Exhibit 4.4
SEMCO Energy, Inc.
NOTE AGREEMENT
Dated as of October 1, 1997
Re: $30,000,000 6.83% Senior Notes
Due October 1, 2002
and
$30,000,000 7.20% Senior Notes
Due October 1, 2007
TABLE OF CONTENTS
(Not a part of the Agreement)
Section Heading Page
Parties 1
Section 1. Description of Notes and Commitment. 1
Section 1.1. Description of Notes 1
Section 1.2. Commitment, Closing Date 2
Section 1.3. Several Obligations 2
Section 2. Prepayment of Notes. 2
Section 2.1. Prepayments - General 2
Section 2.2. Optional Prepayment with Premium 2
Section 2.3. Notice of Optional Prepayments of
Notes 3
Section 2.4. Application of Prepayments 3
Section 2.5. Direct Payment 3
Section 3. Representations. 4
Section 3.1. Representations of the Company 4
Section 3.2. Representations of the Purchasers 4
Section 4. Closing Conditions 6
Section 4.1. Conditions 6
Section 4.2. Waiver of Conditions 7
Section 5. Company Covenants 7
Section 5.1. Corporate Existence, Etc. 7
Section 5.2. Insurance 8
Section 5.3. Taxes, Claims for Labor and
Materials, Compliance with Laws 8
Section 5.4. Maintenance, Etc. 9
Section 5.5. Nature of Business 9
Section 5.6. Limitations on Debt 9
Section 5.7. Fixed Charges Coverage Ratio 10
Section 5.8. Limitation on Liens 11
Section 5.9. Restricted Payments 14
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Section 5.10. Mergers, Consolidations and Sales
of Assets 15
Section 5.11. Guaranties 17
Section 5.12. Repurchase of Notes 17
Section 5.13. Transactions with Affiliates 18
Section 5.14. Termination of Pension Plans 18
Section 5.15. Reports and Rights of Inspection 18
Section 6. Events of Default and Remedies Therefor 22
Section 6.1. Events of Default 22
Section 6.2. Notice to Holders 23
Section 6.3. Acceleration of Maturities 23
Section 6.4. Rescission of Acceleration 25
Section 7. Amendments, Waivers and Consents 25
Section 7.1. Consent Required 25
Section 7.2. Solicitation of Holders 26
Section 7.3. Effect of Amendment or Waiver 26
Section 8. Interpretation of Agreement;
Definitions 26
Section 8.1. Definitions 26
Section 8.2. Accounting Principles 36
Section 8.3. Directly or Indirectly 36
Section 9. Miscellaneous 36
Section 9.1. Registered Notes 36
Section 9.2. Exchange of Notes 37
Section 9.3. Loss, Theft, Etc. of Notes 37
Section 9.4. Expenses, Stamp Tax Indemnity 38
Section 9.5. Powers and Rights Not Waived;
Remedies Cumulative 38
Section 9.6. Notices 38
Section 9.7. Successors and Assigns 39
Section 9.8. Survival of Covenants and
Representations 39
Section 9.9. Severability 39
Section 9.10. Governing Law 39
Section 9.11. Captions 39
Signatures 40
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ATTACHMENTS TO NOTE AGREEMENT:
Schedule I -- Names of Note Purchasers and Amounts of
Commitments
Schedule II -- Liens Securing Funded Debt (including
Capitalized Leases) as of September 30, 1997
Exhibit A-1 -- Form of 6.83% Senior Notes due October 1,
2002
Exhibit A-2 -- Form of 7.20% Senior Note due October 1, 2007
Exhibit B -- Representations and Warranties of the Company
Exhibit C -- Description of Special Counsel's Closing
Opinion
Exhibit D -- Description of Closing Opinion of General
Counsel of the Company
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SEMCO Energy, Inc.
405 Water Street
Port Huron, Michigan 48060
NOTE AGREEMENT
Re: $30,000,000 6.83% Senior Notes
Due October 1, 2002
and
$30,000,000 7.20% Senior Notes
Due October 1, 2007
Dated as of
October 1, 1997
To the Purchasers named on Schedule I
to this Agreement
The undersigned, SEMCO Energy, Inc., a Michigan corporation
(the "Company"), agrees with the Purchasers named on Schedule I
to this Agreement (the "Purchasers") as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. The Company will
authorize the issue and sale of:
(a) $30,000,000 aggregate principal amount of its
6.83% Senior Notes to be dated the date of issue, to bear
interest from such date of issue at the rate of 6.83% per
annum, to be expressed to mature on October 1, 2002, and to
be substantially in the form attached hereto as Exhibit A-1
(the "2002 Notes"); and
(b) $30,000,000 aggregate principal amount of its
7.20% Senior Notes to be dated the date of issue, to bear
interest from such date of issue at the rate of 7.20% per
annum, to be expressed to mature on October 1, 2007, and to
be substantially in the form attached hereto as Exhibit A-2
(the "2007 Notes").
The 2002 Notes and the 2007 Notes are hereinafter collectively
referred to as the "Notes". The 2002 Notes and the 2007 Notes
are each herein referred to as Notes of a "Series". The
interest on the Notes of each Series shall be payable
semiannually on the first day of each April and October in each
year (commencing April 1, 1998) and at maturity and shall bear
interest on overdue principal (including any overdue required or
optional prepayment of principal) and premium, if any, and (to
the extent legally enforceable) on any overdue installment of
interest at the Overdue Rate applicable to such Series after the
date due, whether by acceleration or otherwise, until paid.
Interest on the Notes shall be computed on the basis of a
360-day year of twelve 30-day months. The Notes are not subject
to prepayment or redemption prior to their expressed maturity
dates except as set forth in Section 2 of this Agreement. The
term "Notes" as used herein shall include each Note delivered
pursuant to this Agreement.
Section 1.2. Commitment, Closing Date. Subject to the
terms and conditions hereof and on the basis of the
representations and warranties hereinafter set forth, the
Company agrees to issue and sell to each Purchaser, and such
Purchaser agrees to purchase from the Company, Notes of the
Series and in the principal amount set forth opposite such
Purchaser's name on Schedule I hereto at a price of 100% of the
principal amount thereof on the Closing Date hereafter mentioned.
Delivery of the Notes will be made at the offices of Chapman
and Cutler, 111 West Monroe Street, Chicago, Illinois 60603,
against payment therefor in Federal Reserve or other funds
current and immediately available at the principal office of
Michigan National Bank, ABA No. 072000805, for the account of
SEMCO Energy, Inc., Account No. 2705-29672-7 in the amount of the
purchase price at 10:00 a.m. Chicago time, on October 17, 1997
(the "Closing Date"). The Notes delivered to each Purchaser on
the Closing Date will be delivered to such Purchaser in the form
of a single registered Note in the form attached hereto as
Exhibit A-1 or A-2, as the case may be, for the full amount of
such Purchaser's purchase (unless different denominations are
specified by such Purchaser), registered in such Purchaser's
name or in the name of such Purchaser's nominee, all as such
Purchaser may specify at any time prior to the date fixed for
delivery.
Section 1.3. Several Obligations. The obligations of the
Purchasers shall be several and not joint and no Purchaser shall
be liable or responsible for the acts or defaults of any other
Purchaser.
SECTION 2. PREPAYMENT OF NOTES.
Section 2.1. Prepayments - General. Except as set forth
in Section 2.2, the 2002 Notes and the 2007 Notes are not subject
to any prepayment or redemption prior to their express maturity
date.
Section 2.2. Optional Prepayment with Premium. Upon
compliance with Section 2.3 the Company shall have the privilege,
at any time and from time to time, of prepaying the outstanding
Notes, either in whole or in part (but if in part then in a
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minimum principal amount of $100,000) by payment of the principal
amount of the Notes, or portion thereof to be prepaid, and
accrued interest thereon to the date of such prepayment, together
with a premium equal to the Make-Whole Amount, determined as of
five business days prior to the date of such prepayment pursuant
to this Section 2.2.
Section 2.3. Notice of Optional Prepayments of Notes. The
Company will give notice of any prepayment of the Notes to be
prepaid pursuant to Section 2.2 to each Holder thereof not less
than 30 days nor more than 60 days before the date fixed for such
optional prepayment specifying (i) such date, (ii) the principal
amount of the Holder's Notes to be prepaid on such date, (iii)
that a premium may be payable, (iv) the date when such premium
will be calculated, (v) the estimated premium, and (vi) the
accrued interest applicable to the prepayment. Such notice of
prepayment shall also certify all facts, if any, which are
conditions precedent to any such prepayment. Notice of
prepayment having been so given, the aggregate principal amount
of the Notes specified in such notice, together with accrued
interest thereon and the premium, if any, payable with respect
thereto shall become due and payable on the prepayment date
specified in said notice. Not later than two business days
prior to the prepayment date specified in such notice, the
Company shall provide each Holder written notice of the premium,
if any, payable in connection with such prepayment and, whether
or not any premium is payable, a reasonably detailed computation
of the Make-Whole Amount.
Section 2.4. Application of Prepayments. All partial
prepayments of any Series of Notes shall be applied on all
outstanding Notes of such Series ratably in accordance with the
unpaid principal amounts thereof.
Section 2.5. Direct Payment. Notwithstanding anything to
the contrary contained in this Agreement or the Notes, in the
case of any Note owned by any Holder that is a Purchaser or any
other Institutional Holder which has given written notice to the
Company requesting that the provisions of this Section 2.5 shall
apply, the Company will punctually pay when due the principal
thereof, interest thereon and premium, if any, due with respect
to said principal, without any presentment thereof, directly to
such Holder at its address set forth herein or such other address
as such Holder may from time to time designate in writing to the
Company or, if a bank account with a United States bank is so
designated for such Holder, the Company will make such payments
in immediately available funds to such bank account, marked for
attention as indicated, or in such other manner or to such other
account in any United States bank as such Holder may from time
to time direct in writing; provided that if the principal,
interest and premium, if any, with respect to any Note has been
paid in full, such Note shall thereafter in due course be
returned by the Holder thereof to the Company for cancellation.
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SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company
represents and warrants that all representations and warranties
set forth in Exhibit B are true and correct as of the date
hereof and are incorporated herein by reference with the same
force and effect as though herein set forth in full.
Section 3.2. Representations of the Purchasers. (a) Each
Purchaser represents, and in entering into this Agreement the
Company understands, that such Purchaser is acquiring the Notes
for the purpose of investment and not with a view to the
distribution thereof, and that such Purchaser has no present
intention of selling, negotiating or otherwise disposing of the
Notes; it being understood, however, that the disposition of
such Purchaser's property shall at all times be and remain
within such Purchaser's control.
(b) Each Purchaser further represents that at least
one of the following statements concerning each source of
funds to be used by such Purchaser to purchase the Notes is
accurate as of the Closing Date:
(1) the source of funds to be used by such
Purchaser to pay the purchase price of the Notes is an
"insurance company general account" within the meaning
of Department of Labor Prohibited Transaction Exemption
("PTE") 95-60 (issued July 12, 1995) and there is no
employee benefit plan, treating as a single plan, all
plans maintained by the same employer or employee
organization, with respect to which the amount of the
general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceed ten
percent (10%) of the total reserves and liabilities of
such general account (exclusive of separate account
liabilities) plus surplus, as set forth in the NAIC
Annual Statement filed with such Purchaser's state of
domicile;
(2) all or a part of such funds constitute assets
of one or more separate accounts, trusts or a
commingled pension trust maintained by such Purchaser,
and either (i) constitute an insurance company pooled
separate account within the meaning of PTE 90-1 or (ii)
such Purchaser has disclosed to the Company the names
of such employee benefit plans whose assets in such
separate account or accounts or pension trusts exceed
10% of the total assets or are expected to exceed 10%
of the total assets of such account or accounts or
trusts as of the date of such purchase (for the purpose
of this clause (2), all employee benefit plans
maintained by the same employer or employee
organization are deemed to be a single plan);
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(3) all or part of such funds constitute assets
of a bank collective investment fund maintained by such
Purchaser, and such Purchaser has disclosed to the
Company the names of such employee benefit plans whose
assets in such collective investment fund exceed 10% of
the total assets or are expected to exceed 10% of the
total assets of such fund as of the date of such
purchase (for the purpose of this clause (3), all
employee benefit plans maintained by the same employer
or employee organization are deemed to be a single
plan);
(4) all or part of such funds constitute assets
of one or more employee benefit plans, each of which
has been identified to the Company in writing;
(5) such Purchaser is acquiring the Notes for the
account of one or more pension funds, trust funds or
agency accounts, each of which is a "governmental plan"
as defined in Section 3(32) of ERISA;
(6) the source of funds is an "investment fund"
managed by a "qualified professional asset manager" or
"QPAM" (as defined in Part V of PTE 84-14, issued
March 13, 1984), provided that no other party to the
transactions described in this Agreement and no
"affiliate" of such other party (as defined in Section
V(c) of PTE 84-14) has at this time, and during the
immediately preceding one year has exercised the
authority to appoint or terminate said QPAM as manager
of the assets of any plan identified in writing
pursuant to this clause (6) or to negotiate the terms
of said QPAM's management agreement on behalf of any
such identified plans;
(7) the source of funds is an insurance company
separate account maintained solely in connection with
the fixed contractual obligations of the insurance
company under which the amounts payable, or credited,
to any employee benefit plan (or its related trust) and
to any participant or beneficiary of such plan
(including any annuitant) are not affected in any
manner by the investment performance of the separate
account; or
(8) if such Purchaser is other than an insurance
company, all or a portion of such funds consists of
funds which do not constitute "plan assets".
If any Purchaser is relying on the representation described
in paragraph (2), (3), (4) or (6) above, the Company shall
deliver a certificate on the Closing Date which certificate shall
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either state that (i) it is neither a "party in interest" (as
defined in Title I, Section 3(14) of ERISA) nor a "disqualified
person" (as defined in Section 4975(e)(2) of the Internal Revenue
Code of 1986, as amended), with respect to any plan identified
pursuant to paragraphs (2), (3) or (4) above, or (ii) with
respect to any plan identified pursuant to paragraph (6) above,
neither it nor any "affiliate" (as defined in Section V(c) of
PTE 84-14) is described in the proviso to said paragraph (6).
As used in this Section 3.2(b), the terms "separate account",
"employer securities", and "employee benefit plan" shall have the
respective meanings assigned to them in ERISA and the term "plan
assets" shall have the meaning assigned to it in Department of
Labor Regulation 29 C.F.R. Section 2510.3-101.
SECTION 4. CLOSING CONDITIONS.
Section 4.1. Conditions. The obligation of each Purchaser
to purchase the Notes proposed to be sold to such Purchaser
pursuant to this Agreement on the Closing Date shall be subject
to the performance by the Company of its agreements hereunder
which by the terms hereof are to be performed at or prior to the
time of delivery of the Notes and to the following further
conditions precedent:
(a) Closing Certificate. On the Closing Date, such
Purchaser shall have received a certificate dated the
Closing Date, signed by the President or a Vice President of
the Company, the truth and accuracy of which shall be a
condition to such Purchaser's obligation to purchase the
Notes proposed to be sold to such Purchaser and to the
effect that (i) the representations and warranties of the
Company set forth in Exhibit B hereto are true and correct
on and with respect to the Closing Date, (ii) the Company
has performed all of its obligations hereunder which are to
be performed on or prior to the Closing Date, and (iii) no
Default or Event of Default has occurred and is continuing.
(b) Legal Opinions. On the Closing Date, such
Purchaser shall have received from Chapman and Cutler, who
is acting as special counsel to the Purchasers in this
transaction, and from Arnold Madigan, Esq., General Counsel
of the Company, their respective opinions dated the Closing
Date, in form and substance satisfactory to such Purchaser,
and covering the matters set forth in Exhibits C and D,
respectively, hereto.
(c) Related Transactions. On the Closing Date, the
Company shall have consummated the sale of the entire
principal amount of the Notes scheduled to be sold on the
Closing Date pursuant to this Agreement; provided, however,
that the Company's obligation to sell any such Notes shall
be contingent upon the purchase by the Purchasers of all
other such Notes in the respective amounts set forth on
Schedule I.
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(d) Private Placement Number. On or prior to the
Closing Date, a private placement number for each Series of
Notes shall have been obtained from Standard & Poor's
Corporation.
(e) Legal Investment. On the Closing Date, the Notes
purchased by such Purchaser shall qualify as legal
investments under the laws and regulations of each
jurisdiction to which such Purchaser is subject (without
resort to so called "basket provisions" permitting limited
investments by it without restriction as to the character of
a particular investment) and such purchase shall not subject
such Purchaser to any penalty or other onerous condition
under or pursuant to any applicable law or governmental
regulation; and such Purchaser shall have received such
certificates or other evidence as it may reasonably request
to enable it to establish compliance with this condition.
(f) Satisfactory Proceedings. On the Closing Date,
all proceedings taken in connection with the transactions
contemplated by this Agreement, and all documents necessary
to the consummation thereof, shall be satisfactory in form
and substance to such Purchaser and such Purchaser's special
counsel, and such Purchaser shall have received a copy
(executed or certified as may be appropriate) of all legal
documents or proceedings taken in connection with the
consummation of said transactions.
Section 4.2. Waiver of Conditions. If on the Closing Date
the Company fails to tender to any Purchaser the Notes to be
issued to such Purchaser on such date or if the conditions
specified in Section 4.1 have not been fulfilled, such Purchaser
may thereupon elect to be relieved of all further obligations
under this Agreement. Without limiting the foregoing, if the
conditions specified in Section 4.1 have not been fulfilled, such
Purchaser may waive compliance by the Company with any such
condition to such extent as such Purchaser may in its sole
discretion determine. Nothing in this Section 4.2 shall operate
to relieve the Company of any of its obligations hereunder or to
waive any Purchaser's rights against the Company.
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as
any amount remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc. The Company will
preserve and keep in full force and effect, and will cause each
Subsidiary to preserve and keep in full force and effect, its
corporate existence and all licenses and permits necessary to
the proper conduct of its business provided, that the Company
shall not be required to preserve and keep in full force and
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effect any such license, permit or corporate existence if the
loss thereof would not have a material adverse effect on the
financial condition or business of the Company and its
Subsidiaries, taken as a whole; provided further, however, that
the foregoing shall not prevent any transaction permitted by
Section 5.10.
Section 5.2. Insurance. The Company will maintain, and
will cause each Subsidiary to maintain, insurance coverage by
financially sound and reputable insurers in such forms and
amounts and against such risks as are customary for corporations
of established reputation engaged in the same or a similar
business and owning and operating similar properties; provided,
that the Company shall not be deemed to be in violation of this
Section 5.2 for minor variations from the foregoing requirements
if such variations could not reasonably be expected to have a
material adverse effect upon the financial condition or business
of the Company and its Subsidiaries, taken as a whole.
Section 5.3. Taxes, Claims for Labor and Materials,
Compliance with Laws. The Company will promptly pay and
discharge, and will cause each Subsidiary promptly to pay and
discharge, all lawful taxes, assessments and governmental
charges or levies imposed upon the Company or such Subsidiary,
respectively, or upon or in respect of all or any part of the
property or business of the Company or such Subsidiary, all
trade accounts payable in accordance with usual and customary
business terms, and all claims for work, labor or materials,
which if unpaid might become a Lien upon any property of the
Company or such Subsidiary; provided, however, that the Company
or such Subsidiary shall not be required to pay any such tax,
assessment, charge, levy, account payable or claim if (i) the
validity, applicability or amount thereof is being contested in
good faith by appropriate actions or proceedings which are
intended to prevent the forfeiture or sale of any property of
the Company or such Subsidiary or any material interference with
the use thereof by the Company or such Subsidiary, and the
Company or such Subsidiary shall set aside on its books,
reserves deemed by it to be adequate with respect thereto, or
(ii) the non-payment of all such taxes, assessments, charges,
levies, accounts payable and claims would not have a material
adverse effect on the financial condition or business of the
Company and its Subsidiaries, taken as a whole. The Company
will promptly comply and will cause each Subsidiary to comply
with all laws, ordinances or governmental rules and regulations
to which it is subject including, without limitation, the
Occupational Safety and Health Act of 1970, as amended, ERISA
and all laws, ordinances, governmental rules and regulations
relating to environmental protection in all applicable
jurisdictions, the violation of which would have a material
adverse effect on the financial condition or business of the
Company and its Subsidiaries, taken as a whole, or would result
in any Lien not permitted under Section 5.8.
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Section 5.4. Maintenance, Etc. The Company will maintain,
preserve and keep, and will cause each Subsidiary to maintain,
preserve and keep, its properties which are used or useful in
the conduct of its business (whether owned in fee or a leasehold
interest) in good repair and working order and from time to time
will make all necessary repairs, replacements, renewals and
additions so that at all times the efficiency thereof shall be
maintained; provided, that the Company shall not be required to
so maintain, preserve and keep any such properties or to so make
such repairs, replacements, renewals and additions unless the
failure to take any such action would have a material adverse
effect on the financial condition or business of the Company and
its Subsidiaries, taken as whole.
Section 5.5. Nature of Business. Neither the Company nor
any Subsidiary will engage in any business if, as a result, the
general nature of the business, taken on a consolidated basis,
which would then be engaged in by the Company and its
Subsidiaries would be substantially changed from the general
nature of the business engaged in by the Company and its
Subsidiaries on the date of this Agreement. For purposes of the
preceding sentence, the general nature of the business of the
Company and its Subsidiaries shall not be deemed to be
substantially changed from that engaged in on the date of this
Agreement so long as not less than 80% of the net sales of the
Company and its Subsidiaries for any fiscal year ending after
the Closing Date shall be derived from energy operations and
related businesses of the Company and its Subsidiaries.
Section 5.6. Limitations on Debt. (a) The Company will at
all times keep and maintain Consolidated Adjusted Funded Debt in
an amount (i) which is less than (y) during the period beginning
with the Closing Date and ending on and including April 30,
1998, 69% of Consolidated Adjusted Total Capitalization and (z)
at all times after April 30, 1998, 65% of Consolidated Adjusted
Total Capitalization, and (ii) which, when added to Guaranteed
Amounts, shall be less than (y) during the period beginning with
the Closing Date and ending on and including April 30, 1998, 72%
of the sum of Consolidated Adjusted Total Capitalization plus
Guaranteed Amounts and (z) at all times after April 30, 1998,
70% of the sum of Consolidated Adjusted Total Capitalization
plus Guaranteed Amounts.
(b) The Company will not, and will not permit any
Subsidiary to create, assume or incur or in any manner
become liable in respect of any secured Debt except Debt
secured by Liens permitted by Section 5.8; provided,
however, that after giving effect to the issuance of Debt of
the Company or a Subsidiary secured by a Lien permitted by
Section 5.8(a)(xi) and to the application of the proceeds
thereof, the aggregate amount of all Debt of the Company and
its Subsidiaries secured by Liens permitted solely by
Section 5.8(a)(xi) shall not exceed $2,000,000.
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(c) The Company will not permit any Subsidiary to
create, assume or incur or in any manner become liable in
respect of any unsecured Debt, except
(i) unsecured Debt of a Subsidiary incurred under
a line of credit established and used by such
Subsidiary for the sole purpose of financing accounts
receivable of such Subsidiary, provided that after
giving effect to the incurrence of such unsecured Debt,
the aggregate amount of unsecured Debt outstanding
under such line of credit shall not be in excess of the
aggregate amount of accounts receivable of such
Subsidiary then being financed thereunder;
(ii) unsecured Debt of any Subsidiary to the
Company or to a Wholly-owned Subsidiary;
(iii) unsecured Debt of any business entity
acquired by the Company or a Subsidiary, provided that
such Debt was in existence prior to the acquisition and
was not incurred in connection with or in contemplation
of the acquisition; and
(iv) in the event of a consolidation or merger of
the Company in compliance with Section 5.10(a)(2) where
the surviving corporation is not the Company (the
surviving corporation being the "Acquiring
Corporation"), the unsecured Debt of any subsidiary of
such Acquiring Corporation, provided that such Debt was
in existence prior to such consolidation or merger, as
the case may be, and was not incurred in connection
with or in contemplation of such consolidation or
merger.
(d) Any corporation which becomes a Subsidiary after
the date hereof shall for all purposes of this Section 5.6
be deemed to have created, assumed or incurred at the time
it becomes a Subsidiary all Debt of such corporation
existing immediately after it becomes a Subsidiary.
Section 5.7. Fixed Charges Coverage Ratio. The Company
will keep and maintain the ratio of Net Income Available for
Fixed Charges to Fixed Charges for each period of four
consecutive fiscal quarters at not less than the Required
Coverage Ratio; provided, that if the Company or any Subsidiary
(the "Acquiring Entity") shall, during any such period, incur,
create, or assume any Indebtedness ("Acquisition Indebtedness")
for the purpose of financing the acquisition (the "Acquisition")
of additional property ("Acquired Property"), then (i) in
computing Fixed Charges for such period, there shall be included
therein Fixed Charges on Acquisition Indebtedness for that
portion of such period preceding the date of Acquisition (the
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"Preacquisition Portion" of such period), as though the
Acquisition Indebtedness had been incurred at the beginning of
such period at an interest rate for the Preacquisition Portion
of such period equal to the interest rate of the Acquisition
Indebtedness in effect on the date of the Acquisition, and (ii)
in computing Net Income Available for Fixed Charges, there shall
be included therein the net earnings or net loss, as the case
may be (herein the "Net Income") for the Preacquisition Portion
of such period, as though the Acquired Property had been owned
by the Acquiring Entity for the entire such period (such Net
Income to be determined (x) prior to any deduction for Interest
Charges or any Federal, state or other income taxes and (y) on a
cumulative basis for the Preacquisition Portion of such period).
Section 5.8. Limitation on Liens. (a) Except as set forth
in Section 5.8(b) below, the Company will not, and will not
permit any Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien on its or their property or
assets, whether now owned or hereafter acquired, or upon any
income or profits therefrom, or transfer any property for the
purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or
acquire or agree to acquire, or permit any Subsidiary to acquire,
any property or assets upon conditional sales agreements or other
title retention devices, except:
(i) Liens for taxes and assessments or
governmental charges or levies and Liens securing
claims or demands of mechanics and materialmen,
provided payment thereof is not at the time required by
Section 5.3;
(ii) Liens of or resulting from any judgment or
award, the time for the appeal or petition for
rehearing of which shall not have expired, or in
respect of which the Company or a Subsidiary shall at
any time in good faith be prosecuting an appeal or
proceeding for a review and in respect of which a stay
of execution pending such appeal or proceeding for
review shall have been secured;
(iii) Liens incidental to the conduct of business
or the ownership of properties and assets (including
Liens in connection with worker's compensation,
unemployment insurance and other like laws,
warehousemen's and attorneys' liens and statutory
landlords' liens) and Liens to secure the performance
of bids, tenders or trade contracts, or to secure
statutory obligations, surety or appeal bonds or other
Liens of like general nature incurred in the ordinary
course of business and not in connection with the
borrowing of money; provided in each case, the
obligation secured is not overdue or, if overdue, is
being contested in good faith by appropriate actions or
proceedings;
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(iv) minor survey exceptions or minor
encumbrances, easements or reservations, or rights of
others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the use
of real properties, which are necessary for the conduct
of the activities of the Company and its Subsidiaries
or which customarily exist on properties of
corporations engaged in similar activities and
similarly situated and which do not in any event
materially impair the operation of the business of the
Company and its Subsidiaries, taken as a whole;
(v) Liens securing Indebtedness of a Subsidiary
to the Company or to another Subsidiary;
(vi) Liens existing as of September 30, 1997 and
reflected in Schedule II hereto;
(vii) Liens incurred after the Closing Date given
to secure the payment of the purchase price incurred in
connection with the acquisition of fixed assets useful
and intended to be used in carrying on the business of
the Company or a Subsidiary, including Liens existing
on such fixed assets (1) at the time of acquisition
thereof or (2) at the time of acquisition by the
Company or a Subsidiary of any business entity then
owning such fixed assets (in the event of any such
acquisition of a business entity as used in this
paragraph (vii), the term "fixed assets" shall mean and
include any assets of such business entity), whether or
not such existing Liens were given to secure the
payment of the purchase price of the fixed assets to
which they attach so long as they were not incurred,
extended or renewed in contemplation of such
acquisition, provided that (x) the Lien shall attach
solely to the fixed assets acquired or purchased, (y)
at the time of acquisition of such fixed assets, the
aggregate amount remaining unpaid on all Debt secured
by Liens on such fixed assets whether or not assumed by
the Company or a Subsidiary shall not exceed an amount
equal to 90% (or 100% in the case of Capitalized
Leases) of the lesser of the total purchase price or
fair market value at the time of acquisition of such
fixed assets (as determined in good faith by the (A)
President or Executive Vice President of the Company,
or (B) by the Board of Directors of the Company, or (C)
if the fixed assets are being acquired by a Subsidiary,
by the Board of Directors of the Subsidiary), and (z)
all such Debt shall have been permitted under the
limitations provided in Section 5.6;
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(viii) in the event of a consolidation or merger of
the Company in compliance with Section 5.10(a)(2) where
the surviving corporation is not the Company (the
surviving corporation being the "Acquiring
Corporation"), Liens existing on the assets of the
Acquiring Corporation and its subsidiaries at the time
of the consolidation or merger, as the case may be, so
long as (A) any Debt secured by such Liens was not
incurred in connection with or in contemplation of such
consolidation or merger, and (B) all such Debt is
permitted under the limitations provided in Section 5.6(a);
(ix) Liens on assets constituting part or all of
the project in a project financing of the Company or a
Subsidiary; provided, that (x) any Debt incurred to
finance any such project shall be nonrecourse to the
Company and its Subsidiaries (other than a Subsidiary
all the assets of which constitute assets relating to
such project) with recourse being limited to the assets
which constitute the project, and (y) immediately after
giving effect to any such project financing, no Default
or Event of Default shall have occurred which shall
then be continuing;
(x) any extension, renewal or replacement of any
Lien permitted by the preceding paragraphs (vi), (vii)
and (viii) of this Section 5.8(a) in respect of the
same property theretofore subject to such Lien in
connection with the extension, renewal or replacement
of the Debt secured thereby; provided that (1) such
Lien shall attach solely to the same such property, (2)
such extension, renewal or replacement of such Debt
shall be without increase in the principal remaining
unpaid as of the date of such extension, renewal or
replacement, and (3) the Debt secured by such Lien
shall have been permitted under the limitations
provided in Section 5.6; and
(xi) Liens in addition to those set forth in
paragraphs (i) through (x) of this Section 5.8(a),
securing Debt of the Company or any Subsidiary,
provided, that any such Debt shall have been permitted
under the applicable limitations provided in Section
5.6.
(b) If the Company or any Subsidiary shall create or
assume any Lien upon any of its property or assets, whether
now owned or hereafter acquired, other than Liens permitted
by the provisions of Section 5.8(a) above, it will make or
cause to be made effective provision whereby the Notes will
be secured by such Lien equally and ratably with or prior to
any and all other Indebtedness thereby secured so long as
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any such other Indebtedness shall be so secured and delivers
to the holders of the Notes an opinion of counsel that the
Notes are so secured. In the event the Company shall
propose to secure the Notes pursuant to this Section 5.8(b),
the mortgage or other instrument creating such Lien shall be
satisfactory in form and substance (including without
limitation the portion thereof pertaining to the release of the
collateral secured thereby and the application of the proceeds
from the sale or other disposition of such collateral) to the
holders of not less than 66-2/3% in aggregate principal amount
of the Notes then outstanding.
Section 5.9. Restricted Payments. The Company will not
except as hereinafter provided:
(a) Declare or pay any dividends, either in cash or
property, on any shares of its capital stock of any class
(except dividends or other distributions payable in shares
of capital stock of the Company);
(b) Directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock
of any class or any warrants, rights or options to purchase
or acquire any shares of its capital stock (other than in
exchange for or out of the net cash proceeds to the Company
from the substantially concurrent issue or sale of other
shares of capital stock of the Company or warrants, rights
or options to purchase or acquire any shares of its capital
stock); or
(c) Make any other payment or distribution, either
directly or indirectly or through any Subsidiary, in respect
of its capital stock;
(such declarations or payments of dividends, purchases,
redemptions or retirements of capital stock and warrants, rights
or options and all such other payments or distributions being
herein collectively called "Restricted Payments"), if after
giving effect thereto (i) any Event of Default shall have
occurred and be continuing, (ii) the aggregate amount of
Restricted Payments made during the period from and after
January 1, 1994 to and including the date of the making of the
Restricted Payment in question, would exceed the sum of (y) the
sum of (A) $11,000,000 plus (B) for any determination made on or
after December 31, 1996, the NOARK Adjustment Amount plus (z)
100% of Consolidated Net Income for such period, computed on a
cumulative basis for said entire period (or if such Consolidated
Net Income is a deficit figure, then minus 100% of such
deficit), or (iii) Consolidated Net Worth shall be less than
$80,000,000.
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The Company will not declare any dividend which constitutes
a Restricted Payment payable more than 90 days after the date of
declaration thereof.
For the purposes of this Section 5.9, the amount of any
Restricted Payment declared, paid or distributed in property
shall be deemed to be the greater of the book value or fair
market value (as determined in good faith by the Board of
Directors of the Company) of such property at the time of the
making of the Restricted Payment in question.
Section 5.10. Mergers, Consolidations and Sales of Assets.
(a) The Company will not, and will not permit any Subsidiary to,
(i) consolidate with or be a party to a merger with any other
corporation or (ii) sell, lease or otherwise dispose of all or
any substantial part (as defined in paragraph (d) of this Section
5.10) of the assets of the Company and its Subsidiaries;
provided, however, that:
(1) any Subsidiary may merge or consolidate with
or into the Company or any Wholly-owned Subsidiary so
long as in any merger or consolidation involving the
Company, the Company shall be the surviving or
continuing corporation;
(2) the Company may consolidate or merge with any
other corporation if (i) the corporation which results
from such consolidation or merger (the "surviving
corporation") either (y) is the Company or (z) is not
the Company and (A) is organized under the laws of any
State of the United States or the District of Columbia,
and (B) the obligations of the Company under this
Agreement are expressly assumed in writing by the
surviving corporation and the surviving corporation
shall furnish the holders of the Notes an opinion of
counsel satisfactory to such holders to the effect that
the instrument of assumption has been duly authorized,
executed and delivered and constitutes the legal, valid
and binding contract and agreement of the surviving
corporation enforceable in accordance with its terms,
except as enforcement of such terms may be limited by
bankruptcy, insolvency, fraudulent conveyance and
similar laws affecting creditors' rights generally and
except that equitable remedies lie in the discretion of
a court and may be unenforceable, (ii) approval of
appropriate governmental regulatory authorities has
been obtained, and (iii) at the time of such
consolidation or merger and immediately after giving
effect thereto, no Default or Event of Default shall
have occurred and be continuing and the surviving
corporation could incur at least $1.00 of additional
Indebtedness pursuant to Section 5.6; and
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(3) any Subsidiary may sell, lease or otherwise
dispose of all or any substantial part of its assets to
the Company or any Wholly-owned Subsidiary.
(b) The Company will not permit any Subsidiary to
issue or sell any shares of stock of any class (including as
"stock" for the purposes of this Section 5.10, any warrants,
rights or options to purchase or otherwise acquire stock or
other Securities exchangeable for or convertible into stock)
of such Subsidiary to any Person other than the Company or a
Wholly-owned Subsidiary, except for the purpose of
qualifying directors, or except in satisfaction of the
validly pre-existing preemptive rights of minority
shareholders in connection with the simultaneous issuance of
stock to the Company and/or a Subsidiary whereby the Company
and/or such Subsidiary maintain their same proportionate
interest in such Subsidiary.
(c) The Company will not sell, transfer or otherwise
dispose of any shares of stock of any Subsidiary (except to
qualify directors) or any Indebtedness of any Subsidiary
(except, in either such case, to a Wholly-owned Subsidiary),
and will not permit any Subsidiary to sell, transfer or
otherwise dispose of (except to the Company or a
Wholly-owned Subsidiary) any shares of stock or any
Indebtedness of any other Subsidiary, unless:
(1) simultaneously with such sale, transfer, or
disposition, all shares of stock and all Indebtedness
of such Subsidiary at the time owned by the Company and
by every other Subsidiary shall be sold, transferred or
disposed of as an entirety;
(2) the Board of Directors of the Company shall
have determined, as evidenced by a resolution thereof,
that the proposed sale, transfer or disposition of said
shares of stock and Indebtedness is in the best
interests of the Company;
(3) said shares of stock and Indebtedness are
sold, transferred or otherwise disposed of to a Person,
for a consideration and on terms reasonably deemed by
the Board of Directors to be adequate and satisfactory;
(4) the Subsidiary being disposed of shall not
have any continuing investment in the Company or any
other Subsidiary not being simultaneously disposed of;
and
(5) such sale or other disposition does not
involve a substantial part (as hereinafter defined) of
the assets of the Company and its Subsidiaries.
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(d) As used in this Section 5.10, a sale, lease or
other disposition of assets shall be deemed to be a
"substantial part" of the assets of the Company and its
Subsidiaries if the book value of such assets, when added to
the book value of all other assets sold, leased or otherwise
disposed of by the Company and its Subsidiaries determined
on a consolidated basis (other than in the ordinary course
of business) during the 12-month period ending with the date
of such sale, lease or other disposition, exceeds 10% of
Tangible Assets, determined as of the end of the immediately
preceding fiscal year; provided, however, that assets shall
not be deemed to be sold, leased or otherwise disposed of
for purposes of the computations required by the preceding
provisions of this paragraph (d) to the extent that the net
proceeds therefrom remaining after satisfying any
indebtedness secured by such assets shall, within 180 days
from the date of such sale, lease or disposition thereof by
the Company or a Subsidiary, as the case may be, be used to
purchase other capital assets for the Company and/or its
Subsidiaries having a value at least equal to, the assets
sold to obtain such proceeds.
Section 5.11. Guaranties. The Company will not, and will
not permit any Material Subsidiary to, become or be liable in
respect of any Guaranty except Guaranties which are limited in
amount to a stated maximum dollar exposure (other than the usual
and customary fees, costs and expenses with respect to the
enforcement thereof); provided, however, there shall be excluded
from the foregoing limitation (i) any Guaranties without a
stated maximum dollar exposure existing on September 30, 1997,
and (ii) Guaranties of obligations of Affiliates or
Subsidiaries, or parties to transactions with Affiliates or
Subsidiaries, without a stated maximum dollar exposure so long
as the aggregate amount of such Guaranties would not reasonably
be expected to have a material adverse effect upon the financial
condition or business of the Company and its Subsidiaries, taken
as a whole.
Section 5.12. Repurchase of Notes. Neither the Company nor
any Subsidiary may, nor shall the Company or any Subsidiary cause
any Affiliate to, repurchase or make any offer to repurchase any
Notes of a Series unless an offer has been made to repurchase
Notes, pro rata, from all Holders of Notes of such Series at the
same time and upon the same terms. In case the Company
repurchases or otherwise acquires any Notes, such Notes shall
immediately thereafter be canceled and no Notes shall be issued
in substitution therefor. Without limiting the foregoing, upon
the repurchase or other acquisition of any Notes by the Company,
any Subsidiary or any Affiliate (or upon the agreement of
Company, any Subsidiary or any Affiliate to purchase or otherwise
acquire the Notes), such Notes shall no longer be outstanding for
purposes of any section of this Agreement relating to the taking
by the Holders of any actions with respect hereto, including,
without limitation, Section 6.3, Section 6.4 and Section 7.1.
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Section 5.13. Transactions with Affiliates. The Company
will not, and will not permit any Subsidiary to, enter into or be
a party to any transaction or arrangement with any Affiliate
(including, without limitation, the purchase from, sale to or
exchange of property with, or the rendering of any service by or
for, any Affiliate), except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in
a comparable arm's-length transaction with a Person other than
an Affiliate; provided, that if the Company or any Subsidiary
shall enter into or be a party to any such transaction or
arrangement with an Affiliate which does not comply with the
foregoing provisions of this Section 5.13 (a "Noncomplying
Transaction"), the Company shall not be deemed to be in violation
of this Section 5.13 unless and until all such Noncomplying
Transactions in the aggregate have a material adverse effect on
the financial condition or business of the Company and its
Subsidiaries, taken as a whole.
Section 5.14. Termination of Pension Plans. The Company
will not and will not permit any Subsidiary to (a) withdraw from
any Multiemployer Plan if such withdrawal could result in
withdrawal liability (as described in Part I of Subtitle E of
Title IV of ERISA) which would have a material adverse effect on
the financial condition or business of the Company and its
Subsidiaries, taken as a whole or (b) terminate any Plan if such
termination could result in the imposition of a lien on any
property of the Company or any Subsidiary pursuant to Section
4068 of ERISA.
Section 5.15. Reports and Rights of Inspection. The
Company will keep, and will cause each Subsidiary to keep, proper
books of record and account in which full and correct entries
will be made of all dealings or transactions of, or in relation
to, the business and affairs of the Company or such Subsidiary,
in accordance with GAAP consistently applied (except for changes
disclosed in the financial statements furnished to the Holders
pursuant to this Section 5.15 and concurred in by the independent
public accountants referred to in Section 5.15(b) hereof), and
will furnish to each Institutional Holder (in duplicate if so
specified below or otherwise requested):
(a) Quarterly Statements. As soon as available and in
any event within 45 days after the end of each quarterly
fiscal period (except the last) of each fiscal year, copies
of:
(1) consolidated balance sheets of the Company
and its Subsidiaries as of the close of such quarterly
fiscal period, setting forth in comparative form the
consolidated figures for the fiscal year then most
recently ended,
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(2) consolidated statements of income of the
Company and its Subsidiaries for such quarterly fiscal
period and for the portion of the fiscal year ending
with such quarterly fiscal period, in each case setting
forth in comparative form the consolidated figures for
the corresponding periods of the preceding fiscal year,
and
(3) consolidated statements of cash flows of the
Company and its Subsidiaries for the portion of the
fiscal year ending with such quarterly fiscal period,
setting forth in comparative form the consolidated
figures for the corresponding period of the preceding
fiscal year,
all in reasonable detail and certified as complete and
correct by an authorized financial officer of the Company;
(b) Annual Statements. As soon as available and in
any event within 90 days after the close of each fiscal year
of the Company, copies of:
(1) consolidated balance sheets of the Company
and its Subsidiaries as of the close of such fiscal
year, and
(2) consolidated statements of income and
retained earnings and cash flows of the Company and its
Subsidiaries for such fiscal year,
in each case setting forth in comparative form the
consolidated figures for the preceding fiscal year, all in
reasonable detail and accompanied by a report thereon of a
firm of independent public accountants of recognized
national or regional standing selected by the Company to the
effect that the consolidated financial statements present
fairly, in all material respects, the consolidated financial
position of the Company and its Subsidiaries as of the end
of the fiscal year being reported on and the consolidated
results of the operations and cash flows for said year in
conformity with GAAP and that the examination of such
accountants in connection with such financial statements has
been conducted in accordance with generally accepted
auditing standards;
(c) Audit Reports. Promptly upon receipt thereof, one
copy of each annual or special audit made by independent
public accountants of the books of the Company or any
Subsidiary;
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(d) SEC and Other Reports. Promptly upon their
becoming available, one copy of each financial statement,
report, notice or proxy statement sent by the Company to
stockholders generally and of each regular or periodic
report, and any registration statement or prospectus filed
by the Company or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any
successor agency, and copies of any orders in any
proceedings to which the Company or any of its Subsidiaries
is a party, issued by any governmental agency, Federal or
state, having jurisdiction over the Company or any of its
Subsidiaries, which orders may have a material adverse
effect on the financial condition or business of the Company
and its Subsidiaries, taken as a whole;
(e) ERISA Reports. Promptly upon the occurrence
thereof and upon a Responsible Company Officer first
obtaining knowledge thereof, written notice of (i) a
Reportable Event with respect to any Plan; (ii) the
institution of any steps by the Company, any ERISA
Affiliate, the PBGC or any other person to terminate any
Plan; (iii) the institution of any steps by the Company or
any ERISA Affiliate to withdraw from any Plan; (iv) a
non-exempt "prohibited transaction" within the meaning of
Section 406 of ERISA in connection with any Plan; (v) any
material increase in the contingent liability of the Company
or any Subsidiary under any welfare plan attributable to an
increase in benefits offered under such a plan; or (vi) the
taking of any action by, or the threatening of the taking of
any action by, the Internal Revenue Service, the Department
of Labor or the PBGC with respect to any of the foregoing;
(f) Officer's Certificates. Within the periods
provided in paragraphs (a) and (b) above, a certificate of
an authorized financial officer of the Company stating that
such officer has reviewed the provisions of this Agreement
and setting forth: (i) the information (including the source
thereof) and detailed computations which establish whether
the Company was in compliance with the requirements of
Sections 5.6, 5.7, 5.9 and 5.10 at the end of the period
covered by the financial statements then being furnished;
provided, however, that, with respect to Section 5.6(b),
only the computations necessary to show compliance with
Section 5.8(a)(xi) need be provided and, with respect to
Section 5.10(d), the computations with respect to the
calculation of a "substantial part" need be provided only
for such times during the period covered by such financial
statements when the aggregate book value of the assets sold,
leased or otherwise disposed of for the preceding 12-month
period exceeds 5% of Tangible Assets, and (ii) to the best
of such officer's knowledge, whether there existed as of the
date of such financial statements and whether there exists
-20-
on the date of the certificate or existed at any time during
the period covered by such financial statements any Default
or Event of Default and, if any such condition or event
exists on the date of the certificate, specifying the nature
and period of existence thereof and the action the Company
is taking and proposes to take with respect thereto;
(g) Accountant's Certificates. Within the period
provided in paragraph (b) above, a certificate of the
accountants who render an opinion with respect to such
financial statements, stating that they have reviewed this
Agreement and stating further whether, in making their
audit, such accountants have become aware of any Default or
Event of Default under any of the terms or provisions of
this Agreement insofar as any such terms or provisions
pertain to or involve accounting matters or determinations,
and if any such condition or event then exists, specifying
the nature and period of existence thereof;
(h) Rule 144A. Except at such times as the Company is
a reporting company under Section 13 or Section 15(d) of the
Securities and Exchange Act of 1934, as amended, or has
complied with the requirements for the exemption from
registration under the Securities and Exchange Act of 1934,
as amended, set forth in Rule 12g3-2(b) under such Act, such
financial or other information as any holder of the Notes or
any Person designated by such holder may reasonably
determine is required to permit such holder to comply with
the requirements of Rule 144A promulgated under the Act in
connection with the resale by it of the Notes, in any such
case promptly after the same is requested; and
(i) Requested Information. With reasonable
promptness, such other data and information as such
Institutional Holder may reasonably request.
Without limiting the foregoing, the Company will permit each
Institutional Holder (or such Persons as such Institutional
Holder may designate), to visit and inspect, under the Company's
guidance, any of the properties of the Company or any
Subsidiary, to examine all of their books of account, records,
reports and other papers, to make copies and extracts therefrom
and to discuss their respective affairs, finances and accounts
with their respective officers, and independent public
accountants (and by this provision the Company authorizes said
accountants to discuss with any Institutional Holder the
finances and affairs of the Company and its Subsidiaries) all at
such reasonable times and as often as may be reasonably
requested. The Company shall not be required to pay or
reimburse any Holder for expenses which such Holder may incur in
connection with any such visitation or inspection, except that
if such visitation or inspection is made during any period when
a Default or an Event of Default shall have occurred and be
continuing, the Company agrees to reimburse such Holder for all
such expenses promptly upon demand.
-21-
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the
following shall constitute an "Event of Default" as such term is
used herein:
(a) Default shall occur in the payment of interest on
any Note when the same shall have become due and such
default shall continue for more than 10 days; or
(b) Default shall occur in the making of any payment
of the principal of any Note or premium, if any, thereon at
the expressed or any accelerated maturity date or at any
date fixed for prepayment; or
(c) Default shall be made in the payment when due
(whether by lapse of time, by declaration, by call for
redemption or otherwise) of the principal of or interest on
any Indebtedness (including Notes of another Series) of the
Company or any Subsidiary under any indenture, agreement or
other instrument under which Indebtedness of the Company or
any Subsidiary aggregating $2,000,000 or more is outstanding
and such default shall result in the acceleration of the
maturity of any such Indebtedness; or
(d) Default or the happening of any event shall occur
under any indenture, agreement or other instrument under
which any Indebtedness of the Company or any Subsidiary
aggregating $2,000,000 or more is outstanding and such
default or event shall result in the acceleration of the
maturity of any such Indebtedness; or
(e) Default shall occur in the observance or
performance of any covenant or agreement contained in
Section 5.6, Section 5.7, Section 5.9, Section 5.10 or
Section 6.2; or
(f) Default shall occur in the observance or
performance of any other provision of this Agreement which
is not remedied within 45 days after the earlier of (i) the
day on which a Responsible Company Officer first obtains
knowledge of such default, or (ii) the day on which written
notice thereof is given to the Company by any Holder; or
(g) Any material representation or warranty made by
the Company herein, or made by the Company in any statement
or certificate furnished by the Company in connection with
the consummation of the issuance and delivery of the Notes
or furnished by the Company pursuant hereto, is untrue in
any material respect as of the date of the issuance or
making thereof; or
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(h) Final judgment or judgments for the payment of
money aggregating in excess of $1,000,000 is or are
outstanding against the Company or any Subsidiary or against
any property or assets of either and such judgments
aggregating in excess of $1,000,000 have remained unpaid,
unvacated, unbonded and unstayed by appeal or otherwise for
a period of 30 days from the date of its entry; or
(i) A custodian, liquidator, trustee or receiver is
appointed for the Company or any Material Subsidiary or for
the major part of the property of either and is not
discharged within 60 days after such appointment; or
(j) The Company or any Material Subsidiary becomes
insolvent or bankrupt, is generally not paying its debts as
they become due or makes an assignment for the benefit of
creditors, or the Company or any Material Subsidiary applies
for or consents to the appointment of a custodian,
liquidator, trustee or receiver for the Company or such
Material Subsidiary or for the major part of the property of
either; or
(k) Bankruptcy, reorganization, arrangement or
insolvency proceedings, or other proceedings for relief
under any bankruptcy or similar law or laws for the relief
of debtors, are instituted by or against the Company or any
Material Subsidiary and, if instituted against the Company
or any Material Subsidiary, are consented to or are not
dismissed within 60 days after such institution.
Section 6.2. Notice to Holders. When, to the knowledge of
any Responsible Company Officer, any Event of Default described
in the foregoing Section 6.1 has occurred, or if any Holder or
the holder of any other evidence of Debt of the Company gives any
notice or takes any other action with respect to a claimed
default, the Company agrees to give notice within five business
days of such event to all Holders.
Section 6.3. Acceleration of Maturities. When any Event
of Default described in paragraph (a) or (b) of Section 6.1 has
happened and is continuing with respect to any Series, (i) any
Holder of such Series which, as a result of such Event of
Default, has not received a payment due on the Notes held by it,
may declare all Notes held by it to be, and all Notes of such
Holder shall thereupon become, forthwith due and payable, and
(ii) any Holder or Holders holding at least 33-1/3% of the
principal amount of the Notes of such Series at any time
outstanding may declare the entire principal and all interest
accrued on all Notes of such Series to be, and all Notes of such
Series shall thereupon become, forthwith due and payable. When
any Event of Default described in paragraphs (c) through (i),
inclusive, of said Section 6.1 has happened and is continuing,
-23-
any Holder or Holders holding 33-1/3% or more of the principal
amount of Notes of any Series at the time outstanding may, by
written notice to the Company, declare the entire principal and
all interest accrued on all Notes of such Series to be, and all
Notes of such Series shall thereupon become, forthwith due and
payable, without any presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived; provided,
however, that if an Event of Default described in paragraph (d)
shall occur and results from the acceleration of an aggregate
amount of Indebtedness which is less than $10,000,000 (the
"Defaulted Indebtedness"), the right of the Holders of any Series
of Notes to accelerate the maturity of such Series pursuant to
the foregoing provisions of this sentence may be exercised only
by Holders holding 66-2/3% or more of the principal amount of the
Notes of such Series at the time outstanding and if such right is
so exercised with respect to such an Event of Default, the
Holders of such Series shall not initiate any collection actions
until the expiration of the 15-day period (the "Cure Period")
immediately following the date on which such Event of Default
occurred; provided further, that if during the Cure Period (i)
the Company shall either (A) pay the creditors of such Defaulted
Indebtedness in full and terminate the underlying agreement, or
(B) obtain a written waiver of the default which resulted in the
acceleration of the Defaulted Indebtedness from the creditors,
(ii) the Company shall furnish the Holders of such Series with
written notice and evidence of the Company's satisfaction of
either requirement set forth in clause (i) above, and (iii) no
other Default or Event of Default shall be outstanding hereunder,
the acceleration of the Notes of such Series shall be deemed to
be rescinded and annulled.
When any Event of Default described in paragraph (j) or (k)
of Section 6.1 has occurred, then all outstanding Notes shall
immediately become due and payable without presentment, demand or
notice of any kind. Upon any Notes becoming due and payable as a
result of any Event of Default as aforesaid, the Company will
forthwith pay to the Holders of such Notes, the entire principal
and interest accrued on such Notes and, to the extent not
prohibited by applicable law, an amount as liquidated damages for
the loss of the bargain evidenced hereby (and not as a penalty)
equal to the Make-Whole Amount, determined as of the date on
which such Notes shall so become due and payable. No course of
dealing on the part of the Holder or Holders nor any delay or
failure on the part of any Holder to exercise any right shall
operate as a waiver of such right or otherwise prejudice such
Holder's rights, powers and remedies. The Company further
agrees, to the extent permitted by law, to pay to the Holder or
Holders all costs and expenses incurred by them in the collection
of any Notes upon any default hereunder or thereon, including
reasonable compensation to such Holder's or Holders' attorneys
for all services rendered in connection therewith.
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Section 6.4. Rescission of Acceleration. The provisions
of Section 6.3 are subject to the condition that if the principal
of and accrued interest on all or any outstanding Notes of a
Series have been declared immediately due and payable by reason
of the occurrence of any Event of Default described in paragraphs
(a) through (i), inclusive, of Section 6.1, the Holders holding
more than 66-2/3% in aggregate principal amount of the Notes of
such Series then outstanding may, by written instrument filed
with the Company, rescind and annul such declaration and the
consequences thereof, provided that at the time such declaration
is annulled and rescinded:
(a) no judgment or decree has been entered for the
payment of any monies due pursuant to the Notes or this
Agreement;
(b) all arrears of interest upon all the Notes of such
Series and all other sums payable under such Notes and under
this Agreement (except any principal, interest or premium on
such Notes which has become due and payable solely by reason
of such declaration under Section 6.3) shall have been duly
paid; and
(c) each and every other Default and Event of Default
shall have been made good, cured or waived pursuant to
Section 7.1;
and provided further, that no such rescission and annulment shall
extend to or affect any subsequent Default or Event of Default or
impair any right consequent thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1. Consent Required. Any term, covenant,
agreement or condition of this Agreement may, with the consent of
the Company, be amended or compliance therewith may be waived
with respect to any Series of Notes (either generally or in a
particular instance and either retroactively or prospectively),
if the Company shall have obtained the consent in writing of the
Holders holding more than 66-2/3% in aggregate principal amount
of outstanding Notes of such Series; provided, however, that
without the written consent of all of the Holders of such
Series, no such amendment or waiver shall be effective with
respect to such Series (i) which will change the time of payment
of the principal of or the interest on any Note of such Series
or change the principal amount thereof or change the rate of
interest thereon, or (ii) which will change any of the
provisions with respect to optional prepayments for such Series,
or (iii) which will change the percentage of Holders required to
consent to any such amendment or waiver of any of the provisions
of this Section 7 or Section 6.
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Section 7.2. Solicitation of Holders. So long as there
are any Notes outstanding, the Company will not solicit, request
or negotiate for or with respect to any proposed waiver or
amendment with respect to a Series of any of the provisions of
this Agreement or the Notes of such Series unless each Holder of
Notes of such Series (irrespective of the amount of Notes then
owned by it) shall be informed thereof by the Company and shall
be afforded the opportunity of considering the same and shall be
supplied by the Company with sufficient information to enable it
to make an informed decision with respect thereto. The Company
will not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any Holder of the Notes of a
Series as consideration for or as an inducement to entering into
by such Holder of any waiver or amendment of any of the terms
and provisions of this Agreement or the Notes unless such
remuneration is concurrently offered, on the same terms, ratably
to all Holders of Notes of such Series.
Section 7.3. Effect of Amendment or Waiver. Any such
amendment or waiver shall apply equally to all of the Holders of
the Notes of a Series and shall be binding upon them, upon each
future Holder of Notes of such Series and upon the Company,
whether or not any Note shall have been marked to indicate such
amendment or waiver. No such amendment or waiver shall extend
to or affect any obligation not expressly amended or waived or
impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1. Definitions. Unless the context otherwise
requires, the terms hereinafter set forth when used herein shall
have the following meanings and the following definitions shall
be equally applicable to both the singular and plural forms of
any of the terms herein defined:
"Affiliate" shall mean any Person (other than a Subsidiary)
(i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, the Company, (ii) which beneficially owns or holds
5% or more of any class of the Voting Stock of the Company or
(iii) 5% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 5% or more of the equity interest) of
which is beneficially owned or held by the Company or a
Subsidiary. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"Agreement" shall mean this Note Agreement.
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"Capitalized Lease" shall mean any lease the obligation for
Rentals with respect to which is required to be capitalized on a
consolidated balance sheet of the lessee and its subsidiaries in
accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the
date of any determination thereof the amount at which the
aggregate Rentals due and to become due under all Capitalized
Leases under which such Person is a lessee would be reflected as
a liability on a consolidated balance sheet of such Person in
accordance with GAAP.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Company" shall mean SEMCO Energy, Inc., a Michigan
corporation, and any Person who succeeds to all, or substantially
all, of the assets and business of SEMCO Energy, Inc.
"Consolidated Adjusted Funded Debt" shall mean all
Consolidated Funded Debt (i) minus Guaranteed Amounts to the
extent included in determining such Consolidated Funded Debt,
(ii) plus Additional Funded Debt; provided, however, that (A) no
Funded Debt shall for purposes of this definition be included as
Consolidated Funded Debt if money sufficient to pay such Funded
Debt in full (either on the date of maturity expressed therein
or on such earlier date as such Funded Debt may be called for
redemption) shall be held in trust for such purpose by the
trustee or proper depository under the instrument pursuant to
which such Funded Debt was issued, and (B) in the event of the
issuance of Funded Debt ("New Funded Debt"), for purposes of
this definition there shall be excluded from Consolidated Funded
Debt at the time of such issuance and thereafter:
(1) existing Funded Debt which is paid in full
substantially concurrently with the issuance of the New
Funded Debt and out of proceeds therefrom; and
(2) existing Funded Debt which is paid out of the
proceeds from the issuance of the New Funded Debt in
compliance with the following:
(x) on the date of the issuance of the New Funded
Debt (the "Issuance Date") an amount from the proceeds
sufficient to pay such existing Funded Debt in full if
called for redemption as hereinafter described shall be
deposited in an escrow account (the "Escrow Account")
with a third party selected by the Company with written
instructions from the Company that the proceeds shall
be used for such purpose;
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(y) not later than the 30th day following the
Issuance Date, such existing Funded Debt shall be
called for redemption on a date which is not later than
the 70th day following the Issuance Date; and
(z) on a date which is not later than the 70th
day following the Issuance Date, such existing Funded
Debt shall be paid in full from the proceeds deposited
in the Escrow Account.
As used in this definition, the term "Additional Funded Debt"
shall mean at any time an amount equal to the excess, if any, of
(i) the lowest daily average of the smallest aggregate principal
amount of Consolidated Current Debt minus Guaranteed Amounts to
the extent included in determining such Consolidated Current
Debt outstanding on each day for any period of 30 consecutive
days during the 12-month period immediately preceding the date
of determination, over (ii) the sum of $10,000,000.
"Consolidated Adjusted Total Capitalization" shall mean, as
of the date of any determination thereof, the sum of (i) the
aggregate principal amount of Consolidated Adjusted Funded Debt
then outstanding, plus (ii) Consolidated Net Worth.
"Consolidated Current Debt" shall mean all Current Debt of
the Company and its Subsidiaries determined on a consolidated
basis eliminating intercompany items.
"Consolidated Debt" shall mean all Debt of the Company and
its Subsidiaries, determined on a consolidated basis eliminating
intercompany items.
"Consolidated Funded Debt" shall mean all Funded Debt of the
Company and its Subsidiaries determined on a consolidated basis
eliminating intercompany items.
"Consolidated Net Income" for any period shall mean the
gross revenues of the Company and its Subsidiaries for such
period less all expenses and other proper charges (including
taxes on income), determined on a consolidated basis after
eliminating earnings (except to the extent provided in clause (f)
below) or losses attributable to outstanding Minority Interests,
but excluding in any event:
(a) any gains or losses on the sale or other
disposition of Investments or fixed or capital assets, and
any taxes on such excluded gains and any tax deductions or
credits on account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Subsidiary accrued
prior to the date it became a Subsidiary;
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(d) net earnings and losses of any corporation (other
than a Subsidiary), substantially all the assets of which
have been acquired in any manner by the Company or any
Subsidiary, realized by such corporation prior to the date
of such acquisition;
(e) net earnings and losses of any corporation (other
than a Subsidiary) with which the Company or a Subsidiary
shall have consolidated or which shall have merged into or
with the Company or a Subsidiary prior to the date of such
consolidation or merger;
(f) net earnings of any business entity (other than a
Subsidiary) in which the Company or any Subsidiary has an
ownership interest unless such net earnings shall have
actually been received by the Company or such Subsidiary in
the form of cash distributions;
(g) any portion of the net earnings of any Subsidiary
which for any reason is unavailable for payment of dividends
to the Company or any other Subsidiary;
(h) earnings resulting from any reappraisal,
revaluation or write-up of assets;
(i) any deferred or other credit representing any
excess of the equity in any Subsidiary at the date of
acquisition thereof over the amount invested in such
Subsidiary;
(j) any gain arising from the acquisition of any
Securities of the Company or any Subsidiary;
(k) any reversal of any contingency reserve, except to
the extent that provision for such contingency reserve shall
have been made from income arising during such period; and
(l) any items other than those described in clauses
(a) through (k) above of this definition which are properly
classified under GAAP as extraordinary items.
"Consolidated Net Worth" shall mean as of the date of any
determination thereof the stockholders' capital and surplus of
the Company determined in accordance with GAAP.
"Current Debt" of any Person shall mean as of the date of
any determination thereof (i) all Indebtedness of such Person for
borrowed money other than Funded Debt of such Person and (ii)
Guaranties by such Person of Current Debt of others.
"Debt" of any Person shall mean all Current Debt and all
Funded Debt of such Person.
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"Default" shall mean any event or condition the occurrence
of which would, with the lapse of time or the giving of notice,
or both, constitute an Event of Default.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, and any successor statute of similar
import, together with the regulations thereunder, in each case as
in effect from time to time. References to sections of ERISA
shall be construed to also refer to any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or
business that is, along with the Company, a member of a
controlled group of corporations or a controlled group of trades
or businesses, as described in section 414(b) and 414(c),
respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in
Section 6.1.
"Fixed Charges" for any period shall mean on a consolidated
basis the sum of all Interest Charges on all Debt (including the
interest component of Rentals on Capitalized Leases) of the
Company and its Subsidiaries.
"Funded Debt" of any Person shall mean (i) all Indebtedness
of such Person for borrowed money or which has been incurred in
connection with the acquisition of assets in each case having a
final maturity of one or more than one year from the date of
origin thereof (or which is renewable or extendible at the
option of the obligor for a period or periods more than one year
from the date of origin), including all principal payments in
respect thereof that are required to be made within one year
from the date of any determination of Funded Debt, whether or
not the obligation to make such payments shall constitute a
current liability of the obligor under GAAP; provided, that any
notes of such Person evidencing Indebtedness of such Person
which when issued constitute a current liability of such Person
under GAAP shall not be included as Funded Debt of such Person,
(ii) all Capitalized Rentals of such Person, and (iii) all
Guaranties by such Person of Funded Debt of others.
"GAAP" shall mean generally accepted accounting principles
at the time in the United States.
"Guaranteed Amounts" shall mean as of any date the aggregate
amounts of Guaranties of the Company and its Subsidiaries of Debt
of others determined on a consolidated basis.
"Guaranties" by any Person shall mean all obligations (other
than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person
guaranteeing, or in effect guaranteeing, any Indebtedness,
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dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (i) to
purchase such Indebtedness or obligation or any property or
assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or
obligation, (y) to maintain working capital or other balance
sheet condition or otherwise to advance or make available funds
for the purchase or payment of such Indebtedness or obligation,
(iii) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the
owner of such Indebtedness or obligation of the ability of the
primary obligor to make payment of the Indebtedness or
obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss
in respect thereof. For the purposes of all computations made
under this Agreement, a Guaranty in respect of any Indebtedness
for borrowed money shall be deemed to be Indebtedness equal to
the principal amount of such Indebtedness for borrowed money
which has been guaranteed, and a Guaranty in respect of any
other obligation or liability or any dividend shall be deemed to
be Indebtedness equal to the maximum aggregate amount of such
obligation, liability or dividend which has been guaranteed.
"Holder" shall mean any Person which is, at the time of
reference, the registered holder of any Note.
"Indebtedness" of any Person shall mean and include all
obligations of such Person which in accordance with GAAP shall be
classified upon a balance sheet of such Person as liabilities of
such Person, and in any event shall include all (i) obligations
of such Person for borrowed money or which has been incurred in
connection with the acquisition of property or assets, (ii)
obligations secured by any Lien upon property or assets owned by
such Person, even though such Person has not assumed or become
liable for the payment of such obligations, (iii) obligations
created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such
Person, notwithstanding the fact that the rights and remedies of
the seller, lender or lessor under such agreement in the event of
default are limited to repossession or sale of property, (iv)
Capitalized Rentals and (v) Guaranties of obligations of others
of the character referred to in this definition.
"Institutional Holder" shall mean any Holder which is a
Purchaser or an insurance company, bank, savings and loan
association, trust company, investment company, charitable
foundation, employee benefit plan (as defined in ERISA) or other
institutional investor or financial institution and, for
purposes of the direct payment provisions of this Agreement,
shall include any nominee of any such Holder.
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"Interest Charges" for any period shall mean all interest
and all amortization of debt discount and expense on any
particular Indebtedness for which such calculations are being
made.
"Investments" shall mean all investments, in cash or by
delivery of property made, directly or indirectly in any Person,
whether by acquisition of shares of capital stock, indebtedness
or other obligations or Securities or by loan, advance, capital
contribution or otherwise; provided, however, that "Investments"
shall not mean or include routine investments in property to be
used or consumed in the ordinary course of business.
"Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner
of the property, whether such interest is based on the common
law, statute or contract, and including but not limited to the
security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term "Lien"
shall include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including,
with respect to stock, stockholder agreements, voting trust
agreements, buy-back agreements and all similar arrangements)
affecting property. For the purposes of this Agreement, the
Company or a Subsidiary shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional
sale agreement, Capitalized Lease or other arrangement pursuant
to which title to the property has been retained by or vested in
some other Person for security purposes and such retention or
vesting shall constitute a Lien.
"Make-Whole Amount" with respect to any Series of Notes
shall mean in connection with any prepayment or acceleration of
such Series of Notes the excess, if any, of (i) the aggregate
present value as of the date of such prepayment of each dollar of
principal being prepaid and the amount of interest (exclusive of
interest accrued to the date of prepayment) that would have been
payable in respect of such dollar if such prepayment had not
been made, determined by discounting such amounts at the
Reinvestment Rate from the respective dates on which they would
have been payable, over (ii) 100% of the principal amount of the
outstanding Notes of such Series being prepaid. If the
Reinvestment Rate with respect to the 2002 Notes is equal to or
higher than 6.83%, the Make-Whole Amount shall be zero. If the
Reinvestment Rate with respect to the 2007 Notes is equal to or
higher than 7.20%, the Make-Whole Amount shall be zero. For
purposes of any determination of the Make-Whole Amount:
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"Reinvestment Rate" for purposes of Section 2.2 shall
mean 0.50%, and for purposes of all other provisions of this
Agreement, shall mean 1.00%, plus the arithmetic mean of the
yields published in the Statistical Release under the
caption "Treasury Constant Maturities" for the maturity
(rounded to the nearest month) corresponding to the maturity
of the principal being prepaid. If no maturity exactly
corresponds to such maturity, yields for the published
maturity next longer than such maturity and for the
published maturity next shorter than such maturity shall be
calculated pursuant to the immediately preceding sentence
and the Reinvestment Rate shall be interpolated from such
yields on a straight-line basis, rounding in each of such
relevant periods to the nearest month. For the purposes of
calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of
determination of the Make-Whole Amount shall be used.
"Statistical Release" shall mean the then most recently
published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the
Federal Reserve System and which establishes yields on
actively traded U.S. Government Securities adjusted to
constant maturities or, if such statistical release is not
published at the time of any determination hereunder, then
such other reasonably comparable index which shall be
designated by the Holders holding 66-2/3% in aggregate
principal amount of the outstanding Notes of such Series so
being accelerated or prepaid.
"Material Subsidiary" shall mean a Subsidiary which at the
date of any determination either (a) has Tangible Assets with a
book value equal to or in excess of 5% of Tangible Assets,
determined as of the end of the immediately preceding fiscal
year, or (b) during the most recent period of four consecutive
fiscal quarters immediately preceding such date of determination,
had net income at least equal to 5% of Consolidated Net Income.
"Minority Interests" shall mean any shares of stock of any
class of a Subsidiary (other than directors' qualifying shares as
required by law) that are not owned by the Company and/or one or
more of its Subsidiaries. Minority Interests shall be valued by
valuing Minority Interests constituting preferred stock at the
voluntary or involuntary liquidating value of such preferred
stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and
surplus applicable thereto adjusted, if necessary, to reflect
any changes from the book value of such common stock required by
the foregoing method of valuing Minority Interests in preferred
stock.
"Multiemployer Plan" shall have the same meaning as in
ERISA.
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"Net Income Available for Fixed Charges" for any period
shall mean the sum of (i) Consolidated Net Income during such
period plus (to the extent deducted in determining Consolidated
Net Income), (ii) all provisions for any Federal, state or other
income taxes made by the Company and its Subsidiaries during such
period, (iii) Fixed Charges of the Company and its Subsidiaries
during such period and (iv) if such period includes the fourth
fiscal quarter of 1996, the NOARK Writedown; provided, that if
the Company during any period shall sell or otherwise dispose of
its investment in the NOARK Pipeline System and such sale or
disposition shall result in an increase of Consolidated Net
Income (over the amount, whether positive or negative, which
would otherwise be calculated for Consolidated Net Income without
giving effect to such sale or disposition) for such period, for
purposes of calculating Net Income Available for Fixed Charges
for such period, Consolidated Net Income used in clause (i) of
this definition shall be reduced by the amount of such increase.
"NOARK Adjustment Amount" shall mean, for purposes of
calculating compliance with the provisions of Section 5.9 with
respect to Restricted Payments (i) for any period ending prior to
the fourth fiscal quarter of 1999, the NOARK Basket Amount and
(ii) for any period ending after the third fiscal quarter of
1999, the excess, if any, of (A) the NOARK Basket Amount over (B)
an amount equal to $625,000 multiplied by the number of
Amortization Quarters included in such period where the term
"Amortization Quarter" means any fiscal quarter or portion
thereof following the third fiscal quarter of 1999.
"NOARK Basket Amount" shall mean $10,000,000; provided that
if the Company shall sell or otherwise dispose of its investment
in the NOARK Pipeline System and such sale or disposition shall
result in an increase in Consolidated Net Income (over the
amount, whether positive or negative, which would otherwise be
calculated for Consolidated Net Income without giving effect to
such sale or disposition) for purposes of calculating compliance
with Section 5.9, then the NOARK Basket Amount shall thereafter
be equal to $10,000,000 reduced, but not below zero, by such
increase.
"NOARK Pipeline System" shall mean NOARK Pipeline System,
Limited Partnership, a limited partnership organized under the
laws of Arkansas.
"NOARK Writedown" shall mean the $21,000,000 non-cash,
after-tax charge recorded by the Company against earnings in the
fourth fiscal quarter of 1996 resulting from the write-down of
the Company's investment in the NOARK Pipeline System.
"Overdue Rate" shall mean with respect to (a) the 2002
Notes, 8.83% per annum or (b) the 2007 Notes, 9.20% per annum.
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"PBGC" means the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, and a government or agency
or political subdivision thereof.
"Plan" means a "pension plan," as such term is defined in
ERISA, established or maintained by the Company or any ERISA
Affiliate or as to which the Company or any ERISA Affiliate
contributed or is a member or otherwise may have any liability.
"Purchasers" shall have the meaning set forth in Section
1.1.
"Rentals" shall mean and include as of the date of any
determination thereof all fixed payments (including as such all
payments which the lessee is obligated to make to the lessor on
termination of the lease or surrender of the property) payable
by the Company or a Subsidiary, as lessee or sublessee under a
lease of real or personal property, but shall be exclusive of
any amounts required to be paid by the Company or a Subsidiary
(whether or not designated as rents or additional rents) on
account of maintenance, repairs, insurance, taxes and similar
charges. Fixed rents under any so-called "percentage leases"
shall be computed solely on the basis of the minimum rents, if
any, required to be paid by the lessee regardless of sales
volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Required Coverage Ratio" shall mean a ratio of 1.50 to 1.00
except that for purposes of determining compliance by the Company
with Section 5.7, for any period which includes the fourth fiscal
quarter of 1996, Required Coverage Ratio shall mean a ratio of
1.75 to 1.00.
"Responsible Company Officer" shall mean any one of the
President, any Executive Vice President, any Vice President, the
Treasurer or the Controller of the Company.
"Security" shall have the same meaning as in Section 2(1) of
the Securities Act of 1933, as amended.
The term "subsidiary" shall mean as to any particular parent
corporation any corporation of which more than 50% (by number of
votes) of the Voting Stock shall be beneficially owned, directly
or indirectly, by such parent corporation. The term "Subsidiary"
shall mean a subsidiary of the Company.
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"Tangible Assets" shall mean as of the date of any
determination thereof the total amount of all assets of the
Company and its Subsidiaries on a consolidated basis (less
depreciation, depletion and other properly deductible valuation
reserves) after deducting good will, patents, trade names, trade
marks, copyrights, franchises, experimental expense, organization
expense, unamortized debt discount and expense, deferred assets
other than prepaid insurance and prepaid taxes, the excess of
cost of shares acquired over book value of related assets and
such other assets as are properly classified as "intangible
assets" in accordance with GAAP.
"Voting Stock" shall mean Securities of any class or
classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate
directors (or Persons performing similar functions).
"Wholly-owned" when used in connection with any Subsidiary
shall mean a Subsidiary of which all of the issued and
outstanding shares of stock (except shares required as directors'
qualifying shares and except preferred stock in the case of SEMCO
Energy Gas Company) shall be owned by the Company and/or one or
more of its Wholly-owned Subsidiaries.
Section 8.2. Accounting Principles. Where the character
or amount of any asset or liability or item of income or expense
is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes
of this Agreement, the same shall be done in accordance with
GAAP, to the extent applicable, except where such principles are
modified or replaced by the specific terms of this Agreement.
Section 8.3. Directly or Indirectly. Where any provision
in this Agreement refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision
shall be applicable whether the action in question is taken
directly or indirectly by such Person; provided that, in the
case of indirect action, such action is, in fact, taken at the
direction of such Person.
SECTION 9. MISCELLANEOUS.
Section 9.1. Registered Notes. The Company shall cause to
be kept at its principal office a register for the registration
and transfer of the Notes (hereinafter called the "Note
Register"), and the Company will register or transfer or cause
to be registered or transferred as hereinafter provided any Note
issued pursuant to this Agreement.
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At any time and from time to time any Holder which has been
duly registered as hereinabove provided may transfer such Note
upon surrender thereof at the principal office of the Company
duly endorsed or accompanied by a written instrument of transfer
duly executed by the Holder or its attorney duly authorized in
writing.
The Person in whose name any registered Note shall be
registered shall be deemed and treated as the owner and holder
thereof and a Holder for all purposes of this Agreement. Payment
of or on account of the principal, premium, if any, and interest
on any registered Note shall be made to or upon the written order
of such Holder.
Section 9.2. Exchange of Notes. At any time and from time
to time, upon not less than ten days' notice to that effect given
by the Holder of any Note initially delivered or of any Note
substituted therefor pursuant to Section 9.1, this Section 9.2 or
Section 9.3, and, upon surrender of such Note at its office, the
Company will deliver in exchange therefor, without expense to
such Holder, except as set forth below, a Note for the same
aggregate principal amount as the then unpaid principal amount of
the Note so surrendered, or Notes in the denomination of $500,000
or any amount in excess thereof as such Holder shall specify,
dated as of the date to which interest has been paid on the Note
so surrendered or, if such surrender is prior to the payment of
any interest thereon, then dated as of the date of issue,
registered in the name of such Person or Persons as may be
designated by such Holder, and otherwise of the same form and
tenor as the Notes so surrendered for exchange. The Company may
require the payment of a sum sufficient to cover any stamp tax or
governmental charge imposed upon such exchange or transfer.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of
evidence satisfactory to the Company of the loss, theft,
mutilation or destruction of any Note, and in the case of any
such loss, theft or destruction upon delivery of a bond of
indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation
upon surrender and cancellation of the Note, the Company will
make and deliver without expense to the Holder thereof, a new
Note, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Note. If an Institutional Holder is the owner of any
such lost, stolen or destroyed Note, then the affidavit of an
authorized officer of such owner, setting forth the fact of
loss, theft or destruction and of its ownership of such Note at
the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof and no further indemnity shall be
required as a condition to the execution and delivery of a new
Note other than the written agreement of such owner to indemnify
the Company.
-37-
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or
not the transactions herein contemplated shall be consummated,
the Company agrees to pay directly all of the Purchasers'
out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement and the transactions
contemplated hereby, including but not limited to the reasonable
charges and disbursements of Chapman and Cutler, special counsel
to the Purchasers, duplicating and printing costs and charges
for shipping the Notes, adequately insured to each Purchaser's
home office or at such other place as such Purchaser may
designate, and all such expenses of the Holders relating to any
amendment, waivers or consents pursuant to the provisions
hereof, including, without limitation, any amendments, waivers,
or consents resulting from any work-out, renegotiation or
restructuring relating to the performance by the Company of its
obligations under this Agreement and the Notes. The Company
also agrees that it will pay and save each Purchaser harmless
against any and all liability with respect to stamp and other
taxes (other than taxes based, in part, on the income of a
Holder), if any, which may be payable or which may be determined
to be payable in connection with the execution and delivery of
this Agreement or the Notes originally issued hereunder. The
Company agrees to protect and indemnify each Purchaser against
any liability for any and all brokerage fees and commissions
payable or claimed to be payable to any Person in connection
with the transactions contemplated by this Agreement. Each
Purchaser represents that no placement agent, broker or finder
has been retained by such Purchaser in connection with its
purchase of the Notes.
Section 9.5. Powers and Rights Not Waived; Remedies
Cumulative. No delay or failure on the part of any Holder in the
exercise of any power or right shall operate as a waiver thereof;
nor shall any single or partial exercise of the same preclude any
other or further exercise thereof, or the exercise of any other
power or right, and the rights and remedies of each Holder are
cumulative to, and are not exclusive of, any rights or remedies
any such Holder would otherwise have.
Section 9.6. Notices. All communications provided for
hereunder shall be in writing and, if to a Holder, delivered or
mailed prepaid by registered or certified mail or overnight air
courier, or by facsimile communication, in each case addressed
to such Holder at its address or its facsimile number, as the
case may be, appearing beneath its signature at the foot of this
Agreement or such other address or facsimile number as any
Holder may designate to the Company in writing, and if to the
Company, delivered or mailed by registered or certified mail or
overnight air courier, or by facsimile communication, to the
Company at the address or the facsimile number, as the case may
be, appearing beneath its signature at the foot of this
Agreement or to such other address or facsimile number as the
-38-
Company may in writing designate to the Holders; provided,
however, that a notice to a party hereto by overnight air
courier shall only be effective if delivered to such party at a
street address designated for such purpose in accordance with
this Section 9.6, and a notice to such party by facsimile
communication shall only be effective if made by confirmed
transmission to such party at a telephone number designated for
such purpose in accordance with this Section 9.6 and promptly
followed by the delivery of such notice by registered or
certified mail or overnight air courier, as set forth above.
Section 9.7. Successors and Assigns. This Agreement shall
be binding upon the successors and assigns of each of the parties
hereto and shall inure to the benefit of each successor and
assign, including each successive Holder.
Section 9.8. Survival of Covenants and Representations.
All covenants, representations and warranties made herein and in
any certificates delivered pursuant hereto, whether or not in
connection with the Closing Date, shall survive the closing and
the delivery of this Agreement and the Notes.
Section 9.9. Severability. Should any part of this
Agreement for any reason be declared invalid or unenforceable,
such decision shall not affect the validity or enforceability of
any remaining portion, which remaining portion shall remain in
force and effect as if this Agreement had been executed with the
invalid or unenforceable portion thereof eliminated and it is
hereby declared the intention of the parties hereto that they
would have executed the remaining portion of this Agreement
without including therein any such part, parts or portion which
may, for any reason, be hereafter declared invalid or
unenforceable.
Section 9.10. Governing Law. This Agreement and the Notes
issued and sold hereunder shall be governed by and construed in
accordance with Michigan law.
Section 9.11. Captions. The descriptive headings of the
various Sections or parts of this Agreement are for convenience
only and shall not affect the meaning or construction of any of
the provisions hereof.
-39-
The execution hereof by the Purchasers shall constitute a
contract among the Company and the Purchasers for the uses and
purposes hereinabove set forth. This Agreement may be executed
in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.
SEMCO Energy, Inc.
By William L. Johnson
Its President
SEMCO Energy, Inc.
405 Water Street
Port Huron, Michigan 48060
Attention: President
Telefacsimile: (810) 987-4570
Confirmation: (810) 987-2200
-40-
Accepted as of October 1, 1997:
Connecticut General Life
Insurance Company
By CIGNA Investments, Inc.
By Edward Lewis
Its Managing Director
Connecticut General Life
Insurance Company
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Attention: Private Securities Division - S-307
Fax: 203-726-7203
Payments
All payments on or in respect of the Notes to be by Federal Funds
Wire Transfer to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/AC=9009001802
ABA #021000021
OBI=[name of company; description of security; interest
rate; maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made);
contact name and phone.]
Address for Notices Related to Payments:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
900 Cottage Grove Road
Hartford, Connecticut 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities S-307
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: 860-726-7203
-41-
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P. O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
Fax: 212-552-3107/1005
Address for All Other Notices:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities Division - S-307
James G. Schelling
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: 860-726-7203
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number for CIG & Co.: 13-3574027
-42-
Accepted as of October 1, 1997:
Life Insurance Company of North
America
By CIGNA Investments, Inc.
By Edward Lewis
Its Managing Director
Life Insurance Company of
North America
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Attention: Private Securities Division - S-307
Fax: 203-726-7203
Payments
All payments on or in respect of the Notes to be by Federal Funds
Wire Transfer to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/AC=9009001802
ABA #021000021
OBI=[name of company; description of security; interest
rate; maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made);
contact name and phone.]
Address for Notices Related to Payments:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
900 Cottage Grove Road
Hartford, Connecticut 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities S-307
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: 860-726-7203
-43-
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P. O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
Fax: 212-552-3107/1005
Address for All Other Notices:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities Division - S-307
James G. Schelling
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: 860-726-7203
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number for CIG & Co.: 13-3574027
-44-
Accepted as of October 1, 1997:
Connecticut General Life
Insurance Company, on behalf
of one or more separate
accounts
By CIGNA Investments, Inc.
By Edward Lewis
Its Managing Director
Connecticut General Life
Insurance Company, on
behalf of one or more
separate accounts
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Attention: Private Securities Division - S-307
Fax: 203-726-7203
Payments
All payments on or in respect of the Notes to be by Federal Funds
Wire Transfer to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/AC=9009001802
ABA #021000021
OBI=[name of company; description of security; interest
rate; maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made);
contact name and phone.]
Address for Notices Related to Payments:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
900 Cottage Grove Road
Hartford, Connecticut 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities S-307
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: 860-726-7203
-45-
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P. O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
Fax: 212-552-3107/1005
Address for All Other Notices:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities Division - S-307
James G. Schelling
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: 860-726-7203
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number for CIG & Co.: 13-3574027
-46-
Accepted as of October 1, 1997:
CIGNA Property and Casualty
Insurance Company
By CIGNA Investments, Inc.
By Edward Lewis
Its Managing Director
CIGNA Property and Casualty
Insurance Company
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Attention: Private Securities Division - S-307
Fax: 203-726-7203
Payments
All payments on or in respect of the Notes to be by Federal Funds
Wire Transfer to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/AC=9009001802
ABA #021000021
OBI=[name of company; description of security; interest
rate; maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made);
contact name and phone.]
Address for Notices Related to Payments:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
900 Cottage Grove Road
Hartford, Connecticut 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities S-307
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: 860-726-7203
-47-
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P. O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
Fax: 212-552-3107/1005
Address for All Other Notices:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities Division - S-307
James G. Schelling
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: 860-726-7203
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number for CIG & Co.: 13-3574027
-48-
Accepted as of October 1, 1997:
New York Life Insurance and
Annuity Corporation
By: New York Life Insurance
Company
By Lisa Scuderi
Its Investment Manager
New York Life Insurance and Annuity
Corporation
c/o New York Life Insurance Company
51 Madison Avenue
New York, New York 10010
Attention: Investment Department, Private Finance Group,
Room 206
Telefacsimile Number: (212) 447-4122
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "SEMCO Energy, Inc., 7.20% Senior
Notes due 2007, PPN 78412D A@ 8, principal, premium or interest")
to:
Chase Manhattan Bank
New York, New York 10019
ABA #021000021
for the Account of New York Life Insurance and Annuity
Corporation
General Account Number 008-0-57001
Notices
With advice of such payments to:
New York Life Insurance and Annuity Corporation
c/o New York Life Insurance Company
51 Madison Avenue
New York, New York 10010-1603
Attention: Treasury Department, Securities Income Section,
Room 209
All other notices and communications to be addressed as first
provided above, with a copy of any notices regarding Defaults or
Events of Default to: Office of the General Counsel, Investment
Section, Room 1104, Telefacsimile Number (212) 576-8340
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 13-3044743
-49-
Accepted as of October 1, 1997:
New York Life Insurance Company
By Lisa Scuderi
Its Investment Manager
New York Life Insurance Company
51 Madison Avenue
New York, New York 10010-1603
Attention: Investment Department,
Private Finance Group, Room 206
Telefacsimile Number: (212) 447-4122
Confirmation Number: (212) 576-6065
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "SEMCO Energy, Inc., 7.20% Senior
Notes due 2007, principal, premium or interest") to:
Chase Manhattan Bank
New York, New York 10019
ABA No. 021-000-021
For the account of New York Life Insurance Company
General Account Number 008-9-00687
Notices
With advice of such payments to:
New York Life Insurance Company
51 Madison Avenue
New York, New York 10010-1603
Attention: Treasury Department, Securities Income Section,
Room 209
Telefacsimile Number: (212) 447-4160
All other notices and communications to be addressed as first
provided above, with a copy of any notices regarding Defaults or
Events of Default to such address, but indicating: Attention:
Office of the General Counsel, Investment Section, Room 1104,
Telefacsimile Number (212) 576-8340
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 13-5582869
-50-
Accepted as of October 1, 1997:
The Equitable Life Assurance
Society of the United States
By Kenneth G. Ostmann
Its Investment Officer
The Equitable Life Assurance Society
of the United States
c/o Alliance Capital Management, L.P.
1345 Avenue of the Americas, 38th Floor
New York, New York 10105
Attention: Alliance Corporate Finance Group
Telephone: (212) 969-1576
Telefacsimile: (212) 969-1466
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "SEMCO Energy, Inc. 7.20% Senior
Notes due 2007, PPN 78412D A@ 8", principal, premium or
interest") to:
The Chase Manhattan Bank, N.A.
1251 Avenue of the Americas
New York, New York 10020
ABA #021-00-0021
Account of: The Equitable Life Assurance Society of the
United States
Account #037-2-409417
Notices
All notices of payment, on or in respect of the Notes, and
written confirmation of each such payment to be addressed:
The Equitable Life Assurance Society of the United States
c/o Alliance Capital Management, L.P.
135 West 50th Street - 6th Floor
New York, New York 10020
Attention: Cash Operations Department
Telephone: (212) 887-2838
Telefacsimile: (212) 887-2222
All notices and communications other than those in respect to
payments to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 13-5570651
-51-
Accepted as of October 1, 1997:
The Equitable of Colorado, Inc.
By Beatriz M. Cuervo
Its Investment Officer
The Equitable of Colorado, Inc.
c/o Alliance Capital Management, L.P.
1345 Avenue of the Americas, 38th Floor
New York, New York 10105
Attention: Alliance Corporate Finance Group
Telephone: (212) 969-1576
Telefacsimile: (212) 969-1466
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "SEMCO Energy, Inc. 7.20% Senior
Notes due 2007, PPN 78412D A@ 8", principal, premium or
interest") to:
The Chase Manhattan Bank, N.A.
1251 Avenue of the Americas
New York, New York 10020
ABA #021-00-0021
Account of: The Equitable of Colorado, Inc.
Account #037-2-406389
Notices
All notices of payment, on or in respect of the Notes, and
written confirmation of each such payment to be addressed:
The Equitable of Colorado, Inc.
c/o Alliance Capital Management, L.P.
135 West 50th Street - 6th Floor
New York, New York 10020
Attention: Cash Operations Department
Telephone: (212) 887-2838
Telefacsimile: (212) 887-2222
All notices and communications other than those in respect to
payments to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 13-3198083
-52-
Accepted as of October 1, 1997:
American United Life Insurance
Company
By Kent R. Adams
Its Vice President
American United Life Insurance Company
One American Square
Post Office Box 368
Indianapolis, Indiana 46206
Attention: Chris Pahlke, Securities Department
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "SEMCO Energy, Inc., 6.83% Senior
Notes due 2002, PPN 78412D A* 0" and identifying the breakdown of
principal and interest and the payment date) to:
Bank of New York
Attn: P & I Department
One Wall Street, 3rd Floor
New York, New York 10286
Window A
Account #186683/AUL
ABA #021000018, BNF: IOC566
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 35-0145825
-53-
Accepted as of October 1, 1997:
Modern Woodmen of America
By J. V. Standaert
Its National Secretary
Modern Woodmen of America
1701 1st Avenue
Rock Island, Illinois 61201
Attention: Investment Department
Telecopier Number: (309) 793-5574
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "SEMCO Energy, Inc., (i) 6.83%
Senior Notes due 2002, PPN 78412D A* 0 or (ii) 7.20% Senior Notes
due 2007, PPN 78412D A@ 8, as the case may be, principal, premium
or interest") to:
Harris Trust and Savings Bank (ABA #071000288)
111 West Monroe Street
Chicago, Illinois 60690
for credit to: Modern Woodmen of America
Account Number 347 904 5
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 36-149-3430
-54-
Accepted as of October 1, 1997:
United of Omaha Life Insurance
Company
By Edwin H. Garrison, Jr.
Its First Vice President
United of Omaha Life Insurance Company
Mutual of Omaha Plaza
Omaha, Nebraska 68175
Attention: Investment Division
Telefacsimile: (402) 351-2913
Confirmation: (402) 351-2583
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "SEMCO Energy, Inc., 6.83% Senior
Notes due 2002, PPN 78412D A* 0, principal, premium or interest")
to:
First Bank, N.A. (ABA #1040-0002-9)
17th and Farnam Streets
Omaha, Nebraska 68102
for credit to: United of Omaha Life Insurance Company
Account Number 1-487-1447-0769
For Payment on: [Name of issue and PPN Number]
Interest Amount:
Principal Amount:
Payable Date:
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payment and written
confirmation of each such payment, to be addressed: Attention:
Investments/Securities Accounting.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0322111
-55-
Accepted as of October 1, 1997:
The Security Mutual Life
Insurance Company of Lincoln,
Nebraska
By Kevin W. Hammond
Its Vice President
Chief Investment Officer
The Security Mutual Life Insurance
Company of Lincoln, Nebraska
200 Centennial Mall North
Lincoln, Nebraska 68508
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "SEMCO Energy, Inc., 7.20% Senior
Notes due 2007, PPN 78412D A@ 8, principal, premium or interest")
to:
National Bank of Commerce (ABA #1040-00045)
13th and O Streets
Lincoln, Nebraska
for credit to: Security Mutual Life
Account Number 40-797-624
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payments and written
confirmation of each such payment to be addressed:
The Security Mutual Life Insurance Company
of Lincoln, Nebraska
200 Centennial Mall North
Lincoln, Nebraska 68508
Attention: Investment Department
Fax: (402) 434-9599
Phone: (402) 434-9500
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0293990
-56-
Accepted as of October 1, 1997:
Mennonite Mutual Aid Association
By Steve Garboden
Its Vice President and
Treasurer
Mennonite Mutual Aid Association
1110 North Main, Box 483
Goshen, Indiana 46527-0483
Attention: Delmar King
Phone: (219) 533-9511, (800) 348-7468
Fax: (219) 534-4381
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "SEMCO Energy, Inc., 7.20% Senior
Notes due 2007, PPN 78412D A@ 8, principal, premium or interest")
to:
Fed Cincinnati
ABA #0420 00314
Fifth Cin/Trust_Account #01-003-2624500
Account Name: Mennonite Mutual Aid Association
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 35-6059333
-57-