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EXHIBIT 99(e)
Common
GUARANTEE AGREEMENT
OF
SEMCO ENERGY, INC. (AS GUARANTOR)
DATED AS OF JUNE 16, 2000
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TABLE OF CONTENTS*
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PAGE
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ARTICLE I DEFINITIONS .............................................................................. 1
SECTION 1.01. Definitions................................................................... 1
ARTICLE II GUARANTEE .............................................................................. 4
SECTION 2.01. Guarantee..................................................................... 4
SECTION 2.02. Waiver of Notice and Demand................................................... 4
SECTION 2.03. Obligations Not Affected...................................................... 4
SECTION 2.04. Rights of Holders............................................................. 5
SECTION 2.05. Guarantee of Payment.......................................................... 5
SECTION 2.06. Subrogation................................................................... 5
SECTION 2.07. Independent Obligations....................................................... 6
ARTICLE III SUBORDINATION .............................................................................. 6
SECTION 3.01. Subordination................................................................. 6
ARTICLE IV LIMITATIONS OF TRANSACTIONS; RANKING............................................................. 6
SECTION 4.01 Limitation of Transactions.................................................... 6
ARTICLE V TERMINATION .............................................................................. 7
SECTION 5.01. Termination................................................................... 7
ARTICLE VI MISCELLANEOUS .............................................................................. 7
SECTION 6.01. Successors and Assigns........................................................ 7
SECTION 6.02. Amendments.................................................................... 8
SECTION 6.03. Notices....................................................................... 8
SECTION 6.04. Benefit....................................................................... 9
SECTION 6.05. Interpretation................................................................ 9
SECTION 6.06. Governing Law................................................................. 9
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* 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.
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of June 16,
2000 is executed and delivered by SEMCO ENERGY, INC., a Michigan corporation
(the "Guarantor"), (as defined herein).
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of June 16, 2000, among Bank One Trust Company,
National Association, a national banking association, as trustee (the
"Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Trust Common Securities, 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 $2,783,510
aggregate liquidation amount of its Trust Common Securities (the "Trust Common
Securities") representing common undivided beneficial interests in the assets of
the Trust and having the terms set forth in the Trust Agreement;
WHEREAS, the Trust Common Securities will be issued by the Trust and
the proceeds thereof will be used to purchase Senior Deferrable Notes (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 Common
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 Common
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 Common
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.
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"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Trust.
"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 Common Securities,
to the extent not paid or made by or on behalf of the Trust: (i) any accrued and
unpaid distributions which are required to be paid on such Trust Common
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 Common Securities in respect of
which the Senior Deferrable Notes have been redeemed by the Guarantor upon the
occurrence of a Tax Event Redemption 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 Senior Deferrable Notes to the holders of Trust Securities or
the redemption of all of the Trust Common Securities), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid distributions on
the Trust Common 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"). If an event of
default under the Indenture has occurred and is continuing, the rights of
holders of the Common Securities to receive payments under the Common Securities
Guarantee Agreement are subordinated to the rights of holders of Preferred
Securities to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Trust, of any Trust Common Securities; provided, however, that in
determining whether the holders of the requisite percentage of Trust Common
Securities have given any request, notice, consent or waiver hereunder.
"Indenture" means the Indenture, dated as of October 23, 1998, among
the Guarantor, as issuer, and Bank One Trust Company, National Association, as
trustee, as supplemented by the Supplemental Indenture between the Guarantor and
Bank One Trust Company, National Association as trustee.
"Majority in liquidation amount of Trust Common Securities" means a
vote by Holder(s) of Trust Common Securities, voting separately as a class, of
more than 50% of the liquidation amount of all Trust Common 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:
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(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.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Securities" means the securities representing preferred
undivided beneficial interests in the assets of the Trust.
"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.
"Senior Deferrable Notes" means the 9% Senior Deferrable Notes of the
Guarantor due August 16, 2005.
"Supplemental Indenture" means the First Supplemental Indenture, dated
as of June 16, 2000 to the Indenture.
"Tax Event Redemption" has the same meaning as defined in Annex I to
the Trust Agreement.
"Trust Securities" means the Trust Preferred Securities and the Trust
Common Securities.
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ARTICLE II
GUARANTEE
SECTION 2.01. 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 2.02. 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.
SECTION 2.03. 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 Common 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 Common Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Trust Common Securities; provided, however, that
if the Guarantor has exercised its right under Section 2.8 of the Supplemental
Indenture to defer the interest payments on the Senior Deferrable Notes, the
Guarantor shall have no obligation hereunder until the expiration of the
Applicable Extension Period (as defined in the Supplemental 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 Common Securities,
or any action on the part of the Trust granting indulgence or extension of any
kind;
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(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 Common
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 2.04. Rights of Holders
The Guarantor expressly acknowledges that: (i) the Holders of a
Majority in liquidation amount of the Trust Common Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of this Guarantee Agreement; and (ii) 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 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 2.05. 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
Senior Deferrable Notes to the Holders in exchange for all of the Trust Common
Securities.
SECTION 2.06. 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,
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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 2.07. Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Trust Common
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 2.03 hereof.
ARTICLE III
SUBORDINATION
SECTION 3.01. Subordination
This Guarantee Agreement will constitute an deferrable obligation of
the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor, including the Senior Deferrable Notes,
except those obligations or liabilities made pari passu or subordinate by their
terms, (ii) pari passu with the most senior deferrable obligations now or
hereafter issued or guaranteed by the Guarantor, and (iii) senior to all common
stock of the Guarantor.
ARTICLE IV
LIMITATION OF TRANSACTIONS; RANKING
SECTION 4.01 Limitation of Transactions
So long as any Trust Common Securities issued by the Trust remain
outstanding, if there shall have occurred an Event of Default or an Event of
Default under the Trust Agreement or this Guarantee Agreement and written notice
of such Event of Default has been given to the Guarantor, then the Guarantor
shall not (a) make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities that rank junior to the Senior
Deferrable Notes in the right of payment issued by the Guarantor, or (b) make
any guarantee payments with respect to any guarantee by the Guarantor of any
securities of any of its subsidiaries if such guarantee ranks junior to the
Senior Deferrable Notes in right of payment or (c) declare or pay any dividends
or distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Guarantor's capital stock, except for or as a result
of dividends or distributions in, or options, warrants or rights to subscribe
for or purchase, the Guarantor's
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common stock; any declaration of a dividend in connection with the
implementation of a shareholder's rights plan, or the issuance of shares under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto; a reclassification of the Guarantor's capital stock solely
into shares of one or more classes or series of the Guarantor's capital stock;
or the exchange or conversion of one class or series of the Guarantor's capital
stock for or into another class or series of the Guarantor's capital stock; the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged; and the purchase of the Guarantor's
common stock in connection with the Guarantor's normal course issuer
bid-purchases for the satisfaction by the Guarantor of its obligations under any
benefit plans for the Guarantor and the Guarantor's subsidiaries' directors,
officers or employees of the Guarantor's dividend reinvestment plans.
ARTICLE V
TERMINATION
SECTION 5.01. 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 Common
Securities in the case that the Guarantor repurchases all of the Senior
Deferrable Notes upon the occurrence of a Tax Event Redemption, (ii) the
distribution of Senior Deferrable Notes to the Holders in exchange for all of
the Trust Common 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 Common Securities or
under this Guarantee Agreement.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. 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.
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SECTION 6.02. 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 a majority in liquidation amount of Trust Common
Securities. The provisions of Article Six of the Trust Agreement concerning
meetings of Holders shall apply to the giving of such approval.
SECTION 6.03. 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:
SEMCO Energy, Inc.
405 Water Street
Port Huron, Michigan 48060
(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:
Bank One Trust Company, National Association
Corporate Trust Administration,
11th Floor, Suite MI1-8110
611 Woodward Avenue
Detroit, Michigan 48226
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.
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SECTION 6.04. Benefit
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Trust Common Securities.
SECTION 6.05. 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 reference to the singular includes the plural and vice versa; and
(f) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.
SECTION 6.06. 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
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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 GUARANTEE AGREEMENT is executed as of the day and year first above
written.
SEMCO ENERGY, INC.
By:
--------------------------------------
Name: William L. Johnson
Title: Chairman of the Board and
Chief Executive Officer
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AMENDMENT NO. 1 TO GUARANTEE AGREEMENT
This Amendment No. 1 to GUARANTEE AGREEMENT, dated as of July 26, 2000,
is executed and delivered by SEMCO ENERGY, INC., a Michigan corporation (the
"Guarantor") as of July 26, 2000.
WHEREAS, On June 16, 2000 the Guarantor entered into a Guarantee
Agreement (the "Guarantee Agreement") under which it irrevocably and
unconditionally agreed, to the extent set forth therein, to pay to the Holders
of Trust Common Securities the Guarantee Payments (as defined in the Guarantee
Agreement) and to make certain other payments on the terms and conditions set
forth therein.
WHEREAS as of this date, the Trust is issuing $340,210 additional
liquidation amount of Trust Common Securities (the "Additional Securities")
representing common undivided beneficial interests in the assets of the Trust;
WHEREAS the Guarantor desires that all the provisions of the Guarantee
Agreement be applicable to the Additional Securities.
NOW THEREFORE the Guarantor executes and delivers this Amendment to
Guarantee Agreement for the benefit of the Holders from time to time of the
Trust Common Securities.
Article I
Additional Guarantee
All of the provisions of the Guarantee Agreement, including Article V
thereof containing the Guarantee, shall apply with like force and effect to the
Additional Securities.
Article II
Miscellaneous
2.1 This Amendment No. 1 shall be governed by and construed and
interpreted in accordance with the internal laws of the State of New York.
2.2 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.
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THIS AMENDED GUARANTEE AGREEMENT is executed as of the day and year
first above written.
SEMCO ENERGY, INC.
By:
----------------------------------------------------
Name: William L. Johnson
Title: Chairman of the Board and
Chief Executive Officer
BANK ONE TRUST COMPANY, National
Association, as Trustee
By:
----------------------------------------------------
Name: Ernest J. Peck
Title: Vice President
