UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal period from __________ to __________
Commission file number 001-15565
SEMCO ENERGY, INC.
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2144267
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
405 WATER STREET, PORT HURON, MICHIGAN 48060
(Address of principal executive offices)
810-987-2200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such requirements
for the past 90 days. Yes [X] No [ ]
The number of outstanding shares of the Registrant's common stock as of April
30, 2000: 17,932,770.
<PAGE>
INDEX TO FORM 10-Q
------------------
For Quarter Ended March 31, 2000
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
COVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. . . . . . . . . . . . .. . . . . . . . . . . 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . 21
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . 21
SIGNATURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
EXHIBIT INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that are based on current
expectations, estimates and projections of SEMCO Energy, Inc. and its
subsidiaries (the "Company"). Statements that are not historical facts,
including statements about the Company's outlook, beliefs, plans, goals, and
expectations, are forward-looking statements. These statements are subject to
potential risks and uncertainties and, therefore, actual results may differ
materially. The Company undertakes no obligation to update publicly any
forward-looking statements whether as a result of new information, future events
or otherwise. Factors that may impact forward-looking statements include, but
are not limited to, the following: (i) the effects of weather and other natural
phenomena; (ii) the economic climate and growth in the geographical areas where
the Company does business; (iii) the capital intensive nature of the Company's
business; (iv) increased competition within the energy industry as well as from
alternative forms of energy; (v) the timing and extent of changes in commodity
prices for natural gas and propane; (vi) the effects of changes in governmental
and regulatory policies, including income taxes, environmental compliance and
authorized rates; (vii) the Company's ability to bid on and win construction,
engineering and quality assurance contracts; (viii) the impact of energy prices
on the amount of projects and business available to the Company's engineering
services segment; (ix) the nature, availability and projected profitability of
potential investments available to the Company; (x) the Company's ability to
accomplish its financing objectives in a timely and cost-effective manner in
light of changing conditions in the capital markets and, in particular, the
Company's ability to refinance in a timely and cost effective manner, the $290
million short-term bridge-loan obtained to finance the acquisition of ENSTAR
Natural Gas Company and Alaska Pipeline Company and (xi) the Company's ability
to operate and integrate acquired businesses in accordance with its plans.
- 2 -
<PAGE>
<TABLE>
<CAPTION>
SEMCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
March 31, March 31,
-------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales. . . . . . . . . . . . . . . . . . . . $ 98,932 $ 68,978 $221,123 $164,841
Gas transportation . . . . . . . . . . . . . . . 11,498 6,629 27,238 17,432
Construction services. . . . . . . . . . . . . . 12,919 3,557 59,326 19,000
Engineering services . . . . . . . . . . . . . . 3,665 4,547 13,960 42,335
Gas marketing. . . . . . . . . . . . . . . . . . - 96,855 - 341,998
Other. . . . . . . . . . . . . . . . . . . . . . 3,288 3,314 9,537 9,289
--------- --------- --------- ---------
$130,302 $183,880 $331,184 $594,895
--------- --------- --------- ---------
OPERATING EXPENSES
Cost of gas sold . . . . . . . . . . . . . . . . $ 60,535 $ 45,999 $132,325 $106,873
Cost of gas marketed . . . . . . . . . . . . . . - 95,632 - 337,092
Operations and maintenance . . . . . . . . . . . 32,416 18,309 114,929 95,477
Depreciation and amortization. . . . . . . . . . 7,982 4,236 23,752 15,844
Property and other taxes . . . . . . . . . . . . 3,100 2,357 9,367 9,006
--------- --------- --------- ---------
$104,033 $166,533 $280,373 $564,292
--------- --------- --------- ---------
OPERATING INCOME . . . . . . . . . . . . . . . . . $ 26,269 $ 17,347 $ 50,811 $ 30,603
OTHER INCOME (DEDUCTIONS)
Divestiture of energy marketing business . . . . $ - $ 1,122 $ - $ 1,122
Divestiture of NOARK investment. . . . . . . . . - - - 3,568
Interest expense . . . . . . . . . . . . . . . . (8,696) (3,894) (25,376) (15,018)
Dividends on preferred stock . . . . . . . . . . - (48) (277) (193)
Other. . . . . . . . . . . . . . . . . . . . . . 1,060 419 3,593 879
--------- --------- --------- ---------
$ (7,636) $ (2,401) $(22,060) $ (9,642)
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES . . . . . . . . . . . . $ 18,633 $ 14,946 $ 28,751 $ 20,961
INCOME TAXES . . . . . . . . . . . . . . . . . . . $ 6,639 $ 4,543 $ 9,501 $ 8,591
--------- --------- --------- ---------
NET INCOME BEFORE EXTRAORDINARY CHARGE . . . . . . $ 11,994 $ 10,403 $ 19,250 $ 12,370
Extraordinary charge due to early retirement of
debt, net of income taxes of $269 . . . . . . - - - (499)
--------- --------- --------- ---------
NET INCOME . . . . . . . . . . . . . . . . . . . . $ 11,994 $ 10,403 $ 19,250 $ 11,871
========= ========= ========= =========
EARNINGS PER SHARE - BASIC AND DILUTED . . . . . . $ 0.67 $ 0.60 $ 1.08 $ 0.72
========= ========= ========= =========
CASH DIVIDENDS PAID PER SHARE. . . . . . . . . . . $ 0.205 $ 0.200 $ 0.868 $ 0.766
========= ========= ========= =========
AVERAGE COMMON SHARES OUTSTANDING. . . . . . . . . 17,917 17,438 17,815 16,553
========= ========= ========= =========
<FN>
The accompanying notes to the consolidated financial statements are an integral part of these
statements.
</TABLE>
- 3 -
<PAGE>
<TABLE>
<CAPTION>
SEMCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ASSETS
(In thousands)
March 31, December 31,
2000 1999
---------- -------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and temporary cash investments, at cost . . . $ 3,569 $ 6,086
Receivables, less allowances of $1,315 and $1,080. 53,914 79,587
Accrued revenue. . . . . . . . . . . . . . . . . . 15,932 25,380
Prepaid expenses . . . . . . . . . . . . . . . . . 14,366 14,231
Gas in underground storage . . . . . . . . . . . . 7,287 11,723
Materials and supplies, at average cost. . . . . . 6,425 6,146
Gas charges recoverable from customers . . . . . . 2,948 3,009
Accumulated deferred income taxes. . . . . . . . . 3,526 3,528
Other. . . . . . . . . . . . . . . . . . . . . . . 98 844
---------- -------------
$ 108,065 $ 150,534
PROPERTY, PLANT AND EQUIPMENT
Gas distribution . . . . . . . . . . . . . . . . . $ 548,653 $ 542,505
Diversified businesses . . . . . . . . . . . . . . 63,854 61,434
---------- -------------
612,507 603,939
Less - accumulated depreciation. . . . . . . . . . 136,268 129,593
---------- -------------
$ 476,239 $ 474,346
DEFERRED CHARGES AND OTHER ASSETS
Goodwill, less amortization of $6,174 and $5,052 . $ 161,681 $ 162,691
Deferred retiree medical benefits. . . . . . . . . 11,464 11,689
Unamortized debt expense . . . . . . . . . . . . . 6,728 7,644
Other. . . . . . . . . . . . . . . . . . . . . . . 9,411 8,279
---------- -------------
$ 189,284 $ 190,303
---------- -------------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . $ 773,588 $ 815,183
========== =============
<FN>
The accompanying notes to the consolidated financial statements are an integral
part of these statements.
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
SEMCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
LIABILITIES AND CAPITALIZATION
(In thousands)
March 31, December 31,
2000 1999
---------- -------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Notes payable . . . . . . . . . . . . . . . . . . . . . . . $ 352,837 $ 376,629
Accounts payable. . . . . . . . . . . . . . . . . . . . . . 12,467 35,725
Customer advance payments . . . . . . . . . . . . . . . . . 9,796 13,885
Accrued interest. . . . . . . . . . . . . . . . . . . . . . 4,482 4,527
Amounts payable to customers. . . . . . . . . . . . . . . . 2,967 5,715
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,618 11,701
---------- -------------
$ 398,167 $ 448,182
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes . . . . . . . . . . . . . $ 25,868 $ 25,774
Customer advances for construction. . . . . . . . . . . . . 13,540 15,045
Unamortized investment tax credit . . . . . . . . . . . . . 1,913 1,980
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,220 11,862
---------- -------------
$ 54,541 $ 54,661
LONG-TERM DEBT. . . . . . . . . . . . . . . . . . . . . . . . $ 170,000 $ 170,000
COMMON SHAREHOLDERS' EQUITY
Common stock - $1 par value; 40,000,000 shares authorized;
17,926,676 and 17,908,616 shares outstanding. . . . . . . $ 17,927 $ 17,909
Capital surplus . . . . . . . . . . . . . . . . . . . . . . 124,061 123,861
Retained earnings . . . . . . . . . . . . . . . . . . . . . 8,892 570
---------- -------------
$ 150,880 $ 142,340
---------- -------------
TOTAL LIABILITIES AND CAPITALIZATION. . . . . . . . . . . . . $ 773,588 $ 815,183
========== =============
<FN>
The accompanying notes to the consolidated financial statements are an integral part of
these statements.
</TABLE>
- 5 -
<PAGE>
<TABLE>
<CAPTION>
SEMCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
--------------------
2000 1999
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,994 $ 10,403
Adjustments to reconcile net income (loss) to net
cash from operating activities:
Depreciation and amortization. . . . . . . . . . . . . . . . . . 7,982 4,236
Gain on divestiture of energy marketing business . . . . . . . . - (1,122)
Changes in assets and liabilities, net of effects of
acquisitions, divestitures and other changes as shown below . 13,527 37,171
--------- ---------
NET CASH FROM OPERATING ACTIVITIES . . . . . . . . . . . . $ 33,503 $ 50,688
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Property additions - gas distribution. . . . . . . . . . . . . . . . . $ (6,623) $ (3,907)
Property additions - diversified businesses. . . . . . . . . . . . . . (2,436) (1,922)
Proceeds from property sales, net of retirement costs. . . . . . . . . 285 (31)
Acquisitions of businesses, net of cash acquired . . . . . . . . . . . - (925)
--------- ---------
NET CASH FROM INVESTING ACTIVITIES . . . . . . . . . . . . $ (8,774) $ (6,785)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock, net of expenses. . . . . . . . . . . . . . . $ 218 $ 1,996
Net cash change in notes payable and related expenses. . . . . . . . . (23,792) (41,498)
Payment of dividends . . . . . . . . . . . . . . . . . . . . . . . . . (3,672) (3,527)
--------- ---------
NET CASH FROM FINANCING ACTIVITIES . . . . . . . . . . . . $(27,246) $(43,029)
--------- ---------
CASH AND TEMPORARY CASH INVESTMENTS
Net increase (decrease). . . . . . . . . . . . . . . . . . . . . . . . $ (2,517) $ 874
Beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . 6,086 4,953
--------- ---------
End of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,569 $ 5,827
========= =========
CHANGES IN ASSETS AND LIABILITIES, NET OF EFFECTS OF
ACQUISITIONS, DIVESTITURES AND OTHER CHANGES:
Receivables, net . . . . . . . . . . . . . . . . . . . . . . . . $ 25,673 $ (2,933)
Accrued revenue. . . . . . . . . . . . . . . . . . . . . . . . . 9,447 22,934
Materials, supplies and gas in underground storage . . . . . . . 4,158 23,582
Gas charges recoverable from customers . . . . . . . . . . . . . 61 8,792
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . (23,257) (13,494)
Customer advances and amounts payable to customers . . . . . . . (8,342) (2,745)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,787 1,035
--------- ---------
$ 13,527 $ 37,171
========= =========
<FN>
The accompanying notes to the consolidated financial statements are an integral part of these
statements.
</TABLE>
- 6 -
<PAGE>
SEMCO ENERGY, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) SIGNIFICANT ACCOUNTING POLICIES
Under the rules and regulations of the Securities and Exchange Commission
for Form 10-Q Quarterly Reports, certain footnotes and other financial statement
information normally included in the year-end financial statements of SEMCO
Energy, Inc. and its subsidiaries (the "Company") have been condensed or omitted
in the accompanying unaudited financial statements. These financial statements
prepared by the Company should be read in conjunction with the financial
statements and notes thereto included in the Company's 1999 Annual Report on
Form 10-K filed with the Securities and Exchange Commission. The information in
the accompanying financial statements reflects, in the opinion of the Company's
management, all adjustments (which include only normal recurring adjustments)
necessary for a fair statement of the information shown, subject to year-end and
other adjustments, as later information may require. Certain reclassifications
have been made to the prior periods' financial statements to conform with the
2000 presentation.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
SUPPLEMENTAL CASH FLOW INFORMATION - Supplemental cash flow information for
the three months ended March 31, 2000 and 1999 is as follows (in thousands of
dollars):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
2000 1999
------ --------
<S> <C> <C>
CASH PAID DURING THE PERIOD FOR:
Interest. . . . . . . . . . . . . . . . . . . . $7,810 $ 1,271
Income taxes. . . . . . . . . . . . . . . . . . $2,357 $ 5,550
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Capital stock issued for acquisitions . . . . . $ -- $ --
Deferred payments for acquisitions. . . . . . . $ -- $ 805
DETAILS OF ACQUISITIONS:
Fair value of assets acquired . . . . . . . . . $ -- $ 4,957
Fair value of liabilities assumed . . . . . . . -- (3,152)
Deferred payments . . . . . . . . . . . . . . . -- (805)
Company stock issued. . . . . . . . . . . . . . -- --
------ --------
Cash paid . . . . . . . . . . . . . . . . . . . $ -- $ 1,000
Less cash acquired. . . . . . . . . . . . . . . -- 75
------ --------
Net cash paid for (acquired via) acquisitions . $ -- $ 925
====== ========
</TABLE>
(2) CAPITALIZATION
REGISTRATION STATEMENT - In March 2000, a registration statement on
Form S-3 ("registration statement") filed by the Company and SEMCO Capital Trust
I, SEMCO Capital Trust II and SEMCO Capital Trust III ("Capital Trusts") with
the Securities and Exchange Commission became effective. The registration
statement was for the registration of debt securities, preferred stock, common
stock, stock purchase contracts and stock purchase units of the Company and
trust preferred securities of the Capital Trusts and related guarantees in any
combination up to $500 million.
- 7 -
<PAGE>
In April 2000, SEMCO Capital Trust I issued 1.6 million shares of 10.25%
cumulative trust preferred securities ("Trust Preferred Securities") in a public
offering at a price of $25 per security. SEMCO Capital Trust I used the $40
million in proceeds from the issuance of the Trust Preferred Securities to
invest in subordinated debentures of the Company bearing an interest rate of
10.25% ("Subordinated Debentures"). Also in April 2000, the Company sold $30
million of 8% Senior Notes due 2010 ("Senior Notes") in a public offering. The
Company used the entire net proceeds from the sale of the Senior Notes and
Subordinated Debentures to repay a portion of the bridge loan utilized in the
ENSTAR Natural Gas Company acquisition, including a $56 million payment due May
1, 2000.
COMMON STOCK EQUITY - On April 18, 2000 the Company's Board of Directors
declared a regular quarterly cash dividend of $.21 per share on the Company's
common stock (a 2.4% increase over the prior quarterly cash dividend of $.205
per share). The dividend is payable on May 15, 2000 to shareholders of record
at the close of business on May 5, 2000.
In February 2000, the Company paid a quarterly cash dividend of $.205 per
share on its common stock. The total cash dividend was approximately $3.7
million of which $.7 million was reinvested by shareholders into common stock
through participation in the Direct Stock Purchase and Dividend Reinvestment
Plan ("DRIP"). During the first quarter of 2000, the DRIP purchased Company
common stock on the open market to meet the dividend reinvestment and stock
purchase requirements of its participants. Also during the first quarter of
2000, the Company issued approximately 18,000 shares of its common stock to
certain of the Company's employee benefit plans.
(3) EARNINGS PER SHARE
The computations of basic and diluted earnings per share for the three
months and twelve months ended March 31, 2000 and 1999 are as follows (in
thousands except per share amounts):
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
------------------ -------------------
2000 1999 2000 1999
------- ------- ------- --------
<S> <C> <C> <C> <C>
BASIC EARNINGS PER SHARE COMPUTATION
Income before extraordinary charge . . . . . . . . $11,994 $10,403 $19,250 $12,370
Extraordinary charge . . . . . . . . . . . . . . . -- -- -- (499)
------- ------- ------- --------
Net Income . . . . . . . . . . . . . . . . . . . . $11,994 $10,403 $19,250 $11,871
======= ======= ======= ========
Weighted average common shares outstanding . . . . 17,917 17,438 17,815 16,533
------- ------- ------- --------
EARNINGS PER SHARE - BASIC
Income before extraordinary charge . . . . . . . $ 0.67 $ 0.60 $ 1.08 $ 0.75
Extraordinary charge . . . . . . . . . . . . . . -- -- -- (0.03)
------- ------- ------- --------
Net Income . . . . . . . . . . . . . . . . . . . $ 0.67 $ 0.60 $ 1.08 $ 0.72
======= ======= ======= ========
DILUTED EARNINGS PER SHARE COMPUTATION
Income before extraordinary charge . . . . . . . . $11,994 $10,403 $19,250 $12,370
Adjustment for effect of assumed conversions:
Preferred convertible stock dividends. . . . . . -- 4 9 15
------- ------- ------- --------
Adjusted income before extraordinary charge. . . . 11,994 10,407 19,259 12,385
Extraordinary charge . . . . . . . . . . . . . . . -- -- -- (499)
------- ------- ------- --------
Net Income . . . . . . . . . . . . . . . . . . . . $11,994 $10,407 $19,259 $11,886
======= ======= ======= ========
Weighted average common shares outstanding . . . . 17,917 17,438 17,815 16,553
Incremental shares from assumed conversions of:
Preferred convertible stock. . . . . . . . . . . -- 26 16 26
Stock options. . . . . . . . . . . . . . . . . . -- 1 -- 1
------- ------- ------- --------
Diluted weighted average common shares outstanding 17,917 17,465 17,831 16,580
======= ======= ======= ========
EARNINGS PER SHARE - DILUTED
Income before extraordinary charge . . . . . . . $ 0.67 $ 0.60 $ 1.08 $ 0.75
Extraordinary charge . . . . . . . . . . . . . . -- -- -- (0.03)
------- ------- ------- --------
Net Income . . . . . . . . . . . . . . . . . . . $ 0.67 $ 0.60 $ 1.08 $ 0.72
======= ======= ======= ========
</TABLE>
- 8 -
<PAGE>
(4) BUSINESS SEGMENTS
The Company's adoption of SFAS 131 addressing disclosure about business
segments and policies applicable to the disclosure are discussed in Note 12 in
the Company's 1999 Annual Report on Form 10-K.
The Company operates four business segments: (1) gas distribution; (2)
construction services; (3) engineering services; and (4) propane, pipelines and
storage. The latter three segments are sometimes referred to together as the
"diversified businesses". The Company's gas distribution segment distributes
and transports natural gas to approximately 255,000 customers in the state of
Michigan and approximately 102,000 customers in the state of Alaska. The
construction services segment currently does business in the mid-western,
southern and southeastern areas of the United States. In addition to
constructing underground gas pipelines, the Company is expanding its underground
construction services into other industries such as telecommunications and water
supply. The engineering services segment has offices in New Jersey, Michigan,
Louisiana and Texas and provides a variety of energy related engineering and
quality assurance services in several states. The propane, pipelines and
storage segment sells approximately 5 million gallons of propane annually to
retail customers in Michigan's upper peninsula and northeast Wisconsin and
operates natural gas transmission, gathering and storage facilities in Michigan.
The Company sold the subsidiary comprising its energy marketing business
effective March 31, 1999.
The accounting policies of the operating segments are the same as those
described in Note 1 of the Notes to the Consolidated Financial Statements in the
Company's 1999 Annual Report on Form 10-K except that intercompany transactions
have not been eliminated in determining individual segment results. The
following table provides business segment information as well as a
reconciliation ("Corporate and other") of the segment information to the
applicable line in the Consolidated Financial Statements. Corporate and other
includes corporate related expenses not allocated to segments, intercompany
eliminations and results of other smaller operations.
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
-------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
(in thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES
Gas Distribution . . . . . . . . . $111,688 $ 76,980 $251,539 $185,413
Construction Services. . . . . . . 14,554 4,685 68,141 27,869
Engineering Services . . . . . . . 5,549 5,719 17,315 43,938
Propane, Pipelines and Storage . . 2,061 1,944 6,400 6,106
Energy Marketing . . . . . . . . . -- 96,904 -- 346,519
Corporate and other (a). . . . . . (3,550) (2,352) (12,211) (14,950)
--------- --------- --------- ---------
Consolidated Operating Revenues. $130,302 $183,880 $331,184 $594,895
========= ========= ========= =========
OPERATING INCOME (LOSS)
Gas Distribution . . . . . . . . . $ 28,659 $ 17,867 $ 50,925 $ 27,217
Construction Services. . . . . . . (2,278) (1,245) 1,578 (186)
Engineering Services . . . . . . . 71 451 (894) 2,975
Propane, Pipelines and Storage . . 473 796 2,017 2,008
Energy Marketing . . . . . . . . . -- (341) -- 654
Corporate and other. . . . . . . . (656) (181) (2,815) (2,065)
--------- --------- --------- ---------
Consolidated Operating Income. . $ 26,269 $ 17,347 $ 50,811 $ 30,603
========= ========= ========= =========
<FN>
(a) Includes the elimination of intercompany energy marketing revenues of
$49 and $4,521 for the three and twelve months ended March 31, 1999,
respectively. Includes the elimination of intercompany construction services
revenue of $1,635 and $8,816 for the three and twelve months ended March 31,
2000, respectively, and $1,127 and $8,869 for the three and twelve months ended
March 31, 1999, respectively. Includes the elimination of intercompany
engineering services revenue of $1,884 and $3,355 for the three and twelve
months ended March 31, 2000, respectively, and $1,173 and $1,603 for the three
and twelve months ended March 31, 1999, respectively.
</TABLE>
- 9 -
<PAGE>
(5) PRO FORMA INFORMATION
On November 1, 1999, the Company acquired the assets and certain
liabilities of ENSTAR Natural Gas Company and the outstanding stock of Alaska
Pipeline Company (together known as "ENSTAR"). The Company acquired ENSTAR from
Ocean Energy, Inc. ("Ocean Energy") for approximately $290 million in cash,
which included adjustments for working capital and the purchase of $58.7 million
of ENSTAR's debt held by Ocean Energy, plus the accrued interest thereon. The
acquisition has been accounted for using the purchase method of accounting.
Accordingly, the purchase price has been preliminarily allocated to the assets
purchased and the liabilities assumed based on their estimated fair values at
the date of the acquisition, with the $134.4 million of purchase price in excess
of these estimated fair values classified as goodwill and amortized on a
straight-line basis over 40 years.
The following pro forma amounts for operating revenue, consolidated net
income and earnings per share (basic and diluted) have been determined as if the
acquisition of ENSTAR occurred on January 1, 1998, and illustrate the effects
of: (1) the elimination of activities between ENSTAR and Ocean Energy or its
predecessor, Seagull Energy, Inc., that occurred prior to the closing of the
acquisition by the Company; (2) the adjustments resulting from the acquisition
by the Company including increases in depreciation and amortization expense due
primarily to the amortization, over a 40 year period, of the goodwill associated
with the acquisition; and (3) the assumed public issuance of $165 million of
debentures, $40 million of trust preferred securities and approximately 6.8
million shares of common stock of the Company producing net proceeds of
approximately $85 million and the resulting adjustments to interest expense from
these issuances (the "Financing Transactions"). The Financing Transactions
represent the Company's current expectations regarding permanent financing for
the ENSTAR acquisition. The net proceeds from the Financing Transactions will be
used primarily to retire a $290 million bridge loan facility of the Company
which was used to finance the ENSTAR acquisition.
The pro forma amounts do not reflect any potential cost savings or
operating synergies that may be realized following the acquisition of ENSTAR.
<TABLE>
<CAPTION>
Actual Pro Forma
------------------ ------------------
Three months ended March 31, 2000 1999 2000 1999
---------------------------- -------- -------- -------- --------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Operating revenue (a) . . . . $130,302 $183,880 $130,302 $222,541
Net income. . . . . . . . . . 11,994 10,403 12,497 15,504
Basic and diluted EPS . . . . 0.67 0.60 0.51 0.64
<FN>
(a) The decrease in operating revenues and expenses is due primarily to
the energy marketing business, which was sold effective March 31, 1999,
offset partially by the results of new business acquisitions.
</TABLE>
(6) COMMITMENTS AND CONTINGENCIES
ENVIRONMENTAL MATTERS - Prior to the construction of major natural gas
pipelines, gas for heating and other uses was manufactured from processes
involving coal, coke or oil. The Company owns seven Michigan sites which
formerly housed such manufacturing facilities and expects that it will
ultimately incur investigation and remedial action costs at some of these sites,
and a number of other sites. The Company has submitted plans to the appropriate
environmental regulatory authority in the State of Michigan to close one site
and begin work at another site. The extent of the Company's liabilities and
potential costs in connection with these sites cannot reasonably be estimated at
this time. In accordance with an MPSC accounting order, any environmental
investigation and remedial action costs will be deferred and amortized over ten
years. Rate recognition of the related amortization expense will not begin until
after a prudence review in a general rate case.
- 10 -
<PAGE>
PART I - FINANCIAL INFORMATION - (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
Net income of SEMCO Energy, Inc. and its subsidiaries (the "Company") was
$12.0 million (or $0.67 per share) for the quarter ended March 31, 2000 compared
to $10.4 million (or $0.60 per share) for the quarter ended March 31, 1999. On
a weather-normalized basis, net income for the quarter ended
March 31, 2000 would have been approximately $14.7 million (or $0.82 per share)
compared to approximately $11.1 million (or $0.63 per share) for the same period
of the prior year. The net income for the first quarter of 1999 includes a gain
of $.7 million after tax (or $0.04 per share) from the sale of the Company's
energy marketing business.
Net income for the twelve months ended March 31, 2000 was $19.2 million (or
$1.08 per share) compared to $11.9 million (or $0.72 per share) for the twelve
months ended March 31, 1999. On a weather-normalized basis, net income would
have been approximately $25.0 million (or $1.40 per share) for the twelve months
ended March 31, 2000 compared to approximately $17.1 million (or $1.03 per
share) for the same period of the prior year. The net income for the twelve
months ended March 31, 1999 includes the gain of $.7 million after tax on the
sale of the energy marketing business plus an extraordinary charge of $.5
million after tax (or $0.03 per share) from the early retirement of long-term
debt.
The Company's largest business segment, natural gas distribution, is
seasonal in nature and depends on the winter months for the majority of its
operating revenue. As a result, a substantial portion of the Company's annual
results of operations is earned during the first and fourth quarters of the
year. In addition, the Company's construction services business segment is also
seasonal in nature and makes most of its income during the summer and fall
months and incurs losses during the winter and spring months. Therefore, the
Company's results of operations for the three months ended March 31, 2000 and
1999 are not necessarily indicative of results for a full year.
<TABLE>
<CAPTION>
Three months ended Twelve months ended
March 31, March 31,
2000 1999 2000 1999
--------- --------- --------- ---------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Operating revenues (a). . . . . . . . . . $130,302 $183,880 $331,184 $594,895
Operating expenses (a) . . . . . . . . 104,033 166,533 280,373 564,292
--------- --------- --------- ---------
Operating income. . . . . . . . . . . . . $ 26,269 $ 17,347 $ 50,811 $ 30,603
Other income (deductions). . . . . . . (7,636) (2,401) (22,060) (9,642)
Income taxes . . . . . . . . . . . . . (6,639) (4,543) (9,501) (8,591)
Extraordinary charge . . . . . . . . . - - - (499)
--------- --------- --------- ---------
Net income. . . . . . . . . . . . . . . . $ 11,994 $ 10,403 $ 19,250 $ 11,871
Earnings per share ("EPS"). . . . . . . . $ 0.67 $ 0.60 $ 1.08 $ 0.72
Average common shares outstanding . . . . 17,917 17,438 17,815 16,553
Impact on net income of the following:
Colder (warmer) than normal weather. . $ (2,732) $ (667) $ (5,705) $ (5,247)
Gain on sale of marketing business . . $ - $ 729 $ - $ 729
Extraordinary charge . . . . . . . . . $ - $ - $ - $ (499)
Net income excluding the foregoing items. $ 14,726 $ 10,341 $ 24,955 $ 16,888
EPS excluding the foregoing items . . . . $ 0.82 $ 0.59 $ 1.40 $ 1.02
<FN>
(a) The decrease in operating revenues and expenses is due primarily to the energy marketing
business, which was sold effective March 31, 1999, offset partially by the
results of new business acquisitions.
</TABLE>
- 11 -
<PAGE>
The results for the three and twelve months ended March 31, 2000 also
include net income of $2.2 million and $4.8 million, respectively, from ENSTAR
Natural Gas Company and Alaska Pipeline Company, which were acquired on November
1, 1999. The business segment analyses and other discussions on the next
several pages provide additional information regarding variances in results of
operations when comparing the three and twelve month periods ended March 31,
2000 to the same periods of the prior year.
PRO FORMA INFORMATION
As previously mentioned, on November 1, 1999, the Company acquired the
assets and certain liabilities of ENSTAR Natural Gas Company and the outstanding
stock of Alaska Pipeline Company (together known as "ENSTAR"). Note 5 of the
Notes to the Consolidated Financial Statements includes additional information
regarding the acquisition as well as a discussion of how the following pro forma
amounts were developed.
The pro forma amounts do not reflect any potential cost savings or
operating synergies that may be realized following the acquisition of ENSTAR.
<TABLE>
<CAPTION>
Actual Pro Forma
------------------ --------------------
Three months ended March 31, 2000 1999 2000 1999
- ---------------------------- -------- -------- -------- --------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Operating revenue. . . . . . . $130,302 $183,880 $130,302 $222,541
Net income . . . . . . . . . . 11,994 10,403 12,497 15,504
Basic and diluted EPS. . . . . 0.67 0.60 0.51 0.64
Weather normalized results
Net income . . . . . . . . . 14,726 11,070 15,229 15,371
Basic and diluted EPS. . . . 0.82 0.63 0.62 0.63
</TABLE>
SUMMARY OF BUSINESS SEGMENTS
The Company operates four business segments: (1) gas distribution; (2)
construction services; (3) engineering services; and (4) propane, pipelines and
storage. The latter three segments are sometimes referred to together as the
"diversified businesses". Refer to Note 4 of the Notes to the Consolidated
Financial Statements for further information regarding each business segment.
The Company sold the subsidiary comprising its energy marketing business
effective March 31, 1999.
- 12 -
<PAGE>
The following table shows the operating revenues and operating income of
each business segment as well as a reconciliation ("Corporate and other") of the
segment information to the applicable line in the consolidated financial
statements. Corporate and other includes intercompany eliminations, corporate
related expenses not allocated to the business segments and the results of other
smaller operations.
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
-------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
(in thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES
Gas Distribution. . . . . . . . $111,688 $ 76,980 $251,539 $185,413
Construction Services . . . . . 14,554 4,685 68,141 27,869
Engineering Services. . . . . . 5,549 5,719 17,315 43,938
Propane, Pipelines and Storage. 2,061 1,944 6,400 6,106
Energy Marketing. . . . . . . . -- 96,904 -- 346,519
Corporate and Other . . . . . . (3,550) (2,352) (12,211) (14,950)
--------- --------- --------- ---------
Total Operating Revenues. . . $130,302 $183,880 $331,184 $594,895
========= ========= ========= =========
OPERATING INCOME (LOSS)
Gas Distribution. . . . . . . . $ 28,659 $ 17,867 $ 50,925 $ 27,217
Construction Services . . . . . (2,278) (1,245) 1,578 (186)
Engineering Services. . . . . . 71 451 (894) 2,975
Propane, Pipelines and Storage. 473 796 2,017 2,008
Energy Marketing. . . . . . . . -- (341) -- 654
Corporate and Other . . . . . . (656) (181) (2,815) (2,065)
--------- --------- --------- ---------
Total Operating Income. . . . $ 26,269 $ 17,347 $ 50,811 $ 30,603
========= ========= ========= =========
</TABLE>
Each business segment is discussed separately on the following pages. The
Company evaluates the performance of its business segments based on the
operating income generated. Operating income does not include income taxes,
interest expense, extraordinary items, changes in accounting methods or other
non-operating income and expense items. A review of the non-operating items
follows the business segment discussions.
GAS DISTRIBUTION
The Company's gas distribution business segment consists of operations in
Michigan and Alaska. ENSTAR, the Alaska-based operation, was acquired on
November 1, 1999. The acquisition of ENSTAR was accounted for as a purchase and
therefore the consolidated financial statements and the table below include the
results of ENSTAR's operations since November 1, 1999. The Michigan gas
distribution operation and ENSTAR are referred to together as the "Gas
Distribution Business".
Operating income for the Gas Distribution Business was $28.7 million for
the quarter ended March 31, 2000 compared to $17.9 million for the quarter ended
March 31, 1999. On a weather-normalized basis, the operating income of the Gas
Distribution Business would have been approximately $33.0 million for the first
quarter of 2000 compared to approximately $18.8 million for the same period of
the prior year. Approximately $11.2 million of the $14.1 million increase in
weather-normalized operating income for the first quarter of 2000, when compared
to the first quarter of 1999, represents the weather-normalized operating income
of ENSTAR.
- 13 -
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
-------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
(dollars in thousands)
<S> <C> <C> <C> <C>
Gas sales revenue . . . . . . . . . . $ 98,932 $ 68,978 $ 221,123 $ 164,841
Cost of gas sold. . . . . . . . . . . 60,535 45,999 132,325 106,873
--------- --------- --------- ---------
Gas sales margin. . . . . . . . . . $ 38,397 $ 22,979 $ 88,798 $ 57,968
Gas transportation revenue. . . . . . 11,498 6,629 27,237 17,432
Other operating revenue . . . . . . . 1,258 1,373 3,179 3,140
--------- --------- --------- ---------
Gross margin. . . . . . . . . . . . $ 51,153 $ 30,981 $ 119,214 $ 78,540
Operating expenses. . . . . . . . . . 22,494 13,114 68,289 51,323
--------- --------- --------- ---------
Operating income. . . . . . . . . . . $ 28,659 $ 17,867 $ 50,925 $ 27,217
========= ========= ========= =========
Weather-normalized operating income . $ 32,959 $ 18,817 $ 59,575 $ 34,917
========= ========= ========= =========
Volumes sold (MMcf) . . . . . . . . . 23,248 15,875 46,618 32,552
Volumes transported (MMcf). . . . . . 16,010 9,293 39,134 26,403
Number of customers at end of period. 359,913 250,065 359,913 250,065
Degree days . . . . . . . . . . . . . 3,140 3,239 6,551 6,021
Percent colder (warmer) than normal . (10.6%) (2.1%) (10.7%) (12.5%)
<FN>
The amounts in the table above include intercompany transactions.
</TABLE>
GAS SALES MARGIN - During the first quarter of 2000, gas sales margin
increased by $15.4 million when compared to the first quarter of 1999. The
increase includes approximately $14.5 million of gas sales margin from ENSTAR.
The remaining $.9 million of the increase is attributable to the Michigan gas
distribution operation and relates to gas sales margins from new customers and
sales margins earned on the sale of gas under the Company's gas supply and
storage arrangement with TransCanada Gas Services, Inc. ("TransCanada"), offset
partially by a decrease in gas sales as a result of warmer weather and a shift
in customers to transportation as a result of their participation in the
Company's aggregated transportation services ("ATS") program.
The gas supply and storage arrangement with TransCanada pertains to the
Michigan gas distribution operations. Under the terms of the agreements,
TransCanada provides the Company's natural gas requirements and manages the
Company's natural gas supply and the supply aspects of transportation and
storage operations in Michigan for the three year period that began April 1,
1999. TransCanada supplies the gas and related services to the Company at a
cost below the $3.24 per Mcf that the Company is authorized to charge its
Michigan customers for gas. As a result, the Michigan gas distribution
operation retains the sales margin on the sale of gas, subject to a customer
profit sharing mechanism. Prior to April 1, 1999, gas sales margin was
generated primarily from distribution fees and customer fees because the
Michigan operation was not allowed to earn profits from the sale of the gas
commodity. For more information on the TransCanada agreements, the $3.24
authorized gas charge and the customer profit sharing mechanism, see Note 2 of
the Notes to the Consolidated Financial Statements in the Company's 1999 Annual
Report on Form 10-K.
Weather during the first quarter of 2000 was 10.6% warmer than normal
in Michigan and Alaska combined while the weather during the first quarter of
1999 was 2.1% warmer than normal. Under normal weather conditions, gas sales
margin for the quarters ended March 31, 2000 and 1999 would have been higher by
approximately $4.3 million and $1.0 million, respectively.
The ATS program, which was effective April 1, 1998, provides all Michigan
commercial and industrial customers the opportunity to purchase their gas from a
third-party supplier, while allowing the Gas Distribution Business to continue
charging the existing distribution fees and customer fees. Distribution and
customer fees associated with customers who have switched to third-party gas
suppliers are recorded in gas transportation revenue rather than gas sales
revenue because the Company is acting as a transporter for those customers.
- 14 -
<PAGE>
Gas sales margin for the twelve months ended March 31, 2000 increased by
$30.8 million when compared to the twelve months ended March 31, 1999. The
increase includes approximately $26.1 million of gas sales margin from ENSTAR.
The remaining $4.7 million of the increase is attributable to the Michigan gas
distribution operation and relates to gas sales margins from new customers and
sales margins earned on the sale of the gas commodity, some of which may be
non-recurring. These increases were offset partially by the impact of warmer
weather and a shift in customers to transportation as a result of their
participation in the Company's ATS program.
Weather during the twelve months ended March 31, 2000 was 10.7% warmer than
normal in Michigan and Alaska combined, while the weather during the twelve
months ended March 31, 1999 was 12.5% warmer than normal. Under normal weather
conditions, gas sales margin for the twelve months ended March 31, 2000 and 1999
would have been higher by approximately $8.6 million and $7.7 million,
respectively. The impact of weather on gas sales margin during the twelve
months ended March 31, 2000 was larger than during the same period of 1999,
despite the slightly cooler weather, because of the increased customer base as a
result of the ENSTAR acquisition. A significant increase in customer base
causes any variation from normal weather to have a more pronounced impact on gas
sales margin.
GAS TRANSPORTATION REVENUE - For the three months and twelve months ended
March 31, 2000, gas transportation revenue increased by $4.9 million and $9.8
million, respectively, when compared to the same periods of 1999. The increases
are due in part to ENSTAR's transportation revenues during the three months and
twelve months ended March 31, 2000 of $4.1 million and $7.1 million,
respectively. The remainder of the increases during both periods relates
primarily to customers participating in the new ATS program and an increase in
general transportation revenue due to increased transportation volumes. As
discussed above, the increase in gas transportation revenue as a result of
participation in the ATS program is generally offset by a corresponding decrease
in gas sales margin.
OPERATING EXPENSES - The operating expenses of the Gas Distribution
Business increased by $9.4 million during the three months ended March 31, 2000
compared to the three months ended March 31, 1999. Operating expenses
attributable to ENSTAR account for $8.9 million of the increase. The remaining
$.5 million of the increase relates to the Michigan operation. Approximately
$.2 million of the increase in Michigan operating expenses was due to additional
depreciation expense and property taxes on new property, plant and equipment
placed in service and the remainder of the increase was due primarily to
increased payroll expenses.
During the twelve months ended March 31, 2000, operating expenses increased
by $16.9 million when compared to the twelve months ended March 31, 1999.
Approximately $14.9 million of the increase is attributable to ENSTAR. The
remainder of the increase relates to the Michigan operation. Approximately $.7
million of the increase in Michigan operating expenses is due to additional
depreciation on new property, plant and equipment placed in service and
approximately $.7 million is due to increased information technology expenses
related primarily to year-2000 computer remediation. There was also an overall
increase in general and administrative operating expenses of approximately $.9
million due primarily to higher payroll related costs.
The increases in Michigan operating expenses in the twelve month period
ended March 31, 2000 were offset partially by a $.3 million decrease in general
taxes. The decrease in general taxes is made up of a reduction of $1.3 million
in property taxes which the Company booked based on pending appeals of prior
years' personal property assessments in Michigan and new property valuation
tables approved by the State of Michigan in 1999, offset partially by an
increase in property taxes associated with additional property, plant and
equipment placed in service and an increase in Michigan business tax. The
Company filed the appeals over the past three years claiming that its Michigan
utility property was over-assessed. The new valuation tables approved by the
state of Michigan are consistent with the Company's claim regarding utility
property assessments and thus significantly increases the likelihood of
recovering the overpaid property taxes.
- 15 -
<PAGE>
CONSTRUCTION SERVICES
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
-------------------- -------------------
2000 1999 2000 1999
-------- -------- ------- --------
(in thousands)
<S> <C> <C> <C> <C>
Operating revenues. . . . . $14,554 $ 4,685 $68,141 $27,869
Operating expenses. . . . . 16,832 5,930 66,563 28,055
-------- -------- ------- --------
Operating income (loss) . . $(2,278) $(1,245) $ 1,578 $ (186)
======== ======== ======= ========
Feet of pipe installed. . . 997 697 6,508 4,702
======== ======== ======= ========
<FN>
The amounts in the table above include intercompany transactions.
</TABLE>
OPERATING REVENUES - The operating revenues of the construction services
segment ("Construction Services") increased by $9.9 million, or more than 200%,
during the first quarter of 2000 when compared to the first quarter of 1999.
The increase is due primarily to the revenues of three contruction businesses
acquired after the first quarter of 1999. Operating revenues during the twelve
months ended March 31, 2000 increased by $40.3 million, or 145%, when compared
to the twelve months ended March 31, 1999 due primarily to the timing of
business acquisitions. Refer to Note 3 of the Notes to the Consolidated
Financial Statement in the Company's 1999 Annual Report on Form 10-K for the
acquisition dates of all construction businesses acquired during the past three
years
OPERATING INCOME - Construction Services' seasonal operating loss for the
first quarter of 2000 was $2.3 million compared to $1.2 million for the first
quarter of 1999. Construction Services generally incurs operating losses during
the winter and spring months when underground construction is inhibited by
weather and generates the majority of its income during the summer and fall
months. The increased operating loss for the first quarter of 2000 when
compared to the first quarter of 1999 was due primarily to the seasonal losses
of the three business acquired after the first quarter of 1999. As the Company
expands its construction business, the seasonal losses and profits become
proportionally larger.
Operating income for the twelve months ended March 31, 2000 increased by
$1.8 million when compared to the same period of 1999. The increase is due
primarily to the operating income of the businesses acquired since February 1999
and the absence during the twelve months ended March 31, 2000 of operating
losses from an overhead-line construction company that was started in Florida in
January of 1998. The operations of this start-up business were halted in
mid-1998 in response to lower than expected business levels and earnings.
Construction Services' results for the twelve months ended March 31, 1999
include an operating loss of $.7 million from this overhead-line business.
ENGINEERING SERVICES
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
------------------ ---------------------
2000 1999 2000 1999
------- ------- --------- --------
(in thousands, except billed hours)
<S> <C> <C> <C> <C>
Operating revenues . . . . $ 5,549 $ 5,719 $ 17,315 $ 43,938
Operating expenses . . . . 5,478 5,268 18,209 40,963
------- ------- --------- --------
Operating income (loss). . $ 71 $ 451 $ (894) $ 2,975
======= ======= ========= ========
Billed hours . . . . . . . 94,000 97,000 356,000 619,000
======= ======= ========= ========
<FN>
The amounts in the table above include intercompany transactions.
</TABLE>
- 16 -
<PAGE>
OPERATING REVENUES - The engineering services segment ("Engineering
Services") had operating revenues of $5.5 million during the three months ended
March 31, 2000 compared to $5.7 million for the same period of the prior year.
The decrease in operating revenues was due primarily to a reduction in
engineering projects that began during the first half of 1999. Engineering
projects for the gas distribution industry have been delayed due to the cash
flow impact on the industry of warmer weather during the past few years. Also,
many pipeline construction and engineering projects scheduled for 1999 were cut
back or delayed due to gas market uncertainty and lower oil prices in 1998 and
early 1999. Oil prices have since recovered significantly and a turnaround in
business for 2000 may occur as new and delayed engineering projects are
released.
The decrease in revenues caused by the reduction in available engineering
projects was offset partially by revenues from other lower margin jobs accepted
and performed during the first quarter of 2000. The lower margin jobs covered a
portion of Engineering Services' fixed overhead costs.
During the twelve months ended March 31, 2000, Engineering Services'
operating revenues decreased by approximately $26.6 million from the twelve
months ended March 31, 1999. The decrease was due primarily to the reduction in
available engineering projects, including turn-key projects, caused by the same
factors discussed with respect to the first quarter.
OPERATING INCOME - Operating income for Engineering Services was $.1
million for the first quarter of 2000 compared to $.5 million for the first
quarter of 1999. The decrease was due primarily to the reduction in available
engineering projects. As discussed above, a turnaround in business for 2000 may
occur as new and delayed engineering projects are released in response to higher
oil prices.
Operating income decreased by $3.9 million during the twelve months ended
March 31, 2000 when compared to the same period of the prior year. The
significant decrease in operating income was due primarily to the decrease in
operating revenues and corresponding project costs as a result of the deferral
of engineering projects discussed previously, and unanticipated ground
restoration and clean-up costs incurred during the twelve months ended March 31,
2000 related to a large turn-key project completed during the twelve months
ended March 31, 1999.
PROPANE, PIPELINES AND STORAGE
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
------------------ -------------------
2000 1999 2000 1999
------ ------ ------ ------
(in thousands)
<S> <C> <C> <C> <C>
Operating revenues . . $2,061 $1,944 $6,400 $6,106
Operating expenses . . 1,588 1,148 4,383 4,098
------ ------ ------ ------
Operating income . . . $ 473 $ 796 $2,017 $2,008
====== ====== ====== ======
</TABLE>
OPERATING REVENUES - For the three months and twelve months ended March 31,
2000, the operating revenues of the Company's propane, pipelines and storage
business increased by $.1 million and $.3 million, respectively, when compared
to the same periods of 1999. The increases during both the three and twelve
month periods were due to higher propane distribution revenues offset partially
by slightly lower pipeline revenues due to the absence of revenues from a
pipeline that was sold in mid-1999.
OPERATING INCOME - The operating income from the propane, pipelines and
storage business decreased during the three months ended March 31, 2000 by $.3
million when compared to the first quarter of 1999. The decrease during the
first quarter of 2000 was caused primarily by higher propane costs, which reduce
propane margins, and the absence of operating income from a pipeline that was
sold in mid-1999.
Operating income was $2.0 million for both the twelve months ended March
31, 2000 and the same period of 1999. Operating revenues were higher during the
twelve months ended March 31, 2000, as discussed above, and pipeline expenses
were lower. However, these items were offset primarily by higher propane costs.
- 17 -
<PAGE>
OTHER INCOME AND DEDUCTIONS
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
------------------ --------------------
2000 1999 2000 1999
-------- -------- --------- ---------
(in thousands)
<S> <C> <C> <C> <C>
Divestiture of energy marketing business. $ -- $ 1,122 $ -- $ 1,122
Divestiture of NOARK investment . . . . . -- -- -- 3,568
Interest expense. . . . . . . . . . . . . (8,696) (3,894) (25,376) (15,018)
Dividends on preferred stock. . . . . . . -- (48) (277) (193)
Other income. . . . . . . . . . . . . . . 1,060 419 3,593 879
-------- -------- --------- ---------
Total other income (deductions) . . . . $(7,636) $(2,401) $(22,060) $ (9,642)
======== ======== ========= =========
</TABLE>
DIVESTITURE OF ENERGY MARKETING BUSINESS - The Company sold its energy
marketing business effective March 31, 1999. The divestiture generated a gain
of $1.1 million ($.7 million after tax) which is reflected in the results for
the three months and twelve months ended March 31, 1999.
DIVESTITURE OF NOARK INVESTMENT - The Company sold its investment in the
NOARK Pipeline System Partnership ("NOARK") in 1998 after a number of
write-downs and reserve adjustments related to the investment. Refer to
Management's Discussion and Analysis and Note 15 in the Notes to the
Consolidated Financial Statements in the Company's 1999 Annual Report on Form
10-K for additional information related to the NOARK investment.
INTEREST EXPENSE - During the first quarter of 2000, interest expense
increased $4.8 million compared to the first quarter of 1999. The increase is
due primarily to increases in debt levels to finance the Company's capital
expenditure and business acquisition programs and for general corporate
purposes, offset partially by $2.1 million of income recognized on interest rate
hedge instruments during the first quarter of 2000. The Company incurred $290
million of additional short-term debt on November 1, 1999 to finance the
acquisition of ENSTAR ("bridge loan"). Approximately $5.9 million of interest
expense during the first quarter of 2000 relates to the bridge loan. Also, $.8
million of the $5.9 million in interest expense associated with the bridge loan
is amortization of debt costs. Debt costs related to the bridge loan are being
amortized over the expected life of the loan.
Interest expense for the twelve months ended March 31, 2000 increased by
$10.4 million when compared to the same period in 1999. The increase between
the twelve-month periods is due generally to the same items that caused the
increase between quarterly periods, including the $2.1 million of income
recognized on interest rate hedge instruments during the first quarter of 2000 .
Approximately $10.1 million of interest expense during the twelve months ended
March 31, 2000 relates to the bridge loan, of which $1.5 million represents
amortization of debt costs associated with the loan.
OTHER INCOME - Other income for the three months ended March 31, 2000
increased by $.6 million when compared to the first quarter of 1999. The
increase is due in part to a $.4 million increase in equity income from a
partnership investment in a gas storage facility, most of which is likely to be
non-recurring. The remainder of the increase is due primarily to an increase in
gains on property sales.
Other income for the twelve months ended March 31, 2000 increased by $2.7
million when compared to the same twelve months of 1999. Approximately $.8
million of the increase between twelve month periods relates to life insurance
proceeds received upon the death of a retired company executive, $.7 million
relates to gains on the sale of various property, $.6 million relates to an
increase in equity income from partnership investments and the remainder is
attributable to higher miscellaneous non-operating income.
- 18 -
<PAGE>
INCOME TAXES
Income taxes for the three months and twelve months ended March 31, 2000
increased by $2.1 million and $.9 million, respectively, when compared to the
same periods of the prior year. The change in income taxes, when comparing one
period to another, is due primarily to changes in pre-tax earnings and any
adjustments necessary for compliance with tax laws and regulations.
EXTRAORDINARY ITEM
The Company incurred an extraordinary charge of $.5 million after-tax in
the second quarter of 1998 for the early redemption of all of its outstanding
8.625% debentures due April 15, 2017. The charge is reflected in the results
for the twelve months ended March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS FROM INVESTING - The following table identifies capital
investments for the first quarter of 2000 and 1999:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
2000 1999
------ ------
Capital Investments: (in thousands)
<S> <C> <C>
Property additions - gas distribution. . . . $6,623 $3,907
Property additions - diversified businesses. 2,436 1,922
Business acquisitions (a). . . . . . . . . . -- 1,730
------ ------
$9,059 $7,559
====== ======
<FN>
(a) Includes net cash paid, deferred payments and the value, at the time of
issuance, of Company stock issued for acquisitions.
</TABLE>
The Company has spent approximately $9.1 million on property additions
during the first three months of 2000 and anticipates spending approximately
$40.9 million on property additions during the remainder of 2000. In addition,
the Company may incur additional expenditures for business acquisitions during
the remainder of 2000.
CASH FLOWS FROM OPERATIONS - Net cash from operating activities for the
three months ended March 31, 2000, as compared to the same three months of the
prior year, decreased by $17.2 million. The change in operating cash flows is
significantly influenced by changes in the level and cost of gas in underground
storage, changes in accounts receivable and accrued revenue and other working
capital changes. The changes in these accounts are largely the result of the
timing of cash receipts and payments.
CASH FLOWS FROM FINANCING - During the three months ended March 31, 2000
and 1999, the Company used $27.2 million and $43.0 million, respectively, for
financing activities.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
2000 1999
--------- ---------
Cash provided by (used in) financing activities: (in thousands)
<S> <C> <C>
Issuance (repurchase) of common stock . . . . . . $ 218 $ 1,996
Net cash change in notes payable. . . . . . . . . (23,792) (41,498)
Payment of dividends. . . . . . . . . . . . . . . (3,672) (3,527)
--------- ---------
$(27,246) $(43,029)
========= =========
</TABLE>
- 19 -
<PAGE>
In April 2000 the Company's Board of Directors declared a regular quarterly
cash dividend of $.21 per share on the Company's common stock, which was an
increase of 2.4% over the prior quarterly cash dividend. The dividend is
payable on May 15, 2000 to shareholders of record at the close of business on
May 5, 2000.
In March 2000, a registration statement on Form S-3 ("registration
statement") filed by the Company and SEMCO Capital Trust I, SEMCO Capital Trust
II and SEMCO Capital Trust III ("Capital Trusts") with the Securities and
Exchange Commission became effective. The registration statement was for the
registration of debt securities, preferred stock, common stock, stock purchase
contracts and stock purchase units of the Company and trust preferred securities
of the Capital Trusts and related guarantees in any combination up to $500
million.
In April 2000, SEMCO Capital Trust I issued 1.6 million shares of 10.25%
cumulative trust preferred securities ("Trust Preferred Securities") in a public
offering at a price of $25 per security. SEMCO Capital Trust I used the $40
million in proceeds from the issuance of the Trust Preferred Securities to
invest in subordinated debentures of the Company bearing an interest rate of
10.25% ("Subordinated Debentures"). Also in April 2000, the Company sold $30
million of 8% Senior Notes due 2010 ("Senior Notes") in a public offering. The
Company used the entire net proceeds from the sale of the Senior Notes and
Subordinated Debentures to repay a portion of the ENSTAR bridge loan, including
a $56 million payment due May 1, 2000.
FUTURE FINANCING - In general, the Company funds its capital expenditure
program and dividend payments with operating cash flows and the utilization of
short-term lines of credit. When appropriate, the Company will refinance its
short-term lines with long-term debt, common stock or other long-term financing
instruments. At March 31, 2000, the Company had $110 million of short-term
credit facilities, of which $49 million was unused.
As discussed above, the Company has registered up to $500 million of
securities under the registration statement, of which $70 million was utilized
to issue securities during April of 2000.
The Company expects to acquire additional businesses in 2000 and will
likely raise the required capital through a combination of utilizing short-term
lines of credit and issuing long-term debt or equity. The Company also plans to
refinance the ENSTAR bridge loan in 2000 with a combination of long-term debt,
equity and trust preferred securities. The bridge loan matures on October 30,
2000. Payments of $56,000,000 are required on May 1, 2000 and August 1, 2000 if
the bridge loan is not prepaid prior to such dates. As discussed above, the net
proceeds from securities issued in April 2000 were used to repay a portion of
the bridge loan including the May 1, 2000 payment.
The Company's ratio of earnings to fixed charges was 2.12 for the twelve
months ended March 31, 2000.
NEW ACCOUNTING STANDARD
In June of 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 establishes
accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts) be
recorded in the statement of financial position as either an asset or liability
measured at its fair value. SFAS 133 requires that changes in the derivative's
fair value be recognized currently in earnings unless specific hedge accounting
criteria are met. Special accounting for qualifying hedges allows a
derivative's gains and losses to offset related results on the hedged item in
the income statement, and requires that a company must formally document,
designate, and assess the effectiveness of transactions that receive hedge
accounting.
SFAS 133 is effective for fiscal years beginning after June 15, 2000. The
Company is studying the effects of SFAS 133 but does not expect it to have a
material impact on the Company's liquidity, financial condition and results of
operations.
- 20 -
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES.
During the first quarter of 2000, the Company issued 2,731 shares of
unregistered common stock to the members of its Board of Directors in exchange
for services rendered, valued at $31,932.
The preceding transaction is exempt from registration under Section
4(2) of the Securities Act of 1933.
ITEM 3. Not applicable.
ITEM 4. Not applicable.
ITEM 5. Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) List of Exhibits - (See page 23 for the Exhibit Index.)
10.1 Form of Change in Control Agreement (for certain officers).
10.2 Form of Change of Control Employment Agreement dated as of March 1, 2000
(for certain officers).
10.3 Amended and Restated Trust Agreement of SEMCO Capital Trust I dated as of
April 19, 2000.
10.4 Guarantee Agreement between SEMCO Energy, Inc. as Guarantor and Bank One
Trust Company, National Association as Trustee dated as of April 19, 2000.
10.5 Form of 10 % Trust Preferred Security.
10.6 Indenture dated as of April 19, 2000 between SEMCO Energy, Inc. and Bank
One Trust Company, National Association, as Trustee.
10.7 First Supplemental Indenture to Indenture dated as of April 19, 2000.
10.8 Form of 10 % Subordinated Debenture.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
The Company filed a Form 8-K Report on March 20, 2000, to file (1) the
ENSTAR Combined Financial Statements and Notes Thereto for the Years Ended
December 31, 1999, 1998 and 1997 and (2) the Company's Pro Forma Statement of
Income for the Year Ended December 31, 1999 reflecting the acquisition of
ENSTAR.
- 22 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SEMCO ENERGY, INC.
(Registrant)
Dated: May 12, 2000
By: /s/Sebastian Coppola
--------------------------------
Sebastian Coppola
Senior Vice President and
Principal Financial Officer
- 22 -
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Form 10-Q
First Quarter 2000
Exhibit
No. Description Filed Herewith
- ------ ----------- --------------
<C> <S> <C>
10.1 Form of Change in Control Agreement (for certain officers). . . . . . . . . . x
10.2 Form of Change of Control Employment Agreement dated
as of March 1, 2000 (for certain officers). . . . . . . . . . . . . . x
10.3 Amended and Restated Trust Agreement of SEMCO Capital
Trust I dated as of April 19, 2000. . . . . . . . . . . . . . . . . . x
10.4 Guarantee Agreement between SEMCO Energy, Inc. as
Guarantor and Bank One Trust Company, National Association
as Trustee dated as of April 19, 2000. . . . . . . . . . . . . . . . . x
10.5 Form of 10 % Trust Preferred Security. . . . . . . . . . . . . . . . . x
10.6 Indenture dated as of April 19, 2000 between SEMCO
Energy, Inc. and Bank One Trust Company, National
Association, as Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . x
10.7 First Supplemental Indenture to Indenture dated as of
April 19, 2000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x
10.8 Form of 10 % Subordinated Debenture. . . . . . . . . . . . . . . . . . . x
27 Financial Data Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . x
</TABLE>
- 23 -
Exhibit 10.1
- -------------
CHANGE IN CONTROL AGREEMENT
This is an Agreement entered into between SEMCO Energy, Inc., a Michigan
corporation ("Company"), and ______________ ("Executive"). References to
employment by Executive with the Company include employment by the Company or
one of its subsidiaries.
BACKGROUND
A. Executive is a valued member of the Company's management team.
B. The Board of Directors of the Company desires to recognize the
contributions of the Executive to the Company and to assure continuous
harmonious management of the Company.
C. The Board of Directors of the Company believes that public companies in
the natural gas industry face the possibility of a Change in Control (as
hereinafter defined), and that the management uncertainty related to a Change in
Control can have potential adverse effects on the Company and its shareholders.
D. The Board of Directors of the Company believes that it is in the best
interests of the Company that the Executive remain in the employ of the Company
during an actual or threatened Change in Control of the Company, and that the
Executive be granted certain protection in the event that the Executive's
employment is involuntarily terminated or the Executive terminates employment
for Good Reason (as hereinafter defined) prior to or following a Change in
Control.
AGREEMENT
Executive and Company agree as follows:
SECTION 1. EFFECTIVE DATE OF AGREEMENT. This Agreement shall be effective
immediately upon its execution by both parties.
SECTION 2. TERMINATION OF AGREEMENT. This Agreement shall terminate upon
the earlier of:
(a) The termination of the Executive's employment with the Company for any
reason (i) prior to a Change in Control and (ii) not In Anticipation of a Change
in Control (excluding assignment of Executive to employment by the Company or a
subsidiary of the Company);
(b) Upon the Executive's assignment to a non-Executive position if said
assignment is (i) prior to a Change in Control and (ii) not In Anticipation of a
Change in Control;
-1-
<PAGE>
(c) The termination of Executive's employment because of death, disability,
voluntary retirement on or after age 65, or Cause (as defined in Section 6(b));
or
(d) April 1, 2003, unless extended by the Board of Directors of the Company.
SECTION 3. REQUIREMENTS FOR BENEFITS. The benefits set forth in Section 7
shall be provided in the event there has been a Change in Control as set forth
in Section 4 and within two years thereafter there is a Termination of
Employment of Executive, as described in Section 6. The benefits set forth in
Section 7 shall also be provided in the event there is a Termination of
Employment of Executive In Anticipation of a Change in Control as set forth in
Section 5. Benefits shall be provided only in response to a valid claim made
within sixty (60) days of such event or the Change in Control, whichever is
later, in accordance with the provisions of Section 14.
SECTION 4. CHANGE IN CONTROL. A "Change in Control" as used herein shall be
deemed to have occurred:
(a) if any "person," including a "group" as determined in accordance with
Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange Act"), is
or becomes the beneficial owner, directly or indirectly, of securities of the
Company representing forty (40) percent or more of the combined voting power of
the Company's then outstanding securities;
(b) if the shareholders of the Company approve (i) the sale of all or
substantially all the Company's assets or (ii) any transaction which would
result in paragraph (a) above being true; or
(c) upon the addition of a majority of new members to the Board of Directors
within any twelve-month period.
SECTION 5. IN ANTICIPATION OF A CHANGE IN CONTROL. An action is taken "In
Anticipation of a Change in Control" if taken in preparation for a Change in
Control within six (6) months prior to an actual Change in Control. Subject to
reasonable rebuttal, any action by the Company taken within six (6) months prior
to a Change in Control shall be presumed to be an action taken In Anticipation
of a Change in Control.
SECTION 6. TERMINATION OF EMPLOYMENT.
(a) "Termination of Employment" means:
(1) Termination by the Company of the Executive's employment for any
reason other than death, disability, voluntary retirement on or after age 65 or
Cause (excluding assignment of Executive to employment by the Company or a
subsidiary of Company); or
-2-
<PAGE>
(2) Resignation by Executive for Good Reason.
(b) "Good Reason" means the occurrence of any of the following events
without Executive's express written consent:
(1) Any reduction in the Executive's salary;
(2) Any failure by the Company to continue any bonus plan, or other
incentive plan (without instituting a comparable plan) in which the Executive
participated;
(3) Any significant diminution of the Executive's authority, duties and
responsibilities,
(4) Any required relocation of the Executive's residence to a location
outside of the state of Michigan.
(c) "Cause" means an act of Executive constituting willful gross
misconduct, material breach of duties, or an act of material dishonesty or fraud
that is injurious to the Company.
SECTION 7. SEVERANCE BENEFIT. Upon the occurrence of the events described
in Section 3, Company shall provide the Executive the following benefits:
(a) An amount equal to one year's salary, computed as (i) Executive's
highest annual W-2 Compensation from the Company during the last three years, or
(ii), if Executive has not been employed by the Company for at least one full
calendar year upon the occurrence of the events described in Section 3, an
amount equal to Executive's annual base salary rate at the time of such
occurrence. "W-2 Compensation" shall exclude compensation derived from the
exercise of stock options and other income from the Company's stock based
incentive plan, signing bonuses, relocation expense reimbursement and awards
under the Short Term Incentive Plan or its successor.
(b) Continued participation in the Company's (or successor's) group life and
disability coverage (to the extent permitted by law and any applicable insurance
carrier), family medical, hospitalization and dental coverage, until the earlier
of the expiration of one (1) year or the commencement of a comparable coverage
from another employer; provided that any continuation of medical and dental
coverage shall run concurrently with the Executive's statutory COBRA period.
The Executive shall promptly notify the Company upon receipt of comparable
coverage from a new employer.
-3-
<PAGE>
(c) The Company shall provide and pay for services for an out placement
executive search firm for a period of six months following a Termination of
Employment of Executive.
(d) Benefits shall be reduced to the extent necessary to avoid loss of any
tax deduction or payment of non-deductible items under Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code").
SECTION 8. METHOD OF PAYMENT.
(a) In the case of a "Friendly Change in Control," as defined below,
the Benefit payable under Section 7(a) shall be paid over twelve months in equal
payments consistent with the Company's payroll practices, the first payment
being due on the first payday of the month following Termination of Employment.
Any late payments shall include interest at the prime rate (as published by
First of Michigan Bank) plus two percentage points. A "Friendly Change in
Control" means a transaction approved by (i) a majority of the members of the
Board of Directors who have been in office for at least twelve (12) months or
(ii) a Board whose majority consists of members in office twelve months, plus
members who were recommended or elected by a majority of incumbent directors.
(b) In any case other than a Friendly Change in Control, the Benefit
payable under Section 7(a) shall be paid in a lump sum within twenty (20) days
after Termination of Employment, with interest thereon accruing thereafter at
the rate described above.
SECTION 9. NO MITIGATION OR DUTY TO SEEK EMPLOYMENT. Executive shall be
under no obligation to seek or accept other employment after Termination of
Employment. Further, any Benefits, except as set forth in Section 7(b), shall
not be diminished as a result of subsequent employment.
SECTION 10. TAX WITHHOLDING. The Company may withhold or require Executive
to remit (at the time of receipt of Benefits) all applicable Federal, State,
local or other withholding taxes.
SECTION 11. BINDING EFFECT.
(a) This Agreement shall be binding upon successors and assigns of the
company.
(b) This Agreement shall be binding upon Executive and shall inure to
the benefit of Executive's legal representatives and heirs.
SECTION 12. AMENDMENT OR MODIFICATION OF AGREEMENT. This Agreement may not
be modified or amended except by instrument in writing signed by the parties
hereto.
-4-
<PAGE>
SECTION 13. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision.
SECTION 14. CLAIMS PROCEDURE.
(a) The Administrator shall be the Company, whose address is SEMCO
Energy, Inc., 405 Water St., Port Huron, Michigan. The Company shall have the
right to designate one or more employees as Administrator at any time. The
Company shall give Executive written notice of any change. All notices shall be
in writing, and delivered to Executive in person or sent by certified mail to
Executive's last known address.
(b) The Administrator shall make all determinations as to Benefits.
Any denial of a claim for benefits shall be stated in writing and delivered or
mailed within ten (10) business days after receipt of the claim, unless special
circumstances require an extension of time. Written notice of an extension
shall be furnished prior to the termination of the initial 10-day period. Such
extension may not exceed ten (10) business days. Failure to provide any notice
within ten (10) business days constitutes acceptance of the claim. Notice of
denial shall set forth reasons for the denial, reference to provisions upon
which the denial is based, a description of additional material or information
necessary to perfect the claim, with an explanation of why such material or
information is necessary, and an explanation of claim review procedures, written
in a manner that may be understood without legal counsel.
(c) A claimant whose claim has been wholly or partially denied may
request, within ten (10) days following such denial in writing a review of such
denial. The claimant may submit comments in writing and may include a request
for a hearing in person before the administrator. Prior to submitting a
request, the claimant shall be entitled to review such documents as the
Administrator agrees are pertinent to the claim. The claimant may be
represented by counsel. The Administrator's decision with respect to any review
shall be in writing and shall be mailed not later than ten (10) days following
receipt of the request for review unless special circumstances, such as the need
to hold a hearing, require an extension of time, in which case the
Administrator's decision shall be delivered in person, or mailed by certified
mail, not later than twenty (20) days after receipt of such request.
(d) A claimant who has followed the procedure in paragraphs (b) and (c)
of this section, but who has not obtained full relief on Executive's claim may,
within sixty (60) days following receipt of the decision on review, apply in
writing to the Administrator for binding arbitration of Executive's claim before
three arbitrators in St. Clair County, Michigan, in accordance with the
commercial arbitration rules of the American Arbitration Association. The
Company shall designate one arbitrator, the Executive shall choose an arbitrator
and the two arbitrators jointly shall designate a third arbitrator. The
arbitrators' sole authority shall be to interpret and apply the provisions of
this Agreement; they shall not change, add to, or subtract from, any of its
provisions. The arbitrators shall have the power to compel attendance of
witnesses at the hearing. Once a claimant commences arbitration proceedings,
any right to commence litigation shall be waived, and the arbitration
proceedings shall continue to conclusion. Any court having jurisdiction may
enter a judgment based upon such arbitration. All decisions of the arbitrators
shall be final and binding without appeal to any court.
-5-
<PAGE>
SECTION 15. LEGAL FEES AND EXPENSES. To the extent that Executive is
successful in the above-described proceedings, the Company shall reimburse
Executive for legal fees and expenses incurred as the result of any controversy
over any provision in this Agreement. The Company shall reimburse the executive
within twenty (20) days following written demand therefor with interest accruing
thereafter in accordance with the provisions of Section 8(a).
SECTION 16. NON-ALIENATION OF BENEFITS. Except as may be protected by
applicable law, no transfer, pledge, or attachment of any Benefits shall be
valid.
SECTION 17. MISCELLANEOUS. A waiver of any breach shall not constitute a
waiver of any subsequent breach. The headings shall not be a part of, or
control or affect the meaning of, any provision hereof.
SECTION 18. GOVERNING LAW. To the extent not preempted by Federal law, this
agreement shall be governed and construed in accordance with the laws of the
state of Michigan.
SECTION 19. ENTIRE AGREEMENT. This document represents the entire agreement
and understanding of the parties with respect to its subject matter.
INTENDING TO BE LEGALLY BOUND, the parties hereto have executed this
Agreement as of the _____ day of ___________, _____.
SEMCO Energy, Inc.
By ___________________________________
William L. Johnson
Chairman and CEO
Executive
______________________________________
Signature
Printed name:
COCAGR.DOC(sla)
-6-
<PAGE>
*****
This form of Change in Control Agreement is in effect for the following
Executives of the Company:
- -- Samuel B. Dallas dated June 10, 1999
- -- Steven W. Warsinske dated March 20, 1998
-7-
Exhibit 10.2
- -------------
CHANGE OF CONTROL
EMPLOYMENT AGREEMENT
AGREEMENT by and between SEMCO ENERGY, INC., a Michigan corporation (the
"Company"), and _________________ (the "Executive"), dated as of March 1, 2000.
The Board of Directors of the Company (the "Board") has determined that it
is in the best interests of the Company and its shareholders to assure that the
Company will have the exclusive dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefit arrangements upon a Change of Control
which ensure that the compensation and benefit expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board had caused the
Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) The "Effective Date" shall mean the first date during the
Change of Control Period (as defined in Section 1(b)) on which a Change of
Control (as defined in Section 2) occurs. Anything in this Agreement to the
contrary notwithstanding, if a Change of Control occurs and if the Executive's
employment with the Company is terminated within six months prior to the date on
which the Change of Control occurs, then for all purposes of this Agreement the
"Effective Date" shall mean the date immediately prior the date of such
termination of employment.
(b) The "Change of Control Period" shall mean the period commencing on
the date hereof and ending on the third anniversary of the date hereof;
provided, however, that commencing on the date one year after the date hereof,
and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice
to the Executive that the Change of Control Period shall not be so extended.
2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities"),
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or
- 1 -
<PAGE>
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board, provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
50% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 30% or more of, the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or
(e) the sale of substantially all of the assets and business of
the SEMCO Energy Gas Company Division of the Company (the Company's Michigan gas
utility).
3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company, subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the third anniversary of
such date (the "Employment Period").
- 2 -
<PAGE>
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) the Executive's
position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held, exercised and
assigned at any time during the 120-day period immediately preceding the
Effective Date and (B) the Executive's services shall be performed at the
location where the Executive was employed immediately preceding the Effective
Date or at the Company's Farmington Hills location or any office or location
less than 35 miles from such location.
(ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Executive
shall receive an annual base salary ("Annual Base Salary"), which shall be paid
at a monthly rate, at least equal to Executive's annual base salary immediately
prior to the Employment Period. During the Employment Period, the Annual Base
Salary shall be reviewed at least annually. Any increase in Annual Base Salary
shall not serve to limit or reduce any other obligation to the Executive under
this Agreement. Annual Base Salary shall not be reduced after any such increase
and the term Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased. As used in this Agreement, the term
"affiliated companies" shall include any company controlled by or under common
control with the Company.
(ii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be (A) eligible for an annual incentive
bonus in accordance with the Company's Short Term Incentive Plan, payable upon
the attainment of specific targets as agreed to annually by the Executive and
the Board, and (B) entitled to participate in the Company's Long Term Incentive
Plan and all other incentive, savings and retirement plans, practices, policies
and programs applicable generally to other senior executives of the Company and
its affiliated companies, but in no event shall such plans, practices, policies
and programs provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the extent, if
any, that such distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the aggregate, than the
most favorable of those provided by the Company and its affiliated companies for
the Executive under such plans, practices, policies and programs as in effect at
any time during the 120-day period immediately preceding the Effective Date or
if more favorable to the Executive, those provided generally at any time after
the Effective Date to other senior executives of the Company and its affiliated
companies.
- 3 -
<PAGE>
(iii) Welfare Benefit Plans. During the Employment Period,
the Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to
other senior executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other senior executives of the Company
and its affiliated companies.
(iv) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement of all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and its affiliated companies in effect
for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other senior executives of the
Company and its affiliated companies.
(v) Office and Support Staff. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company and its affiliated companies at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time thereafter with
respect to other senior executives of the Company and its affiliated companies.
(vi) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other senior executives
of the Company and its affiliated companies.
5. Termination of Employment. (a) Death or Disability. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written
notice in accordance with Section 11(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this
Agreement, "Disability" shall mean the absence of the Executive from the
Executive's duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company
or its insurers and acceptable to the Executive or the Executive's legal
representative.
- 4 -
<PAGE>
(b) Cause. the Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this Agreement, "Cause"
shall mean:
(i) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company or one of its
affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to the Executive by the Board which specifically identifies the
manner in which the Board believes that the Executive has not substantially
performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct
or gross misconduct which is materially and demonstrably injurious to the
Company.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of
employment of the Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the outside
members of the Board at a meeting of the Board called and held for such purpose
(after reasonable notice is provided to the Executive and the Executive is given
an opportunity, together with counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, the Executive is guilty of the
conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.
(c) Good Reason. The Executive's employment may be terminated by
the Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 4(a) of this Agreement, or any other
action by the Company which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
- 5 -
<PAGE>
(iii) The Company's requiring the Executive to be based at
any office or location other than as provided in Section 4(a)(i)(B) hereof or
the Company's requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the Effective
Date;
(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement;
or
(v) any failure by the Company to comply with and satisfy
Section 10(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 11(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.
6. Obligations of the Company upon Termination. (a) Good Reason; Other
Than for Cause, Death or Disability. If, during the Employment Period, the
Company shall terminate the Executive's employment other than for Cause or
Disability or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in
cash within 60 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) the Executive's Annual Base salary
through the Date of Termination to the extent not theretofore paid, and (2) any
compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) and any accrued vacation pay, in each case to the
extent not theretofore paid (the sum of the amounts described in clauses (1) and
(2) shall be hereinafter referred to as the "Accrued Obligations"); and
- 6 -
<PAGE>
B. the amount (hereinafter referred to as the "Severance
Amount") equal to the product of (1) two and ninety-nine hundredths (2.99) and
(2) the sum of (x) Executive's Annual Base Salary and (y) Executive's Recent
Average Bonus (defined as the average annualized bonus paid or payable to
Executive under the Company's Short Term Incentive Plan with respect to the
three fiscal years immediately preceding the fiscal year in which the Effective
Date occurs); and
C. if it shall be determined that any payment to
Executive pursuant to this Agreement or any other payment or benefit from the
Company for the benefit of Executive would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"),
or any similar or successor excise tax, then Executive shall receive an
additional amount such that, after payment of the aforesaid excise tax and any
incremental federal, state or local income taxes or excises taxes payable by
Executive on such amount, there remains a balance sufficient to pay all such
taxes being reimbursed, it being the intention of the parties that after all
additional income or excise taxes so payable by Executive are deducted from the
gross amount received by Executive, the net amount shall be equal to the
aggregate amount of benefits to be provided to Executive under this Agreement
without regard to any excise tax under Section 4999 of the Code or any similar
or successor excise tax;
(ii) for the remainder of the Employment Period after the
Executive's Date of Termination the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to those which would have
been provided to them in accordance with the plans, programs, practices and
policies described in Section 4(b)(iii) of this Agreement if the Executive's
employment had not been terminated or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other senior executives
of the Company and its affiliated companies and their families, provided,
however, that if the Executive becomes reemployed with another employer and is
eligible to receive medical or other welfare benefits under another
employer-provided plan, the medical and other welfare benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility. For purposes of determining eligibility (but
not the time of commencement of benefits) of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the Executive shall be
considered to have remained employed until twelve months after the Date of
Termination and to have retired on the last day of such period; and
(iii) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive is eligible to
receive under any plan, program, policy or practice or contract or agreement of
the Company and its affiliated companies (such other amounts and benefits shall
include and executive shall be entitled to receive the benefits described in
Section 6 (b) below and shall be hereinafter referred to as the "Other
Benefits").
(b) Death. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be
paid to the Executive's estate or beneficiary, as applicable, in a lump sum in
cash within 60 days of the Date of Termination. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 6(b)
shall include, without limitation, and the Executive's estate and/or
beneficiaries shall be entitled to receive, benefits at least equal to the most
favorable benefits provided by the Company and affiliated companies to the
estates and beneficiaries of senior executives of the Company and such
affiliated companies under such plans, programs, practices and policies relating
to death benefits, if any, as in effect with respect to other senior executives
and their beneficiaries at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive's estate
and/or the Executive's beneficiaries, as in effect on the date of the
Executive's death with respect to other senior executives of the Company and its
affiliated companies and their beneficiaries.
- 7 -
<PAGE>
(c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a lump
sum in cash within 60 days of the Date of Termination. With respect to the
provision of Other Benefits, the term Other Benefits as utilized in this Section
6(c) shall include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits at least equal to the
most favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other senior executives and their families at
any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive's family, as in effect
at any time thereafter generally with respect to other senior executives of the
Company and its affiliated companies and their families.
(d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay to the Executive (i) his Annual Base Salary through
the Date of Termination, (ii) the amount of any compensation previously deferred
by the Executive, and (iii) Other Benefits, in each case to the extent
theretofore unpaid. If the Executive voluntarily terminates employment during
the Employment Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to the Executive, other than for
Accrued Obligations and the timely payment or provision of Other Benefits. In
such case, all Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 60 days of the Date of Termination.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor, subject to Section
11(f), shall anything herein limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the Company or any of
its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
8. Settlement. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder may be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Executive or others.
- 8 -
<PAGE>
9. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 9 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
10. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
11. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan. The captions of
this Agreement are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
[Executive's Name]
[Executive's Street Address]
[Executive's City, State, Zip]
If to the Company:
Chairman of the Board of Directors
SEMCO Energy, Inc.
405 Water Street
Port Huron, Michigan 48060
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<PAGE>
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
(f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will".
Either the Company or the Executive may terminate the Executive's employment at
any time, with or without cause, subject to the provisions of this Agreement.
This Agreement sets forth the entire agreement and understanding of the parties
with respect to the matters contemplated hereby and supersedes any other
agreement between the parties with respect to the subject matter hereof,
including the Change of Control Employment Agreement dated __________________.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
SEMCO ENERGY, INC.
By_______________________________________
Executive
_________________________________________
cocagrlc.doc
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<PAGE>
*****
This form of Change of Control Employment Agreement is in effect for the
following Executives of the Company:
- -- Lila R. Bradley
- -- Rudolfo D. Cifolelli
- -- Sebastian Coppola
- -- William L. Johnson
- -- Carl W. Porter
- -- John E. Schneider
- 11 -
Exhibit 10.3
- -------------
AMENDED AND RESTATED TRUST AGREEMENT
SEMCO CAPITAL TRUST I
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
SEMCO ENERGY, INC., AS DEPOSITOR,
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION, AS PROPERTY TRUSTEE
BANK ONE DELAWARE, INC., AS DELAWARE TRUSTEE
AND
SEBASTIAN COPPOLA AND EDRIC R. MASON, JR.,
AS ADMINISTRATIVE TRUSTEES
DATED AS OF
APRIL 19, 2000
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
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<S> <C> <C>
ARTICLE I Defined Terms 2
Section 1.01 Definitions 2
ARTICLE II Establishment of the Trust 8
Section 2.01 Name 8
Section 2.02 Offices of the Trustees; Principal Place of Business 8
Section 2.03 Initial Contribution of Trust Property; Organizational
Expenses 8
Section 2.04 Issuance of the Trust Preferred Securities 8
Section 2.05 Subscription and Purchase of Subordinated Debentures;
Issuance of the Trust Common Securities 8
Section 2.06 Declaration of Trust. 8
Section 2.07 Authorization to Enter into Certain Transactions. 9
Section 2.08 Assets of Trust. 12
Section 2.09 Title to Trust Property. 12
Section 2.10 Mergers and Consolidations of the Trust
ARTICLE III Payment Account 13
Section 3.01 Payment Account. 13
ARTICLE IV Distributions; Redemption 14
Section 4.01 Distributions 14
Section 4.02 Redemption. 14
Section 4.03 Subordination of Trust Common Securities. 16
Section 4.04 Payment Procedures. 16
Section 4.05 Tax Returns and Reports. 16
ARTICLE V Trust Securities Certificates 17
Section 5.01 Initial Ownership 17
Section 5.02 The Trust Securities Certificates. 17
Section 5.03 Authentication of Trust Securities Certificates 17
Section 5.04 Registration of Transfer and Exchange of Preferred
Securities Certificates 17
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates 18
Section 5.06 Persons Deemed Securityholders. 18
Section 5.07 Access to List of Securityholders' Names and Addresses 18
Section 5.08 Maintenance of Office or Agency 19
Section 5.09 Appointment of Paying Agent 19
Section 5.10 Ownership of Trust Common Securities by Depositor 19
Section 5.11 Book-Entry Trust Preferred Securities Certificates; Common
Securities Certificate 19
Section 5.12 Notices to Clearing Agency 20
Section 5.13 Definitive Trust Preferred Securities Certificates. 20
Section 5.14 Rights of Securityholders. 20
ARTICLE VI Acts of Securityholders; Meetings; Voting. 22
Section 6.01 Limitations on Voting Rights. 22
Section 6.02 Notice of Meetings. 22
Section 6.03 Meetings of Trust Preferred Securityholders. 22
Section 6.04 Voting Rights. 23
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
Section 6.05 Proxies, etc 23
Section 6.06 Securityholder Action by Written Consent. 23
Section 6.07 Record Date for Voting and Other Purposes 23
Section 6.08 Acts of Securityholders. 23
Section 6.09 Inspection of Records 24
ARTICLE VII Representations and Warranties of the Property Trustee
and Delaware Trustee. 24
Section 7.01 Representations and Warranties of the Property Trustee
and Delaware Trustee. 24
Section 7.02 Representations and Warranties of Depositor 25
ARTICLE VIII The Trustees 26
Section 8.01 Certain Duties and Responsibilities. 26
Section 8.02 Notice of Defaults. 26
Section 8.03 Certain Rights of Property Trustee 26
Section 8.04 Not Responsible for Recitals or Issuance of Securities 27
Section 8.05 Trustee May Hold Securities 27
Section 8.06 Compensation; Fees; Indemnity 27
Section 8.07 Trustees Required; Eligibility. 28
Section 8.08 Conflicting Interests 28
Section 8.09 Co-Property Trustees and Separate Trustee 28
Section 8.10 Resignation and Removal; Appointment of Successor 29
Section 8.11 Acceptance of Appointment by Successor. 30
Section 8.12 Merger, Conversion, Consolidation or Succession
to Business 31
Section 8.13 Preferential Collection of Claims Against Depositor
or Trust 31
Section 8.14 Reports by Property Trustee 32
Section 8.15 Reports to the Property Trustee 32
Section 8.16 Evidence of Compliance with Conditions Precedent. 32
Section 8.17 Number of Trustees. 32
Section 8.18 Delegation of Power 32
Section 8.19 Enforcement of Rights of Property Trustee by
Securityholders 32
ARTICLE IX Termination and Liquidation 34
Section 9.01 Termination Upon Expiration Date 34
Section 9.02 Early Termination 34
Section 9.03 Termination 34
Section 9.04 Liquidation 34
Section 9.05 Bankruptcy. 35
ARTICLE X Miscellaneous Provisions. 35
Section 10.01 Guarantee by the Depositor 35
Section 10.02 Limitation of Rights of Securityholders 36
Section 10.03 Amendment 36
Section 10.04 Separability 36
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 10.05 Governing Law. 36
Section 10.06 Notice of Deferral of Distribution 37
Section 10.07 Headings. 37
Section 10.08 Notice and Demand 37
Section 10.09 Agreement Not to Petition. 37
Section 10.10 Conflict with Trust Indenture Act. 38
Section 10.11 Successors. 38
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEMCO CAPITAL TRUST I
CERTAIN SECTIONS OF THIS TRUST AGREEMENT RELATING TO
SECTIONS 310 THROUGH 318 OF THE
TRUST INDENTURE ACT OF 1939:
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
(c) 8.01(a)
(d) 8.01, 8.03
(e) Not Applicable
Section 316(a) 8.19
(a)(1)(A) 8.19
(a)(1)(B) 8.19
(a)(2) Not Applicable
(b) Not Applicable
(c) 6.07
Section 317(a)(1) 8.01(c)
(a)(2) 8.01(c)
(b) 5.09
Section 318(a) 10.10
<FN>
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.
</TABLE>
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT is made as of April 19, 2000 by
and among (i) SEMCO Energy, Inc., a Michigan corporation (the "Depositor" or the
"Corporation"), (ii) Bank One Trust Company, National Association, a national
banking association, as trustee (the "Property Trustee" and, in its separate
corporate capacity and not in its capacity as Property Trustee, the "Bank"),
(iii) Bank One 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) Sebastian Coppola, 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 November 23, 1999 (the
"Certificate of Trust") and by the entering into that certain Trust Agreement,
dated as of November 23, 1999 (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:
1
<PAGE>
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
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.
2
<PAGE>
"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.
"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. C Section 3801 et seq., as it may be amended from time to time.
--- - -- ---
3
<PAGE>
"Delaware Corporation" means Bank One 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 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.
4
<PAGE>
"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 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.
"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;
5
<PAGE>
(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.
"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.
6
<PAGE>
"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 $41,237,125 aggregate principal amount
of the Depositor's Series 10 % Subordinated Debentures due June 30, 2040 issued
pursuant to the Subordinated Debenture Indenture.
"Subordinated Debenture Indenture" means the Subordinated Debenture
Indenture, dated as of April 19, 2000, 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 April 19, 2000,
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.
"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 Bank One Trust Company, National Association,
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.
7
<PAGE>
"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.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
April 12, 2000 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 I" 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 Bank One Trust Company, National Association,
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 Bank One Delaware, Inc.,
3 Christina Centre, 201 N. Walnut St., Wilmington, Delaware 19801, Attention:
Legal Department / First USA, 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 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 $40,000,000 (the "Trust Preferred Securities") against receipt of the
aggregate purchase price of such Trust Preferred Securities of $40,000,000 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 aggregate amount of
Trust Common Securities having an aggregate Liquidation Amount of $1,237,125
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 $41,237,125 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 $41,237,125.
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, Sebastian Coppola, 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 and the Administrative
Trustees, as the trustees under the Original Trust Agreement, have 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.
8
<PAGE>
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;
(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;
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(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;
(xiv) to assist in the listing of the Trust Preferred Securities upon the
New York Stock Exchange 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;
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(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;
(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):
(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 New York Stock Exchange for listing upon notice
of issuance of any Trust Preferred Securities;
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(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 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.
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ARTICLE III
PAYMENT ACCOUNT
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.
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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 June 30, 2000. 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 10 % 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 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;
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(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.
(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 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.
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(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. 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.
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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.
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.
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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 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, and by reasonable proof that each such
applicant has owned a Trust Security for a period of at least six months
preceding the date of such application, then the Administrative Trustees shall,
within five Business Days after the receipt of such application, either (i)
afford such applicants access during normal business hours to the current list
of Securityholders, or (ii) inform such applicants as to the approximate number
of Holders according to the most recent information so furnished to or received
by such trustee, and as to the approximate cost of mailing to such Holders the
form of proxy or other communication, if any, specified in such application. If
such trustee shall elect not to afford to such applicants access to such
information, such trustee shall, upon the written request of such applicants,
mail to all such Trust Security holders copies of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to such trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing, unless
within five days after such tender, such trustee shall mail to such applicants,
and file with the Securities and Exchange Commission together with a copy of the
material to be mailed a written statement to the effect that, in the opinion of
such trustee, such mailing would be contrary to the best interests of the
Holders or would be in violation of applicable law. Such written statement
shall specify the basis for such opinion. After opportunity for hearing upon
the objections specified in the written statement so filed, the Securities and
Exchange Commission may, and if demanded by such trustee or by such applicants
shall, enter an order either sustaining one or more of such objections or
refusing to sustain any of them. If the Commission shall enter an order
refusing to sustain any of such objections, or if, after the entry of an order
sustaining one or more of such objections, the Securities and Exchange
Commission shall find, after notice and opportunity for hearing, that all
objections so sustained have been met, and shall enter an order so declaring,
such trustee shall mail copies of such material to all such Holders with
reasonable promptness
after the entry of such order and the renewal of such tender. 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 or by reason of
mailing pursuant to a request made under this Section 5.07, regardless of the
source from which such information was derived.
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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 Bank One Trust
Company, National Association, 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 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 give the Property Trustee notice of any
default by the Depositor in the making of any payment under the Subordinated
Debentures. 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:
(i) the provisions of this Section 5.11(a) shall be in full force and
effect;
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(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 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
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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.
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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)
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 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.
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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.
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.
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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.
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 Bank One 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 national banking association or trust company duly
organized, validly existing and in good standing under the laws of the United
States, and Bank One 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 Bank One 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 this Trust Agreement and to
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 of this Trust Agreement and the
consummation of the transactions contemplated thereby by each of the Bank in its
capacity as the Property Trustee and by Bank One 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 Bank One 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 Bank One Delaware, Inc. and such execution,
delivery and performance will not (i) violate the Bank's or Bank One Delaware,
Inc.'s charter or by-laws, or (ii) violate any law, governmental rule or
regulation of the United States or the State of 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 Bank One Delaware, Inc. in its capacity as the Delaware Trustee or
in its separate corporate capacity, (as appropriate in context) or any
indenture, mortgage, bank credit agreement, note or bond purchase agreement,
long-term lease, license or other agreement or any order, judgment or decree
applicable to the Bank, the Property Trustee, Bank One Delaware, Inc. or the
Delaware Trustee; and
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(e) neither the authorization, execution, delivery or performance 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 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 withholding of objection on the part of, the giving
of notice to, the filing, the registration, or the qualification with or the
taking of any other action with respect to any governmental authority or agency
under any existing federal or Delaware law governing the banking, trust, or
corporate powers of the Property Trustee or the Delaware Trustee (as appropriate
in context).
(f) There are no proceedings pending or, to the best of their knowledge,
threatened against the Bank, the Delaware Corporation, the Property Trustee, or
the Delaware Trustee in any court or before any governmental authority, agency
or arbitration board or tribunal which, individually or in the aggregate, would
have a material adverse effect on the right, power and authority of the Bank,
the Delaware Corporation, the Property Trustee or the Delaware Trustee to enter
into or perform its obligations under this Trust Agreement.
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.
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ARTICLE VIII
THE TRUSTEES
Section 8.01 Certain Duties and Responsibilities.
Subject to Section 3.15(a) of the Trust Indenture Act:
(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 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.
(c) The Property Trustee shall be authorized in the case of a default in
the payment of the principal of any Trust Security, when and as the same shall
become due and payable, or in the case of a default in payment of the interest
on any such Trust Security, when and as the same shall become due and payable
and the continuance of such default for 10 days, to recover judgment in its own
name and as trustee of an express trust, against the Depositor upon the Trust
Securities for the whole amount of principal and interest remaining unpaid; and
to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of such trustee and of the Holders
allowed in any judicial proceedings relative to the Depositor upon the Trust
Securities, its creditors or its property.
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
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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;
(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:
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(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.
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 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.
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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 a 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 a 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 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 a 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.
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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.
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), within three months prior to a failure by the Depositor
to make payment in full of principal or interest, when and as the same becomes
due and payable, or subsequent to such failure, 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,
2000, 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.
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 to the extent applicable 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.
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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.
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
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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, or the Holders of a majority
in aggregate Liquidation Amount of the Trust Preferred Securities may, on behalf
of all Holders, consent to the waiver of any past default and its consequences.
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.
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ARTICLE IX
TERMINATION AND LIQUIDATION
Section 9.01 Termination Upon Expiration Date. The Trust shall
automatically terminate on April 19, 2050 (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;
(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.
34
<PAGE>
(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.
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
(a) 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.
(b) Limitation on Liability of Securityholders. Pursuant to Section
3803(a) of the Business Trust Act, the Securityholders 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.
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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 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.
36
<PAGE>
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 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,
Bank One Trust Company, National Association, Corporate Trust Administration,
11th Floor, Suite 8110, 611 Woodward Avenue, Detroit, Michigan 48226; with
respect to the Delaware Trustee, Bank One Delaware, Inc., 3 Christina Centre,
201 N. Walnut St., Wilmington, Delaware 19801, Attention: Legal Department /
First USA with a copy to Bank One Trust Company, National Association, Corporate
Trust Administration, 11th Floor, Suite 8110, 611 Woodward Avenue, Detroit,
Michigan 48226, 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 I, 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 the Trustees or the Trust may assert. The provisions of this Section
10.09 shall survive the termination of this Trust Agreement.
37
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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: /s/William L. Johnson
-------------------------------------------
William L. Johnson
Chairman of the Board and Chief Executive Officer
38
<PAGE>
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
as Property Trustee
By: /s/Ernest J. Peck
-------------------------------------------
Ernest J. Peck,
Title: Vice President
BANK ONE DELAWARE, INC.,
as Delaware Trustee
By: /s/J. Michael Banas
-------------------------------------------
J. Michael Banas
Title: Vice President
/s/Sebastian Coppola
- ----------------------------------------------
Sebastian Coppola, as Administrative Trustee
/s/Edric R. Mason, Jr.
- ----------------------------------------------
Edric R. Mason, Jr., as Administrative Trustee
39
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
SEMCO CAPITAL TRUST I
THIS CERTIFICATE OF TRUST OF SEMCO CAPITAL TRUST I (the "Trust"), is being
duly executed and filed by the undersigned as trustee, to form a business trust
under the Delaware Business Trust Act (12 Del., C. ss. 3801 et seq.) (the
"Act").
1. Name. The name of the business trust to be formed by this
Certificate of Trust is SEMCO Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware are Bank One Delaware, Inc., 3 Christina
Centre, 201 N. Walnut St., Wilmington, Delaware 19801
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, has duly executed this Certificate of
Trust in accordance with Section 3811(a)(1) of the Act.
BANK ONE DELAWARE, INC., not in its individual capacity but solely as
Trustee of the Trust
By: -------------------------------------------
Name: J. Michael Banas
Title: Vice President
- ----------------------------------------------
Sebastian Coppola, as
Administrative Trustee
- ----------------------------------------------
Edric R. Mason, Jr., as
Administrative Trustee
1
<PAGE>
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 I, 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
I ____ % 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 _______, 2000 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 Bank One Trust
Company, National Association, as guarantee trustee, or under this Agreement for
any reason whatsoever. This Agreement is continuing, irrevocable, unconditional
and absolute.
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
1
<PAGE>
(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:
SEMCO Capital Trust I
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
2
<PAGE>
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 I
By: ----------------------------------------------
Sebastian Coppola, as Administrative Trustee
By: ----------------------------------------------
Edric R. Mason, Jr., as Administrative Trustee
3
<PAGE>
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 I
TRUST COMMON SECURITIES
(LIQUIDATION AMOUNT $25 PER TRUST COMMON SECURITY)
SEMCO Capital Trust I, 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 April _, 2000, between the Holder and Bank One Trust Company,
National Association 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 April __, 2000, 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.
IN WITNESS WHEREOF, the Administrative Trustees of the Trust have executed
this certificate this _____day of April, 2000
SEMCO Capital Trust I
By: ---------------------------------------------
Sebastian Coppola
as Administrative Trustee
By: ---------------------------------------------
Edric R. Mason, Jr.,
as Administrative Trustee
1
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Trust Common Securities referred to in the within
mentioned Trust Agreement.
------------------------------------------------
Sebastian Coppola, as Administrative Trustee
2
<PAGE>
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
I 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 I
_____ % TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER TRUST PREFERRED SECURITY)
SEMCO Capital Trust I, 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 I ____ % 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 _________, 2000, 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 Bank One Trust Company, National
Association, as guarantee trustee, dated as of _________, 2000, 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.
1
<PAGE>
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 I
By: ----------------------------------------------
Sebastian Coppola, 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.
-------------------------------------------------
Sebastian Coppola, as Administrative Trustee
2
<PAGE>
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)
DETROIT 15245-21 508915-3
3
Exhibit 10.4
GUARANTEE AGREEMENT
BETWEEN
SEMCO ENERGY, INC. (AS GUARANTOR) AND BANK ONE TRUST COMPANY, NATIONAL
ASSOCIATION
(AS TRUSTEE)
DATED AS OF APRIL 19, 2000
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS*
PAGE
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<S> <C> <C>
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
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
<FN>
* 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.
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
CROSS-REFERENCE TABLE*
SECTION OF SECTION OF
TRUST INDENTURE ACT GUARANTEE
OF 1939, AS AMENDED AGREEMENT
- -------------------- --------------------
<C> <S>
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(iii), 2.06
316(b) 5.04
316(c) 2.02
317(a) 5.04(ii)
317(b) Inapplicable
318(a) 2.01(b)
318(b) 2.01
318(c) 2.01(a)
<FN>
* 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.
</TABLE>
ii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of April 19,
2000 is executed and delivered by SEMCO ENERGY, INC., a Michigan corporation
(the "Guarantor"), and 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 Preferred Securities (as
defined herein) of SEMCO CAPITAL TRUST I, a Delaware statutory business trust
(the "Trust ").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of April 19, 2000, 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 $40,000,000 aggregate liquidation amount of its 10 %
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.
"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").
<PAGE>
"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 April 19, 2000,
among the Guarantor, as issuer, and Bank One Trust Company, NA, as trustee, as
supplemented by the First Supplemental Indenture dated as of April 19, 2000, by
and between the Guarantor and Bank One Trust Company, NA, 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
(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 Bank One Trust Company, National Association 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.
2
<PAGE>
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; Record Date.
(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 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), 312(b) and 316(c) of the Trust Indenture Act.
Section 2.03. Reports by the Trustee
Within 60 days after May 15 of each year commencing May 15, 2000, the Trustee
shall provide to the Holders of the Trust Preferred Securities such reports as
are required by Section 313(a) and (b) 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.
3
<PAGE>
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, 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:
(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
4
<PAGE>
(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' 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;
5
<PAGE>
(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.
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
6
<PAGE>
(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).
(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.
7
<PAGE>
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.
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.
8
<PAGE>
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 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; (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; and (v) the Holders
have those rights set forth in Section 316(b) of the Trust Indenture Act.
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.
9
<PAGE>
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 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:
SEMCO Energy, Inc.
10
<PAGE>
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:
SEMCO Capital Trust I
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;
(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
11
<PAGE>
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.
12
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
SEMCO ENERGY, INC.
By: /s/William L. Johnson
Name: William L. Johnson
Title: Chairman of the Board and
Chief Executive Officer
BANK ONE TRUST COMPANY, National
Association
as Trustee
By: /s/Ernest J. Peck
Name: Ernest J. Peck
Title: Vice President
DETROIT 15245-21 508911-3
13
Exhibit 10.5
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to SEMCO Capital Trust
I 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 I
_____ % TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER TRUST PREFERRED SECURITY)
SEMCO Capital Trust I, 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 I ____ % 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 _________, 2000, 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 Bank One Trust Company, National
Association, as guarantee trustee, dated as of _________, 2000, 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.
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 I
By: ----------------------------------------------
Sebastian Coppola, 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.
-------------------------------------------------
Sebastian Coppola, as Administrative Trustee
1
<PAGE>
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)
DETROIT 15245-21 508915-3
2
Exhibit 10.6
SEMCO ENERGY, INC.
TO
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
TRUSTEE
INDENTURE
DATED AS OF APRIL 19, 2000 SUBORDINATED DEBENTURES
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS*
PAGE
----
<S> <C> <C>
ARTICLE ONE 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
<FN>
* 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.
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <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
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
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
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
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
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
ARTICLE SEVENTEEN MISCELLANEOUS PROVISIONS 82
SECTION 1701 ASSIGNMENT; BINDING EFFECT 82
SECTION 1702 ADDITIONAL INTEREST 82
</TABLE>
<TABLE>
<CAPTION>
EXHIBITS:
<S> <C> <C>
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
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
SEMCO ENERGY, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT
OF 1939 (THE "1939 ACT") AND INDENTURE, DATED AS OF
APRIL 19, 2000
TRUST INDENTURE ACT SECTION INDENTURE SECTION
<C> <S> <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) 701
(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) 60601
(c) 602
(d) 602
(d)(1) 602
(d)(2) 602
(d)(3) 602
(e) 515,608
</TABLE>
v
<PAGE>
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION INDENTURE SECTION
<C> <S> <C>
(S) 310(a)(1) 607
316(a)(1)(A) 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
<FN>
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.
</TABLE>
vi
<PAGE>
INDENTURE, dated as of April 19, 2000, 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 BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION, a national
banking association, 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.
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.
<PAGE>
"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.
"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.
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"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 President, any Vice President,
Secretary or Treasurer 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.
"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:
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(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
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.
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"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.
"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 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.
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"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.
"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.
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"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 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.
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"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, 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.
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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.
(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.
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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.
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 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 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.
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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.
Bank One Trust Company, National Association
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.
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);
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(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 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;
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(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 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 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.
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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
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.
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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 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).
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.
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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 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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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 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
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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.
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.
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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
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 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.
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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.
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 Order, and at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture as to such series when
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(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 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
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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
(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:
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(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
(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
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
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(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.
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;
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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 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; 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.
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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 or
after the respective due dates expressed in such Security or coupon (or, in the
case of redemption, on the Redemption Date) or to institute suit for the
enforcement of any such payment on or after such respective dates, 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 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.
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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.
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;
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(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;
(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.
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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 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.
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(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.
(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.
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(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 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), within three months prior to any failure to make payment
in full of any principal or interest when and as the same becomes due and
payable or subsequent to such a default, 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
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(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
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.
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Bank One Trust Company, National Association
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 May 15 of each year
commencing with the first May 15 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 May
15 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 in the possession or control of the Company or any of
its paying agents 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
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(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.
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:
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(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
(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:
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(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.
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.
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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 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.
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.
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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
(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.
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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 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 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.
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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;
(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
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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 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
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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 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 (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.
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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,
(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
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(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 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.
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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 a 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 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.
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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 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.
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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 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 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.
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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
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.
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(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 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.
(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.
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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 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.
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(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.
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.
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").
54
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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.
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) 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, 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 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.
55
<PAGE>
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 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 exercising any rights against
the Company and any other Person; or (vi) apply any sums received by them to
Senior Indebtedness.
56
<PAGE>
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 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.
57
<PAGE>
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.
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.
58
<PAGE>
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: /s/William L. Johnson
William L. Johnson
Chairman of the Board and
Chief Executive Officer
Attest: /s/Sherry L. Abbott
Sherry L. Abbott
Secretary
Bank One Trust Company, National Association
as Trustee
By: /s/Ernest J. Peck
Title: Vice President
Attest: /s/J. Michael Banas
Title: Vice )President
59
<PAGE>
STATE OF MICHIGAN )
) ss:
COUNTY OF ST. CLAIR )
On the 17th day of April, 2000, before me personally came William L.
Johnson, to me known, who, being by me duly sworn, did depose and say that he is
Chairman of the Board and Chief Executive Officer of SEMCO ENERGY INC., one of
the parties described in and which executed the foregoing instrument, and that
he signed his name thereto by authority of the Board of Directors.
(Notarial Seal)
/s/Joyce A. Ford
Notary Public
COMMISSION EXPIRES 10/10/03
STATE OF MICHIGAN)
) ss:
COUNTY OF WAYNE )
On the 17th day of April, 2000, before me personally came Ernest J. Peck,
to me known, who, being by me duly sworn, did depose and say that he/she resides
at -------------, that he/she is a Vice President of Bank One Trust Company,
National Association, 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)
/s/Pamela Nagel Goers
Notary Public
COMMISSION EXPIRES 12/08/03
60
<PAGE>
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 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.
A-1-1
<PAGE>
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>
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>
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:
DETROIT 15245-21 508912-2
A-2-2
Exhibit 10.7
SEMCO ENERGY, INC. TO
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION
Trustee
FIRST SUPPLEMENTAL INDENTURE Dated as of April 19, 2000
$ 41,237,125
SERIES A 10 1/4% SUBORDINATED DEBENTURES
DUE June 30, 2040
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS*
PAGE
<S> <C> <C>
ARTICLE 1 SERIES A SUBORDINATED DEBENTURES 1
Section 101 Establishment 1
Section 102 Definitions 2
Section 103 Payment of Principal and Interest 5
Section 104 Deferral of Interest Payments 6
Section 105 Denominations 7
Section 106 Global Securities 7
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 10
Section 112 Listing of Series A Debentures 10
Section 113 Covenant Defeasance 10
Section 114 Set-Off 10
Section 115 Subordination 11
Section 116 Paying Agent 11
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 12
<FN>
* 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.
</TABLE>
2
<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE is made as of the 19th day of April,
2000, 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 Bank One Trust Company, National
Association, 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 even date herewith (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 10 1/4% 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 10 1/4%
Subordinated Debentures due June 30, 2040 (the "Series A Debentures").
There are to be authenticated and delivered $ 41,237,125 principal amount
of Series A Debentures, and no further Series A Debentures shall be
authenticated and delivered except as provided by Sections 304, 305, 306, 906,
1107 or 1305 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 I.
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.
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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
10 1/4% 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, 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 Bank One Trust Company, National Association, as guarantee
trustee, for the benefit of the holders of the Trust Preferred Securities, as
such Agreement may be amended from time to time.
"Interest Payment Dates" means March 31, June 30, September 30 and December
31 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 April 19, 2000.
"Outstanding", when used with respect to the Series A Debenture 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
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(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
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 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.
"Property Trustee", when used with respect to the Series A Debenture 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 I, 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 June 30, 2040.
"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 in substantial 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 Preferred Securities" means the 10 1/4% Trust Preferred Securities
issued by 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 10 1/4% per annum until paid or duly provided for, such interest
to accrue from April 19, 2000 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for. Interest shall be paid
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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.
The principal amount of the Series A Debentures shall be due and payable at
the Stated Maturity. 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 thirty
(30) 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 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
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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 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 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 Depository 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 Depository shall have
been appointed by the Corporation within 90 days of receipt by the Corporation
of such notification, or if at any time the Depository 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 Depository 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 April 19, 2005 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; 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.
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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 outstanding, contain a condition that
provides that redemption of the Series A Debenture, 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 respect of the Series A Debentures so shall
irrevocably deposit or cause to with the provisions of Section 401 or case may
be, within ten Business Days respect any portion of such excess moneys 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 money 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.
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
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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 share 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 of 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 than 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.
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 New York Stock Exchange 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 New York Stock Exchange or any other national securities exchange.
Section 113. Covenant Defeasance
Section 1403 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.
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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.
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 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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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: /s/William L. Johnson
William L. Johnson
Chairman of the Board and
Chief Executive Officer
Attest: /s/Sherry L. Abbott
Sherry L. Abbott
Secretary
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION
By /s/Ernest J. Peck
Authorized Officer
Vice President
Attest: /s/J. Michael Banas
Vice President
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EXHIBIT A
FORM OF
SERIES A % SUBORDINATED DEBENTURE
DUE , 2040
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: , 2000
Stated Maturity: , 2040
Interest Payment Dates: , , ,
Interest Rate: % per annum % per annum
Authorized Denomination: $25
Initial Redemption Date: , 2005
SEMCO Energy, Inc., a Michigan corporation (the "Corporation", which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to, or registered
assigns, the principal sum of ___________ DOLLARS ($) 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. 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 thereof 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 any securities exchange 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.
12
<PAGE>
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 on 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 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
New York Stock Exchange 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 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. 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 thirty (30) 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 now
outstanding or hereafter incurred and waives reliance by each such holder upon
said provisions.
13
<PAGE>
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.
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.
Bank One Trust Company,
National Association
By: _____________________________
Authorized Officer
14
<PAGE>
(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 Bank One Trust Company, National
Association, 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 receives 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 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.
15
<PAGE>
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 an 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
resect 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 Trustee to institute proceedings in respect of such Event
of Default as Trustee and of 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.
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:
TEN COM - As tenants in common UNI GIFT MIN ACT -
TEN ENT - As tenants by the entireties Custodian (Cust)
------
16
<PAGE>
(Minor)
JT TEN - As joint tenants with rights of Under Uniform Gifts
survivorship and not as tenants in To Minors Act (State)
common
17
<PAGE>
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.
18
<PAGE>
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION
By: _______________________________
Authorized Officer
DETROIT 15245-21 512010
19
Exhibit 10.8
EXHIBIT A
FORM OF
SERIES A % SUBORDINATED DEBENTURE
DUE , 2040
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: , 2000
Stated Maturity: , 2040
Interest Payment Dates: , , ,
Interest Rate: % per annum % per annum
Authorized Denomination: $25
Initial Redemption Date: , 2005
SEMCO Energy, Inc., a Michigan corporation (the "Corporation", which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to, or registered
assigns, the principal sum of ___________ DOLLARS ($) 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. 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 thereof 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 any securities exchange 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.
<PAGE>
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 on 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 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
New York Stock Exchange 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 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. 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 thirty (30) 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 now
outstanding or hereafter incurred and waives reliance by each such holder upon
said provisions.
2
<PAGE>
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.
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.
Bank One Trust Company,
National Association
By: _____________________________
Authorized Officer
3
<PAGE>
(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 Bank One Trust Company, National
Association, 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 receives 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 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.
4
<PAGE>
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 an 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
resect 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 Trustee to institute proceedings in respect of such Event
of Default as Trustee and of 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.
5
<PAGE>
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:
TEN COM - As tenants in common UNI GIFT MIN ACT -
TEN ENT - As tenants by the entireties Custodian (Cust)
------
(Minor)
JT TEN - As joint tenants with rights of Under Uniform Gifts
survivorship and not as tenants in To Minors Act (State)
common
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.
6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statements of Income, Consolidated Statements of Financial Position
and Consolidated Statements of Cash Flows and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 3,569
<SECURITIES> 0
<RECEIVABLES> 71,161
<ALLOWANCES> 1,315
<INVENTORY> 13,712
<CURRENT-ASSETS> 108,065
<PP&E> 612,507
<DEPRECIATION> 136,268
<TOTAL-ASSETS> 773,588
<CURRENT-LIABILITIES> 398,167
<BONDS> 170,000
0
0
<COMMON> 17,927
<OTHER-SE> 132,953
<TOTAL-LIABILITY-AND-EQUITY> 773,588
<SALES> 98,932
<TOTAL-REVENUES> 130,302
<CGS> 60,535
<TOTAL-COSTS> 60,535
<OTHER-EXPENSES> 43,498
<LOSS-PROVISION> 479
<INTEREST-EXPENSE> 8,696
<INCOME-PRETAX> 18,633
<INCOME-TAX> 6,639
<INCOME-CONTINUING> 11,994
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,994
<EPS-BASIC> 0.67
<EPS-DILUTED> 0.67
</TABLE>
