the Trust Agreement;
provided that the amendment does not adversely affect in any material respect
the interests of any holder of Trust Securities, or (ii) to modify, eliminate or
add to any provisions of the Trust Agreement to such extent as shall be
necessary to ensure that the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes or (iii) to provide
the Property Trustee with the authority to execute on behalf of the
Administrative Trustees Trust Preferred Securities certificates. Except as
provided in the succeeding paragraph, other amendments to the Trust Agreement
may be made (i) upon approval of the holders of not less than 66 2/3% in
aggregate liquidation amount of the Trust Preferred Securities then outstanding
and (ii) upon receipt by the Trustees of an opinion of counsel to the effect
that such amendment will not affect the Trust's status as a grantor trust or the
Trust's exemption from the 1940 Act.
Also, without the consent of the Property Trustee or the Delaware Trustee,
no amendment may be made that affects the powers, duties or rights of the
Property Trustee or the Delaware Trustee, respectively.
Notwithstanding the foregoing, without the consent of each affected holder
of Trust Securities, the Trust Agreement may not be amended to (i) change the
amount or timing of any distribution (or any payment upon redemption) on the
Trust Securities or otherwise adversely affect the amount of any distribution
(or any payment upon redemption) required to be made in respect of the Trust
Securities as of a specified date, (ii) restrict the right of a holder of Trust
Securities to institute suit for the enforcement of any such payment on or after
such date, (iii) change the purpose of the Trust, (iv) authorize the issuance of
any additional beneficial interests in the Trust, or (v) change the consent
required to amend the Trust Agreement.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other entity, except as
described below. The Trust may, at the request of the Company, with the consent
of the Administrative Trustees and, unless an Event of Default shall have
occurred or be continuing, without the consent of the holders of the Trust
Securities or the Property Trustee or the Delaware Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any state; provided that (i) such successor entity either (x)
expressly assumes all of the obligations of the Trust with respect to the Trust
Securities or (y) substitutes for the Trust Securities other securities having
substantially the same terms as the Trust Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Trust
Securities rank in priority with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Company expressly appoints a
trustee of such successor entity possessing substantially the same powers and
duties as the Property Trustee as the holder of the Subordinated Debentures,
(iii) the Trust Preferred Securities or any Successor Securities are listed, or
any Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Trust Preferred
Securities are then listed, (iv) such consolidation, amalgamation, merger or
replacement does not cause the Trust Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized statistical
rating organization, (v) such consolidation, amalgamation, merger or replacement
does not adversely affect the rights, preferences and privileges of the holders
of the Trust Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose substantially identical to
that of the Trust, (vii) prior to such consolidation, amalgamation, merger or
replacement, the Company and the Property Trustee have received an opinion of
counsel to the effect that (A) such consolidation,
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amalgamation, merger or replacement does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect, and (B) following such
consolidation, amalgamation, merger or replacement, neither the Trust nor such
successor entity will be required to register as an "investment company" under
the 1940 Act, and (viii) the Company owns all of the common securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Trust Guarantee.
Notwithstanding the foregoing, the Trust may not, except with the consent of
holders of 100% in liquidation amount of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
the successor entity to be classified as other than a grantor trust for United
States federal income tax purposes.
Any corporation or other entity into which any of the Property Trustee, the
Delaware Trustee or any Administrative Trustee that is not a natural person may
be merged or converted or with which it may be consolidated, or any corporation
or other entity resulting from any merger, conversion or consolidation to which
any such Trustee shall be a party, or any corporation or other entity succeeding
to all or substantially all the corporate trust business of any such Trustee,
shall be the successor of such Trustee under the Trust Agreement; provided that
such corporation or other entity is otherwise qualified and eligible.
PAYMENT AND PAYING AGENT
So long as DTC or a successor clearing agency is acting as securities
depositary for the Trust Preferred Securities, payments in respect of the Trust
Preferred Securities shall be made to DTC, which is expected to credit the
relevant accounts at DTC or such successor clearing agency on the applicable
Distribution Dates. If the Trust Preferred Securities are not held by DTC or a
successor clearing agency, such payments shall be made by check mailed to the
address of the holder entitled thereto as such address shall appear in the
Security Register (as such term is defined in the Trust Agreement). The Paying
Agent shall initially be the Property Trustee. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Administrative Trustees and the Company. In such event, the Administrative
Trustees shall appoint a successor to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
It is anticipated that the Property Trustee initially, and thereafter it or
one of its affiliates, will act as registrar and transfer agent (the "Security
Registrar") for the Trust Preferred Securities.
Registration of transfers of Trust Preferred Securities will be effected
upon delivery of a transfer instrument in a form satisfactory to the
Administrative Trustees without charge by or on behalf of the Trust, but upon
payment in respect of any tax or other governmental charges which may be imposed
in relation to it.
The Security Registrar will not be required to register or cause to be
registered any transfer of Trust Preferred Securities that have been called for
redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a Trust Agreement Event of
Default with respect to the Trust Securities, undertakes to perform only such
duties as are specifically set forth in the Trust Agreement and, after default,
shall exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to such provisions, the Property
Trustee is under no obligation to exercise any of the powers vested in it by the
Trust Agreement at the request of any holder of Trust Preferred Securities,
unless offered reasonable indemnity by such holder against the costs, expenses
and liabilities which might be incurred thereby.
First Chicago Delaware Inc. serves as the Delaware Trustee. NBD Bank serves
as the Property Trustee, Subordinated Indenture Trustee and Trust Guarantee
Trustee. NBD Bank also serves as the Note Indenture Trustee under the Note
Indenture of the Company pursuant to which the Medium Term Notes of the
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Company which are described in the Prospectus under "Description of Debt
Securities" would be issued. The Company and certain of its affiliates also
maintain deposit accounts and banking relationships with NBD Bank.
GOVERNING LAW
The Trust Agreement and the Trust Preferred Securities will be governed by,
and construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to operate the
Trust so that the Trust will not be deemed to be an "investment company"
required to be registered under the 1940 Act or taxed as other than a grantor
trust for United States federal income tax purposes and so that the Subordinated
Debentures will be treated as indebtedness of the Company for United States
federal income tax purposes. In this connection, the Administrative Trustees and
the Company are authorized to take any action, not inconsistent with applicable
law, the Trust's certificate of trust or the Trust Agreement, that the
Administrative Trustees and the Company determine in their discretion to be
necessary or desirable for such purposes, as long as such action does not
materially and adversely affect the interests of the holders of the Trust
Preferred Securities.
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DESCRIPTION OF THE SUBORDINATED DEBENTURES
Set forth below is a description of the terms of the Subordinated
Debentures. This description supplements, and should be read together with, the
description of the general terms and provisions of the Subordinated Debentures
set forth in the accompanying Prospectus under the captions "Description of the
Debt Securities" and "Additional Description of Subordinated Debentures To Be
Issued to the Trust". The following description does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, the
description in the accompanying Prospectus and the Subordinated Indenture (as
defined therein) and the Supplemental Indenture creating the Subordinated
Debentures. Certain capitalized terms used herein are defined in the
Subordinated Indenture.
GENERAL
The Subordinated Debentures will be issued as a series of Subordinated
Debentures under the Subordinated Indenture. The Subordinated Debentures will be
limited in aggregate principal amount to $ , such amount being equal to
the aggregate liquidation amount of the Trust Securities.
The entire principal amount of the Subordinated Debentures will mature and
become due and payable, together with any accrued and unpaid interest thereon
(including any Additional Interest (as defined below)), on ,
. The Subordinated Debentures are not subject to any sinking fund
provision.
The interest rate and interest and other payment dates of the Subordinated
Debentures will correspond to those of the Trust Preferred Securities, as
described herein.
The Subordinated Debentures will rank pari passu with any other series of
Subordinated Debentures issued under the Subordinated Indenture.
OPTIONAL REDEMPTION
The Subordinated Indenture provides that the Company will have the right to
redeem the Subordinated Debentures, in whole or in part, without premium, from
time to time, on or after , , or at any time in whole
within 90 days following the occurrence of a Special Event as described under
"Description of the Trust Preferred Securities -- Special Event Redemption or
Distribution," upon not less than 30 nor more than 60 days' notice, at a
Redemption Price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest (including any Additional Interest) to the
Redemption Date. If a partial redemption of the Subordinated Debentures would
result in the delisting of the Trust Preferred Securities, the Company may
redeem the Subordinated Debentures only in whole.
INTEREST
Each Subordinated Debenture will bear interest at the Securities Rate from
the Issue Date, payable quarterly in arrears on March 31, June 30, September 30
and December 31 of each year, commencing on , , to the
person in whose name such Subordinated Debenture is registered at the close of
business on the fifteenth calendar day prior to such payment date; provided that
interest payable at the stated maturity of principal of the Subordinated
Debentures or on a Redemption Date will be paid to the person to whom such
principal is payable. The amount of interest payable will be computed on the
basis of a 360-day year of twelve 30-day months. In the event that any date on
which interest is payable on the Subordinated Debentures is not a Business Day,
then payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company will have the right at any time, and from time to time, to
defer payments of interest on the Subordinated Debentures by extending the
interest payment period for up to 20 consecutive quarters, but not
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beyond the stated maturity date. Upon the termination of an Extension Period,
which termination shall be on an Interest Payment Date, the Company shall pay
all interest then accrued and unpaid (including any Additional Interest) on the
next succeeding Interest Payment Date. Prior to the termination of any Extension
Period, the Company may further defer payments of interest by extending the
interest payment period; provided that such Extension Period, together with all
such previous and further extensions thereof, may not exceed 20 consecutive
quarters. During an Extension Period, the Company will have the right to make
partial payments of interest on any Interest Payment Date. Upon the termination
of any Extension Period and the payment of all amounts then due, the Company may
select a new Extension Period, subject to the above requirements. The Company
has no present intention of exercising its right to defer payments of interest
by extending the interest payment period on the Subordinated Debentures.
The Company shall give the holder or holders of the Subordinated Debentures
and the Subordinated Indenture Trustee notice of its selection or extension of
an Extension Period at least one Business Day prior to the earlier of (i) the
record date relating to the Interest Payment Date on which the Extension Period
is to commence or relating to the Interest Payment Date on which an Extension
Period that is being extended would otherwise terminate or (ii) the date the
Company or the Trust is required to give notice to the NASDAQ or other
applicable self-regulatory organization of the record date or the date such
distributions are payable.
ADDITIONAL INTEREST
"Additional Interest" with respect to the Subordinated Debentures is
defined in the Subordinated Indenture as (i) such additional amounts as may be
required so that the net amounts received and retained by a holder of
Subordinated Debentures (if the holder is the Trust) after paying taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States or any other taxing authority will not be
less than the amounts the holder would have received had no such taxes, duties,
assessments, or other governmental charges been imposed; and (ii) such interest
as shall accrue on interest due and not paid on an Interest Payment Date,
accruing at the Securities Rate from the applicable Interest Payment Date to the
date of payment, compounded quarterly, on each Interest Payment Date, to the
extent permitted by applicable law.
CERTAIN COVENANTS
The Company covenants in the Subordinated Indenture, for the benefit of the
holders of Subordinated Debentures, that, (i) if at such time the Company shall
have given notice of its election to extend an interest payment period for the
Subordinated Debentures and such extension shall be continuing or (ii) if at
such time a Subordinated Indenture Event of Default shall have occurred and be
continuing, (a) the Company shall not declare or pay any dividend or make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock, and (b) the
Company shall not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities (including guarantees other
than the Trust Guarantee) issued by the Company which rank pari passu with or
junior to the Subordinated Debentures. None of the foregoing, however, shall
restrict (i) any of the actions described in the preceding sentence resulting
from any reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (ii) repurchases, redemptions or
other acquisitions of shares of the Company's capital stock in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of employees, officers or directors or a stock purchase and dividend
reinvestment plan, (iii) dividends or distributions in capital stock of the
Company, or (iv) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged.
The Subordinated Indenture further provides that, for so long as the Trust
Securities remain outstanding, the Company covenants (i) directly or indirectly
to maintain 100% ownership of the Trust Common Securities of the Trust;
provided, however, that any permitted successor of the Company under the
Subordinated Indenture may succeed to the Company's ownership of such Trust
Common Securities, and (ii) to use its
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<PAGE> 27
reasonable efforts to cause the Trust (a) to remain a statutory business trust,
except in connection with the distribution of Subordinated Debentures to the
holders of Trust Securities in liquidation of such Trust, the redemption of all
of the Trust Securities of the Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Trust Agreement, and (b) to otherwise
continue to be classified as a grantor trust for United States federal income
tax purposes.
BOOK-ENTRY AND ISSUANCE
If distributed to holders of Trust Securities in connection with the
voluntary or involuntary dissolution, winding-up or liquidation of the Trust,
the Subordinated Debentures are expected to be issued in the form of one or more
global certificates registered in the name of the securities depositary or its
nominee. In such event, the procedures applicable to the transfer and payment of
the Subordinated Debentures are expected to be substantially similar to those
described with respect to the Trust Preferred Securities in "Description of the
Trust Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Company."
DENOMINATIONS
The Subordinated Debentures will be issuable in registered form without
coupons in denominations of $ or any integral multiples thereof.
DEFEASANCE
The Company may cause itself to be discharged from its obligations (with
certain exceptions) with respect to any Subordinated Debentures ("Defeasance")
on and after the date certain conditions set forth in the Subordinated Indenture
are satisfied. See "Description of Debt Securities -- Discharge, Defeasance and
Covenant Defeasance" in the accompanying Prospectus.
Under current United States federal income tax laws, Defeasance would be
treated as an exchange of the relevant Subordinated Debentures in which holders
of such Subordinated Debentures might recognize gain or loss. In addition,
thereafter, the amount, timing and character of amounts that holders would be
required to include in income might be different from that which would be
includible in the absence of such Defeasance. Prospective investors are urged to
consult their own tax advisors as to the specific consequences of a Defeasance,
including the applicability and effect of tax laws other than the United States
federal income tax laws.
MISCELLANEOUS
The Company will have the right at all times to assign any of its rights or
obligations under the Subordinated Indenture with respect to the Subordinated
Debentures to a direct or indirect wholly-owned subsidiary of the Company;
provided that, in the event of any such assignment, the Company will remain
primarily liable for the performance of all such obligations.
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<PAGE> 28
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,
THE SUBORDINATED DEBENTURES AND THE TRUST GUARANTEE
So long as payments of interest and other payments are made when due on the
Subordinated Debentures, such payments will be sufficient to cover distributions
and payments due on the Trust Securities primarily because (i) the aggregate
principal amount of Subordinated Debentures will be equal to the sum of the
aggregate liquidation amount of the Trust Securities; (ii) the interest rate and
interest and other payment dates on the Subordinated Debentures will correspond
to the distribution rate and distribution and other payment dates for the Trust
Preferred Securities; (iii) the Company will pay for all costs and expenses of
the Trust pursuant to the Agreement as to Expenses and Liabilities; and (iv) the
Trust Agreement provides that the Trustees shall not cause or permit the Trust
to, among other things, engage in any activity that is not consistent with the
purposes of the Trust.
Payments of distributions (to the extent funds therefor are legally and
immediately available) and other payments due on the Trust Preferred Securities
(to the extent funds therefor are legally and immediately available) are
guaranteed by the Company as and to the extent set forth under "Description of
the Trust Guarantee" in the accompanying Prospectus. If the Company does not
make the required payments on the Subordinated Debentures, it is not expected
that the Trust will have sufficient funds to make the related distributions on
the Trust Preferred Securities. The Trust Guarantee is a guarantee from the time
of its issuance, but does not apply to any payment of distributions unless and
until the Trust has sufficient funds legally and immediately available for the
payment of such distributions.
If a Subordinated Indenture Event of Default occurs and is continuing, then
(i) the holders of Trust Preferred Securities will rely on the enforcement by
the Property Trustee of its rights against the Company as the holder of the
Subordinated Debentures and (ii) the holders of a majority in aggregate
liquidation amount of the Trust Preferred Securities will have the right to
direct the time, method, and place of conducting any proceeding for any remedy
available to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under the Trust Agreement, including
the right to direct the Property Trustee to exercise the remedies available to
it as a holder of the Subordinated Debentures. If the Property Trustee fails to
enforce its rights under the Subordinated Debentures, a holder of Trust
Preferred Securities may, to the extent permitted by applicable law and as
provided in the Trust Agreement, institute a legal proceeding against the
Company to enforce its rights under the Trust Agreement without first
instituting any legal proceeding against the Property Trustee or any other
person or entity, including the Trust. Notwithstanding the foregoing, a holder
of Trust Preferred Securities may institute a legal proceeding directly against
the Company, without first instituting a legal proceeding against, or requesting
or directing that action be taken by, the Property Trustee or any other person
or entity, for enforcement of payment to such holder of principal of or interest
on the Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Trust Preferred Securities of such holder on or after
the due dates specified in the Subordinated Debentures. The Trust Agreement also
provides a mechanism whereby the holders of Trust Preferred Securities may
appoint a substitute Property Trustee if a Subordinated Indenture Event of
Default occurs and is continuing.
The Trust Guarantee provides a mechanism whereby the holders of the Trust
Preferred Securities may direct the Trust Guarantee Trustee to enforce its
rights thereunder. In addition, any holder of Trust Preferred Securities may
institute a legal proceeding directly against the Company to enforce its rights
under the Trust Guarantee without first instituting a legal proceeding against
the Trust Guarantee Trustee or any other person or entity.
The Trust Guarantee, the Subordinated Indenture, the Subordinated
Debentures, the Trust Agreement and the Agreement as to Expenses and
Liabilities, as described above, provide a full and unconditional guarantee,
subject to certain subordination provisions, by the Company of the payments due
on the Trust Preferred Securities.
Upon any voluntary or involuntary dissolution, winding-up or termination of
the Trust, unless the Subordinated Debentures are distributed in connection
therewith, the holders of Trust Preferred Securities will be entitled to
receive, out of assets legally available for distribution to holders, the
Liquidation
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<PAGE> 29
Distribution in cash. See "Description of the Trust Preferred Securities --
Liquidation Distribution Upon Dissolution."
Upon any voluntary or involuntary liquidation or bankruptcy of the Company,
the Property Trustee, as holder of the Subordinated Debentures, would be a
subordinated creditor of the Company, subordinated in right of payment to all
Senior Indebtedness, but entitled to receive payment in full of principal and
interest, before the shareholders of the Company receive payments or
distributions. Because the Company is guarantor under the Trust Guarantee and
has agreed to pay for all costs, expenses and liabilities of the Trust (other
than the Trust's obligations to holders of the Trust Preferred Securities)
pursuant to the Agreement as to Expenses and Liabilities, the positions of a
holder of Trust Preferred Securities and a holder of Subordinated Debentures
relative to other creditors and the shareholders of the Company in the event of
liquidation or bankruptcy of the Company would be substantially the same.
A default or event of default under any Senior Debt would not constitute a
default or Event of Default under the Subordinated Indenture with respect to the
Subordinated Debentures. However, in the event of a default under, or
acceleration of, Senior Indebtedness, the subordination provisions of the
Subordinated Debentures provide that no payments may be made in respect of the
Subordinated Debentures until such Senior Indebtedness has been paid in full (in
the case of any payment by, or distribution of assets of, the Company to
creditors upon any dissolution, winding-up, liquidation or reorganization of the
Company), or all amounts due thereon have been paid (in the case of a payment
default thereunder (beyond any period of grace) or the acceleration of the
maturity of such Senior Indebtedness because of a default with respect to such
Senior Indebtedness). Failure to make required payments on the Subordinated
Debentures would (with the lapse of time, in the case of defaults in the payment
of interest) constitute a Subordinated Indenture Event of Default, except that
failure to make interest payments on the Subordinated Debentures will not be a
Subordinated Indenture Event of Default during an Extension Period; provided,
however, that any Extension Period may not exceed 20 consecutive quarters or
extend beyond the stated maturity of the Subordinated Debentures.
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<PAGE> 30
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain material United States federal income
tax consequences of the purchase, ownership and disposition of the Trust
Preferred Securities and constitutes the opinion of Dickinson Wright PLLC,
special tax counsel to the Company and the Trust, insofar as it relates to
matters of law and legal conclusions. This discussion deals only with Trust
Preferred Securities held as capital assets within the meaning of the Internal
Revenue Code of 1986, as amended to the date hereof (the "Code"), by Holders (as
defined herein) that acquire Trust Preferred Securities on their original issue
at their original offering price. Moreover, it does not include all of the tax
consequences that may be important to a Holder in light of the Holder's
particular circumstances or to Holders subject to special rules, such as certain
financial institutions, real estate investment trusts, regulated investment
companies, insurance companies, tax-exempt organizations, dealers in securities
or currencies, individual retirement and certain tax deferred accounts, and
persons who engage in a straddle or a hedge relating to a Trust Preferred
Security. Prospective investors should consult their own tax advisors with
regard to the application of the tax considerations discussed below to their
particular situations as well as the application of any state, local or other
tax laws. This summary is based on laws, existing and proposed regulations, and
applicable judicial and administrative determinations, all of which are subject
to change at any time, and any such changes may be retroactively applied in a
manner that could adversely affect Holders. As used herein, the term "Holder"
means a beneficial owner of a Trust Preferred Security that for United States
federal income tax purposes is (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity created or organized in or under
the laws of the United States or of any political subdivision thereof, (iii) an
estate the income of which is subject to United States federal income taxation
regardless of its source, and (iv) a trust if (a) a court within the United
States is able to exercise primary supervision over the administration of the
trust and (b) one or more U.S. persons have the authority to control all
substantial decisions of the trust. The following discussion does not address
any tax consequences that apply specifically to nonresident aliens or foreign
entities.
TREATMENT OF THE TRUST AND TRUST PREFERRED SECURITIES FOR FEDERAL INCOME TAX
PURPOSES
The Trust will be treated as a "grantor trust" and not as an association
taxable as a corporation for federal income tax purposes. Thus, for federal
income tax purposes, each Holder will be treated as the beneficial owner of a
pro rata undivided interest in the Subordinated Debentures and, consequently,
will be required to include in income the Holder's pro rata share of the entire
income from the Subordinated Debentures. Each Holder generally will determine
its net income or loss with respect to the Trust in accordance with its own
method of accounting, although income arising from OID, if any, must be taken
into account under the accrual method of accounting even if the Holder otherwise
would use the cash receipts and disbursements method.
The tax effects of the Trust's purchase of debt instruments such as the
Subordinated Debentures in conjunction with its issuance of equity interests
such as the Trust Securities have not been addressed in any Treasury Regulations
or court decision and have not been approved or disapproved by the Internal
Revenue Service ("IRS") in any published ruling or notice. However, the IRS has
recently challenged the deductibility, for federal income tax purposes of the
interest expense claimed on subordinated debt instruments similar to the
Subordinated Debentures held by an entity similar in certain respects to the
Trust. No final determination has been reached with respect to such proposed
adjustments. However, an adverse final determination or developments favoring
the IRS's position with respect to the above-described challenge, or other
unrelated subsequent developments, could give rise to a Tax Event. See
"Description of the Trust Preferred Securities -- Special Event Redemption."
ORIGINAL ISSUE DISCOUNT
Under applicable income tax regulations, the Company believes that the
Subordinated Debentures will not be treated as issued with OID. It should be
noted that these regulations have not yet been addressed in any rulings or other
interpretations by the Internal Revenue Service (the "IRS"). Accordingly, it is
possible that the IRS could take a position contrary to the interpretations
described herein. Should the Company exercise its option to defer payments of
interest, the Subordinated Debentures would at that time be treated as issued
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<PAGE> 31
with OID and all the stated interest payments on the Subordinated Debentures
would thereafter be treated as OID for so long as they remained outstanding. As
a result, all Holders would, in effect, be required to accrue interest income
even if such Holders are on a cash method of accounting. Consequently, in the
event that the payment of interest is deferred, a Holder could be required to
include OID in income on an economic accrual basis, notwithstanding that the
Company will not make any interest payments during such period on the
Subordinated Debentures.
Because income on the Trust Preferred Securities will constitute interest
or OID, corporate Holders will not be entitled to a dividends-received deduction
with respect to any income recognized with respect to the Trust Preferred
Securities.
SALE OF TRUST PREFERRED SECURITIES
Upon the sale, retirement (including redemption) or other taxable
disposition of all or part of a Trust Preferred Security, a Holder thereof will
recognize gain or loss equal to the difference between the amount realized on
such sale, retirement or other disposition and such Holder's adjusted tax basis
in the Trust Preferred Security or part thereof. If the Holder disposes of a
Trust Preferred Security prior to the occurrence of an Extension Period, any
portion of the amount received that is attributable to accrued interest will be
treated as interest income to the Holder and will not be treated as part of the
amount realized for purposes of determining gain or loss on the disposition of
the Trust Preferred Security. Any recognized gain or loss will be capital gain
or loss, and such capital gain or loss will be long-term if the holding period
for the Trust Preferred Security is more than one year at the time of sale,
retirement or other disposition. In the case of individuals, "net capital gain,"
i.e., the excess of net long-term capital gain over net short-term capital loss
is generally subject to a reduced rate of federal income tax. Capital gains and
losses from property held for more than 18 months will be taken into account in
determining "adjusted net capital gain," which is subject to a further reduction
in the rate of tax pursuant to a recent amendment of the Code. Also, in taxable
years beginning after December 31, 2000, an additional reduction in the rate of
tax may be available in certain circumstances for capital gains from property
held by the taxpayer for more than five years. A Holder's adjusted tax basis in
a Trust Preferred Security acquired by purchase will generally equal the cost of
such Trust Preferred Security to the Holder, increased by the amount of any
related accrued OID included in taxable income by the Holder and reduced by any
prior payments on the Subordinated Debentures distributed with respect to the
Trust Preferred Security. The redemption of only part of a Trust Preferred
Security will require an allocation of the Holder's pro rata share of the
adjusted issue price of the related Subordinated Debentures between the portion
of the Subordinated Debentures redeemed and the portion retained by the Holder
in order to determine gain or loss.
RECEIPT OF SUBORDINATED DEBENTURES UPON LIQUIDATION OF THE TRUST
As described under "Description of the Trust Preferred Securities --
Special Event Redemption or Distribution," Subordinated Debentures may be
distributed to Holders in exchange for the Trust Preferred Securities and in
liquidation of the Trust. Such a distribution would be treated as a nontaxable
event to each Holder and each Holder would receive an aggregate tax basis in the
Holder's Subordinated Debentures equal to the Holder's aggregate tax basis in
its Trust Preferred Securities. A Holder's holding period with respect to the
Subordinated Debentures so received in liquidation of the Trust would include
the period for which the Trust Preferred Securities were held by such Holder.
If, however, the Trust were to be characterized for United States federal
income tax purposes as an association taxable as a corporation at the time of
its dissolution, the distribution of the Subordinated Debentures would
constitute a taxable event to Holders of Trust Preferred Securities and a
Holder's holding period in Subordinated Debentures would begin on the date such
Subordinated Debentures were received.
INFORMATION REPORTING TO HOLDERS
Income on the Trust Preferred Securities will be reported to Holders on
Form 1099, which form is expected to be mailed to Holders of Trust Preferred
Securities by January 31 following each calendar year.
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<PAGE> 32
BACKUP WITHHOLDING
A Holder may be subject to "backup withholding" under certain
circumstances. Backup withholding applies to a Holder if the Holder, among other
things, (i) fails to furnish his social security number or other taxpayer
identification number ("TIN") to the payor responsible for backup withholding
(for example, the Holder's securities broker), (ii) furnishes such payor an
incorrect TIN, (iii) fails to provide such payor with a certified statement,
signed under penalties of perjury, that the TIN provided to the payor is correct
and that the Holder is not subject to backup withholding, or (iv) fails to
properly report interest and dividends on his tax return. Backup withholding,
however, does not apply to payments made to certain exempt recipients, such as
corporations and tax-exempt organizations. The backup withholding rate is 31% of
"reportable payments," which generally will include distributions of interest
and principal payments on the Subordinated Debentures and payment of the
proceeds from the disposition of Trust Preferred Securities. Any amount withheld
from a Holder under the backup withholding rules will be allowed as a refund or
a credit against such Holder's United States federal income tax liability,
provided the required information is furnished to the IRS.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE MAY NOT BE APPLICABLE TO
A HOLDER, DEPENDING UPON A HOLDER'S PARTICULAR SITUATION, AND THEREFORE EACH
HOLDER SHOULD CONSULT HIS TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF
THE OWNERSHIP AND DISPOSITION OF TRUST PREFERRED SECURITIES, INCLUDING THE TAX
CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAW.
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<PAGE> 33
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement"), the Trust has agreed to sell to each of the
underwriters named below (the "Underwriters"), and each of the Underwriters, for
whom and , are acting as representatives (the
"Representatives"), has severally agreed to purchase the number of Trust
Preferred Securities set forth opposite its name below. In the Underwriting
Agreement, the several Underwriters have agreed, subject to the terms and
conditions set forth therein, to purchase all the Trust Preferred Securities
offered hereby if any of the Trust Preferred Securities are purchased. In the
event of default by an Underwriter, the Underwriting Agreement provides that, in
certain circumstances, the purchase commitments of the nondefaulting
Underwriters may be increased or the Underwriting Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
TRUST PREFERRED
UNDERWRITER SECURITIES
----------- ---------------
<S> <C>
Total.......................................................
</TABLE>
The Underwriters propose to offer the Trust Preferred Securities, in part,
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and, in part, to certain securities
dealers at such price less a concession of $ per Trust Preferred Security.
The Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per Trust Preferred Security to certain brokers and dealers.
After the Trust Preferred Securities are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
Representatives.
In view of the fact that the proceeds of the sale of the Trust Preferred
Securities will be used to purchase the Subordinated Debentures, the
Underwriting Agreement provides that the Company will pay as compensation (the
"Underwriters' Compensation") for the Underwriters arranging the investment
therein of such proceeds, an amount in immediately available funds of
$ per Trust Preferred Security (or $ in the aggregate)
for the accounts of the several Underwriters; provided that such compensation
for sales of 10,000 or more Trust Preferred Securities to any single purchaser
will be $ per Trust Preferred Security. Therefore, to the extent
of such sales, the actual amount of Underwriters' Compensation will be less than
the aggregate amount specified in the preceding sentence.
The Company and the Trust have agreed, during the period of
days from the date of the Underwriting Agreement, not to sell, offer to sell,
grant any option for the sale of, or otherwise dispose of any Trust Preferred
Securities, any security convertible into or exchangeable into or exercisable
for Trust Preferred Securities or the Subordinated Debentures or any debt
securities substantially similar to the Subordinated Debentures or equity
securities substantially similar to the Trust Preferred Securities (except for
the Subordinated Debentures and the Trust Preferred Securities issued pursuant
to the Underwriting Agreement), without the prior written consent of the
Representatives.
Prior to this offering, there has been no public market for the Trust
Preferred Securities. Application has been made to list the Trust Preferred
Securities on NASDAQ. If so approved, trading of the Trust Preferred Securities
on NASDAQ is expected to commence within a 30 day period after the initial
delivery of the Trust Preferred Securities. The Representatives have advised the
Company and the Trust that they intend to make a market in the Trust Preferred
Securities prior to the commencement of trading on NASDAQ. The Representatives
will have no obligation to make a market in the Trust Preferred Securities,
however, and may cease market making activities, if commenced, at any time.
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<PAGE> 34
[IN ORDER TO MEET ONE OF THE REQUIREMENTS FOR LISTING THE TRUST PREFERRED
SECURITIES ON THE NYSE, THE UNDERWRITERS WILL UNDERTAKE TO SELL LOTS OF 100 OR
MORE TRUST PREFERRED SECURITIES TO A MINIMUM OF 400 BENEFICIAL HOLDERS.]
[CHECKING NASDAQ REQUIREMENTS.]
In connection with this offering and in compliance with applicable law and
industry practice, the Underwriters may overallot or effect transactions which
stabilize, maintain or otherwise affect the market price of the Trust Preferred
Securities at levels above those which might otherwise prevail in the open
market, including by entering stabilizing bids. A stabilizing bid means the
placing of any bid, or the effecting of any purchase, for the purpose of
pegging, fixing or maintaining the price of a security.
In general, purchases of a security for the purpose of stabilization could
cause the price of the security to be higher than it might be in the absence of
such purchases.
Neither the Company, the Trust, nor any of the Underwriters makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Trust Preferred
Securities. In addition, neither the Company, the Trust, nor any of the
Underwriters makes any representation that the Underwriters will engage in such
transactions or that such transactions once commenced, will not be discontinued
without notice.
The Company and the Trust have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the 1933 Act.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performed services for, the Company and its affiliates in the
ordinary course of business.
LEGAL OPINIONS
Certain matters of Delaware law relating to the validity of the Trust
Preferred Securities will be passed upon on behalf of the Company and the Trust
by Richards, Layton & Finger, Wilmington, Delaware, special Delaware counsel to
the Company and the Trust. The validity of the Subordinated Debentures, the
Trust Guarantee and certain matters relating thereto, as well as certain matters
relating to United States federal income tax considerations, will be passed upon
on behalf of the Company by Dickinson Wright PLLC, Detroit, Michigan. Certain
matters will be passed upon for the Underwriters by Dewey Ballantine LLP, New
York, New York.
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<PAGE> 35
GLOSSARY
<TABLE>
<S> <C>
1933 Act...................... The Securities Act of 1933, as amended.
1934 Act...................... The Securities Exchange Act of 1934, as amended.
1940 Act...................... The Investment Company Act of 1940, as amended.
Additional Interest........... Amounts payable by the Company as defined under "Description
of the Subordinated Debentures -- Additional Interest."
Administrative Trustees....... The officers of the Company named to act as Trustees,
initially Robert J. Digan, II and Edric R. Mason, Jr.
Agreement as to Expenses and
Liabilities................. The agreement between the Company and the Trust pursuant to
which the Company has agreed to pay all indebtedness,
expenses or liabilities of the Trust, other than the Trust's
obligations to pay to the holders of the Trust Preferred
Securities the amounts due such holders pursuant to the
terms thereof.
Code.......................... The Internal Revenue Code of 1986, as amended.
Company....................... SEMCO Energy, Inc.
Delaware Trustee.............. First Chicago Delaware Inc.
DTC........................... The Depository Trust Company, a clearing company that
initially will hold (through its agents) a global
certificate or certificates evidencing the Trust Preferred
Securities.
Distribution Dates............ March 31, June 30, September 30 and December 31 of each
year.
Extension Period.............. Any period during which interest is not paid on the
Subordinated Debentures (and, consequently, on the Trust
Preferred Securities) at the election of the Company to the
extent permitted under the terms of the Subordinated
Debentures.
Issue Date.................... The date set forth on the cover page hereof on which the
Subordinated Debentures and Trust Preferred Securities are
scheduled to be issued.
Investment Company Act
Event....................... An event of the type described in "Description of the Trust
Preferred Securities -- Special Event Redemption or
Distribution."
Property Trustee.............. A trustee under the Trust Agreement designated to hold the
trust property; initially NBD Bank.
Record Date................... The close of business on the 15th calendar day prior to a
Distribution Date.
Redemption Price.............. The liquidation amount of $25 per Trust Preferred Security,
plus accrued and unpaid distributions thereon (including any
interest thereon) to the date of payment.
Securities Rate............... The per annum interest rate expressed as a percentage of the
liquidation amount of $25 per Trust Preferred Security as
set forth on the cover page of this Prospectus Supplement.
Senior Debt................... Indebtedness of the Company described under "Description of
Debt Securities -- Subordination" in the accompanying
Prospectus.
Special Event................. A Tax Event or an Investment Company Act Event.
Subordinated Debentures....... The junior subordinated deferrable-interest debentures of
the Company designated as % Subordinated Debentures due
, .
</TABLE>
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<PAGE> 36
<TABLE>
<S> <C>
Subordinated Indenture
Trustee..................... The trustee under the Subordinated Indenture initially, NBD
Bank.
Subordinated Indenture........ The indenture pursuant to which the Company's Subordinated
Debentures will be issued.
Subordinated Debenture
Indenture Event of
Default..................... As described, with respect to the Subordinated Debentures,
under "Description Debt Securities -- Events of Default" and
"Additional Description of Subordinated Debentures To Be
Issued to Trust -- Subordinated Indenture Additional Events
of Default" in the accompanying Prospectus.
Tax Event..................... An event of the type described in "Description of the Trust
Preferred Securities -- Special Event Redemption or
Distribution."
Trust......................... SEMCO Capital Trust, a Delaware business trust that will
issue the Trust Securities.
Trust Agreement............... The agreement pursuant to which the Trust is organized, as
it may be amended and restated from time to time.
Trust Agreement Event of
Default..................... As described under "Description of the Trust Preferred
Securities -- Events of Default."
Trust Common Securities....... The trust securities being sold to the Company.
Trustees...................... The Property Trustee, Administrative Trustees and Delaware
Trustee.
Trust Guarantee............... The guarantee by the Company of the payments by the Trust on
the Trust Preferred Securities from funds legally and
immediately available in the Trust.
Trust Guarantee Payments...... Payments required to be made pursuant to the Trust Guarantee
as described in "Description of the Trust Guarantee --
General" in the accompanying Prospectus.
Trust Guarantee Trustee....... The trustee under the Trust Guarantee; initially, NBD Bank.
Trust Indenture Act........... The Trust Indenture Act of 1939, as amended.
Trust Preferred Securities.... The trust securities being offered to investors pursuant to
this Prospectus Supplement and the accompanying Prospectus.
Trust Securities.............. The Trust Preferred Securities and the Trust Common
Securities.
</TABLE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, SEMCO CAPITAL TRUST OR THE
UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY OR SEMCO CAPITAL TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR
TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
S-34
<PAGE> 37
Information contained in this prospectus is subject to completion or amendment.
A registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
jurisdiction.
SUBJECT TO COMPLETION, DATED JULY 8, 1998
PROSPECTUS
- ---------------------
$200,000,000
SEMCO ENERGY, INC.
MEDIUM TERM NOTES
SUBORDINATED DEBENTURES
COMMON STOCK
SEMCO CAPITAL TRUST
TRUST PREFERRED SECURITIES
(LIQUIDATION PREFERENCE $25 PER TRUST PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY SEMCO ENERGY, INC.
------------------------
SEMCO Energy, Inc., a Michigan corporation ("SEMCO Energy" or the "Company")
may offer, from time to time, its (i) unsecured subordinated debt securities
(the "Subordinated Debentures") to the SEMCO Capital Trust, (ii) its unsecured
debentures, notes or other evidences of indebtedness maturing nine months or
more from date of issuance (the "Medium Term Notes") (the Subordinated
Debentures and together with the Medium Term Notes, the "Debt Securities"),
and/or (iii) shares of its common stock ($1 par value per share) (the "Common
Stock") on terms to be determined at the time of sale. The Debt Securities and
the Common Stock offered hereby may be offered at prices and on terms to be
determined at the time of sale and to be set forth in a supplement to this
Prospectus (a "Prospectus Supplement"). The Debt Securities may be offered in
one or more series and will be direct unsecured obligations of the Company. The
Medium Term Notes will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company. The Subordinated Debentures will be
subordinated to all existing and future Senior Indebtedness of the Company, as
defined under "Description of Debt Securities -- Subordination".
SEMCO Capital Trust, a statutory business trust formed under the laws of the
State of Delaware (the "Trust") may offer, from time to time, its preferred
securities (the "Trust Preferred Securities") representing preferred undivided
beneficial interests in the assets of the Trust. SEMCO Energy will be the sole
owner of the undivided common beneficial interests in such assets represented by
trust common securities (the "Trust Common Securities" and, together with Trust
Preferred Securities, the "Trust Securities" of the Trust). The payment of
periodic cash distributions ("distributions") with respect to the Trust
Preferred Securities and payments on liquidation or redemption with respect to
such Trust Preferred Securities will be guaranteed by SEMCO Energy (the "Trust
Guarantee"). SEMCO Energy's obligations under the Trust Guarantee will be
subordinate and junior in right of payment to all other liabilities of SEMCO
Energy and will rank pari passu with the most senior preferred stock which may
be issued by SEMCO Energy. Concurrently with the issuance by the Trust of its
Trust Preferred Securities, the Trust will invest the proceeds thereof in
Subordinated Debentures issued by SEMCO Energy in the form of junior
subordinated deferrable interest debentures. The Subordinated Debentures will be
unsecured and subordinated indebtedness of SEMCO Energy issued under a
Subordinated Debenture Indenture to be entered into between the Company and
First Chicago Delaware Inc., as trustee (such indenture, as the same may be
supplemented or amended form time to time, herein referred to as the
"Subordinated Indenture"). The Subordinated Debentures held by the Trust will be
its sole assets, and the payments of principal of and interest on such
Subordinated Debentures will be its only revenues. The Subordinated Debentures
held by the Trust may be subsequently distributed pro rata to holders of Trust
Preferred Securities and Trust Common Securities in connection with the
dissolution of such Trust. In addition, upon the occurrence of certain events,
SEMCO Energy may redeem the Subordinated Debentures and cause the redemption of
the Trust Preferred Securities.
The specific terms of the Debt Securities, Common Stock and Trust Preferred
Securities (collectively, the "Offered Securities") in respect of which this
Prospectus is being delivered, will be set forth in the applicable Prospectus
Supplement and will include, where applicable and among other terms, (i) in the
case of Debt Securities, the specific title, aggregate principal amount,
maturity, priority, interest rate, time of payment of interest, terms of
redemption at the option of the Trust or repayment at the option of the holder
or for sinking fund payments, and the initial public offering price; (ii) in the
case of Common Stock, the initial public offering price; and (iii) in the case
of Trust Preferred Securities, the specific title, the aggregate amount, the
distribution rate (or the method for determining such rate), the stated
liquidation amount, redemption provisions and other rights, the initial public
offering price and any other special terms, as well as any planned listing on a
securities exchange or the NASDAQ National Market System of such Trust Preferred
Securities. The applicable Prospectus Supplement will also contain information,
where applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered Securities
covered by such Prospectus Supplement.
The aggregate initial public offering price of all the Offered Securities
will be limited to $200,000,000.
------------------------
SEMCO Energy and/or the Trust may sell any of the Offered Securities,
directly, through agents or through underwriters or dealers. The names of any
agents, underwriters or dealers and any applicable purchase price, fee,
commissions and discounts will be set forth in, or calculable from the
information set forth in, the applicable Prospectus Supplement. See "Plan of
Distribution" herein.
Currently outstanding shares of SEMCO Energy Common Stock are traded on
NASDAQ under the symbol SMGS.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement describing the methods and terms
of offering of the Offered Securities.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
------------------------
The date of this Prospectus is , 1998.
<PAGE> 38
AVAILABLE INFORMATION
This Prospectus is part of a Registration Statement on Form S-3 (the
"Registration Statement") filed by SEMCO Energy and the Trust with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933 (the "Securities Act"). The Registration Statement and its exhibits
contain more information about the Company, the Trust and the Offered
Securities. Statements in this Prospectus about documents filed with the
Commission are not necessarily complete; the actual documents may contain a more
complete description of the matter involved.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and therefore files reports and other
information with the Commission. Such reports, proxy statements, and other
information can be inspected and copied at prescribed rates at the Commission's
Public Reference Room at its principal office: Judiciary Plaza, 450 Fifth
Street, NW, Room 1024, Washington, DC 20549 or at the Commission's regional
office in New York at 7 World Trade Center, Suite 1300, New York, New York 10048
and in Chicago at the Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can also be obtained by mail at
prescribed rates from the Public Reference Section of the Commission at its
principal office. The Commission maintains a Web site at http://www.sec.gov that
contains reports, proxy and other information regarding the Company.
Financial statements for SEMCO Energy are included in its Form 10-K for the
fiscal year ended December 31, 1997 and its Form 10-Q for the three months ended
March 31, 1998, which are incorporated by reference into this Prospectus as
discussed below. No separate financial statements of the Trust are included in
this Prospectus. SEMCO Energy believes that such financial statements would not
be material to holders of Trust Preferred Securities because (i) all Trust
voting securities will be owned by SEMCO Energy, a reporting company under the
Exchange Act, (ii) the Trust will not have independent operations, but exists
for the sole purpose of issuing the Trust Securities and holding the
Subordinated Debentures as trust assets, and (iii) the obligations of the Trust
under the Trust Preferred Securities, to the extent funds are available
therefore, are fully and unconditionally guaranteed to the extent set forth
herein by SEMCO Energy. See "Description of Debt Securities"; "Additional
Description of Subordinated Debentures to be Issued to Trust" and "Description
of Trust Guarantee."
This Prospectus contains and each Prospectus Supplement and each document
incorporated by reference herein may contain "forward-looking" statements, as
defined in the Private Securities Litigation Reform Act of 1995, that are based
on current expectations, estimates and projections. Statements that are not
historical facts, including statements about SEMCO Energy's beliefs and
expectations are forward-looking statements. These statements are subject to
potential risks and uncertainties and, therefore, actual results may differ
materially. SEMCO Energy undertakes no obligation to update publicly any
forward-looking statements whether as a result of new information, future events
or otherwise.
Important factors that may affect these projections or expectations
include, but are not limited to: (i) the effects of weather and other natural
phenomena; (ii) the economic climate and growth in the geographical areas where
SEMCO Energy does business; (iii) the capital intensive nature of SEMCO Energy's
business; (iv) increased competition within the energy marketing industry as
well as from alternative forms of energy; (v) the timing and extent of changes
in commodity prices for natural gas; (vi) the effects of changes in governmental
and regulatory policies, including income taxes, environmental compliance and
authorized rates; (vii) SEMCO Energy's ability to bid on and win business
contracts; (viii) the nature, availability and projected profitability of
potential investments available to SEMCO Energy and (ix) the conditions of
capital markets and equity markets. Prospective investors should evaluate any
statements in light of these important factors.
------------------------
2
<PAGE> 39
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, which have been or will be filed with the
Commission, are incorporated into this Prospectus: (a) the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997; (b) the
Company's Form 10-Q and 10-QA for the three months ended March 31, 1998; (c) the
Company's Form 8-K dated March 11, 1998 and (d) all documents later filed
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the
date of this Prospectus and prior to the termination of this offering.
The information in this Prospectus, in documents incorporated into this
Prospectus and in Prospectus Supplements may be changed by information given at
a later date. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and the accompanying Prospectus Supplement to
the extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus or the accompanying Prospectus Supplement.
SEMCO Energy will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus and any accompanying Prospectus
Supplement is delivered, upon written or oral request of such person, a copy of
any and all documents incorporated herein by reference (not including exhibits
to such documents, unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to Edric R. Mason,
Jr., Director of Investor Relations of SEMCO Energy, Inc., 405 Water Street,
Port Huron, Michigan 48060, telephone number (810) 989-4104.
THE COMPANY
The Company is a Michigan corporation with its principal offices at 405
Water Street, Port Huron, Michigan 48060 and its telephone number is (810)
987-2200. Prior to April 24, 1997, the Company's name was Southeastern Michigan
Gas Enterprises, Inc.
The Company is an energy-focused holding company established in 1977 and is
the parent company of three direct subsidiaries, SEMCO Energy Gas Company, SEMCO
Energy Services, Inc., and SEMCO Energy Ventures, Inc. A substantial portion of
the Company's direct subsidiaries' assets are invested in natural gas operations
regulated by various regulatory bodies including the Michigan Public Service
Commission. Weather has a significant impact on the Company's revenues.
SEMCO ENERGY GAS COMPANY
SEMCO Energy Gas Company ("Gas Company") purchases, distributes and
transports natural gas to approximately 240,000 customers in twenty-four
counties in the lower and upper peninsulas of Michigan. During the last four
years, its customer base has grown at an average rate of approximately 6,500
customers, or 3.0%, per year.
SEMCO ENERGY SERVICES, INC.
SEMCO Energy Services, Inc. ("Energy Services") is primarily a gas
marketing company. Its customers include industrial, commercial and municipal
natural gas users, natural gas distribution companies and other marketers. In
addition to its operations in Michigan, Energy Services, through independent
contractors, markets gas in approximately 19 other states.
SEMCO ENERGY VENTURES, INC.
SEMCO Energy Ventures, Inc. ("Ventures") is an asset-based company with
investments in many segments of the natural gas industry including transmission,
gathering, and underground storage.
In August 1997, Ventures, through a wholly-owned subsidiary, acquired the
assets and business of Sub-Surface Construction Co. ("Sub-Surface") for
approximately $15.6 million plus the assumption of certain
3
<PAGE> 40
liabilities. Because of this acquisition and the acquisition of Maverick
Pipeline Services Inc. (in December of 1997 for approximately $50,000 in cash
and 450,000 shares of the Company's Common Stock) and King Energy and
Construction Inc. (in May of 1998 for approximately 18,062 shares of the
Company's Common Stock), Ventures now constructs and maintains underground
natural gas pipelines and associated facilities and provides pipeline
consulting/engineering design and project management services. On March 31,
1998, Ventures, through a wholly-owned subsidiary, acquired the assets and
business of Hotflame Gas, Inc. ("Hotflame") for 352,944 shares of SEMCO Energy
Common Stock. Hotflame supplies propane gas to over 10,000 customers in Northern
Michigan and Northeast Wisconsin.
The Company, through Ventures, has identified three specific areas in which
it intends to diversify and make investments and acquisitions. They are: (1) the
gas-related construction business; (2) gas-related engineering services to
distribution and transmission companies; and (3) the propane business. If the
Company is successful in pursuing such diversified investments, the Company
anticipates that its earnings mix over the long-term would change and that an
increased part of such earnings would arise from such unregulated aspects of the
gas business.
The business of the Company and its subsidiaries, is described in the
documents incorporated into this Prospectus to which documents reference is
hereby made. See "Incorporation of Certain Information by Reference" above.
SELECTED INFORMATION
The following material, which is presented herein solely to furnish limited
introductory information regarding the Company, has been selected from, or is
based upon, the detailed information and financial statements appearing in the
documents incorporated herein by reference or elsewhere in this Prospectus, is
qualified in its entirety by reference thereto and, therefore, should be read
together therewith.
SELECTED OPERATING INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Average Number of Customers of Gas Company..... 236,611 228,802 222,303 216,082 210,522
Total Gas Company Throughput (MMcf)............ 63,358 64,290 64,636 60,663 58,483
Degree Days (Percent of Normal)................ 99.4% 104.5% 105.3% 102.4% 105.0%
Volume of Gas Marketed by Energy Services
(MMcf)....................................... 199,689 129,429 82,504 78,082 31,501
</TABLE>
SELECTED FINANCIAL INFORMATION OF THE COMPANY
<TABLE>
<CAPTION>
12 MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, ------------------------------------------------------------
1998 1997 1996 1995 1994 1993
--------- ---- ---- ---- ---- ----
(THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues................. $741,558 $770,272 $ 544,949 $335,538 $372,430 $288,963
Income Before Interest Charges..... 25,401 28,141(2) (1,556)(2) 22,247 20,963 21,294
Net Income After Dividends on
Preferred Stock.................. 13,482(1) 14,921(2) (12,803)(2) 11,331 9,992 9,563
</TABLE>
- -------------------------
(1) Reflects $1,784,000 net of tax effect of change in accounting for property
taxes.
(2) Reflects a $21 million expense, net of tax, in 1996 because of a reserve for
the NOARK investment. Also, reflects a gain of $5 million, net of tax, in
1997 because of an adjustment to that reserve.
4
<PAGE> 41
<TABLE>
<CAPTION>
CAPITALIZATION OF THE COMPANY
-----------------------------
(UNAUDITED AS OF
MARCH 31, 1998)
(THOUSANDS)
<S> <C>
Common Stock Equity......................................... $107,701
Cumulative Preferred Stock.................................. 165
Cumulative Preferred Stock of Subsidiary.................... 3,100
Long-Term Debt Including Capital Leases..................... 163,559
--------
Total Capitalization................................... $274,525
</TABLE>
THE TRUST
The Trust is a statutory business trust formed under Delaware law pursuant
to the filing of a certificate of trust with the Delaware Secretary of State on
July 7, 1998. The business of the Trust is set forth in a Trust Agreement,
executed by the Company, as Depositor (the "Depositor"), the Delaware Trustee
and the Administrative Trustees (each as defined below). The Trust Agreement
will be amended and restated in its entirety (as so amended and restated, the
"Trust Agreement") substantially in the form filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The Trust
Agreement will be qualified as an indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act" or "TIA"). Upon issuance of the
Trust Preferred Securities, the purchasers thereof will own all of the Trust
Preferred Securities. The Company will acquire all of the Trust Common
Securities in an aggregate liquidation amount equal to approximately 3% of the
total capital of the Trust. The Trust exists for the exclusive purpose of (i)
issuing the Trust Securities representing undivided beneficial interests in the
assets of the Trust, (ii) investing the gross proceeds of the Trust Securities
in the Subordinated Debentures and (iii) engaging in only those other activities
necessary or incidental thereto. The Trust has a term of 50 years, but may
terminate earlier as provided in the Trust Agreement.
The Trust's business and affairs will be conducted by the trustees (the
"Trustees") appointed by the Company, as holder of the Trust Common Securities.
The duties and obligations of the Trustees will be governed by the Trust
Agreement. Pursuant to the Trust Agreement, the number of Trustees will
initially be four. Two of the Trustees (the "Administrative Trustees") will be
persons who are employees or officers of or affiliated with the Company. The
third Trustee will be a corporation which maintains a principal place of
business in the State of Delaware that will serve for the sole purpose of
complying with certain Delaware laws (the "Delaware Trustee"). The fourth
Trustee will be a financial institution unaffiliated with the Company which will
serve as property trustee under the Trust Agreement and as indenture trustee for
purposes of the Trust Indenture Act (the "Property Trustee"). First Chicago
Delaware Inc. will act as the Delaware Trustee and NBD Bank as the Property
Trustee, in each case until removed or replaced by the holder of the Trust
Common Securities. The Property Trustee will also act as indenture trustee under
the Trust Guarantee (the "Guarantee Trustee"). See "Description of the Trust
Guarantee."
The Property Trustee, acting in such capacity, will hold title to the
Subordinated Debentures acquired by the Trust for the benefit of the holders of
the Trust Securities issued by the Trust and will have the power to exercise all
rights, powers and privileges under the Subordinated Indenture, as defined
herein, as the holder of such Subordinated Debentures. In addition, the Property
Trustee will maintain exclusive control of a segregated non-interest bearing
bank account for the Trust (the "Payment Account") to hold all payments made in
respect of the Subordinated Debentures held by the Trust for the benefit of the
holders of the Trust Securities. The Property Trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of the Trust Securities issued by the Trust out of funds from the
Payment Account of the Trust. The Guarantee Trustee will hold the Trust
Guarantee for the benefit of the holders of the Trust Preferred Securities. The
Company as the holder of all the Trust Common Securities, will have the right to
appoint, remove or replace any Trustee and to increase the number of Trustees,
provided that the number of Trustees will be at least three, two of which will
be Administrative Trustees. The Company will pay all fees and expenses related
to the Trust, the offering of the Trust Preferred Securities and the issuance of
the Subordinated Debentures.
5
<PAGE> 42
The rights of the holders of the Trust Preferred Securities, including
economic rights, rights to information and voting rights, are as set forth in
the Trust Agreement for the Trust, the Delaware Business Trust Act, as amended
(the "Trust Act"), and the Trust Indenture Act. See "Description of Trust
Preferred Securities."
The principal place of business of the Trust shall be c/o SEMCO Energy,
Inc., 405 Water Street, Port Huron, Michigan 48060 (telephone number
810-987-2200).
USE OF PROCEEDS
The Trust will use all proceeds from the sale of Trust Securities to
purchase Subordinated Debentures. Unless otherwise indicated in the applicable
Prospectus Supplement, SEMCO Energy intends to use the net proceeds from the
sale of Subordinated Debentures, Medium Term Notes and Common Stock to fund its
subsidiaries, repay debt, fund acquisitions and fund general corporate purposes
in amounts which are currently undetermined. The proceeds may be temporarily
invested in marketable securities.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratios of earnings to fixed
charges and earnings to fixed charges and preferred dividends for SEMCO Energy
and its subsidiaries for the years and period indicated:
<TABLE>
<CAPTION>
12 MONTHS
ENDING YEARS ENDED DECEMBER 31,
MARCH 31, ------------------------------------
1998 1997 1996 1995 1994 1993
--------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to:
Fixed Charges(1)................................... 2.35 2.38 (2) 2.21 2.17 2.07
Fixed Charges and Preferred Dividends (1).......... 2.35 2.38 (2) 2.20 2.16 2.06
</TABLE>
- -------------------------
(1) In January 1998, SEMCO Energy, through a subsidiary of Ventures, SEMCO
Arkansas Pipeline Company, sold its 32.07% partnership interest in NOARK
Pipeline System L.P. ("NOARK"). NOARK had been generating losses since it
was placed in service in 1992. Earnings reflect a share of NOARK's operating
losses and fixed charges include a share of NOARK's interest expense equal
to the Company's percentage interest in NOARK. Pursuant to this sale, SEMCO
Arkansas Pipeline Company paid the purchaser $9.2 million in 1998 and must
pay the purchaser $3.1 million and $0.8 million in 1999 and 2000,
respectively. These payment obligations are guaranteed by SEMCO Energy.
Beginning in the year 2004, the purchaser will pay SEMCO Arkansas Pipeline
Company $842,000 per year for 17 years.
For purposes of calculating the ratios, "earnings" represent the sum of (a)
pretax income from continuing operations (excluding extraordinary items from
the early retirement of debt in 1993 and 1994) and (b) fixed charges. "Fixed
charges" represent the sum of (i) interest incurred by SEMCO Energy and its
subsidiaries plus their share of interest on debt to outsiders incurred by
less-than-fifty-percent-owned persons, (ii) amortization of debt expense and
(iii) the preferred stock dividend requirements of SEMCO Energy's
subsidiaries, increased to an amount representing the pretax earnings
required to cover such dividend requirements. "Preferred Dividends"
represents dividends on the Company's Convertible Preferred Stock.
(2) For the year ended December 31, 1996, fixed charges exceeded earnings by
$20.2 million and fixed charges and preferred dividends exceeded earnings by
$20.2 million. Earnings as defined include a $32.3 million non-cash pretax
write-down of the NOARK (1) investment. Excluding the NOARK write-down the
ratios of earnings to fixed charges and earnings to fixed charges and
preferred dividends would have been 1.83 and 1.83, respectively.
6
<PAGE> 43
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Medium Term Notes will be issued under an indenture, as supplemented
from time to time (the "Note Indenture") between the Company and NBD Bank, as
trustee (the "Note Indenture Trustee"), and the Subordinated Debentures will be
issued under an indenture (the "Subordinated Indenture"), between the Company
and NBD Bank, as trustee (the "Subordinated Indenture Trustee"). The term
"Indenture Trustee," as used herein, shall refer to the Note Indenture Trustee
or the Subordinated Indenture Trustee, as appropriate. The form of Note
Indenture and the form of the Subordinated Indenture being sometimes referred to
herein collectively as the "Indentures" and individually as an "Indenture" are
filed, along with the form of Supplemental Indenture in the case of the
Subordinated Indenture, as exhibits to the Registration Statement to which this
Prospectus is a part and, upon execution and delivery, will be available for
inspection at the corporate trust offices of the Note Indenture Trustee and the
Subordinated Indenture Trustee, or as described under "Available Information."
The Indentures are subject to and governed by the TIA. The following statements
relating to the Debt Securities and the Indentures are summaries of the
provisions thereof and do not purport to be complete and are qualified in their
entirety by reference to the Indentures and the Debt Securities. All Section
references herein are to sections of the Indentures, and capitalized terms used
but not defined herein shall have the respective meanings set forth in the
Indentures and the Debt Securities. The Subordinated Debentures are further
described under "Additional Description of Subordinated Debentures to be Issued
to Trust" below.
TERMS
The Debt Securities will be direct, unsecured obligations of the Company.
The indebtedness represented by the Medium Term Notes will rank on a parity with
all other unsecured and unsubordinated indebtedness of the Company. The
indebtedness represented by the Subordinated Debentures will be subordinated in
right of payment to the prior payment in full of all existing and future Senior
Indebtedness of the Company, as described below under "Subordination." Each
Indenture provides that the Debt Securities may be issued without limit as to
aggregate principal amount, in one or more series, in each case as established
from time to time by the Board of Directors of the Company or as established in
one or more indentures supplemental to such Indenture. Debt Securities may be
issued with terms different from those of Debt Securities previously issued. All
Debt Securities of one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent of the holders
of the Debt Securities of such series, for issuances of additional Debt
Securities of such series (Section 301 of each Indenture).
Each Indenture provides that there may be more than one Indenture Trustee
thereunder, each with respect to one or more series of Debt Securities. Any
Indenture Trustee under either Indenture may resign or be removed with respect
to one or more series of Debt Securities, and a successor Indenture Trustee may
be appointed to act with respect to such series (Section 608 of each Indenture).
In the event that two or more persons are acting as Indenture Trustee with
respect to different series of Debt Securities, each such Indenture Trustee
shall be an Indenture Trustee of a trust under the applicable Indenture separate
and apart from the trust administered by any other Indenture Trustee (Section
609 of each Indenture), and, except as otherwise indicated herein, any action
described herein to be taken by an Indenture Trustee may be taken by each such
Indenture Trustee with respect to, and only with respect to, the one or more
series of Debt Securities of which it is Indenture Trustee under the applicable
Indenture.
The Prospectus Supplement relating to the series of Debt Securities being
offered will contain the specific terms thereof, including, without limitation:
(1) The title and any series of such Debt Securities and whether such
Debt Securities are Medium Term Notes or Subordinated Debentures;
(2) The aggregate principal amount of such Debt Securities and any
limit on such principal amount;
7
<PAGE> 44
(3) The percentage of the principal amount at which such Debt
Securities will be issued and, if other than the principal amount thereof,
the portion of the principal amount thereof payable upon declaration of
acceleration of the maturity thereof;
(4) The date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be payable and
the amount of principal payable thereon;
(5) The rate or rates (which may be fixed or variable) at which such
Debt Securities will bear interest, if any, or the method by which such
rate or rates shall be determined, the date or dates, or the method for
determining such date or dates, from which any such interest will accrue,
the dates on which any such interest will be payable, the record dates for
such interest payment dates, or the method by which such dates shall be
determined, the persons to whom such interest shall be payable, and the
basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
(6) The place or places where the principal of (and premium, if any)
and interest, if any, on such Debt Securities will be payable, where such
Debt Securities may be surrendered for registration of transfer or exchange
and where notices or demands to or upon the Company in respect of such Debt
Securities and the applicable Indenture may be served;
(7) If applicable, whether the interest payment periods may be
extended by the Company and, if so, the terms of any such extension;
(8) The period or periods within which, the price or prices at which,
and other terms and conditions upon which such Debt Securities may be
redeemed, as a whole or in part, at the option of the Company, if the
Company is to have such an option;
(9) The obligation, if any, of the Company to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof, and the period or periods
within which or the date or dates on which, the price or prices at which,
and other terms and conditions upon which such Debt Securities will be
redeemed, repaid or purchased, as a whole or in part, pursuant to such
obligation;
(10) Whether the amount of payments of principal of (and premium, if
any) or interest, if any, on such Debt Securities may be determined with
reference to an index, formula or other method and the manner in which such
amounts shall be determined;
(11) Provisions, if any, granting special rights to the holders of
such Debt Securities upon the occurrence of such events as may be
specified;
(12) Any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to such Debt
Securities, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth in the
applicable Indenture;
(13) Whether such Debt Securities will be issued in certificated or
book-entry form;
(14) Whether such Debt Securities will be in registered or bearer form
and, if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the denominations
thereof and terms and conditions relating thereto;
(15) The applicability if any, of the defeasance and covenant
defeasance provisions described herein, or any modification thereof;
(16) Whether and under what circumstances the Company will pay any
Additional Amounts as defined and contemplated in the applicable Indenture
on such Debt Securities in respect of any tax, assessment or governmental
charge and, if so, whether the Company will have the option to redeem such
Debt Securities in lieu of making such payment; and
(17) Any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture (Section 301 of each Indenture).
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The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Special U.S. federal income tax,
accounting and other considerations applicable to Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
Except as set forth below under "Certain Covenants" and as may be set forth
in any Prospectus Supplement, the Indentures will not contain any provisions
that would limit the ability of the Company to incur indebtedness or that would
afford holders of Debt Securities protection in the event of a highly leveraged
or similar transaction involving the Company or in the event of a change of
control. Reference is made to the applicable Prospectus Supplement for
information with respect to any deletions from, modifications of, or additions
to the events of default or covenants of the Company that are described below,
including any addition of a covenant or other provision providing event risk or
similar protection.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of any series issued in registered form will be issuable in
denominations of $1,000 and integral multiples thereof. Unless otherwise
specified in the applicable Prospectus Supplement, the Debt Securities of any
series issued in bearer form will be issuable in denominations of $5,000
(Section 302 of each Indenture).
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and premium if any) and interest on any series of Medium Term
Notes will be payable at the corporate trust office of the Note Indenture
Trustee, and the principal of (and premium, if any) and interest on any series
of Subordinated Debentures will be payable at the corporate trust office of the
Subordinated Indenture Trustee; provided that, at the option of the Company,
payment of interest on any series of Debt Securities may be made by check mailed
to the address of the Person entitled thereto as it appears in the applicable
register for such Debt Securities or by wire transfer of funds to such person at
an account maintained within the United States (Sections 301, 307 and 1002 of
each Indenture).
Any interest not punctually paid or duly provided for on any interest
payment date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the holder on the applicable Regular Record
Date and may either be paid to the Person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Indenture Trustee, notice whereof shall be given to the holder of such Debt
Security not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner, all as more completely described in the
applicable Indenture (Section 307 of each Indenture).
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for
other Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations upon surrender of such
Debt Securities at the corporate trust office of the applicable Indenture
Trustee referred to above. In addition, subject to certain limitations imposed
upon Debt Securities issued in book-entry form, the Debt Securities of any
series may be surrendered for registration of transfer or exchange thereof at
the corporate trust office of the applicable Indenture Trustee. Every Debt
Security surrendered for registration of transfer or exchange must be duly
endorsed or accompanied by a written instrument of transfer. No service charge
will be made for any registration of transfer or exchange of any Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith (Section 305 of
each Indenture). If the applicable Prospectus Supplement refers to any transfer
agent (in addition to the applicable Indenture Trustee) initially designated by
the Company with respect to any series of Debt Securities, the Company may at
any time rescind the designation of any such transfer agent or approve a change
in the location through which any such transfer agent acts, except that the
trust will be required to maintain a transfer agent in each place of payment for
such series. The Company may at any time designate additional transfer agents
with respect to any series of Debt Securities (Section 1002 of each Indenture).
Neither the Company nor any Indenture Trustee shall be required to (i)
issue, register the transfer of or exchange Debt Securities of any series during
a period beginning at the opening of business 15 days before any
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<PAGE> 46
selection of Debt Securities of that series to be redeemed and ending at the
close of business on the day of mailing of the relevant notice of redemption;
(ii) register the transfer of or exchange any Debt Security or portion thereof,
called for redemption, except the unredeemed portion of any Debt Security being
redeemed in part; or (iii) issue, register the transfer of or exchange any Debt
Security that has been surrendered for repayment at the option of the holder,
except the portion, if any, of such Debt Security not to be so repaid (Section
305 of each Indenture).
MERGER, CONSOLIDATION OR SALE
The Note Indenture provides that the Company will be permitted to
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into, any other entity provided that (a) either the
Company shall be the continuing entity, or the successor entity (if other than
the Company) formed by or resulting from any such consolidation or merger or
which shall have received the transfer of such assets shall expressly assume
payment of the principal of (and premium, if any) and interest on all of the
Medium Term Notes and the due and punctual performance and observance of all of
the covenants and conditions contained in the Note Indenture; (b) immediately
after giving effect to such transaction and treating any indebtedness that
becomes an obligation of the Company or any Subsidiary as a result thereof as
having been incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default under the Note Indenture, and no event which,
after notice or the lapse of time, or both, would become such an Event of
Default, shall have occurred and be continuing; and (c) an officer's certificate
and legal opinion covering such conditions shall be delivered to the Indenture
Trustee (Sections 801 and 803 of the Note Indenture). The provisions of the
Subordinated Indenture regarding merger, consolidation and sale are discussed in
"Additional Description of Subordinated Debentures to be Issued to Trust --
Consolidation, Merger and Sale" below.
CERTAIN COVENANTS
Limitations on Liens. The Indentures provide that the Company shall not,
and shall not cause or permit any Subsidiary to, issue, assume or guarantee any
Debt secured by a Lien upon any property or assets (other than cash) of the
Company or such Subsidiary, as applicable, without effectively providing that
the outstanding Debt Securities (together with, if the Company so determines,
any other indebtedness or obligation then existing or thereafter created ranking
equally with such Debt Securities) shall be secured equally and ratably with (or
prior to) such Debt so long as such Debt shall be so secured. The foregoing
restriction on Liens will not, however, apply to:
(a) Liens in existence on the date of original issue of such Debt
Securities;
(b) (i) any Lien created or arising over any property which is
acquired, constructed or created by the Company, or any of its
Subsidiaries, but only if (A) such Lien secures only principal amounts (not
exceeding the cost of such acquisition, construction or creation) raised
for the purposes of such acquisition, construction or creation, together
with any costs, expenses, interest and fees incurred in relation thereto or
a guarantee given in respect thereof, (B) such Lien is created or arises on
or before 90 days after the completion of such acquisition, construction or
creation and (C) such Lien is confined solely to the property so acquired,
constructed or created; or (ii) any Lien to secure Debt of the Company or a
Subsidiary incurred in connection with a specifically identifiable project
where the Lien relates to and is confined to a property or properties
(including, without limitation, shares or other rights of ownership in the
entities which own such property or project) involved in such project and
acquired by the Company or a Subsidiary after the date of original issue of
the Debt Securities of any series and the recourse of the creditors in
respect of such Debt is limited to any or all of such project and property
(including as aforesaid);
(c) any Lien securing amounts not more than 90 days overdue or
otherwise being contested in good faith;
(d) (i) rights of financial institutions to offset credit balances in
connection with the operation of cash management programs established for
the benefit of the Company or a Subsidiary or in connection
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<PAGE> 47
with the issuance of letters of credit for the benefit of the Company or a
Subsidiary; (ii) any Lien securing Debt of the Company or a Subsidiary
incurred in connection with the financing of accounts receivable; (iii) any
Lien incurred or deposits made in the ordinary course of business,
including, but not limited to, (A) any mechanics', materialmens',
carriers', workmens', vendors' or other like Liens and (B) any Liens
securing amounts in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) any Lien upon specific
items of inventory or other goods and proceeds of the Company or a
Subsidiary securing obligations of the Company or a Subsidiary in respect
of bankers' acceptances issued or created for the account of such person to
facilitate the purchase, shipment or storage of such inventory or other
goods; (v) any Lien incurred or deposits made securing the performance of
tenders, bids, leases, trade contracts (other than for borrowed money),
statutory obligations, surety bonds, appeal bonds, government contracts,
performance bonds, return-of-money bonds and other obligations of like
nature incurred in the ordinary course of business; (vi) any Lien
constituted by a right of set off or right over a margin call account or
any form of cash or cash collateral or any similar arrangement for
obligations incurred in respect of the hedging or management of risks under
transactions involving any currency or interest rate swap, cap or collar
arrangements, forward exchange transaction, option, warrant, forward rate
agreement, futures contract or other derivative instrument of any kind;
(vii) any Lien arising out of title retention or like provisions in
connection with the purchase of goods and equipment in the ordinary course
of business; and (viii) any Lien securing reimbursement obligations under
letters of credit, guaranties and other forms of credit enhancement given
in connection with the purchase of goods and equipment in the ordinary
course of business;
(e) Liens in favor of the Company or a Subsidiary;
(f) (i) Liens on any property or assets acquired from a corporation
which is merged with or into the Company or a Subsidiary, or any Liens on
the property or assets of any corporation or other entity existing at the
time such corporation or other entity becomes a Subsidiary of the Company
and, in either such case, is not created in anticipation of any such
transaction (unless such Lien is created to secure or provide for the
payment of any part of the purchase price of such corporation); (ii) any
Lien on any property or assets existing at the time of acquisition thereof
and which is not created in anticipation of such acquisition (unless such
Lien was created to secure or provide for the payment of any part of the
purchase price of such property or assets); and (iii) any Lien created or
outstanding on or over any asset of any Person which becomes a Subsidiary
on or after the date of the issuance of such Debt Securities when such Lien
is created prior to the date on which such Person becomes a Subsidiary;
(g) (i) Liens required by any contract or statute in order to permit
the Company or a Subsidiary to perform any contract or subcontract made by
it with or at the request of a governmental entity or any department,
agency or instrumentality thereof, or to secure partial, progress, advance
or any other payments by the Company or a Subsidiary to such governmental
unit pursuant to the provisions of any contract or statute; (ii) any Lien
securing industrial revenue, development or similar bonds issued by or for
the benefit of the Company or a Subsidiary, provided that such industrial
revenue, development or similar bonds are nonrecourse to the Company or
such Subsidiary; and (iii) any Lien securing taxes or assessments or other
applicable governmental charges or levies;
(h) (i) any Lien which arises pursuant to any order of attachment,
distrait or similar legal process arising in connection with court
proceedings and any Lien which secures the reimbursement obligation for any
bond obtained in connection with an appeal taken in any court proceeding,
so long as the execution or other enforcement of such Lien arising pursuant
to such legal process is effectively stayed and the claims secured thereby
are being contested in good faith and, if appropriate, by appropriate legal
proceedings, or any Lien in favor of a plaintiff or defendant in any action
before a court or tribunal as security for costs and/or other expenses; or
(ii) any Lien arising by operation of law or by order of a court or
tribunal or any Lien arising by an agreement of similar effect, including,
without limitation, judgment liens; or
(i) any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, or any Liens referred to
in the foregoing clauses, for amounts not exceeding the
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principal amount of the Debt secured by the Lien so extended, renewed or
replaced, provided that such extension, renewal or replacement Lien is
limited to all or a part of the same property or assets that were covered
by the Lien extended, renewed or replaced (plus improvements on such
property or assets) (Section 1011 of each Indenture).
Limitations on Sale and Leaseback Transactions. The Indentures also provide
that the Company will not, and will not permit any Subsidiary to, enter into any
arrangement with any Person (other than the Company or a Subsidiary), providing
for the leasing to the Company or a Subsidiary of any assets which have been or
are to be sold or transferred by the Company or such Subsidiary to such Person
(a "Sale and Lease-Back Transaction") unless: (a) such transaction involves a
lease for a temporary period not to exceed three years; (b) such transaction is
between the Company or a Subsidiary and an affiliate of the Company; (c) the
Company would be entitled to incur debt secured by a Lien on the assets or
property involved in such transaction at least equal in amount to the
Attributable Debt with respect to such Sale and Lease-Back Transaction, without
equally and ratably securing the Debt Securities, pursuant to the limitation on
Liens described above; (d) such transaction is entered into within 90 days after
the initial acquisition by the Company of the assets or property subject to such
transaction; (e) after giving effect thereto, the aggregate amount of all
Attributable Debt with respect to all such Sale and Lease-Back Transactions does
not exceed 10% of Consolidated Net Tangible Assets; or (f) the Company or a
Subsidiary within the twelve months preceding the sale or transfer or the twelve
months following the sale or transfer, regardless of whether such sale or
transfer may have been made by the Company or such Subsidiary, applies in the
case of a sale or transfer for cash, an amount equal to the net proceeds thereof
and, in the case of a sale or transfer otherwise than for cash, an amount equal
to the fair value of the assets so leased at the time of entering into such
arrangement (as determined by the Board of Directors of the Company or such
Subsidiary), (i) to the retirement of debt, incurred or assumed by the Company
or a Subsidiary, which by its terms matures at, or is extendible or renewable at
the option of the obligor to, a date more than twelve months after the date of
incurring, assuming or guaranteeing such debt or (ii) to investment in any
assets of the Company or any Subsidiary (Section 1012 of each Indenture).
Existence. Except as permitted under "Merger, Consolidation or Sale," the
Company will be required to do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights and franchises;
provided, however, that the Company shall not be required to preserve an right
or franchise if it determines that the preservation thereof is no longer
desirable in the conduct of its business (Section 1004 of each Indenture).
Maintenance of Properties. The Company will be required to cause all of its
material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times (Section 1005 of each Indenture).
Insurance. The Company will be required to, and will be required to cause
each of its Subsidiaries to, keep all of its insurable properties insured
against loss or damage at least equal to their then full insurable value with
insurers of recognized responsibility and, if described in the applicable
Prospectus Supplement, having a specified rating from a recognized insurance
rating service (Section 1006 of each Indenture).
Payment of Taxes and Other Claims. The Company will be required to pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or, any Subsidiary, and (ii) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a material lien upon the property
of the Company or any Subsidiary; PROVIDED, HOWEVER, that the Company shall not
be required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith (Section 1007 of each Indenture).
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Provision of Financial Information. Whether or not the Company is subject
to Section 13 or 15(d) of the Exchange Act, the Company will be required, within
15 days of each of the respective dates by which the Company would have been
required to file annual reports, quarterly reports and other documents with the
Commission if the Company were so subject, to (i) transmit by mail to all
holders of Debt Securities, as their names and addresses appear in the
applicable register for such Debt Securities, without cost to such holders,
copies of the annual reports, quarterly reports and other documents that the
Company would have been required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act if the Company were subject to such sections,
(ii) file with the applicable Indenture Trustee copies of the annual reports,
quarterly reports and other documents that the Company would have been required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
if the Company were subject to such Sections, and (iii) promptly upon written
request and payment of the reasonable cost of duplication and delivery, supply
copies of such documents to any prospective holder (Section 1008 of each
Indenture).
Additional Covenants. Any additional covenants of the Company with respect
to any series of Debt Securities will be set forth in the Prospectus Supplement
relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Each Indenture will provide that the following events are "Events of
Default" with respect to any series of Debt Securities issued thereunder: (a)
default for 30 days in the payment of any installment of interest or Additional
Amounts, or Additional Interest, as applicable, payable on any Debt Security of
such series; (b) default in the payment of principal of (or premium, if any, on)
any Debt Security of such series at its maturity; (c) default in making any
sinking fund payment as required for any Debt Security of such series; (d)
default in the performance or breach of any other covenant or warranty of the
Company contained in the Indenture (other than a covenant added to the Indenture
solely for the benefit of a series of Debt Securities issued thereunder other
than such series), continued for 60 days after written notice as provided in the
Indenture; (e) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company (including obligations under
leases required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles but not including any indebtedness or
obligations for which recourse is limited to property purchased) in an aggregate
principal amount in excess of $5,000,000 or under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company (including such
leases, but not including such indebtedness or obligations for which recourse is
limited to property purchased) in an aggregate principal amount in excess of
$5,000,000, whether such indebtedness now exists or shall hereafter be created
which default shall have resulted in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable or such obligations being accelerated, without such
acceleration having been rescinded or annulled; (f) certain events of
bankruptcy, insolvency or reorganization, or court appointment of a receiver,
liquidator or trustee of the Company or any Significant Subsidiary of the
Company; and (g) any other event of default provided with respect to a
particular series of Debt Securities (Section 501 of each Indenture). The term
"Significant Subsidiary" means each significant subsidiary (as defined in
Regulation S-X promulgated under the Securities Act) of the Company.
If an Event of Default under either Indenture with respect to Debt
Securities of any series at the time outstanding occurs and is continuing, then
in every such case the Indenture Trustee or the holders of not less than 25% in
principal amount of the outstanding Debt Securities of that series will have the
right to declare the principal amount (or, if the Debt Securities of that series
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms thereof) of, and premium, if any, on all of the
Debt Securities of that series to be due and payable immediately by written
notice thereof to the Company (and to the Indenture Trustee if given by the
holders). However, at any time after such a declaration of acceleration with
respect to Debt Securities of such series (or of all Debt Securities then
outstanding under the applicable Indenture, as the case may be) has been made,
but before a judgment or decree for payment of the money due has been obtained
by the Indenture Trustee, the holders of not less than a majority in principal
amount of outstanding Debt Securities of such series (or of all Debt Securities
then outstanding under the
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<PAGE> 50
applicable Indenture, as the case may be) may rescind and annul such declaration
and its consequences if (a) the Company shall have deposited with the applicable
Indenture Trustee all required payments of the principal of (and premium, if
any) and interest, and any Additional Amounts, on the Debt Securities of such
series (or of all Debt Securities then outstanding under the applicable
Indenture, as the case may be), plus certain fees, expenses, disbursements and
advances of such Indenture Trustee and (b) all Events of Default, other than the
non-payment of accelerated principal (or specified portion thereof and the
premium, if any) or interest, with respect to Debt Securities of such series (or
of all Debt Securities then outstanding under the applicable Indenture, as the
case may be) have been cured or waived as provided in the applicable Indenture
(Section 502 of each Indenture). Each Indenture also provides that the holders
of not less than a majority in principal amount of the outstanding Debt
Securities of any series (or of all Debt Securities then outstanding under the
applicable Indenture, as the case may be) may waive any past default with
respect to such series and its consequences, except a default (x) in the payment
of the principal of (or premium, if any) or interest or Additional Amounts, or
Additional Interest, as applicable, payable on any Debt Security of such series
or (y) in respect of a covenant or provision contained in the applicable
Indenture that cannot be modified or amended without the consent of the holder
of each outstanding Debt Security affected thereby (Section 513 of each
Indenture).
Each Indenture Trustee will be required to give notice to the holders of
Debt Securities within 90 days of a default under the applicable Indenture
unless such default shall have been cured or waived; PROVIDED, HOWEVER, that
such Indenture Trustee may withhold notice to the holders of any series of Debt
Securities of any default with respect to such series (except a default in the
payment of the principal of (or premium, if any) or interest or Additional
Amounts, or Additional Interest, as applicable, payable on any Debt Security of
such series or in the payment of any sinking fund installment in respect of any
Security of such series) if specified responsible officers of such Indenture
Trustee consider such withholding to be in the interest of such holders (Section
601 of each Indenture).
Each Indenture will provide that no holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to
such Indenture or for any remedy thereunder, except in the cases of failure of
the Indenture Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an event of default from the
holders of not less than 25% in principal amount of the outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it (Section 507 of each Indenture). This provision will not
prevent, however, any holder of Debt Securities from instituting suit for the
enforcement of payment of the principal of (and premium, if any), interest on
and Additional Amounts, or Additional Interest, as applicable, payable with
respect to, such Debt Securities at the respective due dates thereof.
Subject to provisions in each Indenture relating to its duties in case of
default, each Indenture Trustee will not be under any obligation to exercise any
of its rights or powers under the applicable Indenture at the request or
direction of any holders of any series of Debt Securities then outstanding under
such Indenture, unless such holders shall have offered to the Indenture Trustee
thereunder reasonable security or indemnity (Section 602 of each Indenture). The
holders of not less than a majority in principal amount of the outstanding Debt
Securities of any series (or of all Debt Securities then outstanding under the
applicable Indenture, as the case may be) shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Indenture Trustee, or of exercising any trust or power conferred upon such
Indenture Trustee. However, an Indenture Trustee may refuse to follow any
direction which is in conflict with any law or the Indenture, which may involve
the Indenture Trustee in personal liability or which may be unduly prejudicial
to the holders of Debt Securities of such series not joining therein (Section
512 of each Indenture).
Within 120 days after the close of each fiscal year, the Company will be
required to deliver to each Indenture Trustee a certificate, signed by one of
several specified officers of the Company, stating whether or not such officer
has knowledge of any default under the applicable Indenture and, if so,
specifying each such default and the nature and status thereof (Section 1009 of
each Indenture).
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Additional provisions of the Subordinated Indenture regarding Events of
Default are discussed in "Additional Description of Subordinated Debentures to
be Issued to Trust -- Subordinated Indenture Additional Events of Default"
below.
MODIFICATION OF THE INDENTURES
Modifications and amendments of either Indenture will be permitted to be
made only with the consent of the holders of not less than a majority in
principal amount of all outstanding Debt Securities issued under each Indenture
which are affected by such modification or amendment; PROVIDED, HOWEVER, that no
such modification or amendment may, without the consent of the holder of each
such Debt Security affected thereby, (a) change the stated maturity of the
principal of (or premium, if any), or any installment of principal of or
interest payable on, any such Debt Security; (b) reduce the principal amount of,
or the rate or amount of interest on, or any premium payable on redemption of,
or Additional Amounts, or Additional Interest, as applicable, payable with
respect to, any such Debt Security, or reduce the amount of principal of an
Original Issue Discount Security that would be due and payable upon declaration
of acceleration of the maturity thereof or would be provable in bankruptcy, or
adversely affect any right of repayment of the holder of any such Debt Security;
(c) change the place of payment, or currency, for payment of principal of (and
premium, if any), or interest on, or any Additional Amounts, or Additional
Interest, as applicable, payable with respect to, any such Debt Security; (d)
impair the right to institute suit for the enforcement of any payment on or with
respect to any such Debt Security; (e) reduce the above-stated percentage of
outstanding Debt Securities of any series necessary to modify or amend the
applicable Indenture, to waive compliance with certain provisions thereof or
certain defaults and consequences thereunder or to reduce the quorum or voting
requirements set forth in the Indenture; or (f) modify any of the foregoing
provisions or any of the provisions relating to the waiver of certain past
defaults or certain covenants, except to increase the required percentage to
effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such Debt Security
(Section 902 of each Indenture).
The holders of not less than a majority in principal amount of outstanding
Debt Securities issued under either Indenture will have the right to waive
compliance by the Company with certain covenants in such Indenture (Section 1013
of each Indenture).
Modifications and amendments of each Indenture will be permitted to be made
by the Company and the applicable Indenture Trustee thereunder without the
consent of any holder of Debt Securities for any of the following purposes: (i)
to evidence the succession of another person to the Company as obligor under the
applicable Indenture; (ii) to add to the covenants of the Company for the
benefit of the holders of all or any series of Debt Securities or to surrender a
right or power conferred upon the Company in the applicable Indenture; (iii) to
add events of default for the benefit of the holders of all or any series of
Debt Securities; (iv) to add or change any provisions of the applicable
Indenture to facilitate the issuance of, or to liberalize certain terms of, Debt
Securities in bearer form, or to permit or facilitate the issuance of Debt
Securities in uncertificated form, PROVIDED that such action shall not adversely
affect the interests of the holders of the Debt Securities of any series in any
material aspect; (v) to change or eliminate any provisions of the applicable
Indenture, PROVIDED that any such change or elimination shall become effective
only when there are no Debt Securities outstanding of any series created prior
thereto which are entitled to the benefit of such provision; (vi) to secure the
Debt Securities; (vii) to establish the form or terms of Debt Securities of any
series; (viii) to provide for the acceptance of appointment by a successor
Indenture Trustee or facilitate the administration of the trusts imposed under
the applicable Indenture by more than one Indenture Trustee; (ix) to cure any
ambiguity, defect or inconsistency in the applicable Indenture, PROVIDED that
such action shall not adversely affect the interests of holders of Debt
Securities of any series issued under such Indenture in any material respect; or
(x) to supplement any of the provisions of such Indenture to the extent
necessary to permit or facilitate defeasance and discharge of any series of such
Debt Securities, PROVIDED that such action shall not adversely affect the
interests of the holders of the Debt Securities of any series in any material
respect (Section 901 of each Indenture).
Each Indenture will provide that in determining whether the holders of the
requisite principal amount of outstanding Debt Securities of a series have given
any request, demand, authorization, direction, notice,
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consent or waiver thereunder or whether a quorum is present at a meeting of
holders of Debt Securities, (i) the principal amount of an Original Issue
Discount Security that shall be deemed to be outstanding shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon declaration of acceleration of the maturity thereof, and (ii)
Debt Securities owned by the Company or any other obligor upon the Debt
Securities or any affiliate of the Company or of such other obligor shall be
disregarded (Section 104 of each Indenture).
Each Indenture will contain provisions for convening meetings of the
holders of Debt Securities of a series (Section 1501 of each Indenture). A
meeting will be permitted to be called at any time by the applicable Indenture
Trustee, and also, upon request, by the Company or the holders of at least 10%
in principal amount of the outstanding Debt Securities of such series, in any
such case upon notice given as provided in the applicable Indenture (Section
1502 of each Indenture). Except for any consent that must be given by the holder
of each Debt Security affected by certain modifications and amendments of the
applicable Indenture, any resolution presented at a meeting or adjourned meeting
duly reconvened at which a quorum is present may be adopted by the affirmative
vote of the holders of a majority in principal amount of the outstanding Debt
Securities of that series; PROVIDED, HOWEVER, that, except as referred to above,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
holders of a specified percentage, which is less than a majority, in principal
amount of the outstanding Debt Securities of a series may be adopted at a
meeting or adjourned meeting or adjourned meeting duly reconvened at which a
quorum is present by the affirmative vote of the holders of such specified
percentage in principal amount of the outstanding Debt Securities of that
series. Any resolution passed or decision taken at any meeting of holders of
Debt Securities of any series duly held in accordance with the applicable
Indenture will be binding on all holders of Debt Securities of that series. The
quorum at any meeting called to adopt a resolution, and at an reconvened
meeting, will be persons holding or representing a majority in principal amount
of the outstanding Debt Securities of a series; PROVIDED, HOWEVER, that if any
action is to be taken at such meeting with respect to a consent or waiver which
may be given by the holders of not less than a specified percentage in principal
amount of the outstanding Debt Securities of a series, the persons holding or
representing such specified percentage in principal amount of the outstanding
Debt Securities of such series will constitute a quorum (Section 1504 of each
Indenture).
Notwithstanding the foregoing provisions, each Indenture will provide that
if any action is to be taken at a meeting of holders of Debt Securities of any
series with respect to any request, demand, authorization, direction, notice,
consent, waiver and other action that the Indenture expressly provides may be
made, given or taken by the holders of a specified percentage in principal
amount of all outstanding Debt Securities affected thereby, or of the holders of
such series and one or more additional series: (i) there shall be no minimum
quorum requirement for such meeting, and (ii) the principal amount of the
outstanding Debt Securities of such series that vote in favor of such request,
demand, authorization, direction, notice, consent, waiver or other action shall
be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been made,
given or taken under the Indenture (Section 1504 of each Indenture).
SUBORDINATION
Upon any distribution to creditors of the Company in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
the Subordinated Debentures will be subordinated to the extent provided in the
Subordinated Indenture in right of payment to the prior payment in full of all
Senior Indebtedness defined below (Sections 1601 and 1602 of the Subordinated
Indenture), but the obligation of the Company to make payment of the principal
and interest on the Subordinated Debentures will not otherwise be affected
(Section 1606 of the Subordinated Indenture). No payment of principal or
interest may be made on the Subordinated Debentures at any time if (i) any
Senior Indebtedness is not paid when due and any applicable grace period has
ended or such default has not been waived; (ii) a default on Senior Indebtedness
exists that permits the holders of such Senior Indebtedness to accelerate its
maturity or (iii) notice has been given of the exercise of an option to require
repayment or prepayment of Senior Indebtedness (Section 1603 of the Subordinated
Indenture). After all Senior Indebtedness is paid in full and
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until the Subordinated Debentures are paid in full, holders will be subrogated
to the rights of holders of Senior Indebtedness to the extent that distributions
otherwise payable to holders have been applied to the payment of Senior
Indebtedness (Section 1605 of the Subordinated Indenture). By reason of such
subordination, in the event of a distribution of assets upon insolvency, certain
general creditors of the Company may recover more, ratably, than holders of the
Subordinated Debentures.
Senior Indebtedness is defined in the Subordinated Indenture as, (i) any
payment due in respect of indebtedness of a Person, whether outstanding at the
date of execution of the Subordinated Indenture or thereafter incurred, created
or assumed, (a) in respect of money borrowed (including any financial
derivative, hedging or futures contract or similar instrument) and (b) evidenced
by securities, debentures, bonds, notes or other similar instruments issued by
such Person which, by their terms, are senior or senior subordinated debt
securities including, without limitation, all obligations under its indentures
with various trustees; (ii) all capital lease obligations; (iii) all obligations
issued or assumed as the deferred purchase price of property, all conditional
sale obligations and all obligations of such Person under any title retention
agreement (but excluding trade accounts payable arising in the ordinary course
of business and long-term purchase obligations); (iv) all obligations for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (v) all obligations of the type referred
to in clauses (i) through (iv) above of other Persons the payment of which such
Person is responsible or liable as obligor, guarantor or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
Persons secured by any lien on any property or asset of such Person (whether or
not such obligation is assumed by such Person), except for (1) any such
indebtedness that is by its terms subordinated to or pari passu with the
Subordinated Debentures and (2) any unsecured indebtedness between or among such
Person or its Affiliates. At March 31, 1998, Senior Indebtedness aggregated
approximately $195,359,000. There are no restrictions in the Subordinated
Indenture upon the creation of additional Senior Indebtedness.
Upon payment in full of all amounts due on the Senior Indebtedness then
outstanding, the rights of the holders of the Subordinated Debentures will be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions applicable to such Senior Indebtedness until all
amounts owing on the Subordinated Debentures are paid in full.
In addition, because SEMCO Energy is a holding company the right of SEMCO
Energy, and hence the right of the creditors of SEMCO Energy (including any
holder of Subordinated Debentures), to participate in any distribution of the
assets of any subsidiary upon its liquidation or recognition or otherwise is
necessarily subject to the prior claims of creditors of such subsidiary, except
to the extent that claims of SEMCO Energy as a creditor of such subsidiary may
be recognized. There is no restriction in the Subordinated Indenture against
subsidiaries of SEMCO Energy incurring secured or unsecured indebtedness or
issuing secured or unsecured securities. The ability of SEMCO Energy to make
payments of principal and interest on the Subordinated Debentures will be
dependent upon the payment to it by its subsidiaries of dividends, loans or
advances.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Under each Indenture, the Company may discharge certain obligations to
holders of any series of Debt Securities issued thereunder that have not already
been delivered to the applicable Indenture Trustee for cancellation and that
either have become due and payable or will become due and payable within one
year (or scheduled for redemption within one year) by irrevocably depositing
with the applicable Indenture Trustee, in trust, funds in an amount sufficient
to pay the entire indebtedness on such Debt Securities in respect of principal
(and premium, if any) and interest and any Additional Amounts, or Additional
Interest, as applicable, payable to the date of such deposit (if such Debt
Securities have become due and payable) or to the stated maturity or redemption
date, as the case may be (Section 401 of each Indenture).
Each Indenture will provide that, if the provisions of Article Fourteen
thereof are made applicable to the Debt Securities of or within any series
pursuant to Section 301 of such Indenture, the Company may elect either (a) to
defease and be discharged from any and all obligations with respect to such Debt
Securities (except for the obligations to pay Additional Amounts, or Additional
Interest, as applicable, if any, upon the
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occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Debt Securities and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities and to hold moneys for payment in trust)
("defeasance") (Section 1402 of each Indenture) or (b) to be released from its
obligations with respect to such Debt Securities under Sections 1004 to 1008,
inclusive, and Sections 1011 and 1012 under such Indenture (being the
restrictions described under "Certain Covenants") or, if provided pursuant to
such Indenture, its obligations with respect to any other covenant, and any
omission to comply with such obligations shall not constitute an event of
default with respect to such Debt Securities ("covenant defeasance") (Section
1403 of each Indenture), in either case upon the irrevocable deposit by the
Company with the applicable Indenture Trustee, in trust, of an amount of money,
or Government Obligations (as defined below), or both, applicable to such Debt
Securities which through the scheduled payment of principal and interest in
accordance with their terms will provide money in an amount sufficient to pay
the principal of (and premium, if any) and interest on such Debt Securities, and
any mandatory sinking fund or analogous payments thereon, on the scheduled due
dates therefor (Section 1404 of each Indenture).
Such a trust will only be permitted to be established if, among other
things, the Company has delivered to the applicable Indenture Trustee an opinion
of counsel (as specified in each Indenture) to the effect that the holders of
such Debt Securities will not recognize income, gain or loss for U.S. federal
income tax purposes as a result of such defeasance or covenant defeasance and
will be subject to U.S. federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such defeasance or
covenant defeasance had not occurred, and such opinion of counsel, in the case
of defeasance, will be required to refer to and be based upon a ruling of the
Internal Revenue Service or a change in applicable United States federal income
tax law occurring after the date of such Indenture (Section 1404 of each
Indenture).
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guarantee as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, PROVIDED that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount receiving by
the custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt (Section 101 of each Indenture).
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any Event of Default other than the Event of Default described
in clause (d) under "Events of Default, Notice and Waiver" with respect to
Sections 1004 to 1008, inclusive, and Sections 1011 and 1012 of either Indenture
(which sections would no longer be applicable to such Debt Securities) or
described in clause (g) under "Events of Default, Notice and Waiver" with
respect to any other covenant as to which there has been covenant defeasance,
the amount in which such Debt Securities are payable, and Government Obligations
on deposit with the applicable Indenture Trustee, will be sufficient to pay
amounts due on such Debt Securities at the time of their stated maturity but may
not be sufficient to pay amounts due on such Debt Securities at the time of the
acceleration resulting from such Event of Default. However, the Company would
remain liable to make payment of such amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
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GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
GOVERNING LAW
The Indentures, each Supplemental Indenture thereto, the Medium Term Notes,
and the Subordinated Debentures will be governed by the laws of the State of New
York.
DESCRIPTION OF TRUST PREFERRED SECURITIES
The Trust will issue only one series of Trust Preferred Securities. The
Trust Agreement will be qualified as an indenture under the Trust Indenture Act
and will contain the terms of Trust Preferred Securities.
The Property Trustee will act as indenture trustee for purposes of the
Trust Indenture Act. The Trust Preferred Securities will have such terms,
including distributions, redemption, voting, liquidation rights and such other
preferred, deferred or other special rights or such restrictions as will be set
forth in the Trust Agreement or made part of the Trust Agreement by the Trust
Indenture Act and which will correspond to the terms of the Subordinated
Debentures held by the Trust and described in the Prospectus Supplement relating
thereto. Reference is made to the Prospectus Supplement relating to the Trust
Preferred Securities for specific terms, including (i) the distinctive
designation of the Trust Preferred Securities; (ii) the number of Trust
Preferred Securities issuable by the Trust; (iii) the annual distribution rate
(or method of determining such rate) for Trust Preferred Securities and the date
or dates upon which such distributions will be payable; (iv) whether
distributions on Trust Preferred Securities will be cumulative, and, in the case
of Trust Preferred Securities having such cumulative distribution rights, the
date or dates or method of determining the date or dates from which
distributions on Trust Preferred Securities will be cumulative; (v) the amount
or amounts which will be paid out of the assets of the Trust to the holders of
Trust Preferred Securities upon voluntary or involuntary dissolution, winding-up
or termination of the Trust; (vi) the obligation, if any, of the Trust to
purchase or redeem Trust Preferred Securities and the price or prices at which,
the period or periods within which, and the terms and conditions upon which
Trust Preferred Securities will be purchased or redeemed, in whole or in part,
pursuant to such obligation; (vii) the voting rights, if any, of holders of
Trust Preferred Securities in addition to those required by law, including the
number of votes per Trust Preferred Security and any requirement for approval by
the holders of such Trust Preferred Securities, as a condition to specified
action or amendments to the Trust Agreement; (viii) the terms and conditions, if
any, upon which the Subordinated Debentures owned by the Trust may be
distributed to holders of Trust Preferred Securities; (ix) if applicable, any
securities exchange upon which the Trust Preferred Securities will be listed;
and (x) any other relevant rights, preferences, privileges, limitations or
restrictions of Trust Preferred Securities not inconsistent with the Trust
Agreement or with applicable law.
SEMCO Energy will guarantee distributions on Trust Preferred Securities to
the extent set forth below under "Description of the Trust Guarantee." Certain
United States federal income tax considerations applicable to Trust Preferred
Securities will be described in a Prospectus Supplement relating to the Trust
Preferred Securities.
The Trust will issue the series of Trust Common Securities in connection
with the issuance of Trust Preferred Securities. Except for voting rights, the
terms of Trust Common Securities will be substantially identical to the terms of
Trust Preferred Securities. Trust Common Securities will rank pari passu with
Trust Preferred Securities except that, upon an event of default under the Trust
Agreement, the rights of holders of Trust Common Securities to payments will be
subordinated to the rights of holders of Trust Preferred
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Securities. The Trust Common Securities will also carry the right to vote to
appoint, remove or replace any Trustee of the Trust. All of the Trust Common
Securities will be owned by SEMCO Energy.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST PREFERRED SECURITIES
If an Event of Default as defined and provided in the Trust Agreement
occurs and is continuing, then the holders of Trust Preferred Securities would
rely on the enforcement by the Property Trustee of its rights as a holder of the
applicable series of Subordinated Debentures against SEMCO Energy. In addition,
the holders of a majority in aggregate liquidation amount of Trust Preferred
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee
under the Trust Agreement, including the right to direct such Property Trustee
to exercise the remedies available to it as a holder of Subordinated Debentures
provided that such direction shall not be in conflict with any rule of law or
with the Trust Agreement, and could not involve the Property Trustee in personal
liability in circumstances where reasonable indemnity would not be adequate. If
the Property Trustee fails to enforce its rights under the Subordinated
Debentures held by the Trust, a holder of Trust Preferred Securities may, to the
extent permitted by law, institute a legal proceeding directly against SEMCO
Energy to enforce the Property Trustee's rights under the Trust Agreement
without first instituting any legal proceeding against the Property Trustee or
any other entity or person, including the Trust; it being understood and
intended that no one or more of such holders shall have any right in any manner
whatsoever by virtue of, or by availing of, any provision of the Trust Agreement
to affect, disturb or prejudice the rights of any other of such holders or to
obtain or to seek to obtain priority or preference over any other of such
holders or to enforce any right under this Trust Agreement, except in the manner
herein provided and for the equal and ratable benefit of all such holders.
Notwithstanding the foregoing, a holder of Trust Preferred Securities may
institute a proceeding directly against SEMCO Energy without first instituting a
legal proceeding against or requesting that action be taken by the Property
Trustee or any other Person for enforcement of payment to such holder of the
principal of or interest on the Subordinated Debentures having a principal
amount equal to the aggregate stated liquidation amount of the Trust Preferred
Securities of such holder (a "Direct Action") on or after the due dates
specified or provided for in the Subordinated Debentures. In connection with
such Direct Action, SEMCO Energy will be subrogated to the rights of such holder
of Trust Preferred Securities under the Trust Agreement to the extent of any
payment made by SEMCO Energy to such holder of Trust Preferred Securities in
such Direct Action.
DESCRIPTION OF TRUST GUARANTEE
Set forth below is a summary of the Trust Guarantee which will be executed
by SEMCO Energy for the benefit of holders of Trust Preferred Securities. The
Trust Guarantee will be qualified as an indenture under the Trust Indenture Act.
A Prospectus Supplement with respect to the Trust Preferred Securities will
identify the indenture trustee for purposes of the Trust Indenture Act (the
"Trust Guarantee Trustee"). The following summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
by its entirety by reference to the form of Trust Guarantee, which is filed as
an exhibit to the Registration Statement of which this Prospectus forms a part.
The Trust Guarantee will be held by the Property Trustee for the benefit of
holders of Trust Preferred Securities.
GENERAL
To the extent set forth in the Trust Guarantee, SEMCO Energy will agree to
pay in full the Guarantee Payments (as defined herein), without duplication of
amounts theretofore paid by or on behalf of the Trust, as and when due
regardless of defense, right of set off or counter-claim which SEMCO Energy may
have. The following payments or distributions to the extent not paid or made
(the "Guarantee Payments") will be subject to the Trust Guarantee: (i) any
accrued and unpaid distributions on Trust Preferred Securities, to the extent
the Trust has funds legally and immediately available therefor; (ii) the
redemption price (the "Redemption Price"), to the extent the Trust has funds
legally and immediately available therefor with respect to Trust Preferred
Securities called for redemption; and (iii) upon voluntary or involuntary
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termination, dissolution or winding up of the Trust (other than in connection
with the distribution of Subordinated Debentures to holders of Trust Preferred
Securities or the redemption of all Trust Preferred Securities), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
distributions on Trust Preferred Securities to the date of payment, to the
extent the Trust has funds legally and immediately available therefor and (b)
the amount of assets of the Trust remaining available for distribution to
holders of Trust Preferred Securities in liquidation of the Trust. The
redemption price and liquidation amount will be fixed at the time the Trust
Preferred Securities are issued. SEMCO Energy's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by SEMCO
Energy to the holders of Trust Preferred Securities or by causing the Trust to
pay such amounts to such holders.
The Trust Guarantee will not apply to any payment or distribution except to
the extent the Trust has funds legally available therefor. If SEMCO Energy does
not make interest payments on Subordinated Debentures, the Trust will not pay
distributions on Trust Preferred Securities and will not have funds legally
available therefor. The Trust Guarantee, when taken together with SEMCO Energy's
obligations under the Subordinated Debentures, the Subordinated Indenture and
the Trust Agreement, including its obligation to pay costs, expenses, debt, and
liabilities of the Trust (other than with respect to the Trust Securities), will
be a full and unconditional guarantee, on a subordinated basis, by SEMCO Energy
of payments due on the Trust Preferred Securities from the time of issuance, but
will not apply to the payment of distributions and other payments on the Trust
Preferred Securities when the Property Trustee does not have sufficient funds in
the Property Account of the Trust to make such distributions or other payments.
If SEMCO Energy does not make interest payments on the Subordinated Debentures
held by the Property Trustee, the Trust will not make distributions on the Trust
Preferred Securities and will not have funds available therefor. See "Additional
Description of the Subordinated Debentures to be Issued to Trust -- Certain
Covenants."
AMENDMENT OF TRUST GUARANTEE; ASSIGNMENT
Except for changes which do not materially adversely affect the rights of
holders of Trust Preferred Securities, the Trust Guarantee may be amended only
with the approval of not less than 66 2/3% in liquidation amount of Trust
Preferred Securities. The manner of obtaining any such approval will be as set
forth in Article Six of the Trust Agreement. The Trust Guarantee will bind the
successors, assigns receivers, trustees and representatives of SEMCO Energy and
continue to benefit the Trust Guarantee Trustee and holders of Trust Preferred
Securities. Except in connection with a consolidation, merger, conveyance,
transfer or lease involving SEMCO Energy, permitted under Article Eight of the
Subordinated Indenture, SEMCO Energy may not assign its rights or delegate its
obligations under the Trust Guarantee.
TERMINATION OF THE TRUST GUARANTEE
The Trust Guarantee will terminate (a) upon full payment of the Redemption
Price of all Trust Preferred Securities, (b) upon distribution of Subordinated
Debentures held by the Trust to the holders of and in exchange for Trust
Preferred Securities or (c) upon full payment of amounts payable in accordance
with the Trust Agreement upon liquidation of the Trust. See "Status of the Trust
Guarantee" and "Additional Description of Subordinated Debentures to be Issued
to Trust -- Subordinated Indenture Additional Events of Default" for a
description of the events of default and enforcement rights of the holders of
Subordinated Debentures. The Trust Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of Trust
Preferred Securities must repay any sums paid to them under the Trust Preferred
Securities or Trust Guarantee.
EVENTS OF DEFAULT
An event of default under the Trust Guarantee will occur if SEMCO Energy
fails to make the payments required by the Trust Guarantee.
The holders of a majority in liquidation amount of Trust Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trust Guarantee Trustee or to direct
the exercise of any trust or power conferred upon the Trust Guarantee Trustee
under the Trust
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Guarantee. If the Trust Guarantee Trustee fails to enforce the Trust Guarantee,
any holder of record of Trust Preferred Securities may institute a legal
proceeding directly against SEMCO Energy to enforce the Trust Guarantee
Trustee's rights, without first instituting any other legal proceeding.
STATUS OF TRUST GUARANTEE
The Trust Guarantee will constitute an unsecured obligation of SEMCO Energy
and will rank (i) subordinate and junior in right of payment to all other
liabilities of SEMCO Energy, including the Subordinated Debentures, except those
made pari passu or subordinate by their terms, (ii) pari passu with the most
senior preferred or preference stock which may now or hereafter be issued or
guaranteed by SEMCO Energy; and (iii) senior to SEMCO Energy's Common Stock. The
terms of the Trust Preferred Securities provide that each holder of Trust
Preferred Securities, by acceptance thereof, agrees to the subordination
provisions and other terms of the Trust Guarantee relating thereto. The Trust
Guarantee will constitute a guarantee of payment and not of collection (i.e.,
the guaranteed party may institute a legal proceeding directly against the
guarantor to enforce its rights under such Trust Guarantee without instituting a
legal proceeding against any other person or entity). The Trust Guarantee will
be deposited with the Guarantee Trustee to be held for the benefit of the
holders of the Trust Preferred Securities. Except as otherwise noted herein, the
Guarantee Trustee has the right to enforce the Trust Guarantee on behalf of the
holders of the related Trust Preferred Securities. Except as described under
"Termination of the Trust Guarantee" above, the Trust Guarantee will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Trust).
INFORMATION CONCERNING TRUST GUARANTEE TRUSTEE
The Trust Guarantee Trustee, prior to the occurrence of a default with
respect to the Trust Guarantee and after the curing of all such defaults that
may have occurred, undertakes to perform only such duties as are specifically
set forth in the Trust Guarantee and, during the continuance of any default,
will exercise the same degree of care as a prudent individual would exercise in
the conduct of such individual's own affairs. Subject to such provisions, the
Trust Guarantee Trustee is under no obligation to exercise any of the powers
vested in it by the Trust Guarantee at the request of any holder of Trust
Preferred Securities, unless offered reasonable indemnity against the costs,
expenses and liabilities which might be incurred thereby; but the foregoing
shall not relieve the Trust Guarantee Trustee, upon the occurrence of an Event
of Default under such Trust Guarantee, from exercising the rights and powers
vested in it by such Trust Guarantee. The Trust Guarantee Trustee also serves as
Property Trustee. SEMCO Energy and its officers and directors have no material
relationship with the initial Trust Guarantee Trustee other than normal banking
relationships.
GOVERNING LAW
The Trust Guarantee will be governed by the laws of the State of New York.
THE AGREEMENT AS TO EXPENSES AND LIABILITIES
Pursuant to an Agreement as to Expenses and Liabilities to be entered into
by the Company under the Trust Agreement, the Company will irrevocably and
unconditionally guarantee to each person or entity to whom the Trust becomes
indebted or liable the full payment of any indebtedness, expenses or liabilities
of the Trust other than obligations of the Trust to pay to the holders of the
related Trust Securities or other similar interests in the Trust the amounts due
such holders pursuant to the terms of such Trust Securities or such other
similar interests, as the case may be.
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ADDITIONAL DESCRIPTION OF SUBORDINATED DEBENTURES
TO BE ISSUED TO TRUST
Set forth below is a description of the terms of the Subordinated
Debentures which the Trust will hold as trust assets. The general provisions of
the Subordinated Debentures are set forth under "Description of Debt Securities"
above. The following description does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the Subordinated Indenture
(as defined in "Description of Debt Securities" above), as supplemented by the
Supplemental Indenture creating the Subordinated Debentures. The Subordinated
Indenture and the form of Supplemental Indenture are filed as exhibits to the
Registration Statement of which this Prospectus forms a part. The terms of the
Subordinated Debentures will include those stated in the Subordinated Indenture
and the related Supplemental Indenture and those made a part of the Subordinated
Indenture by reference to the Trust Indenture Act.
Upon a dissolution of the Trust, Subordinated Debentures held by the Trust
may be distributed to the holders of Trust Securities in liquidation of the
Trust. See "Description of Trust Preferred Securities -- Dissolution;
Distribution of Subordinated Debentures" in the applicable Prospectus
Supplement.
If any Subordinated Debentures are distributed to holders of Trust
Preferred Securities, SEMCO Energy will use its best efforts to have such
Subordinated Debentures traded on the same stock exchange as the related Trust
Preferred Securities are traded.
GENERAL
Subordinated Debentures will be issued in a principal amount equal to the
aggregate stated Liquidation Amount of Trust Preferred Securities plus SEMCO
Energy's investment in Trust Common Securities.
The entire principal amount of the Subordinated Debentures held by the
Trust will mature and become due and payable, together with any accrued and
unpaid interest thereon, including Additional Interest (as defined herein), if
any, on the date set forth in the applicable Prospectus Supplement.
The covenants contained in the Subordinated Debenture Indenture would not
necessarily afford protection to holders of the Subordinated Debentures in the
event of a decline in credit quality resulting from takeovers, recapitalizations
or similar restructurings of SEMCO Energy.
If Subordinated Debentures held by the Trust are distributed to holders of
the Trust Preferred Securities in liquidation of such holders' interests in the
Trust, such Subordinated Debentures will initially be issued as a Global
Security. To the extent described under "Description of the Subordinated
Debentures -- Book Entry and Issuance" in the applicable Prospectus Supplement,
under certain limited circumstances, Subordinated Debentures may be issued in
certificated form in exchange for a Global Security. In the event Subordinated
Debentures are issued in certificated form, such Subordinated Debentures will be
in denominations as specified in the applicable Prospectus Supplement and
integral multiples thereof and may be transferred or exchanged at the offices
described therein. Payments on Subordinated Debentures issued as a Global
Security will be made to the Depositary for the Subordinated Debentures. In the
event Subordinated Debentures are issued in certificated form, principal and
interest will be payable, the transfer of the Subordinated Debentures will be
registrable and Subordinated Debentures will be exchangeable for Subordinated
Debentures of other denominations of a like aggregate principal amount at the
corporate trust office of the Debt Trustee in New York, New York; provided, that
payment of interest may be made at the option of SEMCO Energy by check mailed to
the address of the persons entitled thereto.
The Indenture does not contain provisions that afford holders of the
Subordinated Debentures protection in the event of a highly leveraged
transaction involving SEMCO Energy.
CERTAIN COVENANTS
If (i) there has occurred any event that would constitute an Indenture
Event of Default or (ii) SEMCO Energy is in default with respect to its payment
of any obligations under the Trust Guarantee, then (a) SEMCO Energy may not
declare or pay any dividend on, make any distributions with respect to, or
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redeem, purchase or make a liquidation payment with respect to, any of its
capital stock (other than (i) purchases or acquisitions of shares of SEMCO
Energy common stock in connection with the satisfaction by SEMCO Energy of its
obligations under any employee benefit plans or any other contractual obligation
of SEMCO Energy (other than a contractual obligation ranking pari passu with or
junior to the Subordinated Debentures), (ii) as a result of a reclassification
of SEMCO Energy capital stock or the exchange or conversion of one class or
series of SEMCO Energy capital stock for another class or series of SEMCO Energy
capital stock, or (iii) the purchase of fractional interests in shares of SEMCO
Energy capital stock pursuant to the conversion or exchange provisions of such
SEMCO Energy capital stock or the security being converted or exchanged), (b)
SEMCO Energy may not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities (including guarantees)
issued by SEMCO Energy which rank pari passu with or junior to the Subordinated
Debentures, and (c) SEMCO Energy may not make any guarantee payments with
respect to the foregoing (other than pursuant to the Trust Guarantee).
SEMCO Energy will covenant, as long as Trust Preferred Securities remain
outstanding, (i) to maintain 100% ownership of Trust Common Securities, (ii) to
not cause the Trust to terminate, except in connection with a distribution of
Subordinated Debentures and (iii) to use its reasonable efforts to cause the
Trust (a) to remain a statutory business trust, except in connection with the
distribution of Subordinated Debentures to the holders of Trust Securities in
liquidation of the Trust, the redemption of all Trust Securities, or certain
mergers, consolidations or amalgamations, each as permitted by the Trust
Agreement, and (b) to otherwise continue to be classified as a grantor trust for
United States federal income tax purposes.
OPTIONAL REDEMPTION
SEMCO Energy will have the right to redeem the Subordinated Debentures, in
whole or in part, from time to time, without premium or penalty, on or after the
date set forth in the applicable Prospectus Supplement, upon not less than
thirty (30) or more than sixty (60) days' notice, at a redemption price equal to
a percentage of the principal amount to be redeemed plus any accrued and unpaid
interest, including Additional Interest (as defined herein), if any, to the
Redemption Date, as specified in the applicable Prospectus Supplement. If a
partial redemption of the Trust Preferred Securities resulting from a partial
redemption of the Subordinated Debentures held by the Trust would result in the
delisting of the Trust Preferred Securities, SEMCO Energy may only redeem such
Subordinated Debentures in whole. In addition, upon the occurrence of a Special
Event, SEMCO Energy may, upon not less than thirty (30) or more than (60) days
notice, within ninety (90) days following the occurrence thereof and subject to
the terms and conditions of the Subordinated Indenture, redeem the Subordinated
Debentures, in whole, at a price equal to 100% of the principal amount to be
redeemed plus any accrued but unpaid interest (including Additional Interest, if
any) to the Redemption Date. In the event of redemption of the Subordinated
Debentures in part only, new Subordinated Debentures for the unredeemed portion
shall be issued in the name or names of the holders thereof upon the surrender
thereof.
INTEREST
Each Subordinated Debenture will bear interest at the rate set forth in the
applicable Prospectus Supplement from the original date of issuance, payable
quarterly in arrears on dates which will be specified in the Prospectus
Supplement (each, an "Interest Payment Date"), to the person in whose name such
Subordinated Debenture is registered, subject to certain exceptions, on the
record date specified in the applicable Prospectus Supplement.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Subordinated Debentures is not a Business Day, then
payment of the interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
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OPTION TO EXTEND INTEREST PAYMENT PERIOD
Except to the extent set forth in the applicable Prospectus Supplement,
SEMCO Energy will have the right at any time to defer payments of interest on
Subordinated Debentures by extending the interest payment period for up to 20
consecutive quarters. At the end of such an Extension Period, SEMCO Energy will
pay all interest then accrued and unpaid (including any Additional Interest,
together with interest thereon at the rate specified and to the extent permitted
by applicable law). SEMCO Energy covenants in the Supplemental Indenture for the
benefit of the holders of a series of Subordinated Debentures, that, subject to
the next succeeding sentence, (a) SEMCO Energy shall not declare or pay any
dividend on, or make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock,
and (b) SEMCO Energy shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees other than the Trust Guarantee) issued by SEMCO Energy
which rank pari passu with or junior to said series of Subordinated Debentures
(i) if at such time SEMCO Energy shall have given notice of its election to
extend an interest payment period for a series of Subordinated Debentures and
such extension shall be continuing or (ii) if at such time an Event of Default
with respect to a series of Subordinated Debentures shall have occurred and be
continuing. The preceding sentence, however, shall not restrict (A) any of the
actions described in the preceding sentence resulting from any reclassification
of SEMCO Energy's capital stock or the exchange or conversion of one class or
series of SEMCO Energy's capital stock for another class or series of SEMCO
Energy's capital stock, (B) repurchases, redemptions or other acquisitions of
shares of SEMCO Energy's capital stock in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
employees, officers or directors or a stock purchase and dividend reinvestment
plan, and (C) dividends or distributions in capital stock of SEMCO Energy, or
(D) the purchase of fractional interests in shares of SEMCO Energy's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged.
Prior to the termination of any such Extension Period for a series of
Subordinated Debentures, SEMCO Energy may further defer payments of interest on
such Subordinated Debentures, by extending the interest payment period, provided
that such Extension Period together with all such previous and further
extensions thereof for such series of Subordinated Debentures may not exceed 20
consecutive quarters or extend beyond the maturity of such series of
Subordinated Debentures.
Upon the termination of any Extension Period for a series of Subordinated
Debentures, and the payment of all accrued and unpaid interest on the
Subordinated Debentures then due, SEMCO Energy may select a new Extension Period
for such series of Subordinated Debentures, as if no Extension Period had
previously been declared, subject to the above requirements. No interest on a
series of Subordinated Debentures during an Extension Period, except at the end
thereof, will be due and payable on such series of Subordinated Debentures.
If the Property Trustee is the sole holder of the Subordinated Debentures,
SEMCO Energy will give the Regular Trustees and the Property Trustee notice of
its selection of such Extension Period for such series of Subordinated
Debentures one Business Day prior to the earlier of (i) the next succeeding date
on which distributions on the related Trust Preferred Securities are payable or
(ii) the date the Trust is required to give notice to the NASDAQ or other
applicable self-regulatory organization or to holders of such Trust Preferred
Securities on the record date or the date such distribution is payable, but in
any event not less than one Business Day prior to such record date. The Regular
Trustees shall give notice of SEMCO Energy's selection of such Extension Period
to the holders of such Trust Preferred Securities. If the Property Trustee is
not the sole holder of a series of Subordinated Debentures, SEMCO Energy will
give the holders of such Subordinated Debentures notice of its selection of such
Extension Period ten Business Days prior to the earlier of (i) the Interest
Payment Date or (ii) the date SEMCO Energy is required to give notice to the
NASDAQ or other applicable self-regulatory organization or to holders of such
Subordinated Debentures, but in any event at least two Business Days before such
record date.
SEMCO Energy has no present intention to defer interest payments.
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ADDITIONAL INTEREST
If the Trust is required to pay any taxes, duties, assessments or other
governmental charges (other than withholding taxes) imposed by the United
States, or any other taxing authority, SEMCO Energy will pay as additional
interest ("Additional Interest") such additional amounts as shall be required so
that the net amounts received and retained by the Trust after paying any such
charges will be equal to the amount the Trust would have received had no such
charge been imposed.
SUBORDINATED INDENTURE ADDITIONAL EVENTS OF DEFAULT
In addition to the Events of Default described under "Description of Debt
Securities -- Events of Default," the following will be an additional Event of
Default:
(a) the voluntary or involuntary dissolution, winding up or
termination of the Trust except in connection with
(i) the distribution of Subordinated Debentures to holders of
Trust Securities in liquidation of the Trust,
(ii) the redemption of all outstanding Trust Securities, or
(iii) certain mergers or consolidations permitted by the Trust
Agreement.
The holders of not less than a majority in aggregate principal amount of
Subordinated Debentures may waive any past default, except (i) a default in
payment of principal, premium, interest or Additional Interest (unless such
default has been cured and a sum sufficient to pay all installments due
otherwise than by acceleration has been deposited with the Subordinated
Debenture Trustee) or (ii) a default in a covenant or provision which under
Article Nine of the Subordinated Indenture may not be modified or amended
without the consent or each holder of a Subordinate Debenture. The holders of
Trust Preferred Securities in certain circumstances have the right to direct the
Property Trustee to exercise its rights as holder of Subordinated Debentures.
PAYMENT AND PAYING AGENTS
Payment of principal and premium (if any) on Subordinated Debentures will
be made only if the holder of Subordinated Debentures surrenders them to the
Paying Agent of the Subordinated Debentures.
Principal of and any premium and interest, if any, on Subordinated
Debentures will be payable, subject to any applicable laws and regulations, at
the office of such Paying Agent or Paying Agents as SEMCO Energy may designate
from time to time pursuant to the Subordinated Debenture Indenture. Payment of
interest on the Subordinated Debentures on any Interest Payment Date will be
made to the person in whose name the Subordinated Debenture (or predecessor
security) is registered at the close of business on the Regular Record Date for
such interest payment.
The Subordinated Indenture Trustee will act as Paying Agent with respect to
the Subordinated Debentures. SEMCO Energy may at any time designate additional
Paying Agents or rescind the designation of any Paying Agent or approve a change
in the office through which any Paying Agent acts, except that SEMCO Energy will
be required to maintain a Paying Agent at the place of payment.
CONSOLIDATION, MERGER AND SALE
The Subordinated Indenture provides that the Company will be permitted to
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into, any other entity provided that (a) either the
Company shall be the continuing entity, or the successor entity (if other than
the Company) formed by or resulting from any such consolidation or merger or
which shall have received the transfer of such assets shall expressly assume the
Company's obligations under the Trust Guarantee and the payment of the principal
of (and premium, if any) and interest on all of the Subordinated Debentures and
the due and punctual performance and observance of all of the covenants and
conditions contained in the Subordinated
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Indenture; (b) immediately after giving effect to such transaction and treating
any indebtedness that becomes an obligation of the Company or any Subsidiary as
a result thereof as having been incurred by the Company or such Subsidiary at
the time of such transaction, no Event of Default under the Subordinated
Indenture or the Trust Guarantee, and no event which, after notice or the lapse
of time, or both, would become such an Event of Default, shall have occurred and
be continuing; and (c) an officer's certificate and legal opinion covering such
conditions shall be delivered to the Indenture Trustee (Sections 801 and 803 of
the Subordinated Indenture).
INFORMATION CONCERNING SUBORDINATED DEBENTURE TRUSTEE
The Subordinated Indenture Trustee, prior to default and after the curing
of all defaults, if any, undertakes to perform only such duties as are
specifically set forth in the Subordinated Indenture and, after a default (that
has not been cured or waived), will exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provision, the Subordinated Indenture Trustee is under no
obligation to exercise any of the powers vested in it by the Subordinated
Indenture at the request of any holder of Subordinated Indentures, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby; but the foregoing will not relieve
the Subordinated Indenture Trustee, upon the occurrence of an Indenture Event of
Default, from exercising the rights and powers vested in it by the Subordinated
Indenture. The Subordinated Indenture Trustee is not required to expend or risk
its own funds or otherwise incur personal financial liability in the performance
of its duties if the Subordinated Indenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
MISCELLANEOUS
SEMCO Energy will have the right at all times to assign any of its rights
or obligations under the Subordinated Indenture to a direct or indirect
wholly-owned subsidiary of SEMCO Energy; provided that, in the event of any such
assignment, SEMCO Energy will remain liable for all of such obligations. Subject
to the foregoing, the Subordinated Indenture will be binding upon and inure to
the benefit of the parties thereto and their respective successors and assigns.
The Subordinated Indenture provides that it may not otherwise be assigned by the
parties thereto.
EFFECT OF OBLIGATIONS UNDER SUBORDINATED DEBENTURES
AND TRUST PREFERRED SECURITIES GUARANTEE
As long as payments are made when due on Subordinated Debentures, the Trust
will have sufficient funds to be able to make all appropriate payments on Trust
Securities. This is primarily because (i) the aggregate principal amount of the
Subordinated Debentures will be equal to the sum of the aggregate stated
liquidation amount of such Trust Securities; (ii) the interest rate and interest
and other payment dates on the Subordinated Debentures will match the
distribution rate and distribution and other payment dates for the Trust
Securities; (iii) SEMCO Energy will pay for all costs and expenses of each
Trust; and (iv) the Trust Agreement provides that the Trustees may not cause or
permit the Trust to, among other things, engage in any activity that is not
consistent with the purposes of the Trust.
Payments of distributions and other payments due on the Trust Preferred
Securities (to the extent funds are available therefor) are guaranteed by SEMCO
Energy to the extent set forth under "Description of the Trust Guarantee." If
SEMCO Energy does not make interest payments on Subordinated Debentures, it is
expected that the Trust will not have sufficient funds to pay distributions on
its Trust Preferred Securities. The Trust Guarantee is a full and unconditional
guarantee, but does not apply to any payment unless the Trust has sufficient
funds for such payment.
If SEMCO Energy fails to make payments on Subordinated Debentures when due
(taking into account any Extension Period), the Trust Agreement will provide a
mechanism whereby holders of Trust Preferred Securities may direct the Property
Trustee to enforce its rights, including proceeding directly against SEMCO
Energy. If the Property Trustee fails to enforce its rights, a holder of Trust
Preferred Securities may sue
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SEMCO Energy directly to enforce those rights, without first instituting legal
proceedings against the Trust, the Property Trustee or any other person or
entity.
If SEMCO Energy fails to make payments under the Trust Guarantee, the Trust
Guarantee provides a mechanism whereby the holders of Trust Preferred Securities
may direct the Trust Guarantee Trustee to enforce its rights. If the Trust
Guarantee Trustee fails to enforce its rights, any holder of Trust Preferred
Securities may institute a legal proceeding against SEMCO Energy directly to
enforce those rights without first instituting legal proceedings against the
Trust, the Trust Guarantee Trustee or any other person or entity.
Pursuant to an Agreement as to Expenses and Liabilities to be entered into
by the Company under the Trust Agreement, the Company will irrevocably and
unconditionally guarantee to each person or entity to whom the Trust becomes
indebted or liable the full payment of any indebtedness, expenses or liabilities
of the Trust other than obligations of the Trust to pay to the holders of the
related Trust Securities or other similar interests in the Trust the amounts due
such holders pursuant to the terms of such Trust Securities or such other
similar interests, as the case may be.
The above mechanisms and obligations, taken together, are equivalent to a
full and unconditional guarantee by SEMCO Energy of payments due on Trust
Preferred Securities to the extent of funds available to the Trust.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 20,000,000 shares of
Common Stock, 500,000 shares of Cumulative Preferred Stock, par value $1.00
("Preferred Stock"), and 3,000,000 shares of Preference Stock, par value $1.00
("Preference Stock"). At March 31, 1998, there were outstanding 13,644,875
shares of Common Stock and 6,751 shares of Series A Convertible Cumulative
Preferred Stock, a series of the Preferred Stock (the "Series A Preferred
Stock"). Each share of the Series A Preferred Stock outstanding is currently
convertible into 4.11 shares of Common Stock or an aggregate of approximately
27,747 shares of Common Stock. 2,000,000 shares of the Preference Stock are
reserved for issuance pursuant to a Shareholder Rights Plan described below; no
Preference Stock is outstanding.
A copy of the Company's Articles of Incorporation is filed as an Exhibit to
the Registration Statement. The following summary does not purport to be
complete and is subject in all respects to the provisions of such Articles of
Incorporation and does not relate to or give effect to the provisions of the
statutory or common law of the State of Michigan. The summary given below is
qualified in its entirety by reference to such Articles of Incorporation and the
laws of the State of Michigan.
COMMON STOCK
Dividend Rights. The holders of Common Stock are entitled to dividends
when, as and if, declared by the Company's Board of Directors out of the surplus
of the Company after full cumulative dividends on the Preferred Stock and
Preference Stock shall have been paid or set apart for payment and any sinking
fund obligations with respect to the Preferred Stock and Preference Stock have
been satisfied.
The Company has long-term debt agreements which contain restrictive
financial covenants including, among others, limits on the payment of dividends
beyond certain levels. The Company is currently in compliance with all of the
covenants in these agreements. With respect to the payment of dividends or any
other distributions in respect of its capital stock, such agreements provide
that the Company may not declare and pay any dividends (except dividends or
other distributions payable in shares of its capital stock), redeem or retire
its capital stock (or any warrants, rights, or options to purchase or acquire
its capital stock), or make other distributions with respect to its capital
stock (such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such other
payments or distributions being collectively referred to as "Restricted
Payments") if, after giving effect thereto, (i) any event of default under such
agreements exist; (ii) the aggregate amount of Restrictive Payments since
January 1, 1994 would exceed the Company's consolidated net income for the same
period plus an adjustment factor of $14,171,000; or (iii) would cause the
consolidated net worth of the Company to be less than $80,000,000.
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After December 31, 1999, the adjustment factor of $14,171,000 is reduced each
quarter by $625,000 until the adjustment factor equals $11,000,000. Under the
most restrictive terms, as of March 31, 1998, $12,381,000 is available for
dividends.
Voting Rights. The holders of Common Stock are entitled to one vote for
each share on all matters voted upon by the Company's shareholders and, subject
to any voting rights of the holders of the Cumulative Preferred Stock and
Preference Stock described below, the holders of such shares currently possess
all voting power. The Company's Articles of Incorporation provide for cumulative
voting for the election of directors of the Company.
Preemptive Rights. No holder of Common Stock has any preemptive right to
subscribe to any additional securities which may be issued by the Company.
Liquidation Rights. Subject to the preferential rights of holders of the
Preferred Stock and Preference Stock, the holders of the Common Stock are
entitled to share on a pro rata basis in the net assets of the Company which
remain after satisfaction of all liabilities.
PREFERRED STOCK
The Board of Directors of the Company is authorized, without further action
by shareholders, to issue Preferred Stock, in one or more series, from time to
time, with such rights and preferences as may be provided in a resolution
adopted by the Board of Directors. The authority of the Board includes, but is
not limited to, the determination or fixing of the following with respect to
shares of such class or any series thereof: (i) the rate of dividends and the
extent of further participation in dividend distribution, if any; (ii) the price
at and the terms and conditions on which the shares are redeemable; (iii) the
amount payable upon shares in event of voluntary or involuntary liquidation;
(iv) sinking fund provisions for the redemption or purchase of shares; and (v)
the terms and conditions on which shares are convertible.
In the event of the liquidation or dissolution of the Company, the holders
of Preferred Stock are entitled to receive a fixed amount for each series before
any distribution is made to the holders of Common Stock. As long as any
Preferred Stock remains outstanding, the Company may not purchase any shares of
its Common Stock or redeem any Preference Stock.
As long as any Preferred Stock remains outstanding, the Company may not
without the consent of the holders of at least two-thirds of the outstanding
Preferred Stock authorize any class of stock having a priority or preference
over or ranking on a parity with the Preferred Stock as to dividends or
distribution of assets.
If at any time the Company shall fail to declare and pay or set apart for
payment in full eight quarterly dividends (whether or not consecutive) on all of
the outstanding Preferred Stock, then the holders of the outstanding Preferred
Stock shall, thereupon, have the right, voting as a single class irrespective of
series, to elect such number of directors of the Company as shall constitute one
less than the smallest number of directors necessary to constitute a majority of
the full Board of Directors, and such right shall continue (and may be exercised
at any annual or other meeting of shareholders for the election of directors)
until the Company shall have paid or declared and set apart for payment all
accrued dividends on the Preferred Stock for all past quarterly dividend
periods.
SERIES A PREFERRED STOCK
The Series A Preferred Stock carries a dividend of $2.3125 per share per
annum which accrued from the date of original issue. Upon redemption, the
holders of such shares are entitled to receive $25 per share plus all dividends
accrued or in arrears thereon. The preferential amount payable upon the shares
of this series in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company or reduction of capital resulting in
the distribution of assets to the shareholders, is $25 per share together with
an amount equal to dividends accrued or in arrears thereon. The holders of
shares of this series shall have the right, at their option, to convert such
shares into shares of Common Stock of the Company at any time at a current
conversion price of 4.11 shares of Common Stock for each share of Series A
Preferred Stock. The conversion
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price is subject to adjustment as a result of certain events. The holders of
Series A Preferred Stock have the voting rights described above under Preferred
Stock.
PREFERENCE STOCK
The Board of Directors has the authority to divide the shares of Preference
Stock into series and, within the limitations set forth in the laws of the State
of Michigan and in the Articles of Incorporation, to fix and determine the
relative rights and preferences of the shares of any series so established. The
Preference Stock ranks junior to all series of Preferred Stock as to the payment
of dividends and the distribution of assets, except to the extent that a
specific series of Preferred Stock provides otherwise.
SERIES A PREFERENCE STOCK
In January, 1997, the Board of Directors created a series of Preference
Stock designated as Series A Preference Stock with the number of shares
constituting such series set at 2,000,000. No shares of Preference Stock are
outstanding.
If Series A Preference Stock was outstanding, dividends would accrue and be
cumulative in an amount per share per quarter equal to the greater of (i) $10.00
or (ii) the Adjustment Number (as defined below) times the per share amount of
all cash dividends, and the Adjustment Number times the per share amount
(payable in kind) of all non-cash dividends or other distributions (other than a
dividend payable in shares of Common Stock or a subdivision of the shares of
Common Stock), declared on the Common Stock since the preceding quarterly
dividend payment date, or, if later, since the issuance or such Series A
Preference Stock. Upon any liquidation or dissolution of the Company the holders
of Series A Preference Stock are entitled to receive $100 per share plus all
accrued and unpaid dividends. The Series A Preference Stock is not redeemable
and ranks junior to all series of Preferred Stock as to the payment of dividends
and the distribution of assets, unless the terms of any series provides
otherwise. If Series A Preference Stock was outstanding, a holder of Series A
Preference Stock would be entitled to the number of votes equal to the
Adjustment Number times the number of votes to which a holder of Common Stock is
entitled. Except as otherwise provided below or by law, Series A Preference
Stock and Common Stock shall vote together as one class on all matters submitted
to a vote of the holders of Common Stock. If any dividends on Series A
Preference Stock shall be in arrears for six or more quarterly dividends, a
"default period" shall begin. The default period shall end when all accrued
dividends shall have been paid or set apart for payment. During a default
period, Series A Preference Stock shall have the right to elect two directors.
This vote shall be as a class for all series of Preference Stock entitled to
vote.
The Articles of Incorporation initially set the Adjustment Number at 100.
If the Company shall (i) pay any dividend on Common Stock in shares of Common
Stock, (ii) subdivide the Common Stock, or (iii) combine the Common Stock into a
smaller number of shares, the Adjustment Number shall be modified by multiplying
it by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock outstanding immediately prior to such event.
DIRECT STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
The Company sponsors a direct stock purchase and dividend reinvestment plan
(the "Reinvestment Plan") under which investors may purchase shares of Common
Stock without paying brokerage fees and other expenses. Under the Reinvestment
Plan, Common Stock may be purchased at the average of the over-the-counter
closing ask prices for the three trading days prior to the fifth day of each
month as quoted in the NASDAQ System. The Company initially reserved 2,000,000
shares of its Common Stock for issuance under the Reinvestment Plan. As of May
15, 1998, 1,848,943 shares were available for issuance under the Reinvestment
Plan.
30
<PAGE> 67
OTHER PROVISIONS
Articles of Incorporation. The following provisions of the Company's
Articles of Incorporation may delay, defer or prevent a person from acquiring
the Company or changing control of the Company's Board of Directors. The
Company's Articles of Incorporation divide the Board into three classes with
staggered terms; each director is elected for a three year term. Approximately
one-third of the Board positions are filled by a shareholder vote each year.
Directors may be removed but only for cause, at an annual meeting of
shareholders and by the affirmative vote of a majority of the shares then
entitled to vote for the election of directors. In addition to requirements
imposed under Section 7A of the Michigan Business Corporation Act (the "MBCA"),
the Company's Articles of Incorporation provide that a business combination
cannot occur unless a written opinion is obtained from an independent investment
banker that the consideration to be paid to the shareholders of the Company is
fair and reasonable; provided, however, the directors may waive this
requirement. The Company's Articles of Incorporation also contain provisions
limiting the personal liability of directors.
Anti-Takeover Statutes. The Company is subject to Chapter 7A of the MBCA,
which provides that business combinations subject to Chapter 7A between a
Michigan corporation and a beneficial owner of shares entitled to 10% or more of
the voting power of such corporation generally require the affirmative vote of
90% of the votes of each class of stock entitled to vote, and not less than 2/3
of each class of stock entitled to vote (excluding voting shares owned by such
10% owner), voting as a separate class. Such requirements do not apply if (i)
the corporation's board of directors approves the transaction prior to the time
the 10% owner becomes such or (ii) the transaction satisfies certain fairness
standards, certain other conditions are met and the 10% owner has been such for
at least five years.
The Company is subject to Chapter 7B of the MBCA which provides that,
unless a corporation's articles of incorporation or bylaws provide that Chapter
7B does not apply, "control shares" of a corporation acquired in a control share
acquisition have no voting rights except as granted by the stockholders of the
corporation. "Control shares" are shares which, when added to shares previously
owned by a stockholder, increase such stockholder's ownership of voting stock to
more than 20% but less than 33 1/3%, more than 33 1/3% but less than a majority,
or more than a majority, of the votes to which all of the capital stock of the
corporation is entitled. Voting rights of control shares must be approved by the
affirmative vote of a majority of all shares entitled to vote excluding voting
shares owned by the acquirer and certain officers and directors. However, no
such approval is required for gifts or other transactions not involving
consideration, for a merger to which the corporation is a party or certain other
transactions described in Chapter 7B.
Rights to Purchase Preference Stock. In January 1997, the Company adopted a
Shareholder's Rights Plan (the "Shareholders Rights Plan") pursuant to which
2,000,000 shares of Series A Preference Stock are reserved under the
Shareholders Rights Plan for sale to holders of Common Stock. The Common Stock
currently trades with a right (the "Right") to purchase such Series A Preference
Stock. The Right is intended to protect shareholders in the event of an
unsolicited attempt to acquire the Company and becomes exercisable upon the
occurrence of certain triggering events. The Right is transferred automatically
with the transfer of the Common Stock until separate rights certificates are
distributed upon the occurrence of certain events. The Right could have the
effect of delaying, deferring or preventing a person from acquiring the Company
or accomplishing a change in control of the Company's board of directors.
Registration Rights. In connection with the Company's acquisition of
Hotflame (See "The Company -- SEMCO Ventures, Inc."), the Company has agreed,
among other things, to file with the Commission a registration statement for the
352,944 shares of Common Stock received by the selling shareholders of Hotflame
and use its best efforts to keep the registration statement effective until the
earlier of (i) the time all the Common Stock received by the selling
shareholders of Hotflame has been sold or (ii) one year. The Company intends to
file a Registration Statement on Form S-3 with respect to these shares of Common
Stock.
Transfer Agent. The Company is its own transfer agent and registrar for its
Common Stock.
The Common Stock is traded in the over-the-counter market and is quoted on
the NASDAQ National Market System under the symbol SMGS.
31
<PAGE> 68
PLAN OF DISTRIBUTION
SEMCO Energy may sell Medium Term Notes or Common Stock and the Trust may
sell Trust Preferred Securities in any of the following ways: (i) directly to
purchasers, (ii) through agents, (iii) to or through underwriters or (iv)
through dealers.
Offers to purchase these securities may be solicited directly by SEMCO
Energy and/or the Trust, or by their agents. The applicable Prospectus
Supplement will set forth the terms of the offering of the Offered Securities,
including the names of any underwriters, dealers or agents, the purchase price
of such Offered Securities, the proceeds to the Company, any underwriting
discounts or other compensation any initial public offering providing any
discounts or concessions or paid to dealers or any security exchange on which
such Offered Securities may be listed.
If underwriters or dealers are used, securities will be acquired by them
for their own account and may be resold in one or more transactions at fixed or
varying prices determined at the time of sale. Each underwriter and dealer will
be named in the applicable Prospectus Supplement. Underwriters and dealers may
receive discounts or commissions from SEMCO Energy and may also receive
commissions from purchasers.
Agents, underwriters, and dealers may be entitled under the relevant
agreements to indemnification by SEMCO Energy and/or the Trust against certain
liabilities, including liabilities under the Securities Act or to contribution
with respect to payments the underwriters, dealers or agents may be required to
make in respect thereof.
Certain of the underwriters, agents and their controlling persons may
engage in transactions with or perform services for SEMCO Energy or its
affiliates in the ordinary course of business.
All Debt Securities and all Trust Preferred Securities will be new issues
of securities with no established trading market. Any underwriters to whom such
securities are sold for public offering and sale may make a market in such
securities, but such underwriters will not be obligated to so do and may
discontinue any market making at any time without notice. No assurance can be
given concerning liquidity of the trading market for any such securities.
LEGAL MATTERS
The validity of the securities offered here and certain related matters
will be passed upon for SEMCO Energy, and certain United Stated federal income
taxation matters will be passed upon for SEMCO Energy and the Trust by Dickinson
Wright PLLC, Detroit, Michigan. Certain matters of Delaware law relating to the
validity of the Trust Preferred Securities will be passed upon on behalf of the
Trust by Richards, Layton & Finger, P.A., Wilmington, Delaware. Certain legal
matters will be passed upon for the Underwriters by Dewey Ballantine LLP, New
York, New York.
32
<PAGE> 69
EXPERTS
The Financial Statements and schedule included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997, which are incorporated
by reference in this Prospectus, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated herein by reference in reliance upon the authority
of said firm as experts in giving said report.
With respect to the unaudited interim consolidated financial information in
the Company's Quarterly Report on Form 10-Q for the period ended March 31, 1998,
Arthur Andersen LLP has applied limited procedures in accordance with
professional standards for a review of such information. However, their separate
report thereon states that they did not audit and they did not express an
opinion on that interim consolidated financial information. Accordingly, the
degree of reliance on their report on that information should be restricted in
light of the limited nature of the review procedures applied. In addition, the
accountants are not subject to the liability provisions of Section 11 of the
Securities Act of 1933, as amended ("Securities Act"), for their report on the
unaudited interim consolidated financial information because that report is not
a "report" or "part" of the registration statement prepared or certified by the
accountants within the meaning of Sections 7 and 11 of the Securities Act.
Future Financial Statements of the Company and the reports thereon of
Arthur Andersen LLP also will be incorporated by reference in this Prospectus in
reliance upon the authority of that firm as experts in giving those reports to
the extent that said firm has audited said Financial Statements and consented to
the use of their reports thereon.
33
<PAGE> 70
------------------------------------------------------
------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, SEMCO CAPITAL TRUST OR THE
UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR PROSPECTUS
NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR
SEMCO CAPITAL TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary of Offering....................... S-4
Risk Factors.............................. S-8
SEMCO Capital Trust....................... S-10
Description of the Trust Preferred
Securities.............................. S-11
Description of the Subordinated
Debentures.............................. S-23
Relationship Among the Trust Preferred
Securities, the Subordinated Debentures
and the Trust Guarantee................. S-26
Material Federal Income Tax
Considerations.......................... S-28
Underwriting.............................. S-31
Legal Opinions............................ S-32
Glossary.................................. S-33
PROSPECTUS
Available Information..................... 2
Incorporation of Certain Information by
Reference............................... 3
The Company............................... 3
The Trust................................. 5
Use of Proceeds........................... 6
Consolidated Ratios of Earnings to Fixed
Charges................................. 6
Description of Debt Securities............ 7
Description of Trust Preferred
Securities.............................. 19
Description of the Trust Guarantee........ 20
The Agreement as to Expenses and
Liabilities............................. 22
Additional Description of Subordinated
Debentures to be Issued to Trust........ 23
Effect of Obligations Under Subordinated
Debentures and Trust
Preferred Securities Guarantee.......... 27
Description of Capital Stock.............. 28
Plan of Distribution...................... 32
Legal Matters............................. 32
Experts................................... 33
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
SEMCO CAPITAL TRUST
% CUMULATIVE
TRUST PREFERRED SECURITIES
---------------------------
PROSPECTUS SUPPLEMENT
---------------------------
, 1998
------------------------------------------------------
------------------------------------------------------
<PAGE> 71
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following statement sets forth the estimated amounts of expenses, other
than underwriting discounts and commissions, to be borne by the Company in
connection with the distribution of the Offered Securities:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $ 59,000
Printing Expenses........................................... 180,000
Accounting Fees and Expenses................................ 120,000
Legal Fees and Expenses..................................... 600,000
Trustee Fees and Expense.................................... 35,000
Miscellaneous Expenses...................................... 216,000
----------
Total Estimated Expenses.......................... $1,210,000
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Bylaws of the Company provide that directors and officers, former
directors and officers, their heirs, executors and administrators of the Company
are entitled to indemnification to the extent and under the circumstances
permitted by the Michigan Business Corporation Act ("MBCA") including, where
permitted and upon satisfaction of any undertaking required, advance of
expenses.
Through reference to the MBCA, the Company's Bylaws contain indemnification
provisions concerning third party actions as well as actions in the right of the
Company. The Bylaws, through reference to the MBCA, provide that the Company
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Company) by reason of the fact that he or she is or
was a director or officer of the Company, or is or was serving at the request of
the Company as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise, whether for profit or not, against expenses (including
attorneys' fees), judgments, penalties, fees and amounts paid in settlement
actually and reasonably incurred by him or her in connection with such action,
suit or proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the Company
or its shareholders, and with respect to any criminal action or proceeding, had
no reasonable cause to believe his or her conduct was unlawful.
With respect to derivative actions, the Bylaws, through the reference to
the MBCA, provide that the Company shall indemnify any person who was or is a
party to or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Company to procure a judgment
in its favor by reason of the fact that he or she is or was a director or
officer of the Company, or is or was serving at the request of the Company as a
director, officer, partner, trustee, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him or her in connection with the defense or settlement of such judgment or suit
if he or she acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the Company or its shareholders
and except that no indemnification shall be made in respect of any claim, issue
or matter as to which such person has been found liable to the Company unless
and only to the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all relevant circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses, but such indemnification is
limited to reasonable expenses incurred.
The MBCA provides for corporate power to purchase and maintain insurance on
behalf of directors and officers (including persons acting as a director,
officer, employee or agent of another business entity on behalf
II-1
<PAGE> 72
of the corporation) against any liability due to such status, whether or not the
corporation would have power to indemnify such person against such liability.
The Company provides such insurance.
The Company's Articles of Incorporation provide that a director of the
Company shall not be personally liable to the Company or its shareholders for
monetary damages for breach of the director's fiduciary duty. However, it does
not eliminate or limit the liability of a director for any breach of a duty, act
or omission for which the elimination or limitation of liability is not
permitted by the MBCA, currently including, without limitation, the following:
(1) the amount of a financial benefit received by a director to which he or she
is not entitled; (2) intentional infliction of harm on the Company or its
shareholders; (3) illegal loans, distributions of dividends or assets, or stock
purchases as described in Section 551(1) of MBCA; and (4) an intentional
criminal act committed by the director.
The Trust Agreement provides that the Company shall indemnify the Trustees
against loss, damage, claim, liability or expense incurred without negligence,
willful misconduct or bad faith on their part, arising out of or in connection
with the acceptance or administration of the Trust Agreement, including the
costs and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their power or duties
thereunder.
II-2
<PAGE> 73
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
- ----------- -----------------------
<S> <C>
1.1* Form of Underwriting Agreement relating to the Subordinated
Debentures and Trust Preferred Securities
1.2* Form of Distribution Agreement relating to the Medium Term
Notes
1.3* Form of Underwriting Agreement relating to the Common Stock
3.1 Articles of Incorporation (a)
3.2 Bylaws (b)
4.1 Form of Subordinated Debenture Indenture
4.2 Form of Supplemental Indenture to Subordinated Debenture
Indenture to be used in connection with issuance of
Subordinated Debentures
4.3 Form of Note Indenture
4.4* Form of Supplemental Indenture, if any, to Note Indenture to
be used in connection with the issuance of Medium Term Notes
4.5 Certificate of Trust for SEMCO Capital Trust
4.6 Trust Agreement for SEMCO Capital Trust
4.7 Amended and Restated Trust Agreement for SEMCO Capital Trust
4.8 Form of Trust Preferred Security (included in Exhibit 4.7
above)
4.9 Form of Trust Guarantee
4.10 Form of Subordinated Debenture (included in Exhibit 4.2
above)
4.11* Form of Medium Term Note
4.12 Form of Agreement as to Expenses and Liabilities (included
in Exhibit 4.7 above)
4.13 Specimen of Common Stock Certificate
4.14 Shareholder's Rights Agreement dated as of April 16, 1997
(c)
5.1 Opinion of Dickinson Wright PLLC
5.2 Opinion of Richards, Layton & Finger, P.A. relating to SEMCO
Capital Trust
8 Tax Opinion of Dickinson Wright PLLC
12 Statement Relating to Computation of Ratios
23.1 Consent of Dickinson Wright PLLC (included in Exhibit 5.1
above)
23.2 Consent of Dickinson Wright PLLC (included in Exhibit 8
above)
23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2 above)
23.4 Consents of Arthur Andersen LLP
24 Power of Attorney
25.1 Statement of Eligibility on Form T-1 of Note Indenture
Trustee
25.2 Statement of Eligibility on Form T-1 of Subordinated
Indenture Trustee
25.3 Statement of Eligibility on Form T-1 of Property Trustee
25.4 Statement of Eligibility on Form T-1 of Guarantee Trustee
27* Financial Data Schedule
</TABLE>
- -------------------------
* To be filed by amendment.
(a) Articles of Incorporation as restated July 11, 1989, (Filed with Form 10-K
for 1989, dated March 29, 1990, File No. 0-8503), Certificate of Amendment
to Article III of the Articles of Incorporation dated May 16, 1990 (Filed
with Form 10-K for 1990, dated March 28, 1991, File No 0-8503) and
Certificate of Amendment to Articles I, III and VI of the Articles of
Incorporation dated April 16, 1997 (Filed with Form 10-Q for the quarter
ended March 31, 1997, File No. 0-8503) and incorporated herein by reference
with the same effect as if filed with this Registration Statement.
(b) Filed with Form 10-Q for the quarter ended September 30, 1997, File No.
0-8503, and incorporated herein by reference with the same effect as if
filed with this Registration Statement.
(c) Filed with Form 10-K for 1996, dated March 27, 1997, File No. O-8503, and
incorporated herein by reference with the same effect as if filed with this
Registration Statement.
II-3
<PAGE> 74
ITEM 17. UNDERTAKINGS.
Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, unless the information required to be included
in such post-effective amendment is contained in a periodic report filed
with or furnished to the Securities and Exchange Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 and incorporated by reference in this Registration
Statement;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement, unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed with or furnished to the Securities and Exchange Commission
by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 and incorporated by reference in this
Registration Statement; provided, however that any increase or decrease
in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of SEMCO Energy's Form 10-K pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(5) To provide to the underwriter (if any), at the closing of the sale
of Trust Preferred Securities, certificates representing Trust Preferred
Securities in such denominations and registered in such names as required
by the underwriter to permit prompt delivery to each purchaser.
(6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of each Registrant pursuant to any charter provision,
bylaw, contract, arrangement, statute, or otherwise, each Registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a Registrant of
expenses incurred or paid by a director, officer, or controlling person of
a Registrant in the successful defense of any such action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the affected Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling
II-4
<PAGE> 75
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
(7) That, for the purposes of determining any liability under the
Securities Act of 1933:
(i) The information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(ii) Each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
ITEM 18. FINANCIAL STATEMENTS AND SCHEDULES.
Not applicable.
II-5
<PAGE> 76
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, SEMCO Energy,
Inc. certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Port Huron and State of Michigan, on
the 8th day of July, 1998.
SEMCO ENERGY, INC.
By: /s/ WILLIAM L. JOHNSON
------------------------------------
William L. Johnson
Chairman, President and C.E.O.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed below by the
following persons in the capacities indicated on July 8, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
Chairman and President (Director and Principal
- ----------------------------------------------------- Executive Officer)
William L. Johnson
Senior Vice President (Principal Financial and
- ----------------------------------------------------- Accounting Officer)
Robert J. Digan, II
/s/ DANIEL A. BURKHARDT* Director
- -----------------------------------------------------
Daniel A. Burkhardt
/s/ EDWARD J. CURTIS* Director
- -----------------------------------------------------
Edward J. Curtis
/s/ JOHN T. FERRIS* Director
- -----------------------------------------------------
John T. Ferris
/s/ MICHAEL O. FRAZER* Director
- -----------------------------------------------------
Michael O. Frazer
/s/ HARVEY I. KLEIN* Director
- -----------------------------------------------------
Harvey I. Klein
Director
- -----------------------------------------------------
Stewart J. Kniff
/s/ BRUCE G. MACLEOD* Director
- -----------------------------------------------------
Bruce G. Macleod
/s/ FREDERICK S. MOORE* Director
- -----------------------------------------------------
Frederick S. Moore
/s/ EDITH A. STOTLER* Director
- -----------------------------------------------------
Edith A. Stotler
/s/ DONALD W. THOMASON* Director
- -----------------------------------------------------
Donald W. Thomason
*By /s/ WILLIAM L. JOHNSON
- -----------------------------------------------------
William L. Johnson, Attorney-in-fact
</TABLE>
II-6
<PAGE> 77
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the SEMCO
Capital Trust has duly caused this registration statement or amendment to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Port Huron and State of Michigan, on the 8th day of July, 1998.
SEMCO CAPITAL TRUST
By SEMCO Energy, Inc., as Depositor
BY: /s/ WILLIAM L. JOHNSON
-----------------------------------
William L. Johnson
Chairman, President and C.E.O.
BY: /s/ ROBERT J. DIGAN, II
-----------------------------------
Robert J. Digan, II
Senior Vice President and Chief
Financial Officer
II-7
<PAGE> 78
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
- ----------- -----------------------
<S> <C>
1.1* Form of Underwriting Agreement relating to the Subordinated
Debentures and Trust Preferred Securities
1.2* Form of Distribution Agreement relating to the Medium Term
Notes
1.3* Form of Underwriting Agreement relating to the Common Stock
3.1 Articles of Incorporation (a)
3.2 Bylaws (b)
4.1 Form of Subordinated Debenture Indenture
4.2 Form of Supplemental Indenture to Subordinated Debenture
Indenture to be used in connection with issuance of
Subordinated Debentures
4.3 Form of Note Indenture
4.4* Form of Supplemental Indenture, if any, to Note Indenture to
be used in connection with the issuance of Medium Term Notes
4.5 Certificate of Trust for SEMCO Capital Trust
4.6 Trust Agreement for SEMCO Capital Trust
4.7 Amended and Restated Trust Agreement for SEMCO Capital Trust
4.8 Form of Trust Preferred Security (included in Exhibit 4.7
above)
4.9 Form of Trust Guarantee
4.10 Form of Subordinated Debenture (included in Exhibit 4.2
above)
4.11* Form of Medium Term Note
4.12 Form of Agreement as to Expenses and Liabilities (included
in Exhibit 4.7 above)
4.13 Specimen of Common Stock Certificate
4.14 Shareholder's Rights Agreement dated as of April 16, 1997
(c)
5.1 Opinion of Dickinson Wright PLLC
5.2 Opinion of Richards, Layton & Finger, P.A. relating to SEMCO
Capital Trust
8 Tax Opinion of Dickinson Wright PLLC
12 Statement Relating to Computation of Ratios
23.1 Consent of Dickinson Wright PLLC (included in Exhibit 5.1
above)
23.2 Consent of Dickinson Wright PLLC (included in Exhibit 8
above)
23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2 above)
23.4 Consents of Arthur Andersen LLP
24 Power of Attorney
25.1 Statement of Eligibility on Form T-1 of Note Indenture
Trustee
25.2 Statement of Eligibility on Form T-1 of Subordinated
Indenture Trustee
25.3 Statement of Eligibility on Form T-1 of Property Trustee
25.4 Statement of Eligibility on Form T-1 of Guarantee Trustee
27* Financial Data Schedule
</TABLE>
- -------------------------
* To be filed by amendment.
(a) Articles of Incorporation as restated July 11, 1989, (Filed with Form 10-K
for 1989, dated March 29, 1990, File No. 0-8503), Certificate of Amendment
to Article III of the Articles of Incorporation dated May 16, 1990 (Filed
with Form 10-K for 1990, dated March 28, 1991, File No 0-8503) and
Certificate of Amendment to Articles I, III and VI of the Articles of
Incorporation dated April 16, 1997 (Filed with Form 10-Q for the quarter
ended March 31, 1997, File No. 0-8503) and incorporated herein by reference
with the same effect as if filed with this Registration Statement.
(b) Filed with Form 10-Q for the quarter ended September 30, 1997, File No.
0-8503, and incorporated herein by reference with the same effect as if
filed with this Registration Statement.
(c) Filed March 6, 1997 as part of 1997 Proxy Statement, dated March 7, 1997,
File No. D-8503, and incorporated herein by reference with the same effect
as if filed with this Registration Statement.
<PAGE> 1
EXHIBIT 4.1
- --------------------------------------------------------------------------------
SEMCO ENERGY, INC.
TO
NBD BANK
Trustee
-------------------------
Indenture
Dated as of _____ 1, 1998 Subordinated Debentures
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE........................................................................................................1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION............................................................1
SECTION 101. DEFINITIONS.....................................................................................1
SECTION 102. COMPLIANCE CERTIFICATE AND OPINIONS.............................................................11
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE..........................................................11
SECTION 104. ACTS OF HOLDERS.................................................................................12
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY...........................................................14
SECTION 106. NOTICE TO HOLDERS; WAIVER.......................................................................14
SECTION 107. EFFECT OF HEADINGS AND TABLE OF CONTENTS........................................................15
SECTION 108. SUCCESSORS AND ASSIGNS..........................................................................15
SECTION 109. SEPARABILITY CLAUSE.............................................................................15
SECTION 110. BENEFITS OF INDENTURE...........................................................................15
SECTION 111. GOVERNING LAW...................................................................................15
SECTION 112. LEGAL HOLIDAYS..................................................................................15
SECTION 113. NO RECOURSE AGAINST OTHERS......................................................................16
ARTICLE TWO SECURITIES FORMS......................................................................................16
SECTION 201. FORMS OF SECURITIES.............................................................................16
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.................................................16
SECTION 203. SECURITIES ISSUABLE IN GLOBAL FORM..............................................................17
ARTICLE THREE THE SECURITIES......................................................................................17
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES............................................................17
SECTION 302. DENOMINATIONS...................................................................................20
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING..................................................21
SECTION 304. TEMPORARY SECURITIES............................................................................23
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.............................................25
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES................................................28
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED..................................................29
SECTION 308. PERSONS DEEMED OWNERS...........................................................................31
SECTION 309. CANCELLATION....................................................................................32
SECTION 310. COMPUTATION OF INTEREST.........................................................................32
ARTICLE FOUR SATISFACTION AND DISCHARGE...........................................................................32
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.........................................................32
SECTION 402. APPLICATION OF TRUST FUNDS......................................................................34
ARTICLE FIVE REMEDIES..............................................................................................34
SECTION 501. EVENTS OF DEFAULT...............................................................................34
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT..............................................36
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.................................37
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM................................................................38
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES OR COUPONS..........................38
SECTION 506. APPLICATION OF MONEY COLLECTED..................................................................39
SECTION 507. LIMITATION ON SUITS.............................................................................39
SECTION 508. UNCONDITIONAL RIGHTS OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM,
IF ANY, INTEREST AND ADDITIONAL INTEREST........................................................40
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES..............................................................40
</TABLE>
*This Table of Contents does not constitute part of the Indenture or
have any bearing upon the interpretation of any of its terms and provisions.
i
<PAGE> 3
<TABLE>
<S> <C>
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE..................................................................40
SECTION 511. DELAY OR OMISSION NOT WAIVER....................................................................40
SECTION 512. CONTROL BY HOLDERS OF SECURITIES................................................................41
SECTION 513. WAIVER OF PAST DEFAULTS.........................................................................41
SECTION 514. WAIVER OF USURY, STAY OR EXTENSION LAWS.........................................................41
SECTION 515. UNDERTAKINGS FOR COSTS..........................................................................42
ARTICLE SIX THE TRUSTEE............................................................................................42
SECTION 601. NOTICE OF DEFAULTS..............................................................................42
SECTION 602. CERTAIN RIGHTS OF TRUSTEE.......................................................................42
SECTION 603. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES..........................................44
SECTION 604. MAY HOLD SECURITIES.............................................................................44
SECTION 605. MONEY HELD IN TRUST............................................................................44
SECTION 606. COMPENSATION AND REIMBURSEMENT..................................................................44
SECTION 607. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY; CONFLICTING INTERESTS..................................45
SECTION 608. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR...............................................45
SECTION 609. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR..........................................................46
SECTION 610. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.....................................47
SECTION 611. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY...............................................48
SECTION 612. APPOINTMENT OF AUTHENTICATING AGENT.............................................................48
ARTICLE SEVEN HOLDERS' LIST AND REPORTS BY TRUSTEE AND COMPANY....................................................50
SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS....................................................50
SECTION 702. REPORTS BY TRUSTEE..............................................................................50
SECTION 703. REPORTS BY COMPANY..............................................................................50
SECTION 704. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESS OF HOLDERS.........................................51
ARTICLE EIGHT CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE...................................................51
SECTION 801. CONSOLIDATIONS AND MERGERS OF COMPANY AND SALES, LEASES AND
CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS.............................................51
SECTION 802. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION......................................................52
SECTION 803. OFFICER'S CERTIFICATE AND OPINIONS OF COUNSEL...................................................52
ARTICLE NINE SUPPLEMENTAL INDENTURES..............................................................................52
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS..............................................52
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.................................................54
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES............................................................55
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES...............................................................55
SECTION 905. CONFORMITY WITH TIA.............................................................................55
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES..............................................55
ARTICLE TEN COVENANTS..............................................................................................55
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST AND ADDITIONAL
INTEREST.......................................................................................55
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY................................................................56
SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST..............................................57
SECTION 1004. EXISTENCE......................................................................................58
SECTION 1005. MAINTENANCE OF PROPERTIES......................................................................58
SECTION 1006. INSURANCE......................................................................................59
SECTION 1007. PAYMENT OF TAXES AND OTHER CLAIMS..............................................................59
SECTION 1008. PROVISION OF FINANCIAL INFORMATION.............................................................59
SECTION 1009. STATEMENT AS TO COMPLIANCE.....................................................................59
SECTION 1010. ADDITIONAL INTEREST............................................................................59
SECTION 1011. LIMITATIONS ON LIENS...........................................................................60
SECTION 1012. LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS................................................62
SECTION 1013. WAIVER OF CERTAIN COVENANTS....................................................................63
SECTION 1014. COVENANTS REGARDING TRUST......................................................................63
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE ELEVEN REDEMPTION OF SECURITIES...........................................................................63
SECTION 1101. APPLICABILITY OF ARTICLE.......................................................................63
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE..........................................................64
SECTION 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED..............................................64
SECTION 1104. NOTICE OF REDEMPTION...........................................................................64
SECTION 1105. DEPOSIT OF REDEMPTION PRICE....................................................................65
SECTION 1106. SECURITIES PAYABLE ON REDEMPTION DATE..........................................................66
SECTION 1107. SECURITIES REDEEMED IN PART....................................................................66
ARTICLE TWELVE SINKING FUNDS......................................................................................67
SECTION 1201. APPLICABILITY OF ARTICLE.......................................................................67
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES..........................................67
SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUNDS.....................................................67
ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF HOLDERS...............................................................68
SECTION 1301. APPLICABILITY OF ARTICLE.......................................................................68
SECTION 1302. REPAYMENT OF SECURITIES........................................................................68
SECTION 1303. EXERCISE OF OPTION.............................................................................68
SECTION 1304. WHEN SECURITIES PRESENTED FOR REPAYMENT BECOME DUE AND PAYABLE.................................69
SECTION 1305. SECURITIES REPAID IN PART......................................................................70
ARTICLE FOURTEEN DEFEASANCE AND COVENANT DEFEASANCE...............................................................70
SECTION 1401. APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT DEFEASANCE
OR COVENANT DEFEASANCE.........................................................................70
SECTION 1402. DEFEASANCE AND DISCHARGE.......................................................................70
SECTION 1403. COVENANT DEFEASANCE............................................................................71
SECTION 1404. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE................................................71
SECTION 1405. DEPOSITED MONEY AND GOVERNMENT OBLIGATION TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.................................................................73
ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES.................................................................73
SECTION 1501. PURPOSES FOR WHICH MEETINGS MAY BE CALLED......................................................73
SECTION 1502. CALL, NOTICE AND PLACE OF MEETINGS.............................................................73
SECTION 1503. PERSONS ENTITLED TO VOTE AT MEETING............................................................74
SECTION 1504. QUORUM; ACTION.................................................................................74
SECTION 1505. DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS............................75
SECTION 1506. COUNTING VOTES AND RECORDING ACTION OF MEETINGS................................................76
ARTICLE SIXTEEN SUBORDINATION......................................................................................76
SECTION 1601. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS..................................................76
SECTION 1602. PAYMENT OF PROCEEDS UPON DISSOLUTION, ETC......................................................77
SECTION 1603. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.................................................78
SECTION 1604. PAYMENT PERMITTED IF NO DEFAULT................................................................78
SECTION 1605. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS........................................78
SECTION 1606. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS....................................................78
SECTION 1607. TRUSTEE TO EFFECTUATE SUBORDINATION............................................................79
SECTION 1608. NO WAIVER OF SUBORDINATION PROVISIONS..........................................................79
SECTION 1609. TRUST MONEYS NOT SUBORDINATED..................................................................80
SECTION 1610. NOTICE TO THE TRUSTEE..........................................................................80
SECTION 1611. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.................................80
SECTION 1612. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.......................................81
SECTION 1613. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS PRESERVATION
OF TRUSTEE'S RIGHTS............................................................................81
SECTION 1614. ARTICLE APPLICABLE TO PAYING AGENTS............................................................81
SECTION 1615. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON SUBORDINATION PROVISIONS.........................81
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE SEVENTEEN MISCELLANEOUS PROVISIONS........................................................................82
SECTION 1701. ASSIGNMENT; BINDING EFFECT.....................................................................82
SECTION 1702. ADDITIONAL INTEREST............................................................................82
</TABLE>
EXHIBITS:
EXHIBIT A-1 FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY
OR TO OBTAIN INTEREST PAYABLE PRIOR TO THE
EXCHANGE DATE
EXHIBIT A-2 FORM OF CERTIFICATE TO BE GIVEN BY
EUROCLEAR AND CEDEL S.A. IN CONNECTION WITH
THE EXCHANGE OF A PORTION OF A TEMPORARY
GLOBAL SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
iv
<PAGE> 6
SEMCO ENERGY, INC.
Reconciliation and tie between Trust Indenture Act
of 1939 (the "1939 Act") and Indenture, dated as of
______ 1, 1998
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C> <C>
(S) 310(a)(1)................................................607
(a)(2)...................................................607
(a)(3)........................................Not Applicable
(a)(4)........................................Not Applicable
(b)..............................................604,607,608
(S) 311(a)...................................................611
311(b)(4)................................................611
(b)(6)...................................................611
(S) 312(a)...................................................704
(b)......................................................701
(c)......................................................702
(S) 313(a)...................................................702
313(b)...................................................703
313(c)...............................................702,703
(d)......................................................703
(S) 314(a)..............................................703,1009
(a)(4)..................................................1009
(b)...........................................Not Applicable
(c)(1)...................................................102
(c)(2)...................................................102
(c)(3)........................................Not Applicable
(d)...........................................Not Applicable
(e)......................................................102
(S) 315(a)...................................................602
(b)60....................................................601
(c)......................................................602
(d)......................................................602
(d)(1)...................................................602
(d)(2)...................................................602
(d)(3)...................................................602
(e)..................................................515,608
(S) 316(a)...................................................101
</TABLE>
v
<PAGE> 7
<TABLE>
<S> <C> <C>
(a)(1)(A)...........................................502, 512
(a)(1)(B)................................................513
(a)(2)........................................Not Applicable
(b)......................................................508
(S) 317(a)(1)................................................503
(a)(2)...................................................504
(b).....................................................1003
(S) 318(a)...................................................111
(c)......................................................111
</TABLE>
- ------------------
NOTE: This reconciliation and tie shall not, for any juries, be
deemed to be a part of the Indenture.
Attention should also be directed to Section 318(c) of the 1939 Act, which
provides that the provisions of Sections 310 to and including 317 of the 1939
Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
vi
<PAGE> 8
INDENTURE, dated as of _____ 1, 1998, between SEMCO ENERGY,
INC., a corporation organized under the laws of Michigan (hereinafter called the
"Company"), having its principal office at 405 Water Street, Port Huron,
Michigan 48060 and NBD BANK, a Michigan banking corporation, as Trustee
hereunder (hereinafter called the "Trustee"), having its Corporate Trust Office
at 611 Woodward Avenue, Detroit, Michigan 48226.
RECITALS OF THE TRUST
The Company deems it necessary to issue from time to time for
its lawful purposes subordinated debentures (hereinafter called the
"Securities") evidencing its unsecured and subordinated indebtedness, and has
duly authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of the Securities, unlimited as to principal amount,
to bear interest at the rates or formulas, to mature at such times and to have
such other provisions as shall be fixed as hereinafter provided.
This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended ("TIA"), that are deemed to be incorporated
into this Indenture and shall, to the extent applicable, be governed by such
provisions.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the holders thereof ("Holders"), it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions . For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the TIA,
either directly or by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have
meanings assigned to them in accordance with GAAP; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
<PAGE> 9
Certain terms, used principally in Article Three, Article
Five, Article Six and Article Ten, are defined in those Articles. In addition,
the following terms shall have the indicated respective meanings:
"Acquired Debt" means Debt of a Person (i) existing at the
time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, other than Debt incurred
in connection with, or in contemplation of, such Person becoming a Subsidiary or
such acquisition. Acquired Debt shall be deemed to be incurred on the date of
the related acquisition of assets from any Person or the date the acquired
Person becomes a Subsidiary.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Interest" means (i) such additional amounts as may
be required so that the net amounts received and retained by the Holder (if the
Holder is the Securities Trust) after paying taxes, duties, assessments, or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States or any other taxing authority will not be less than the
amounts the Holder would have received had not such taxes, duties, assessments,
or other governmental charges been imposed; and (ii) such interest as shall
accrue on interest due and not paid on an Interest Payment Date, accruing at the
rate specified for such series in accordance with the terms hereof from the
applicable Interest Payment Date to the date of payment, compounded quarterly,
on each Interest Payment Date, to the extent permitted by applicable law.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Annual Service Charge" as of any date means the maximum
amount which is payable in any period for interest on, and original issue
discount of, Debt of the Company and its Subsidiaries.
"Attributable Debt" means, in respect of a Sale and Lease-Back
Transaction, as at the time of determination, the present value (discounted at
the rate borne by the applicable series of Securities) of the total obligations
of the lessee for rental payments during the remaining term of the lease
included in such Sale and Lease-Back Transaction (including any period for which
such lease has been extended).
"Authenticating Agent" means any authenticating agent
appointed by the Trustee pursuant to Section 612.
"Authorized Newspaper"means a newspaper, printed in the
English language or in an official language of the country of publication,
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays, and of general circulation in each
2
<PAGE> 10
place in connection with which the term is used or in the financial community of
each such place. Whenever successive publications are required to be made in
Authorized Newspapers, the successive publications may be made in the same or in
different Authorized Newspapers in the same city meeting the foregoing
requirements and in each case on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
"Bearer Security" means any Security established pursuant to
Section 201 which is payable to bearer.
"Board of Directors" means the board of Directors of the
Company, the executive committee or any committee of that board duly authorized
to act hereunder.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment
or any other particular location referred to in this Indenture or in the
Securities, means, unless otherwise specified with respect to any Securities
pursuant to Section 301, any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in that Place of
Payment or particular location are authorized or required by law, regulation or
executive order to close.
"Capital Stock" means, with respect to any Person, any capital
stock (including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible or exchangeable for corporate stock), warrants
or options to purchase any thereof.
"CEDEL" means Central de Livraison de Valeurs Mobilieres,
S.A., or its successor.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after execution of this instrument such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Common Shares" means, with respect to any Person, capital
stock issued by such Person other than Preferred Shares.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" and "Company Order" mean, respectively, a
written request or order signed in the name of the Company by the [LIST
APPROPRIATE OFFICERS] of the Company, and delivered to the Trustee.
3
<PAGE> 11
"Consolidated Net Tangible Assets" shall mean the total of all
assets (including revaluations thereof as a result of commercial appraisals,
price level restatement or otherwise) appearing on a consolidated balance sheet
of the Company, net of applicable reserves and deductions, but excluding
goodwill, trade names, trademarks, patents, unamortized debt discount and all
other like intangible assets (which term shall not be construed to include such
revaluations), less the aggregate of the consolidated current liabilities of the
Company appearing on such balance sheet.
"Corporate Trust Office" means the office of the Trustee at
which, at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at 611 Woodward Avenue,
Detroit Michigan 48226.
"Corporation" includes corporations, associations,
partnerships, companies and business trusts.
"Coupon" means any interest coupon appertaining to a Bearer
Security.
"Custodian" has the meaning specified in Section 501.
"Debt" of the Company or a Subsidiary means any indebtedness
of the Trust or a Subsidiary, whether or not contingent, in respect of (without
duplication) (i) borrowed money evidenced by bonds, notes, debentures or similar
instruments, (ii) indebtedness secured by any mortgage, pledge, lien, charge,
encumbrance or any security interest existing on property owned by the Company
or any Subsidiary, (iii) the reimbursement obligations, contingent or otherwise,
in connection with any letters of credit actually issued or amounts representing
the balance deferred and unpaid of the purchase price of any property or
services, except any such balance that constitutes an accrued expense or trade
payable, or all conditional sale obligations or obligations under any title
retention agreement, (iv) the principal amount of all obligations of the Company
or any Subsidiary with respect to redemption, repayment or other repurchase of
any disqualified stock or (v) any lease of property by the Company or any
Subsidiary as lessee which is reflected on the Company's consolidated balance
sheet as a capitalized lease in accordance with GAAP to the extent, in the case
of items of indebtedness under (i) through (iii) above, that any such items
(other than letters of credit) would appear as a liability on the Company's
consolidated balance sheet in accordance with GAAP, and also includes, to the
extent not otherwise included, any obligation by the Company or any Subsidiary
to be liable for, or to pay, as obligor, guarantor or otherwise (other than for
purposes of collection in the ordinary course of business), Debt of another
Person (other than the Company or any Subsidiary).
"Defaulted Interest" has the meaning specified in Section 307.
"Dollar" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States of America as at the time shall be
legal tender for the payment of public and private debts.
"DTC" means The Depository Trust Company.
4
<PAGE> 12
"Encumbrance" means any mortgage, security interest, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security agreement except:
(a)......liens for taxes and other governmental assessments,
including utility charges and vault rentals, (i) which are not yet delinquent,
(ii) which are not in an aggregate amount, as to the Company and its
Subsidiaries, greater than 10% of Total Assets or (iii) which are being
contested in good faith by all appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the Company or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b)......carriers, warehousemen's, mechanic's, materialmen's,
repairmen's, brokers' or other like liens (i) which are not in an aggregate
amount, as to the Company and its Subsidiaries, greater than 10% of Total
Assets, (ii) which do not remain unsatisfied or undischarged for a period of
more than 90 days or (iii) which are being contested in good faith by all
appropriate proceedings;
(c) pledges or deposits in connection with workers
compensation, unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds performance bonds and other obligations of a like nature
incurred in the ordinary course of business; and
(e) easements, rights of way, restrictions, development
orders, plats and other similar encumbrances.
"Euroclear" means Morgan Guaranty Trust of New York,
Brussels Office, or its successor as operator of the Euroclear System.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder by the Commission.
"GAAP" means generally accepted accounting principles, as in
effect from time to time, as used in the United States applied on a consistent
basis.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America, for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust as custodian with respect to any
such Government Obligation or a specific payment of interest on or principal of
any such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
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<PAGE> 13
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of the Government Obligation evidenced by such depository receipt.
"Guarantee" means a Guarantee Agreement, if any, executed and
delivered by the Company for the benefit of the holders from time to time of all
or a portion of the Trust Securities of a Securities Trust.
"Holder" means, in the case of a Registered Security, the
Person in whose name a Security is registered in the Security Register and, in
the case of a Bearer Security, the bearer thereof and, when used with respect to
any coupon, shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of particular series of Securities established as
contemplated by Section 301; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
the particular series of Securities for which such Person is Trustee established
as contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
"Interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, shall
mean interest payable after Maturity, and, when used with respect to a Security
which provides for the payment of Additional Interest pursuant to Section 1010,
includes such Additional Interest.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"Lien" means any mortgage, lien, pledge, security interest or
other encumbrance; provided, however, that the term "Lien" shall not mean any
easements, rights-of-way, restrictions and other similar encumbrances and
encumbrances consisting of zoning restrictions, leases, subleases, licenses,
sublicenses, restrictions on the use of property or defects in title thereto.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption, notice of
option to elect repayment or otherwise.
"Officer's Certificate" means a certificate signed by an
executive officer of the Company, and delivered to the Trustee.
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"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company or who may be an employee of or other counsel for
the Company and who shall be reasonably satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption or repayment at the option of the Holder money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities and any coupons
appertaining thereto, provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Securities, except to the extent provided in Sections
1402 and 1403 with respect to which the Trust has effected defeasance
and/or covenant defeasance as provided in Article Fourteen; and
(iv) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502 and (ii) Securities owned by the Company or another
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in making such calculation or
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as
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outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or an
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of (and premium, if any) or interest on any Securities or
coupons on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities
of or within any series, means the place or places where the principal of (and
premium, if any) and interest on such Securities are payable as specified as
contemplated by Sections 301 and 1002.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Preferred Shares" means, with respect to any Person, capital
shares issued by such Person that are entitled to a preference or priority over
any other capital shares issued by such Person upon any distribution of such
Person's assets, whether by dividend or upon liquidation.
"Redemption Date", when used with respect to any security to
be redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" shall mean any Security which is
registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 301, whether or not a
Business Day.
"Repayment Date" means, when used with respect to any Security
to be repaid at the option of the Holder, the date fixed for such repayment by
or pursuant to this Indenture.
"Repayment Price" means, when used with respect to any
Security to be repaid at the option of the Holder, the price at which it is to
be repaid by or pursuant to this Indenture.
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"Responsible Officer", when used with respect to the Trustee,
means the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "vice president"), the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any corporate trust
officer, the controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of such officer's
knowledge and familiarity with the particular subject.
"Sale and Lease-Back Transaction" has the meaning specified in
Section 1012.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder by the Commission.
"Securities Trust" means any statutory business trust formed
by the Company or an Affiliate to issue Trust Securities, the proceeds of which
will be used to purchase Securities of one or more series.
"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture; provided, however, that, if at any time
there is more than one Person acting as Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of any series as to which such
Person is not Trustee.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Senior Indebtedness"means, with respect to any Person, (i)
any payment due in respect of indebtedness of such Person, whether outstanding
at the date of execution of this Indenture or thereafter incurred, created, or
assumed, (a) in respect of money borrowed (including any financial derivative,
hedging or futures contract or similar instrument) and (b) evidenced by
securities, debentures, bonds, notes or other similar instruments issued by such
Person which, by their terms, are senior or senior subordinated debt securities
including, without limitation, all obligations under its indentures with various
trustees; (ii) all capital lease obligations; (iii) all obligations issued or
assumed as the deferred purchase price of property, all conditional sale
obligations and all obligations of such Person under any title retention
agreement (but excluding trade accounts payable arising in the ordinary course
of business and long-term purchase obligations); (iv) all obligations for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (v) all obligations of the type referred
to in clauses (i) through (iv) above of other Persons the payment of which such
Person is responsible or liable as obligor, guarantor or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
Persons secured by any lien on any property or asset of such Person (whether or
not such obligation is assumed by such Person), except for (1) any such
indebtedness that is by its terms subordinated to or pari passu with the
Securities
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and (2) any unsecured indebtedness between or among such Person or
its Affiliates. Such Senior Indebtedness shall continue to be entitled to the
benefits of the subordination provisions contained in Article Thirteen
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness.
"Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated under the Securities Act of 1933) of the Trust.
"Special Record Date" for the payment of any Defaulted
Interest on the Registered Securities of or within any series means a date fixed
by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security or a coupon representing such installment of interest
as the fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation a majority of the partnership
interests or a majority of the outstanding voting stock of which is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries of
the Company. For the purposes of this definition, "voting stock" means stock
having voting power for the election of directors, whether at all times or only
so long as no senior class of stock has such voting power by reason of any
contingency.
"Trust Agreement", when used with respect to a Securities
Trust, means the agreement or instrument that governs the affairs of such
Securities Trust.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939, as amended and as in force at the date as of which this Indenture was
executed, except as provided in Section 905.
"Trust Securities" means the securities issued by a Securities
Trust evidencing the entire beneficial interest therein.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become so
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"United States" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, the United States of America
(including the states and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
"United States Person" means, unless otherwise specified with
respect to any Securities pursuant to Section 301, an individual who is a
citizen or resident of the United States,
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a corporation, partnership or other entity created or organized in or under the
laws of the United States or an estate or trust the income of which is subject
to United States federal income taxation regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at
the time of issuance of a Security (or, if applicable, at the most recent
redetermination of interest on such Security) and as set forth in such Security
in accordance with generally accepted United States bond yield computation
principles.
SECTION 102. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
delivered pursuant to Section 1009) shall include:
(1) a statement that each individual signing such
certificate or opinion has read such condition or covenant and
the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as
is necessary to enable him to express an informed opinion as
to whether or not such condition or covenant has been complied
with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied
with.
SECTION 103. Form of Documents Delivered to Trustee . In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion as to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by
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counsel, unless such officer knows, or in the exercise of reasonable care should
know, that the opinion, certificate or representations with respect to the
matters upon which his certificate or opinion is based are erroneous. Any such
Opinion of Counsel or certificate or representations may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, an officer or officers of the Company stating that the information as to
such factual matters is in the possession of the Company, unless such counsel
knows that the certificate or opinion or representations as to such matters are
erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of the Outstanding Securities of all series or one or more series, as
the case may be, may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fifteen, or a combination of such
instruments and such record. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments or record or
both are delivered to the Trustee and, where it is hereby expressly required, to
the Company. Such instrument or instruments and any such record (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments or so voting at any
such meeting. Proof of execution of such an instrument or of a writing
appointing any such agent, or of the holding by any Person of a Security, shall
be sufficient for any purpose of this Indenture. The record of any meeting of
Holders of Securities shall be proved in the manner provided in Section 1506.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in an other reasonable manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by
the Security Register.
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(d) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary, wherever
situated, if such certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein mentioned such Person had on deposit with such
depositary, or exhibited to it, the Bearer Securities therein described; or such
facts may be proved by the certificate or affidavit of the Person holding such
Bearer Securities, if such certificate or affidavit is deemed by the Trustee to
be satisfactory. The Trustee and the Company may assume that such ownership of
any Bearer Security continues until (1) another certificate or affidavit bearing
a later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or such
Bearer Security is surrendered in exchange for a Registered Security, or (3)
such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company shall solicit from the Holders of
Registered Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company may, at its option, in or pursuant to
a Board Resolution, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
In the absence of any such record date fixed by the Company,
regardless as to whether a solicitation of the Holders is occurring on behalf of
the Company or any Holder, the Trustee may, at its option, fix in advance a
record date for the determination of such Holders entitled to receive such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Trustee shall have no obligation to do so. Any such record date shall be
a date not more than 30 days prior to the first solicitation of Holders
generally in connection therewith no later than the date of such solicitation.
(f) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent, any Authenticating Agent or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
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SECTION 105. Notices, etc., to Trustee and Company . Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(1) the Trustee by a Holder or by the Company shall
be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee, at the
Corporate Trust Office; Attention: Corporate Trust
Administration.
(2) the Company by the Trustee or by any Holder shall
be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed, first
class postage prepaid, to the Company addressed to it at the
address of its principal office specified in the first
paragraph of this Indenture or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver . Where this Indenture
provides for notice of any event to Holders of Registered Securities by the
Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed first-class
postage prepaid, to each such Holder affected by such event, at his address as
it appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Holders of Registered Securities is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein. Any notice mailed to a
Holder in the manner herein prescribed shall be conclusively deemed to have been
received by such Holder, whether or not such Holder actually receives such
notice.
If by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause it shall be impracticable to give
such notice by mail, then such notification to Holders of Registered securities
as shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise
specified with respect to any Securities pursuant to Section 301, where this
Indenture provides for notice to Holders of Bearer Securities of any event, such
notice shall be sufficiently given if published in an Authorized Newspaper in
New York City and in such other city or cities as may be specified in such
Securities on a Business Day, such publication to be not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once, on the date of the first such
publication.
If by reason of the suspension of publication of any
Authorized Newspaper or Authorized Newspapers or by reason of any other cause it
shall be impracticable to publish any notice to Holders of Bearer Securities as
provided above, then such notification to Holders of Bearer Securities as shall
be given with the approval of the Trustee shall constitute sufficient notice to
such Holders for every purpose hereunder. Neither the failure to give notice by
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<PAGE> 22
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent
or waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents . The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns . All covenants and
agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 109. Separability Clause . In case any provision in
this Indenture or in any Security or coupon shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture . Nothing in this
Indenture or in the Securities or coupons, express or implied, shall give to any
Person, other than the parties hereto, any Security Registrar, any Paying Agent,
any Authenticating Agent and their successors hereunder and the Holders any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law . This Indenture and the
Securities and coupons shall be governed by and construed in accordance with the
law of the State of New York. This Indenture is subject to the provisions of the
TIA that are required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions.
SECTION 112. Legal Holidays . In any case where any Interest
Payment Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or any
Security or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof), payment of
interest or any Additional Interest or principal (and premium, if any) need not
be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date, Redemption Date, Repayment Date or
sinking fund payment date, or at the Stated Maturity or Maturity, provided that
no interest shall accrue on the amount so
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<PAGE> 23
payable for the period from and after such Interest Payment Date, Redemption
Date, Repayment Date, sinking fund payment date, Stated Maturity or Maturity,
as the case may be.
SECTION 113. No Recourse Against Others . An incorporator or
any past, present or future director, officer, employee or stockholder, as such,
of the Company shall not have any liability for any obligations of the Company
under the Securities or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Holder shall waive and release all such liability. Such waiver and release
shall be part of the consideration for the issue of the Securities.
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities . The Registered Securities,
if any, of each series and the Bearer Securities, if any, of each series and
related coupons shall be in substantially the forms as shall be established in
one or more indentures supplemental hereto or approved from time to time by or
pursuant to a Board Resolution in accordance with Section 301, shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301,
Bearer Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed,
lithographed or engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or may be produced in any other
manner, all as determined by the officers executing such securities or coupons,
as evidenced by their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
Subject to Section 612, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
[ ]
as Trustee
By
-------------------------------
Authorized Signatory
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SECTION 203. Securities Issuable in Global Form . If
Securities of or within a series are issuable in global form, as specified as
contemplated by Section 301, then, notwithstanding clause (8) of Section 301 and
the provisions of Section 302, any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
of such series from time to time endorsed thereon and that the aggregate amount
of Outstanding Securities of such series represented thereby may from time to
time be increased or decreased to reflect exchanges. Any endorsement of a
Security in global form to reflect the amount, or any increase or decrease in
the amount, of Outstanding Securities represented thereby shall be made by the
Trustee in such manner and upon instructions given by such Person or Persons as
shall be specified therein or in the Company Order to be delivered to the
Trustee pursuant to Section 303 or 304. Subject to the provisions of Section 303
and, if applicable, Section 304, the Trustee shall deliver and redeliver any
security in permanent global form in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Company Order. If a
Company Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form shall be in writing but need
not comply with Section 102 and need not be accompanied by an Opinion of
Counsel.
The provisions of the last sentence of Section 303 shall apply
to any security represented by a Security in global form if such Security was
never issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby together with the written statement contemplated by the last sentence of
Section 303.
Notwithstanding the provisions of Section 307, unless
otherwise specified as contemplated by Section 301, payment of principal of and
any premium and interest on any Security in permanent global form shall be made
to the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as
provided in the preceding paragraph, the Company, the Trustee and any agent of
the Company and the Trustee shall treat as the Holder of such principal amount
of Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of a permanent
global Security in bearer form, Euroclear or CEDEL.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
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The Securities may be issued in one or more series. There
shall be established in one or more Board Resolutions or pursuant to authority
granted by one or more Board Resolutions and, subject to Section 303, set forth,
or determined in the manner provided, in an Officer's Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (13) below), if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series when issued from time to time):
(1) the title of the Securities of the series (which
shall distinguish the Securities of such series from all other
series of Securities);
(2) any limit upon the aggregate principal amount of
the Securities of the series that may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of, transfer of,
or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906, 1107 or 1305);
(3) the date or dates, or the method by which such
date or dates will be determined, on which the principal of
the Securities of the series shall be payable;
(4) the rate or rates at which the Securities of the
series shall bear interest if any, or the method by which such
rate or rates shall be determined, the date or dates from
which such interest shall accrue or the method by which such
date or dates shall be determined, the Interest Payment Dates
on which such interest will be payable and the Regular Record
Date, if any, for the interest payable on any Registered
Security on an Interest Payment Date, or the method by which
such date shall be determined, and the basis upon which
interest shall be calculated if other than that of a 360-day
year of twelve 30-day months;
(5) the place or places, if any, other than or in
addition to the Borough of Manhattan, New York City, where the
principal of (and premium, if any), interest, if any, on, and
Additional Interest, if any, payable in respect of, Securities
of the series shall be payable, any Registered Securities of
the series may be surrendered for registration of, transfer or
exchange and notices or demands to or upon the Company in
respect of the Securities of the series and this Indenture may
be served;
(6) the period or periods within which, the price or
prices at which, and other terms and conditions upon which
Securities of the series may be redeemed, in whole or in part,
at the option of the Company, if the Company is to have the
option;
(7) the obligation, if any, of the Company to redeem,
repay or purchase Securities of the series pursuant to any
sinking fund or analogous provision or at the option of a
Holder thereof, and the period or periods within which or the
date or dates on which, the price or prices at which, and
other terms and conditions
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upon which Securities of the series shall be redeemed, repaid
or purchased, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and an
integral multiple thereof, the denominations in which any
Registered Securities of the series shall be issuable and,
other than the denomination of $5,000, the denomination or
denominations in which any Bearer Securities of the series
shall be issuable;
(9) if other than the Trustee, the identity of each
Security Registrar and/or Paying Agent;
(10) if other than the principal amount thereof, the
portion of the principal amount or Securities of the series
that shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 502;
(11) whether the amount of payments of principal of
(and premium, if any) or interest, if any, on the Securities
of the series may be determined with reference to an index,
formula or other method, and the manner in which such amounts
shall be determined;
(12) provisions, if any, granting special rights to
the Holders of Securities of the series upon the occurrence
of such events as may be specified;
(13) any deletions from, modifications of or
additions to the Events of Default or covenants of the Trust
with respect to Securities of the series, whether or not such
Events of Default or covenants are consistent with the Events
of Default or covenants set forth herein;
(14) whether Securities of the series are to be
issuable as Registered Securities, Bearer Securities (with or
without coupons) or both, any restrictions applicable to the
offer, sale or delivery of Bearer Securities and the terms
upon which Bearer Securities of the series may be exchanged
for Registered Securities of the series and vice versa (if
permitted by applicable laws and regulations), whether any
Securities of the series are to be issuable initially in
temporary global form and whether any Securities of the series
are to be issuable in permanent global form with or without
coupons and, if so, whether beneficial owners of interests in
any such permanent global Security may exchange such interests
for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under
which any such exchanges may occur, if other than in the
manner provided in Section 305, and, if Registered Securities
of the series are to be issuable as a global Security, the
identity of the depositary for such series;
(15) the date as of which any Bearer Securities of
the series and any temporary global Security representing
Outstanding Securities of the series shall be dated if other
than the date of original issuance of the first Security of
the series to be issued;
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(16) the Person to whom any interest on any
Registered Security of the series shall be payable, if other
than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, the
manner in which, or the Person to whom, any interest on any
Bearer Security of the series shall be payable, if otherwise
than on presentation and surrender of the coupons
appertaining thereto as they severally mature, and the extent
to which, or the manner in which, any interest payable on a
temporary global Security on an Interest Payment Date will be
paid if other than in the manner provided in Section 304;
(17) the applicability, if any, of Sections 1402
and/or 1403 to the Securities of the series and any
provisions in modification of, in addition to or in lieu of
any of the provisions of Article Fourteen;
(18) if the Securities of such series are to be
issuable in definitive form (whether upon original issue or
upon exchange of a temporary Security of such series) only
upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and/or terms
of such certificates, documents or conditions;
(19) whether and under what circumstances the Company
will pay Additional Interest as contemplated by Section 1010
on the Securities of the series to any Holder who is not a
United States person (including any modification to the
definition of such term) in respect of any tax, assessment or
governmental charge and, if so, whether the Company will have
the option to redeem such Securities rather than pay such
Additional Interest (and the terms of any such option); and
(20) any other terms of the series (which terms shall
not be inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining
to any Bearer Securities of such series shall be substantially identical
except, in the case of Registered Securities, as to denomination and
except as may otherwise be provided in or pursuant to such Board Resolution
(subject to Section 303) and set forth in such Officer's Certificate or in any
such indenture supplemental hereto. All Securities of any one series need not
be issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders, for issuances of additional
Securities of such series.
If any of the terms of the Securities of any series are
established by action taken pursuant to one or more Board Resolutions, a copy of
an appropriate record of such action(s) shall be certified by the Secretary or
an Assistant Secretary of the Company and delivered to the Trustee at or prior
to the delivery of the Officer's Certificate setting forth the terms of the
Securities of such series.
SECTION 302. Denominations. The Securities of each series
shall be issuable in such denominations as shall be specified as contemplated by
Section 301. In the
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absence of any such provisions with respect to the Securities of any series, the
Registered Securities of such series, other than Registered Securities issued in
global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination), shall be issuable in a denomination of
$5,000.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities and any coupons appertaining thereto shall be executed on behalf
of the Company by an executive officer of the Company and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
individuals on the Securities and coupons may be Manual or facsimile signatures
of the present or any future such authorized officer and may be imprinted or
otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Securities or did not hold such offices at the date of such Securities
or coupons.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series,
together with any coupon appertaining thereto, executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or Cedel, as the case
may be, in the form set forth in Exhibit A-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 301, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. If any
Security shall be represented by a permanent global Bearer Security, then, for
purposes of this Section and Section 304, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon exchange of a
portion of a temporary global Security shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest in
such permanent global Security. Except as permitted by Section 306, the Trustee
shall not authenticate and deliver any Bearer Security unless all appurtenant
coupons for interest then matured have been detached and canceled.
If all the Securities of any series are not to be issued at
one time and if the Board Resolution or supplemental indenture establishing such
series shall so permit, such Company Order may set forth procedures acceptable
to the Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula, maturity
date, date of issuance and date from which interest shall accrue. In
authenticating such
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Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to TIA Section 315(a) through 315(d)) shall be fully protected in
relying upon,
(i) an Opinion of Counsel stating that
(a) the form or forms of such Securities and
any coupons have been established in conformity with
the provisions of this Indenture;
(b) the terms of such Securities and any
coupons have been established in conformity with the
provisions of this Indenture; and
(c) such Securities, together with any
coupons appertaining thereto, when completed by
appropriate insertions and executed and delivered by
the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and
delivered by the Trustee in accordance with this
Indenture and issued by the Company in the manner and
subject to any conditions specified in such Opinion
of Counsel, will constitute legal, valid and binding
obligations of the Company, enforceable in accordance
with their terms, subject to applicable bankruptcy,
insolvency, reorganization and other similar laws of
general applicability relating to or affecting the
enforcement of creditors' rights generally and to
general equitable principles; and
(ii) an Officer's Certificate stating that all
conditions precedent provided for in this Indenture relating to the
issuance of the Securities have been complied with and that, to the
best of the knowledge of the signers of such certificate, no Event of
Default with respect to any of the Securities shall have occurred and
be continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all the Securities of any series are not to be issued at
one time, it shall not be necessary to deliver an Officer's Certificate
otherwise required pursuant to Section 301 or a Company Order, or an Opinion of
Counsel or an Officer's Certificate otherwise required pursuant to the preceding
paragraph at the time of issuance of each Security of such series, but such
order, opinion and certificates, with appropriate modifications to cover such
future issuances, shall be delivered at or before the time of issuance of the
first Security of such series.
Each Registered Security shall be dated the date of its
authentication and each Bearer Security shall be dated as of the date specified
as contemplated by Section 301.
No Security or coupon shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears on
such Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for
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herein duly executed by the Trustee by manual signature of an authorized
signatory and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been authenticated and
delivered hereunder but never issued and sold by the Company, and the Company
shall deliver such Security to the Trustee for cancellation as provided in
Section 309 together with a written statement (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this
Indenture.
SECTION 304. Temporary Securities.
(a) Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form, or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.
Except in the case of temporary Securities in global form
(which shall be exchanged in accordance with Section 304(b) or as otherwise
provided in or pursuant to a Board Resolution), if temporary Securities of any
series are issued, the Company will cause definitive Securities of that series
to be prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto), the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of the same series of authorized
denominations; provided, however, that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; and provided further
that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 303.
Until so exchanged, the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series.
(b) Unless otherwise provided in or pursuant to a Board
Resolution, this Section 304(b) shall govern the exchange of temporary
Securities issued in global form other than through the facilities of The
Depository Trust Company. If any such temporary Security is issued in global
form, then such temporary global Security shall, unless otherwise provided
therein, be delivered to the London office of a depositary or common depositary
(the "Common Depositary"), for the benefit of Euroclear and CEDEL, for credit to
the respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
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Without unnecessary delay but in any event not later than the
date specified in, or determined pursuant to the terms of, any such temporary
global Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. On or after
the Exchange Date, such temporary global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as and contemplated by Section 301, and, if any
combination thereof is so specified, as requested by the beneficial owner
thereof; provided, however, that, unless otherwise specified in such temporary
global Security, upon such presentation by the Common Depositary, such temporary
global Security is to be accompanied by a certificate dated the Exchange Date or
a subsequent date and signed by Euroclear as to the portion of such temporary
global Security held for its account then to be exchanged and a certificate
dated the Exchange Date or a subsequent date and signed by CEDEL as to the
portion of such temporary global Security held for its account then to be
exchanged, each in the form set forth in Exhibit A-2 to this Indenture or in
such other form as may be established pursuant to Section 301; and provided
further that definitive Bearer Securities shall be delivered in exchange for a
portion of a temporary global Security only in compliance with the requirements
of Section 303.
Unless otherwise specified in such temporary global Security,
the interest of a beneficial owner of Securities of a series in a temporary
global Security shall be exchanged for definitive Securities of the same series
and of like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other form as may be
established pursuant to Section 301), dated no earlier than 15 days prior to the
Exchange Date, copies of which certificate shall be available from the offices
of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive Securities
in bearer form to be delivered in exchange for any portion of a temporary global
Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary global
Security on an Interest Payment Date for Securities of such series occurring
prior to the applicable Exchange Date shall be payable to Euroclear and CEDEL on
such Interest Payment
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<PAGE> 32
Date upon delivery by Euroclear and CEDEL to the Trustee of a certificate or
certificates in the form set forth in Exhibit A-2 to this Indenture (or in such
other forms as may be established pursuant to Section 301), for credit without
further interest on or after such Interest Payment Date to the respective
accounts of Persons who are the beneficial owners of such temporary global
Security on such Interest Payment Date and who have each delivered to Euroclear
or CEDEL, as the case may be, a certificate dated no earlier than 15 days prior
to the Interest Payment Date occurring prior to such Exchange Date in the form
set forth as Exhibit A-1 to this Indenture (or in such other forms as may be
established pursuant to Section 301). Notwithstanding anything to the contrary
herein contained, the certifications made pursuant to this paragraph shall
satisfy the certification requirements of the preceding two paragraphs of this
Section 304(b) and of the third paragraph of Section 303 of this Indenture and
the interests of the Persons who are the beneficial owners of the temporary
global Security with respect to which such certification was made will be
exchanged for definitive Securities of the same series and of like tenor on the
Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary global Security will be
made unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
SECTION 305. Registration, Registration of Transfer and
Exchange. The Company shall cause to be kept at the Corporate Trust Office of
the Trustee or in any office or agency of the Company in a Place of Payment a
register for each series of Securities (the registers maintained in such office
or in any such office or agency of the Company in a Place of Payment being
herein sometimes referred to collectively as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Registered Securities and of transfers of
Registered Securities. The Security Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. The Trustee, at its Corporate Trust Office, is hereby appointed "Security
Registrar" for the purpose of registering Registered securities and transfers of
Registered Securities on such Security Register as herein provided. In the event
that the Trustee shall cease to be Security Registrar, it shall have the right
to examine the Security Register at all reasonable times.
Subject to the provisions of this Section 305, upon surrender
for registration of transfer of any Registered Security of any series at any
office or agency of the Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Registered
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount, bearing a number not contemporaneously outstanding,
and containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option
of the Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal
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amount, containing identical terms and provisions, upon surrender of the
Registered Securities to be exchanged at any such office or agency. Whenever any
such Registered Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Registered
Securities which the Holder making the exchange is entitled to receive. Unless
otherwise specified with respect to any series of Securities as contemplated by
Section 301, Bearer Securities may not be issued in exchange for Registered
Securities.
If (but only if) permitted by the applicable Board Resolution
and (subject to Section 303) set forth in the applicable Officers' Certificate,
or in any indenture supplemental hereto, delivered as contemplated by Section
301, at the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, any such permitted exchange
may be effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company in an amount equal to the face amount of such missing
coupon or coupons, or the surrender of such missing coupon or coupons may be
waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that, except as otherwise provided in Section 1002,
interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified
as contemplated by Section 301, any permanent global Security shall be
exchangeable only as provided in this paragraph. If the depositary for any
permanent global Security is The Depository Trust Company ("DTC"), then, unless
the terms of such global Security expressly permit such global Security to be
exchanged in whole or in part for definitive Securities, a global Security may
be transferred, in whole but not in part, only to a nominee of DTC, or by a
nominee of DTC to DTC, or to a successor to DTC for such global Security
selected or approved by the Company or to a nominee of such successor to DTC. If
at any time DTC notifies the Company that it is
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unwilling or unable to continue as depositary for the applicable global Security
or Securities or if at any time DTC ceases to be a clearing agency registered
under the Securities Exchange Act of 1934 if so required by applicable law or
regulation, the Company shall appoint a successor depositary with respect to
such global Security or Securities. If (x) a successor depositary for such
global Security or Securities is not appointed by the Company within 90 days
after the Company receives such notice or becomes aware of such unwillingness,
inability or ineligibility, (y) an Event of Default has occurred and is
continuing and the beneficial owners representing a majority in principal amount
of the applicable series of Securities represented by such global Security or
Securities advise DTC to cease acting as depositary for such global Security or
Securities or (z) the Company, in its sole discretion, determines at any time
that all Outstanding Securities (but not less than all) of any series issued or
issuable in the form of one or more global Securities shall no longer be
represented by such global Security or Securities, then the Company shall
execute, and the Trustee shall authenticate and deliver definitive Securities of
like series, rank, tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such global Security or Securities. If
any beneficial owner of an interest in a permanent global Security is otherwise
entitled to exchange such interest for Securities of such series and of like
tenor and principal amount of another authorized form and denomination, as
specified as contemplated by Section 301 and provided that any applicable notice
provided in the permanent global Security shall have been given, then without
unnecessary delay but in any event not later than the earliest date on which
such interest may be so exchanged, the Company shall execute, and the Trustee
shall authenticate and deliver definitive Securities in aggregate principal
amount equal to the principal amount of such beneficial owner's interest in such
permanent global Security. On or after the earliest date on which such interests
may be so exchanged, such permanent global Security shall be surrendered for
exchange by DTC or such other depositary as shall be specified in the Company
Order with respect thereto to the Trustee, as the Company's agent for such
purpose; provided, however, that no such exchanges may occur during a period
beginning at the opening of business 15 days before any selection of Securities
to be redeemed and ending on the relevant Redemption Date if the Security for
which exchange is requested may be among those selected for redemption; and
provided further that no Bearer Security delivered in exchange for a portion of
a permanent global Security shall be mailed or otherwise delivered to any
location in the United States. If a Registered Security is issued in exchange
for any portion of a permanent global Security after the close of business at
the office or agency where such exchange occurs on (i) any Regular Record Date
and before the opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) any Special Record Date and the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, interest or Defaulted Interest, as the case may be, will not
be payable on such Interest Payment Date or proposed date for payment, as the
case may be, in respect of such Registered Security, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Person to whom interest in respect of such portion of such permanent global
Security is payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
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Every Registered Security presented or surrendered for
registration of transfer or for exchange or redemption shall (if so required by
the Company or the Security Registrar) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906, 1107 or 1305 not involving an
transfer.
The Company or the Trustee, as applicable, shall not be
required (i) to issue, register the transfer of or exchange any Security if such
Security may be among those selected for redemption during a period beginning at
the opening of business 15 days before selection of the Securities to be
redeemed under Section 1103 and ending at the close of business on (A) if such
Securities are issuable only as Registered Securities, the day of the mailing of
the relevant notice of redemption and (B) if such Securities are issuable as
Bearer Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities and
there is no publication, the mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange any Registered Security so selected
for redemption in whole or in part, except, in the case of any Registered
Security to be redeemed in part, the portion thereof not to be redeemed, or
(iii) to exchange any Bearer Security so selected for redemption except that
such a Bearer Security may be exchanged for a Registered Security of that series
and like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities. If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or the Company, together with,
in proper cases, such security or indemnity as may be required by the Company or
the Trustee to save each of them or any agent of either of them harmless, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and principal amount, containing
identical terms and provisions and bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
the surrendered Security.
If there shall be delivered to the Company and to the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon, and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security or coupon has
been acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
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contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs,
in case any such mutilated, destroyed, lost or stolen Security or coupon has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium, if any),
and interest on and any Additional Interest with respect to, Bearer Securities
shall, except as otherwise provided in Section 1002, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 301, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any,
issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security, or in exchange for a Security to which a destroyed, lost or stolen
coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
and its coupons, if any, or the destroyed, lost or stolen coupon shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, interest on any Registered
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 1002; provided, however,
that each installment of interest on any Registered Security may at the
Company's option be paid by (i) mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 308,
to the address of such Person as it appears on the Security Register or (ii)
transfer to an account maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 301 with
respect to the Securities of any series, payment of interest may be made, in the
case of a Bearer Security by transfer to an account maintained by the payee with
a bank located outside the United States.
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Unless otherwise provided as contemplated by Section 301,
every permanent global Security will provide that interest, if any, payable on
any Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the
case may be, with respect to that portion of such permanent global Security held
for its account by Cede & Co. or the Common Depositary, as the case may be, for
the purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in
exchange for a Registered Security of such series after the close of business
(at an office or agency in a Place of Payment for such series) on any Regular
Record Date and before the opening of business (at such office or agency) on the
next succeeding Interest Payment Date, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date and interest will not
be payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture.
Except as otherwise specified with respect to a series of
Securities in accordance with the provisions of Section 301, any interest on any
Registered Security of any series that is payable, but is not punctually paid or
duly provided for, on an Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder thereof
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Registered Security of such series and the date of the proposed payment
(which shall not be less than 20 days after such notice is received by the
Trustee), and at the same time the Company shall deposit with the Trustee
dollars in an amount equal to the aggregate amount proposed to be paid in
respect to such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days prior to
the date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Registered Securities of such
series at his address as it appears in the Security Register not less than 10
days prior to such Special Record Date. The Trustee may, in its discretion, in
the name and at the
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expense of the Company, cause a similar notice to be published
at least once in an Authorized Newspaper in each place of
payment, but such publications shall not be a condition
precedent to the establishment of such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Registered Securities of such
series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following
clause (2). In case a Bearer Security of any series is
surrendered at the office or agency in a Place of Payment for
such series in exchange for a Registered Security of such
series after the close of business at such office or agency on
any Special Record Date and before the opening of business at
such office or agency on the related proposed date for payment
of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date
of payment and Defaulted Interest will not be payable on such
proposed date of payment in respect of the Registered Security
issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted
Interest on the Registered Securities of any series in any
other lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner
of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and
Section 305, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment
of a Registered Security for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
such Registered Security is registered as the owner of such Security for the
purpose of receiving payment of principal of (and premium, if any), and (subject
to Sections 305 and 307) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining
thereto shall pass by delivery. The Company, the Trustee and any agent of the
Company or the Trustee may treat the Holder of any Bearer Security and the
Holder of any coupon as the absolute owner of such Security or coupon for the
purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not such Security or coupon be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
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None of the Company, the Trustee, any Paying Agent or the
Security Registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global
Security, nothing herein shall prevent the Company, the Trustee, or any agent of
the Company or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by any depositary, as a Holder, with
respect to such global Security or impair, as between such depositary and owners
of beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
SECTION 309. Cancellation. All Securities and coupons
surrendered for payment, redemption, repayment at the option of the
Holder, registration of transfer or exchange or for credit against any sinking
fund payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and coupons and Securities
and coupons surrendered directly to the Trustee for any such purpose shall be
promptly canceled by it; provided, however, where the Place of Payment is
located outside of the United States, the Paying Agent at such Place of Payment
may cancel the Securities surrendered to it for such purposes prior to
delivering the Securities to the Trustee. The Company may at any time deliver
to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly canceled by the Trustee. If the Company shall so
acquire any of the Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly permitted by this
Indenture. Canceled Securities and coupons held by the Trustee shall be
destroyed by the Trustee and the Trustee shall deliver a certificate of such
destruction to the Company, unless by a Company Order the Company directs their
return to it.
SECTION 310. Computation of Interest. Except as otherwise
specified as contemplated by Section 301 with respect to Securities of any
series, interest on the Securities of each series shall be computed on the basis
of a 360-day year consisting of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This
Indenture shall upon Company Request cease to be of further effect with respect
to any series of Securities specified in such Company Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for and any right to receive Additional
Interest, as provided in Section 1010), and the Trustee, upon receipt of a
Company
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Order, and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture as to such series
when
(1) either
(A) all Securities of such series
theretofore authenticated and delivered and all
coupons, if any, appertaining thereto (other than (i)
coupons appertaining to Bearer Securities surrendered
for exchange for Registered Securities and maturing
after such exchange, whose surrender is not required
or has been waived as provided in Section 305, (ii)
Securities and coupons of such series which have been
destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306, (iii)
coupons appertaining to Securities called for
redemption and maturing after the relevant Redemption
Date, whose surrender has been waived as provided in
Section 1106, and (iv) Securities and coupons of such
series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section
1003) have been delivered to the Trustee for
cancellation; or
(B) all Securities of such series and, in
the case of (i) or (ii) below, any coupons
appertaining thereto not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at
their Stated Maturity within one year, or
(iii) if redeemable at the option of
the Company, are to be called for redemption
within one year under arrangements
satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in
the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
the purpose and in an amount sufficient to pay and discharge the entire
indebtedness on such Securities and such coupons not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any) and interest,
and any Additional Interest with respect thereto, to the date of such deposit
(in the case of Securities which have become due and payable) or to the Stated
Maturity Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein provided
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for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Funds. Subject to the
provisions of the last paragraph of Section 1003, all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Securities, the coupons and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any), and any interest and Additional Interest for whose payment such money has
been deposited with or received by the Trustee, but such money need not be
segregated from other funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. "Event of Default", wherever
used herein with respect to any particular series of Securities, means any one
of the following events (whatever the reason for such Event of Default and
whether or not it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any
Security of that series when it becomes due and payable on an
Interest Payment Date other than at Maturity, including
Additional Interest (as defined in clause (ii) of the
definition thereof) in respect thereof, and continuance of
such default for a period of thirty (30) days; provided,
however, that (i) a valid extension of the interest payment
period by the Company pursuant to the terms of a supplemental
indenture authorizing the Security of that series shall not
constitute a default in the payment of interest for this
purpose; or
(2) default in the payment of Additional Interest (as
defined in clause (i) of the definition thereof) and the
continuance of such default for a period of thirty (30) days;
or
(3) default in the payment of the principal of, (or
premium, if any) or interest (including Additional Interest as
defined in clause (ii) of the definition thereof) on any
Security of that series at its Maturity; or
(4) default in the deposit of any sinking fund
payment, when and as due by the terms of any Security of that
series; or
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(5) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture with
respect to any Security of that series (other than a covenant
or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of
the Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(6) default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Company
(including obligations under leases required to be capitalized
on the balance sheet of the lessee under generally accepted
accounting principles, but not including any indebtedness or
obligations for which recourse is limited to property
purchased) in an aggregate principal amount in excess of
$5,000,000 or under any mortgage, indenture or instrument
under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by
the Company (including such leases but not including such
indebtedness or obligations for which recourse is limited to
property purchased) in an aggregate principal amount in excess
of $5,000,000 by the Company, whether such indebtedness now
exists or shall hereafter be created, which default shall have
resulted in such indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise have
become due and payable or such obligations being accelerated,
without such acceleration having been rescinded or annulled;
or
(7) the Company or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for
relief against it in an involuntary case,
(C) consents to the appointment of a
Custodian of it or for all or substantially all of
its property, or
(D) makes a general assignment for the
benefit of its creditors; or
(8) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or
any Significant Subsidiary or for all or
substantially all of either of its property, or
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(C) orders the liquidation of the Company or
any Significant Subsidiary, and the order or decree
remains unstayed and in effect for 90 days; or
(9) the voluntary or involuntary dissolution, winding
up or termination of the Securities Trust except in connection
with:
(A) the distribution of Securities to
holders of Trust Securities in liquidation of the
Securities Trust,
(B) the redemption of all outstanding Trust
Securities, or
(C) certain mergers or consolidations
permitted by the Trust Agreement; or
(10)any other Event of Default provided with respect
to Securities of that series.
As used in this Section 501, the term "Bankruptcy Law" means title 11, U.S. Code
or any similar Federal or State law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default with respect to Securities of any series at
that time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal (or, if any
Securities are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) of all the
Securities of that series, and premium, if any, to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by the Holders), and upon any such declaration such principal or specified
portion thereof shall become immediately due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the
Trustee a sum sufficient to pay:
(A) all overdue installments of interest on
and any Additional Interest payable in respect of all
Outstanding Securities of that series and any related
coupons,
(B) the principal of (and premium, if any,
on) any Outstanding Securities of that series which
have become due otherwise than by such
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declaration of acceleration and interest thereon at
the rate or rates borne by or provided for in such
Securities,
(C) to the extent that payment of such
interest is lawful, interest upon overdue
installments of interest and any Additional Interest
at the rate or rates borne by or provided for in such
Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel; and
(2) all Events of Default with respect to Securities
of that series, other than the nonpayment of the principal of
(or premium, if any) or interest on Securities of that series
which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section
513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if:
(1) default is made in the payment of any installment
of interest or Additional Interest, if any, on any Security of
any series and any related coupon when such interest or
Additional Amount becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal
of (or premium, if any, on) any Security of any series at its
Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest and Additional Interest, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of interest
or Additional Interest, if any, at the rate or rates borne by or provided for in
such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon such Securities
of such series and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon such Securities of such series, wherever situated.
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If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series and any related coupons by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization arrangement, adjustment, composition or other judicial proceeding
relative to the Company or any other obligor upon the Securities or the property
of the Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Securities of any series shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal, premium, if any, or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount,
or such lesser amount as may be provided for in the Securities of such
series, of principal (and premium, if any) and interest and Additional
Interest if any, owing and unpaid in respect of the Securities and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii)to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute
the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and coupons to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee and any predecessor Trustee, their agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder of
a Security or coupon any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or coupons or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security or coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities or Coupons. All rights of action and claims under this Indenture
or any of the Securities or coupons may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or coupons or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the
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reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities and coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money
collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or premium, if any) or
interest and any Additional Interest, upon presentation of the Securities or
coupons, or both, as the case may be, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon
the Securities and coupons for principal (and premium, if any) and
interest and any Additional Interest payable, in respect of which or
for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the aggregate
amounts due and payable on such Securities and coupons for principal
(and premium, if any), interest and Additional Interest, respectively;
and
THIRD: To the payment of the remainder, if any, to the
Company.
SECTION 507. Limitation on Suits. No Holder of any Security
of any series or any related coupon shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for a other remedy hereunder, unless:
(1) such Holder has previously given written notice
to the Trustee of a continuing Event of Default with respect
to the Securities of that series;
(2) the Holders of not less than 25% in principal
amount of the Outstanding Securities of that series shall have
made written request to the Trustee to institute proceedings
in respect of such Event of Default in its own name as Trustee
hereunder;
(3) such Holder or Holders have offered to the
Trustee indemnity reasonably satisfactory to the Trustee
against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute
any such proceeding; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount of the
Outstanding Securities of that series;
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it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium, if any, Interest and Additional Interest. Notwithstanding
any other provision in this Indenture, (1) the Holder of any Security or coupon
shall have the right which is absolute and unconditional to receive payment of
the principal of (and premium, if any) and subject to Sections 305 and 307,
interest on, and any Additional Interest in respect of, such Security or payment
of such coupon on the respective due dates expressed in such Security or coupon
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder and (2) so long as the Securities of any
series are held by a Securities Trust, a registered holder of preferred
securities issued by such Securities Trust may institute a legal proceeding
directly against the Company (or against the Guarantor pursuant to the
Guarantee), without first instituting a legal proceeding directly against or
requesting or directing that action be taken by the Property Trustee of such
Securities Trust or any other Person, for enforcement of payment to such
registered holder of principal of or interest on Securities of such series
having a principal amount equal to the aggregate stated liquidation amount of
such preferred securities of such registered holder on or after the due dates
therefor specified or provided for in the Securities of such series.
SECTION 509. Restoration of Rights and Remedies. If the
Trustee or any Holder of a Security or coupon has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, the Company, the
Trustee and the Holders of Securities and coupons shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities or coupons in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders of Securities or coupons is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Security or coupon to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article
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or by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders of
Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities. The Holders
of not less than a majority in principal amount of the Outstanding Securities of
any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any
rule of law or with this Indenture,
(2) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such
direction, and
(3) the Trustee need not take any action which might
involve it in personal liability or be unduly prejudicial to
the Holders of Securities of such series not joining therein.
SECTION 513. Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series and any
related coupons waive any past default hereunder with respect to such series and
its consequences, except a default
(1) in the payment of the principal of (or premium,
if any) or interest on or Additional Interest payable in
respect of any Security of such series or any related coupons,
or
(2) in respect of a covenant or provision hereof
which under Article Nine cannot be modified or amended without
the consent of the Holder of each Outstanding Security of such
series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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SECTION 515. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Security by his acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of any undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys, fees, against any party litigant in such suit
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
outstanding securities, or to any suit instituted by any Holder for the
enforcement or the payment of the principal of (or premium, if any) or interest
on any Security on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder with respect to the Securities of any
series, the Trustee shall transmit in the manner and to the extent provided in
TIA Section 313(c), notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on or any Additional Interest with respect to any Security
of such series, or in the payment of any sinking fund installment with respect
to the Securities of such series, the Trustee shall be protected in withholding
such notice if and so long as Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the Holders
of the Securities and coupons of such series; and provided further that in the
case of any default or breach of the character specified in Section 501(4) with
respect to the Securities and coupons of such series, no such notice to Holders
shall be given until at least 60 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to the Securities of such series.
SECTION 602. Certain Rights of Trustee. Subject to the
provisions of TIA Section 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note,
coupon or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or
Company Order (other than delivery of any Security, together
with any coupons appertaining thereto, to the
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Trustee for authentication and delivery pursuant to Section
303 which shall be sufficiently evidenced as provided therein)
and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any Section
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;
(5) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders of
Securities of any series or any related coupons pursuant to
this Indenture, unless such Holders shall have offered to the
Trustee adequate security or indemnity satisfactory to the
Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or
direction;
(6) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, coupon or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to make
reasonable examination of the books, records and premises of
the Company, personally or by agent or attorney following
reasonable notice to the Company;
(7) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee
shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by
it hereunder; and
(8) the Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
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Except during the continuance of an Event of Default, the
Trustee undertakes to perform only such duties as are specifically set forth in
this Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
SECTION 603. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying
Agent, Security Registrar, Authenticating Agent or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and coupons and, subject to TIA Sections 310(b) and 311,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.
SECTION 605. Money Held in Trust. Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement. The Company
agrees:
(1) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of
an express trust);
(2) except as otherwise expressly provided herein, to
reimburse each of the Trustee and any predecessor Trustee upon
its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance
as may be attributable to [any act for which the Trustee shall
have been adjudged negligent or to have acted in bad faith];
and
(3) to indemnify each of the Trustee and any
predecessor Trustee for, and to hold it harmless against, any
loss, liability or expense incurred, [except for gross
negligence or actions taken in bad faith] without negligence
or bad faith on its own part, arising out of or in connection
with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending
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itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties
hereunder.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(6) or Section
501(7), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (or premium, if any)
or interest on particular Securities or any coupons.
The provisions of this Section shall survive the termination
of this Indenture.
SECTION 607. Corporate Trustee Required; Eligibility;
Conflicting Interests. There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA Section 310(a)(1) and shall have a
combined capital and surplus of at least $50,000,000. If such corporation
publishes reports of condition at least annually, pursuant to law or the
requirements of Federal, State, Territorial or District of Columbia supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the
provisions of TIA Section 310(b) after written request
therefor by the Company or by any Holder of a Security who has
been a bona fide Holder of a Security for at least six months,
or
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(2) the Trustee shall cease to be eligible under
Section 607 and shall fail to resign after written request
therefor by the Company or by any Holder of a Security who has
been a bona fide Holder of a Security for at least six months,
or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause with respect to the Securities of one or more series, the Company, by
or pursuant to a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall
be only one Trustee with respect to the Securities of any particular series).
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with resect to the Securities of
any series shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the Company and
the retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment, become the successor Trustee with respect to
the Securities of such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the Securities
of any series shall have been so appointed by the Company or the Holders of
Securities and accepted appointment in the manner hereinafter provided, any
Holder of a Security who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
in the manner provided for notices to the Holders of Securities in Section 106.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor. (a) In
case of the appointment hereunder of a successor Trustee with respect to all
Securities, every such successor Trustee shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring
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Trustee; but, on request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee, and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder, subject
nevertheless to its claim, if any, provided for in Section 606.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto, pursuant to Article Nine hereof, wherein each successor
Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case
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any Securities or coupons shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such authentication and deliver the
Securities or coupons so authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities or coupons. In case any
Securities or coupons shall not have been authenticated by such predecessor
Trustee, any such successor Trustee may authenticate and deliver such Securities
or coupons, in either its own name or that of its predecessor Trustee, with the
full force and effect which this Indenture provides for the certificate of
authentication of the Trustee.
SECTION 611. Preferential Collection of Claims Against
Company. If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor). For purposes of TIA Section 311(b)(4)
and (6)
(1) "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or
in checks or other orders drawn upon banks or bankers and
payable upon demand; and
(2) "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Company (or any such obligor)
for the purpose of financing the purchase, processing,
manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title
to, possession of, or a lien upon the goods, wares or
merchandise or the receivables or proceeds arising from the
sale of the goods, wares or merchandise previously
constituting the security, provided the security is received
by the Trustee simultaneously with the creation of the
creditor relationship with the Company (or any such obligor)
arising from the making, drawing, negotiating or incurring of
the draft, bill of exchange, acceptance or obligation.
SECTION 612. Appointment of Authenticating Agent. At any time
when any of the Securities remain Outstanding, the Trustee may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, registration of transfer or
partial redemption or repayment thereof, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Any such
appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer of the Trustee, a copy of which instrument shall be promptly
furnished to the Company. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a bank or trust company or corporation
organized and doing business and in good standing under the laws of the United
States of America or of any State or
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the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authorities. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at
any time resign by giving written notice of resignation to the Trustee for such
series and to the Company. The Trustee for any series of Securities may at any
time terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation including reimbursement of its reasonable
expenses for its services under this Section.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication substantially in the
following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
NBD Bank
as Trustee
By:
---------------------------------
as Authenticating Agent
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities or coupons, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any Authenticating Agent nor any Paying Agent nor any Security Registrar shall
be held accountable by reason of the disclosure of any information as to the
names and addresses of the Holders of Securities in accordance with TIA Section
312, regardless of the source from which such information was derived, and that
the Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee. Within 60 days after June 1
of each year commencing with the first June 1 after the first issuance of
Securities pursuant to this Indenture, the Trustee shall transmit by mail to all
Holders of Securities as provided in TIA Section 313(c) a brief report dated as
of such June 1 if required by TIA Section 313(a).
SECTION 703. Reports by Company. The Company will:
(a) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if
the Company is not required to file information, documents or reports pursuant
to either of such Sections, then it will file with the Trustee, in accordance
with rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations;
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(c) the Trustee shall transmit the reports required by TIA
Section 313(b) at the times specified therein; and
(d) transmit by mail to the Holders of Securities, within 30
days after the filing thereof with the Trustee, in the manner and to the extent
provided in TIA Section 313(c) and (d), such summaries of any information,
documents and reports required to be filed by the Company pursuant to paragraphs
(a) and (b) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.
SECTION 704. Company to Furnish Trustee Names and Addresses
of Holders. The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular
Record Date for interest for each series of Securities, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if there
is no Regular Record Date for interest for such series of Securities,
semi-annually, upon such dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other entity, provided that in any such
case, (1) either the Company shall be the continuing entity, or the successor
entity (if other than the Company) formed by or resulting from any such
consolidation or merger or which shall have received the transfer of such assets
shall expressly assume the Company's obligations under the Trust Guarantee and
the due and punctual payment of the principal of (and premium, if any) and any
interest (including all Additional Interest, if any, payable pursuant to Section
1010) on all of the Securities, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by the Company and (2) immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation of the
Company or any Subsidiary as a result thereof as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of Default,
and no event which, after notice or the lapse of time, or both, would become an
Event of Default, shall have occurred and be continuing under the Trust
Guarantee or this Indenture.
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SECTION 802. Rights and Duties of Successor Corporation. In
case of any such consolidation, merger, sale, lease or conveyance and upon any
such assumption by the successor entity, such successor entity shall succeed to
and be substituted for the Company, with the same effect as if it had been named
herein as the party of the first part, and the predecessor entity, except in the
event of a lease, shall be relieved of any further obligation under this
Indenture and the Securities. Such successor entity thereupon may cause to be
signed, and may issue either in its own name or in the name of the Company, any
or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor entity, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor entity thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or
conveyance, such changes in phraseology and form (but not in substance) may be
made in the Securities thereafter to be issued as may be appropriate.
SECTION 803. Officer's Certificate and Opinion of Counsel.
Any consolidation, merger, sale, lease or conveyance permitted under Section 801
is also subject to the condition that the Trustee receive an Officer's
Certificate and an Opinion of Counsel to the effect that any such
consolidation, merger, sale, lease or conveyance, and the assumption by any
entity corporation, complies with the provisions of this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of
Holders. Without the consent of any Holders of Securities or coupons, the
Company, when authorized by or pursuant to a Board Resolution, and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another Person to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the securities
contained; or
(2) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities (and
if such covenants are to be for the benefit of less than all
series of Securities, stating that such covenants are
expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred
upon the Company; or
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(3) to add any additional Events of Default for the
benefit of the Holders of all or any series of Securities (and
if such Events of Default are to be for the benefit of less
than all series of Securities, stating that such Events of
Default are expressly being included solely for the benefit of
such series); provided, however, that in respect of any such
additional Events of Default such supplemental indenture may
provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case
of other defaults) or may provide for an immediate enforcement
upon such default or may limit the remedies available to the
Trustee upon such default or may limit the right of the
Holders of a majority in aggregate principal amount of that or
those series of Securities to which such additional Events of
Default apply to waive such default; or
(4) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable
as to principal, to change or eliminate any restrictions on
the payment of principal of or any premium or interest on
Bearer Securities, to permit Bearer Securities to be issued in
exchange for Registered Securities, to permit Bearer
Securities to be issued in exchange for Bearer Securities of
other authorized denominations or to permit or facilitate the
issuance of Securities in uncertificated form, provided that
any such action shall not adversely affect the interests of
the Holders of Securities of any series or any related coupons
in any material respect; or
(5) to change or eliminate any of the provisions of
this Indenture, provided that any such change or elimination
shall become effective only when there is no Security
Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit
of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of
any series and any related coupons as permitted by Sections
201 and 301; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to
the Securities of one or more series and to add to or change
any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement
any provision herein which may be defective or inconsistent
with any other provision herein, or to make any other
provisions with respect to matters or questions arising under
this Indenture which shall not be inconsistent with the
provisions of this Indenture, provided such provisions shall
not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any
material respect; or
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(10)to supplement any of the provisions of this
Indenture to such extent as shall be necessary to permit or
facilitate the defeasance and discharge of any series of
Securities pursuant to Sections 401, 1402 and 1403; provided
that any such action shall not adversely affect the interests
of the Holders of Securities of such series and any related
coupons or any other series of Securities in any material
respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount
of all Outstanding Securities affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of
(or premium, if any, on) or any installment of principal of or
interest on, any Security; or reduce the principal amount
thereof or the rate or amount of interest thereon or any
Additional Interest payable in respect thereof, or any premium
payable upon the redemption thereof, or change any obligation
of the Company to pay Additional Interest pursuant to Section
1010 (except as contemplated by Section 801(l) and permitted
by Section 901(1)), or reduce the amount of the principal of
an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502 or the amount thereof provable
in bankruptcy pursuant to Section 504, or adversely affect any
right of repayment at the option of the Holder of any
Security, or change any Place of Payment where, or the
currency in which, any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption or repayment
at the option of the Holder, on or after the Redemption Date
or the Repayment Date, as the case may be), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose
Holders is required for any such supplemental indenture, or
the consent of whose Holders is required for any waiver with
respect to such series (or compliance with certain provisions
of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or reduce the
requirements of Section 1504 for quorum or voting, or
(3) modify any of the provisions of this Section,
Section 513 or Section 1013, except to increase the required
percentage to effect such action or to provide that certain
other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding
Security affected thereby.
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It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modification thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appertaining thereto shall be bound thereby.
SECTION 905. Conformity with TIA. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements
of the TIA as then in effect.
SECTION 906. Reference in Securities to Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall,
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, Interest
and Additional Interest. The Company covenants and agrees for the benefit of the
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on and any Additional Interest
payable in respect of the Securities of that series in accordance with the terms
of such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, any interest due on and any Additional
Interest payable in respect of Bearer
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Securities on or before Maturity, other than Additional Interest, if any,
payable as provided in Section 1010 in respect of principal of (or premium, if
any, on) such a Security, shall be payable only upon presentation and surrender
of the several coupons for such interest installments as are evidenced thereby
as they severally mature. Unless otherwise specified with respect to Securities
of any series pursuant to Section 301, at the option of the Company, all
payments of principal may be paid by check to the registered Holder of the
Registered Security or other person entitled thereto against surrender of such
Security.
SECTION 1002. Maintenance of Office or Agency. If Securities
of a series are issuable only as Registered Securities, the Company shall
maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain: (A) in the Borough of Manhattan, New York City, an office or agency
where any Registered Securities of that series may be presented or surrendered
for payment or where any Registered Securities of that series may be surrendered
for registration of transfer, where Securities of that series may be surrendered
for exchange, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment in the circumstances described in the following paragraph (and not
otherwise); (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Securities of that series and related coupons may be
presented and surrendered for payment (including payment of any Additional
Interest payable on Securities of that series pursuant to Section 1010);
provided, however, that if the Securities of that series are listed on the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company will maintain a
Paying Agent for the Securities of that series in Luxembourg or any other
required city located outside the United States, as the case may be, so long as
the Securities of that series are listed on such exchange; and (C) subject to
any laws or regulations applicable thereto, in a Place of Payment for that
series located outside the United States, an office or agency where any
Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange and
where notices and demands to or upon the Company in respect of the Securities of
that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of each such office or agency. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, except that Bearer
Securities of that series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Interest payable on
Bearer Securities of that series pursuant to Section 1010) or at the offices
specified in the Security, in London, England, and the Company hereby appoints
the same as its agent to receive such respective presentations, surrenders,
notices and demands, and the Company hereby appoints the Trustee its agent to
receive all such presentations, surrenders, notices and demands.
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Unless otherwise specified with respect to any Securities
pursuant to Section 301, no payment of principal, premium or interest on or
Additional Interest in respect of Bearer Securities shall be made at any office
or agency of the Company in the United States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank
allocated in the United States; provided, however, that payment of principal of
and any premium and interest on any Bearer Security (including any Additional
Interest payable on securities of such series pursuant to Section 1010) shall be
made at the office of the designated agent of the Company's Paying Agent in the
Borough of Manhattan, New York City if (but only if) payment in Dollars of the
full amount of such principal, premium, interest or Additional Interest, as the
case may be, at all offices or agencies outside the United States maintained for
the purpose by the Company in accordance with this Indenture, is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Company may from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all of such purposes, and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in accordance with the requirements set forth above for
Securities of any series for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency. Unless otherwise noted with
respect to any Securities pursuant to Section 301 with respect to a series of
Securities, the Company hereby designates as a Place of Payment for each series
of Securities the office or agency of the Company in the Borough of Manhattan
New York City, and initially appoints the Trustee at its Corporate Trust office
as Paying Agent and as its agent to receive all such presentations, surrenders,
notices and demands.
SECTION 1003. Money for Securities Payments to Be Held in
Trust. If the Company shall at any time act as its own Paying Agent with respect
to any series of any securities and any related coupons, it will, on or before
each due date of the principal of (and premium, if any), or interest on or
Additional Interest in respect of, any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium if any) or interest or
Additional Interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided, and will promptly notify
the Trustee, of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities and any related coupons, it will, before each due date
of the principal of (and premium, if any), or interest on or Additional Interest
in respect of, any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium if any) or interest or Additional
Interest, so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest or Additional Interest
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will
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(1) hold all sums held by it for the payment of
principal of (and premium, if any) or interest on Securities
or Additional Interest in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the
Trust (or any other obligor upon the Securities) in the making
of any such payment of principal (and premium, if any) or
interest or Additional Interest; and
(3) at any time during the continuance of any such
default upon the written request of the Trustee, forthwith pay
to the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series,
any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and premium, if any) or
interest on, or any Additional Interest in respect of, any Security of any
series and remaining unclaimed for two years after such principal (and premium,
if any), interest or Additional Interest has become due and payable shall be
paid to the Company upon Company Request or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment of such
principal of (and premium, if any) or interest on, or any Additional Interest in
respect of, any Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 1004. Existence. Subject to Article Eight, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its existence as a corporation, rights (charter and statutory)
and franchises; provided, however, that the Company shall not be required to
preserve any right or franchise if the Board of Directors shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company.
SECTION 1005. Maintenance of Properties. The Company will
cause all of its material properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied
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with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times.
SECTION 1006. Insurance. The Company will, and will cause each
of its Subsidiaries to, keep all of its insurable properties insured against
loss or damage at least equal to their then full insurable value with insurers
of recognized responsibility.
SECTION 1007. Payment of Taxes and Other Claims. The Company
will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a material lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith.
SECTION 1008. Provision of Financial Information. Whether or
not the Company is subject to Section 13 or 15(d) of the Exchange Act, the
Company will prepare the annual reports, quarterly reports and other documents
within 15 days of each of the respective dates by which the Company would have
been required to file with the Commission pursuant to such Section 13 or 15(d)
and will (i) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, without cost to such Holders copies of the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act if the Company were subject to such Sections, (ii) file with
the Trustee copies of the annual reports, quarterly reports and other documents
which the Trust would have been required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act if the Company were subject to such
Sections and (iii) promptly upon written request and payment of the reasonable
cost of duplication and delivery, supply copies of such documents to any
prospective Holder.
SECTION 1009. Statement as to Compliance. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Indenture and,
in the event of any noncompliance, specifying such noncompliance and the nature
and status thereof. For purposes of this Section 1009, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
SECTION 1010. Additional Interest. If any Securities of a
series provide for the payment of Additional Interest, the Company will pay to
the Holder of any Security of such series or any coupon appertaining thereto
Additional Interest as may be specified as contemplated by Section 301. Whenever
in this Indenture there is mentioned, in any context except in the case of
Section 502(1), the payment of the principal of or any premium or interest on,
or in respect of, any Security of any series or payment of any related coupon or
the net proceeds received on the sale or exchange of any Security of any series,
such mention shall be
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deemed to include mention of the payment of Additional Interest provided by
the terms of such series established pursuant to Section 301 to the extent
that, in such context, Additional Interest is, was or would be payable
in respect thereof pursuant to such terms and express mention of the payment of
Additional Interest (if applicable) in any provisions hereof shall not be
construed as excluding Additional Interest in those provisions hereof where
such express mention is not made.
Except as otherwise specified as contemplated by Section 301,
if the Securities of a series provide for the payment of Additional Interest, at
least 10 days prior to the first Interest Payment Date with respect to that
series of Securities (or if the Securities of that series will not bear interest
prior to Maturity, the first day on which a payment of principal and any premium
is made), and at least 10 days prior to each date of payment of principal and
any premium or interest if there has been any change with respect to the matters
set forth in the below-mentioned Officers' Certificate, the Company will furnish
the Trustee and the Company's principal Paying Agent or Paying Agents, if other
than the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities of that series or any related coupons who are not United States
persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series or related coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Interest required by the
terms of such Securities. In the event that the Trustee or any Paying Agent, as
the case may be, shall not so receive the above-mentioned certificate, then the
Trustee or such Paying Agent shall be entitled (i) to assume that no such
withholding or deduction is required with respect to any payment of principal or
interest with respect to any Securities of a series or related coupons until it
shall have received a certificate advising otherwise and (ii) to make all
payments of principal and interest with respect to the Securities of a series or
related coupons without withholding or deductions until otherwise advised. The
Company covenants to indemnify the Trustee and any Paying Agent for, and to hold
them harmless against, any loss, liability or expense reasonably incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by any of them or in reliance on any Officers'
Certificate furnished pursuant to this Section or in reliance on the Company's
not furnishing such an Officers' Certificate.
SECTION 1011. Limitations on Liens. The Company shall not, and
shall not cause or permit any Subsidiary to, issue, assume or guarantee any Debt
secured by a Lien upon any property or assets (other than cash) of the Company
or such Subsidiary, as applicable, without effectively providing that the
outstanding Securities (together with, if the Company so determines, any other
indebtedness or obligation then existing or thereafter created ranking equally
with such Securities) shall be secured equally and ratably with (or prior to)
such Debt so long as such Debt shall be so secured. The foregoing restriction on
Liens will not, however, apply to:
(a) Liens in existence on the date of original issue of such
Securities;
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(b) (i) any Lien created or arising over any property which is
acquired, constructed or created by the Company, or any of its Subsidiaries, but
only if (A) such Lien secures only principal amounts (not exceeding the cost of
such acquisition, construction or creation) raised for the purposes of such
acquisition, construction or creation, together with any costs, expenses,
interest and fees incurred in relation thereto or a guarantee given in respect
thereof, (B) such Lien is created or arises on or before 90 days after the
completion of such acquisition, construction or creation and (C) such Lien is
confined solely to the property so acquired, constructed or created; or (ii) any
Lien to secure Debt of the Company or a Subsidiary incurred in connection with a
specifically identifiable project where the Lien relates to and is confined to a
property or properties (including, without limitation, shares or other rights of
ownership in the entities which own such property or project) involved in such
project and acquired by the Company or a Subsidiary after the date of original
issue of the Securities of any series and the recourse of the creditors in
respect of such Debt is limited to any or all of such project and property
(including as aforesaid);
(c) any Lien securing amounts not more than 90 days overdue or
otherwise being contested in good faith;
(d) (i) rights of financial institutions to offset credit
balances in connection with the operation of cash management programs
established for the benefit of the Company or a Subsidiary or in connection with
the issuance of letters of credit for the benefit of the Company or a
Subsidiary; (ii) any Lien securing Debt of the Company or a Subsidiary incurred
in connection with the financing of accounts receivable; (iii) any Lien incurred
or deposits made in the ordinary course of business, including, but not limited
to, (A) any mechanics', materialmens', carriers', workmens', vendors' or other
like Liens and (B) any Liens securing amounts in connection with workers'
compensation, unemployment insurance and other types of social security; (iv)
any Lien upon specific items of inventory or other goods and proceeds of the
Company or a Subsidiary securing obligations of the Company or a Subsidiary in
respect of bankers' acceptances issued or created for the account of such person
to facilitate the purchase, shipment or storage of such inventory or other
goods; (v) any Lien incurred or deposits made securing the performance of
tenders, bids, leases, trade contracts (other than for borrowed money),
statutory obligations, surety bonds, appeal bonds, government contracts,
performance bonds, return-of-money bonds and other obligations of like nature
incurred in the ordinary course of business; (vi) any Lien constituted by a
right of set off or right over a margin call account or any form of cash or cash
collateral or any similar arrangement for obligations incurred in respect of the
hedging or management of risks under transactions involving any currency or
interest rate swap, cap or collar arrangements, forward exchange transaction,
option, warrant, forward rate agreement, futures contract or other derivative
instrument of any kind; (vii) any Lien arising out of title retention or like
provisions in connection with the purchase of goods and equipment in the
ordinary course of business; and (viii) any Lien securing reimbursement
obligations under letters of credit, guaranties and other forms of credit
enhancement given in connection with the purchase of goods and equipment in the
ordinary course of business;
(e) Liens in favor of the Company or a Subsidiary;
(f) (i) Liens on any property or assets acquired from a
corporation which is merged with or into the Company or a Subsidiary, or any
Liens on the property or assets of any
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corporation or other entity existing at the time such corporation or other
entity becomes a Subsidiary of the Company and, in either such case, is not
created in anticipation of any such transaction (unless such Lien is created to
secure or provide for the payment of any part of the purchase price of such
corporation); (ii) any Lien on any property or assets existing at the time of
acquisition thereof and which is not created in anticipation of such acquisition
(unless such Lien was created to secure or provide for the payment of any part
of the purchase price of such property or assets); and (iii) any Lien created or
outstanding on or over any asset of any Person which becomes a Subsidiary on or
after the date of the issuance of such Securities when such Lien is created
prior to the date on which such Person becomes a Subsidiary;
(g) (i) Liens required by any contract or statute in order to
permit the Company or a Subsidiary to perform any contract or subcontract made
by it with or at the request of a governmental entity or any department, agency
or instrumentality thereof, or to secure partial, progress, advance or any other
payments by the Company or a Subsidiary to such governmental unit pursuant to
the provisions of any contract or statute; (ii) any Lien securing industrial
revenue, development or similar bonds issued by or for the benefit of the
Company or a Subsidiary, provided that such industrial revenue, development or
similar bonds are nonrecourse to the Company or such Subsidiary; and (iii) any
Lien securing taxes or assessments or other applicable governmental charges or
levies;
(h) (i) any Lien which arises pursuant to any order of
attachment, distraint or similar legal process arising in connection with court
proceedings and any Lien which secures the reimbursement obligation for any bond
obtained in connection with an appeal taken in any court proceeding, so long as
the execution or other enforcement of such Lien arising pursuant to such legal
process is effectively stayed and the claims secured thereby are being contested
in good faith and, if appropriate, by appropriate legal proceedings, or any Lien
in favor of a plaintiff or defendant in any action before a court or tribunal as
security for costs and/or other expenses; or (ii) any Lien arising by operation
of law or by order of a court or tribunal or any Lien arising by an agreement of
similar effect, including, without limitation, judgment liens; or
(i) any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of any Liens
referred to in the foregoing clauses, for amounts not exceeding the principal
amount of the Debt secured by the Lien so extended, renewed or replaced,
provided that such extension, renewal or replacement Lien is limited to all or a
part of the same property or assets that were covered by the Lien extended,
renewed or replaced (plus improvements on such property or assets).
Nothing contained in this Indenture in any way restricts or
prevents the Company or any Subsidiary from incurring any Debt.
SECTION 1012. Limitations on Sale and Lease-Back Transactions.
The Company covenants and agrees that so long as any Securities of such series
remains outstanding, it will not, and the Company will not permit any Subsidiary
to, enter into any arrangement with any Person (other than the Company or a
Subsidiary), providing for the leasing to the Company or a Subsidiary of any
assets which have been or are to be sold or transferred by the Company or such
Subsidiary to such Person (a "Sale and Lease-Back Transaction") unless; (a) such
transaction involves a lease for a temporary period not to exceed three years;
(b) such transaction
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is between the Company or a Subsidiary and an affiliate of the Company; (c) the
Company would be entitled to incur debt secured by a Lien on the assets or
property involved in such transaction at least equal in amount to the
Attributable Debt with respect to such Sale and Lease-Back Transaction, without
equally and ratably securing the Securities, pursuant to the limitation on Liens
described above; (d) such transaction is entered into within 90 days after the
initial acquisition by the Company of the assets or property subject to such
transaction; (e) after giving effect thereto, the aggregate amount of all
Attributable Debt with respect to all such Sale and Lease-Back Transactions does
not exceed 10% of Consolidated Net Tangible Assets; or (f) the Company or a
Subsidiary within the twelve months preceding the sale or transfer or the twelve
months following the sale or transfer, regardless of whether such sale or
transfer may have been made by the Company or such Subsidiary, applies in the
case of a sale or transfer for cash, an amount equal to the net proceeds thereof
and, in the case of a sale or transfer otherwise than for cash, an amount equal
to the fair value of the assets so leased at the time of entering into such
arrangement (as determined by the Board of Directors of the Company or such
Subsidiary), (i) to the retirement of debt, incurred or assumed by the Company
or a Subsidiary, which by its terms matures at, or is extendible or renewable at
the option of the obligor to, a date more than twelve months after the date of
incurring, assuming or guaranteeing such debt or (ii) to investment in any
assets of the Company or any Subsidiary.
SECTION 1013. Waiver of Certain Covenants. The Company may
omit in any particular instance to comply with any term, provision or condition
set forth in Sections 1004 to 1008, inclusive, or section 1011 or Section 1012
if before or after the time for such compliance the Holders of at least a
majority in principal amount of all outstanding Securities of such series, by
Act of such Holders, either waive such compliance in such instance or generally
waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
SECTION 1014. Covenants Regarding Trust. For so long as the
Trust Securities remain outstanding, the Company covenants (i) to directly or
indirectly maintain 100% of ownership of the Trust Common Securities (as defined
in the Trust Agreement relating to such securities) of the Trust; provided,
however, that any permitted successor of the Company hereunder may succeed to
the Company's ownership of such Trust Common Securities, and (ii) to use its
reasonable efforts to cause the Trust (a) to remain a statutory business trust,
except in connection with the distribution of Subordinated Debentures to the
holders of Trust Securities in liquidation of the Trust, the redemption of all
of the Trust Securities of the Trust, or certain mergers, consolidations or
amalgamations, each as permitted under the Trust Agreement, and (b) to otherwise
continue to be classified as a grantor trust for United States federal income
tax purposes.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any
series which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and
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(except as otherwise specified as contemplated by Section 301 for Securities of
any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Securities shall be evidenced by or
pursuant to a Board Resolution. In the case of any redemption at the election of
the Company of less than all of the Securities of any series, the Company shall,
at least 45 days prior to the giving of the notice of redemption in Section 1104
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities of
such series to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities of any series issued on the same day
with the same terms are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series issued on such date with
the same terms not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security which has been or
is to be redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption shall
be given in the manner provided in Section 106, not less than 30 days nor more
than 60 days prior to the Redemption Date, unless a shorter period is specified
by the terms of such series established pursuant to Section 301, to each Holder
of Securities to be redeemed, but failure to give such notice in the manner
herein provided to the Holder of any Security designated for redemption as a
whole or in part, or any defect in the notice to any such Holder, shall not
affect the validity of the proceedings for the redemption of any other such
Security or portion thereof.
Any notice that is mailed to the Holders of Registered
Securities in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
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(2) the Redemption Price, accrued interest to the
Redemption Date payable as provided in Section 1106, if any,
and Additional Interest, if any,
(3) if less than all Outstanding Securities of any
series are to be redeemed, the identification (and, in the
case of partial redemption, the principal amount) of the
particular Security or Securities to be redeemed,
(4) in case any Security is to be redeemed in part
only, the notice which relates to such Security shall state
that on and after the Redemption Date, upon surrender of such
Security, the holder will receive, without a charge, a new
Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price
and accrued interest to the Redemption Date payable as
provided in Section 1106, if any, will become due and payable
upon each such Security, or the portion thereof, to be
redeemed and if applicable, that interest thereon shall cease
to accrue on and after said date,
(6) the Place or Places of Payment where such
Securities, together in the case of Bearer Securities with all
coupons appertaining thereto, if any, maturing after the
Redemption Date, are to be surrendered for payment of the
Redemption Price and accrued interest, if any,
(7) that the redemption is for a sinking fund, if
such is the case,
(8) that, unless otherwise specified in such notice,
Bearer Securities of any series, if any, surrendered for
redemption must be accompanied by all coupons maturing
subsequent to the date fixed for redemption or the amount of
any such missing coupon or coupons will be deducted from the
Redemption Price, unless security or indemnity satisfactory to
the Company, the Trustee for such series and any Paying Agent
is furnished,
(9) if Bearer Securities of any series are to be
redeemed and any Registered Securities of such series are not
to be redeemed, and if such Bearer Securities may be exchanged
for Registered Securities not subject to redemption on this
Redemption Date pursuant to Section 305 or otherwise, the last
date, as determined by the Company, on which such exchanges
may be made, and
(10)the CUSIP number of such Security, if any
Notice of redemption of Securities to be redeemed shall be
given by the Company or, at the Company's request, by the Trustee in the name
and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price. At least one
Business Day prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, which it may not do in the case of a sinking fund payment under Article
Twelve, segregate and hold in trust as provided in section
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1003) an amount sufficient to pay on the Redemption Date the Redemption Price
of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities or portions thereof which are to be
redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified (together with accrued interest, if any, to the Redemption
Date), and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Securities shall, if
the same were interest-bearing, cease to bear interest and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest, if
any, to the Redemption Date; provided, however, that installments of interest on
Bearer Securities whose Stated Maturity is on or prior to the Redemption Date
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 1002) and, unless otherwise specified
as contemplated by Section 301, only upon presentation and surrender of coupons
for such interest; and provided further that, installments of interest on
Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate borne by
the Security.
SECTION 1107. Securities Redeemed in Part. Any Registered
Security which is to be redeemed only in part (pursuant to the provisions of
this Article or of Article Twelve) shall be surrendered at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing) and the Company shall execute and the Trustee shall authenticate and
deliver to the
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Holder of such Security without service charge a new Security or Securities of
the same series, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article. The provisions of this
Article shall be applicable to any sinking fund for the retirement of Securities
of a series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of an sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund Payment", and any payment in excess of such minimum amount provided
for by the terms of such Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of any Securities
of any series, the cash amount of any mandatory sinking fund Payment may be
subject to reduction as provided in Section 1202. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of the Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities. The Company may, in satisfaction of all or any part of any mandatory
sinking fund payment with respect to the Securities of a series, (1) deliver
Outstanding Securities of such series (other than any previously called for
redemption) together in the case of any Bearer Securities of such series with
all unmatured coupons appertaining thereto and (2) apply as a credit Securities
of such series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, as
provided for by the terms of such Securities, or which have otherwise been
acquired by the Company; provided that such Securities so delivered or applied
as a credit have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the applicable
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such mandatory sinking fund payment shall
be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund. Not
less than 60 days prior to each sinking fund payment date for Securities of any
series, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing mandatory sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202, and the optional amount, if any, to be added in cash
to the next ensuing mandatory sinking fund payment, and will also deliver to the
Trustee any Securities to be so delivered and credited. If such Officers'
Certificate shall specify an optional amount to be added in cash to the next
ensuing mandatory sinking fund payment, the Trust shall thereupon be obligated
to pay the amount therein specified. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner
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specified in Section 1103 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of
Securities of any series before their Stated Maturity at the option of Holders
thereof shall be made in accordance with the terms of such Securities, if any,
and (except as otherwise specified by the terms of such series established
pursuant to Section 301) in accordance with this Article.
SECTION 1302. Repayment of Securities. Securities of any
series subject to repayment in whole or in part at the option of the Holders
thereof will, unless otherwise provided in the terms of such Securities, be
repaid at a price equal to the principal amount thereof, together with interest,
if any, thereon accrued to the Repayment Date specified in or pursuant to the
terms of such Securities. The Company covenants that at least one Business Day
prior to the Repayment Date it will deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount sufficient to pay the principal
(or, if so provided by the terms of the Securities of any series, a percentage
of the principal) of, and (except if the Repayment Date shall be an Interest
Payment Date) accrued interest on, all the Securities or portions thereof, as
the case may be, to be repaid on such date.
SECTION 1303. Exercise of Option. Securities of any series
subject to repayment at the option of the Holders thereof will contain an
"Option to Elect Repayment" form on the reverse of such Securities. In order for
any Security to be repaid at the option of the Holder, the Trustee must receive
at the Place of Payment therefor specified in the terms of such Security (or at
such other place or places of which the Company shall from time to time notify
the Holders of such Securities) not earlier than 60 days nor later than 30 days
prior to the Repayment Date (1) the Security so providing for such repayment
together with the "Option to Elect Repayment" form on the reverse thereof duly
completed by the Holder (or by the Holder's attorney duly authorized in writing)
or (2) a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange, or the National Association of Securities Dealers,
Inc. ("NASD"), or a commercial bank or trust company in the United States
setting forth the name of the Holder of the security, the principal amount of
the Security, the principal amount of the Security to be repaid, the CUSIP
number, if any, or a description of the tenor and terms of the Security, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Security to be repaid, together with the duly completed form
entitled "Option to Elect Repayment" on the reverse of the Security will be
received by the Trustee not later than the fifth Business Day after the date of
such telegram, telex, facsimile transmission or letter; provided, however, that
such telegram, telex, facsimile transmission or letter shall only be effective
if such Security and form duly completed are received by the Trustee by such
fifth Business Day. If less than the entire principal amount of such Security is
to be repaid in accordance with the terms of such Security, the principal amount
of such Security to be repaid, in
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increments of the minimum denomination for Securities of such series, and the
denomination or denominations of the Security or Securities to be issued to the
Holder for the portion of the principal amount of such Security surrendered that
is not to be repaid, must be specified. The principal amount of any Security
providing for repayment at the option of the Holder thereof may not be repaid in
part if, following such repayment, the unpaid principal amount of such Security
would be less than the minimum authorized denomination of Securities of the
series of which such Security to be repaid is a part. Except as otherwise may be
provided by the terms of any Security providing for repayment at the option of
the Holder thereof, exercise of the repayment option by the Holder shall be
irrevocable unless waived by the Company.
SECTION 1304. When Securities Presented for Repayment Become
Due and Payable. If Securities of any series providing for repayment at the
option of the Holders thereof shall have been surrendered as provided in this
Article and as provided by or pursuant to the terms of such Securities, such
Securities or the portions thereof, as the case may be, to be repaid shall
become due and payable and shall be paid by the Company on the Repayment Date
therein specified, and on and after such Repayment Date (unless the Company
shall default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security or repayment in accordance with such provisions, together with
all coupons, if any, appertaining thereto maturing after the Repayment Date, the
principal amount of such Security so to be repaid shall be paid by the Company,
together with accrued interest, if any, to the Repayment Date; provided,
however, that coupons whose Stated Maturity is on or prior to the Repayment Date
shall be payable, only at an office or agency located outside the United States
(except as otherwise provided in Section 1002) and, unless otherwise specified
pursuant to Section 301, only upon presentation and surrender of such coupons;
and provided further that, in the case of Registered Securities, installments of
interest, if any, whose Stated Maturity is on or prior to the Repayment Date
shall be payable (but without interest thereon, unless the Company shall default
in the payment thereof) to the Holders of such Securities, or one or more
Predecessor Securities registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to the Trustee or any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made as provided in the preceding sentence, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest represented
by coupons shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified as contemplated by Section 301, only upon presentation and
surrender of those coupons.
If the principal amount of any Security surrendered for
repayment shall not be so repaid upon surrender thereof, such principal amount
(together with interest, if any, thereon
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accrued to such Repayment Date) shall, until paid, bear interest from the
Repayment Date at the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) set forth in such Security.
SECTION 1305. Securities Repaid in Part. Upon surrender of any
Registered Security which is to be repaid in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision
is made for either or both of (a) defeasance of the Securities of or within a
series under Section 1402 or (b) covenant defeasance of the Securities of or
within a series under Section 1403, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as, may be specified pursuant to Section 301
with respect to any Securities) shall be applicable to such Securities and any
coupons appertaining thereto, and the Company may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 1402 (if applicable) or Section 1403
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
SECTION 1402. Defeasance and Discharge. Upon the Company's
exercise of the above option applicable to this Section with respect to any
Securities of or within a series, the Company shall be deemed to have been
discharged from its obligations with respect to such Outstanding Securities and
any coupons appertaining thereto on the date the conditions set forth in Section
1404 are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by such Outstanding Securities and any
coupons appertaining thereto, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 1405 and the other Sections of
this Indenture referred to in clauses (A) and (B) below, and to have satisfied
all of its other obligations under such Securities and any coupons appertaining
thereto and this Indenture insofar as such Securities and any coupons
appertaining thereto are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same) except for the
following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of such Outstanding Securities and any
coupons appertaining thereto to receive, solely from the trust fund described in
Section 1404 and as more fully set forth in such Section, payments in respect of
the principal of (and premium, if any) and interest, if any, on such Securities
and any coupons appertaining thereto when such payments are due, (B) the
Company's obligations with respect to such Securities under Sections 305, 306,
1002 and 1003 and with respect to the payment of Additional Interest, if any, on
such Securities as contemplated
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by Section 1010, (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (D) this Article. Subject to compliance with this Article
Fourteen, the Company may exercise its option under this Section notwithstanding
the prior exercise of its option under Section 1403 with respect to such
Securities and any coupons appertaining thereto.
SECTION 1403. Covenant Defeasance. Upon the Company's exercise
of the above option applicable to this Section with respect to any Securities of
or within a series, the Company shall be released from its obligations under
Sections 1004 to 1008, inclusive, Section 1011 and Section 1012, and, if
specified pursuant to Section 301, its obligations under any other covenant,
with respect to such Outstanding Securities and any coupons appertaining thereto
on and after the date the conditions set forth in Section 1404 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with Sections 1004 to 1008,
inclusive, Section 1011 or Section 1012, or such other covenant, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to such Outstanding
Securities and any coupons appertaining thereto, the Company may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in any such Section or such other covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
such other covenant or by reason of reference in any such Section or such other
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a default or an Event of Default under
Section 501(4) or 501(8) or otherwise, as the case may be, but, except as
specified above, the remainder of this Indenture and such Securities and any
coupons appertaining thereto shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of Section 1402 or Section
1403 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:
(a) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Fourteen applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities and any coupons appertaining
thereto, (1) an amount of money, or (2) Government Obligations applicable to
such Securities and coupons appertaining thereto which through the scheduled
payment of principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any payment of
principal of (and premium, if any) and interest, if any, on such Securities and
any coupons appertaining thereto, money in an amount, or (3) a combination
thereof, in any case, in an amount, sufficient, without consideration of any
reinvestment of such principal and interest, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying trustee) to pay and
discharge, (1) the principal of (and premium, if any) and interest, if any, on
such Outstanding Securities and any coupons appertaining thereto on the Stated
Maturity of such principal or installment of principal or interest and (ii) any
mandatory sinking fund payments or analogous payments applicable to such
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Outstanding securities and any coupons appertaining thereto on the day on which
such payments are due and payable in accordance with the terms of this Indenture
and of such Securities and any coupons appertaining thereto.
(b) Such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(c) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to such Securities
and any coupons appertaining thereto shall have occurred and be continuing on
the date of such deposit or, insofar as Sections 501(6) and 501(7) are
concerned, at any time during the period ending on the 91st day after the date
of such deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
(d) In the case of an election under Section 1402, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture, there
has been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the Holders
of such Outstanding Securities and any coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred.
(e) In the case of an election under Section 1403, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an
Officers' Certificate and an opinion of Counsel, each stating that all
conditions precedent to the defeasance under Section 1402 or the covenant
defeasance under Section 1403 (as the case may be) have been complied with and
an Opinion of Counsel to the effect that either (i) as a result of a deposit
pursuant to subsection (a) above and the related exercise of the Company's
option under Section 1402 or Section 1403 (as the case may be), registration is
not required under the Investment Trust Act of 1940, as amended, by the Company,
with respect to the trust funds representing such deposit or by the Trustee for
such trust funds or (ii) all necessary registrations under said Act have been
effected.
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 301.
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SECTION 1405. Deposited Money and Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions. Subject to the provisions of the
last paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1405, the "Trustee") pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons as pertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium, if any) and interest and Additional Interest, if any, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the Government
Obligations deposited pursuant to Section 1404 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of such Outstanding Securities and any
coupons appertaining thereto.
Anything in this Article to the contrary notwithstanding,
subject to Section 606, the Trustee shall deliver or pay to the Company from
time to time upon Company Request any money or Government Obligations (or other
property and any proceeds therefrom) held by it as provided in Section 1404
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect a defeasance or covenant defeasance, as applicable, in
accordance with this Article.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A
meeting of Holders of Securities of any series may be called at any time and
from time to time pursuant to this Article to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders of Securities
of such series.
SECTION 1502. Call, Notice and Place of Meetings. (a) The
Trustee may at any time call a meeting of Holders of Securities of any series
for any purpose specified in Section 1501, to be held at such time and at such
place in the Borough of Manhattan, New York City, as the Trustee shall
determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days or to the date
fixed for the meeting.
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(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 1501, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 21 days after receipt of
such request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series in
the amount above specified, as the case may be, may determine the time and the
place in the Borough of Manhattan, New York City, for such meeting and may call
such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
SECTION 1503. Persons Entitled to Vote at Meeting. To be
entitled to vote at any meeting of Holders of Securities of any series, a Person
shall be (1) a Holder of one or more Outstanding Securities of such series, or
(2) a Person appointed by an instrument in writing as proxy for a Holder or
Holders of one or more Outstanding Securities of such series by such Holder or
Holders. The only Persons who shall be entitled to be present or to speak at any
meeting of Holders of Securities of any series shall be the Persons entitled to
vote at such meeting and their counsel, any representatives of the Trustee and
its counsel and any representatives of the Company and its counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote a
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if, any action is to be taken at such meeting with
respect to a consent or waiver which this Indenture expressly provides may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Securities of a series, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding Securities of such
series shall constitute a quorum. In the absence of a quorum within 30 minutes
after the time appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Securities of such series, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at the reconvening of any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days; at the reconvening of any meeting adjourned or further
adjourned for lack of a quorum, the persons entitled to vote 25% in the
aggregate principal amount of the Securities at the time outstanding shall
constitute a quorum for the taking of any action set forth in the notice of the
original meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1502(a), except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened.
Except as limited by the proviso to Section 902, any
resolution presented to a meeting or adjourned meeting duly reconvened at which
a quorum is present as aforesaid may be adopted by the affirmative vote of the
persons entitled to vote a majority in aggregate principal amount of the
Outstanding Securities represented at such meeting; provided, however, that,
except as limited by the proviso to Section 902, any resolution with respect to
any request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture
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expressly provides may be made, given or taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of
Holders of Securities of any series duly held in accordance with this Section
shall be binding on all the Holders of Securities of such series and the related
coupons, whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504,
if any action is to be taken at a meeting of Holders of Securities of any series
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(i) there shall be no minimum quorum requirement for
such meeting; and
(ii)the principal amount of the Outstanding
Securities of such series that vote in favor of such request, demand,
authorization, direction, notice, consent, waiver or other action shall
be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has
been made, given or taken under this Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings.
(a) Notwithstanding any provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of a series in regard to proof of the holding
of Securities of such series and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 104
and the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the Person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such regulations may
provide that written instruments appointing proxies regular on their face, may
be presumed valid and genuine without the proof specified in Section 104 or
other proof.
(b) The Trustee shall, by an instrument in writing appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a
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temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by vote of the Persons entitled to vote a majority in
principal amount of the Outstanding Securities of such series represented at
the meeting.
(c) At any meeting each Holder of a Security of such series or
proxy shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 1502 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in principal amount of
the Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of Securities
of any series shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities of such series or of their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities of such series held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record, at least in duplicate, of
the proceedings of each meeting of Holders of Securities of any Series shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
fact, setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 1502 and, if applicable, Section 1504.
Each copy shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one such copy shall be delivered to
the Company and another to the Trustee to be preserved by the Trustee, the
latter to have attached thereto the ballots voted at the meeting. Any record so
signed and verified shall be conclusive evidence of the matters therein stated.
ARTICLE SIXTEEN
SUBORDINATION
SECTION 1601. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article (subject to Article Four), the
payment of the principal of, premium, if any, and interest (including Additional
Interest, if any) on each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment in full in cash
of all Senior Indebtedness.
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SECTION 1602. Payment of Proceeds Upon Dissolution, Etc. Upon
any payment or distribution of assets of the Company to creditors upon any
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors, marshalling of assets or liabilities or any bankruptcy, insolvency
or similar proceedings of the Company (each such event, if any, referred to as a
"Proceeding"), the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due on or to become due on or in respect of all
Senior Indebtedness (including any interest accruing thereon after the
commencement of any such Proceeding, whether or not allowed as a claim against
the Company in such Proceeding), before the Holders of the Securities are
entitled to receive any payment or distribution (excluding any payment described
in Section 1609) on account of the principal of, premium, if any, or interest
(including Additional Interest, if any) on the Securities or on account of any
purchase, redemption or other acquisition of Securities by the Company (all such
payments, distributions, purchases, redemptions and acquisitions, whether or not
in connection with a Proceeding, herein referred to, individually and
collectively, as a "Payment").
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing shall be received by
the Trustee or the Holders of the Securities before all Senior Indebtedness is
paid in full, or provision is made for such payment in money in accordance with
its terms, such payment or distribution shall be held in trust for the benefit
of and shall be paid over or delivered to the holders of Senior Indebtedness or
to the trustee or trustees under any indenture pursuant to which any instruments
evidencing any such Senior Indebtedness may have been issued, as their
respective interests may appear, as calculated by the Company, for application
to the payment of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness.
For purposes of this Article, "assets of the Company" shall
not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article with respect to the
Securities to the payment of all Senior Indebtedness that may at the time be
outstanding, provided, however, that (i) Senior Indebtedness is assumed by the
new corporation, if any, resulting from any such reorganization or readjustment,
and (ii) the rights of the holders of the Senior Indebtedness are not, without
the consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in
Article Eight hereof shall not be deemed a dissolution, winding-up, liquidation
or reorganization for the purposes of this Section 1602 if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Eight hereof. Nothing in
Section 1603 or in this Section 1602 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 606.
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SECTION 1603. No Payment When Senior Indebtedness in Default.
No payment of any principal, including redemption payments, if any, premium, if
any, or interest (including Additional Interest, if any) on the Securities shall
be made if
(i) any Senior Indebtedness is not paid when due
whether at the stated maturity of such payment or by call for
redemption and any applicable grace period with respect to such default
has ended, with such default remaining uncured and such default has not
been waived or otherwise ceased to exist;
(ii)the maturity of any Senior Indebtedness has been
accelerated because of a default; or
(iii) notice has been given of the exercise of an
option to require repayment, mandatory payment or prepayment of Senior
Indebtedness.
In the event that, notwithstanding the foregoing, the Company
shall make any Payment to the Trustee or any Holder prohibited by the foregoing
provisions of this Section, then in such event such event such Payment shall be
held in trust and paid over and delivered forthwith to the holders of the Senior
Indebtedness.
The provisions of this Section shall not apply to any Payment
with respect to which Section 1602 hereof would be applicable.
SECTION 1604. Payment Permitted If No Default. Nothing
contained in this Article or elsewhere in this Indenture or in any of the
Securities shall prevent the Company, at any time except during the pendency of
any Proceeding referred to in Section 1602 hereof or under the conditions
described in Section 1603 hereof, from making Payments. Nothing in this Article
shall have any effect on the right of the Holders or the Trustee to accelerate
the maturity of the Securities upon the occurrence of an Event of Default, but,
in that event, no payment may be made in violation of the provisions of this
Article with respect to the Securities. If payment of the Securities is
accelerated because of an Event of Default, the Company shall promptly notify
the holders of the Senior Indebtedness (or their representatives) of such
acceleration.
SECTION 1605. Subrogation to Rights of Holders of Senior
Indebtedness. The rights of the Holders of the Securities shall be subrogated to
the rights of the holders of such Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to the Senior
Indebtedness until the principal of, premium, if any, and interest (including
Additional Interest, if any) on the Junior Subordinated Notes shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article, and no payments pursuant to the provisions of this
Article to the holders of Senior Indebtedness by Holders of the Securities or
the Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
SECTION 1606. Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the
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<PAGE> 86
Holders on the one hand and the holders of Senior Indebtedness on the other
hand. Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional
(and which, subject to the rights under this Article of the holders of Senior
Indebtedness, is intended to rank equally with all other general obligations of
the Company), to pay to the Holders of the Securities the principal of, premium,
if any, and interest (including Additional Interest, if any) on the Securities
as and when the same shall become due and payable in accordance with their
terms; or (b) affect the relative rights against the Company of the Holders of
the Securities and creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Senior Indebtedness to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder or, under the conditions
specified in Section 1603, to prevent any payment prohibited by such Section or
enforce their rights pursuant to the penultimate paragraph in Section 1603.
SECTION 1607. Trustee to Effectuate Subordination. Each Holder
of a Security by his acceptance thereof authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of the Company, whether
in bankruptcy, insolvency, receivership proceedings, or otherwise, the timely
filing of a claim for the unpaid balance of the indebtedness of the Company
owing to such Holder in the form required in such proceedings and the causing of
such claim to be approved.
SECTION 1608. No Waiver of Subordination Provisions. No right
of any present or future holder of any Senior Indebtedness to enforce the
subordination provisions provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or any failure to act, in good faith, by any such holder, or by
any noncompliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof any such holder may have to
be or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: i) change the manner,
place or terms of payment or extend the time for payment of, or renew or alter,
Senior Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) permit the Company to borrow, repay and
then reborrow any or all of the Senior Indebtedness; (iii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iv) release any Person liable in any manner for
the collection of Senior Indebtedness; (v) exercise or refrain from
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<PAGE> 87
exercising any rights against the Company and any other Person; or (vi) apply
any sums received by them to Senior Indebtedness.
SECTION 1609. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money held in trust by
the Trustee under Article Four for the payment of the principal of, premium, if
any, and interest (including Additional Interest, if any) on any series of
Securities shall not be subordinated to the prior payment of any Senior
Indebtedness or subject to the restrictions set forth in this Article and no
Holder of such Securities nor the Trustee shall be obligated to pay over such
amount to the Company, any holder of Senior Indebtedness (or a designated
representative of such holder) or any other creditor of the Company.
SECTION 1610. Notice to the Trustee. The Company shall give
prompt written notice to a Responsible Officer of the Trustee of any fact known
to the Company that would prohibit the making of any payment of monies to or by
the Trustee in respect of the Securities pursuant to the provisions of this
Article. Notwithstanding the provisions of this Article or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment of monies
to or by the Trustee in respect of the Securities pursuant to the provisions of
this Article unless and until a Responsible Officer of the Trustee shall have
received written notice thereof at the Corporate Trust Office of the Trustee
from the Company or a holder or holders of Senior Indebtedness or from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 601, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section 1610 at
least two Business Days prior to the date upon which, by the terms hereof, any
money may become payable for any purpose (including, without limitation, the
payment of the principal of (or premium, if any) or interest on any Security),
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such money and to apply the same
to the purposes for which they were received, and shall not be affected by any
notice to the contrary that may be received by it within two Business Days prior
to such date.
The Trustee, subject to the provisions of Section 601, shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be holder of Senior Indebtedness (or a trustee on behalf
of such holder) to establish that such notice has been given by a holder of
Senior Indebtedness or a trustee on behalf of any such holder or holders. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished the
Trustee may defer any payment to such person pending judicial determination as
to the right of such person to receive such payment.
SECTION 1611. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Company
referred to in this Article, the
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<PAGE> 88
Trustee, subject to the provisions of Section 601 hereof, and the Holders of the
Securities shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which such Proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Person entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article, provided that
the foregoing shall apply only if such court has been apprised of the provisions
of this Article.
SECTION 1612. Trustee Not Fiduciary for Holders of Senior
Indebtedness; Subject to the provisions of Section 601, the Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article or otherwise.
SECTION 1613. Rights of Trustee as Holder of Senior
Indebtedness; Preservation of Trustee's Rights. The Trustee in its individual
capacity shall be entitled to all the rights set forth in this Article with
respect to any Senior Indebtedness which may at any time be held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments
to, the Trustee or pursuant to Section 606 hereof.
SECTION 1614. Article Applicable to Paying Agents. In case at
any time any Paying Agent other than the Trustee (or the Company or an Affiliate
of the Company) shall have been appointed by the Company and be then acting
hereunder, the term "Trustee" as used in this Article shall in such case (unless
the context otherwise required) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article in addition to or in place of the
Trustee.
SECTION 1615. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Holder by accepting a Security acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Securities, to acquire and continue to hold, or to continue to
hold, such Senior Indebtedness and such holder of Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or to continue to hold, such Senior Indebtedness.
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<PAGE> 89
ARTICLE SEVENTEEN
MISCELLANEOUS PROVISIONS
SECTION 1701. Assignment; Binding Effect. The Company shall
have the right at all times to assign any of its rights or obligations under
this Indenture to a direct or indirect wholly-owned subsidiary of the Company,
provided that, in the event of any such assignment, the Company shall remain
primarily liable for the performance of all such obligations. This Indenture may
also be assigned by the Company in connection with a transaction described in
Article Eight. This Indenture shall be binding upon and inure to the benefit of
the Company, the Trustee, the Holders, any Security Registrar, Paying Agent, and
Authenticating Agent and, to the extent specifically set forth herein, the
holders of Senior Indebtedness and their respective successors and assigns. The
provisions of clause (2) of Section 508 are for the benefit of the holders of
the series of Trust Securities referred to therein and, prior to the dissolution
of the related Securities Trust, may be enforced by such holders. A holder of a
Trust Security shall not have the right, as such a holder, to enforce any other
provision of this Indenture.
SECTION 1702. Additional Interest. Whenever there is mentioned
in this Indenture, in any context, the payment of the principal of, premium, if
any, or interest on, or in respect of, any Security of any series such mention
shall be deemed to include mention of the payment of Additional Interest
provided for by the terms of such series of Securities to the extent that, in
such context, Additional Interest is, was or would be payable in respect thereof
pursuant to such terms, and express mention of the payment of Additional
Interest in any provisions hereof shall not be construed as excluding Additional
Interest in those provisions hereof where such express mention is not made.
This Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Indenture.
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<PAGE> 90
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed all as of the day and year first above written.
SEMCO ENERGY INC.
By:
------------------------------
Title:
Attest:
------------------------------
Title:
NBD Bank
as Trustee
By:
------------------------------
Title:
Attest:
------------------------------
Title:
83
<PAGE> 91
STATE OF __________________ )
)ss:
COUNTY OF__________________ )
On the _____ day of ________ 1998, before me personally came
_______________________, to me known, who, being by me duly sworn, did depose
and say that he/she resides at _______________________, that he/she is
__________ of SEMCO ENERGY INC., one of the parties described in and which
executed the foregoing instrument, and that he/she signed his/her name thereto
by authority of the Board of Directors.
(Notarial Seal)
_________________________________
Notary Public
COMMISSION EXPIRES
STATE OF __________________ )
)ss:
COUNTY OF__________________ )
On the _____ day of _____, 1998, before me personally came
__________________, to me known, who, being by me duly sworn, did depose and say
that he/she resides at ____________________, that he/she is a _________________
of NBD Bank, one of the parties described in and which executed the foregoing
instrument, and that he/she signed his/her name thereto by authority of the
Board of Directors.
(Notarial Seal)
_________________________________
Notary Public
COMMISSION EXPIRES
84
<PAGE> 92
EXHIBIT A
FORMS OF CERTIFICATION
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
(Insert title or sufficient description of Securities to be delivered)
This is to certify that, as of the date hereof, and except as
set forth below, the above-captioned Securities held by you for our account (i)
are owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing
for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise SEMCO Energy, Inc., or its agent that such financial
institution will comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the United States Internal Revenue Code of 1986, as amended, and the
regulations thereunder), or (iii) are owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, in addition, if the owner is a United States or foreign financial
institution described in clause (iii) above (whether or not also ascribed in
clause (i) or (ii)), this is to further certify that such financial institution
has not acquired the Securities for purposes of resale directly or indirectly to
a United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the above-captioned Securities held by you for our account in accordance with
your operating procedures if any applicable statement herein is not correct on
such date, and in the absence of any such notification it may be assumed that
this certification applies as of such date.
This certificate excepts and does not relate to {U.S.$} of
such interest in the above-captioned Securities in respect of which we are not
able to certify and as to which we
A-1-1
<PAGE> 93
understand an exchange for an interest in a Permanent Global Security or an
exchange for and delivery of definitive Securities (or, if relevant, collection
of any interest) cannot be made until we do so certify.
We understand that this certificate may be required in
connection with certain tax legislation in the United States. If administrative
or legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: 19
---------------------------------- ---
(To be dated no earlier than the 15th day prior to (i)
the Exchange Date or (ii) the relevant Interest
Payment Date occurring prior to the Exchange Date,
as applicable)
(Name of Person Making Certification)
-------------------------------------
(Authorized Signature)
Name:
Title:
A-1-2
<PAGE> 94
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
(Insert title or sufficient description of Securities to be delivered)
This is to certify that, based solely on written
certifications that we have received in writing, by tested telex or by
electronic transmission from each of the persons appearing in our records as
persons entitled to a portion of the principal amount set forth below (our
"Member Organizations") substantially in the form attached hereto, as of the
date hereof, {U.S.$} _________________ principal amount of the above-captioned
Securities (i) is owned by person(s) that are not citizens or residents of the
United States, domestic partnerships, domestic corporations or any estate or
trust the income of which is subject to United States Federal income taxation
regardless of its source ("United States person(s)"), (ii) is owned by United
States person(s) that are (a) foreign branches of United States financial
institutions (financial institutions, as defined in U.S. Treasury Regulations
Section 1.165-12(c)(1)(v) are herein referred to as "financial institutions")
purchasing for their own account or for resale, or (b) United States person(s)
who acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such
financial institution has agreed, on its own behalf or through its agent, that
we may advise SEMCO Energy, Inc. or its agent that such financial institution
will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) is owned by United States or foreign financial institution(s) for purposes
of resale during the restricted period (as defined in United States Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, to the further effect, that
financial institutions described in clause (iii) above (whether or not also
described in clause (i) or (ii)) have certified that they have not acquired the
Securities for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island and the Northern Mariana Islands.
We further certify that (i) we are not making available
herewith for exchange (or, if relevant, collection of any interest) any portion
of the temporary global Security representing the above-captioned Securities
excepted in the above referenced certificates of Member organizations and (ii)
as of the date hereof we have not received any notification from any of our
Member Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
A-2-1
<PAGE> 95
We understand that this certification is required in
connection with certain tax legislation in the United States. If administrative
or legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: ___________________________ 19___
(To be dated no earlier than the Exchange Date or
the relevant Interest Payment Date occurring prior
to the Exchange Date, as applicable)
(Morgan Guaranty Trust of New York,
Brussels Office,) as
Operator of the Euroclear System or
Cedel S.A.)
By:_________________________________
A-2-2
<PAGE> 1
EXHIBIT 4.2
- --------------------------------------------------------------------------------
SEMCO ENERGY, INC.
TO
NBD BANK
Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of _________ , 1998
$__________________
SERIES A _____% SUBORDINATED DEBENTURES
DUE _____________
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I SERIES A SUBORDINATED DEBENTURES.................................................1
Section 101 Establishment....................................................................1
Section 102 Definitions......................................................................2
Section 103 Payment of Principal and Interest................................................4
Section 104 Deferral of Interest Payments....................................................5
Section 105 Denominations....................................................................6
Section 106 Global Securities................................................................6
Section 107 Redemption.......................................................................7
Section 108 Additional Interest..............................................................8
Section 109 Limitations on Dividend and Certain Other Payments...............................9
Section 110 Covenants Regarding Securities Trust.............................................9
Section 111 No Fiduciary Duty of Trustee to Holders of Trust Securities......................9
Section 112 Listing of Series A Debentures...................................................10
Section 113 Covenant Defeasance..............................................................10
Section 114 Set-Off..........................................................................10
Section 115 Subordination....................................................................10
Section 116 Paying Agent.....................................................................10
ARTICLE 2 MISCELLANEOUS PROVISIONS.........................................................11
Section 201 Recitals by Corporation..........................................................11
Section 202 Ratification and Incorporation of Original Indenture.............................11
Section 203 Executed in Counterparts.........................................................11
Section 204 Counterparts.....................................................................11
Section 205 Enforcement by Holders of Preferred Securities of Right of Holders
to Receive Principal and Interest.............................................11
</TABLE>
- -------------------------
* This Table of Contents does not constitute part of the Indenture or have any
bearing upon the interpretation of any of its terms and provisions.
<PAGE> 3
THIS FIRST SUPPLEMENTAL INDENTURE is made as of the ____ day
of ___________, 1998, by and between SEMCO ENERGY, INC., a corporation organized
under the laws of Michigan, having its principal office at 405 Water Street,
Port Huron, Michigan 48060 (the "Corporation"), and NBD Bank, a Michigan banking
corporation, as Trustee (herein called the "Trustee").
W I T N E S S E T H:
WHEREAS, the Corporation has heretofore entered into a
Subordinated Indenture, dated as of _________ 1, 1998 (the "Original Indenture")
with the Trustee;
WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as supplemented by this First Supplemental
Indenture, is herein called the "Indenture";
WHEREAS, under the Original Indenture, a new series of
Securities may at any time be established in accordance with the provisions of
the Original Indenture and the terms of such series may be described by a
supplemental indenture executed by the Corporation and the Trustee;
WHEREAS, the Corporation proposes to create under the
Indenture a series of Securities;
WHEREAS, additional Securities of other series hereafter
established, except as may be limited in the Original Indenture as at the time
supplemented and modified, may be issued from time to time pursuant to the
Indenture as at the time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution
and delivery of this First Supplemental Indenture and to make it a valid and
binding obligation of the Corporation have been done or performed.
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1
SERIES A _____ % SUBORDINATED DEBENTURES
Section 101. Establishment
There is hereby established a new series of Securities to be
issued under the Indenture, to be designated as the Corporation's Series A ____
% Subordinated Debentures due (the "Series A Debentures").
There are to be authenticated and delivered $___________
principal amount of Series A Debentures, and no further Series A Debentures
shall be authenticated and delivered
-1-
<PAGE> 4
except as provided by Sections 304, 305, 306, 906 or 1106 of the Original
Indenture. The Series A Debentures shall be issued in definitive fully
registered form without coupons.
The Series A Debentures shall be in substantially the form set
out in Exhibit A hereto. The entire principal amount of the Series A Debentures
shall initially be evidenced by one certificate issued to the Property Trustee
of the SEMCO Capital Trust.
The form of the Trustee's Certificate of Authentication for
the Series A Debentures shall be in substantially the form set forth in Exhibit
B hereto.
The Series A Debenture shall be dated the date of
authentication thereof and shall bear interest from the date of original
issuance thereof or from the most recent Interest Payment Date to which interest
has been paid or duly provided for.
Section 102. Definitions
The following defined terms used herein shall, unless the
context otherwise requires, have the meanings specified below. Capitalized terms
used herein for which no definition is provided herein shall have the meanings
set forth in the Original Indenture.
"Additional Interest" means (i) such additional amounts as may
be required so that the net amounts received and retained by the Holder (if the
Holder is the Securities Trust) after paying taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States or any other taxing authority will not be less than the
amounts the Holder would have received had not such taxes, duties, assessments,
or other governmental charges been imposed; and (ii) such interest as shall
accrue on interest due and not paid on an Interest Payment Date, accruing at the
rate of _______ % per annum from the applicable Interest Payment Date to the
date of payment, compounded quarterly, on each Interest Payment Date, to the
extent permitted by applicable law.
"Business Day" means a day other than (i) a Saturday or a
Sunday, (ii) a day on which banks in New York, New York are authorized or
obligated by law or executive order to remain closed or (iii) a day on which the
Corporate Trust Office or the principal corporate trust office of the Property
Trustee is closed for business.
"Deferred Interest" means such installments of interest as are
not paid during any Extension Period, plus Additional Interest (as defined in
clause (ii) of the definition thereof) thereon.
"Extension Period" means any period during which the
Corporation has elected to defer payments of interest, which deferral may be for
a period of up to twenty (20) consecutive quarters.
"Guarantee" means the Guarantee Agreement executed and
delivered by the Corporation and NBD Bank, as guarantee trustee, for the benefit
of the holders of the Trust Preferred Securities, as such Agreement may be
amended from time to time.
-2-
<PAGE> 5
"Interest Payment Dates" means _________ , __________ ,
_________ and ____________ of each year.
"Investment Company Act Event" means that the Administrative
Trustees (as defined in the Trust Agreement) and the Corporation shall have
received an Opinion of Counsel experienced in such matters to the effect that,
as a result of the occurrence of a change in law or regulation or a written
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Securities Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended, which change becomes effective on or after the
Original Issue Date.
"Original Issue Date" means ___________, 1998.
"Outstanding", when used with respect to the Series A
Debentures, means, as of the date of determination, all Series A Debentures,
theretofore authenticated and delivered under the Indenture, except:
(i) Series A Debentures theretofore canceled by the
Trustee or delivered to the Trustee for cancellation;
(ii) Series A Debentures for whose payment or redemption
the necessary amount of money or money's worth has
been theretofore deposited with the Trustee or any
Paying Agent (other than the Corporation) in trust or
set aside and segregated in trust by the Corporation
(if the Corporation shall act as its own Paying
Agent) for the Holders of such Series A Debentures;
provided that if such Series A Debentures are to be
redeemed, notice of such redemption has been duly
given pursuant to the Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Series A Debentures as to which Defeasance has been
effected pursuant to Section 1402 of the Original
Indenture; and
(iv) Series A Debentures that have been paid or in
exchange for or in lieu of which other Series A
Debentures have been authenticated and delivered
pursuant to the Indenture, other than any such Series
A Debentures in respect of which there shall have
been presented to the Trustee proof satisfactory to
it that such Series A Debentures are held by a bona
fide purchaser in whose hands such Series A
Debentures are valid obligations of the Corporation;
provided, however, that in determining, during any period in which any Series A
Debentures are owned by any Person other than the Corporation or any Affiliate
thereof, whether the Holders of the requisite principal amount of Outstanding
Series A Debentures have given, made or taken any request, demand,
authorization, direction, notice, consent, waiver or other action hereunder as
of any date, Series A Debentures owned, whether of record or beneficially, by
the Corporation or any Affiliate thereof (with the exception of the Securities
Trust) shall be disregarded and deemed not to be Outstanding. In determining
whether the Trustee shall be protected in relying
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upon such request, demand, authorization, direction, notice, consent, waiver or
other action, only Series A Debentures that the Trustee knows to be so owned by
the Corporation or an Affiliate of the Corporation (with the exception of the
Securities Trust) in the above circumstances shall be so disregarded. Series A
Debentures so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Series A Debentures and that the
pledgee is not the Corporation or any Affiliate of the Corporation.
"Trust Preferred Securities" means the _____% Trust Originated
Preferred Securities issued by the Securities Trust.
"Property Trustee", when used with respect to the Series A
Debentures, means the Person designated as such in the Trust Agreement.
"Regular Record Date" means, with respect to each Interest
Payment Date, the close of business on the 15th calendar day preceding such
Interest Payment Date.
"Securities Trust" means SEMCO Capital Trust, a statutory
business trust formed by the Corporation under Delaware law to issue the Trust
Securities, the proceeds of which will be used to purchase Series A Debentures,
or a successor thereof.
"Special Event" means an Investment Company Act Event or Tax
Event.
"Stated Maturity" means __________.
"Tax Event" means that the Administrative Trustees and the
Corporation shall have received an Opinion of Counsel experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein or (b) any amendment to, or change in, an
interpretation or application of such laws or regulations, there is more than an
insubstantial risk that (i) the Securities Trust would be subject to United
States federal income tax with respect to income accrued or received on the
Series A Debentures, (ii) interest payable on the Series A Debentures would not
be deductible by the Corporation for United States federal income tax purposes,
or (iii) the Securities Trust would be subject to more than a de minimis amount
of other taxes, duties or other governmental charges, which change or amendment
becomes effective on or after the Original Issue Date.
"Trust Agreement" means the Amended and Restated Trust
Agreement that governs the affairs of the Securities Trust.
"Trust Securities" means the securities issued by the
Securities Trust evidencing the entire beneficial interest therein.
Section 103. Payment of Principal and Interest
The unpaid principal amount of the Series A Debentures shall
bear interest at the rate of _____% per annum until paid or duly provided for,
such interest to accrue from ____________, 1998 or from the most recent Interest
Payment Date to which interest has been
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<PAGE> 7
paid or duly provided for. Interest shall be paid quarterly in arrears on each
Interest Payment Date to the Person in whose name the Series A Debentures are
registered on the Regular Record Date for such Interest Payment Date; provided
that interest payable at the Stated Maturity of principal or on a Redemption
Date as provided herein will be paid to the Person to whom principal is payable.
So long as an Extension Period is not occurring, any such interest that is not
so punctually paid or duly provided for will forthwith cease to be payable to
the Holders on such Regular Record Date and may either be paid to the Person or
Persons in whose name the Series A Debentures are registered at the close of
business on a Special Record Date for the payment of such defaulted interest to
be fixed by the Trustee ("Special Record Date"), notice whereof shall be given
to Holders of the Series A Debentures not less than ten (10) days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange, if any, on which
the Series A Debentures may be listed, and upon such notice as may be required
by any such exchange, all as more fully provided in the Original Indenture.
Payments of interest on the Series A Debentures will include
interest accrued to but excluding the respective Interest Payment Dates.
Interest payments for the Series A Debentures shall be computed and paid on the
basis of a 360-day year of twelve 30-day months. In the event that any date on
which interest is payable on the Series A Debentures is not a Business Day, then
payment of the interest payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date the
payment was originally payable.
Payment of the principal and interest (including Additional
Interest, if any) on the Series A Debentures shall be made at the office of the
Paying Agent in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts, with
any such payment that is due at the Stated Maturity or at earlier redemption of
any Series A Debentures being made upon surrender of such Series A Debentures to
the Paying Agent. Payments of interest (including interest on any Interest
Payment Date) will be made, subject to such surrender where applicable, at the
option of the Corporation, (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer at such place and to such account at a banking institution in
the United States as may be designated in writing to the Trustee at least
sixteen (16) days prior to the date for payment by the Person entitled thereto.
The Corporation shall pay, as additional interest on the
Series A Debentures, when due to the United States or any other taxing
authority, the amounts set forth in clause (i) of the definition of Additional
Interest.
Section 104. Deferral of Interest Payments
The Corporation has the right at any time and from time to
time to extend the interest payment period of the Series A Debentures for up to
twenty (20) consecutive quarters (each, an "Extension Period"), during which
Extension Period the Corporation shall have the right to make partial payments
of interest on any Interest Payment Date; provided, however, that
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<PAGE> 8
no such Extension Period may extend beyond the Stated Maturity. Notwithstanding
the foregoing, the Corporation has no right to extend its obligation to pay such
amounts as are defined in clause (i) of the definition of Additional Interest.
Prior to the termination of any such Extension Period, the Corporation may
further extend the interest payment period; provided that such Extension Period,
together with all such previous and further extensions of that Extension Period,
shall not exceed twenty (20) consecutive quarters. Upon the termination of any
such Extension Period and upon the payment of all accrued and unpaid interest
and any Additional Interest then due, the Corporation may select a new Extension
Period, subject to the above limitations and requirements.
Upon the termination of any Extension Period, which
termination shall be on an Interest Payment Date, the Corporation shall pay all
Deferred Interest on the next succeeding Interest Payment Date to the Person or
Persons in whose name the Series A Debentures are registered on the Regular
Record Date for such Interest Payment Date; provided that Deferred Interest
payable at Stated Maturity or on any Redemption Date will be paid to the Person
or Persons to whom principal is payable.
The Corporation shall give the Holder or Holders of the Series
A Debentures and the Trustee notice, as provided in Sections 105 and 106,
respectively, of the Original Indenture, of its selection or extension of an
Extension Period at least one Business Day prior to the earlier of (i) the
Regular Record Date relating to the Interest Payment Date on which the Extension
Period is to commence or relating to the Interest Payment Date on which an
Extension Period that is being extended would otherwise terminate, or (ii) the
date the Corporation or the Securities Trust is required to give notice to
NASDAQ or other applicable self-regulatory organization of the record date or
the date such distributions are payable. The Corporation shall cause the
Securities Trust to give notice of the Corporation's selection of such Extension
Period to Holders of the Trust Securities. The month in which any notice is
given pursuant to the immediately preceding sentence of this Section shall
constitute the first month of the first quarter of the twenty (20) consecutive
quarters which comprise the maximum Extension Period.
At any time any of the foregoing notices are given to the
Trustee, the Corporation shall give to the Paying Agent for the Series A
Debentures such information as said Paying Agent shall reasonably require in
order to fulfill its tax reporting obligations with respect to such Series A
Debentures.
Section 105. Denominations
The Series A Debentures may be issued in denominations of $25,
or any integral multiple thereof.
Section 106. Global Securities
If the Series A Debentures are distributed to holders of the
Trust Securities in liquidation of such holders' interests therein, the Series A
Debentures will be issued in the form of one or more Global Securities
registered in the name of the Depositary (which shall be The Depository Trust
Company) or its nominee. Except under the limited circumstances described below,
Series A Debentures represented by such Global Security or Global Securities
will not be
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<PAGE> 9
exchangeable for, and will not otherwise be issuable as, Series A
Debentures in definitive form. The Global Securities described above may not be
transferred except by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or to a successor Depositary or its nominee.
Owners of beneficial interests in such a Global Security will
not be considered the Holders thereof for any purpose under the Indenture, and
no Global Security representing a Series A Debenture shall be exchangeable,
except for another Global Security of like denomination and tenor to be
registered in the name of the Depositary or its nominee or to a successor
Depositary or its nominee or except as described below. The rights of Holders of
such Global Security shall be exercised only through the Depositary.
A Global Security shall be exchangeable for Series A
Debentures registered in the names of persons other than the Depositary or its
nominee only if (i) the Depositary notifies the Corporation that it is unwilling
or unable to continue as a Depositary for such Global Security and no successor
Depositary shall have been appointed by the Corporation within 90 days of
receipt by the Corporation of such notification, or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act at a
time when the Depositary is required to be so registered to act as such
Depositary and no successor Depositary shall have been appointed by the
Corporation within 90 days after it becomes aware of such cessation, or (ii) the
Corporation in its sole discretion determines that such Global Security shall be
so exchangeable. Any Global Security that is exchangeable pursuant to the
preceding sentence shall be exchangeable for Series A Debentures registered in
such names as the Depositary shall direct.
Section 107. Redemption
The Series A Debentures shall be subject to redemption at the
option of the Corporation, in whole or in part, without premium or penalty, at
any time or from time to time on or after _____________, at a Redemption Price
equal to ___% of the principal amount to be redeemed plus accrued but unpaid
interest (including any Additional Interest) to the Redemption Date; provided,
however, that, if a redemption in part shall result in the delisting of the
Trust Preferred Securities, the Corporation may redeem the Series A Debentures
only in whole. In addition, upon the occurrence of a Special Event, the
Corporation may, within ninety (90) days following the occurrence thereof and
subject to the terms and conditions of the Indenture, redeem the Series A
Debentures, in whole, at a price equal to 100% of the principal amount to be
redeemed plus any accrued but unpaid interest (including Additional Interest, if
any) to the Redemption Date.
In the event of redemption of the Series A Debentures in part
only, a new Series A Debentures or Debentures for the unredeemed portion shall
be issued in the name or names of the Holders thereof upon the surrender
thereof.
The Series A Debentures shall not have a sinking fund.
Notice of redemption shall be given as provided in Section
1104 of the Original Indenture. Notwithstanding the foregoing, no notice of
redemption that is given pursuant to such Section with respect to any Series A
Debentures shall, while any Trust Preferred Securities are
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<PAGE> 10
outstanding, contain a condition that provides that redemption of the Series A
Debentures, or the part thereof, specified therein, shall be conditional upon
receipt by the Trustee or the Paying Agent for such Series A Debentures, on or
prior to the date fixed for such redemption, of money sufficient to pay the
principal of and any interest on such Series A Debentures. Any notice provided
to the Trustee under Section 1102 of the Original Indenture shall also be
provided by the Corporation to the Property Trustee; provided that the
Corporation shall provide notice pursuant to such Section 1102 on a date less
than 45 days prior to the Redemption Date only if such shorter notice is
satisfactory to both the Trustee and the Property Trustee.
Any redemption of less than all of the Series A Debentures
shall, with respect to the principal thereof, be divisible by $25.
Section 108. Additional Interest
Whenever there is mentioned in the Indenture, in any context,
the payment of the principal of, or any premium or interest on, or in respect
of, Securities of any series, such mention shall, with respect to the Series A
Debentures, be deemed to include mention of the payment of Additional Interest
provided for by the terms of the Series A Debentures to the extent that, in such
context, Additional Interest is, were or would be payable in respect thereof
pursuant to such terms, and express mention of the payment of Additional
Interest in any provisions of this First Supplemental Indenture shall not be
construed as excluding Additional Interest in those provisions of the Original
Indenture or this First Supplemental Indenture in which such express mention is
not made.
If, subsequent to the date that a satisfaction and discharge
or Defeasance is effected pursuant to Section 401 or 1402, respectively, of the
Original Indenture, Additional Interest (for purposes of this paragraph, as
defined in clause (i) of the definition thereof) (in excess of that established
as of the date that such discharge or Defeasance is effected) becomes payable in
respect of the Series A Debentures so discharged or defeased, the Corporation
shall irrevocably deposit or cause to be irrevocably deposited in accordance
with the provisions of Section 401 or 1404 of the Original Indenture, as the
case may be, within ten Business Days prior to the date the first payment in
respect of any portion of such excess Additional Interest becomes due, such
additional moneys or Government Obligations as are necessary to satisfy the
provisions of Section 401 or 1404 of the Original Indenture, as the case may be,
as if a discharge or Defeasance were being effected as of the date of such
subsequent deposit.
Except as otherwise provided in or pursuant to the Indenture,
at least 10 days prior to the first Interest Payment Date upon which Additional
Interest (for purposes of this paragraph, as defined in clause (i) of the
definition thereof) shall be payable, and at least 10 days prior to each date of
payment of principal and any premium or interest if there has been any change
with respect to the information set forth in the Officers' Certificate
hereinafter mentioned, the Corporation shall furnish the Trustee and any Paying
Agent, if other than the Trustee or the Corporation, with an Officers'
Certificate stating the amount of the Additional Interest payable per minimum
authorized denomination of the Series A Debentures.
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<PAGE> 11
Section 109. Limitations on Dividend and Certain Other Payments
The Corporation covenants, for the benefit of the Holders of
the Series A Debentures, that, subject to the next succeeding sentence, (a) the
Corporation shall not declare or pay any dividend on, or make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, and (b) the Corporation shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities (including guarantees other than the Guarantee)
issued by the Corporation which rank pari passu with or junior to the Series A
Debentures (i) if at such time the Corporation shall have given notice of its
election to extend an interest payment period for the Series A Debentures and
such extension shall be continuing or (ii) if at such time an Event of Default
with respect to the Series A Debentures shall have occurred and be continuing.
The preceding sentence, however, shall not restrict (A) any of the actions
described in the preceding sentence resulting from any reclassification of the
Corporation's capital stock or the exchange or conversion of one class or series
of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (B) repurchases, redemptions or other acquisitions
of shares of the Corporation's capital stock in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
employees, officers or directors or a stock purchase and dividend reinvestment
plan, and (C) dividends or distributions in capital stock of the Corporation, or
(D) the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged.
Section 110. Covenants Regarding Securities Trust
For so long as the Trust Securities remain outstanding, the
Corporation covenants (i) directly or indirectly to maintain 100% ownership of
the Trust Common Securities (as defined in the Trust Agreement) of the
Securities Trust; provided, however, that any permitted successor of the
Corporation under the Indenture may succeed to the Corporation's ownership of
such Trust Common Securities, and (ii) to use its reasonable efforts to cause
the Securities Trust (a) to remain a statutory business trust, except in
connection with the distribution of Series A Debentures to the holders of Trust
Securities in liquidation of the Securities Trust, the redemption of all of the
Trust Securities, or certain mergers, consolidations or amalgamations, each as
permitted under the Trust Agreement, and (b) to otherwise continue to be
classified as a grantor trust for United States federal income tax purposes. The
Corporation shall deliver to the Trustee, no later than the Business Day on
which the event occurs, written notice of the liquidation, dissolution or
winding-up of the Securities Trust if such liquidation, dissolution or
winding-up would occur earlier than the Stated Maturity of the Series A
Debentures owned by such Securities Trust.
Section 111. No Fiduciary Duty of Trustee to Holders of Trust
Securities
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Trust Securities and shall be entitled to rely on the delivery to
it of a written notice by a Person representing himself to be a holder of a
Trust Security to establish that such Person is such a holder.
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Section 112. Listing of Series A Debentures
If the Series A Debentures are to be issued as a Global
Security in connection with the distribution of the Series A Debentures to the
holders of the Trust Preferred Securities, the Corporation shall use its best
efforts to list such Series A Debentures on NASDAQ or any other exchange on
which such Trust Preferred Securities are then listed. The Corporation shall
notify the Trustee if and when the Series A Debentures become admitted to
trading on NASDAQ or any other national securities exchange.
Section 113. Covenant Defeasance
Section 1404 of the Original Indenture shall not apply to any of the
Series A Debentures.
Section 114. Set-Off
Notwithstanding anything to the contrary in the Indenture or
in any Series A Debenture, prior to the dissolution of the Securities Trust, the
Corporation shall have the right to set-off and apply against any payment it is
otherwise required to make hereunder or thereunder with respect to the principal
of or interest (including any Additional Interest) on the Series A Debentures
with and to the extent the Corporation has theretofore made, or is concurrently
on the date of such payment making, a payment with respect to the Trust
Preferred Securities under the Guarantee. Contemporaneously with, or as promptly
as practicable after, any such payment under the Guarantee, the Corporation
shall deliver to the Trustee an Officers' Certificate (upon which the Trustee
shall be entitled to rely conclusively without any requirement to investigate
the facts contained therein) to the effect that such payment has been made and
that, as a result of such payment, the corresponding payment under the Series A
Debentures has been set-off in accordance with this Section 114.
Section 115. Subordination
The indebtedness evidenced by the Series A Debentures shall
be, to the extent and in the manner set forth in the Original Indenture,
subordinate and junior in right of payment to the prior payment in full of all
Senior Indebtedness (as defined in the Original Indenture) with respect to the
Series A Debentures, and the Series A Debentures shall rank pari passu in right
of payment with each other series of Securities issued under the Indenture, with
the exception of any series of Securities which by its terms provides otherwise.
Section 116. Paying Agent
The Trustee shall initially serve as Paying Agent with respect
to the Series A Debentures, with the Place of Payment initially being the
Corporate Trust Office of the Trustee.
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ARTICLE 2
MISCELLANEOUS PROVISIONS
Section 201. Recitals by Corporation
The recitals in this First Supplemental Indenture are made by
the Corporation only and not by the Trustee, and all of the provisions contained
in the Original Indenture in respect of the rights, privileges, immunities,
powers and duties of the Trustee shall be applicable in respect of the Series A
Debentures and of this First Supplemental Indenture as fully and with like
effect as if set forth herein in full.
Section 202. Ratification and Incorporation of Original
Indenture
As supplemented hereby, the Original Indenture is in all
respects ratified and confirmed, and the Original Indenture and this First
Supplemental Indenture shall be read, taken and construed as one and the same
instrument.
Section 203. Executed in Counterparts
This First Supplemental Indenture may be executed in several
counterparts, each of which shall be deemed to be an original, and such
counterparts shall together constitute but one and the same instrument.
Section 204. Assignment
The Corporation shall have the right at all times to assign
any of its rights or obligations under this Indenture with respect to the Series
A Debentures to a direct or indirect wholly-owned subsidiary of the Corporation;
provided that, in the event of any such assignment, the Corporation shall remain
primarily liable for the performance of all such obligations. The Indenture may
also be assigned by the Corporation in connection with a transaction described
in Article Eight of the Original Indenture.
Section 205. Enforcement by Holders of Preferred Securities of
Right of Holders to Receive Principal and Interest
So long as the Series A Debentures are held by the Property
Trustee on behalf of the Securities Trust, a registered holder of Trust
Preferred Securities may institute a legal proceeding directly against the
Corporation, without first instituting a legal proceeding directly against or
requesting or directing that action be taken by the Property Trustee or any
other Person, for enforcement of payment to such registered holder of principal
of or interest on Series A Debentures having a principal amount equal to the
aggregate stated liquidation amount of such Trust Preferred Securities of such
registered holder on or after the due dates therefor specified or provided for
in the Series A Debentures. This Section 205 and Section 109 of this First
Supplemental Indenture are for the benefit of the registered holders of Trust
Preferred Securities and, prior to the dissolution of the Securities Trust, may
be enforced by such holders. A holder of a Trust Preferred Security shall not
have the right, as such holder, to enforce any other provision of the Indenture.
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<PAGE> 14
IN WITNESS WHEREOF, each party hereto has caused this
instrument to be signed in its name and behalf by its duly authorized officers,
all as of the day and year first above written.
SEMCO ENERGY, INC.
By:________________________
Its:_______________________
Attest:
_______________________________
NBD Bank,
as Trustee
By:________________________
Authorized Officer
Attest:
_______________________________
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<PAGE> 15
EXHIBIT A
FORM OF
SERIES A ____% SUBORDINATED DEBENTURE
DUE _____________, ________
No. 1 CUSIP NO. _____________
THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE
INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN
FULL OF ALL SENIOR INDEBTEDNESS AND THIS SECURITY IS ISSUED SUBJECT TO THE
PROVISIONS OF THE INDENTURE WITH RESPECT THERETO.
SEMCO ENERGY, INC.
SERIES A _____% SUBORDINATED DEBENTURE
DUE ________________
Principal Amount: $
Regular Record Date: 15th calendar day prior to Interest Payment Date
Original Issue Date: _____________
Stated Maturity: ________________
Interest Payment Dates: ________, _______, _________, _________
Interest Rate: _______% per annum
Authorized Denomination: $25
Initial Redemption Date: ____________, _____
SEMCO Energy, Inc., a Michigan corporation (the "Corporation",
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received, hereby promises to pay to, or
registered assigns, the principal sum of DOLLARS ($) on the Stated Maturity
shown above (or upon earlier redemption), and to pay interest thereon from the
Original Issue Date shown above, or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, quarterly in arrears on
each Interest Payment Date as specified above, commencing on the Interest
Payment Date next succeeding the Original Issue Date shown above and on the
Stated Maturity (or upon earlier redemption) at the rate per annum shown above
(the "Interest Rate") until the principal hereof is paid or made available for
payment and on any overdue principal and on any overdue installment of interest.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date (other than an Interest Payment Date that is the Stated
Maturity or on a Redemption Date) will, as provided in such Indenture, be paid
to the Person in whose name this Series A ____% Subordinated Debenture (this
"Security") is registered at the close of business on the Regular Record Date as
specified above next preceding such Interest Payment Date; provided that any
interest payable at Stated Maturity or on any Redemption Date will be paid to
the Person to whom principal is payable.
<PAGE> 16
Except as otherwise provided in the Indenture, any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security is registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest to be fixed by the Trustee,
notice whereof shall be given to Holders of Securities of this series not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of NASDAQ or of any
securities exchange, if any, on which the Securities of this series shall be
listed, and upon such notice as may be required by any such exchange, all as
more fully provided in said Indenture.
Payments of interest on this Security will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for this Security shall be computed and paid on the basis of a 360-day
year of twelve 30-day months. In the event that any date on which interest is
payable on this Security is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on the date the payment was originally payable.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on
which banks in New York, New York are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office or the principal corporate trust office of the Property Trustee is closed
for business.
The Corporation shall have the right at any time and from time
to time during the term of this Security to extend the interest payment period
of such Security for up to 20 consecutive quarters (each, an "Extension
Period"), but not beyond the Stated Maturity of this Security, during which
Extension Periods interest shall accrue on unpaid installments of interest at
the Interest Rate, compounded quarterly, to the date of payment to the extent
permitted by applicable law (such unpaid interest plus such interest thereon
being called "Deferred Interest"); provided, however, that the Corporation shall
have the right to make partial payments of interest on any Interest Payment Date
during any Extension Period. Upon the termination of each Extension Period,
which shall be an Interest Payment Date, the Corporation shall pay all Deferred
Interest on the next succeeding Interest Payment Date to the Person in whose
name this Security is registered at the close of business on the Regular Record
Date for such Interest Payment Date; provided that any Deferred Interest payable
at Stated Maturity or on any Redemption Date will be paid to the Person to whom
principal is payable. Prior to the termination of any such Extension Period, the
Corporation may further extend the interest payment period; provided that such
Extension Period together with all such previous and further extensions thereof
shall not exceed twenty (20) consecutive quarters. Upon the termination of any
such Extension Period, and the payment of all accrued and unpaid interest
(including any Additional Interest) then due, the Corporation may select a new
Extension Period, subject to the above requirements. The Corporation shall not
(i) declare or pay any dividend or distribution on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of its capital stock, and
(ii) make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees other than the
Guarantee) issued by the Corporation that rank pari passu with or junior to this
Security if the Corporation shall have given notice of its election to extend an
interest payment period for this Security and such
A-2
<PAGE> 17
extension shall be continuing or if at such time an Event of Default with
respect to the series of which this Security is a part shall have occurred and
be continuing. The preceding sentence, however, shall not restrict (A) any of
the actions described in the preceding sentence resulting from any
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for another
class or series of the Corporation's capital stock, (B) repurchases, redemptions
or other acquisitions of shares of the Corporation's capital stock in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers or directors or a stock purchase and
dividend reinvestment plan, (C) dividends or distributions on capital stock of
the Corporation, or (D) the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged. The Corporation
shall give the Holder of this Security and the Trustee notice of its selection
or extension of an Extension Period at least one Business Day prior to the
earlier of (i) the Regular Record Date relating to the Interest Payment Date on
which the Extension Period is to commence or relating to the Interest Payment
Date on which an Extension Period that is being extended would otherwise
terminate or (ii) the date the Corporation or the Securities Trust is required
to give notice to the NASDAQ or other applicable self-regulatory organization of
the record date or the date such distributions are payable.
The Corporation also shall be obligated to pay when due and
without extension all additional amounts as may be required so that the net
amount received and retained by the Holder of this Security (if the Holder is
the Securities Trust) after paying taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed by the United
States or any other taxing authority will not be less than the amounts such
Holder would have received had no such taxes, duties, assessments, or other
governmental charges been imposed.
Payment of the principal of and interest (including Additional
Interest, if any) due at the Stated Maturity or earlier redemption of this
Security shall be made upon surrender of this Security, at the Corporate Trust
Office of the Trustee, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts. Payment of interest (including interest on an Interest Payment Date) will
be made, subject to such surrender where applicable, at the option of the
Corporation, (i) by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or (ii) by wire transfer
at such place and to such account at a banking institution in the United States
as may be designated in writing to the Trustee at least sixteen (16) days prior
to the date for payment by the Person entitled thereto.
The indebtedness evidenced by this Security is, to the extent
and in the manner set forth in the Indenture, subordinate in right of payment to
the prior payment in full of all Senior Indebtedness (as defined in the
Indenture), and this Security is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Security, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided, and (c) appoints the
Trustee his attorney-in-fact for any and all such purposes. Each Holder hereof,
by his acceptance hereof, waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness whether
A-3
<PAGE> 18
now outstanding or hereafter incurred and waives reliance by each such holder
upon said provisions.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
SECURITY SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
A-4
<PAGE> 19
IN WITNESS WHEREOF, the Corporation has caused this instrument
to be duly executed under its corporate seal.
Dated:
SEMCO ENERGY, INC.
By:________________________
Its:____________________
Attest:
______________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
NBD Bank,
as Trustee
By:________________________
Authorized Officer
A-5
<PAGE> 20
(Reverse Side of Security)
This Security is one of a duly authorized issue of Securities
of the Corporation (the "Securities"), issued and issuable in one or more series
under a Subordinated Indenture, dated as of _________, _______, as supplemented
(the "Indenture"), between the Corporation and NBD Bank, as Trustee (the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitation of rights, duties and
immunities thereunder of the Corporation, the Trustee and the Holders of the
Securities issued thereunder and of the terms upon which said Securities are,
and are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof as Series A ______% Subordinated Debentures due
__________, ____ (the "Series A Debentures") in the aggregate principal amount
of up to $__________. Capitalized terms used herein for which no definition is
provided herein shall have the meanings set forth in the Indenture.
The Corporation shall have the right, subject to the terms and
conditions of the Indenture, to redeem this Security at any time on or after
_____________, _____ at the option of the Corporation, without premium or
penalty, in whole or in part, at a Redemption Price equal to ___% of the
principal amount to be redeemed plus accrued but unpaid interest (including any
Additional Interest) to the Redemption Date. Upon the occurrence of a Special
Event (as defined below), the Corporation may, within 90 days following the
occurrence thereof and subject to the terms and conditions of the Indenture,
redeem this Security without premium or penalty, in whole, at a Redemption Price
equal to ___% of the principal amount thereof plus accrued but unpaid interest
(including any Additional Interest) to the Redemption Date. A Special Event may
be a Tax Event or an Investment Company Act Event. "Tax Event" means that the
Administrative Trustees and the Corporation shall have received an Opinion of
Counsel experienced in such matters to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations, there
is more than an insubstantial risk that (i) the Securities Trust would be
subject to United States federal income tax with respect to income accrued or
received on the Series A Debentures, (ii) interest payable on the Series A
Debentures would not be deductible by the Corporation for United States federal
income tax purposes, or (iii) the Securities Trust would be subject to more than
a de minimis amount of other taxes, duties or other governmental charges, which
change or amendment becomes effective on or after the Original Issue Date.
"Investment Company Act Event" means that the Administrative Trustees and the
Corporation shall have received an Opinion of Counsel experienced in such
matters to the effect that, as a result of the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Securities Trust is
or will be considered an "investment company" that is required to be registered
under the Investment Company Act of 1940, as amended, which change becomes
effective on or after the Original Issue Date.
In the event of redemption of this Security in part only, a
new Security or Securities of this series for the unredeemed portion hereof will
be issued in the name of the
A-6
<PAGE> 21
Holder hereof upon the surrender hereof. The Securities of this series will not
have a sinking fund.
If an Event of Default with respect to the Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Corporation and the rights of the Holders of the Securities
of all series affected under the Indenture at any time by the Corporation and
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of all series affected thereby
(voting as one class). The Indenture contains provisions permitting the Holders
of not less than a majority in principal amount of the Outstanding Securities of
all series with respect to which a default under the Indenture shall have
occurred and be continuing (voting as one class), on behalf of the Holders of
the Securities of all such series, to waive, with certain exceptions, such
default under the Indenture and its consequences. The Indenture also permits the
Holders of not less than a majority in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all Securities
of such series, to waive compliance by the Corporation with certain provisions
of the Indenture affecting such series. Any such consent or waiver by the Holder
of this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Corporation, which is absolute and unconditional, to pay the principal of and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Corporation for such purpose, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Corporation and the Security Registrar and duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities of this series, of authorized denominations and of like
tenor and for the same aggregate principal amount, will be issued to the
designated transferee or transferees. No service charge shall be made for any
such registration of transfer or exchange, but the Corporation may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than a majority in principal
amount of the Securities of this series at the time Outstanding shall have made
written request to the
A-7
<PAGE> 22
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities of
this series at the time Outstanding a direction inconsistent with such request
and shall have failed to institute any such proceeding for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of principal hereof or any interest hereon on or after the
respective due dates expressed herein.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of the Securities of this series upon compliance with
certain conditions set forth in the Indenture.
Prior to due presentment of this Security for registration of
transfer, the Corporation, the Trustee and any agent of the Corporation or the
Trustee may treat the Person in whose name this Security is registered as the
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Corporation, the Trustee nor any such agent shall be affected by
notice to the contrary.
The Securities of this series are issuable only in registered
form without coupons in denominations of $25 and any integral multiple thereof.
As provided in the Indenture and subject to the limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same upon surrender of the Security or
Securities to be exchanged at the office or agency of the Corporation.
This Security shall be governed by, and construed in
accordance with, the internal laws of the State of New York.
A-8
<PAGE> 23
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
<TABLE>
<S> <C> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT -
(Cust)
TEN ENT - as tenants by the entireties Custodian ____________
(Minor)
JT TEN - as joint tenants with rights under Uniform Gifts
of survivorship and not as tenants to Minors Act ____________
in common (State)
</TABLE>
Additional abbreviations may also be used though not on the
above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and
transfer(s) unto __________________________________ (please insert Social
Security or other identifying number of assignee).
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
________________________________________________________________________________
agent to transfer said Security on the books of the Corporation, with full power
of substitution in the premises.
Dated:____________________________ ____________________________________
____________________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within instrument in every
particular without alteration or
enlargement, or any change whatever.
A-9
<PAGE> 24
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
NBD Bank,
as Trustee
By:________________________
Authorized Officer
i
<PAGE> 1
EXHIBIT 4.3
- --------------------------------------------------------------------------------
SEMCO ENERGY, INC.
TO
NBD BANK
Trustee
Indenture
Dated as of _______ 1, 1998 Senior Debt Securities
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS*
<TABLE>
<S> <C>
Page
----
ARTICLE ONE.........................................................................................................1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.............................................................1
SECTION 101. DEFINITIONS......................................................................................1
SECTION 102. COMPLIANCE CERTIFICATE AND OPINIONS.............................................................10
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE..........................................................10
SECTION 104. ACTS OF HOLDERS.................................................................................11
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY...........................................................13
SECTION 106. NOTICE TO HOLDERS; WAIVER.......................................................................13
SECTION 107. EFFECT OF HEADINGS AND TABLE OF CONTENTS........................................................14
SECTION 108. SUCCESSORS AND ASSIGNS..........................................................................14
SECTION 109. SEPARABILITY CLAUSE.............................................................................14
SECTION 110. BENEFITS OF INDENTURE...........................................................................14
SECTION 111. GOVERNING LAW...................................................................................14
SECTION 112. LEGAL HOLIDAYS..................................................................................14
SECTION 113. NO RECOURSE AGAINST OTHERS......................................................................15
ARTICLE TWO SECURITIES FORMS......................................................................................15
SECTION 201. FORMS OF SECURITIES.............................................................................15
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.................................................15
SECTION 203. SECURITIES ISSUABLE IN GLOBAL FORM..............................................................16
ARTICLE THREE THE SECURITIES......................................................................................17
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES............................................................17
SECTION 302. DENOMINATIONS...................................................................................20
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING..................................................20
SECTION 304. TEMPORARY SECURITIES............................................................................21
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.............................................24
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES................................................27
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED..................................................28
SECTION 308. PERSONS DEEMED OWNERS...........................................................................30
SECTION 309. CANCELLATION....................................................................................31
SECTION 310. COMPUTATION OF INTEREST.........................................................................32
ARTICLE FOUR SATISFACTION AND DISCHARGE...........................................................................32
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.........................................................32
SECTION 402. APPLICATION OF TRUST FUNDS......................................................................33
ARTICLE FIVE REMEDIES..............................................................................................33
SECTION 501. EVENTS OF DEFAULT...............................................................................33
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT..............................................35
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.................................36
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM................................................................37
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES OR COUPONS..........................37
SECTION 506. APPLICATION OF MONEY COLLECTED..................................................................37
SECTION 507. LIMITATION ON SUITS.............................................................................38
SECTION 508. UNCONDITIONAL RIGHTS OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM,
IF ANY, INTEREST AND ADDITIONAL INTEREST........................................................38
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES..............................................................39
</TABLE>
- --------------------------
* This Table of Contents does not constitute part of the Indenture or have any
bearing upon the interpretation of any of its terms and provision.
i
<PAGE> 3
<TABLE>
<S> <C>
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE..................................................................39
SECTION 511. DELAY OR OMISSION NOT WAIVER....................................................................39
SECTION 512. CONTROL BY HOLDERS OF SECURITIES................................................................39
SECTION 513. WAIVER OF PAST DEFAULTS.........................................................................40
SECTION 514. WAIVER OF USURY, STAY OR EXTENSION LAWS.........................................................40
SECTION 515. UNDERTAKINGS FOR COSTS..........................................................................40
ARTICLE SIX THE TRUSTEE............................................................................................41
SECTION 601. NOTICE OF DEFAULTS..............................................................................41
SECTION 602. CERTAIN RIGHTS OF TRUSTEE.......................................................................41
SECTION 603. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES..........................................42
SECTION 604. MAY HOLD SECURITIES.............................................................................42
SECTION 605. MONEY HELD IN TRUST............................................................................43
SECTION 606. COMPENSATION AND REIMBURSEMENT..................................................................43
SECTION 607. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY; CONFLICTING INTERESTS..................................43
SECTION 608. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR...............................................44
SECTION 609. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR..........................................................45
SECTION 610. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.....................................46
SECTION 611. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY...............................................46
SECTION 612. APPOINTMENT OF AUTHENTICATING AGENT.............................................................47
ARTICLE SEVEN HOLDERS' LIST AND REPORTS BY TRUSTEE AND COMPANY.....................................................48
SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS....................................................48
SECTION 702. REPORTS BY TRUSTEE..............................................................................49
SECTION 703. REPORTS BY COMPANY..............................................................................49
SECTION 704. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESS OF HOLDERS.........................................49
ARTICLE EIGHT CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE.....................................................50
SECTION 801. CONSOLIDATIONS AND MERGERS OF COMPANY AND SALES, LEASES AND
CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS.............................................50
SECTION 802. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION......................................................50
SECTION 803. OFFICER'S CERTIFICATE AND OPINIONS OF COUNSEL...................................................50
ARTICLE NINE SUPPLEMENTAL INDENTURES...............................................................................51
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS..............................................51
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.................................................52
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES............................................................53
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES...............................................................53
SECTION 905. CONFORMITY WITH TIA.............................................................................54
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES..............................................54
ARTICLE TEN COVENANTS..............................................................................................54
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST AND ADDITIONAL
AMOUNTS........................................................................................54
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY................................................................54
SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST..............................................56
SECTION 1004. EXISTENCE......................................................................................57
SECTION 1005. MAINTENANCE OF PROPERTIES......................................................................57
SECTION 1006. INSURANCE......................................................................................57
SECTION 1007. PAYMENT OF TAXES AND OTHER CLAIMS..............................................................57
SECTION 1008. PROVISION OF FINANCIAL INFORMATION.............................................................57
SECTION 1009. STATEMENT AS TO COMPLIANCE.....................................................................58
SECTION 1010. ADDITIONAL AMOUNTS.............................................................................58
SECTION 1011. LIMITATIONS ON LIENS...........................................................................59
SECTION 1012. LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS................................................61
SECTION 1013. WAIVER OF CERTAIN COVENANTS....................................................................61
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE ELEVEN REDEMPTION OF SECURITIES............................................................................62
SECTION 1101. APPLICABILITY OF ARTICLE.......................................................................62
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE..........................................................62
SECTION 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED..............................................62
SECTION 1104. NOTICE OF REDEMPTION...........................................................................62
SECTION 1105. DEPOSIT OF REDEMPTION PRICE....................................................................64
SECTION 1106. SECURITIES PAYABLE ON REDEMPTION DATE..........................................................64
SECTION 1107. SECURITIES REDEEMED IN PART....................................................................65
ARTICLE TWELVE SINKING FUNDS.......................................................................................65
SECTION 1201. APPLICABILITY OF ARTICLE.......................................................................65
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES..........................................65
SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUNDS.....................................................66
ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF HOLDERS...............................................................66
SECTION 1301. APPLICABILITY OF ARTICLE.......................................................................66
SECTION 1302. REPAYMENT OF SECURITIES........................................................................66
SECTION 1303. EXERCISE OF OPTION.............................................................................66
SECTION 1304. WHEN SECURITIES PRESENTED FOR REPAYMENT BECOME DUE AND PAYABLE.................................67
SECTION 1305. SECURITIES REPAID IN PART......................................................................68
ARTICLE FOURTEEN DEFEASANCE AND COVENANT DEFEASANCE...............................................................68
SECTION 1401. APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT DEFEASANCE
OR COVENANT DEFEASANCE.........................................................................68
SECTION 1402. DEFEASANCE AND DISCHARGE.......................................................................68
SECTION 1403. COVENANT DEFEASANCE............................................................................69
SECTION 1404. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE................................................69
SECTION 1405. DEPOSITED MONEY AND GOVERNMENT OBLIGATION TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.................................................................71
ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES.................................................................71
SECTION 1501. PURPOSES FOR WHICH MEETINGS MAY BE CALLED......................................................71
SECTION 1502. CALL, NOTICE AND PLACE OF MEETINGS.............................................................72
SECTION 1503. PERSONS ENTITLED TO VOTE AT MEETING............................................................72
SECTION 1504. QUORUM; ACTION.................................................................................72
SECTION 1505. DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS............................73
SECTION 1506. COUNTING VOTES AND RECORDING ACTION OF MEETINGS................................................74
</TABLE>
iii
<PAGE> 5
EXHIBITS:
EXHIBIT A-1 FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
EXHIBIT A-2 FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR AND CEDEL
S.A. IN CONNECTION WITH THE EXCHANGE OF A PORTION OF A
TEMPORARY GLOBAL SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
iv
<PAGE> 6
SEMCO ENERGY, INC.
Reconciliation and tie between Trust Indenture Act
of 1939 (the "1939 Act") and Indenture, dated as of
_______ 1, 1998
<TABLE>
<CAPTION>
Trust Indenture Act Indenture Section
Section
<S> <C> <C>
(S) 310(a)(1)..................................................................607
(a)(2).....................................................................607
(a)(3)..........................................................Not Applicable
(a)(4)..........................................................Not Applicable
(b)................................................................604,607,608
(S) 311(a).....................................................................611
311(b)(4)..................................................................611
(b)(6).....................................................................611
(S) 312(a).....................................................................704
(b)........................................................................701
(c)........................................................................702
(S) 313(a).....................................................................702
313(b).....................................................................703
313(c).................................................................702,703
(d)........................................................................703
(S) 314(a)................................................................703,1009
(a)(4)....................................................................1009
(b).............................................................Not Applicable
(c)(1).....................................................................102
(c)(2).....................................................................102
(c)(3)..........................................................Not Applicable
(d).............................................................Not Applicable
(e)........................................................................102
(S) 315(a).....................................................................602
(b)60......................................................................601
(c)........................................................................602
(d)........................................................................602
(d)(1).....................................................................602
(d)(2).....................................................................602
(d)(3).....................................................................602
(e)....................................................................515,608
</TABLE>
v
<PAGE> 7
<TABLE>
<S> <C> <C>
(S) 316(a).....................................................................101
(a)(1)(A).............................................................502, 512
(a)(1)(B)..................................................................513
(a)(2)..........................................................Not Applicable
(b)........................................................................508
(S) 317(a)(1)..................................................................503
(a)(2).....................................................................504
(b).......................................................................1003
(S) 318(a).....................................................................111
(c)........................................................................111
- ------------------
</TABLE>
NOTE: This reconciliation and tie shall not, for any juries, be deemed
to be a part of the Indenture.
Attention should also be directed to Section 318(c) of the 1939 Act, which
provides that the provisions of Sections 310 to and including 317 of the 1939
Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
<PAGE> 8
SEMCO ENERGY, INC.
Reconciliation and tie between Trust Indenture Act of 1939
(the "1939 Act") and Indenture, dated as of ______ 1, 1998
Indenture Section
Trust Indenture Act
Section
(S) 310(a)(1)................................................607
(a)(2)...................................................607
(a)(3)........................................Not Applicable
(a)(4)........................................Not Applicable
(b)..............................................604,607,608
(S) 311(a)...................................................611
311(b)(4)................................................611
(b)(6)...................................................611
(S) 312(a)...................................................704
(b)......................................................701
(c)......................................................702
(S) 313(a)...................................................702
313(b)...................................................703
313(c)...............................................702,703
(d)......................................................703
(S) 314(a)..............................................703,1009
(a)(4)..................................................1009
(b)...........................................Not Applicable
(c)(1)...................................................102
(c)(2)...................................................102
(c)(3)........................................Not Applicable
(d)...........................................Not Applicable
(e)......................................................102
(S) 315(a)...................................................602
(b)60....................................................601
(c)......................................................602
(d)......................................................602
(d)(1)...................................................602
(d)(2)...................................................602
(d)(3)...................................................602
(e)..................................................515,608
iv
<PAGE> 9
(S) 316(a)...................................................101
(a)(1)(A)...........................................502, 512
(a)(1)(B)................................................513
(a)(2)........................................Not Applicable
(b)......................................................508
(S) 317(a)(1)................................................503
(a)(2)...................................................504
(b).....................................................1003
(S) 318(a)...................................................111
(c)......................................................111
- ------------------
NOTE: This reconciliation and tie shall not, for any juries, be deemed
to be a part of the Indenture.
Attention should also be directed to Section 318(c) of the 1939 Act, which
provides that the provisions of Sections 310 to and including 317 of the 1939
Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
v
<PAGE> 10
INDENTURE, dated as of _______ 1, 1998, between SEMCO ENERGY, INC., a
corporation organized under the laws of Michigan (hereinafter called the
"Company"), having its principal office at 405 Water Street, Port Huron,
Michigan 48060 and NBD BANK, a Michigan banking corporation, as Trustee
hereunder (hereinafter called the "Trustee"), having its Corporate Trust Office
at 611 Woodward Avenue, Detroit, Michigan 48226.
RECITALS OF THE TRUST
The Company deems it necessary to issue from time to time for its
lawful purposes senior debt securities (hereinafter called the "Securities")
evidencing its unsecured and unsubordinated indebtedness, and has duly
authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of the Securities, unlimited as to principal amount,
to bear interest at the rates or formulas, to mature at such times and to have
such other provisions as shall be fixed as hereinafter provided.
This Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended ("TIA"), that are deemed to be incorporated into this
Indenture and shall, to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the holders thereof ("Holders"), it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have meanings
assigned to them in accordance with GAAP; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
<PAGE> 11
Certain terms, used principally in Article Three, Article Five, Article
Six and Article Ten, are defined in those Articles. In addition, the following
terms shall have the indicated respective meanings:
"Acquired Debt" means Debt of a Person (i) existing at the time such
Person becomes a Subsidiary or (ii) assumed in connection with the acquisition
of assets from such Person, in each case, other than Debt incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary or such
acquisition. Acquired Debt shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person
becomes a Subsidiary.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Amounts" means any additional amounts which are required by
a Security or by or pursuant to a Board Resolution, under circumstances
specified therein, to be paid by the Company in respect of certain taxes imposed
on certain Holders and which are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Annual Service Charge" as of any date means the maximum amount which
is payable in any period for interest on, and original issue discount of, Debt
of the Company and its Subsidiaries.
"Attributable Debt" means, in respect of a Sale and Lease-Back
Transaction, as at the time of determination, the present value (discounted at
the rate borne by the applicable series of Securities) of the total obligations
of the lessee for rental payments during the remaining term of the lease
included in such Sale and Lease-Back Transaction (including any period for which
such lease has been extended).
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 612.
"Authorized Newspaper"means a newspaper, printed in the English
language or in an official language of the country of publication, customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
2
<PAGE> 12
"Bearer Security" means any Security established pursuant to Section
201 which is payable to bearer.
"Board of Directors" means the board of Directors of the Company, the
executive committee or any committee of that board duly authorized to act
hereunder.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 301, any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to close.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible or exchangeable for corporate stock), warrants
or options to purchase any thereof.
"CEDEL" means Central de Livraison de Valeurs Mobilieres, S.A., or its
successor.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Common Shares" means, with respect to any Person, capital stock issued
by such Person other than Preferred Shares.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the [LIST APPROPRIATE
OFFICERS] of the Company, and delivered to the Trustee.
"Consolidated Net Tangible Assets" shall mean the total of all assets
(including revaluations thereof as a result of commercial appraisals, price
level restatement or otherwise) appearing on a consolidated balance sheet of the
Company, net of applicable reserves and deductions, but excluding goodwill,
trade names, trademarks, patents, unamortized debt discount and all other like
intangible assets (which term shall not be construed to include such
revaluations), less the aggregate of the consolidated current liabilities of the
Company appearing on such balance sheet.
3
<PAGE> 13
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at 611 Woodward Avenue,
Detroit Michigan 48226.
"Corporation" includes corporations, associations, partnerships,
companies and business trusts.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Custodian" has the meaning specified in Section 501.
"Debt" of the Company or a Subsidiary means any indebtedness of the
Trust or a Subsidiary, whether or not contingent, in respect of (without
duplication) (i) borrowed money evidenced by bonds, notes, debentures or similar
instruments, (ii) indebtedness secured by any mortgage, pledge, lien, charge,
encumbrance or any security interest existing on property owned by the Company
or any Subsidiary, (iii) the reimbursement obligations, contingent or otherwise,
in connection with any letters of credit actually issued or amounts representing
the balance deferred and unpaid of the purchase price of any property or
services, except any such balance that constitutes an accrued expense or trade
payable, or all conditional sale obligations or obligations under any title
retention agreement, (iv) the principal amount of all obligations of the Company
or any Subsidiary with respect to redemption, repayment or other repurchase of
any disqualified stock or (v) any lease of property by the Company or any
Subsidiary as lessee which is reflected on the Company's consolidated balance
sheet as a capitalized lease in accordance with GAAP to the extent, in the case
of items of indebtedness under (i) through (iii) above, that any such items
(other than letters of credit) would appear as a liability on the Company's
consolidated balance sheet in accordance with GAAP, and also includes, to the
extent not otherwise included, any obligation by the Company or any Subsidiary
to be liable for, or to pay, as obligor, guarantor or otherwise (other than for
purposes of collection in the ordinary course of business), Debt of another
Person (other than the Company or any Subsidiary).
"Defaulted Interest" has the meaning specified in Section 307.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"DTC" means The Depository Trust Company.
"Encumbrance" means any mortgage, security interest, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security agreement except:
(a) liens for taxes and other governmental assessments, including
utility charges and vault rentals, (i) which are not yet delinquent, (ii) which
are not in an aggregate amount, as to the Company and its Subsidiaries, greater
than 10% of Total Assets or (iii) which are being contested in good faith by all
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Company or its Subsidiaries, as the case may
be, in conformity with GAAP;
4
<PAGE> 14
(b) carriers, warehousemen's, mechanic's, materialmen's, repairmen's,
brokers' or other like liens (i) which are not in an aggregate amount, as
to the Company and its Subsidiaries, greater than 10% of Total Assets,
(ii) which do not remain unsatisfied or undischarged for a period of more
than 90 days or (iii) which are being contested in good faith by all
appropriate proceedings;
(c) pledges or deposits in connection with workers compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds performance bonds and other obligations of a like nature incurred
in the ordinary course of business; and
(e) easements, rights of way, restrictions, development orders,
plats and other similar encumbrances.
"Euroclear" means Morgan Guaranty Trust of New York, Brussels Office,
or its successor as operator of the Euroclear System.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder by the Commission.
"GAAP" means generally accepted accounting principles, as in effect
from time to time, as used in the United States applied on a consistent basis.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America, for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust as custodian with respect to any
such Government Obligation or a specific payment of interest on or principal of
any such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of the Government Obligation evidenced by such depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case of
a Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into
5
<PAGE> 15
pursuant to the applicable provisions hereof, and shall include the terms of
particular series of Securities established as contemplated by Section 301;
provided, however, that, if at any time more than one Person is acting as
Trustee under this instrument, "Indenture" shall mean, with respect to any one
or more series of Securities for which such Person is Trustee, this instrument
as originally executed or as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of the particular
series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity, and, when used with respect to a Security which
provides for the payment of Additional Amounts pursuant to Section 1010,
includes such Additional Amounts.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Lien" means any mortgage, lien, pledge, security interest or other
encumbrance; provided, however, that the term "Lien" shall not mean any
easements, rights-of-way, restrictions and other similar encumbrances and
encumbrances consisting of zoning restrictions, leases, subleases, licenses,
sublicenses, restrictions on the use of property or defects in title thereto.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Officer's Certificate" means a certificate signed by an executive
officer of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or who may be an employee of or other counsel for the
Company and who shall be reasonably satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
6
<PAGE> 16
(ii) Securities, or portions thereof, for whose payment or
redemption or repayment at the option of the Holder money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities and any coupons
appertaining thereto, provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Securities, except to the extent provided in Sections
1402 and 1403 with respect to which the Trust has effected defeasance
and/or covenant defeasance as provided in Article Fourteen; and
(iv) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502 and (ii) Securities owned by the Company or another
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in making such calculation or
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or an
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities or coupons on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
7
<PAGE> 17
"Place of Payment", when used with respect to the Securities of or
within any series, means the place or places where the principal of (and
premium, if any) and interest on such Securities are payable as specified as
contemplated by Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Preferred Shares" means, with respect to any Person, capital shares
issued by such Person that are entitled to a preference or priority over any
other capital shares issued by such Person upon any distribution of such
Person's assets, whether by dividend or upon liquidation.
"Redemption Date", when used with respect to any security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" shall mean any Security which is registered in
the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 301, whether or not a
Business Day.
"Repayment Date" means, when used with respect to any Security to be
repaid at the option of the Holder, the date fixed for such repayment by or
pursuant to this Indenture.
"Repayment Price" means, when used with respect to any Security to be
repaid at the option of the Holder, the price at which it is to be repaid by or
pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "vice president"), the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any corporate trust
officer, the controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of such officer's
knowledge and familiarity with the particular subject.
"Sale and Lease-Back Transaction" has the meaning specified in Section
1012.
8
<PAGE> 18
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder by the Commission.
"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture; provided, however, that, if at any time
there is more than one Person acting as Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of any series as to which such
Person is not Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act of 1933) of the Trust.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation a majority of the partnership
interests or a majority of the outstanding voting stock of which is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries of
the Company. For the purposes of this definition, "voting stock" means stock
having voting power for the election of directors, whether at all times or only
so long as no senior class of stock has such voting power by reason of any
contingency.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become so
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
9
<PAGE> 19
"United States Person" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time
of issuance of a Security (or, if applicable, at the most recent redetermination
of interest on such Security) and as set forth in such Security in accordance
with generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions . Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
delivered pursuant to Section 1009) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such condition
or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion as to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
10
<PAGE> 20
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of the Outstanding Securities of all series or one or more series, as
the case may be, may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fifteen, or a combination of such
instruments and such record. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments or record or
both are delivered to the Trustee and, where it is hereby expressly required, to
the Company. Such instrument or instruments and any such record (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments or so voting at any
such meeting. Proof of execution of such an instrument or of a writing
appointing any such agent, or of the holding by any Person of a Security, shall
be sufficient for any purpose of this Indenture. The record of any meeting of
Holders of Securities shall be proved in the manner provided in Section 1506.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in an other reasonable manner which the Trustee deems sufficient.
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<PAGE> 21
(c) The ownership of Registered Securities shall be proved by the
Security Register.
(d) The ownership of Bearer Securities may be proved by the production
of such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or such
Bearer Security is surrendered in exchange for a Registered Security, or (3)
such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, in or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
In the absence of any such record date fixed by the Company, regardless
as to whether a solicitation of the Holders is occurring on behalf of the
Company or any Holder, the Trustee may, at its option, fix in advance a record
date for the determination of such Holders entitled to receive such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Trustee shall have no obligation to do so. Any such record date shall be a date
not more than 30 days prior to the first solicitation of Holders generally in
connection therewith no later than the date of such solicitation.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor
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or in lieu thereof in respect of anything done, omitted or suffered to be
done by the Trustee, any Security Registrar, any Paying Agent, any
Authenticating Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
SECTION 105. Notices, etc., to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by a Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee, at the Corporate Trust Office;
Attention: Corporate Trust Administration.
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this Indenture or at any
other address previously furnished in writing to the Trustee by the
Company.
SECTION 106. Notice to Holders; Waiver. Where this Indenture provides
for notice of any event to Holders of Registered Securities by the Company or
the Trustee, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed first-class postage prepaid, to
each such Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders of Registered Securities is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other Holders
of Registered Securities or the sufficiency of any notice to Holders of Bearer
Securities given as provided herein. Any notice mailed to a Holder in the manner
herein prescribed shall be conclusively deemed to have been received by such
Holder, whether or not such Holder actually receives such notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders of Registered securities as
shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notice
shall be sufficiently given if published in an Authorized Newspaper in New York
City and in such other city or cities as may be specified in such Securities on
a Business Day, such publication to be not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. Any
such notice shall be deemed to have been given on the date of such publication
or, if published more than once, on the date of the first such publication.
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If by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 108. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 109. Separability Clause. In case any provision in this
Indenture or in any Security or coupon shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture. Nothing in this Indenture or in the
Securities or coupons, express or implied, shall give to any Person, other than
the parties hereto, any Security Registrar, any Paying Agent, any Authenticating
Agent and their successors hereunder and the Holders any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law. This Indenture and the Securities and
coupons shall be governed by and construed in accordance with the law of the
State of New York. This Indenture is subject to the provisions of the TIA that
are required to be part of this Indenture and shall, to the extent applicable,
be governed by such provisions.
SECTION 112. Legal Holidays. In any case where any Interest Payment
Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or any
Security or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof), payment of
interest or any Additional Amounts or principal (and premium, if any)
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<PAGE> 24
need not be made at such Place of Payment on such date, but may be made on the
next succeeding Business Day at such Place of Payment with the same force and
effect as if made on the Interest Payment Date, Redemption Date, Repayment Date
or sinking fund payment date, or at the Stated Maturity or Maturity, provided
that no interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date, Redemption Date, Repayment Date, sinking fund
payment date, Stated Maturity or Maturity, as the case may be.
SECTION 113. No Recourse Against Others. An incorporator or any past,
present or future director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Holder shall waive and release all such liability. Such waiver and release shall
be part of the consideration for the issue of the Securities.
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities. The Registered Securities, if any, of
each series and the Bearer Securities, if any, of each series and related
coupons shall be in substantially the forms as shall be established in one or
more indentures supplemental hereto or approved from time to time by or pursuant
to a Board Resolution in accordance with Section 301, shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such securities or coupons, as evidenced by
their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication. Subject
to Section 612, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
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NBD BANK
as Trustee
By_______________________________
Authorized Signatory
SECTION 203. Securities Issuable in Global Form. If Securities of or
within a series are issuable in global form, as specified as contemplated by
Section 301, then, notwithstanding clause (8) of Section 301 and the provisions
of Section 302, any such Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities of such series
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities of such series represented thereby may from time to time be increased
or decreased to reflect exchanges. Any endorsement of a Security in global form
to reflect the amount, or any increase or decrease in the amount, of Outstanding
Securities represented thereby shall be made by the Trustee in such manner and
upon instructions given by such Person or Persons as shall be specified therein
or in the Company Order to be delivered to the Trustee pursuant to Section 303
or 304. Subject to the provisions of Section 303 and, if applicable, Section
304, the Trustee shall deliver and redeliver any security in permanent global
form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order. If a Company Order
pursuant to Section 303 or 304 has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 102 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby together with the written statement contemplated by the last sentence of
Section 303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of a permanent
global Security in bearer form, Euroclear or CEDEL.
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ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 303, set forth, or
determined in the manner provided, in an Officer's Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (13) below), if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series when issued from time to time):
(1) the title of the Securities of the series (which shall
distinguish the Securities of such series from all other series of
Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906, 1107
or 1305);
(3) the date or dates, or the method by which such date or dates
will be determined, on which the principal of the Securities of the
series shall be payable;
(4) the rate or rates at which the Securities of the series shall
bear interest if any, or the method by which such rate or rates shall
be determined, the date or dates from which such interest shall accrue
or the method by which such date or dates shall be determined, the
Interest Payment Dates on which such interest will be payable and the
Regular Record Date, if any, for the interest payable on any Registered
Security on an Interest Payment Date, or the method by which such date
shall be determined, and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day
months;
(5) the place or places, if any, other than or in addition to the
Borough of Manhattan, New York City, where the principal of (and
premium, if any), interest, if any, on, and Additional Amounts, if any,
payable in respect of, Securities of the series shall be payable, any
Registered Securities of the series may be surrendered for registration
of, transfer or exchange and notices or demands to or upon the Company
in respect of the Securities of the series and this Indenture may be
served;
(6) the period or periods within which, the price or prices at
which, and other terms and conditions upon which Securities of the
series may be redeemed,
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in whole or in part, at the option of the Company, if the Company is to
have the option;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series pursuant to any sinking fund or
analogous provision or at the option of a Holder thereof, and the
period or periods within which or the date or dates on which, the price
or prices at which, and other terms and conditions upon which
Securities of the series shall be redeemed, repaid or purchased, in
whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and an integral multiple
thereof, the denominations in which any Registered Securities of the
series shall be issuable and, other than the denomination of $5,000,
the denomination or denominations in which any Bearer Securities of the
series shall be issuable;
(9) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;
(10) if other than the principal amount thereof, the portion of
the principal amount or Securities of the series that shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502;
(11) whether the amount of payments of principal of (and
premium, if any) or interest, if any, on the Securities of the
series may be determined with reference to an index, formula or other
method, and the manner in which such amounts shall be determined;
(12) provisions, if any, granting special rights to the Holders
of Securities of the series upon the occurrence of such events as
may be specified;
(13) any deletions from, modifications of or additions to
the Events of Default or covenants of the Trust with respect to
Securities of the series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set
forth herein;
(14) whether Securities of the series are to be issuable
as Registered Securities, Bearer Securities (with or without
coupons) or both, any restrictions applicable to the offer, sale
or delivery of Bearer Securities and the terms upon which Bearer
Securities of the series may be exchanged for Registered
Securities of the series and vice versa (if permitted by applicable
laws and regulations), whether any Securities of the series are to
be issuable initially in temporary global form and whether any
Securities of the series are to be issuable in permanent global form
with or without coupons and, if so, whether beneficial owners of
interests in any such permanent global Security may exchange such
interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which
any such exchanges may occur, if other than in the manner provided
in Section 305, and, if Registered Securities
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of the series are to be issuable as a global Security, the identity of
the depositary for such series;
(15) the date as of which any Bearer Securities of the series and
any temporary global Security representing Outstanding Securities of
the series shall be dated if other than the date of original issuance
of the first Security of the series to be issued;
(16) the Person to whom any interest on any Registered Security of
the series shall be payable, if other than the Person in whose name
that Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest, the
manner in which, or the Person to whom, any interest on any Bearer
Security of the series shall be payable, if otherwise than on
presentation and surrender of the coupons appertaining thereto as they
severally mature, and the extent to which, or the manner in which, any
interest payable on a temporary global Security on an Interest Payment
Date will be paid if other than in the manner provided in Section 304;
(17) the applicability, if any, of Sections 1402 and/or 1403 to the
Securities of the series and any provisions in modification of, in
addition to or in lieu of any of the provisions of Article Fourteen;
(18) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
then the form and/or terms of such certificates, documents or
conditions;
(19) whether and under what circumstances the Company will pay
Additional Amounts as contemplated by Section 1010 on the Securities of
the series to any Holder who is not a United States person (including
any modification to the definition of such term) in respect of any tax,
assessment or governmental charge and, if so, whether the Company will
have the option to redeem such Securities rather than pay such
Additional Amounts (and the terms of any such option); and
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 303) and
set forth in such Officer's Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such series.
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If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officer's Certificate setting forth the terms of the Securities
of such series.
SECTION 302. Denominations. The Securities of each series shall be
issuable in such denominations as shall be specified as contemplated by Section
301. In the absence of any such provisions with respect to the Securities of any
series, the Registered Securities of such series, other than Registered
Securities issued in global form (which may be of any denomination), shall be
issuable in denominations of $1,000 and any integral multiple thereof and the
Bearer Securities of such series, other than Bearer Securities issued in global
form (which may be of any denomination), shall be issuable in a denomination of
$5,000.
SECTION 303. Execution, Authentication, Delivery and Dating. The
Securities and any coupons appertaining thereto shall be executed on behalf of
the Company by an executive officer of the Company and attested by its Secretary
or one of its Assistant Secretaries. The signature of any of these individuals
on the Securities and coupons may be Manual or facsimile signatures of the
present or any future such authorized officer and may be imprinted or otherwise
reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or Cedel, as the case
may be, in the form set forth in Exhibit A-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 301, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. If any
Security shall be represented by a permanent global Bearer Security, then, for
purposes of this Section and Section 304, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon exchange of a
portion of a temporary global Security shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest in
such permanent global Security. Except as permitted by Section 306, the Trustee
shall not authenticate and deliver any
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Bearer Security unless all appurtenant coupons for interest then matured have
been detached and canceled.
If all the Securities of any series are not to be issued at one time
and if the Board Resolution or supplemental indenture establishing such series
shall so permit, such Company Order may set forth procedures acceptable to the
Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula, maturity
date, date of issuance and date from which interest shall accrue. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to TIA Section 315(a) through 315(d)) shall be
fully protected in relying upon,
(i) an Opinion of Counsel stating that
(a) the form or forms of such Securities and any coupons have
been established in conformity with the provisions of this
Indenture;
(b) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture;
and
(c) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the
Trustee in accordance with this Indenture and issued by the
Company in the manner and subject to any conditions specified in
such Opinion of Counsel, will constitute legal, valid and binding
obligations of the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency,
reorganization and other similar laws of general applicability
relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles; and
(ii)an Officer's Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the
Securities have been complied with and that, to the best of the
knowledge of the signers of such certificate, no Event of Default with
respect to any of the Securities shall have occurred and be continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all the Securities of any series are not to be issued at
one time, it shall not be necessary to deliver an Officer's Certificate
otherwise required pursuant to Section 301 or a Company Order, or an Opinion of
Counsel or an Officer's Certificate otherwise required pursuant to the preceding
paragraph at the time of issuance of each Security of such series, but such
order, opinion and
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certificates, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 301.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signator and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
SECTION 304. Temporary Securities.
(a) Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form, or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with Section 304(b) or as otherwise provided in or
pursuant to a Board Resolution), if temporary Securities of any series are
issued, the Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto), the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of the same series of authorized
denominations; provided, however, that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; and provided further
that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in
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Section 303. Until so exchanged, the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
(b) Unless otherwise provided in or pursuant to a Board Resolution,
this Section 304(b) shall govern the exchange of temporary Securities issued in
global form other than through the facilities of The Depository Trust Company.
If any such temporary Security is issued in global form, then such temporary
global Security shall, unless otherwise provided therein, be delivered to the
London office of a depositary or common depositary (the "Common Depositary"),
for the benefit of Euroclear and CEDEL, for credit to the respective accounts of
the beneficial owners of such Securities (or to such other accounts as they may
direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. On or after
the Exchange Date, such temporary global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as and contemplated by Section 301, and, if any
combination thereof is so specified, as requested by the beneficial owner
thereof; provided, however, that, unless otherwise specified in such temporary
global Security, upon such presentation by the Common Depositary, such temporary
global Security is to be accompanied by a certificate dated the Exchange Date or
a subsequent date and signed by Euroclear as to the portion of such temporary
global Security held for its account then to be exchanged and a certificate
dated the Exchange Date or a subsequent date and signed by CEDEL as to the
portion of such temporary global Security held for its account then to be
exchanged, each in the form set forth in Exhibit A-2 to this Indenture or in
such other form as may be established pursuant to Section 301; and provided
further that definitive Bearer Securities shall be delivered in exchange for a
portion of a temporary global Security only in compliance with the requirements
of Section 303.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other form as may be
established pursuant to Section 301), dated no earlier than 15 days prior to the
Exchange Date, copies of which certificate shall be available from the offices
of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving
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definitive Securities must bear the cost of insurance, postage, transportation
and the like unless such Person takes delivery of such definitive Securities in
person at the offices of Euroclear or CEDEL. Definitive Securities in bearer
form to be delivered in exchange for any portion of a temporary global Security
shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary global
Security on an Interest Payment Date for Securities of such series occurring
prior to the applicable Exchange Date shall be payable to Euroclear and CEDEL on
such Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee
of a certificate or certificates in the form set forth in Exhibit A-2 to this
Indenture (or in such other forms as may be established pursuant to Section
301), for credit without further interest on or after such Interest Payment Date
to the respective accounts of Persons who are the beneficial owners of such
temporary global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth as Exhibit A-1 to this Indenture (or in such
other forms as may be established pursuant to Section 301). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 304(b) and of the third paragraph of Section 303 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary global Security will be
made unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
SECTION 305. Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for each
series of Securities (the registers maintained in such office or in any such
office or agency of the Company in a Place of Payment being herein sometimes
referred to collectively as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby appointed "Security Registrar" for the purpose
of registering Registered securities and transfers of Registered Securities on
such Security Register as herein provided. In the event that the Trustee shall
cease to be Security Registrar, it shall have the right to examine the Security
Register at all reasonable times.
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<PAGE> 34
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the Holder
making the exchange is entitled to receive. Unless otherwise specified with
respect to any series of Securities as contemplated by Section 301, Bearer
Securities may not be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and
(subject to Section 303) set forth in the applicable Officers' Certificate, or
in any indenture supplemental hereto, delivered as contemplated by Section 301,
at the option of the Holder, Bearer Securities of any series may be exchanged
for Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such payment; provided,
however, that, except as otherwise provided in Section 1002, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the
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<PAGE> 35
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent global
Security is The Depository Trust Company ("DTC"), then, unless the terms of such
global Security expressly permit such global Security to be exchanged in whole
or in part for definitive Securities, a global Security may be transferred, in
whole but not in part, only to a nominee of DTC, or by a nominee of DTC to DTC,
or to a successor to DTC for such global Security selected or approved by the
Company or to a nominee of such successor to DTC. If at any time DTC notifies
the Company that it is unwilling or unable to continue as depositary for the
applicable global Security or Securities or if at any time DTC ceases to be a
clearing agency registered under the Securities Exchange Act of 1934 if so
required by applicable law or regulation, the Company shall appoint a successor
depositary with respect to such global Security or Securities. If (x) a
successor depositary for such global Security or Securities is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such unwillingness, inability or ineligibility, (y) an Event of Default
has occurred and is continuing and the beneficial owners representing a majority
in principal amount of the applicable series of Securities represented by such
global Security or Securities advise DTC to cease acting as depositary for such
global Security or Securities or (z) the Company, in its sole discretion,
determines at any time that all Outstanding Securities (but not less than all)
of any series issued or issuable in the form of one or more global Securities
shall no longer be represented by such global Security or Securities, then the
Company shall execute, and the Trustee shall authenticate and deliver definitive
Securities of like series, rank, tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such global Security
or Securities. If any beneficial owner of an interest in a permanent global
Security is otherwise entitled to exchange such interest for Securities of such
series and of like tenor and principal amount of another authorized form and
denomination, as specified as contemplated by Section 301 and provided that any
applicable notice provided in the permanent global Security shall have been
given, then without unnecessary delay but in any event not later than the
earliest date on which such interest may be so exchanged, the Company shall
execute, and the Trustee shall authenticate and deliver definitive Securities in
aggregate principal amount equal to the principal amount of such beneficial
owner's interest in such permanent global Security. On or after the earliest
date on which such interests may be so exchanged, such permanent global Security
shall be surrendered for exchange by DTC or such other depositary as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose; provided, however, that no such exchanges may
occur during a period beginning at the opening of business 15 days before any
selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those selected
for redemption; and provided further that no Bearer Security delivered in
exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or Defaulted Interest, as the
case may be, will not be
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payable on such Interest Payment Date or proposed date for payment, as the
case may be, in respect of such Registered Security, but will be payable on
such Interest Payment Date or proposed date for payment, as the case may be,
only to the Person to whom interest in respect of such portion of such
permanent global Security is payable in accordance with the provisions of
this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1305 not involving an transfer.
The Company or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security may be
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
1103 and ending at the close of business on (A) if such Securities are issuable
only as Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if such Securities are issuable as Bearer Securities, the day
of the first publication of the relevant notice of redemption or, if such
Securities are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Registered Security
to be redeemed in part, the portion thereof not to be redeemed, or (iii) to
exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of that series and
like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee or the Company, together with, in proper cases, such
security or indemnity as may be required by the Company or the Trustee to save
each of them or any agent of either of them harmless, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and principal amount, containing identical terms and
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provisions and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon, and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the absence
of notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium, if any),
and interest on and any Additional Amounts with respect to, Bearer Securities
shall, except as otherwise provided in Section 1002, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 301, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved. Except as
otherwise specified with respect to a series of Securities in accordance with
the provisions of
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Section 301, interest on any Registered Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest at the office or agency of the Company maintained for such
purpose pursuant to Section 1002; provided, however, that each installment of
interest on any Registered Security may at the Company's option be paid by (i)
mailing a check for such interest, payable to or upon the written order of the
Person entitled thereto pursuant to Section 308, to the address of such Person
as it appears on the Security Register or (ii) transfer to an account maintained
by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 301 with respect
to the Securities of any series, payment of interest may be made, in the case of
a Bearer Security by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent global Security held for
its account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on an Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of
such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Registered Security of
such series and the date of the proposed payment (which shall not be
less than 20 days after such notice is received by the Trustee), and at
the same time the Company shall deposit with the Trustee dollars in an
amount equal to the
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aggregate amount proposed to be paid in respect to such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Registered Securities of such series at his
address as it appears in the Security Register not less than 10 days
prior to such Special Record Date. The Trustee may, in its discretion,
in the name and at the expense of the Company, cause a similar notice
to be published at least once in an Authorized Newspaper in each place
of payment, but such publications shall not be a condition precedent to
the establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid
to the Persons in whose names the Registered Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2). In case a Bearer Security
of any series is surrendered at the office or agency in a Place of
Payment for such series in exchange for a Registered Security of such
series after the close of business at such office or agency on any
Special Record Date and before the opening of business at such office
or agency on the related proposed date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the coupon
relating to such proposed date of payment and Defaulted Interest will
not be payable on such proposed date of payment in respect of the
Registered Security issued in exchange for such Bearer Security, but
will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the
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Company or the Trustee may treat the Person in whose name such Registered
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of (and premium, if any), and (subject to
Sections 305 and 307) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depositary, as a Holder, with respect to
such global Security or impair, as between such depositary and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
SECTION 309. Cancellation. All Securities and coupons surrendered for
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and coupons and Securities and coupons surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it;
provided, however, where the Place of Payment is located outside of the United
States, the Paying Agent at such Place of Payment may cancel the Securities
surrendered to it for such purposes prior to delivering the Securities to the
Trustee. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and may deliver to the Trustee (or
to any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly canceled by the Trustee. If
the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. Canceled Securities and coupons held by
the Trustee shall be destroyed by the Trustee and the Trustee shall deliver a
certificate of such destruction to the Company, unless by a Company Order the
Company directs their return to it.
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SECTION 310. Computation of Interest. Except as otherwise specified as
contemplated by Section 301 with respect to Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture
shall upon Company Request cease to be of further effect with respect to any
series of Securities specified in such Company Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for and any right to receive Additional
Amounts, as provided in Section 1010), and the Trustee, upon receipt of a
Company Order, and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series when
(1) either
(A) all Securities of such series theretofore authenticated
and delivered and all coupons, if any, appertaining thereto (other
than (i) coupons appertaining to Bearer Securities surrendered for
exchange for Registered Securities and maturing after such
exchange, whose surrender is not required or has been waived as
provided in Section 305, (ii) Securities and coupons of such
series which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306, (iii) coupons
appertaining to Securities called for redemption and maturing
after the relevant Redemption Date, whose surrender has been
waived as provided in Section 1106, and (iv) Securities and
coupons of such series for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to
the Trustee for cancellation; or
(B) all Securities of such series and, in the case of (i) or
(ii) below, any coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) if redeemable at the option of the Company, are to
be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of
the Company,
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and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
the purpose and in an amount sufficient to pay and discharge the entire
indebtedness on such Securities and such coupons not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any) and interest,
and any Additional Amounts with respect thereto, to the date of such deposit (in
the case of Securities which have become due and payable) or to the Stated
Maturity Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture as to such series have been complied
with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Funds. Subject to the
provisions of the last paragraph of Section 1003, all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Securities, the coupons and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any), and any interest and Additional Amounts for whose payment such money has
been deposited with or received by the Trustee, but such money need not be
segregated from other funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. "Event of Default",
wherever used herein with respect to any particular series of Securities,
means any one of the following events (whatever the reason for such Event
of Default and whether or not it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest upon or any
Additional Amounts payable in respect of any Security of that
series or of any coupon appertaining thereto, when such
interest, Additional Amounts or coupon becomes due and payable,
and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium,
if any, on) any Security of that series when it becomes due
and payable at its Maturity; or
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(3) default in the deposit of any sinking fund payment,
when and as due by the terms of any Security of that series;
or
(4) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture with
respect to any Security of that series (other than a covenant
or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of
the Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of
Default" hereunder; or
(5) default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Company
(including obligations under leases required to be
capitalized on the balance sheet of the lessee under
generally accepted accounting principles, but not including
any indebtedness or obligations for which recourse is limited
to property purchased) in an aggregate principal amount in
excess of $5,000,000 or under any mortgage, indenture or
instrument under which there may be issued or by which there
may be secured or evidenced any indebtedness for money
borrowed by the Company (including such leases but not
including such indebtedness or obligations for which recourse
is limited to property purchased) in an aggregate principal
amount in excess of $5,000,000 by the Company, whether such
indebtedness now exists or shall hereafter be created, which
default shall have resulted in such indebtedness becoming or
being declared due and payable prior to the date on which it
would otherwise have become due and payable or such
obligations being accelerated, without such acceleration
having been rescinded or annulled; or
(6) the Company or any Significant Subsidiary pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of
its creditors; or
(7) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case,
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(B) appoints a Custodian of the Company or any
Significant Subsidiary or for all or substantially all
of either of its property, or
(C) orders the liquidation of the Company or any
Significant Subsidiary, and the order or decree remains
unstayed and in effect for 90 days; or
(8) any other Event of Default provided with
respect to Securities of that series.
As used in this Section 501, the term "Bankruptcy Law" means title 11, U.S. Code
or any similar Federal or State law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Securities of any series at that time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal (or, if any Securities are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal as may be specified in the terms thereof) of all the Securities of
that series, and premium, if any, to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by the Holders), and upon
any such declaration such principal or specified portion thereof shall become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest on and any
Additional Amounts payable in respect of all Outstanding
Securities of that series and any related coupons,
(B) the principal of (and premium, if any, on) any
Outstanding Securities of that series which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate or rates borne by or provided for in such
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in such
Securities, and
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(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the nonpayment of the principal of (or premium, if
any) or interest on Securities of that series which have become due
solely by such declaration of acceleration, have been cured or waived
as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if:
(1) default is made in the payment of any installment of interest
or Additional Amounts, if any, on any Security of any series and any
related coupon when such interest or Additional Amount becomes due and
payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security of any series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest and Additional Amounts, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of interest
or Additional Amounts, if any, at the rate or rates borne by or provided for in
such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
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SECTION 504. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities of any series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal, premium, if any, or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of
principal (and premium, if any) and interest and Additional Amounts if
any, owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and coupons to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee and any predecessor Trustee, their agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons . All rights of action and claims under this Indenture or
any of the Securities or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities and coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or
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premium, if any) or interest and any Additional Amounts, upon presentation of
the Securities or coupons, or both, as the case may be, and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium, if any) and interest
and any Additional Amounts payable, in respect of which or for the
benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the aggregate amounts
due and payable on such Securities and coupons for principal (and
premium, if any), interest and Additional Amounts, respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
SECTION 507. Limitation on Suits. No Holder of any Security of any
series or any related coupon shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for a other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to the Trustee against the
costs, expenses and liabilities to be incurred in compliance with
such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities of
that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium, if any, Interest and Additional Amounts. Notwithstanding any
other provision in this
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Indenture, the Holder of any Security or coupon shall have the right which is
absolute and unconditional to receive payment of the principal of (and premium,
if any) and subject to Sections 305 and 307, interest on, and any Additional
Amounts in respect of, such Security or payment of such coupon on the respective
due dates expressed in such Security or coupon (or, in the case of redemption,
on the Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or any
Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, the Company, the Trustee and the
Holders of Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or coupons in the last paragraph of Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of Securities or coupons is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security or coupon to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
SECTION 512. Control by Holders of Securities. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series,
provided that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
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(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of
Securities of such series not joining therein.
SECTION 513. Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series and any
related coupons waive any past default hereunder with respect to such series and
its consequences, except a default
(1) in the payment of the principal of (or premium, if any)
or interest on or Additional Amounts payable in respect of any
Security of such series or any related coupons, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of
the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 515. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of any undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys, fees, against any party litigant in such suit
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
outstanding securities, or to any suit instituted by any Holder for the
enforcement or the payment of the principal of (or premium, if any) or interest
on any Security on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date).
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder with respect to the Securities of any
series, the Trustee shall transmit in the manner and to the extent provided in
TIA Section 313(c), notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on or any Additional Amounts with respect to any Security of
such series, or in the payment of any sinking fund installment with respect to
the Securities of such series, the Trustee shall be protected in withholding
such notice if and so long as Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the Holders
of the Securities and coupons of such series; and provided further that in the
case of any default or breach of the character specified in Section 501(4) with
respect to the Securities and coupons of such series, no such notice to Holders
shall be given until at least 60 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to the Securities of such series.
SECTION 602. Certain Rights of Trustee. Subject to the provisions
of TIA Section 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon or other
paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company
Order (other than delivery of any Security, together with any
coupons appertaining thereto, to the Trustee for authentication
and delivery pursuant to Section 303 which shall be sufficiently
evidenced as provided therein) and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any Section
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
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(5) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Securities of any
series or any related coupons pursuant to this Indenture, unless
such Holders shall have offered to the Trustee adequate security
or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon or other
paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to
make reasonable examination of the books, records and premises of
the Company, personally or by agent or attorney following
reasonable notice to the Company;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder; and
(8) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
SECTION 603. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying Agent,
Security Registrar, Authenticating Agent or any other agent of the Company, in
its individual or
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any other capacity, may become the owner or pledgee of Securities and coupons
and, subject to TIA Sections 310(b) and 311, may otherwise deal with the Company
with the same rights it would have if it were not Trustee, Paying Agent,
Security Registrar, Authenticating Agent or such other agent.
SECTION 605. Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the
extent required by law. The Trustee shall be under no liability for
interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 606. Compensation and Reimbursement. The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse each of the Trustee and any predecessor Trustee upon its
request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to
[any act for which the Trustee shall have been adjudged negligent
or to have acted in bad faith]; and
(3) to indemnify each of the Trustee and any predecessor
Trustee for, and to hold it harmless against, any loss, liability
or expense incurred, [except for gross negligence or actions taken
in bad faith] without negligence or bad faith on its own part,
arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the
costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of
its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(6) or Section 501(7), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of (or premium, if any) or interest
on particular Securities or any coupons.
The provisions of this Section shall survive the termination of
this Indenture.
SECTION 607. Corporate Trustee Required; Eligibility Conflicting
Interests. There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee
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under TIA Section 310(a)(1) and shall have a combined capital and surplus of at
least $50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or the requirements of Federal, State, Territorial or
District of Columbia supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
TIA Section 310(b) after written request therefor by the Company
or by any Holder of a Security who has been a bona fide Holder of
a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 607
and shall fail to resign after written request therefor by the
Company or by any Holder of a Security who has been a bona fide
Holder of a Security for at least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or
of its property shall be appointed or any public officer shall
take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
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(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with resect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee with respect to the Securities
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders of Securities
and accepted appointment in the manner hereinafter provided, any Holder of a
Security who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series in the
manner provided for notices to the Holders of Securities in Section 106. Each
notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor. (a) In case
of the appointment hereunder of a successor Trustee with respect to all
Securities, every such successor Trustee shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee,
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder, subject
nevertheless to its claim, if any, provided for in Section 606.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto,
pursuant to Article Nine hereof, wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights powers,
trusts and duties of the retiring Trustee with
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respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
SECTION 611. Preferential Collection of Claims Against Company. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor). For purposes of TIA Section 311(b)(4) and (6)
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(1) "cash transaction" means any transaction in which full payment
for goods or securities sold is made within seven days after delivery
of the goods or securities in currency or in checks or other orders
drawn upon banks or bankers and payable upon demand; and
(2) "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred
by the Company (or any such obligor) for the purpose of financing the
purchase, processing, manufacturing, shipment, storage or sale of
goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon the goods, wares or
merchandise or the receivables or proceeds arising from the sale of the
goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Company (or any such
obligor) arising from the making, drawing, negotiating or incurring of
the draft, bill of exchange, acceptance or obligation.
SECTION 612. Appointment of Authenticating Agent. At any time when
any of the Securities remain Outstanding, the Trustee may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, registration of transfer or
partial redemption or repayment thereof, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Any such
appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer of the Trustee, a copy of which instrument shall be promptly
furnished to the Company. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a bank or trust company or corporation
organized and doing business and in good standing under the laws of the United
States of America or of any State or the District of Columbia, authorized under
such laws to act as Authenticating Agent, having a combined capital and surplus
of not less than $50,000,000 and subject to supervision or examination by
Federal or State authorities. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
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under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation including reimbursement of its reasonable expenses
for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
NBD Bank
as Trustee
By:_____________________________
as Authenticating Agent
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders . Every
Holder of Securities or coupons, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under TIA Section 312(b).
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SECTION 702. Reports by Trustee. Within 60 days after June 1 of each
year commencing with the first June 1 after the first issuance of Securities
pursuant to this Indenture, the Trustee shall transmit by mail to all Holders of
Securities as provided in TIA Section 313(c) a brief report dated as of such
June 1 if required by TIA Section 313(a).
SECTION 703. Reports by Company. The Company will:
(a) file with the Trustee, within 15 days after the Company is required
to file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company
is not required to file information, documents or reports pursuant to either of
such Sections, then it will file with the Trustee, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations;
(c) the Trustee shall transmit the reports required by TIA Section
313(b) at the times specified therein; and
(d) transmit by mail to the Holders of Securities, within 30 days after
the filing thereof with the Trustee, in the manner and to the extent provided in
TIA Section 313(c) and (d), such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (a) and (b)
of this Section as may be required by rules and regulations prescribed from time
to time by the Commission.
SECTION 704. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular
Record Date for interest for each series of Securities, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if there
is no Regular Record Date for interest for such series of Securities,
semi-annually, upon such dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished,
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provided, however, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other entity, provided that in any such
case, (1) either the Company shall be the continuing entity, or the successor
entity (if other than the Company) formed by or resulting from any such
consolidation or merger or which shall have received the transfer of such assets
shall expressly assume the due and punctual payment of the principal of (and
premium, if any) and any interest (including all Additional Amounts, if any,
payable pursuant to Section 1010) on all of the Securities, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by the Company and (2) immediately after giving
effect to such transaction and treating any indebtedness which becomes an
obligation of the Company or any Subsidiary as a result thereof as having been
incurred by the Company or such Subsidiary at the time of such transaction, no
Event of Default, and no event which, after notice or the lapse of time, or
both, would become an Event of Default, shall have occurred and be continuing.
SECTION 802. Rights and Duties of Successor Corporation. In case of
any such consolidation, merger, sale, lease or conveyance and upon any
such assumption by the successor entity, such successor entity shall succeed
to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part, and the predecessor entity,
except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor entity
thereupon may cause to be signed, and may issue either in its own name or in
the name of the Company, any or all of the Securities issuable hereunder
which theretofore shall not have been signed by the Company and delivered to
the Trustee; and, upon the order of such successor entity, instead of the
Company, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any
Securities which such successor entity thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Securities so issued
shall in all respects have the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all of such Securities had been
issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officer's Certificate and Opinion of Counsel. Any
consolidation, merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officer's Certificate
and an Opinion of Counsel to the
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effect that any such consolidation, merger, sale, lease or conveyance, and the
assumption by any successor entity, complies with the provisions of this Article
and that all conditions precedent herein provided for relating to such
transaction have been complied with.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the
Company herein and in the securities contained; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are
to be for the benefit of less than all series of Securities, stating
that such covenants are expressly being included solely for the benefit
of such series) or to surrender any right or power herein conferred
upon the Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such Events of
Default are to be for the benefit of less than all series of
Securities, stating that such Events of Default are expressly being
included solely for the benefit of such series); provided, however,
that in respect of any such additional Events of Default such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to
the Trustee upon such default or may limit the right of the Holders of
a majority in aggregate principal amount of that or those series of
Securities to which such additional Events of Default apply to waive
such default; or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of or
any premium or interest on Bearer Securities, to permit Bearer
Securities to be issued in exchange for Registered Securities, to
permit Bearer Securities to be issued in exchange for Bearer Securities
of other authorized denominations or to permit or facilitate the
issuance of Securities in uncertificated form, provided that any such
action shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material
respect; or
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(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series and
any related coupons as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture, provided such provisions shall
not adversely affect the interests of the Holders of Securities of any
series or any related coupons in any material respect; or
(10)to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 401, 1402
and 1403; provided that any such action shall not adversely affect the
interests of the Holders of Securities of such series and any related
coupons or any other series of Securities in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Securities affected by such supplemental indenture, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium, if
any, on) or any installment of principal of or interest on, any
Security; or reduce the principal amount thereof or the rate or amount
of interest thereon or any Additional Amounts payable in respect
thereof, or any premium payable upon the redemption thereof, or change
any obligation of the Company to pay Additional Amounts pursuant to
Section 1010 (except as contemplated by Section 801(l) and permitted by
Section 901(1)), or reduce the amount of the principal of an Original
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Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
502 or the amount thereof provable in bankruptcy pursuant to Section
504, or adversely affect any right of repayment at the option of the
Holder of any Security, or change any Place of Payment where, or the
currency in which, any Security or any premium or the interest thereon
is payable, or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof (or, in the
case of redemption or repayment at the option of the Holder, on or
after the Redemption Date or the Repayment Date, as the case may be),
or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver with respect to such series (or compliance with
certain provisions of this Indenture or certain defaults hereunder and
their consequences) provided for in this Indenture, or reduce the
requirements of Section 1504 for quorum or voting, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1013, except to increase the required percentage to effect such
action or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder and of any coupon appertaining
thereto shall be bound thereby.
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SECTION 905. Conformity with TIA. Every supplemental indenture executed
pursuant to this Article shall conform to the requirements of the TIA as then in
effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, Interest and
Additional Amounts. The Company covenants and agrees for the benefit of the
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on an any Additional Amounts
payable in respect of the Securities of that series in accordance with the terms
of such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 1010 in respect
of principal of (or premium, if any, on) such a Security, shall be payable only
upon presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature. Unless otherwise
specified with respect to Securities of any series pursuant to Section 301, at
the option of the Company, all payments of principal may be paid by check to the
registered Holder of the Registered Security or other person entitled thereto
against surrender of such Security.
SECTION 1002. Maintenance of Office or Agency. If Securities of a
series are issuable only as Registered Securities, the Company shall maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. If Securities of a
series are issuable as Bearer Securities, the Company will maintain: (A) in the
Borough of Manhattan, New York City, an office or agency where any Registered
Securities of that series may be presented or surrendered for payment or where
any Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange, where
notices and demands to or upon the Company in respect of the Securities of that
series and this Indenture may be served and where Bearer Securities of that
series and related coupons may be presented or surrendered for payment in the
circumstances described in the following paragraph (and not otherwise); (B)
subject to any laws or regulations applicable thereto, in a Place of Payment for
that series which is located outside the United States, an office or agency
where Securities of that series and related coupons may be presented and
surrendered for
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payment (including payment of any Additional Amounts payable on Securities of
that series pursuant to Section 1010); provided, however, that if the Securities
of that series are listed on the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent for the Securities of that
series in Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Securities of that series are listed
on such exchange; and (C) subject to any laws or regulations applicable thereto,
in a Place of Payment for that series located outside the United States an
office or agency where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of each such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, except that Bearer Securities of that series and the related coupons
may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Bearer Securities of that series pursuant to
Section 1010) or at the offices specified in the Security, in London, England,
and the Company hereby appoints the same as its agent to receive such respective
presentations, surrenders, notices and demands, and the Company hereby appoints
the Trustee its agent to receive all such presentations, surrenders, notices and
demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium or interest on or Additional
Amounts in respect of Bearer Securities shall be made at any office or agency of
the Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank allocated in the
United States; provided, however, that payment of principal of and any premium
and interest on any Bearer Security (including any Additional Amounts payable on
securities of such series pursuant to Section 1010) shall be made at the office
of the designated agent of the Company's Paying Agent in the Borough of
Manhattan, New York City if (but only if) payment in Dollars of the full amount
of such principal, premium, interest or Additional Amounts, as the case may be,
at all offices or agencies outside the United States maintained for the purpose
by the Company in accordance with this Indenture, is illegal or effectively
precluded by exchange controls or other similar restrictions.
The Company may from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all of such purposes, and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency. Unless otherwise noted with respect to any
Securities pursuant to Section 301 with respect to a series of Securities, the
Company hereby designates as a Place of Payment for each series of Securities
the office or agency of the Company in the Borough of Manhattan New York City,
and initially appoints the Trustee at its Corporate Trust office as Paying Agent
and as its agent to receive all such presentations, surrenders, notices and
demands.
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SECTION 1003. Money for Securities Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent with respect to any series
of any securities and any related coupons, it will, on or before each due date
of the principal of (and premium, if any), or interest on or Additional Amounts
in respect of, any of the Securities of that series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal (and premium if any) or interest or Additional Amounts so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided, and will promptly notify the Trustee, of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities and any related coupons, it will, before each due date of
the principal of (and premium, if any), or interest on or Additional Amounts in
respect of, any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium if any) or interest or Additional
Amounts, so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest or Additional Amounts
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Securities or Additional Amounts in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee notice of any default by the Trust (or any
other obligor upon the Securities) in the making of any such payment of
principal (and premium, if any) or interest or Additional Amounts; and
(3) at any time during the continuance of any such default upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest on,
or any Additional Amounts in respect of, any Security of any series and
remaining unclaimed for two years after such principal (and premium, if any),
interest or Additional Amounts has become due and payable shall be paid to
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the Company upon Company Request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
principal of (and premium, if any) or interest on, or any Additional Amounts in
respect of, any Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 1004. Existence. Subject to Article Eight, the Company will do
or cause to be done all things necessary to preserve and keep in full force and
effect its existence as a corporation, rights (charter and statutory) and
franchises; provided, however, that the Company shall not be required to
preserve any right or franchise if the Board of Directors shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company.
SECTION 1005. Maintenance of Properties. The Company will cause all of
its material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times.
SECTION 1006. Insurance. The Company will, and will cause each of its
Subsidiaries to, keep all of its insurable properties insured against loss or
damage at least equal to their then full insurable value with insurers of
recognized responsibility.
SECTION 1007. Payment of Taxes and Other Claims. The Company will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a material lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith.
SECTION 1008. Provision of Financial Information. Whether or not the
Company is subject to Section 13 or 15(d) of the Exchange Act, the Company will
prepare the annual reports, quarterly reports and other documents within 15 days
of each of the respective dates by which the Company would have been required to
file with the Commission pursuant to such Section 13 or 15(d) and will (i)
transmit by mail to all Holders, as their names and addresses appear in
the Security Register, without cost to such Holders copies of the annual
reports, quarterly reports and other documents which the Company would have
been required to file with
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the Commission pursuant to Section 13 or 15(d) of the Exchange Act if the
Company were subject to such Sections, (ii) file with the Trustee copies of the
annual reports, quarterly reports and other documents which the Trust would have
been required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act if the Company were subject to such Sections and (iii) promptly
upon written request and payment of the reasonable cost of duplication and
delivery, supply copies of such documents to any prospective Holder.
SECTION 1009. Statement as to Compliance. The Company will deliver to
the Trustee, within 120 days after the end of each fiscal year, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture and, in the
event of any noncompliance, specifying such noncompliance and the nature and
status thereof. For purposes of this Section 1009, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
SECTION 1010. Additional Amounts. If any Securities of a series provide
for the payment of Additional Amounts, the Company will pay to the Holder of any
Security of such series or any coupon appertaining thereto Additional Amounts as
may be specified as contemplated by Section 301. Whenever in this Indenture
there is mentioned, in any context except in the case of Section 502(1), the
payment of the principal of or any premium or interest on, or in respect of, any
Security of any series or payment of any related coupon or the net proceeds
received on the sale or exchange of any Security of any series, such mention
shall be deemed to include mention of the payment of Additional Amounts provided
by the terms of such series established pursuant to Section 301 to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to such terms and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.
Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if other than
the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities of that series or any related coupons who are not United States
persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series or related coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Amounts required by the terms
of such Securities. In the event that the Trustee or any Paying Agent, as the
case may be, shall not so receive the above-mentioned certificate, then the
Trustee or such Paying Agent shall be entitled (i) to assume that no such
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withholding or deduction is required with respect to any payment of principal or
interest with respect to any Securities of a series or related coupons until it
shall have received a certificate advising otherwise and (ii) to make all
payments of principal and interest with respect to the Securities of a series or
related coupons without withholding or deductions until otherwise advised. The
Company covenants to indemnify the Trustee and any Paying Agent for, and to hold
them harmless against, any loss, liability or expense reasonably incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by any of them or in reliance on any Officers'
Certificate furnished pursuant to this Section or in reliance on the Company's
not furnishing such an Officers' Certificate.
SECTION 1011. Limitations on Liens. The Company shall not, and shall
not cause or permit any Subsidiary to, issue, assume or guarantee any Debt
secured by a Lien upon any property or assets (other than cash) of the Company
or such Subsidiary, as applicable, without effectively providing that the
outstanding Securities (together with, if the Company so determines, any other
indebtedness or obligation then existing or thereafter created ranking equally
with such Securities) shall be secured equally and ratably with (or prior to)
such Debt so long as such Debt shall be so secured. The foregoing restriction on
Liens will not, however, apply to:
(a) Liens in existence on the date of original issue of such
Securities;
(b) (i) any Lien created or arising over any property which is
acquired, constructed or created by the Company, or any of its Subsidiaries, but
only if (A) such Lien secures only principal amounts (not exceeding the cost of
such acquisition, construction or creation) raised for the purposes of such
acquisition, construction or creation, together with any costs, expenses,
interest and fees incurred in relation thereto or a guarantee given in respect
thereof, (B) such Lien is created or arises on or before 90 days after the
completion of such acquisition, construction or creation and (C) such Lien is
confined solely to the property so acquired, constructed or created; or (ii) any
Lien to secure Debt of the Company or a Subsidiary incurred in connection with a
specifically identifiable project where the Lien relates to and is confined to a
property or properties (including, without limitation, shares or other rights of
ownership in the entities which own such property or project) involved in such
project and acquired by the Company or a Subsidiary after the date of original
issue of the Securities of any series and the recourse of the creditors in
respect of such Debt is limited to any or all of such project and property
(including as aforesaid);
(c) any Lien securing amounts not more than 90 days overdue or
otherwise being contested in good faith;
(d) (i) rights of financial institutions to offset credit balances in
connection with the operation of cash management programs established for the
benefit of the Company or a Subsidiary or in connection with the issuance of
letters of credit for the benefit of the Company or a Subsidiary; (ii) any Lien
securing Debt of the Company or a Subsidiary incurred in connection with the
financing of accounts receivable; (iii) any Lien incurred or deposits made in
the ordinary course of business, including, but not limited to, (A) any
mechanics', materialmens', carriers', workmens', vendors' or other like Liens
and (B) any Liens securing amounts in connection with workers' compensation,
unemployment insurance and other types of social
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security; (iv) any Lien upon specific items of inventory or other goods and
proceeds of the Company or a Subsidiary securing obligations of the Company or a
Subsidiary in respect of bankers' acceptances issued or created for the account
of such person to facilitate the purchase, shipment or storage of such inventory
or other goods; (v) any Lien incurred or deposits made securing the performance
of tenders, bids, leases, trade contracts (other than for borrowed money),
statutory obligations, surety bonds, appeal bonds, government contracts,
performance bonds, return-of-money bonds and other obligations of like nature
incurred in the ordinary course of business; (vi) any Lien constituted by a
right of set off or right over a margin call account or any form of cash or cash
collateral or any similar arrangement for obligations incurred in respect of the
hedging or management of risks under transactions involving any currency or
interest rate swap, cap or collar arrangements, forward exchange transaction,
option, warrant, forward rate agreement, futures contract or other derivative
instrument of any kind; (vii) any Lien arising out of title retention or like
provisions in connection with the purchase of goods and equipment in the
ordinary course of business; and (viii) any Lien securing reimbursement
obligations under letters of credit, guaranties and other forms of credit
enhancement given in connection with the purchase of goods and equipment in the
ordinary course of business;
(e) Liens in favor of the Company or a Subsidiary;
(f) (i) Liens on any property or assets acquired from a corporation
which is merged with or into the Company or a Subsidiary, or any Liens on the
property or assets of any corporation or other entity existing at the time such
corporation or other entity becomes a Subsidiary of the Company and, in either
such case, is not created in anticipation of any such transaction (unless such
Lien is created to secure or provide for the payment of any part of the purchase
price of such corporation); (ii) any Lien on any property or assets existing at
the time of acquisition thereof and which is not created in anticipation of such
acquisition (unless such Lien was created to secure or provide for the payment
of any part of the purchase price of such property or assets); and (iii) any
Lien created or outstanding on or over any asset of any Person which becomes a
Subsidiary on or after the date of the issuance of such Securities when such
Lien is created prior to the date on which such Person becomes a Subsidiary;
(g) (i) Liens required by any contract or statute in order to permit
the Company or a Subsidiary to perform any contract or subcontract made by it
with or at the request of a governmental entity or any department, agency or
instrumentality thereof, or to secure partial, progress, advance or any other
payments by the Company or a Subsidiary to such governmental unit pursuant to
the provisions of any contract or statute; (ii) any Lien securing industrial
revenue, development or similar bonds issued by or for the benefit of the
Company or a Subsidiary, provided that such industrial revenue, development or
similar bonds are nonrecourse to the Company or such Subsidiary; and (iii) any
Lien securing taxes or assessments or other applicable governmental charges or
levies;
(h) (i) any Lien which arises pursuant to any order of attachment,
distraint or similar legal process arising in connection with court proceedings
and any Lien which secures the reimbursement obligation for any bond obtained in
connection with an appeal taken in any court proceeding, so long as the
execution or other enforcement of such Lien arising pursuant to such legal
process is effectively stayed and the claims secured thereby are being contested
in good faith and, if appropriate, by appropriate legal proceedings, or any Lien
in favor of a plaintiff
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or defendant in any action before a court or tribunal as security for costs
and/or other expenses; or (ii) any Lien arising by operation of law or by order
of a court or tribunal or any Lien arising by an agreement of similar effect,
including, without limitation, judgment liens; or
(i) any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, or any Liens referred to in
the foregoing clauses, for amounts not exceeding the principal amount of the
Debt secured by the Lien so extended, renewed or replaced, provided that such
extension, renewal or replacement Lien is limited to all or a part of the same
property or assets that were covered by the Lien extended, renewed or replaced
(plus improvements on such property or assets).
Nothing contained in this Indenture in any way restricts or prevents
the Company or any Subsidiary from incurring any Debt.
SECTION 1012. Limitations on Sale and Lease-Back Transactions. The
Company covenants and agrees that so long as any Securities of such series
remains outstanding, it will not, and the Company will not permit any Subsidiary
to, enter into any arrangement with any Person (other than the Company or a
Subsidiary), providing for the leasing to the Company or a Subsidiary of any
assets which have been or are to be sold or transferred by the Company or such
Subsidiary to such Person (a "Sale and Lease-Back Transaction") unless; (a) such
transaction involves a lease for a temporary period not to exceed three years;
(b) such transaction is between the Company or a Subsidiary and an affiliate of
the Company; (c) the Company would be entitled to incur debt secured by a Lien
on the assets or property involved in such transaction at least equal in amount
to the Attributable Debt with respect to such Sale and Lease-Back Transaction,
without equally and ratably securing the Securities, pursuant to the limitation
on Liens described above; (d) such transaction is entered into within 90 days
after the initial acquisition by the Company of the assets or property subject
to such transaction; (e) after giving effect thereto, the aggregate amount of
all Attributable Debt with respect to all such Sale and Lease-Back Transactions
does not exceed 10% of Consolidated Net Tangible Assets; or (f) the Company or a
Subsidiary within the twelve months preceding the sale or transfer or the twelve
months following the sale or transfer, regardless of whether such sale or
transfer may have been made by the Company or such Subsidiary, applies in the
case of a sale or transfer for cash, an amount equal to the net proceeds thereof
and, in the case of a sale or transfer otherwise than for cash, an amount equal
to the fair value of the assets so leased at the time of entering into such
arrangement (as determined by the Board of Directors of the Company or such
Subsidiary), (i) to the retirement of debt, incurred or assumed by the Company
or a Subsidiary, which by its terms matures at, or is extendible or renewable at
the option of the obligor to, a date more than twelve months after the date of
incurring, assuming or guaranteeing such debt or (ii) to investment in any
assets of the Company or any Subsidiary.
SECTION 1013. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 1004 to 1008, inclusive, or Section 1011 or Section 1012 if before or
after the time for such compliance the Holders of at least a majority in
principal amount of all outstanding Securities of such series, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall
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become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any series which
are redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In the case of any redemption at the election of the Company
of less than all of the Securities of any series, the Company shall, at least 45
days prior to the giving of the notice of redemption in Section 1104 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities of any series issued on the same day with the same
terms are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities of such series issued on such date with the same
terms not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption shall be given
in the manner provided in Section 106, not less than 30 days nor more than 60
days prior to the Redemption Date, unless a shorter period is specified by the
terms of such series established pursuant to Section 301, to each Holder of
Securities to be redeemed, but failure to give such notice in the manner herein
provided to the Holder of any Security designated for redemption as
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a whole or in part, or any defect in the notice to any such Holder, shall not
affect the validity of the proceedings for the redemption of any other such
Security or portion thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 1106, if any, and Additional Amounts, if
any,
(3) if less than all Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Security or
Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the holder will
receive, without a charge, a new Security or Securities of authorized
denominations for the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 1106, if
any, will become due and payable upon each such Security, or the
portion thereof, to be redeemed and if applicable, that interest
thereon shall cease to accrue on and after said date,
(6) the Place or Places of Payment where such Securities, together
in the case of Bearer Securities with all coupons appertaining thereto,
if any, maturing after the Redemption Date, are to be surrendered for
payment of the Redemption Price and accrued interest, if any,
(7) that the redemption is for a sinking fund, if such is the
case,
(8) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all coupons maturing subsequent to the date fixed for
redemption or the amount of any such missing coupon or coupons will be
deducted from the Redemption Price, unless security or indemnity
satisfactory to the Company, the Trustee for such series and any Paying
Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if
such Bearer Securities may be exchanged for Registered Securities not
subject to redemption
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on this Redemption Date pursuant to Section 305 or otherwise, the last
date, as determined by the Company, on which such exchanges may be
made, and
(10)the CUSIP number of such Security, if any.
Notice of redemption of Securities to be redeemed shall be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 1105. Deposit of Redemption Price. At least one Business Day
prior to any Redemption Date, the Company shall deposit with the Trustee or with
a Paying Agent (or, if the Company is acting as its own Paying Agent, which it
may not do in the case of a sinking fund payment under Article Twelve),
segregate and hold in trust as provided in section 1003 an amount sufficient)
to pay on the Redemption Date the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified (together with accrued interest, if any, to the Redemption
Date), and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Securities shall, if
the same were interest-bearing, cease to bear interest and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest, if
any, to the Redemption Date; provided, however, that installments of interest on
Bearer Securities whose Stated Maturity is on or prior to the Redemption Date
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 1002) and, unless otherwise specified
as contemplated by Section 301, only upon presentation and surrender of coupons
for such interest; and provided further that, installments of interest on
Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an office
or agency located outside the United States (except as otherwise
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provided in Section 1002) and, unless otherwise specified as contemplated by
Section 301, only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
SECTION 1107. Securities Redeemed in Part. Any Registered Security
which is to be redeemed only in part (pursuant to the provisions of this Article
or of Article Twelve) shall be surrendered at a Place of Payment therefor (with,
if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing) and
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge a new Security or Securities of
the same series, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of an sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of the Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities .
The Company may, in satisfaction of all or any part of any mandatory sinking
fund payment with respect to the Securities of a series, (1) deliver Outstanding
Securities of such series (other than any previously called for redemption)
together in the case of any Bearer Securities of such series with all unmatured
coupons appertaining thereto and (2) apply as a credit Securities of such series
which have been redeemed either at the election of the Company pursuant to the
terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, as provided for
by the terms of such Securities, or which have otherwise been acquired by the
Company; provided that such Securities so delivered or applied as a credit have
not been previously so credited. Such Securities shall be received and credited
for such purpose by the Trustee at the applicable Redemption Price specified in
such Securities for redemption through operation of the sinking fund and the
amount of such mandatory sinking fund payment shall be reduced accordingly.
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SECTION 1203. Redemption of Securities for Sinking Fund. Not less than
60 days prior to each sinking fund payment date for Securities of any series,
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing mandatory sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 1202, and the optional amount, if any, to be added in cash to the next
ensuing mandatory sinking fund payment, and will also deliver to the Trustee any
Securities to be so delivered and credited. If such Officers' Certificate shall
specify an optional amount to be added in cash to the next ensuing mandatory
sinking fund payment, the Trust shall thereupon be obligated to pay the amount
therein specified. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of Securities of any
series before their Stated Maturity at the option of Holders thereof shall be
made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
301) in accordance with this Article.
SECTION 1302. Repayment of Securities. Securities of any series subject
to repayment in whole or in part at the option of the Holders thereof will,
unless otherwise provided in the terms of such Securities, be repaid at a price
equal to the principal amount thereof, together with interest, if any, thereon
accrued to the Repayment Date specified in or pursuant to the terms of such
Securities. The Company covenants that at least one Business Day prior to the
Repayment Date it will deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount sufficient to pay the principal (or, if so
provided by the terms of the Securities of any series, a percentage of the
principal) of, and (except if the Repayment Date shall be an Interest Payment
Date) accrued interest on, all the Securities or portions thereof, as the case
may be, to be repaid on such date.
SECTION 1303. Exercise of Option. Securities of any series subject to
repayment at the option of the Holders thereof will contain an "Option to Elect
Repayment" form on the reverse of such Securities. In order for any Security to
be repaid at the option of the Holder, the Trustee must receive at the Place of
Payment therefor specified in the terms of such Security (or at such other place
or places of which the Company shall from time to time notify the Holders of
such Securities) not earlier than 60 days nor later than 30 days prior to the
Repayment Date (1) the Security so providing for such repayment together with
the "Option to Elect Repayment" form on the reverse thereof duly completed by
the Holder (or by the Holder's attorney duly authorized in writing) or (2) a
telegram, telex, facsimile transmission or a letter
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from a member of a national securities exchange, or the National Association of
Securities Dealers, Inc. ("NASD"), or a commercial bank or trust company in the
United States setting forth the name of the Holder of the security, the
principal amount of the Security, the principal amount of the Security to be
repaid, the CUSIP number, if any, or a description of the tenor and terms of the
Security, a statement that the option to elect repayment is being exercised
thereby and a guarantee that the Security to be repaid, together with the duly
completed form entitled "Option to Elect Repayment" on the reverse of the
Security will be received by the Trustee not later than the fifth Business Day
after the date of such telegram, telex, facsimile transmission or letter;
provided, however, that such telegram, telex, facsimile transmission or letter
shall only be effective if such Security and form duly completed are received by
the Trustee by such fifth Business Day. If less than the entire principal amount
of such Security is to be repaid in accordance with the terms of such Security,
the principal amount of such Security to be repaid, in increments of the minimum
denomination for Securities of such series, and the denomination or
denominations of the Security or Securities to be issued to the Holder for the
portion of the principal amount of such Security surrendered that is not to be
repaid, must be specified. The principal amount of any Security providing for
repayment at the option of the Holder thereof may not be repaid in part if,
following such repayment, the unpaid principal amount of such Security would be
less than the minimum authorized denomination of Securities of the series of
which such Security to be repaid is a part. Except as otherwise may be provided
by the terms of any Security providing for repayment at the option of the Holder
thereof, exercise of the repayment option by the Holder shall be irrevocable
unless waived by the Company.
SECTION 1304. When Securities Presented for Repayment Become Due and
Payable. If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security or repayment in accordance with such provisions, together with
all coupons, if any, appertaining thereto maturing after the Repayment Date, the
principal amount of such Security so to be repaid shall be paid by the Company,
together with accrued interest, if any, to the Repayment Date; provided,
however, that coupons whose Stated Maturity is on or prior to the Repayment Date
shall be payable, only at an office or agency located outside the United States
(except as otherwise provided in Section 1002) and, unless otherwise specified
pursuant to Section 301, only upon presentation and surrender of such coupons;
and provided further that, in the case of Registered Securities, installments of
interest, if any, whose Stated Maturity is on or prior to the Repayment Date
shall be payable (but without interest thereon, unless the Company shall default
in the payment thereof) to the Holders of such Securities, or one or more
Predecessor Securities registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the
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face amount of all such missing coupons, or the surrender of such missing coupon
or coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to the Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made as provided in the preceding sentence, such
Holder shall be entitled to receive the amount so deducted; provided, however,
that interest represented by coupons shall be payable only at an office or
agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If the principal amount of any Security surrendered for repayment shall
not be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part. Upon surrender of any
Registered Security which is to be repaid in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision is
made for either or both of (a) defeasance of the Securities of or within a
series under Section 1402 or (b) covenant defeasance of the Securities of or
within a series under Section 1403, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as, may be specified pursuant to Section 301
with respect to any Securities) shall be applicable to such Securities and any
coupons appertaining thereto, and the Company may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 1402 (if applicable) or Section 1403
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
SECTION 1402. Defeasance and Discharge . Upon the Company's exercise of
the above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any coupons
appertaining thereto on the date the conditions set forth in Section 1404 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities and any coupons
appertaining thereto, which shall
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thereafter be deemed to be "Outstanding" only for the purposes of Section 1405
and the other Sections of this Indenture referred to in clauses (A) and (B)
below, and to have satisfied all of its other obligations under such Securities
and any coupons appertaining thereto and this Indenture insofar as such
Securities and any coupons appertaining thereto are concerned (and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
the same) except for the following which shall survive until otherwise
terminated or discharged hereunder: (A) the rights of Holders of such
Outstanding Securities and any coupons appertaining thereto to receive, solely
from the trust fund described in Section 1404 and as more fully set forth in
such Section, payments in respect of the principal of (and premium, if any) and
interest, if any, on such Securities and any coupons appertaining thereto when
such payments are due, (B) the Company's obligations with respect to such
Securities under Sections 305, 306, 1002 and 1003 and with respect to the
payment of Additional Amounts, if any, on such Securities as contemplated by
Section 1010, (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (D) this Article. Subject to compliance with this Article
Fourteen, the Company may exercise its option under this Section notwithstanding
the prior exercise of its option under Section 1403 with respect to such
Securities and any coupons appertaining thereto.
SECTION 1403. Covenant Defeasance. Upon the Company's exercise of the
above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be released from its obligations under
Sections 1004 to 1008, inclusive, Section 1011 and Section 1012, and, if
specified pursuant to Section 301, its obligations under any other covenant,
with respect to such Outstanding Securities and any coupons appertaining thereto
on and after the date the conditions set forth in Section 1404 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with Sections 1004 to 1008,
inclusive, Section 1011 or Section 1012, or such other covenant, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to such Outstanding
Securities and any coupons appertaining thereto, the Company may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in any such Section or such other covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
such other covenant or by reason of reference in any such Section or such other
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a default or an Event of Default under
Section 501(4) or 501(8) or otherwise, as the case may be, but, except as
specified above, the remainder of this Indenture and such Securities and any
coupons appertaining thereto shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of Section 1402 or Section 1403
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Fourteen applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities and any coupons appertaining
thereto, (1)
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an amount of money, or (2) Government Obligations applicable to such Securities
and coupons appertaining thereto which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment of principal
of (and premium, if any) and interest, if any, on such Securities and any
coupons appertaining thereto, money in an amount, or (3) a combination thereof,
in any case, in an amount, sufficient, without consideration of any reinvestment
of such principal and interest, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and discharge, (1) the
principal of (and premium, if any) and interest, if any, on such Outstanding
Securities and any coupons appertaining thereto on the Stated Maturity of such
principal or installment of principal or interest and (ii) any mandatory sinking
fund payments or analogous payments applicable to such Outstanding securities
and any coupons appertaining thereto on the day on which such payments are due
and payable in accordance with the terms of this Indenture and of such
Securities and any coupons appertaining thereto.
(b) Such defeasance or covenant defeasance shall not result in a breach
or violation of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Company is a party or by which it
is bound.
(c) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to such Securities and any
coupons appertaining thereto shall have occurred and be continuing on the date
of such deposit or, insofar as Sections 501(6) and 501(7) are concerned, at any
time during the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until the
expiration of such period).
(d) In the case of an election under Section 1402, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling, or (ii) since the date of execution of this Indenture, there has been
a change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders of such
Outstanding Securities and any coupons appertaining thereto will not recognize
income, gain or loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
had not occurred.
(e) In the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant defeasance under
Section 1403 (as the case may be) have been complied
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with and an Opinion of Counsel to the effect that either (i) as a result of a
deposit pursuant to subsection (a) above and the related exercise of the
Company's option under Section 1402 or Section 1403 (as the case may be),
registration is not required under the Investment Trust Act of 1940, as amended,
by the Company, with respect to the trust funds representing such deposit or by
the Trustee for such trust funds or (ii) all necessary registrations under said
Act have been effected.
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 301.
SECTION 1405. Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1405, the "Trustee") pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons as pertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium, if any) and interest and Additional Amounts, if any, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1404 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, subject to
Section 606, the Trustee shall deliver or pay to the Company from time to time
upon Company Request any money or Government Obligations (or other property and
any proceeds therefrom) held by it as provided in Section 1404 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Article.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A meeting of
Holders of Securities of any series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent,
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waiver or other action provided by this Indenture to be made, given or taken by
Holders of Securities of such series.
SECTION 1502. Call, Notice and Place of Meetings. (a) The Trustee may
at any time call a meeting of Holders of Securities of any series for any
purpose specified in Section 1501, to be held at such time and at such place in
the Borough of Manhattan, New York City, as the Trustee shall determine. Notice
of every meeting of Holders of Securities of any series, setting forth the time
and the place of such meeting and in general terms the action proposed to be
taken at such meeting, shall be given, in the manner provided in Section 106,
not less than 21 nor more than 180 days or to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 10% in principal amount of the Outstanding Securities of
any series shall have requested the Trustee to call a meeting of the Holders of
Securities of such series for any purpose specified in Section 1501, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication of the
notice of such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, New York City, for such meeting and may call such meeting
for such purposes by giving notice thereof as provided in subsection (a) of this
Section.
SECTION 1503. Persons Entitled to Vote at Meeting. To be entitled to
vote at any meeting of Holders of Securities of any series, a Person shall be
(1) a Holder of one or more Outstanding Securities of such series, or (2) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities of such series by such Holder or Holders. The
only Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote a majority
in principal amount of the Outstanding Securities of a series shall constitute a
quorum for a meeting of Holders of Securities of such series; provided, however,
that if, any action is to be taken at such meeting with respect to a consent or
waiver which this Indenture expressly provides may be given by the Holders of
not less than a specified percentage in principal amount of the Outstanding
Securities of a series, the Persons entitled to vote such specified percentage
in principal amount of the Outstanding Securities of such series shall
constitute a quorum. In the absence of a quorum within 30 minutes after the time
appointed for any such meeting, the meeting shall, if convened at the request of
Holders of Securities of such series, be dissolved. In any other case the
meeting may be adjourned for a period of not less than 10 days as determined by
the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at the reconvening of any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10
days; at the reconvening of any meeting adjourned or further adjourned for lack
of a quorum, the persons entitled to vote 25% in the aggregate principal amount
of the Securities at the time outstanding shall constitute a quorum for
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the taking of any action set forth in the notice of the original meeting. Notice
of the reconvening of any adjourned meeting shall be given as provided in
Section 1502(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the persons
entitled to vote a majority in aggregate principal amount of the Outstanding
Securities represented at such meeting; provided, however, that, except as
limited by the proviso to Section 902, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of a series may be adopted at a
meeting or an adjourned meeting duly reconvened and at which a quorum is present
as aforesaid by the affirmative vote of the Holders of such specified percentage
in principal amount of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(i) there shall be no minimum quorum requirement for such meeting;
and
(ii)the principal amount of the Outstanding Securities of such
series that vote in favor of such request, demand, authorization, direction,
notice, consent, waiver or other action shall be taken into account in
determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under this
Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
of Meetings.
(a) Notwithstanding any provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the
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<PAGE> 83
manner specified in Section 104 and the appointment of any proxy shall be proved
in the manner specified in Section 104 or by having the signature of the Person
executing the proxy witnessed or guaranteed by any trust company, bank or banker
authorized by Section 104 to certify to the holding of Bearer Securities. Such
regulations may provide that written instruments appointing proxies regular on
their face, may be presumed valid and genuine without the proof specified in
Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings. The vote
upon any resolution submitted to any meeting of Holders of Securities of any
series shall be by written ballots on which shall be subscribed the signatures
of the Holders of Securities of such series or of their representatives by proxy
and the principal amounts and serial numbers of the Outstanding Securities of
such series held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record, at least in duplicate, of the proceedings
of each meeting of Holders of Securities of any Series shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the fact, setting forth a
copy of the notice of the meeting and showing that said notice was given as
provided in Section 1502 and, if applicable, Section 1504. Each copy shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to the Company and another to
the Trustee to be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
74
<PAGE> 84
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
SEMCO ENERGY INC.
By:____________________________
Title:
Attest:
______________________________
Title:
NBD Bank
as Trustee
By:____________________________
Title:
Attest:
______________________________
Title:
75
<PAGE> 85
STATE OF ________________ )
) ss:
COUNTY OF_________________ )
On the _____ day of ______, 1998, before me personally came
_______________________, to me known, who, being by me duly sworn, did depose
and say that he/she resides at _______________________, that he/she is
__________ of SEMCO ENERGY INC., one of the parties described in and which
executed the foregoing instrument, and that he/she signed his/her name thereto
by authority of the Board of Directors.
(Notarial Seal)
_______________________________
Notary Public
COMMISSION EXPIRES
STATE OF )
---------------------------
) ss:
COUNTY OF )
--------------------------
On the _____ day of ______, 1998, before me personally came
__________________, to me known, who, being by me duly sworn, did depose and say
that he/she resides at ____________________, that he/she is a _________________
of NBD BANK, one of the parties described in and which executed the foregoing
instrument, and that he/she signed his/her name thereto by authority of the
Board of Directors.
(Notarial Seal)
_______________________________
Notary Public
COMMISSION EXPIRES
76
<PAGE> 86
EXHIBIT A
FORMS OF CERTIFICATION
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
{Insert title or sufficient description of Securities to be delivered}
This is to certify that, as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that are
(a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing
for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise SEMCO Energy, Inc., or its agent that such financial
institution will comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the United States Internal Revenue Code of 1986, as amended, and the
regulations thereunder), or (iii) are owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, in addition, if the owner is a United States or foreign financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii)), this is to further certify that such financial institution
has not acquired the Securities for purposes of resale directly or indirectly to
a United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
operating procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to (U.S.$) of such
interest in the above-captioned Securities in respect of which we are not
able to certify and as to which we
A-1-1
<PAGE> 87
understand an exchange for an interest in a Permanent Global Security or an
exchange for and delivery of definitive Securities (or, if relevant, collection
of any interest) cannot be made until we do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated:____________________________ 19__
(To be dated no earlier than the 15th day prior to (i)
the Exchange Date or (ii) the relevant Interest
Payment Date occurring prior to the Exchange Date,
as applicable)
(Name of Person Making Certification)
___________________________________
(Authorized Signature)
Name:
Title:
A-1-2
<PAGE> 88
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
(Insert title or sufficient description of Securities to be delivered)
This is to certify that, based solely on written certifications that we
have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, (U.S.$) _________________
principal amount of the above-captioned Securities (i) is owned by person(s)
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v) are herein
referred to as "financial institutions") purchasing for their own account or for
resale, or (b) United States person(s) who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such United States financial institutions on the date hereof
(and in either case (a) or (b), each such financial institution has agreed, on
its own behalf or through its agent, that we may advise SEMCO Energy, Inc. or
its agent that such financial institution will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) is owned by United States or
foreign financial institution(s) for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and, to the further effect, that financial institutions
described in clause (iii) above (whether or not also described in clause (i) or
(ii)) have certified that they have not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security representing the above-captioned Securities excepted
in the above referenced certificates of Member organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
A-2-1
<PAGE> 89
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated:_________________________ 19__
(To be dated no earlier than the Exchange Date or the relevant Interest
Payment Date occurring prior to the Exchange Date, as applicable)
(Morgan Guaranty Trust of New York,
Brussels Office,) as Operator of the
Euroclear System or Cedel S.A.)
By:
---------------------------------
A-2-2
<PAGE> 1
EXHIBIT 4.5
CERTIFICATE OF TRUST
OF
SEMCO CAPITAL TRUST
THIS CERTIFICATE OF TRUST OF SEMCO CAPITAL TRUST (the "Trust"), dated
July 7, 1998, is being duly executed and filed by the undersigned to form a
business trust under the Delaware Business Trust Act (12 Del. Code, Section
3801 et seq.).
1. Name. The name of the business trust to be formed by this
Certificate of Trust is SEMCO Capital Trust.
2. Trustee. The name and business address of the trustee of the
Trust with its principal place of business in the State of
Delaware is:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
3. Effective Date. This Certificate of Trust shall be effective
upon filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
FIRST CHICAGO DELAWARE INC., Trustee,
not in its individual capacity but
solely as Trustee of the Trust
By: /s/ J. Michael Banas
-------------------------------------
Name: J. Michael Banas
Title: Authorized Officer
/s/ Edric R. Mason, Jr.
----------------------------------------
Edric R. Mason, Jr., as Administrative
Trustee
/s/ Robert J. Digan, II
----------------------------------------
Robert J. Digan, II, as Administrative
Trustee
<PAGE> 1
EXHIBIT 4.6
TRUST AGREEMENT
OF
SEMCO CAPITAL TRUST
THIS TRUST AGREEMENT is made as of July 7, 1998 (this "Agreement"), by
and among SEMCO Energy, Inc., a Michigan corporation, as depositor (the
"Depositor"), First Chicago Delaware Inc., a Delaware corporation, as trustee,
Edric R. Mason, Jr., as trustee, and Robert J. Digan, II, as trustee
(collectively the "Trustees"). The Depositor and the Trustees hereby agree as
follows:
1. The trust created hereby shall be known as "SEMCO Capital Trust "
(the "Trust"), in which name the Trustees or the Depositor, to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to
the Trust the sum of $10. Such amount shall constitute the initial trust estate.
It is the intention of the parties hereto that the Trust created hereby
constitute a business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. Section 3801, et seq. (the "Business Trust Act"), and that this
document constitute the governing instrument of the Trust. The Trustees are
hereby authorized and directed to execute and file a certificate of trust with
the Delaware Secretary of State in such form as the Trustees may approve.
3. The Depositor and the Trustees will enter into an amended and
restated Trust Agreement satisfactory to each such party to provide for the
contemplated operation of the Trust created hereby and the issuance of the Trust
Preferred Securities and Trust Common Securities referred to therein. Prior to
the execution and delivery of such amended and restated Trust Agreement, the
Trustees shall not have any duty or obligation hereunder or with respect of the
trust estate, except as otherwise required by applicable law or as may be
necessary to obtain prior to such execution and delivery any licenses, consents
or approvals required by applicable law or otherwise. Notwithstanding the
foregoing, the Trustees may take all actions deemed proper as are necessary to
effect the transactions contemplated herein.
4. The Depositor is hereby authorized, in its sole discretion, (i) to
file with the Securities and Exchange Commission (the "Commission") and to
execute, in the case of the 1933 Act Registration Statement and 1934 Act
Registration Statement (as herein defined), on behalf of the Trust, (a) the 1933
Act Registration Statement, including pre-effective or post-effective amendments
to such Registration Statement, relating to the registration under the
Securities Act of 1933, as amended (the "1933 Act"), of the Trust Preferred
Securities of the Trust, (b) any preliminary prospectus or prospectus or
supplement thereto relating to the Trust Preferred Securities required to be
filed under the 1933 Act, and (c) if required, a Registration Statement on Form
8-A or other appropriate form (the "Registration Statement") (including all
pre-effective and post-effective amendments thereto) relating to the
registration of the Trust Preferred
<PAGE> 2
Securities of the Trust under the Securities Exchange Act of 1934, as amended;
(ii) to file with the NASDAQ National Market and execute on behalf of the Trust
a listing application and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to cause the
Trust Preferred Securities to be listed with the NASDAQ National Market; (iii)
to file and execute on behalf of the Trust such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of process and
other papers and documents as shall be necessary or desirable to register the
Trust Preferred Securities under the securities or "Blue Sky" laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem necessary or
desirable; (iv) to execute, deliver and perform on behalf of the Trust, an
underwriting agreement with the Depositor and the underwriter or underwriters of
the Trust Preferred Securities of the Trust; (v) to execute, deliver and perform
a depository agreement with the initial clearing agency, relating to the Trust
Preferred Securities; and (vi) to apply for and obtain a tax identification
number for the Trust.
In the event that any filing referred to in this Section 4 is required
by the rules and regulations of the Commission, PORTAL or state securities or
Blue Sky laws to be executed on behalf of the Trust by the Trustees, the
Trustees, in their capacity as trustees of the Trust, are hereby authorized and
directed to join in any such filing and to execute on behalf of the Trust any
and all of the foregoing, it being understood that First Chicago Delaware Inc.,
in its capacity as trustee of the Trust, shall not be required to join in any
such filing or execute on behalf of the Trust any such document unless required
by the rules and regulations of the Commission, PORTAL or state securities or
Blue Sky laws. In connection with all of the foregoing, the Depositor hereby
constitutes and appoints Robert J. Digan, II, as its true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for the Depositor or in the Depositor's name, place and stead, in any and all
capacities, to sign any and all amendments (including all pre-effective and
post-effective amendments) to the 1933 Act Registration Statement and any 1934
Act Registration Statement and to file the same, with all exhibits thereto, and
any other documents in connection therewith, with the Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as the Depositor might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his respective substitute or substitutes, shall do or cause to be done
by virtue hereof.
5. This Agreement may be executed in one or more counterparts.
6. The number of trustees of the Trust initially shall be three and
thereafter the number of trustees of the Trust shall be such number as shall be
fixed from time to time by a written instrument signed by the Depositor which
may increase or decrease the number of trustees of the Trust; provided, however,
that to the extent required by the Business Trust Act, one trustee of the Trust
shall either be a natural person who is a resident of the State of Delaware or,
if not a natural person, any entity which has its principal place of business in
the State of Delaware. Subject to the foregoing, the Depositor is entitled to
appoint or remove without cause any trustee of the Trust at any time. Any
trustee of the Trust may resign upon thirty days' prior notice to the Depositor.
2
<PAGE> 3
7. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware (with regard to conflict of laws
principles).
8. The Delaware Trustee shall not have any of the powers or duties of
the Trustees set forth herein, except as required under the Business Trust Act.
The Delaware Trustee shall be a Trustee hereunder for the sole and limited
purpose of fulfilling the requirements of Section 3807(a) of the Business
Trust Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SEMCO Energy, Inc., as Depositor
By: /s/ William L. Johnson
----------------------------
Name: William L. Johnson
-----------------------
Title: Chairman, President and
Chief Executive Officer
First Chicago Delaware Inc.,
not in its individual capacity but
solely as trustee of the Trust
By: /s/ J. Michael Banas
------------------------------
Name: J. Michael Banas
Title: Authorized Officer
/s/ Edric R. Mason, Jr.
----------------------------------
Edric R. Mason, Jr.,
as Administrative Trustee
/s/ Robert J. Digan, II
----------------------------------
Robert J. Digan, II,
as Administrative Trustee
3
<PAGE> 1
EXHIBIT 4.7
FORM OF AMENDED & RESTATED TRUST AGREEMENT
SEMCO CAPITAL TRUST
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
SEMCO ENERGY, INC., AS DEPOSITOR,
NBD BANK, AS PROPERTY TRUSTEE
FIRST CHICAGO DELAWARE INC., AS DELAWARE TRUSTEE
AND
ROBERT J. DIGAN, II AND EDRIC R. MASON, JR.,
AS ADMINISTRATIVE TRUSTEES
DATED AS OF
----------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I Defined Terms........................................................................
Section 1.01 Definitions....................................................................
ARTICLE II Establishment of the Trust...........................................................
Section 2.01 Name...........................................................................
Section 2.02 Offices of the Trustees; Principal Place of Business...........................
Section 2.03 Initial Contribution of Trust Property; Organizational
Expenses.......................................................................
Section 2.04 Issuance of the Trust Preferred Securities.....................................
Section 2.05 Subscription and Purchase of Subordinated Debentures;
Issuance of the Trust Common Securities........................................
Section 2.06 Declaration of Trust...........................................................
Section 2.07 Authorization to Enter into Certain Transactions...............................
Section 2.08 Assets of Trust................................................................
Section 2.09 Title to Trust Property........................................................
Section 2.10 Mergers and Consolidations of the Trust........................................
ARTICLE III Payment Account......................................................................
Section 3.01 Payment Account................................................................
ARTICLE IV Distributions; Redemption............................................................
Section 4.01 Distributions .................................................................
Section 4.02 Redemption.....................................................................
Section 4.03 Subordination of Trust Common Securities.......................................
Section 4.04 Payment Procedures.............................................................
Section 4.05 Tax Returns and Reports........................................................
ARTICLE V Trust Securities Certificates .......................................................
Section 5.01 Initial Ownership..............................................................
Section 5.02 The Trust Securities Certificates..............................................
Section 5.03 Authentication of Trust Securities Certificates................................
Section 5.04 Registration of Transfer and Exchange of Preferred
Securities Certificates........................................................
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates...................................................................
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Section 5.06 Persons Deemed Securityholders.................................................
Section 5.07 Access to List of Securityholders' Names and Addresses.........................
Section 5.08 Maintenance of Office or Agency................................................
Section 5.09 Appointment of Paying Agent....................................................
Section 5.10 Ownership of Trust Common Securities by Depositor..............................
Section 5.11 Book-Entry Trust Preferred Securities Certificates; Common
Securities Certificate.........................................................
Section 5.12 Notices to Clearing Agency.....................................................
Section 5.13 Definitive Trust Preferred Securities Certificates.............................
Section 5.14 Rights of Securityholders......................................................
ARTICLE VI Acts of Securityholders; Meetings; Voting............................................
Section 6.01 Limitations on Voting Rights...................................................
Section 6.02 Notice of Meetings.............................................................
Section 6.03 Meetings of Trust Preferred Securityholders....................................
Section 6.04 Voting Rights..................................................................
Section 6.05 Proxies, etc...................................................................
Section 6.06 Securityholder Action by Written Consent.......................................
Section 6.07 Record Date for Voting and Other Purposes......................................
Section 6.08 Acts of Securityholders........................................................
Section 6.09 Inspection of Records..........................................................
ARTICLE VII Representations and Warranties of the Property Trustee
and Delaware Trustee...........................................................
Section 7.01 Representations and Warranties of the Property Trustee
and Delaware Trustee...........................................................
Section 7.02 Representations and Warranties of Depositor ...................................
ARTICLE VIII The Trustees.........................................................................
Section 8.01 Certain Duties and Responsibilities............................................
Section 8.02 Notice of Defaults.............................................................
Section 8.03 Certain Rights of Property Trustee.............................................
Section 8.04 Not Responsible for Recitals or Issuance of Securities.........................
Section 8.05 Trustee May Hold Securities....................................................
Section 8.06 Compensation; Fees; Indemnity..................................................
Section 8.07 Trustees Required; Eligibility.................................................
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
Section 8.08 Conflicting Interests..........................................................
Section 8.09 Co-Property Trustees and Separate Trustee......................................
Section 8.10 Resignation and Removal; Appointment of Successor..............................
Section 8.11 Acceptance of Appointment by Successor.........................................
Section 8.12 Merger, Conversion, Consolidation or Succession
to Business....................................................................
Section 8.13 Preferential Collection of Claims Against Depositor
or Trust.......................................................................
Section 8.14 Reports by Property Trustee....................................................
Section 8.15 Reports to the Property Trustee................................................
Section 8.16 Evidence of Compliance with Conditions Precedent...............................
Section 8.17 Number of Trustees.............................................................
Section 8.18 Delegation of Power............................................................
Section 8.19 Enforcement of Rights of Property Trustee by
Securityholders................................................................
ARTICLE IX Termination and Liquidation..........................................................
Section 9.01 Termination Upon Expiration Date...............................................
Section 9.02 Early Termination..............................................................
Section 9.03 Termination....................................................................
Section 9.04 Liquidation....................................................................
Section 9.05 Bankruptcy.....................................................................
ARTICLE X Miscellaneous Provisions.............................................................
Section 10.01 Guarantee by the Depositor.....................................................
Section 10.02 Limitation of Rights of Securityholders........................................
Section 10.03 Amendment......................................................................
Section 10.04 Separability...................................................................
Section 10.05 Governing Law..................................................................
Section 10.06 Notice of Deferral of Distribution.............................................
Section 10.07 Headings.......................................................................
Section 10.08 Notice and Demand..............................................................
Section 10.09 Agreement Not to Petition......................................................
Section 10.10 Conflict with Trust Indenture Act..............................................
Section 10.11 Successors.....................................................................
</TABLE>
<PAGE> 5
EXHIBIT A - Certificate of Trust
EXHIBIT B - Form of Expense Agreement
EXHIBIT C - Form of Trust Common Securities Certificate
EXHIBIT D - Form of Trust Preferred Securities Certificate
<PAGE> 6
SEMCO CAPITAL TRUST
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Act Trust Agreement
Section Section
- ------- -------
<S> <C>
Section 310(a)(1).................................... 8.07
(a)(2).......................................... 8.07
(a)(3).......................................... 8.09
(a)(4).......................................... Not Applicable
(b)............................................. 8.08
Section 311(a)....................................... 8.13
(b)............................................. 8.13
Section 312(a)....................................... 5.07
(b)............................................. 5.07
(c)............................................. 5.07
Section 313(a)....................................... 8.14
(a)(4).......................................... 8.14(b)
(b)............................................. 8.14(b)
(c)............................................. 8.14(c)
(d)............................................. 8.14(b), 8.14(c)
Section 3.14(a)...................................... 8.15
(b)............................................. Not Applicable
(c)(1).......................................... 8.15, 8.16
(c)(2).......................................... 8.16
(c)(3).......................................... 8.16
(d)............................................. Not Applicable
(e)............................................. 8.16
Section 315(a)....................................... 8.01
(b)............................................. 8.02, 8.14(b)
(c)............................................. 8.01(a)
(d)............................................. 8.01, 8.03
(e)............................................. Not Applicable
Section 316(a)....................................... Not Applicable
(a)(1)(A)....................................... 8.19
(a)(1)(B)....................................... 8.19
(a)(2).......................................... Not Applicable
(b)............................................. Not Applicable
(c)............................................. Not Applicable
Section 317(a)(1).................................... Not Applicable
(a)(2).......................................... Not Applicable
(b)............................................. 5.09
Section 318(a)....................................... 10.10
</TABLE>
Note: This Cross-Reference Table does not constitute part of the Trust
Agreement and shall not affect the interpretation of any of its terms and
provisions.
<PAGE> 7
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT is made as of ____________,
1998 by and among (i) SEMCO Energy, Inc., a Michigan corporation (the
"Depositor" or the "Corporation"), (ii) NBD Bank, a banking corporation duly
organized and existing under the laws of the State of Michigan, as trustee (the
"Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iii) First Chicago Delaware Inc., a
corporation duly organized under the laws of the State of Delaware, as Delaware
trustee (the "Delaware Trustee" and in its separate corporate and not in its
capacity as Delaware Trustee, the "Delaware Corporation"), (iv) Robert J. Digan,
III, an individual, and Edric R. Mason, Jr., an individual, as administrative
trustees (each an "Administrative Trustee" and together the "Administrative
Trustees") (the Property Trustee, the Delaware Trustee and the Administrative
Trustees referred to collectively as the "Trustees") and (v) the several
Holders, as hereinafter defined.
WITNESSETH:
WHEREAS, the Depositor and certain of the Trustees have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by the execution and filing with the Secretary of State of the State
of Delaware of the Certificate of Trust, dated __________ ___, 1998 (the
"Certificate of Trust") and by the entering into that certain Trust Agreement,
dated as of June ___, 1998 (the "Original Trust Agreement"), and
WHEREAS, the parties hereto desire to amend and restate the Original
Trust Agreement in its entirety as set forth herein to provide for, among other
things, (i) the addition of the Bank, as trustee of the Trust, (ii) the
acquisition by the Trust from the Depositor of all of the right, title and
interest in certain subordinated debentures of the Depositor, (iii) the issuance
of the Trust Common Securities by the Trust to the Depositor, and (iv) the
issuance and sale of the Trust Preferred Securities by the Trust pursuant to the
Underwriting Agreement.
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
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ARTICLE I
DEFINED TERMS
Section 1.01 Definitions. For all purposes of this Trust Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, an amount equal to the Additional
Interest (as defined in clause (ii) of the definition of "Additional Interest"
in the Subordinated Debenture Indenture) paid by the Depositor on a Like Amount
of Subordinated Debentures for such period.
"Administrative Trustee" means each of the individuals identified as an
"Administrative Trustee" in the preamble to this Trust Agreement solely in their
capacities as Administrative Trustees of the Trust formed and continued
hereunder and except as specifically provided to the contrary herein and not in
their individual capacities, or such trustee's successor(s) in interest in such
capacity, or any successor "Administrative Trustee" appointed as herein
provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition, control
when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of such Person in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging such
Person a bankrupt or insolvent, or approving as properly filed a petition
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seeking reorganization, arrangement, adjustment or composition of or in respect
of such Person under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of such Person or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 90 consecutive days; or
(ii) the commencement by such Person of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of such Person in an involuntary case or proceeding under
any applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal or state law, or
the consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Corporation or of any substantial
part of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the authorization of any such action by the
board of directors of such Person.
"Bankruptcy Laws" has the meaning specified in Section 10.09.
"Beneficiaries" has the meaning specified in Section 10.01.
"Board Resolution" means a resolution or a copy thereof certified by
the Secretary or an Assistant Secretary of the Depositor to have been duly
adopted by the Depositor's Board of Directors or a duly authorized committee
thereof and to be in full force and effect on the date of such certification,
and delivered to the Trustees.
"Book-Entry Trust Preferred Securities Certificates" means certificates
representing Trust Preferred Securities issued in global, fully registered form
to the Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii)
a day on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office or the Indenture Trustee's principal corporate trust office is closed for
business.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. The Depository Trust
Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for which from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency pursuant to the rules of such Clearing Agency or an agreement
between the Clearing Agency and such Person in the customary form.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act then the body
performing such duties at such time.
"Corporate Trust Office" means the office of the Property Trustee
located in Detroit, Michigan at which its corporate trust business shall be
principally administered.
"Corporation" means SEMCO Energy, Inc., its successors and assigns.
"Debenture Indenture Event of Default" means an "Event of Default" as
defined in the Subordinated Debenture Indenture with respect to the Subordinated
Debentures.
"Debenture Indenture Redemption Date" means "Redemption Date", as
defined in the Subordinated Debenture Indenture.
"Definitive Trust Preferred Securities Certificates" means either or
both (as the context requires) of (i) Trust Preferred Securities Certificates
issued in certificated, fully registered form as provided in Section 5.11(a) and
(ii) Trust Preferred Securities Certificates issued in certificated, fully
registered form as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time.
"Delaware Corporation" means First Chicago Delaware Inc. in its
separate corporate capacity.
"Delaware Trustee" means the corporation identified as the "Delaware
Trustee" and has the meaning specified in the preamble to this Trust Agreement
solely in its capacity as Delaware Trustee of the Trust formed and continued
hereunder and except as specifically provided to the contrary herein, not in its
individual capacity, or its successor in interest in such capacity, or any
successor Delaware Trustee appointed as herein provided.
"Depositor" means SEMCO Energy, Inc., in its capacity as "Depositor"
under this Trust Agreement, its successors and assigns.
"Distribution Date" has the meaning specified in Section 4.01(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"Early Termination Event" has the meaning specified in Section 9.02.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of
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law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Indenture Event of Default; or
(ii) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of 30
days; or
(iii) default by the Trust in the payment of any Redemption Price of
any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, of any covenant or
warranty of the Trustees in this Trust Agreement (other than a covenant or
warranty a default in whose performance or breach is dealt with in clause (ii)
or (iii) above) and continuation of such default or breach for a period of 60
days after there has been given, by registered or certified mail, to the
Trustees by the Holders of at least 25% in Liquidation Amount of the Outstanding
Trust Preferred Securities a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(v) the occurrence of a Bankruptcy Event with respect to the Trust.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Corporation and the Trust, substantially in the form attached as
Exhibit B, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation, with a similar purpose and
effect.
"Extension Period" has the meaning specified in Section 4.01(b).
"Indenture Trustee" means the trustee under the Subordinated Debenture
Indenture.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Issue Date" means the date of the original issuance and delivery of
the Trust Securities by the Administrative Trustees.
"Legal Action" has the meaning specified in Section 2.07(A)(iv).
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (i) Trust Securities having a Liquidation Amount
equal to the principal amount of Subordinated Debentures to be contemporaneously
redeemed in
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accordance with the Subordinated Debenture Indenture and the proceeds of which
will be used to pay the Redemption Price of such Trust Securities and (ii)
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the Holder to whom such Subordinated
Debentures are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Liquidation Date" means the date on which Subordinated Debentures are
to be distributed to Holders of Trust Securities in connection with a
liquidation of the Trust pursuant to Section 9.04.
"Liquidation Distribution" has the meaning specified in Section 9.05.
"Obligations" has the meaning specified in Section 10.01.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Depositor, and
delivered to the appropriate Trustee. One of the officers signing an Officers'
Certificate to be delivered by the Depositor pursuant to Section 8.16 shall be
the principal executive, financial or accounting officer of the Depositor. An
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in the Officers'
Certificate are based;
(c) a statement that, in the opinion of each such officer, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"OID" means "original issue discount" as that term or any substantially
similar subsequent term is defined in the Internal Revenue Code of 1986, as
amended.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Trustees or the Depositor, but not an employee of the
Trust or the Trustees, and who shall be reasonably acceptable to the Property
Trustee. Any Opinion of Counsel pertaining to federal income tax matters may
rely on published rulings of the Internal Revenue Service.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
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"Outstanding", when used with respect to Trust Preferred Securities,
means, as of the date of determination, all Trust Preferred Securities
theretofore authenticated and delivered under this Trust Agreement, except:
(i) Trust Preferred Securities theretofore canceled by the
Administrative Trustees or delivered to the Administrative Trustees for
cancellation;
(ii) Trust Preferred Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Property Trustee
or any Paying Agent for the Holders of such Trust Preferred Securities; provided
that if such Trust Preferred Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Trust Agreement or provision
therefor satisfactory to the Property Trustee has been made; and
(iii) Trust Preferred Securities in exchange for or in lieu of which
other Trust Preferred Securities have been authenticated and delivered pursuant
to this Trust Agreement; provided, however, that in determining whether the
Holders of the requisite Liquidation Amount of the Outstanding Trust Preferred
Securities have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Trust Preferred Securities owned, whether of record
or beneficially, by the Depositor, the Holder of the Trust Common Securities,
any Administrative Trustee or any Affiliate of the Depositor or any
Administrative Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Trust Preferred Securities which such Trustee knows to be so owned
shall be so disregarded and (b) the foregoing shall not apply at any time when
all of the outstanding Trust Preferred Securities are owned by the Depositor,
the Holder of the Trust Common Securities, one or more Administrative Trustees
and/or any such Affiliate. Trust Preferred Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Administrative Trustees the pledgee's right so to act
with respect to such Trust Preferred Securities and that the pledgee is not the
Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Trust Preferred Securities Certificate as reflected in the records of the
Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such Clearing
Agency (directly or indirectly, in accordance with the rules of such Clearing
Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.09 and shall initially be the Property Trustee.
"Payment Account" means a segregated non-interest-bearing corporate
trust account established pursuant to Section 3.01 and maintained by the
Property Trustee for the benefit of the Securityholders in which all amounts
paid in respect of the Subordinated Debentures will be held and from which the
Property Trustee shall make payments to the Securityholders in accordance with
Section 4.01.
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"Person" means an individual, corporation, partnership, joint venture,
trust, estate, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust formed and continued
hereunder and except as specifically provided to the contrary herein not in its
individual capacity, or its successor in interest in such capacity, or any
successor "Property Trustee" as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Indenture Redemption Date shall be a
Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any date fixed for redemption
of any Trust Security, the Liquidation Amount of such Trust Security, plus
accrued and unpaid Distributions to such date.
"Relevant Trustee" has the meaning specified in Section 8.10.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation with a similar purpose and effect.
"Security Register" and "Security Registrar" are described in Section
5.04.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security is or Securities are registered in the Security Register; any such
Person is a beneficial owner within the meaning of the Delaware Business Trust
Act.
"Subordinated Debentures" means the $_________ aggregate principal
amount of the Depositor's Series _____ % Subordinated Debentures due _____,
_____ issued pursuant to the Subordinated Debenture Indenture.
"Subordinated Debenture Indenture" means the Subordinated Debenture
Indenture, dated as of ______________, between the Depositor and the Indenture
Trustee, as supplemented by the Supplemental Indenture.
"Successor Securities" has the meaning specified in Section 2.10.
"Supplemental Indenture" means the Indenture, dated as of
_________________, by and between the Depositor and the Indenture Trustee for
the purpose of supplementing the Subordinated Debenture Indenture entered into
in connection with the Subordinated Debentures.
"Trust" means the Delaware business trust continued hereby and
identified on the cover page to this Trust Agreement.
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"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for an
purposes of this Amended and Restated Trust Agreement and any modification,
amendment or supplement, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this Amended and Restated Trust Agreement and
any such modification, amendment or supplement, respectively.
"Trust Common Securities Certificate" means a certificate evidencing
ownership of a Trust Common Security or Securities, substantially in the form
attached as Exhibit C.
"Trust Common Security" means an undivided beneficial ownership
interest in the assets of the Trust having a Liquidation Amount of $25 and
having the rights provided therefor in this Trust Agreement, including the right
to receive Distributions and a Liquidation Distribution as provided herein.
"Trustees" means the Persons identified as "Trustees" in the preamble
to this Trust Agreement solely in their capacities as Trustees of the Trust
formed hereunder and except as specifically provided to the contrary herein not
in their individual capacities, or any successor in interest in such capacity,
or any successor trustee appointed as herein provided.
"Trust Guarantee" means the Trust Guarantee Agreement executed and
delivered by the Corporation and NBD Bank, as Guarantee Trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Trust Preferred Securities, as amended from
time to time.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Preferred Securities Certificate" means a certificate evidencing
ownership of a Trust Preferred Security or Securities, substantially in the form
attached as Exhibit D.
"Trust Preferred Security" means an undivided beneficial ownership
interest in the assets of the Trust having a Liquidation Amount of $25 and
having rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution as provided herein.
"Trust Property" means (i) the Subordinated Debentures, (ii) any cash
on deposit in, or amounts owing to, the Payment Account, and (iii) all proceeds
and rights in respect of the foregoing and any other property and assets for the
time being held or deemed to be held by the Property Trustee pursuant to this
Trust Agreement.
"Trust Securities Certificate" means any one of the Trust Common
Securities Certificates or the Trust Preferred Securities Certificates.
"Trust Security" means any one of the Trust Common Securities or the
Trust Preferred Securities.
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"Underwriting Agreement" means the Underwriting Agreement, dated as of
___________________ among the Trust, the Depositor and the underwriters named
therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
Section 2.01 Name. The Trust continued hereby shall be known as "SEMCO
Capital Trust" in which name the Trustees may conduct the business of the Trust,
make and execute contracts and other instruments on behalf of the Trust and sue
and be sued. The Administrative Trustees may change the name of the Trust from
time to time following written notice to the Holders.
Section 2.02 Offices of the Trustees; Principal Place of Business. The
address of the Property Trustee is NBD Bank, Corporate Trust Administration,
11th Floor - Suite 8110, 611 Woodward Avenue, Detroit, Michigan 48226, or at
such other address as the Property Trustee may designate by written notice to
the Securityholders and the Depositor. The principal place of business of the
Delaware Trustee is First Chicago Delaware Inc., 300 King Street, Wilmington,
Delaware 19801, or at such other address in Delaware as the Delaware Trustee may
designate by notice to the Depositor. The address of the Administrative Trustees
is c/o SEMCO Energy, Inc., 405 Water Street, P.O. Box 5026, Port Huron, Michigan
48061-5026, Attention: Edric R. Mason, Jr. The principal place of business of
the Trust is c/o SEMCO Energy, Inc., 405 Water Street, P.O. Box 5026, Port
Huron, Michigan 48061-5026. The Depositor may change the principal place of
business of the Trust at any time by giving notice thereof to the Trustees.
Section 2.03 Initial Contribution of Trust Property; Organizational
Expenses. The Trustees acknowledge receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of the Trustees,
promptly reimburse the Trustees for any such expenses paid by the Trustees. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 2.04 Issuance of the Trust Preferred Securities.
Contemporaneously with the execution and delivery of this Trust Agreement, the
Administrative Trustees, on behalf of the Trust, shall execute and deliver to
the underwriters named in the Underwriting Agreement Trust Preferred Securities
Certificates, registered in the name of the nominee of the initial Clearing
Agency, in an aggregate amount of Trust Preferred Securities having an aggregate
Liquidation Amount of $_________ (the "Trust Preferred Securities") against
receipt of the aggregate purchase price of such Trust Preferred Securities of
$__________, which amount the Administrative Trustees shall promptly deliver to
the Property Trustee.
Section 2.05 Subscription and Purchase of Subordinated Debentures;
Issuance of the Trust Common Securities. Contemporaneously with the execution
and delivery of this Trust Agreement, the Administrative Trustees, on behalf of
the Trust, shall execute and deliver to the Depositor Trust Common Securities
Certificates, registered in the name of the Depositor, in an
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aggregate amount of Trust Common Securities having an aggregate Liquidation
Amount of $__________ against payment by the Depositor of such amount.
Contemporaneously therewith, the Administrative Trustees, on behalf of the
Trust, shall subscribe to and purchase from the Depositor Subordinated
Debentures, registered in the name of the Property Trustee, on behalf of the
Trust and the Holders, and having an aggregate principal amount equal to
$___________ and, in satisfaction of the purchase price for such Subordinated
Debentures, the Property Trustee, on behalf of the Trust, shall deliver to the
Depositor the sum of $___________.
Section 2.06 Declaration of Trust. The exclusive purposes and functions
of the Trust are (i) to issue and sell the Trust Securities, (ii) to use the
proceeds from such sale to acquire the Subordinated Debentures, and (iii) to
engage in only those other activities necessary, appropriate, convenient or
incidental thereto. The Depositor hereby appoints each of the Bank, the Delaware
Trustee, Robert J. Digan, II, and Edric R. Mason, Jr., as trustees of the Trust,
to have all the rights, powers and duties to the extent set forth herein. The
Property Trustee hereby declares that it will hold the Trust Property upon and
subject to the conditions set forth herein subject to the conditions set forth
herein for the benefit of the Trust and the Securityholders. The Trustees shall
have all rights, powers and duties set forth herein and in accordance with
applicable law with respect to accomplishing the purposes of the Trust. Except
as may be required under the Delaware Business Trust Act, the Delaware Trustee
shall not be entitled to exercise any powers, nor shall the Delaware Trustee
have any of the duties and responsibilities of any other Trustee set forth
herein. The Delaware Trustee shall be one of the Trustees for the sole and
limited purpose of fulfilling the requirements of Section 3807(a) of the
Delaware Business Trust Act. The Delaware Trustee, as the trustee under the
Original Trust Agreement, has filed the Certificate of Trust of the Trust with
the office of the Secretary of State of the State of Delaware, a copy of which
is attached hereto as Exhibit A, and such filing is hereby confirmed and
ratified.
Section 2.07 Authorization to Enter into Certain Transactions. The
Trustees shall conduct the affairs of the Trust in accordance with the terms of
this Trust Agreement. Subject to the limitations set forth in paragraph (C) of
this Section, and in accordance with the following paragraphs (A) and (B), the
Trustees shall have the authority to enter into all transactions and agreements
determined by the Trustees to be appropriate in exercising the authority,
express (in the case of the Property Trustee) or implied, otherwise granted to
the Trustees under this Trust Agreement, and to perform all acts in furtherance
thereof, including without limitation, the following:
(A) As among the Trustees, the Administrative Trustees, acting singly
or jointly, shall have the exclusive power, duty and authority to act on behalf
of the Trust with respect to the following matters:
(i) to acquire the Subordinated Debentures with the proceeds of the
sale of the Trust Securities; provided, however, the Administrative Trustees
shall cause legal title to all of the Subordinated Debentures to be vested in,
and the Subordinated Debentures to be held of record in the name of, the
Property Trustee for the benefit of the Trust and the Holders of the Trust
Securities;
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(ii) to deliver to the Depositor and the Property Trustee prompt
written notice of the occurrence of any Special Event (as defined in the
Supplemental Indenture) and to take any ministerial actions in connection
therewith; provided that the Administrative Trustees shall consult with the
Depositor and the Property Trustee before taking or refraining to take any
ministerial action in relation to a Special Event;
(iii) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including for the
purposes of Section 316(c) of the Trust Indenture Act and with respect to
Distributions, voting rights, redemptions, and exchanges, and to issue relevant
notices to Holders of the Trust Securities as to such actions and applicable
record dates;
(iv) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 2.07(B)(v), the Property Trustee
has the power to bring such Legal Action;
(v) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(vi) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(vii) to give the certificate to the Property Trustee required by
Section 314(a)(4) of the Trust Indenture Act, which certificate may be executed
by any Administrative Trustee;
(viii) to take all actions and perform such duties as may be required
of the Administrative Trustees pursuant to the terms of this Trust Agreement;
(ix) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Trust
Securities or to enable the Trust to effect the purposes for which the Trust has
been created;
(x) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Administrative Trustees, on
behalf of the Trust;
(xi) to issue and sell the Trust Securities;
(xii) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Expense Agreement and such other agreements
as may be necessary or desirable in connection with the consummation hereof;
(xiii) to assist in the registration of the Trust Preferred Securities
under the Securities Act and under state securities or blue sky laws, and the
qualification of the Trust Agreement as a trust indenture under the Trust
Indenture Act;
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(xiv) to assist in the listing of the Trust Preferred Securities upon
the NASDAQ National Market and such securities exchange or exchanges as shall be
determined by the Depositor and, if required, the registration of the Trust
Preferred Securities under the Exchange Act, and the preparation and filing of
all periodic and other reports and other documents pursuant to the foregoing;
(xv) to send notices (other than notices of default) and other
information regarding the Trust Securities and the Subordinated Debentures to
the Securityholders in accordance with this Trust Agreement;
(xvi) to appoint a Paying Agent (subject to Section 5.09),
authenticating agent and Security Registrar in accordance with this Trust
Agreement;
(xvii) to register transfers of the Trust Securities in accordance
with this Trust Agreement;
(xviii) to assist in the winding up of the affairs of and termination
of the Trust as provided in this Trust Agreement; and
(xix) to take any action incidental to the foregoing as the
Administrative Trustees may from time to time determine is necessary,
appropriate, convenient or advisable to protect and conserve the Trust Property
for the benefit of the Securityholders (without consideration of the effect of
any such action on any particular Securityholder).
(B) As among the Trustees, the Property Trustee shall have the
exclusive power, duty and authority to act on behalf of the Trust with respect
to the following matters:
(i) engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Trust Securities to the
extent the Subordinated Debentures are redeemed or mature;
(ii) upon notice of distribution issued by the Administrative
Trustees in accordance with the terms of this Trust Agreement, engage in such
ministerial activities as shall be necessary or appropriate to effect promptly
the distribution pursuant to the terms of this Trust Agreement of Subordinated
Debentures to Holders of Trust Securities;
(iii) subject to the terms hereof, exercise all of the rights, powers
and privileges of a holder of the Subordinated Debentures under the Subordinated
Debenture Indenture and, if an Event of Default occurs and is continuing,
enforce for the benefit of, and subject to the rights of, the Holders of the
Trust Securities, its rights as holder of the Subordinated Debentures under the
Subordinated Debenture Indenture;
(iv) take all actions and perform such duties as may be specifically
required of the Property Trustee pursuant to the terms of this Trust Agreement;
(v) take any Legal Action which arises out of or in connection with
an Event of Default or the Property Trustee's duties and obligations under this
Trust Agreement, the Delaware Business Trust Act or the Trust Indenture Act;
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(vi) the establishment and maintenance of the Payment Account;
(vii) the receipt of and holding of legal title to the Subordinated
Debentures as described herein;
(viii) the collection of interest, principal and any other payments
made in respect of the Subordinated Debentures in the Payment Account;
(ix) the distribution of amounts received in the Payment Account and
owed to the Securityholders in respect of the Trust Securities;
(x) the sending of notices of default and other information
regarding the Trust Securities and the Subordinated Debentures to the
Securityholders in accordance with this Trust Agreement;
(xi) the distribution of the Trust Property in accordance with the
terms of this Trust Agreement;
(xii) the winding up of the affairs of and termination of the Trust
as provided in this Trust Agreement, and the preparation, execution and filing
of the certificate of cancellation with the Secretary of State of the State of
Delaware; and
(xiii) the taking of any action incidental to the foregoing as the
Property Trustee may from time to time determine is necessary, appropriate,
convenient or advisable to protect and conserve the Trust Property for the
benefit of the Securityholders (without consideration of the effect of any such
action on any particular Securityholder).
(C) So long as this Trust Agreement remains in effect, the Trust
(or the Trustees acting on behalf of the Trust) shall not undertake any
business, activity or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees acting on behalf of the Trust
shall not (i) acquire any investments or engage in any activities not authorized
by this Trust Agreement, (ii) sell, assign, transfer, exchange, pledge, set-off
or otherwise dispose of any of the Trust Property or interests therein,
including to Securityholders, except as expressly provided herein, (iii) take
any action that would cause the Trust to fail or cease to qualify as a grantor
trust for United States federal income tax purposes, (iv) incur any indebtedness
for borrowed money, (v) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property, (vi) issue any securities
other than the Trust Securities, or (vii) have any power to, or agree to any
action by the Depositor that would, vary the investment (within the meaning of
Treasury Regulation Section 301.7701-4(c)) of the Trust or of the
Securityholders. The Trustees shall defend all claims and demands of all Persons
at any time claiming any Lien on any of the Trust Property adverse to the
interest of the Trust or the Securityholders in their capacity as
Securityholders.
(D) In connection with the issue and sale of the Trust Preferred
Securities, the Depositor shall have the right and responsibility to assist the
Trust with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the date
of this Trust Agreement are hereby ratified and confirmed in all respects):
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(i) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 under the Securities Act in relation to the
Trust Preferred Securities, including any amendments thereto;
(ii) to determine the states in which to take appropriate action to
qualify or register for sale all or part of the Trust Preferred Securities and
to do any and all such acts, other than actions which must be taken by or on
behalf of the Trust, and advise the Trustees of actions they must take on behalf
of the Trust, and prepare for execution and filing any documents to be executed
and filed by the Trust or on behalf of the Trust, as the Depositor deems
necessary or advisable in order to comply with the applicable laws of any such
states;
(iii) to prepare for filing by the Trust an application to any other
national stock exchange or the NASDAQ National Market for listing upon notice of
issuance of any Trust Preferred Securities;
(iv) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the Trust
Preferred Securities under Section 12(b) or 12(g) of the Exchange Act, including
any amendments thereto;
(v) to negotiate the terms of the Underwriting Agreement providing
for the sale of the Trust Preferred Securities and to execute, deliver and
perform the Underwriting Agreement on behalf of the Trust;
(vi) to negotiate the terms of an agreement with the Depository
Trust Company relating to the Trust Preferred Securities and to execute, deliver
and perform the agreement on behalf of the Trust; and
(vii) any other actions necessary, incidental, appropriate or
convenient to carry out any of the foregoing activities.
(E) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company Act,
or taxed as other than a grantor trust for United States federal income tax
purposes and so that the Subordinated Debentures will be treated as indebtedness
of the Depositor for United States federal income tax purposes. In this
connection, the Depositor and the Administrative Trustees are authorized to take
any action, not inconsistent with applicable law, the Certificate of Trust or
this Trust Agreement, that each of the Depositor and the Administrative Trustees
determines in its discretion to be necessary or desirable for such purposes, as
long as such action does not materially and adversely affect the interests of
the Holders of the Trust Preferred Securities.
Section 2.08 Assets of Trust. The assets of the Trust shall consist of
the Trust Property.
Section 2.09 Title to Trust Property. Legal title to all Trust Property
shall be vested at all times in the Property Trustee (in its capacity as such)
and shall be held and administered by the Property Trustee for the benefit of
the Securityholders and the Trust in accordance with this Trust Agreement. The
right, title and interest of the Property Trustee to the Subordinated
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Debentures shall vest automatically in each Person who may thereafter be
appointed as Property Trustee in accordance with the terms hereof. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered.
Section 2.10 Mergers and Consolidations of the Trust. The Trust shall
not consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets substantially as an entirety to any
corporation or other entity, except as described below. The Trust may at the
request of the Corporation, with the consent of the Administrative Trustees and,
unless an Event of Default shall have occurred and be continuing, without the
consent of the Holders, the Property Trustee or the Delaware Trustee,
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any state; provided that (i) such successor entity
either (x) expressly assumes all of the obligations of the Trust with respect to
the Trust Securities or (y) substitutes for the Trust Securities other
securities having substantially the same terms as the Trust Securities (herein
referred to as the "Successor Securities") so long as the Successor Securities
rank the same as the Trust Securities rank in priority with respect to
Distributions and payments upon liquidation, redemption and otherwise, (ii) the
Corporation expressly appoints a trustee of such successor entity possessing
substantially the same powers and duties as the Property Trustee as the holder
of legal title to the Subordinated Debentures, (iii) the Trust Preferred
Securities or any Successor Securities are listed, or any Successor Securities
will be listed upon notification of issuance, on any national securities
exchange or other organization on which the Trust Preferred Securities are then
listed, (iv) such merger, consolidation, amalgamation or replacement does not
cause the Trust Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such consolidation, amalgamation, merger or replacement does not adversely
affect the rights, preferences and privileges of the Holders of the Trust
Securities (including any Successor Securities) in any material respect, (vi)
such successor entity has a purpose substantially identical to that of the
Trust, (vii) prior to such consolidation, amalgamation, merger or replacement,
the Corporation and the Property Trustee have received an Opinion of Counsel
experienced in such matters to the effect that (A) such consolidation,
amalgamation, merger or replacement does not adversely affect the rights,
preferences and privileges of the Holders of the Trust Securities (including any
Successor Securities) in any material respect, and (B) following such
consolidation, amalgamation, merger or replacement, neither the Trust nor such
successor entity will be required to register as an investment company under the
Investment Company Act, and (viii) the Corporation owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Trust Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of Holders of 100% in Liquidation Amount of the Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or the successor entity to be classified as
other than a grantor trust for United States federal income tax purposes.
ARTICLE III
PAYMENT ACCOUNT
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Section 3.01 Payment Account.
(a) On or prior to the Issue Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and an agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit of
the Securityholders and for distribution as herein provided, including (and
subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal or interest on, and any other payments
or proceeds with respect to, the Subordinated Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
Section 4.01 Distributions.
(a) Distributions on the Trust Securities shall be cumulative and
accrue from the Issue Date and, except in the event that the Depositor exercises
its right to extend the interest payment period for the Subordinated Debentures
pursuant to Section 104 of the Supplemental Indenture, shall be payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing on __________, ____. If any date on which Distributions are
otherwise payable on the Trust Securities is not a Business Day, then the
payment of such Distribution shall be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next succeeding calendar
year, payment of such Distribution shall be made on the immediately preceding
Business Day, in each case, with the same force and effect as if made on such
date (each such date, a "Distribution Date").
(b) Distributions payable on the Trust Securities shall be fixed at a
rate of _____% per annum of the Liquidation Amount of the Trust Securities. The
amount of Distributions payable for any full quarterly period shall be computed
on the basis of twelve 30-day months and a 360-day year. If the interest payment
period for the Subordinated Debentures is extended pursuant to Section 104 of
the Supplemental Indenture (an "Extension Period"), then the rate per annum at
which Distributions on the Trust Securities accumulate shall be increased by an
amount such that the aggregate amount of Distributions that accumulate on all
Trust Securities during any such Extension Period is equal to the aggregate
amount of interest (including interest payable on unpaid interest at the
percentage rate per annum set forth above, compounded quarterly, to the extent
permitted by applicable law) that accrues during any such Extension Period on
the Subordinated Debentures. The payment of such deferred interest, together
with interest thereon, will be distributed, if and to the extent funds are
legally available
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therefor, to the Holders of the Trust Securities (as they appear on the books
and records of the Trust on the Record Date next following the termination of
such Extension Period) as received at the end of any Extension Period. The
amount of Distributions payable for any period shall include the Additional
Amounts, if any.
(c) Distributions on the Trust Securities shall be made and shall
be deemed payable on each Distribution Date only to the extent that the Trust
has legally and immediately available funds in the Payment Account for the
payment of such Distributions.
(d) Distributions (including Additional Amounts, if any) on the
Trust Securities on each Distribution Date shall be payable to the Holders
thereof as they appear on the Security Register for the Trust Securities on the
relevant record date, which shall be the close of business on the fifteenth
calendar day prior to the relevant Distribution Date. Each Trust Security, upon
registration of transfer of or in exchange for or in lieu of any other Trust
Security, shall carry the rights of Distributions accrued (including Additional
Amounts, if any) and unpaid, and to accrue (including Additional Amounts, if
any), which were carried by such other Trust Security.
Section 4.02 Redemption.
(a) On each Redemption Date with respect to the Subordinated
Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. Any notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the total Liquidation Amount of the Trust Securities to be redeemed;
and
(v) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and the
Distributions thereon will cease to accrue on and after such date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Subordinated Debentures. Redemptions of the Trust Securities shall
be made and the Redemption Price shall be deemed payable on each Redemption Date
only to the extent that the Trust has funds legally and immediately available in
the Payment Account for the payment of such Redemption Price.
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(d) If the Property Trustee gives a notice of redemption in respect
of any Trust Preferred Securities which notice when given shall become
irrevocable, then, by 2:00 P.M. New York City time, on the Redemption Date,
subject to Section 4.02(c), the Property Trustee will, so long as the Trust
Preferred Securities are in book-entry only form, irrevocably deposit with the
Clearing Agency for the Trust Preferred Securities funds sufficient to pay the
applicable Redemption Price. If the Trust Preferred Securities are not in
book-entry only form, the Property Trustee, subject to Section 4.02(c), shall
irrevocably deposit with the Paying Agent funds sufficient to pay the applicable
Redemption Price and will give the Paying Agent irrevocable instructions to pay
the Redemption Price to the Holders thereof upon surrender of their Trust
Preferred Securities Certificates. Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date for any Trust Securities called for
redemption shall be payable to the Holders of such Trust Securities as they
appear on the Security Register for the Trust Securities on the relevant record
dates for the related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then immediately prior to the close
of business on the date of such deposit, all rights of Securityholders holding
Trust Securities so called for redemption will cease, except the right of such
Securityholders to receive the Redemption Price, but without interest, and such
Securities will cease to be outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date shall be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, payment of such Redemption Price shall be made on the immediately
preceding Business, Day, in each case, with the same force and effect as if made
on such date. In the event that payment of the Redemption Price in respect of
Trust Securities is improperly withheld or refused and not paid either by the
Trust or by the Depositor pursuant to the Trust Guarantee, Distributions on such
Trust Securities will continue to accrue at the then applicable rate, from such
Redemption Date originally established by the Trust for such Trust Preferred
Securities to the date such Redemption Price is actually paid.
(e) Payment of the Redemption Price on the Trust Securities shall be
made to the recordholders thereof as they appear on the Security Register for
the Trust Securities on the relevant record date, which shall be the close of
business on the fifteenth calendar day prior to the Redemption Date.
(f) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated 3% to the Trust Common Securities
and 97% to the Trust Preferred Securities, with such adjustments that each
amount so allocated shall be divisible by $25. The particular Trust Preferred
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Property Trustee from the Outstanding Trust Preferred
Securities not previously called for redemption, by such method as the Property
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to $25 or integral multiples thereof of the
Liquidation Amount of Trust Preferred Securities of a denomination larger than
$25); provided, however, that before undertaking redemption of the Trust
Preferred Securities on other than a pro rata basis, the Property Trustee shall
have received an Opinion of Counsel that the status of the Trust as a grantor
trust for United States federal income tax purposes would not be adversely
affected. The Property
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Trustee shall promptly notify the Security Registrar in writing of the Trust
Preferred Securities selected for redemption and, in the case of any Trust
Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of Trust
Preferred Securities shall relate, in the case of any Trust Preferred Securities
redeemed or to be redeemed only in part, to the portion of the Liquidation
Amount of Trust Preferred Securities which has been or is to be redeemed.
(g) Subject to the foregoing provisions of this Section 4.02 and to
applicable law (including, without limitation, United States federal securities
laws), the Corporation or its Affiliates may, at any time and from time to time,
purchase outstanding Trust Preferred Securities by tender, in the open market or
by private agreement.
Section 4.03 Subordination of Trust Common Securities.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made pro rata based on the respective Liquidation Amounts
of the applicable Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date a Debenture Indenture Event of Default
shall have occurred and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price of, any Trust Common
Security, and no other payment on account of the redemption, liquidation or
other acquisition of Trust Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions (including Additional
Amounts, if applicable) on all Outstanding Trust Preferred Securities for all
distribution periods terminating on or prior thereto, or in the case of payment
of the Redemption Price the full amount of such Redemption Price on all
Outstanding Trust Preferred Securities, shall have been made or provided for,
and in funds immediately available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or the Redemption Price of, Trust
Preferred Securities then due and payable.
(b) In the case of the occurrence of any Debenture Indenture Event
of Default, the Holder of Trust Common Securities will be deemed to have waived
any such Event of Default under this Trust Agreement until the effect of all
such Events of Default with respect to the Trust Preferred Securities have been
cured, waived or otherwise eliminated. Until any such Events of Default under
this Trust Agreement with respect to the Trust Preferred Securities have been so
cured, waived or otherwise eliminated, the Property Trustee shall act solely on
behalf of the Holders of the Trust Preferred Securities and not the Holder of
the Trust Common Securities, and only the Holders of the Trust Preferred
Securities will have the right to direct the Property Trustee to act on their
behalf.
Section 4.04 Payment Procedures. Payments in respect of the Trust
Preferred Securities shall be made by check mailed to the address of the Person
entitled thereto as such address shall appear on the Security Register or, if
the Trust Preferred Securities are held by a Clearing Agency, such Distributions
shall be made to the Clearing Agency, which shall credit the relevant Persons'
accounts at such Clearing Agency on the applicable distribution dates.
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Payments in respect of the Trust Common Securities shall be made in such manner
as shall be mutually agreed between the Property Trustee and the Holder of the
Trust Common Securities.
Section 4.05 Tax Returns and Reports. The Administrative Trustee(s)
shall prepare (or cause to be prepared), at the Depositor's expense, and file
all United States federal, state and local tax and information returns and
reports required to be filed by or in respect of the Trust. The Administrative
Trustee(s) shall provide or cause to be provided on a timely basis to each
Holder any Internal Revenue Service form required to be so provided in respect
of the Trust Securities.
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 5.01 Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.03 and until the issuance of
the Trust Securities, and at any time during which no Trust Securities are
outstanding, the Depositor shall be the sole beneficial owner of the Trust.
Section 5.02 The Trust Securities Certificates. Each of the Trust
Preferred and Trust Common Securities Certificates shall be issued by the
Administrative Trustees in minimum denominations of $25 and integral multiples
in excess thereof. The Trust Securities Certificates shall be executed on behalf
of the Trust by manual or facsimile signature of at least one Administrative
Trustee. Trust Securities Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust, shall be validly issued
and entitled to the benefits of this Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Trust Securities Certificates or did not
hold such offices at the date of authentication and delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.04.
Section 5.03 Authentication of Trust Securities Certificates. On the
Issue Date, the Administrative Trustees shall cause Trust Securities
Certificates, in an aggregate Liquidation Amount as provided in Sections 2.04
and 2.05, to be executed on behalf of the Trust, authenticated and delivered to
or upon the written order of the Depositor signed by its Chairman of the Board,
its President or any Vice President, without further corporate action by the
Depositor, in authorized denominations. No Trust Securities Certificate shall
entitle its Holder to any benefit under this Trust Agreement, or shall be valid
for any purpose, unless there shall appear on such Trust Securities Certificate
a certificate of authentication substantially in the form set forth in Exhibit D
or Exhibit C, as applicable, executed by at least one Administrative Trustee by
manual signature; such authentication shall constitute conclusive evidence that
such Trust Securities Certificate shall have been duly authenticated and
delivered hereunder. All Trust Securities Certificates shall be dated the date
of their authentication.
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Section 5.04 Registration of Transfer and Exchange of Trust Preferred
Securities Certificates. The Security Registrar shall keep or cause to be kept,
at the office or agency maintained pursuant to Section 5.08, a Security Register
in which, subject to such reasonable regulations as it may prescribe, the
Security Registrar shall provide for the registration of Trust Preferred
Securities Certificates and the Trust Common Securities Certificates (subject to
Section 5.10 in the case of the Trust Common Securities Certificates) and
registration of transfers and exchanges of Trust Preferred Securities
Certificates as herein provided. The Property Trustee shall be the initial
Security Registrar.
Upon surrender for registration of transfer of any Trust Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.08, the Administrative Trustees shall execute, authenticate and deliver in the
name of the designated transferee or transferees, one or more new Trust
Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of authentication by the
Administrative Trustee or Trustees. The Security Registrar shall not be required
to register the transfer of any Trust Preferred Securities that have been called
for redemption. At the option of a Holder, Trust Preferred Securities
Certificates may be exchanged for other Trust Preferred Securities Certificates
in authorized denominations of the same class and of a like aggregate
Liquidation Amount upon surrender of the Trust Preferred Securities Certificates
to be exchanged at the office or agency maintained pursuant to Section 5.08.
Every Trust Preferred Securities Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Administrative Trustees and
the Security Registrar duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Trust Preferred Securities Certificate
surrendered for registration of transfer or exchange shall be canceled and
subsequently disposed of by the Security Registrar in accordance with its
customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Preferred Securities Certificates, but the Security Registrar
or the Administrative Trustees may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Trust Preferred Securities Certificates.
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Security Registrar, or if the Security Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Security
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees or any one of them on behalf of the Trust
shall execute and authenticate and make available for delivery, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities
Certificate, a new Trust Securities Certificate of like class, tenor and
denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section, the Administrative Trustees or the Security
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Trust Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an
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ownership interest in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Trust Securities Certificate shall be found at any
time.
Section 5.06 Persons Deemed Securityholders. Prior to due presentation
of a Trust Securities Certificate for registration of transfer, the Trustees or
the Security Registrar shall treat the Person in whose name any Trust Securities
Certificate shall be registered in the Security Register as the owner of such
Trust Securities Certificate for the purpose of receiving Distributions (subject
to Section 4.01(d)) and for all other purposes whatsoever, and neither the
Trustees nor the Security Registrar shall be bound by any notice to the
contrary.
Section 5.07 Access to List of Securityholders' Names and Addresses.
The Administrative Trustees shall furnish or cause to be furnished to (i) the
Depositor and the Property Trustee semi-annually, not later than June 1 and
December 1 in each year and (ii) the Depositor or the Property Trustee, as the
case may be, within 30 days after receipt by any Administrative Trustee of a
request therefor from the Depositor or the Property Trustee, as the case may be,
in writing, a list, in such form as the Depositor or the Property Trustee, as
the case may be, may reasonably require, of the names and addresses of the
Securityholders as of a date not more than 15 days prior to the time such list
is furnished; provided that the Administrative Trustees shall not be obligated
to provide such list at any time such list does not differ from the most recent
list given to the Depositor and the Property Trustee by the Administrative
Trustees or at any time the Property Trustee is the Security Registrar. If three
or more Securityholders or one or more Holders of Trust Securities Certificates
evidencing not less than 25% of the outstanding Liquidation Amount apply in
writing to the Administrative Trustees, and such application states that the
applicants desire to communicate with other Securityholders with respect to
their rights under this Trust Agreement or under the Trust Securities
Certificates and such application is accompanied by a copy of the communication
that such applicants propose to transmit, then the Administrative Trustees
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the current list of
Securityholders. Each Holder, by receiving and holding a Trust Securities
Certificate, shall be deemed to have agreed not to hold either the Depositor or
the Administrative Trustees accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.
Section 5.08 Maintenance of Office or Agency. The Administrative
Trustees shall maintain in the Borough of Manhattan, New York, an office or
offices or agency or agencies where Trust Preferred Securities Certificates may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trustees in respect of the Trust Securities Certificates
may be served. The Administrative Trustees initially designate NBD Bank, c/o
First Chicago Trust Company of New York, 14 Wall Street, 8th Floor, Window 2,
New York, New York 10005 as the principal agency for such purposes. The
Administrative Trustees shall give prompt written notice to the Depositor and to
the Securityholders of any change in the location of the Security Register or
any such office or agency.
Section 5.09 Appointment of Paying Agent. The Paying Agent shall make
Distributions and other payments provided hereby to Securityholders from the
Payment Account and shall report the amounts of such Distributions and payments
to the Administrative Trustees and if such Paying Agent shall be other than the
Property Trustee to the Property
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Trustee. Any Paying Agent shall have the revocable power to withdraw funds from
the Payment Account for the purpose of making the Distributions and payments
provided hereby. The Administrative Trustees may revoke such power and remove
the Paying Agent if such Trustees determine in their sole discretion that the
Paying Agent shall have failed to perform its obligations under this Trust
Agreement in any material respect. The Paying Agent shall initially be the
Property Trustee, and it may choose any co-paying agent that is acceptable to
the Administrative Trustees and the Depositor. Any Person acting as Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Administrative Trustees and the Depositor. In the event that a Paying Agent
shall resign or be removed, the Administrative Trustees shall appoint a
successor that is acceptable to the Depositor to act as Paying Agent (which
shall be a bank or trust company). The Administrative Trustees shall cause such
successor Paying Agent or any additional Paying Agent appointed by the
Administrative Trustees to execute and deliver to the Trustees an instrument in
which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The Paying Agent shall
return all unclaimed funds to the Property Trustee and upon removal of a Paying
Agent such Paying Agent shall also return all funds in its possession to the
Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 shall apply to
the Property Trustee also in its role as Paying Agent, for so long as the
Property Trustee shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
Section 5.10 Ownership of Trust Common Securities by Depositor. On the
Issue Date, the Depositor shall acquire, and thereafter retain, beneficial and
record ownership of the Trust Common Securities. Any attempted transfer of the
Trust Common Securities, except for transfers by operation of law or to an
Affiliate of the Depositor or a permitted successor under Section 801 of the
Subordinated Debenture Indenture, shall be void. The Administrative Trustees
shall cause each Trust Common Securities Certificate issued to the Depositor and
its permitted transferees to contain a legend stating "THIS CERTIFICATE IS NOT
TRANSFERABLE EXCEPT AS PROVIDED IN THE TRUST AGREEMENT REFERRED TO HEREIN".
Section 5.11 Book-Entry Trust Preferred Securities Certificates; Trust
Common Securities Certificate.
(a) The Trust Preferred Securities Certificates, upon original
issuance, will be issued in the form of a typewritten Trust Preferred Securities
Certificate or Certificates representing Book-Entry Trust Preferred Securities
Certificates, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Trust Preferred Securities
Certificate or Certificates shall initially be registered on the Security
Register in the name of Cede & Co., the nominee of the initial Clearing Agency,
and no Owner will receive a definitive Trust Preferred Securities Certificate
representing such beneficial owner's interest in such Trust Preferred
Securities, except as provided in Section 5.13. Unless and until Definitive
Trust Preferred Securities Certificates have been issued to Owners pursuant to
Section 5.13:
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(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Security Registrar and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust Agreement relating
to the Book-Entry Trust Preferred Securities Certificates (including the payment
of principal of and interest on the Book-Entry Trust Preferred Securities and
the giving of instructions or directions to Owners of Book-Entry Trust Preferred
Securities) as the sole Holder of Book-Entry Trust Preferred Securities and
shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of this Trust Agreement, the provisions of this Section
shall control;
(iv) the rights of the Owners of the Book-Entry Trust Preferred
Securities Certificates shall be exercised only through the Clearing Agency and
shall be limited to those established by law, agreements between such Owners and
the Clearing Agency and/or the Clearing Agency Participants and the applicable
rules of the Clearing Agency. Unless and until Definitive Trust Preferred
Securities Certificates are issued pursuant to Section 5.13, the Clearing Agency
will make book-entry transfers among the Clearing Agency Participants and
receive and transmit payments on the Trust Preferred Securities to such Clearing
Agency Participants; and
(v) whenever this Trust Agreement requires or permits actions to be
taken based upon instructions or directions of Holders of Trust Preferred
Securities Certificates evidencing a specified percentage of the aggregate
Liquidation Amount, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to such effect
from Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
applicable class of Trust Preferred Securities Certificates and has delivered
such instructions to the Trustees.
(b) A single Trust Common Securities Certificate representing the
Trust Common Securities shall be issued to the Depositor in the form of a
definitive Trust Common Securities Certificate.
Section 5.12 Notices to Clearing Agency. To the extent a notice or
other communication to the Owners is required under this Trust Agreement, unless
and until Definitive Trust Preferred Securities Certificates shall have been
issued to Owners pursuant to Section 5.13, the Trustees shall give all such
notices and communications specified herein to be given to Owners to the
Clearing Agency, and shall have no obligations to the Owners.
Section 5.13 Definitive Trust Preferred Securities Certificates. If (i)
the Depositor advises the Trustees in writing that the Clearing Agency is no
longer willing or able to properly discharge its responsibilities with respect
to the Trust Preferred Securities Certificates, and the Depositor is unable to
locate a qualified successor within 90 days of receipt by the Depositor of such
written advice, or (ii) the Depositor at its option advises the Trustees in
writing that it elects to terminate the book-entry system through the Clearing
Agency, then the Administrative Trustees shall notify the Clearing Agency and
Holders of the Trust Preferred Securities. Upon surrender to the Administrative
Trustees of the typewritten Trust Preferred Securities
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Certificate or Certificates representing the Book-Entry Trust Preferred
Securities Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees or any one of them shall execute and
authenticate the Definitive Trust Preferred Securities Certificates in
accordance with the instructions of the Clearing Agency. Neither the Security
Registrar nor the Trustees shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Trust Preferred Securities
Certificates, the Trustees shall recognize the Holders of the Definitive Trust
Preferred Securities Certificates as Securityholders. The Definitive Trust
Preferred Securities Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
Section 5.14 Rights of Securityholders. The legal title to the Trust
Property is vested exclusively in the Property Trustee (in its capacity as such)
in accordance with Section 2.09, and the Securityholders shall not have any
right or title therein other than the undivided beneficial ownership interest in
the assets of the Trust conferred by their Trust Securities, and they shall have
no right to call for any partition or division of property, profits or rights of
the Trust except as described below. The Trust Securities shall be personal
property giving only the rights specifically set forth therein and in this Trust
Agreement. The Trust Securities shall have no preemptive or other similar rights
and when issued and delivered to Securityholders against payment of the purchase
price therefor will be fully paid and nonassessable by the Trust. Except as
otherwise provided in the Expense Agreement and Section 10.01 hereof with
respect to the Depositor, the Holders of the Trust Securities shall be entitled
to the same limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.01 Limitations on Voting Rights.
(a) Except as provided in this Section, in Section 8.10 or Section
10.03 of this Trust Agreement, in the Subordinated Debenture Indenture, and as
otherwise required by law, no Holder of Trust Preferred Securities shall have
any right to vote or in any manner otherwise control the administration,
operation and management of the Trust or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the Trust
Securities Certificates, be construed so as to constitute the Securityholders
from time to time as joint venturers, partners or members of an association.
(b) So long as any Subordinated Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee, or
executing any trust or power conferred on the Indenture Trustee with respect to
such Subordinated Debentures, (ii) consent to waive any past default which is
waivable under Section 513 of the Subordinated Debenture Indenture, (iii)
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exercise any right to rescind or annul a declaration that the principal of all
the Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Subordinated Debenture Indenture
or the Subordinated Debentures, where such consent shall be required, or to any
other action, as holder of the Subordinated Debentures, under the Subordinated
Debenture Indenture, without, in each case, obtaining the prior approval of the
Holders of at least 66-2/3% in Liquidation Amount of the Outstanding Trust
Preferred Securities; provided, however, that where a consent under the
Subordinated Debenture Indenture would require the consent of each holder of
Subordinated Debentures affected thereby, no such consent shall be given by the
Trustees without the prior written consent of each Holder of Trust Preferred
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of Trust Preferred Securities, except pursuant
to a subsequent vote of the Holders of Trust Preferred Securities. The Property
Trustee shall notify all Holders of the Trust Preferred Securities of any notice
of default received from the Indenture Trustee with respect to the Subordinated
Debentures.
(c) If any proposed amendment to the Trust Agreement provides for,
or the Trustees otherwise propose to effect, (i) any action that would adversely
affect the powers, preferences or special rights of the Trust Preferred
Securities, whether by way of amendment to this Trust Agreement or otherwise, or
(ii) the dissolution, winding-up or termination of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of Outstanding
Trust Preferred Securities as a class will be entitled to vote on such amendment
or proposal and such amendment or proposal shall not be effective except with
the approval of the Holders of at least 66-2/3% in Liquidation Amount of the
Outstanding Trust Preferred Securities.
(d) Notwithstanding that holders of Trust Preferred Securities are
entitled to vote under the circumstances described in Section 6.01(b) and
6.01(c), any of the Trust Preferred Securities that are owned (whether of record
or beneficially) by the Corporation, the Administrative Trustees or any
Affiliate of the Corporation or any Administrative Trustee shall, for purposes
of such vote, be treated as if they were not outstanding.
Section 6.02 Notice of Meetings. Notice of all meetings of the Trust
Preferred Securityholders, stating the time, place and purpose of the meeting,
shall be given by the Administrative Trustees pursuant to Section 10.08 to each
Trust Preferred Securityholder of record, at his registered address, at least 15
days and not more than 90 days before the meeting. At any such meeting, any
business properly before the meeting may be so considered whether or not stated
in the notice of the meeting. Any adjourned meeting may be held as adjourned
without further notice. Any and all notice to which any Trust Preferred
Securityholder hereunder may be entitled and any and all communications shall be
deemed duly served or given if mailed, postage prepaid, addressed to any Trust
Preferred Securityholders of record at his last known address as recorded on the
Security Register.
Section 6.03 Meetings of Trust Preferred Securityholders. No annual
meeting of Securityholders is required to be held. The Administrative Trustees,
however, shall call a meeting of Securityholders to vote on any matter upon the
written request of the Trust Preferred Securityholders of record of 25% of the
Trust Preferred Securities (based upon their Liquidation Amount) and the
Administrative Trustees or the Property Trustee may, at any time
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in their discretion, call a meeting of Trust Preferred Securityholders to vote
on any matters as to which Trust Preferred Securityholders are entitled to vote.
Trust Preferred Securityholders of record of 50% of the Trust Preferred
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Trust
Preferred Securityholders of record present, in person or by proxy, holding more
than 66-2/3% of the Trust Preferred Securities (based upon their Liquidation
Amount) held by the Trust Preferred Securityholders of record present, either in
person or by proxy, at such meeting shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater proportion of
affirmative votes.
Section 6.04 Voting Rights. Securityholders shall be entitled to one
vote for each $25 of Liquidation Amount represented by their Trust Securities in
respect of any matter as to which such Securityholders are entitled to vote.
Section 6.05 Proxies, etc. At any meeting of Securityholders, any
Securityholder entitled to vote may vote by proxy, provided that no proxy shall
be voted at any meeting unless it shall have been placed on file with the
Administrative Trustees, or with such other officer or agent of the Trust as the
Administrative Trustees may direct, for verification prior to the time at which
such vote shall be taken. Pursuant to a resolution of the Property Trustee,
proxies may be solicited in the name of the Property Trustee or one or more
officers of the Property Trustee. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution.
Section 6.06 Securityholder Action by Written Consent. Any action which
may be taken by Securityholders at a meeting may be taken without a meeting if
Securityholders holding at least 66-2/3% of all outstanding Trust Securities
entitled to vote in respect of such action (or such other proportion thereof as
shall be required by any express provision of this Trust Agreement) shall
consent to the action in writing (based upon their Liquidation Amount).
Section 6.07 Record Date for Voting and Other Purposes. For the
purposes of determining the Securityholders who are entitled to notice of and to
vote at any meeting or by written consent, or to participate in any Distribution
on the Trust Securities in respect of which a record date is not otherwise
provided for in this Trust Agreement, or for the purpose of any other action,
the Administrative Trustees may from time to time fix a date, not more than 90
days prior to the date of any meeting of Securityholders or the payment of
distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.
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Section 6.08 Acts of Securityholders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Trust Agreement to be given, made or taken by Securityholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Securityholders in person or by an agent appointed
in writing; and, except as otherwise expressly provided herein, such action
shall become effective when such instrument or instruments are delivered to the
Administrative Trustees. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Securityholders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Trust Agreement and (subject to Section 8.01)
conclusive in favor of the Trustees, if made in the manner provided in this
Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgements of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustees deem sufficient.
The ownership of Trust Preferred Securities shall be proved by the
Security Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Holders of Trust Securities and
the Administrative Trustees or among such Securityholders or Trustees with
respect to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
Section 6.09 Inspection of Records. Upon reasonable notice to the
Trustees, the records of the Trust shall be open to inspection by
Securityholders during normal business hours for any purpose reasonably related
to such Securityholder's interest as a Securityholder.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 7.01 Representations and Warranties of the Property Trustee and
Delaware Trustee. The Bank in its separate corporate capacity and as the
Property Trustee and First Chicago Delaware Inc. in its separate corporate
capacity and as the Delaware Trustee, each on behalf of and as to itself, hereby
represents and warrants for the benefit of the Depositor and the Securityholders
that:
(a) the Bank is a banking corporation or trust company duly
organized, validly existing and in good standing under the laws of the State of
Michigan, and First Chicago Delaware Inc. is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(b) each of the Bank in its separate corporate capacity and in its
capacity as the Property Trustee and First Chicago Delaware Inc. in its separate
corporate capacity and in its capacity as the Delaware Trustee has full
corporate power, authority and legal right to execute, deliver and perform their
obligations under this Trust Agreement and has taken all necessary action to
authorize the execution, delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by each of the Property Trustee and the Delaware Trustee and
constitutes the valid and legally binding agreement of each of the Property
Trustee and the Delaware Trustee, enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(d) the execution, delivery and performance by each of the Bank in
its capacity as the Property Trustee and by First Chicago Delaware Inc. in its
capacity as Delaware Trustee of this Trust Agreement have been duly authorized
by all necessary corporate action on the part of the Bank in its separate
corporate capacity and as Property Trustee, and by First Chicago Delaware Inc.
in its separate corporate capacity and as the Delaware Trustee and do not
require any approval of stockholders of the Bank or of First Chicago Delaware
Inc. and such execution, delivery and performance will not (i) violate the
Bank's or First Chicago Delaware Inc.'s charter or by-laws, or (ii) violate any
law, governmental rule or regulation of the United States or the States of
Michigan or Delaware, as the case may be, governing the banking, trust, or
corporate powers (as appropriate in context) of the Bank in its separate
corporate capacity and in its capacity as the Property Trustee or of First
Chicago Delaware Inc. in its capacity as the Delaware Trustee or in its separate
corporate capacity, (as appropriate in context) or any order, judgment or decree
applicable to the Bank, the Property Trustee, the First Chicago Delaware Inc. or
the Delaware Trustee; and
(e) neither the authorization, execution or delivery by the Bank, the
Delaware Corporation, the Property Trustee, or the Delaware Trustee of this
Trust Agreement, nor the consummation of any of the transactions by the Bank,
the Delaware Corporation, the Property
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Trustee or the Delaware Trustee (as appropriate in context) contemplated herein
or therein, nor the issuance of the Trust Securities Certificates pursuant to
this Trust Agreement require the consent or approval of, the giving of notice
to, the registration with or the taking of any other action with respect to any
governmental authority or agency under any existing federal, Michigan, or
Delaware law governing the banking, trust, or corporate powers of the Property
Trustee or the Delaware Trustee (as appropriate in context).
Section 7.02 Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued at the Closing Date on
behalf of the Trust have been duly authorized and will have been, duly and
validly executed, issued and delivered by the Trustees pursuant to the terms and
provisions of, and in accordance with the requirements of, this Trust Agreement
and the Securityholders will be, as of such date, entitled to the benefits of
this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Property Trustee or the Delaware
Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
Section 8.01 Certain Duties and Responsibilities.
(a) The rights, duties and responsibilities of the Trustees shall be
as provided by this Trust Agreement and the Delaware Business Trust Act and, in
the case of the Property Trustee, the Trust Indenture Act. Notwithstanding the
foregoing, no provision of this Trust Agreement shall require the Trustees to
expend or risk their own funds or otherwise incur any financial liability in the
performance of any of their duties hereunder, or in the exercise of any of their
rights or powers, if they shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to them. Whether or not therein expressly so provided,
every provision of this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustees shall be subject to the
provisions of this Section.
(b) All payments made by the Property Trustee in respect of the Trust
Securities shall be made only from the income and proceeds from the Trust
Property and only to the extent that there shall be sufficient income or
proceeds from the Trust Property to enable the Property Trustee to make payments
in accordance with the terms hereof. Each Securityholder, by its acceptance of a
Trust Security, agrees that it will look solely to the income and proceeds from
the Trust Property to the extent available for distribution to it as herein
provided and that the Trustees are not personally liable to such Holder for any
amount distributable in respect of any Trust Security or for any other liability
in respect of any Trust Security. This Section
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8.01(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act.
Section 8.02 Notice of Defaults. Within 90 days after the occurrence of
any default known to the Property Trustee, the Property Trustee shall transmit,
in the manner and to the extent provided in Section 10.08, notice of any such
default to the Securityholders, the Administrative Trustees and the Depositor,
unless such default shall have been cured or waived. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.
Section 8.03 Certain Rights of Property Trustee. Subject to the
provisions of Section 8.01 and except as provided by law:
(i) the Property Trustee may rely and shall be protected in acting
or refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) if (A) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action, or
(B) in construing any of the provisions in this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein, or (C) the Property Trustee is unsure of the application of
any provision of this Trust Agreement, then, except as to any matter as to which
the Trust Preferred Securityholders are entitled to vote under the terms of this
Trust Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken. The Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if the
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad
faith negligence or willful misconduct;
(iii) the Property Trustee may consult with counsel of its selection
and the written advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(iv) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust Agreement at the request
or direction of any of the Securityholders pursuant to this Trust Agreement,
unless such Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
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(v) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other document, unless requested in writing to do so by one or
more Securityholders; and
(vi) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, provided that the Property Trustee shall be responsible for
its own negligence or recklessness with respect to selection of any agent or
attorney appointed by it hereunder.
Section 8.04 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates shall be
taken as the statements of the Depositor, and the Trustees do not assume any
responsibility for their correctness. The Trustees shall not be accountable for
the use or application by the Trust of the proceeds of the Trust Securities in
accordance with Sections 2.04 and 2.05.
The Property Trustee may conclusively assume that any funds held by it
hereunder are legally available unless an officer of the Property Trustee
assigned to its Corporate Trustee administrative department shall have received
written notice from the Corporation, any Holder or any other Trustee that such
funds are not legally available.
Section 8.05 Trustee May Hold Securities. Except as provided in the
definition of the term "Outstanding" in Article I, any Trustee or any other
agent of the Trustees or the Trust, in its individual or any other capacity, may
become the owner or pledgee of Trust Securities and may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
Section 8.06 Compensation; Fees; Indemnity.
The Depositor agrees:
(1) to pay to the Trustees from time to time reasonable compensation
for all services rendered by the Trustees hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of their agents and counsel), except any such expense,
disbursement or advance as may be attributable to their negligence, willful
misconduct or bad faith; and
(3) to indemnify the Trustees for, and to hold the Trustees harmless
against, any and all loss, damage, claims, liability or expense incurred without
negligence, willful misconduct or bad faith on their part, arising out of or in
connection with the acceptance or administration of this Trust Agreement,
including the costs and expenses of defending themselves against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
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The provisions of this Section 8.06 shall survive the termination of
this Trust Agreement or the resignation or removal of any Trustee.
Section 8.07 Trustees Required; Eligibility.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that has
a combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder. Each Administrative Trustee shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
persons authorized to bind such entity.
(c) There shall at all times be a Delaware Trustee. The Delaware
Trustee shall either be (i) a natural person who is at least 21 years of age and
a resident of the State of Delaware or (ii) a legal entity with its principal
place of business in the State of Delaware that shall act through one or more
persons authorized to bind such entity.
Section 8.08 Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement. To the extent permitted by the Trust Indenture Act, the Property
Trustee shall not be deemed to have a conflicting interest by virtue of being
trustee under the Trust Guarantee. Subject to the foregoing, the Depositor and
any Trustee may engage in or possess an interest in other business ventures of
any nature or description, independently or with others, similar or dissimilar
to the business of the Trust, and the Trust and the Securityholders shall have
no rights by virtue of this Trust Agreement in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. Neither the Depositor, nor any Trustee, shall be obligated to
present any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, (individually or as a partner or fiduciary) or to recommend to others
any such particular investment or other opportunity. Any Trustee may engage or
be interested in any financial or other transaction with the Depositor or any
Affiliate of the Depositor, or may act as depository for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Depositor or its Affiliates.
Section 8.09 Co-Property Trustees and Separate Trustee.
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At any time or times, for the purpose of meeting the legal requirements
of the Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Holder of the Trust Common Securities
and the Property Trustee shall have power to appoint, and upon the written
request of the Property Trustee, the Depositor shall for such purpose join with
the Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint, one or more Persons
approved by the Property Trustee either to act as co-property trustee, jointly
with the Property Trustee, of all or any part of such Trust Property, or to act
as separate trustee of any such Trust Property, in either case with such powers
as may be provided in the instrument of appointment, and to vest in such Person
or Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Agreement. If
the Depositor does not join in such appointment within 15 days after the receipt
by it of a request so to do, or in case an Debenture Indenture Event of Default
has occurred and is continuing, the Property Trustee alone shall have power to
make such appointment. Any co-property trustee or separate trustee appointed
pursuant to this Section shall satisfy the requirements of Section 8.07.
Should any written instrument from the Depositor be required by any
co-property trustee or separate trustee so appointed for more fully confirming
to such co-property trustee or separate trustee such property, title, right, or
power, any and all such instruments shall, on request, be executed,
acknowledged, and delivered by the Depositor.
Every co-property trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms, namely:
(i) The Trust Securities shall be executed, authenticated and
delivered and all rights, powers, duties, and obligations hereunder in respect
of the custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees hereunder, shall be
exercised, solely by the Trustees.
(ii) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-property trustee or
separate trustee jointly, as shall be provided in the instrument appointing such
co-property trustee or separate trustee, except to the extent that under any law
of any jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties, and obligations shall be exercised and performed by
such co-property trustee or separate trustee.
(iii) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-property trustee or separate trustee appointed
under this Section, and, in case an Debenture Indenture Event of Default has
occurred and is continuing, the Property Trustee shall have power to accept the
resignation of, or remove, any such co-property trustee or separate trustee
without the concurrence of the Depositor. Upon the written request of the
Property Trustee, the Depositor shall join with the Property Trustee in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to effectuate such resignation or removal. A
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successor to any co-property trustee or separate trustee so resigned or removed
may be appointed in the manner provided in this Section.
(iv) No co-property trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property Trustee, or
any other such trustee hereunder.
(v) The Trustees shall not be liable by reason of any act of a
co-property trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-property trustee and separate
trustee.
Section 8.10 Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Holders. If the
instrument of acceptance by the successor Trustee required by Section 8.11 shall
not have been delivered to the Relevant Trustee within 30 days after the giving
of such notice of resignation, the resigning Relevant Trustee may petition, at
the expense of the Trust, any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
Unless an Debenture Indenture Event of Default shall have occurred and
be continuing, any Trustee may be removed at any time by Act of the Holder of
the Trust Common Securities. If an Debenture Indenture Event of Default shall
have occurred and be continuing, the Property Trustee or the Delaware Trustee,
or both of them, may be removed at such time by Act of the Holders of a majority
in Liquidation Amount of the Trust Preferred Securities, delivered to the
Relevant Trustee (in its individual capacity and on behalf of the Trust). An
Administrative Trustee may be removed by the Holder of the Trust Common
Securities at any time. In no event will the Holders of the Trust Preferred
Securities have a right to vote to appoint, remove or replace the Administrative
Trustees.
If any Trustee shall resign, be removed or become incapable of
continuing to act as Trustee, or if a vacancy shall occur in the office of any
Trustee for any reason, at a time when no Debenture Indenture Event of Default
shall have occurred and be continuing, the Holder of the Trust Common
Securities, by its Act of the Holders of the Trust Common Securities, shall
promptly appoint a successor Trustee or successor Trustees, and each retiring
Trustee shall comply with the applicable requirements of Section 8.11. If the
Property Trustee or the Delaware Trustee shall resign, be removed or become
incapable of continuing to act as the Property Trustee or the Delaware Trustee,
as the case may be, or a vacancy shall occur in the office of any such Trustee
for any reason, at a time when an Debenture Indenture Event of Default shall
have occurred and be continuing, the Holders of Trust Preferred Securities, by
Act of the Holders of a majority in Liquidation Amount of the Trust Preferred
Securities then Outstanding, shall promptly appoint a successor Relevant Trustee
or Relevant Trustees and
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such successor Relevant Trustee or Relevant Trustees shall comply with the
applicable requirements of Section 8.11. If an Administrative Trustee shall
resign, be removed or become incapable of acting as Administrative Trustee, or a
vacancy shall occur in the office of any such Trustee for any reason, at a time
when an Debenture Indenture Event of Default shall have occurred and be
continuing, the Holder of the Trust Common Securities, by Act of the Holder of
the Trust Common Securities, shall promptly appoint a successor Administrative
Trustee or Administrative Trustees and such successor Administrative Trustee or
Administrative Trustees shall comply with the applicable requirements of Section
8.11. If no successor Relevant Trustee shall have been so appointed in
accordance with this Section 8.10 and accepted appointment in the manner
required by Section 8.11, any Holder who has been a Holder of Trust Securities
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Relevant Trustee.
The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all Holders
in the manner provided in Section 10.08 and shall give notice to the Depositor.
Each notice shall include the name of the successor Relevant Trustee and the
address of its Corporate Trust Office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (i) the act of the remaining Administrative Trustee or (ii)
otherwise by the Depositor (with the successor in each case being a Person who
satisfies the eligibility requirements for an Administrative Trustee or a
Delaware Trustee, as the case may be, set forth in Section 8.07).
Section 8.11 Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Relevant Trustee, every such successor
Relevant Trustee so appointed shall execute, acknowledge and deliver to the
Trust and to the retiring Relevant Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Relevant
Trustee shall become effective and such successor Relevant Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Relevant Trustee; but, on the request
of the Depositor or the successor Relevant Trustee, such retiring Relevant
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Relevant Trustee all the rights, powers and
trusts of the retiring Relevant Trustee and shall duly assign, transfer and
deliver to such successor Relevant Trustee all property and money held by such
retiring Relevant Trustee hereunder.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the preceding paragraph.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
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Section 8.12 Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee, Delaware Trustee or any
Administrative Trustee which is not a natural person may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Relevant Trustee shall be a party, or
any Person succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such Person shall be otherwise qualified and eligible,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
Section 8.13 Preferential Collection of Claims Against Depositor or
Trust.
If and when the Property Trustee shall be or become a creditor of the
Depositor or the Trust (or any other obligor upon the Subordinated Debentures or
the Trust Securities), the Property Trustee shall be subject to the provisions
of the Trust Indenture Act regarding the collection of claims against the
Depositor or Trust (or any such other obligor). For purposes of Section
311(b)(4) and (6) of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which full payment
for goods or securities sold is made within seven days after delivery of the
goods or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by the
Depositor or the Trust (or any such obligor) for the purpose of financing the
purchase, processing, manufacturing, shipment, storage or sale of goods, wares
or merchandise and which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or merchandise previously
constituting the security, provided the security is received by the Property
Trustee simultaneously with the creation of the creditor relationship with the
Depositor or the Trust (or any such obligor) arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.
Section 8.14 Reports by Property Trustee.
(a) Within 60 days after May 15th of each year commencing with May
15, 1999, if required by Section 313(a) of the Trust Indenture Act, the Property
Trustee shall transmit a brief report dated as of such May 15 with respect to
any of the events specified in such Section 313(a) that may have occurred since
the later of the date of this Trust Agreement or the preceding May 15.
(b) The Property Trustee shall transmit to Securityholders the
reports required by Section 313(b) of the Trust Indenture Act at the times
specified therein.
(c) Reports pursuant to this Section shall be transmitted in the
manner and to the Persons required by Sections 313(c) and (d) of the Trust
Indenture Act.
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Section 8.15 Reports to the Property Trustee. The Depositor and the
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and, within 120 days after the end of each
fiscal year of the Depositor, the compliance certificate required by Section
314(a)(4) of the Trust Indenture Act in the form and in the manner required by
Section 314 of the Trust Indenture Act.
Section 8.16 Evidence of Compliance with Conditions Precedent. Each of
the Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given pursuant to Section 314(c)(1) of the
Trust Indenture Act shall comply with Section 314(e) of the Trust Indenture Act.
Section 8.17 Number of Trustees.
(a) The number of Trustees shall initially be four, provided that the
Depositor by written instrument may increase the number of Administrative
Trustees or decrease the number to one but not to zero.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.10, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Trust Agreement), shall have all powers granted to the
Administrative Trustees and shall discharge the duties imposed upon the
Administrative Trustees by this Trust Agreement.
Section 8.18 Delegation of Power.
(a) Any Administrative Trustee, may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.07(A), including any registration statement or amendment thereto filed with
the Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from
time to time to such of their number the doing of such things and the execution
of such instruments either in the name of the Trust or the names of the
Administrative Trustees or otherwise as the Administrative Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
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Section 8.19 Enforcement of Rights of Property Trustee by
Securityholders.
If a Debenture Indenture Event of Default occurs and is continuing,
then (i) the Holders of Trust Preferred Securities will rely on the enforcement
by the Property Trustee of its rights against the Corporation as the holder of
the Subordinated Debentures and (ii) the Holders of a majority in aggregate
Liquidation Amount of the Trust Preferred Securities will have the right to
direct the time, method, and place of conducting any proceeding for any remedy
available to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under this Trust Agreement, including
the right to direct the Property Trustee to exercise the remedies available to
it as a holder of the Subordinated Debentures, provided that such direction
shall not be in conflict with any rule of law or with this Trust Agreement, and
could not involve the Property Trustee in personal liability in circumstances
where reasonable indemnity would not be adequate. If the Property Trustee fails
to enforce its rights under the Subordinated Debentures, a Holder of Trust
Preferred Securities may, to the extent permitted by applicable law, institute a
legal proceeding against the Corporation to enforce its rights under this Trust
Agreement without first instituting any legal proceeding against the Property
Trustee or any other Person, including the Trust; it being understood and
intended that no one or more of such Holders shall have any right in any manner
whatsoever by virtue of, or by availing of, any provision of this Trust
Agreement to affect, disturb or prejudice the rights of any other of such
Holders or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Trust Agreement, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders. Notwithstanding the foregoing, a Holder of Trust Preferred Securities
may institute a legal proceeding directly against the Corporation without first
instituting a legal proceeding against or requesting or directing that action be
taken by the Property Trustee or any other Person, for enforcement of payment to
such Holder of principal of or interest on the Subordinated Debentures having a
principal amount equal to the aggregate stated Liquidation Amount of the Trust
Preferred Securities of such Holder on or after the due dates therefor specified
or provided for in the Subordinated Debentures. The Corporation shall be
subrogated to all rights of the Holders of Trust Preferred Securities in respect
of any amounts paid to such Holders by the Corporation pursuant to this Section.
ARTICLE IX
TERMINATION AND LIQUIDATION
Section 9.01 Termination Upon Expiration Date. The Trust shall
automatically terminate on ________________ (the "Expiration Date") or earlier
pursuant to Section 9.02 or 9.03.
Section 9.02 Early Termination. Upon the first to occur of any of the
following events (such first occurrence, an "Early Termination Event"), the
Trust shall be dissolved and terminated in accordance with the terms hereof:
(i) the occurrence of a Bankruptcy Event in respect of the Depositor,
dissolution or liquidation of the Depositor, or the dissolution of the Trust
pursuant to judicial decree;
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(ii) the delivery of written direction to the Property Trustee by the
Depositor at any time (which direction is optional and wholly within the
discretion of the Depositor) to terminate the Trust and distribute the
Subordinated Debentures to Securityholders as provided in Section 9.04; and
(iii) the payment at maturity or redemption of all of the Subordinated
Debentures, and the consequent payment of the Trust Securities.
Section 9.03 Termination. The respective obligations and
responsibilities of the Trust and the Trustees created hereby shall terminate
upon the latest to occur of the following: (a) the distribution by the Property
Trustee to Securityholders upon the liquidation of the Trust pursuant to Section
9.04, or upon the redemption of all of the Trust Securities pursuant to Section
4.02, of all amounts or instruments required to be distributed hereunder upon
the final payment of the Trust Securities; (b) the payment of any expenses owed
by the Trust; or (c) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders.
Section 9.04 Liquidation.
(a) If any Early Termination Event specified in clause (ii) of
Section 9.02 occurs, the Trust shall be liquidated and the Property Trustee
shall distribute the Subordinated Debentures to the Securityholders as provided
in this Section 9.04.
(b) In connection with a distribution of the Subordinated Debentures,
each Holder of Trust Securities shall be entitled to receive after the
satisfaction of liabilities to creditors of the Trust (as evidenced by a
certificate of the Administrative Trustees), a Like Amount of Subordinated
Debentures. Notice of liquidation shall be given by the Trustees by first-class
mail, postage prepaid, mailed not later than 30 nor more than 60 days prior to
the Liquidation Date to each Holder of Trust Securities at such Holder's address
appearing in the Security Register. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust Securities
Certificates not surrendered for exchange will be deemed to represent a Like
Amount of Subordinated Debentures; and
(iii) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for Subordinated Debentures
as the Administrative Trustees or the Property Trustee shall deem appropriate.
(c) In order to effect the liquidation of the Trust and distribution
of the Subordinated Debentures to Securityholders, the Property Trustee shall
establish a record date for such distribution (which shall be not more than 45
days prior to the Liquidation Date) and, either itself acting as exchange agent
or through the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of
Subordinated Debentures in exchange for the Outstanding Trust Securities
Certificates.
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(d) After the Liquidation Date, (i) the Trust Securities will no
longer be deemed to be Outstanding, (ii) certificates representing a Like Amount
of Subordinated Debentures will be issued to Holders of Trust Securities
Certificates, upon surrender of such certificates to the Administrative Trustees
or their agent for exchange, (iii) any Trust Securities Certificates not so
surrendered for exchange will be deemed to represent a Like Amount of
Subordinated Debentures, accruing interest at the rate provided for in the
Subordinated Debentures from the last Distribution Date on which a Distribution
was made on such Trust Certificates until such certificates are so surrendered
(and until such certificates are so surrendered, no payments of interest or
principal will be made to Holders of Trust Securities Certificates with respect
to such Subordinated Debentures) and (iv) all rights of Securityholders holding
Trust Securities will cease, except the right of such Securityholders to receive
Subordinated Debentures upon surrender of Trust Securities Certificates.
(e) The Depositor will use its best efforts to have the Subordinated
Debentures that are distributed in exchange for the Trust Preferred Securities
listed on such securities exchange as the Trust Preferred Securities are then
listed. The Depositor may elect to have the Subordinated Debentures issued in
book-entry form to the Clearing Agency or its nominee.
Section 9.05 Bankruptcy. If an Early Termination Event specified in
clause (i) of Section 9.02 has occurred, the Trust shall be liquidated. The
Property Trustee shall distribute the Subordinated Debentures to the
Securityholders as provided in Section 9.04, unless such distribution is
determined by the Administrative Trustees not to be practical, in which event
the Holders will be entitled to receive out of the assets of the Trust available
for distribution to Securityholders, after satisfaction of liabilities to
creditors, an amount equal to the Liquidation Amount per Trust Security plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If such Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Trust on the Trust Securities
shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder
of the Trust Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination pro rata
(determined as aforesaid) with Holders of Trust Preferred Securities, except
that, if an Debenture Indenture Event of Default has occurred and is continuing,
the Trust Preferred Securities shall have a priority over the Trust Common
Securities pursuant to Section 4.03.
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ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Guarantee by the Depositor. Subject to the terms and
conditions hereof, the Depositor irrevocably and unconditionally guarantees to
each person or entity to whom the Trust is now or hereafter becomes indebted or
liable (the "Beneficiaries") the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to such Beneficiaries. As used herein,
"Obligations" means any indebtedness, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to Holders of any Trust Securities or
other similar interests in the Trust the amounts due such Holders pursuant to
the terms of the Trust Preferred Securities or such other similar interests, as
the case may be. Such guarantee is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.
Section 10.02 Limitation of Rights of Securityholders. The bankruptcy,
death or dissolution or incapacity of any Person having an interest, beneficial
or otherwise, in a Trust Security shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such Person or any
Securityholder for such Person, to claim an accounting, take any action or bring
any proceeding in and for a partition or winding up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
Section 10.03 Amendment.
(a) This Trust Agreement may be amended from time to time by the
Administrative Trustees and the Depositor, without the consent of any
Securityholders and, except as provided in subsection (e) below, without the
consent of the Property Trustee or the Delaware Trustee, (i) to cure any
ambiguity, correct or supplement any provision herein which may be inconsistent
with any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Trust Agreement, which shall not be
inconsistent with the other provisions of this Trust Agreement, provided,
however, that any such amendment shall not adversely affect in any material
respect the interests of any Securityholder, (ii) to modify, eliminate or add to
any provisions of this Trust Agreement to such extent as shall be necessary to
ensure that the Trust will not be classified as other than a grantor trust for
United States federal income tax purposes at any time that any Trust Securities
are outstanding; provided, however, that, in the case of clause (i), any
amendments of this Trust Agreement shall become effective when notice thereof is
given to the Securityholders or (iii) to provide the Property Trustee with the
authority to execute on behalf of the Administrative Trustees Definitive Trust
Preferred Securities Certificates.
(b) Except as provided in Section 10.03(c) hereof, any provision in
this Trust Agreement may be amended by the Trust or the Trustees with (i) the
consent of Securityholders representing not less than 66-2/3% (based upon
Liquidation Amounts) of the Trust Securities then Outstanding and (ii) receipt
by the Trustees of an Opinion of Counsel to the effect that such amendment or
the exercise of any power granted to the Trustees in accordance with such
amendment will not affect the Trust's status as a grantor trust for United
States federal income
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tax purposes or the Trust's exemption from status of an "investment company"
under the Investment Company Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.03 or 6.06 hereof), this
Trust Agreement may not be amended to (i) change the amount or timing of any
Distribution (or payment upon redemption) on the Trust Securities or otherwise
adversely affect the amount of any Distribution (or payment upon redemption)
required to be made in respect of the Trust Securities as of a specified date,
(ii) restrict the right of a Securityholder to institute suit for the
enforcement of any such payment on or after such date, (iii) change the purpose
of the Trust, (iv) authorize the issuance of any additional beneficial interests
in the Trust, or (v) change the consent required pursuant to this Section 10.03.
(d) Notwithstanding any other provisions of this Trust Agreement, the
Trustees shall not enter into or consent to any amendment to this Trust
Agreement which would cause the Trust to be treated other than as a grantor
trust for United States federal income tax purposes or to fail or cease to
qualify for the exemption from status of an "investment company" under the
Investment Company Act of 1940, as amended, afforded by Rule 3a-5 thereunder.
(e) Without the consent of the Depositor, this Trust Agreement may
not be amended in a manner which imposes any additional obligation on the
Depositor. Without the consent of the Property Trustee or the Delaware Trustee,
as the case may be, this Trust Agreement may not be amended in a manner which
affects the powers, duties or rights of the Property Trustee or the Delaware
Trustee, respectively. In executing any amendment permitted by this Trust
Agreement, the Trustees shall be entitled to receive, and (subject to Section
8.01) shall be fully protected in relying upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this Trust
Agreement. Any Trustee may, but shall not be obligated to, enter into any such
amendment which affects such Trustee's own rights, duties, immunities or
liabilities under this Trust Agreement or otherwise.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
Section 10.04 Separability. In case any provision in this Trust
Agreement or in the Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 10.05 Governing Law. THIS TRUST AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH
RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF DELAWARE.
Section 10.06 Notice of Deferral of Distribution. In the event that the
Depositor exercises its right to extend an interest payment period in respect of
the Subordinated Debentures pursuant to Section 104 of the Supplemental
Indenture and notice of such extension
44
<PAGE> 51
has been provided by the Depositor to the Property Trustee, the Property Trustee
shall give written notice of such extension and of the deferral of the related
Distribution on the Trust Securities, by first-class mail, postage prepaid,
mailed not later than ten days prior to the Distribution Date upon which such
Distribution would otherwise be payable, to each Holder of Trust Preferred
Securities at such Holder's address appearing in the Security Register.
Section 10.07 Headings. The Article and Section headings are for
convenience only and shall not affect the construction of this Trust Agreement.
Section 10.08 Notice and Demand. Any notice, demand or other
communication which by any provision of this Trust Agreement is required or
permitted to be given or served to or upon any Securityholder or the Depositor
may be given or served in writing by deposit thereof, first class postage
prepaid, in the United States mail, hand delivery or facsimile transmission, in
each case, addressed, (i) in the case of a Trust Preferred Securityholder, to
such Trust Preferred Securityholder as such Securityholder's name and address
appear on the Security Register and (ii) in the case of the Trust Common
Securityholder or the Depositor, to SEMCO Energy, Inc., 405 Water Street, P.O.
Box 5026, Port Huron, Michigan 48061-5026, Attention: Edric R. Mason, Jr.,
Facsimile No. (810) 989-4098. Such notice, demand or other communication to or
upon a Securityholder shall be deemed to have been sufficiently given or made,
for all purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust or the Trustees shall be given in writing addressed (until another
address is published by the Trust) as follows: (i) with respect to the Property
Trustee, NBD Bank, Corporate Trust Administration, 11th Floor, Suite 8110, 611
Woodward Avenue, Detroit, Michigan 48226; with respect to the Delaware Trustee,
First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801,
Attention: Michael J. Majchrzak, as the case may be; and (ii) with respect to
the Administrative Trustees, to them at the address above for notices to the
Depositor, marked Attention: Administrative Trustees of SEMCO Capital Trust, c/o
SEMCO Energy, Inc., 405 Water Street, P.O. Box 5026, Port Huron, Michigan
48061-5026, Attn: Edric R. Mason, Jr. Such notice, demand or other communication
to or upon the Trust or the Trustees shall be deemed to have been sufficiently
given or made only upon actual receipt of the writing by the applicable Trustee.
Section 10.09 Agreement Not to Petition. Each of the Trustees and the
Depositor agrees for the benefit of the Securityholders that, until at least one
year and one day after the Trust has been terminated in accordance with Article
IX, it shall not file, or join in the filing of, a petition against the Trust
under any bankruptcy, reorganization, arrangement, insolvency, liquidation or
other similar law (including, without limitation, the United States Bankruptcy
Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of
any proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 10.09, the Property Trustee
agrees, for the benefit of Securityholders, that it shall file an answer with
the bankruptcy court or otherwise properly contest the filing of such petition
by the Depositor against the Trust or the commencement of such action and raise
the defense that the Depositor has agreed in writing not to take such action and
should be stopped and precluded therefrom and such other defenses, if any, as
counsel for
45
<PAGE> 52
the Trustees or the Trust may assert. The provisions of this Section 10.09 shall
survive the termination of this Trust Agreement.
Section 10.10 Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision shall control.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON
BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT
TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE TRUST GUARANTEE AND THE
SUBORDINATED DEBENTURE INDENTURE AND THIS TRUST AGREEMENT, AND PROVIDE NOTICE TO
SUCH SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE
BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER
AND SUCH OTHERS.
Section 10.11 Successors. This Trust Agreement shall be binding upon
and shall inure to the benefit of any successor to both the Trust and the
Trustees, including any successor by operation of law.
IN WITNESS WHEREOF, the parties hereto have executed this Trust
Agreement or have caused this Trust Agreement to be executed on their behalf,
all as of the day and year first above written.
SEMCO ENERGY, INC.
By:
-------------------------------------------
--------------------------------------
Its
-----------------------------------
46
<PAGE> 53
NBD BANK,
as Property Trustee
By:
-------------------------------------------
----------------------------,
Title:
--------------------------------
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By:
-------------------------------------------
J. Michael Banas
Title: Authorized Officer
----------------------------------------------
Robert J. Digan, II, as Administrative Trustee
----------------------------------------------
Edric R. Mason, Jr., as Administrative Trustee
47
<PAGE> 54
EXHIBIT A
CERTIFICATE OF TRUST
OF
SEMCO CAPITAL TRUST
THIS CERTIFICATE OF TRUST OF SEMCO CAPITAL TRUST (the "Trust"), dated
__________ __, 1998, is being duly executed and filed by the undersigned to form
a business trust under the Delaware Business Trust Act (12 Del. Code, Section
3801 et seq.).
1. Name. The name of the business trust to be formed by this
Certificate of Trust is SEMCO Capital Trust.
2. Trustee. The name and business address of the trustee of the
Trust with its principal place of business in the State of
Delaware is:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
3. Effective Date. This Certificate of Trust shall be effective
upon filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
FIRST CHICAGO DELAWARE INC., Trustee, not in
its individual capacity but solely as Trustee
of the Trust
By:
-------------------------------------------
Name: J. Michael Banas
Title: Authorized Officer
----------------------------------------------
Robert J. Digan, II, as
Administrative Trustee
----------------------------------------------
Edric R. Mason, Jr., as
Administrative Trustee
Exhibit A- Page 1
<PAGE> 55
EXHIBIT B
AGREEMENT AS TO EXPENSES AND LIABILITIES
THIS AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement") is
made as of ___________, between SEMCO Energy, Inc., a Michigan corporation (the
"Corporation"), and SEMCO Capital Trust, a Delaware business trust (the
"Trust").
WHEREAS, the Trust intends to issue its Trust Common Securities (the
"Trust Common Securities") to the Corporation and to issue and sell SEMCO
Capital Trust ____ % Trust Preferred Securities (the "Trust Preferred
Securities") with such powers, preferences and special rights and restrictions
as are set forth in the Amended and Restated Trust Agreement of the Trust dated
as of _______, 1998 as the same may be amended from time to time (the "Trust
Agreement") and acquire Series ____% Subordinated Debentures due _________ (the
"Subordinated Debentures") from the Corporation; and
WHEREAS, the Corporation is the issuer of the Subordinated Debentures.
NOW, THEREFORE, in consideration of the purchase by each holder of the
Trust Securities, which purchase the Corporation hereby agrees shall benefit the
Corporation and which purchase the Corporation acknowledges will be made in
reliance upon the execution and delivery of this Agreement, the Corporation and
the Trust hereby agree as follows:
ARTICLE I
Section 1.01. Guarantee by the Corporation. Subject to the terms and
conditions hereof, the Corporation hereby irrevocably and unconditionally
guarantees to each person or entity to whom the Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment, when and as
due, of any and all Obligations (as hereinafter defined) to such Beneficiaries.
As used herein, "Obligations" means any indebtedness, expenses or liabilities of
the Trust, other than obligations of the Trust to pay to holders of any Trust
Securities or other similar interests in the Trust the amounts due such holders
pursuant to the terms of the Trust Preferred Securities or such other similar
interests, as the case may be. This Agreement is intended to be for the benefit
of, and to be enforceable by, all such Beneficiaries, whether or not such
Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall terminate and be
of no further force and effect upon the date on which there are no Beneficiaries
remaining; provided, however, that this Agreement shall continue to be effective
or shall be reinstated, as the case may be, if at any time any holder of Trust
Preferred Securities or any Beneficiary must restore payment of any sums paid
under the Trust Preferred Securities, under any Obligation, under the Trust
Guarantee Agreement dated the date hereof by the Corporation and
_______________, as guarantee trustee, or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
Exhibit B- Page 1
<PAGE> 56
Section 1.03. Waiver of Notice. The Corporation hereby waives notice of
acceptance of this Agreement and of any Obligation to which it applies or may
apply, and the Corporation hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
Section 1.04. No Impairment. The obligations, covenants, agreements and
duties of the Corporation under this Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation under,
arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Trust or any of the assets of
the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or
obtain the consent of, the Corporation with respect to the happening of any of
the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce this Agreement
directly against the Corporation and the Corporation waives any right or remedy
to require that any action be brought against the Trust or any other person or
entity before proceeding against the Corporation.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and agreements contained
in this Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the
Beneficiaries.
Section 2.02. Amendment. So long as there remains any Beneficiary or
any Trust Preferred Securities are outstanding, this Agreement shall not be
modified or amended in any manner adverse to such Beneficiary or to the holders
of the Trust Preferred Securities.
Section 2.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be given in writing by
delivering the same against receipt therefor by facsimile transmission
(confirmed by mail), or by registered or certified mail, addressed as follows
(and if so given, shall be deemed given when mailed), to-wit:
Exhibit B- Page 2
<PAGE> 57
SEMCO Capital Trust
c/o SEMCO Energy, Inc.
405 Water Street
Port Huron, Michigan 48061-5026
Facsimile No.: (810) 989-4098
Attention: Edric R. Mason, Jr.
SEMCO Energy, Inc.
405 Water Street
Port Huron, Michigan 48061-5026
Facsimile No.: (810) 989-4098
Attention: Sherry L. Abbott
Section 2.04. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN.
THIS AGREEMENT is executed as of the date and year first above written.
SEMCO ENERGY, INC.
By:
----------------------------------------------
Name:
Title:
-----------------------------------------
SEMCO CAPITAL TRUST
By:
----------------------------------------------
Robert J. Digan, II, as Administrative Trustee
By:
----------------------------------------------
Edric R. Mason, Jr., as Administrative Trustee
Exhibit B- Page 3
<PAGE> 58
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
EXCEPT AS PROVIDED IN THE TRUST
AGREEMENT REFERRED TO HEREIN
Certificate Number Number of Trust Common Securities
C-1 --------------------
Certificate Evidencing Trust Common Securities
of
SEMCO Capital Trust
Trust Common Securities
(Liquidation Amount $25 per Trust Common Security)
SEMCO Capital Trust, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that SEMCO Energy,
Inc., (the "Holder") is the registered owner of ______ Trust Common Securities
of the Trust representing undivided beneficial interests in the assets of the
Trust and designated the Trust Common Securities (Liquidation Amount $25 per
Trust Common Security) (the "Trust Common Securities"). In accordance with
Section 5.10 of the Trust Agreement (as defined below) the Trust Common
Securities are not transferable, except by operation of law or to an Affiliate
of the Holder or a permitted successor under Section 801 of the Subordinated
Debenture Indenture, dated as of ____________, 1998, between the Holder and
_________________, as trustee, and any attempted transfer hereof shall be void.
The designations, rights, privileges, restrictions, preferences and other terms
and provisions of the Trust Common Securities are set forth in, and this
certificate and the Trust Common Securities represented hereby are issued and
shall in all respects be subject to the terms and provisions of, the Amended and
Restated Trust Agreement of the Trust dated as of _________, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of the Trust Common Securities as set forth therein. The Trust will
furnish a copy of the Trust Agreement to the Holder without charge upon written
request to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
Exhibit C- Page 1
<PAGE> 59
IN WITNESS WHEREOF, the Administrative Trustees of the Trust have
executed this certificate this _____day of _______, ____.
SEMCO Capital Trust
By:
---------------------------------------------
Robert J. Digan, II,
as Administrative Trustee
By:
---------------------------------------------
Edric R. Mason, Jr.,
as Administrative Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Trust Common Securities referred to in the within
mentioned Trust Agreement.
------------------------------------------------
Robert J. Digan, II, as Administrative Trustee
Exhibit C- Page 2
<PAGE> 60
EXHIBIT D
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to SEMCO Capital
Trust or its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), any transfer, pledge, or other use hereof for value or
otherwise by or to any person is wrongful inasmuch as the registered owner
thereof, Cede & Co., has an interest herein.
Certificate Number Number of Trust Preferred Securities
P- CUSIP NO.
Certificate Evidencing Trust Preferred Securities
of
SEMCO Capital Trust
_____ % Trust Preferred Securities
(Liquidation Amount $25 per Trust Preferred Security)
SEMCO Capital Trust, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that ______________
(the "Holder") is the registered owner of ______ Trust Preferred Securities of
the Trust representing undivided beneficial interests in the assets of the Trust
and designated the SEMCO Capital Trust ____ % Trust Preferred Securities
(Liquidation Amount $25 per Trust Preferred Security) (the "Trust Preferred
Securities"). The Trust Preferred Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer as provided in
Section 5.04 of the Trust Agreement (as defined below). The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Trust Preferred Securities are set forth in, and this certificate and the
Trust Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust, dated as of _________, 1998, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of Trust Preferred Securities as set forth therein. The holder of this
certificate is entitled to the benefits of a guarantee by SEMCO Energy, Inc., a
Michigan corporation (the "Corporation"), pursuant to a Trust Guarantee
Agreement between the Corporation and NBD Bank, as guarantee trustee, dated as
of _________, 1998, as the same may be amended from time to time (the "Trust
Guarantee"), to the extent provided therein. The Trust will furnish a copy of
the Trust Agreement and the Trust Guarantee to the holder of this certificate
without charge upon written request to the Trust at its principal place of
business or registered office.
Exhibit D- Page 1
<PAGE> 61
Upon receipt of this certificate, the holder of this certificate is
bound by the Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Administrative Trustees of the Trust have
executed this certificate this _____ day of _________, ____.
SEMCO CAPITAL TRUST
By:
----------------------------------------------
Robert J. Digan, II, as Administrative Trustee
By:
----------------------------------------------
Edric R. Mason, Jr., as Administrative Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Trust Preferred Securities referred to in the within
mentioned Trust Agreement.
-------------------------------------------------
Robert J. Digan, II, as Administrative Trustee
Exhibit D- Page 2
<PAGE> 62
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust Preferred
Security to:
(Insert assignee's social security or tax identification number)
- -----------------------------------
- -----------------------------------
- -----------------------------------
- -----------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -----------------------------------
- -----------------------------------
- -----------------------------------
- -----------------------------------
agent to transfer this Trust Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
------------------------------
Signature:
-------------------------
(Sign exactly as your name appears on the other side of this Trust Preferred
Security Certificate)
Exhibit D- Page 3
<PAGE> 1
EXHIBIT 4.9
GUARANTEE AGREEMENT
Between
SEMCO ENERGY, INC.
(as Guarantor)
and
NBD BANK
(as Trustee)
Dated as of ________________, 1998
<PAGE> 2
TABLE OF CONTENTS*
Page
ARTICLE I DEFINITIONS....................................................1
SECTION 1.01. Definitions...........................................1
ARTICLE II TRUST INDENTURE ACT...........................................3
SECTION 2.01. Trust Indenture Act; Application......................3
SECTION 2.02. Lists of Holders of Securities........................3
SECTION 2.03. Reports by the Trustee................................4
SECTION 2.04. Periodic Reports to Trustee...........................4
SECTION 2.05. Evidence of Compliance with Conditions Precedent......4
SECTION 2.06. Events of Default; Waiver.............................4
SECTION 2.07. Event of Default; Notice..............................4
SECTION 2.08. Conflicting Interests.................................5
ARTICLE III POWERS, DUTIES AND RIGHTS OF TRUSTEE.........................5
SECTION 3.01. Powers and Duties of the Trustee......................5
SECTION 3.02. Certain Rights of Trustee.............................6
SECTION 3.03. Compensation; Fees; Indemnity.........................8
ARTICLE IV TRUSTEE.......................................................8
SECTION 4.01. Trustee; Eligibility..................................8
SECTION 4.02. Appointment, Removal and Resignation of Trustee.......9
ARTICLE V GUARANTEE......................................................9
SECTION 5.01. Guarantee.............................................9
SECTION 5.02. Waiver of Notice and Demand...........................9
SECTION 5.03. Obligations Not Affected..............................10
SECTION 5.04. Rights of Holders.....................................10
SECTION 5.05. Guarantee of Payment..................................11
SECTION 5.06. Subrogation...........................................11
SECTION 5.07. Independent Obligations...............................11
ARTICLE VI SUBORDINATION................................................11
SECTION 6.01. Subordination.........................................11
- ----------------------------
* This Table of Contents does not constitute part of the Indenture or have any
bearing upon the interpretation of any of its terms and provisions.
i
<PAGE> 3
ARTICLE VII TERMINATION..................................................12
SECTION 7.01. Termination...........................................12
ARTICLE VIII MISCELLANEOUS...............................................12
SECTION 8.01. Successors and Assigns................................12
SECTION 8.02. Amendments............................................12
SECTION 8.03. Notices...............................................12
SECTION 8.04. Benefit...............................................13
SECTION 8.05. Interpretation........................................13
SECTION 8.06. Governing Law.........................................14
ii
<PAGE> 4
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
310(a)...................................................................4.01(a)
310(b).............................................................4.01(c), 2.08
310(c)..............................................................Inapplicable
311(a)...................................................................2.02(b)
311(b)...................................................................2.02(b)
311(c)..............................................................Inapplicable
312(a)...................................................................2.02(a)
312(b)...................................................................2.02(b)
313.........................................................................2.03
314(a)......................................................................2.04
314(b)..............................................................Inapplicable
314(c)......................................................................2.05
314(d)..............................................................Inapplicable
314(e)..........................................................1.01, 2.05, 3.02
314(f)................................................................2.01, 3.02
315(a)...................................................................3.01(d)
315(b)......................................................................2.07
315(c)......................................................................3.01
315(d)...................................................................3.01(d)
315(e)..............................................................Inapplicable
316(a).............................................................5.04(i), 2.06
316(b)......................................................................5.03
316(c)......................................................................2.02
317(a)..............................................................Inapplicable
317(b)..............................................................Inapplicable
318(a)...................................................................2.01(b)
318(b)......................................................................2.01
318(c)...................................................................2.01(a)
- ------------------------
* This Cross-Reference Table does not constitute part of the Guarantee Agreement
and shall not affect the interpretation of any of its terms or provisions.
<PAGE> 5
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
_________, 1998 is executed and delivered by SEMCO ENERGY, INC., a Michigan
corporation (the "Guarantor"), and NBD Bank, a Michigan banking corporation, as
trustee (the "Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Trust Preferred Securities (as defined herein) of SEMCO
CAPITAL TRUST, a Delaware statutory business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of _______________, 1998, among the Trustee,
the other Trustees named therein, and SEMCO Energy, Inc., as Depositor, and the
holders of undivided beneficial interests in the assets of the Trust, the Trust
is issuing as of the date hereof $___________ aggregate liquidation amount of
its _____% Trust Originated Trust Preferred Securities (the "Trust Preferred
Securities") representing preferred undivided beneficial interests in the assets
of the Trust and having the terms set forth in the Trust Agreement;
WHEREAS, the Trust Preferred Securities will be issued by the
Trust and the proceeds thereof will be used to purchase Subordinated Debentures
(as defined in the Trust Agreement) of the Guarantor, which will be held by the
Trust as trust assets; and
WHEREAS, as incentive for the Holders to purchase the Trust
Preferred Securities, the Guarantor desires to irrevocably and unconditionally
agree, to the extent set forth herein, to pay to the Holders the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the payment for Trust
Preferred Securities by each Holder thereof, which payment the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to time of the
Trust Preferred Securities.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions
As used in this Guarantee Agreement, the terms set forth below
shall, unless the context otherwise requires, have the following meanings.
Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
<PAGE> 6
"Event of Default" means a failure by the Guarantor to perform
any of its payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Trust Preferred
Securities, to the extent not paid or made by or on behalf of the Trust: (i) any
accrued and unpaid distributions that are required to be paid on such Trust
Preferred Securities but if and only if and to the extent the Trust has funds
legally and immediately available therefor to make such payment; (ii) the
redemption price, including all accrued and unpaid distributions to the date of
redemption (the "Redemption Price"), with respect to the Trust Preferred
Securities called for redemption by the Trust but if and only if and to the
extent that the Trust has funds legally and immediately available therefor
sufficient to make such payment; and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Subordinated Debentures to the holders of Trust
Securities or the redemption of all of the Trust Preferred Securities), the
lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid
distributions on the Trust Preferred Securities to the date of payment, to the
extent the Trust has funds legally and immediately available therefor, and (b)
the amount of assets of the Trust remaining available for distribution to
Holders in liquidation of the Trust (in either case, the "Liquidation
Distribution").
"Holder" shall mean any holder, as registered on the books and
records of the Trust, of any Trust Preferred Securities; provided, however, that
in determining whether the holders of the requisite percentage of Trust
Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.
"Indenture" means the Subordinated Indenture, dated as of
________ 1, 199__, among the Guarantor, as issuer, and NBD Bank, as trustee, as
supplemented by the First Supplemental Indenture dated as of _______________,
1998, by and between the Guarantor and NBD Bank, as trustee.
"Majority in liquidation amount of Trust Preferred Securities"
means a vote by Holder(s) of Trust Preferred Securities, voting separately as a
class, of more than 50% of the liquidation amount of all Trust Preferred
Securities outstanding at the time of determination.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the
Guarantor, and delivered to the Trustee. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
the Officers' Certificate are based;
(c) a statement that, in the opinion of each such officer, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
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(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Responsible Officer" means, with respect to the Trustee, any
vice president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any senior trust officer,
trust officer or assistant trust officer or any other officer of the Corporate
Trust Department of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Successor Trustee" means a successor Trustee possessing the
qualifications to act as Trustee under Section 4.01.
"Trust Common Securities" means the securities representing
common undivided beneficial interests in the assets of the Trust.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trust Securities" means the Trust Preferred Securities and
the Trust Common Securities.
"Trustee" means NBD Bank until a Successor Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Guarantee Agreement and thereafter means each such Successor Trustee.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Guarantee Agreement
and shall, to the extent applicable, be governed by such provisions; and
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.02. Lists of Holders of Securities.
(a) The Guarantor shall furnish or cause to be furnished to
the Trustee (a) semiannually, not later than June 1 and December 1 in each year,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of a date not more than 15 days
prior to the time such list is furnished, and (b) at such other times as the
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Trustee may request in writing, within 30 days after the receipt by the
Guarantor of any such request, a List of Holders as of a date not more than 15
days prior to the time such list is furnished; provided that, the Guarantor
shall not be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Trustee by the Guarantor or at any time the Trustee is the Securities Registrar
under the Trust Agreement. The Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Trustee
Within 60 days after May 15 of each year commencing May 15,
1998, the Trustee shall provide to the Holders of the Trust Preferred Securities
such reports as are required by Section 313(a) of the Trust Indenture Act, if
any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Trustee shall also comply with the other requirements of
Section 313 of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Trustee
The Guarantor shall provide to the Trustee such documents,
reports and information as required by Section 314 of the Trust Indenture Act
(if any) in the form, in the manner and at the times required by Section 314 of
the Trust Indenture Act, and shall provide, within 120 days after the end of
each fiscal year of the Guarantor, the compliance certificate required by
Section 314(a)(4) of the Trust Indenture Act in the form and in the manner
required by such Section.
SECTION 2.05. Evidence of Compliance with Conditions
Precedent
The Guarantor shall provide to the Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Guarantee
Agreement that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.06. Events of Default; Waiver
The Holders of a Majority in liquidation amount of Trust
Preferred Securities may, by vote, on behalf of all of the Holders, waive any
past Event of Default and its consequences. Upon such waiver, any such Event of
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured and not to have existed, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.07. Event of Default; Notice.
(a) The Trustee shall, within 90 days after the occurrence of
an Event of Default actually known to the Trustee, transmit by mail, first class
postage prepaid, to the Holders, notices of all such Events of Default, unless
such defaults have been cured before the giving of such notice,
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provided that the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee, or a trust committee
of directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.
(b) The Trustee shall not be deemed to have knowledge of any
Event of Default unless the Trustee shall have received written notice, or a
Responsible Officer charged with the administration of the Trust Agreement shall
have obtained written notice, of such Event of Default.
SECTION 2.08. Conflicting Interests
The Trust Agreement shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TRUSTEE
SECTION 3.01. Powers and Duties of the Trustee.
(a) This Guarantee Agreement shall be held by the Trustee for
the benefit of the Holders, and the Trustee shall not transfer this Guarantee
Agreement to any Person except the Trustee shall assign rights hereunder to a
Holder to the extent such assignment is necessary to exercise such Holder's
rights pursuant to Section 5.04 or to a Successor Trustee upon acceptance by
such Successor Trustee of its appointment to act as Successor Trustee. The
right, title and interest of the Trustee shall automatically vest in any
Successor Trustee, and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Trustee.
(b) If an Event of Default has occurred and is continuing, the
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Trustee, before the occurrence of any Event of Default
and after the curing or waiving of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.06), the
Trustee shall exercise such of the rights and powers vested in it by this
Guarantee Agreement, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
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(A) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Guarantee Agreement, and the Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee Agreement;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a Majority in liquidation amount
of the Trust Preferred Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee
under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
SECTION 3.02. Certain Rights of Trustee.
(a) Subject to the provisions of Section 3.01:
(i) the Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
rely upon an Officers'
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Certificate which, upon receipt of such request, shall be promptly
delivered by the Guarantor;
(iv) the Trustee may consult with counsel of its choice, and
the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion; such counsel
may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees; the Trustee shall have the right at any
time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction;
(v) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have
provided to the Trustee such adequate security and indemnity as would
satisfy a reasonable person in the position of the Trustee, against the
costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Trustee; provided that nothing contained in this Section 3.02(a)(v)
shall be taken to relieve the Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested
in it by this Guarantee Agreement;
(vi) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(viii) whenever in the administration of this Guarantee
Agreement the Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Trustee (i) may request instructions from the
Holders, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Trustee shall be construed to be
a duty.
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SECTION 3.03. Compensation; Fees; Indemnity.
The Guarantor agrees:
(a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by the Trustee hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Trustee upon request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any provision of
this Guarantee Agreement (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and
(c) to indemnify the Trustee for, and to hold the Trustee
harmless against, any and all loss, damage, claims, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
The provisions of this Section 3.03 shall survive the
termination of this Guarantee Agreement or the registration or removal of the
Trustee.
ARTICLE IV
TRUSTEE
SECTION 4.01. Trustee; Eligibility.
(a) There shall at all times be a Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for the
purposes of this Section 4.01(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Trustee shall cease to be eligible to
so act under Section 4.01(a), the Trustee shall immediately resign in the manner
and with the effect set out in Section 4.02(c).
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(c) If the Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Trustee and Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act, subject to the rights of the Trustee
under the penultimate paragraph thereof.
SECTION 4.02. Appointment, Removal and Resignation of Trustee.
(a) Subject to Section 4.02(b), the Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Trustee shall not be removed until a Successor Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Trustee and delivered to the Guarantor.
(c) The Trustee appointed to office shall hold office until a
Successor Trustee shall have been appointed or until its removal or resignation.
The Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Trustee and delivered to
the Guarantor, which resignation shall not take effect until a Successor Trustee
has been appointed and has accepted such appointment by instrument in writing
executed by such Successor Trustee and delivered to the Guarantor and the
resigning Trustee.
(d) If no Successor Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning Trustee
may petition any court of competent jurisdiction for appointment of a Successor
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01. Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Trust), as and when due, regardless of
any defense, right of set-off or counterclaim which the Guarantor may have or
assert against any person. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Trust to pay such amounts to the
Holders.
SECTION 5.02. Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Trust or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
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SECTION 5.03. Obligations Not Affected
The obligation of the Guarantor to make the Guarantee Payments
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Trust of any express or implied
agreement, covenant, term or condition relating to the Trust Preferred
Securities to be performed or observed by the Trust;
(b) the extension of time for the payment by the Trust of all
or any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Trust Preferred Securities or
the extension of time for the performance of any other obligation under, arising
out of, or in connection with, the Trust Preferred Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Subordinated Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Trust Preferred
Securities, or any action on the part of the Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Trust or any of the
assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the Trust
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.03 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. Rights of Holders
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Trustee to be held for the benefit of the
Holders; (ii) the Trustee has the right to enforce this Guarantee Agreement on
behalf of the Holders; (iii) the Holders of a Majority in liquidation amount of
the Trust Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee in
respect of this Guarantee Agreement or to direct the exercise of any trust or
power conferred upon the Trustee
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under this Guarantee Agreement, provided that such direction shall not be in
conflict with any rule of law or with this Guarantee Agreement, and could not
involve the Trustee in personal liability in circumstances where reasonable
indemnity would not be adequate; and (iv) any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement, without first instituting a legal proceeding against or
requesting or directing that action be taken by the Trustee or any other person;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatsoever by virtue of, or by availing of, any
provision of this Guarantee Agreement to affect, disturb or prejudice the rights
of any other of such Holders or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Guarantee Agreement, except in the manner herein provided and for the equal and
ratable benefit of all of such Holders.
SECTION 5.05. Guarantee of Payment
This Guarantee Agreement creates a guarantee of payment and
not of collection. This Guarantee Agreement will not be discharged except by
payment of the Guarantee Payments in full (without duplication) or upon the
distribution of Subordinated Debentures to the Holders in exchange for all of
the Trust Preferred Securities.
SECTION 5.06. Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders against the Trust in respect of any amounts paid to the Holders by
the Guarantor under this Guarantee Agreement; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts of Guarantee Payments are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.07. Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Trust Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.01. Subordination
This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of
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the Guarantor, including the Subordinated Debentures, except those obligations
or liabilities made pari passu or subordinate by their terms, (ii) pari passu
with the most senior preferred stock now or hereafter issued or guaranteed by
the Guarantor, and (iii) senior to all common stock of the Guarantor.
ARTICLE VII
TERMINATION
SECTION 7.01. Termination
This Guarantee Agreement shall terminate and be of no further
force and effect upon: (i) full payment of the Redemption Price of all Trust
Preferred Securities, (ii) the distribution of Subordinated Debentures to the
Holders in exchange for all of the Trust Preferred Securities, or (iii) full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Trust. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with respect
to Trust Preferred Securities or under this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Successors and Assigns
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
then outstanding. Except in connection with a consolidation, merger, conveyance,
transfer, or lease involving the Guarantor that is permitted under Article Eight
of the Indenture, the Guarantor shall not assign its obligations hereunder.
SECTION 8.02. Amendments
Except with respect to any changes which do not materially and
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than 66-2/3% in liquidation amount of all
the outstanding Trust Preferred Securities. The provisions of Article Six of the
Trust Agreement concerning meetings of Holders shall apply to the giving of such
approval.
SECTION 8.03. Notices
Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the Trustee and the
Holders:
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SEMCO Energy, Inc.
405 Water Street
Port Huron, Michigan 48060
Attn: ___________________
(b) if given to the Trust, in care of the Trustee, or to the
Trustee at the Trust's (and the Trustee's) address set forth below or such other
address as the Trustee on behalf of the Trust may give notice of to the Holders:
SEMCO Capital Trust
c/o [______________________]
with a copy, in the case of a notice to the Trust (other than a notice from the
Guarantor), to the Guarantor.
(c) if given to any Holder, at the address set forth on the
books and records of the Trust.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 8.04. Benefit
This Guarantee Agreement is solely for the benefit of the
Holders and, subject to Section 3.01(a), is not separately transferable from the
Trust Preferred Securities.
SECTION 8.05. Interpretation
In this Guarantee Agreement, unless the context otherwise
requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
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(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 8.06. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE
STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK IN ANY ACTION, SUIT
OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS
GUARANTEE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, AND TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE GUARANTOR HEREBY WAIVES AND AGREES NOT TO
ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR
PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT
THIS GUARANTEE AGREEMENT OR ANY DOCUMENT OR ANY INSTRUMENT REFERRED TO HEREIN OR
THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURTS. THE
GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR
REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN THIS GUARANTEE AGREEMENT
OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-14-
<PAGE> 19
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
SEMCO ENERGY, INC.
By:
--------------------------------------
Name:
Title:
NBD BANK
as Trustee
By:
--------------------------------------
Name:
Title:
-15-
<PAGE> 1
EXHIBIT 4.13
<TABLE>
<CAPTION>
<S><C>
NUMBER [LOGO] SHARES
SEMC- SEMCO ENERGY
------------
ORGANIZED UNDER THE LAWS OF SEE REVERSE FOR CERTAIN DEFINITIONS
THE STATE OF MICHIGAN AND RESTRICTIVE LEGENDS
CUSIP 78412D 10 9
THIS CERTIFIES THAT
Countersigned and Registered:
SEMCO ENERGY, INC.
(Michigan)
Transfer Agent
and Registrar
By:
___________________________________
IS THE OWNER OF Authorized Signature
FULLY PAID AND NON-ASSESSABLE COMMON SHARES OF THE
PAR VALUE OF ONE DOLLAR ($1.00) PER SHARE OF
==============================================================SEMCO Energy, Inc.====================================================
transferable only on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender
of this Certificate properly endorsed.
This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.
Dated:
CANCELED CANCELED
Sherry L. Abbott SEMCO ENERGY, INC. William L. Johnson
CORPORATE SEAL Authorized
SECRETARY MICHIGAN PRESIDENT Officer
(C)NORTHERN BANK NOTE COMPANY
</TABLE>
<PAGE> 2
SEMCO ENERGY, INC.
As SEMCO Energy, Inc. is authorized to issue shares of more than one
class, the corporation will furnish to any shareholder, upon request and
without charge, a full statement of the designations and the powers, preferences
and rights, and the qualifications, limitations or restrictions of the shares of
each class authorized to be issued, and as the corporation is authorized to
issue preferred shares in series, such statement will include the variations in
the relative rights and preferences between the shares of each such series so
far as the same have been fixed and determined, and such statement will include
the authority of the board of directors to fix and determine the relative rights
and preferences of subsequent series; and the holder hereof, by accepting this
certificate, expressly assents to and is bound by all said provisions.
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between SEMCO Energy, Inc.
(the "Company") and the Rights Agent thereunder (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy of which
is on file at the principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a copy of
the Rights Agreement, as in effect on the date of mailing, without charge,
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or held by,
any Person who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent holder, may
become null and void.
________________________________________________________________________________
<TABLE>
<S><C>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full according to applicable laws or regulations:
TEN COM- as tenants in common UNIF GIFT MIN ACT- _________________ Custodian ____________________
TEN ENT- as tenants by the entireties (Cust) (Minor)
JT TEN- as joint tenants with under Uniform Gifts to Minors
right of survivorship and
not as tenants in common Act _________________________________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value received, __________________________________________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________________
| |
|____________________________________________|_____________________________________________________________________________________
___________________________________________________________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________ Shares
of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint ______________________
_______________________________________________________________________________________________________________ Attorney to
transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.
Dated, ___________________________________ X ______________________________________________________________________________________
X ______________________________________________________________________________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT, OR ANY CHANGE WHATEVER.
SIGNATURE GUARANTEED: ____________________________________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
</TABLE>
<PAGE> 1
Exhibit 5.1
Dickinson Wright PLLC
500 Woodward Avenue, Suite 4000
Detroit, Michigan 48226-3425
July 8, 1998
SEMCO Energy, Inc.
405 Water Street
Port Huron, Michigan 48060
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We are acting as counsel to SEMCO Energy, Inc. (the "Corporation") in
connection with the preparation of a Registration Statement on Form S-3 (the
"Registration Statement"), including a preliminary prospectus and preliminary
prospectus supplements, which is to be filed with the Securities and Exchange
Commission (the "Commission") on July 8, 1998 under the Securities Act of
1933, as amended (the "Act"), for the registration under the Act of (1)
Subordinated Debentures (the "Subordinated Debentures") to be issued by the
Corporation to SEMCO Capital Trust (the "Trust"), (2) Trust Preferred
Securities (liquidation amount $25 per Trust Preferred Security) (the "Trust
Preferred Securities") to be issued by the Trust, (3) the Corporation's Trust
Guarantee (as defined in the Registration Statement) with respect to such Trust
Preferred Securities, (4) Medium Term Notes (the "Notes") to be issued by the
Corporation and (5) Common Stock ("Common Stock") to be issued by the
Corporation. The Subordinated Debentures will be issued pursuant to a
subordinated indenture, as supplemented, between the Corporation and the
trustee named therein (the "Subordinated Debenture Indenture"), the Trust
Guarantee will be issued pursuant to a guaranty agreement between the
Corporation and the trustee named therein (the "Trust Guaranty Agreement") and
the Notes will be issued pursuant to a note indenture, as supplemented, between
the Corporation and the trustee named therein (the "Note Indenture"), in each
case substantially in the respective forms filed as exhibits to the
Registration Statement.
1. We are of the opinion that, upon compliance with the pertinent
provisions of the Act and the Trust Indenture Act of 1939, as amended, upon
compliance with applicable securities or blue sky laws of various jurisdictions
and upon the adoption of appropriate resolutions by the Board of Directors of
the Corporation or a duly authorized committee thereof, when the Subordinated
Debenture Indenture, the Note Indenture and the Guaranty Agreement have been
duly executed and delivered by the proper officers of the Corporation and the
trustees named therein, and when the Subordinated Debentures, the Guarantee and
the Notes have been executed, authenticated and delivered in accordance with
the terms of the Subordinated Debenture Indenture, the Guaranty Agreement and
the Note Indenture, as the case may be, the Subordinated Debentures, the
Guarantee and the Notes will be binding obligations of the Corporation
(subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws from time to time in force
and to general principles of equity, whether considered in a proceeding at law
or in equity).
2. We are of the opinion that, the Common Stock when issued and
<PAGE> 2
sold, as contemplated in the Registration Statement, will be legally issued,
fully paid and non-assessable.
The foregoing opinions are limited solely to the Federal laws of the United
States, the laws of the State of Michigan, and, with respect to paragraph 1
above the laws of the State of New York. We are expressing no opinion as to the
effect of the laws of any other jurisdiction and we have, with your consent,
with respect to the laws of the State of New York, relied upon the opinion of
Dewey Ballantine LLP, attached as Exhibit A hereto, as to the matters set forth
in paragraph 1 above.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the statements with respect to our firm under the
captions "Legal Matters" in the Registration Statement and "Legal Opinions" in
the prospectus supplement. In giving the foregoing consent, we do not hereby
admit that we come within the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations of the Commission
thereunder.
Very truly yours,
/s/ DICKINSON WRIGHT PLLC
<PAGE> 3
EXHIBIT A TO EXHIBIT 5.1
DEWEY BALLANTINE LLP
1301 AVENUE OF THE AMERICAS
NEW YORK 10019-6092
TEL 212 259-8000 FAX 212 259-6333
July 8, 1998
Dickinson Wright PLLC
500 Woodward Avenue
Suite 4000
Detroit, Michigan 48226-3425
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We are acting as counsel to underwriters to be designated in connection
with a Registration Statement on Form S-3, including a preliminary
prospectus, which is to be filed with the Securities and Exchange Commission
(the "Commission") on July 8, 1998 (the "Registration Statement"), for the
registration under the Securities Act of 1933, as amended (the "Act"), of (1)
Subordinated Debentures (the "Subordinated Debentures") to be issued by SEMCO
Energy, Inc. (the "Company") to SEMCO Capital Trust (the "Trust"), (2) Trust
Preferred Securities (liquidation amount $25 per Preferred Security) (the
"Trust Preferred Securities") to be issued by the Trust, (3) the Trust
Guarantee (as defined in the Registration Statement) of the Company with
respect to such Trust Preferred Securities and (4) the Company's Medium Term
Notes (as defined in the Registration Statement). The Subordinated Debentures
will be issued pursuant to a subordinated debenture indenture, as supplemented,
between the Company and the trustee named therein (the "Subordinated Debenture
Indenture"), the Trust Guarantee will be issued pursuant to a guarantee
agreement between the Company and the trustee named therein (the "Trust
Guarantee Agreement"), and the Medium Term Notes will be issued pursuant to a
note indenture, as supplemented, between the Company and the trustee named
therein (the "Note Indenture"), in each case in the respective forms filed as
exhibits to the Registration Statement.
We are of the opinion that, assuming that issuance of securities by
the Company is not subject to regulation under the Public Utility
Holding Company Act of 1935, as amended, pursuant to an exemption thereunder,
upon compliance with the pertinent provisions of the Act and the Trust
Indenture Act of 1939, as amended, upon compliance with applicable securities
or blue sky laws of various jurisdictions, upon the adoption of appropriate
resolutions by the Board of Directors of the Company or a duly authorized
committee thereof, when the Subordinated Debenture Indenture has been duly
executed and delivered by the proper officers of the Company and the trustee
named therein, when the Trust Guarantee Agreement has been duly executed and
delivered by the proper officers of the Company and the trustee named therein,
when the Note Indenture has been duly executed and delivered by the proper
officers of the Company and the trustee named therein, and when the
Subordinated Debentures, the Trust Guarantee and the Medium Term Notes have
been
<PAGE> 4
executed, authenticated and delivered in accordance with the terms of the
Subordinated Debenture Indenture, the Trust Guarantee Agreement and the Note
Indenture, as the case may be, the Subordinated Debentures, the Trust Guarantee
and the Medium Term Notes will be binding obligations of the Company (subject
to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting creditors' rights
generally and to general principles of equity, whether considered in a
proceeding at law or in equity).
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the law of the State
of New York.
This opinion is furnished solely for your benefit in connection with
your rendering an opinion to the Company to be filed as Exhibit 5.1 to the
Registration Statement and we hereby consent to your attaching this opinion as
an annex to such opinion. This opinion may not be relied upon by you for any
other purpose, or quoted to or relied upon by any other person, firm or entity
for any purpose, without our prior written consent.
Very truly yours,
/s/ DEWEY BALLANTINE LLP
<PAGE> 1
EXHIBIT 5.2
Richards, Layton & Finger, P.A.
One Rodney Square
Wilmington, Delaware 19899
July 8, 1998
SEMCO Capital Trust
SEMCO Energy, Inc.
405 Water Street
Port Huron, Michigan 48061-5026
Re: SEMCO Capital Trust
Ladies and Gentlemen:
We have acted as special Delaware counsel for SEMCO Energy,
Inc., a Michigan corporation (the "Company"), and SEMCO Capital Trust, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated July 7,
1998 as filed with the office of the Secretary of State of the State of
Delaware (the "Secretary of State") on July 7, 1998;
(b) The Trust Agreement of the Trust, dated as of July 7,
1998 between the Company, as Depositor, and the trustee of the Trust named
therein;
(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a preliminary prospectus (the "Prospectus") and a
prospectus supplement (the "Prospectus Supplement"), relating to the Trust
Preferred Securities of the Trust representing preferred undivided beneficial
interests in the assets of the Trust (each, a "Preferred Security" and
collectively, the "Preferred Securities"), filed by the Company, the Trust
and others as set forth therein with the Securities and Exchange Commission on
or about July 8, 1998;
<PAGE> 2
SEMCO Capital Trust
SEMCO Energy, Inc.
July 8th, 1998
Page 2
(d) A form of Amended and Restated Trust Agreement for the
Trust, to be entered into between the Company, the trustees of the Trust named
therein, and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust (including Exhibits D and E thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated July
8th, 1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Trust Agreement and the Certificate of Trust are in full force and effect and
have not been amended, (ii) except to the extent provided in paragraph 1 below,
the due organization or due formation, as the case may be, and valid existence
in good standing of each party to the documents examined by us under the laws of
the jurisdiction governing its creation, organization or formation, (iii) the
legal capacity of natural persons who are parties to the documents examined by
us, (iv) that each of the parties to the documents examined by us has the power
and authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Preferred Security is to be issued by the Trust (collectively, the "Preferred
Security Holders") of a Preferred Security Certificate for such Preferred
Security and the payment for such Preferred Security, in accordance with the
Trust Agreement and the Registration Statement, and (vii) that the Preferred
Securities are issued and sold to the Preferred Security Holders in accordance
with the Trust Agreement and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
<PAGE> 3
SEMCO Capital Trust
SEMCO Energy Inc.
July 8th, 1998
Page 3
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Securities will represent valid and, subject
to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. In
addition, we hereby consent to the use of our name under the heading "Legal
Matters" in the Prospectus and "Legal Opinions" in the Prospectus Supplement. In
giving the foregoing consents, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder. Except as stated above, without our prior
written consent, this opinion may not be furnished or quoted to, or relied upon
by, any other person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
<PAGE> 1
EXHIBIT 8
Dickinson Wright PLLC
500 Woodward Avenue, Suite 4000
Detroit, Michigan 48226-3425
July 8, 1998
SEMCO Energy, Inc.
405 Water Street
Port Huron, Michigan 48060
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to SEMCO Energy, Inc. (the "Corporation") in
connection with the preparation of a Registration Statement on Form S-3 (the
"Registration Statement"), including a preliminary prospectus and preliminary
prospectus supplements, which is to be filed with the Securities and Exchange
Commission (the "Commission") for the registration under the Securities Act of
1933 (the "Securities Act"), of (1) Subordinated Debentures (the " Subordinated
Debentures") to be issued by the Corporation to SEMCO Capital Trust (the
"Trust"), (2) Trust Preferred Securities (liquidation amount $25 per Trust
Preferred Security) to be issued by the Trust and (3) the Trustee Guarantee (as
defined in the Registration Statement) with respect to such Trust Preferred
Securities. The Trust will be organized pursuant to an Amended and Restated
Trust Agreement between the Corporation and the trustees named therein. The
Subordinated Debentures will be issued pursuant to a Subordinated Indenture, as
supplemented, between the Corporation and the Indenture Trustee named therein
and the Trust Guarantee will be issued pursuant to a guarantee agreement between
the Corporation and the trustee named therein, in the forms filed as an exhibit
to the Registration Statement.
On the basis and subject to the accuracy of the statements contained in
the materials referred to above, and our consideration of such other matters as
we have deemed necessary, it is our opinion that under current law the material
federal income tax consequences to holders of Trust Preferred Securities issued
by the Trust will be as described under the heading "Certain Federal Income Tax
Considerations" in the preliminary prospectus supplement relating thereto
constituting part of the Registration Statement. You have not requested, and we
do not express, an opinion concerning any other tax consequences of the issuance
by the Trust of the Trust Preferred Securities. This opinion is not to be used,
circulated, quoted or otherwise referred to for any purpose without our express
written permission.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement and to the statements with respect to
our firm in the section captioned "Certain Federal Income Tax Considerations" in
the preliminary prospectus supplement relating to the Trust Preferred Securities
constituting part of the Registration Statement. In giving the foregoing
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
/s/ Dickinson Wright PLLC
<PAGE> 1
EXHIBIT 12
SEMCO ENERGY, INC.
Ratio of Earnings to Fixed Charges
(Thousands of Dollars)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
TWELVE MONTHS
ENDED YEAR ENDED
---------------------------------------------------------------------------------
MARCH 31, 1998 1997 1996 1995 1994 1993
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings as defined (a)
Net Income (loss) $13,482 $14,921 ($12,803) $11,331 $9,992 $9,563
Income taxes 5,239 8,228 (7,308) 6,151 4,560 5,809
Other items (96) (96) (96) (96) 1,882 176
Fixed charges as defined 13,783 16,690 14,588 14,402 14,092 14,592
------- ------- ------- ------- ------- -------
Earnings as defined $32,408 $39,743 ($5,619) $31,788 $30,526 $30,140
======= ======= ======= ======= ======= =======
Fixed charges as defined (a)
Interest on long-term debt $10,440 $9,388 $8,514 $8,546 $8,605 $9,426
Amortization of debt expense 405 449 431 520 454 409
Other interest charges 2,664 6,579 5,369 5,062 4,759 4,483
Preferred securities dividends
and distributions 274 274 274 274 274 274
------- ------- ------- ------- ------- -------
Fixed charges as defined $13,783 $16,690 $14,588 $14,402 $14,092 $14,592
======= ======= ======= ======= ======= =======
Ratio of earnings to fixed charges 2.35 2.38 (b) 2.21 2.17 2.07
==== ==== === ==== ==== ====
</TABLE>
NOTES:
(a) Earnings and fixed charges as defined in instructions for Item 503 of
Regulation S-K
(b) For the year ended December 31, 1996, fixed charges exceeded earnings
by $20.2 million. Earnings as defined include a $32.3 million non-cash
pretax write-down of the NOARK investment. Excluding the NOARK
write-down the ratio of earnings to fixed charges would have been 1.83.
<PAGE> 2
EXHIBIT 12
SEMCO ENERGY, INC.
Ratio of Earnings to Fixed Charges and Preferred Dividends
(Thousands of Dollars)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
TWELVE MONTHS
ENDED YEAR ENDED
---------------------------------------------------------------------------------------
MARCH 31, 1998 1997 1996 1995 1994 1993
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings as defined (a)
Net Income (loss) $13,482 $14,921 ($12,803) $11,331 $9,992 $9,563
Income taxes 5,239 8,228 (7,308) 6,151 4,560 5,809
Other items (105) (105) (105) (105) 1,872 166
Fixed charges as defined 13,808 16,715 14,613 14,428 14,120 14,621
------- ------- ------- ------- ------- -------
Earnings as defined $32,424 $39,759 ($5,603) $31,805 $30,544 $30,159
======= ======= ======= ======= ======= =======
Fixed charges as defined (a)
Interest on long-term debt $10,440 $9,388 $8,514 $8,546 $8,605 $9,426
Amortization of debt expense 405 449 431 520 454 409
Other interest charges 2,689 6,604 5,394 5,088 4,787 4,512
Preferred securities dividends
and distributions 274 274 274 274 274 274
------- ------- ------- ------- ------- -------
Fixed charges as defined $13,808 $16,715 $14,613 $14,428 $14,120 $14,621
======= ======= ======= ======= ======= =======
Ratio of earnings to fixed charges
and Preferred Dividends 2.35 2.38 (b) 2.20 2.16 2.06
======= ======= ======= ======= ======= =======
</TABLE>
NOTES:
(a) Earnings and fixed charges as defined in instructions for Item 503 of
Regulation S-K
(b) For the year ended December 31, 1996, fixed charges exceeded earnings
by $20.2 million. Earnings as defined include a $32.3 million non-cash
pretax write-down of the NOARK investment. Excluding the NOARK
write-down the ratio of earnings to fixed charges would have been 1.83.
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
March 10, 1998 included in SEMCO Energy, Inc.'s Form 10-K for the year ended
December 31, 1997, and to all references to our Firm included in this
registration statement
/s/ Arthur Andersen LLP
July 2, 1998
Detroit, Michigan
<PAGE> 2
EXHIBIT 23.4
To SEMCO Energy, Inc.:
We are aware that SEMCO Energy, Inc. has incorporated by reference in
this registration statement its Form 10-Q for the quarter ended March 31, 1998,
which includes our report dated May 5, 1998, covering the unaudited interim
financial information contained therein. Pursuant to Regulation C of the
Securities Act of 1933, that report is not considered a part of the registration
statement prepared or certified by our Firm or a report prepared or certified by
our Firm within the meaning of Sections 7 and 11 of the Act.
/s/ Arthur Andersen LLP
July 2, 1998
Detroit, Michigan
<PAGE> 1
EXHIBIT 24
SEMCO ENERGY, INC.
POWER OF ATTORNEY
Whereas, the Board of Directors of SEMCO Energy, Inc., a Michigan
corporation, at a meeting held on February 27, 1998, authorized the execution of
one or more Shelf Registration Statements for the registration and sale of up to
$200,000,000 of securities for issuance and sale to the public and the filing of
said Registration Statements with the Securities and Exchange Commission under
the Securities Act of 1933, as amended.
NOW, THEREFORE, each of the undersigned hereby appoints William L.
Johnson and Robert J. Digan, II, his or her true and lawful attorneys to
execute, in his/her name and in the capacity shown below, said Registration
Statements and any and all amendments thereto and to file the same with the
Securities and Exchange Commission. Each of said attorneys shall have full
power of substitution and resubstitution.
IN WITNESS WHEREOF, we have hereunto set our hands as of the 27th day
of February, 1998.
/s/ Daniel A. Burkhardt /s/ Harvey I. Klein
- --------------------------------- -------------------------
Daniel A. Burkhardt, Director Harvey I. Klein, Director
/s/ Edward J. Curtis /s/ Bruce G. Macleod
- --------------------------------- -------------------------
Edward J. Curtis, Director Bruce G. Macleod, Director
/s/ Robert J. Digan, II /s/ Frederick S. Moore
- --------------------------------- -------------------------
Robert J. Digan, II, Senior Vice Frederick S. Moore, Director
President and CFO (Principal
Financial and Accounting Officer)
/s/ John T. Ferris /s/ Edith A. Stotler
- --------------------------------- -------------------------
John T. Ferris, Director Edith A. Stotler, Director
/s/ Michael O. Frazer /s/ Donald W. Thomason
- --------------------------------- -------------------------
Michael O. Frazer, Director Donald W. Thomason, Director
/s/ William L. Johnson
- ---------------------------------
William L. Johnson, President and CEO
and Director (Principal Executive Officer)
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
-----------------------------
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED,
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)__
--------------------------------------------
NBD BANK
(Exact name of Trustee as specified in its charter)
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226 38-0864715
(Address of principal executive offices) (Zip Code) (I.R.S. Employer
Identification No.)
NBD BANK
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226
CORPORATE TRUST ADMINISTRATION
ATTN: ERNEST J. PECK, VICE PRESIDENT
TELEPHONE: (313) 225-2025
(Name, Address and Telephone number of agent for service)
SEMCO ENERGY, INC.
(Exact name of obligor as specified in its charter)
MICHIGAN 38-2144267
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
405 WATERSTREET
PORT HURON, MICHIGAN 48061-5026
(Address of principal executive offices) (Zip Code)
MEDIUM TERM NOTES
(Title of Indenture Securities)
1
<PAGE> 2
ITEM 1 GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT:
State of Michigan Financial Institutions Bureau, Lansing, MI
Federal Reserve Bank of Chicago, Chicago, Illinois Federal Deposit
Insurance Corporation, Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
The Trustee is authorized to exercise corporate trust
powers.
ITEM 2 AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
The obligor is not an affiliate of the Trustee.
ITEM 3 VOTING SECURITIES OF THE TRUSTEE.
The following information is furnished as to each class of voting
securities of the Trustee:
As of March 27, 1998
----------------------------------------------------------------------
Column A Column B
----------------------------------------------------------------------
Title of Class Amount Outstanding
----------------------------------------------------------------------
Common Stock, par value $12.50 per share 8,948,648 shares
ITEM 4 TRUSTEESHIPS UNDER OTHER INDENTURES
None.
ITEM 5 THROUGH ITEM 15 Not applicable
ITEM 16 LIST OF EXHIBITS:
EXHIBIT (1) A COPY OF THE ARTICLES OF INCORPORATION OF THE TRUSTEE NOW
IN EFFECT
Incorporated by reference to Exhibit (1) to Item 16 of Form
T-1 filed as Exhibit 25 to Registration Statement, Securities and
Exchange Commission, Registration No. 33-51775.*
EXHIBIT (2) CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS
Incorporated by reference to Exhibit (2) to Item 16 of Form
T-1 filed with Amendment No. 1, Securities and Exchange Commission,
Registration No. 22-4501.*
EXHIBIT (3) AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST
POWERS Incorporated by reference to Exhibit (3) to Item 16 of Form T-1
filed with Amendment No. 1, Securities and Exchange Commission,
2
<PAGE> 3
Registration No. 22-4501.*
EXHIBIT (4) BY-LAWS OF THE TRUSTEE, AS PRESENTLY IN EFFECT
Incorporated by reference to Exhibit (4) to Item 16 of Form
T-1 filed as Exhibit 25 to Registration Statement, Securities and
Exchange Commission, Registration No. 33-51775.*
EXHIBIT (5) Not Applicable.
EXHIBIT (6) CONSENT BY THE TRUSTEE REQUIRED BY SECTION 321 (B) OF
THE ACT.
Incorporated by reference to Exhibit (6) to Item 16 of Form
T-1, filed with Amendment No. 1, Securities and Exchange Commission,
Registration No. 22-4501.*
EXHIBIT (7) A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR
EXAMINING AUTHORITY.
EXHIBIT (8) Not applicable.
EXHIBIT (9) Not applicable.
* Exhibits thus designated are incorporated herein by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 filed by the Trustee with
the Securities and Exchange Commission with the specific references noted.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, NBD Bank, a Michigan banking corporation organized and existing under
the laws of the State of Michigan, has duly caused this Statement of Eligibility
and Qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Detroit, State of Michigan on the 8th day of
July, 1998.
NBD BANK, Trustee
By: /s/ Ernest J. Peck
----------------------------
Ernest J. Peck
Vice President
3
<PAGE> 4
Charter No. 13671 Comptroller of the Currency District
REPORT OF CONDITION CONSOLIDATING
DOMESTIC AND FOREIGN SUBSIDIARIES OF THE
NBD BANK
in the State of Michigan, at the close of business on March 31, 1998 published
in response to call made by Comptroller of the Currency, under title 12, United
States Code, Section 161.
<TABLE>
<CAPTION>
ASSETS
Thousands
of dollars
<S> <C>
Cash and balances due from depository institutions
Noninterest-bearing balances and currency
and coin............................................... 2,082,041
Interest-bearing balances.............................. -
Securities:
Held-to-maturity securities............................ -
Available-for-sale securities.......................... 1,890,702
Federal funds sold and securities purchased
under agreements to resell............................. 58,900
Loans and lease financing receivables:
Loans and leases, net of unearned income............... 17,402,777
LESS: Allowance for loan and lease losses.............. 279,543
Loans and leases, net of unearned income and
allowance.............................................. 17,123,234
Assets held in trading accounts............................ 60,975
Premises and fixed assets (including
capitalized leases).................................... 334,881
Other real estate owned.................................... 4,273
Investments in unconsolidated subsidiaries and
associated companies................................... -
Customers' liability to this bank on acceptances
outstanding............................................ 10,067
Intangible assets.......................................... 100,950
Other assets............................................... 696,538
-----------------
Total assets............................................... 22,362,561
=================
LIABILITIES
Deposits:
In domestic offices.................................... 17,326,675
Noninterest-bearing ............................... 5,470,573
Interest-bearing .................................. 11,856,102
In foreign offices, Edge and Agreement
subsidiaries, and IBFs................................. 170,093
Noninterest-bearing ............................... -
Interest-bearing................................... 170,093
Federal funds purchased and securities sold
under agreements to repurchase......................... 1,184,683
Demand notes issued to the U.S. Treasury................... 285,825
Trading liabilities........................................ 50,580
Other borrowed money:
With remaining maturity of one year or less........ 362,371
With remaining maturity of more than one year
through three years.............................. 54,595
With remaining maturity of more than three years... 3,656
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
Bank's liability on acceptances executed and
outstanding............................................ 10,067
Notes and debentures subordinated to
deposits............................................... 500,000
Other liabilities.......................................... 583,671
-----------------
Total liabilities.......................................... 20,532,216
-----------------
EQUITY CAPITAL
Common stock............................................... 111,858
Surplus.................................................... 671,329
Undivided profits and capital reserves..................... 1,036,236
Net unrealized holding gains (losses) on
available-for-sale securities.......................... 10,922
Cumulative foreign currency translation
adjustments............................................ -
-----------------
Total equity capital....................................... 1,830,345
-----------------
Total liabilities and equity capital....................... 22,362,561
=================
</TABLE>
I, Jason N. Hansen, Vice President of the above-named bank do hereby declare
that this Report of Condition is true and correct to the best of my knowledge
and belief.
JASON N. HANSEN
April 29, 1998
We, the undersigned directors, attest to the correctness of this statement
of resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
THOMAS H. JEFFS II
ALFRED R. GLANCY III
DON H. BARDEN
Directors
<PAGE> 1
EXHIBIT 25.2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
-----------------------------
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED,
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)__
--------------------------------------------
NBD BANK
(Exact name of Trustee as specified in its charter)
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226 38-0864715
(Address of principal executive offices) (Zip Code) (I.R.S. Employer
Identification No.)
NBD BANK
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226
CORPORATE TRUST ADMINISTRATION
ATTN: ERNEST J. PECK, VICE PRESIDENT
TELEPHONE: (313) 225-2025
(Name, Address and Telephone number of agent for service)
SEMCO ENERGY, INC.
(Exact name of obligor as specified in its charter)
MICHIGAN 38-2144267
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
405 WATERSTREET
PORT HURON, MICHIGAN 48061-5026
(Address of principal executive offices) (Zip Code)
SUBORDINATED DEBENTURES
(Title of Indenture Securities)
1
<PAGE> 2
ITEM 1 GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT:
State of Michigan Financial Institutions Bureau, Lansing, MI
Federal Reserve Bank of Chicago, Chicago, Illinois
Federal Deposit Insurance Corporation, Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
The Trustee is authorized to exercise corporate trust
powers.
ITEM 2 AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the Trustee.
ITEM 3 VOTING SECURITIES OF THE TRUSTEE.
The following information is furnished as to each class of voting
securities of the Trustee:
As of March 27, 1998
----------------------------------------------------------------------
Column A Column B
----------------------------------------------------------------------
Title of Class Amount Outstanding
----------------------------------------------------------------------
Common Stock, par value $12.50 per share 8,948,648 shares
ITEM 4 TRUSTEESHIPS UNDER OTHER INDENTURES
None.
ITEM 5 THROUGH ITEM 15 Not applicable
ITEM 16 LIST OF EXHIBITS:
EXHIBIT (1) A COPY OF THE ARTICLES OF INCORPORATION OF THE TRUSTEE NOW
IN EFFECT
Incorporated by reference to Exhibit (1) to Item 16 of Form
T-1 filed as Exhibit 25 to Registration Statement, Securities and
Exchange Commission, Registration No. 33-51775.*
EXHIBIT (2) CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS
Incorporated by reference to Exhibit (2) to Item 16 of Form
T-1 filed with Amendment No. 1, Securities and Exchange Commission,
Registration No. 22-4501.*
EXHIBIT (3) AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST
POWERS Incorporated by reference to Exhibit (3) to Item 16 of Form T-1
filed with Amendment No. 1, Securities and Exchange Commission,
2
<PAGE> 3
Registration No. 22-4501.*
EXHIBIT (4) BY-LAWS OF THE TRUSTEE, AS PRESENTLY IN EFFECT
Incorporated by reference to Exhibit (4) to Item 16 of Form
T-1 filed as Exhibit 25 to Registration Statement, Securities and
Exchange Commission, Registration No. 33-51775.*
EXHIBIT (5) Not Applicable.
EXHIBIT (6) CONSENT BY THE TRUSTEE REQUIRED BY SECTION 321 (B) OF
THE ACT.
Incorporated by reference to Exhibit (6) to Item 16 of Form
T-1, filed with Amendment No. 1, Securities and Exchange Commission,
Registration No. 22-4501.*
EXHIBIT (7) A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR
EXAMINING AUTHORITY.
EXHIBIT (8) Not applicable.
EXHIBIT (9) Not applicable.
* Exhibits thus designated are incorporated herein by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 filed by the Trustee with
the Securities and Exchange Commission with the specific references noted.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, NBD Bank, a Michigan banking corporation organized and existing under
the laws of the State of Michigan, has duly caused this Statement of Eligibility
and Qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Detroit, State of Michigan on the 8th day of
July, 1998.
NBD BANK, Trustee
By: /s/ Ernest J. Peck
----------------------------
Ernest J. Peck
Vice President
3
<PAGE> 4
Charter No. 13671 Comptroller of the Currency District
REPORT OF CONDITION CONSOLIDATING
DOMESTIC AND FOREIGN SUBSIDIARIES OF THE
NBD BANK
in the State of Michigan, at the close of business on March 31, 1998 published
in response to call made by Comptroller of the Currency, under title 12, United
States Code, Section 161.
<TABLE>
<CAPTION>
ASSETS
Thousands
of dollars
<S> <C>
Cash and balances due from depository institutions
Noninterest-bearing balances and currency
and coin............................................... 2,082,041
Interest-bearing balances.............................. -
Securities:
Held-to-maturity securities............................ -
Available-for-sale securities.......................... 1,890,702
Federal funds sold and securities purchased
under agreements to resell............................. 58,900
Loans and lease financing receivables:
Loans and leases, net of unearned income............... 17,402,777
LESS: Allowance for loan and lease losses.............. 279,543
Loans and leases, net of unearned income and
allowance.............................................. 17,123,234
Assets held in trading accounts............................ 60,975
Premises and fixed assets (including
capitalized leases).................................... 334,881
Other real estate owned.................................... 4,273
Investments in unconsolidated subsidiaries and
associated companies................................... -
Customers' liability to this bank on acceptances
outstanding............................................ 10,067
Intangible assets.......................................... 100,950
Other assets............................................... 696,538
-----------------
Total assets............................................... 22,362,561
=================
LIABILITIES
Deposits:
In domestic offices.................................... 17,326,675
Noninterest-bearing ............................... 5,470,573
Interest-bearing .................................. 11,856,102
In foreign offices, Edge and Agreement
subsidiaries, and IBFs................................. 170,093
Noninterest-bearing ............................... -
Interest-bearing................................... 170,093
Federal funds purchased and securities sold
under agreements to repurchase......................... 1,184,683
Demand notes issued to the U.S. Treasury................... 285,825
Trading liabilities........................................ 50,580
Other borrowed money:
With remaining maturity of one year or less........ 362,371
With remaining maturity of more than one year
through three years.............................. 54,595
With remaining maturity of more than three years... 3,656
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
Bank's liability on acceptances executed and
outstanding............................................ 10,067
Notes and debentures subordinated to
deposits............................................... 500,000
Other liabilities.......................................... 583,671
-----------------
Total liabilities.......................................... 20,532,216
-----------------
EQUITY CAPITAL
Common stock............................................... 111,858
Surplus.................................................... 671,329
Undivided profits and capital reserves..................... 1,036,236
Net unrealized holding gains (losses) on
available-for-sale securities.......................... 10,922
Cumulative foreign currency translation
adjustments............................................ -
-----------------
Total equity capital....................................... 1,830,345
-----------------
Total liabilities and equity capital....................... 22,362,561
=================
</TABLE>
I, Jason N. Hansen, Vice President of the above-named bank do hereby declare
that this Report of Condition is true and correct to the best of my knowledge
and belief.
JASON N. HANSEN
April 29, 1998
We, the undersigned directors, attest to the correctness of this statement
of resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
THOMAS H. JEFFS II
ALFRED R. GLANCY III
DON H. BARDEN
Directors
<PAGE> 1
EXHIBIT 25.3
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
-----------------------------
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED,
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)__
--------------------------------------------
NBD BANK
(Exact name of Trustee as specified in its charter)
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226 38-0864715
(Address of principal executive offices) (Zip Code) (I.R.S. Employer
Identification No.)
NBD BANK
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226
CORPORATE TRUST ADMINISTRATION
ATTN: ERNEST J. PECK, VICE PRESIDENT
TELEPHONE: (313) 225-2025
(Name, Address and Telephone number of agent for service)
SEMCO CAPITAL TRUST
(Exact name of obligor as specified in its charter)
DELAWARE PENDING
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
405 WATERSTREET
PORT HURON, MICHIGAN 48061-5026
(Address of principal executive offices) (Zip Code)
TRUST PRERERRED SECURITIES
(Title of Indenture Securities)
1
<PAGE> 2
ITEM 1 GENERAL INFORMATION. Furnish the following information as to
the Trustee:
(a) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT:
State of Michigan Financial Institutions Bureau,
Lansing, MI
Federal Reserve Bank of Chicago, Chicago, Illinois
Federal Deposit Insurance Corporation,
Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS. The Trustee is authorized
to exercise corporate trust powers.
ITEM 2 AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE,
DESCRIBE EACH SUCH AFFILIATION.
The obligor is not an affiliate of the Trustee.
ITEM 3 VOTING SECURITIES OF THE TRUSTEE.
The following information is furnished as to each class of
voting securities of the Trustee:
As of March 27, 1998
--------------------------------------------------------------
Column A Column B
--------------------------------------------------------------
Title of Class Amount Outstanding
--------------------------------------------------------------
Common Stock, par value $12.50 per share 8,948,648 shares
ITEM 4 TRUSTEESHIPS UNDER OTHER INDENTURES
None.
ITEM 5 THROUGH ITEM 15 Not applicable
ITEM 16 LIST OF EXHIBITS:
EXHIBIT (1) A COPY OF THE ARTICLES OF INCORPORATION OF THE
TRUSTEE NOW IN EFFECT
Incorporated by reference to Exhibit (1) to Item 16
of Form T-1 filed as Exhibit 25 to Registration Statement,
Securities and Exchange Commission, Registration
No. 33-51775.*
EXHIBIT (2) CERTIFICATE OF AUTHORITY OF THE TRUSTEE
TO COMMENCE BUSINESS
Incorporated by reference to Exhibit (2) to Item 16
of Form T-1 filed with Amendment No. 1, Securities and
Exchange Commission, Registration No. 22-4501.*
EXHIBIT (3) AUTHORIZATION OF THE TRUSTEE TO
EXERCISE CORPORATE TRUST POWERS Incorporated by reference
to Exhibit (3) to Item 16 of Form T-1 filed with Amendment
No. 1, Securities and Exchange Commission,
2
<PAGE> 3
Registration No. 22-4501.*
EXHIBIT (4) BY-LAWS OF THE TRUSTEE, AS PRESENTLY IN EFFECT
Incorporated by reference to Exhibit (4) to Item 16
of Form T-1 filed as Exhibit 25 to Registration Statement,
Securities and Exchange Commission, Registration No.
33-51775.*
EXHIBIT (5) Not Applicable.
EXHIBIT (6) CONSENT BY THE TRUSTEE REQUIRED BY SECTION
321 (B) OF THE ACT.
Incorporated by reference to Exhibit (6) to Item 16
of Form T-1, filed with Amendment No. 1, Securities and
Exchange Commission, Registration No. 22-4501.*
EXHIBIT (7) A COPY OF THE LATEST REPORT OF CONDITION
OF THE TRUSTEE PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS
OF ITS SUPERVISING OR EXAMINING AUTHORITY.
EXHIBIT (8) Not applicable.
EXHIBIT (9) Not applicable.
* Exhibits thus designated are incorporated herein by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 filed by the Trustee with
the Securities and Exchange Commission with the specific references noted.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, NBD Bank, a Michigan banking corporation organized and existing under
the laws of the State of Michigan, has duly caused this Statement of Eligibility
and Qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Detroit, State of Michigan on the 8th day of
July, 1998.
NBD BANK, Trustee
By: /s/ Ernest J. Peck
------------------------
Ernest J. Peck
Vice President
3
<PAGE> 4
Charter No. 13671 Comptroller of the Currency District
REPORT OF CONDITION CONSOLIDATING
DOMESTIC AND FOREIGN SUBSIDIARIES OF THE
NBD BANK
in the State of Michigan, at the close of business on March 31, 1998 published
in response to call made by Comptroller of the Currency, under title 12, United
States Code, Section 161.
<TABLE>
<CAPTION>
ASSETS
Thousands
of dollars
<S> <C>
Cash and balances due from depository institutions
Noninterest-bearing balances and currency
and coin............................................... 2,082,041
Interest-bearing balances.............................. -
Securities:
Held-to-maturity securities............................ -
Available-for-sale securities.......................... 1,890,702
Federal funds sold and securities purchased
under agreements to resell............................. 58,900
Loans and lease financing receivables:
Loans and leases, net of unearned income............... 17,402,777
LESS: Allowance for loan and lease losses.............. 279,543
Loans and leases, net of unearned income and
allowance.............................................. 17,123,234
Assets held in trading accounts............................ 60,975
Premises and fixed assets (including
capitalized leases).................................... 334,881
Other real estate owned.................................... 4,273
Investments in unconsolidated subsidiaries and
associated companies................................... -
Customers' liability to this bank on acceptances
outstanding............................................ 10,067
Intangible assets.......................................... 100,950
Other assets............................................... 696,538
---------------------------------------
Total assets............................................... 22,362,561
=======================================
LIABILITIES
Deposits:
In domestic offices.................................... 17,326,675
Noninterest-bearing ............................... 5,470,573
Interest-bearing .................................. 11,856,102
In foreign offices, Edge and Agreement
subsidiaries, and IBFs................................. 170,093
Noninterest-bearing ............................... -
Interest-bearing................................... 170,093
Federal funds purchased and securities sold
under agreements to repurchase......................... 1,184,683
Demand notes issued to the U.S. Treasury................... 285,825
Trading liabilities........................................ 50,580
Other borrowed money:
With remaining maturity of one year or less........ 362,371
With remaining maturity of more than one year
through three years.............................. 54,595
With remaining maturity of more than three years... 3,656
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
Bank's liability on acceptances executed and
outstanding............................................ 10,067
Notes and debentures subordinated to
deposits............................................... 500,000
Other liabilities.......................................... 583,671
---------------------------------------
Total liabilities.......................................... 20,532,216
---------------------------------------
EQUITY CAPITAL
Common stock............................................... 111,858
Surplus.................................................... 671,329
Undivided profits and capital reserves..................... 1,036,236
Net unrealized holding gains (losses) on
available-for-sale securities.......................... 10,922
Cumulative foreign currency translation
adjustments............................................ -
---------------------------------------
Total equity capital....................................... 1,830,345
---------------------------------------
Total liabilities and equity capital....................... 22,362,561
=======================================
</TABLE>
I, Jason N. Hansen, Vice President of the above-named bank do hereby declare
that this Report of Condition is true and correct to the best of my knowledge
and belief.
JASON N. HANSEN
April 29, 1998
We, the undersigned directors, attest to the correctness of this statement
of resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
THOMAS H. JEFFS II
ALFRED R. GLANCY III
DON H. BARDEN
Directors
<PAGE> 1
EXHIBIT 25.4
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
-----------------------------
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED,
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)__
--------------------------------------------
NBD BANK
(Exact name of Trustee as specified in its charter)
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226 38-0864715
(Address of principal executive offices) (Zip Code) (I.R.S. Employer
Identification No.)
NBD BANK
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226
CORPORATE TRUST ADMINISTRATION
ATTN: ERNEST J. PECK, VICE PRESIDENT
TELEPHONE: (313) 225-2025
(Name, Address and Telephone number of agent for service)
SEMCO ENERGY, INC.
(Exact name of obligor as specified in its charter)
MICHIGAN 38-2144267
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
405 WATERSTREET
PORT HURON, MICHIGAN 48061-5026
(Address of principal executive offices) (Zip Code)
TRUST PRERERRED SECURITIES GUARANTEE
(Title of Indenture Securities)
<PAGE> 2
ITEM 1 GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT:
State of Michigan Financial Institutions Bureau,
Lansing, MI
Federal Reserve Bank of Chicago, Chicago, Illinois
Federal Deposit Insurance Corporation,
Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS. The Trustee is
authorized to exercise corporate trust powers.
ITEM 2 AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE,
DESCRIBE EACH SUCH AFFILIATION.
The obligor is not an affiliate of the Trustee.
ITEM 3 VOTING SECURITIES OF THE TRUSTEE.
The following information is furnished as to each class of
voting securities of the Trustee:
As of March 27, 1998
--------------------------------------------------------------
Column A Column B
--------------------------------------------------------------
Title of Class Amount Outstanding
--------------------------------------------------------------
Common Stock, par value $12.50 per share 8,948,648 shares
ITEM 4 TRUSTEESHIPS UNDER OTHER INDENTURES
None.
ITEM 5 THROUGH ITEM 15 Not applicable
ITEM 16 LIST OF EXHIBITS:
EXHIBIT (1) A COPY OF THE ARTICLES OF INCORPORATION OF THE
TRUSTEE NOW IN EFFECT
Incorporated by reference to Exhibit (1) to Item 16 of
Form T-1 filed as Exhibit 25 to Registration Statement,
Securities and Exchange Commission, Registration
No. 33-51775.*
EXHIBIT (2) CERTIFICATE OF AUTHORITY OF THE TRUSTEE
TO COMMENCE BUSINESS
Incorporated by reference to Exhibit (2) to Item 16 of
Form T-1 filed with Amendment No. 1, Securities and Exchange
Commission, Registration No. 22-4501.*
EXHIBIT (3) AUTHORIZATION OF THE TRUSTEE TO
EXERCISE CORPORATE TRUST POWERS Incorporated by reference
to Exhibit (3) to Item 16 of Form T-1 filed with Amendment
No. 1, Securities and Exchange Commission,
2
<PAGE> 3
Registration No. 22-4501.*
EXHIBIT (4) BY-LAWS OF THE TRUSTEE, AS PRESENTLY IN EFFECT
Incorporated by reference to Exhibit (4) to Item 16
of Form T-1 filed as Exhibit 25 to Registration Statement,
Securities and Exchange Commission, Registration No.
33-51775.*
EXHIBIT (5) Not Applicable.
EXHIBIT (6) CONSENT BY THE TRUSTEE REQUIRED BY SECTION
321 (B) OF THE ACT.
Incorporated by reference to Exhibit (6) to Item 16
of Form T-1, filed with Amendment No. 1, Securities and
Exchange Commission, Registration No. 22-4501.*
EXHIBIT (7) A COPY OF THE LATEST REPORT OF CONDITION
OF THE TRUSTEE PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS
OF ITS SUPERVISING OR EXAMINING AUTHORITY.
EXHIBIT (8) Not applicable.
EXHIBIT (9) Not applicable.
* Exhibits thus designated are incorporated herein by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 filed by the Trustee with
the Securities and Exchange Commission with the specific references noted.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, NBD Bank, a Michigan banking corporation organized and existing under
the laws of the State of Michigan, has duly caused this Statement of Eligibility
and Qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Detroit, State of Michigan on the 8th day of
July, 1998.
NBD BANK, Trustee
By: /s/ Ernest J. Peck
---------------------------
Ernest J. Peck
Vice President
3
<PAGE> 4
Charter No. 13671 Comptroller of the Currency District
REPORT OF CONDITION CONSOLIDATING
DOMESTIC AND FOREIGN SUBSIDIARIES OF THE
NBD BANK
in the State of Michigan, at the close of business on March 31, 1998 published
in response to call made by Comptroller of the Currency, under title 12, United
States Code, Section 161.
<TABLE>
<CAPTION>
ASSETS
Thousands
of dollars
<S> <C>
Cash and balances due from depository institutions
Noninterest-bearing balances and currency
and coin............................................... 2,082,041
Interest-bearing balances.............................. -
Securities:
Held-to-maturity securities............................ -
Available-for-sale securities.......................... 1,890,702
Federal funds sold and securities purchased
under agreements to resell............................. 58,900
Loans and lease financing receivables:
Loans and leases, net of unearned income............... 17,402,777
LESS: Allowance for loan and lease losses.............. 279,543
Loans and leases, net of unearned income and
allowance.............................................. 17,123,234
Assets held in trading accounts............................ 60,975
Premises and fixed assets (including
capitalized leases).................................... 334,881
Other real estate owned.................................... 4,273
Investments in unconsolidated subsidiaries and
associated companies................................... -
Customers' liability to this bank on acceptances
outstanding............................................ 10,067
Intangible assets.......................................... 100,950
Other assets............................................... 696,538
---------------------------------------
Total assets............................................... 22,362,561
=======================================
LIABILITIES
Deposits:
In domestic offices.................................... 17,326,675
Noninterest-bearing ............................... 5,470,573
Interest-bearing .................................. 11,856,102
In foreign offices, Edge and Agreement
subsidiaries, and IBFs................................. 170,093
Noninterest-bearing ............................... -
Interest-bearing................................... 170,093
Federal funds purchased and securities sold
under agreements to repurchase......................... 1,184,683
Demand notes issued to the U.S. Treasury................... 285,825
Trading liabilities........................................ 50,580
Other borrowed money:
With remaining maturity of one year or less........ 362,371
With remaining maturity of more than one year
through three years.............................. 54,595
With remaining maturity of more than three years... 3,656
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
Bank's liability on acceptances executed and
outstanding............................................ 10,067
Notes and debentures subordinated to
deposits............................................... 500,000
Other liabilities.......................................... 583,671
---------------------------------------
Total liabilities.......................................... 20,532,216
---------------------------------------
EQUITY CAPITAL
Common stock............................................... 111,858
Surplus.................................................... 671,329
Undivided profits and capital reserves..................... 1,036,236
Net unrealized holding gains (losses) on
available-for-sale securities.......................... 10,922
Cumulative foreign currency translation
adjustments............................................ -
---------------------------------------
Total equity capital....................................... 1,830,345
---------------------------------------
Total liabilities and equity capital....................... 22,362,561
=======================================
</TABLE>
I, Jason N. Hansen, Vice President of the above-named bank do hereby declare
that this Report of Condition is true and correct to the best of my knowledge
and belief.
JASON N. HANSEN
April 29, 1998
We, the undersigned directors, attest to the correctness of this statement
of resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
THOMAS H. JEFFS II
ALFRED R. GLANCY III
DON H. BARDEN
Directors
