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
TABLE OF CONTENTS*
PAGE
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.
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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.
10
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
11
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
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
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
(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
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
(Minor)
JT TEN - As joint tenants with rights of Under Uniform Gifts
survivorship and not as tenants in To Minors Act (State)
common
17
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
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