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EXHIBIT 4(b)
SECOND SUPPLEMENTAL INDENTURE
Dated as of June 29, 2000
between
SEMCO ENERGY, INC.,
AS ISSUER
and
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
AS TRUSTEE
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.......................................................................................1
Section 1.1 Certain Terms Defined............................................................1
ARTICLE II ISSUE, EXECUTION, FORM AND REGISTRATION OF
SECURITIES
Section 2.1 Authentication and Delivery of Securities......................................4
Section 2.2 Execution of Securities........................................................4
Section 2.3 Certificate of Authentication..................................................4
Section 2.4 Form, Denomination and Date of Securities......................................4
Section 2.5 Global Securities..............................................................7
Section 2.6 Original Issue Discount........................................................7
ARTICLE III TERMS OF ROARS..................................................................................8
Section 3.1 Interest and Interest Payment Dates............................................8
Section 3.2 Remarketing and Determination of Interest Rate to Maturity.....................9
(i) Interest Rate to Maturity...............................................9
(ii) Floating Rate Period...................................................11
(iii) Notification of Results; Settlement....................................13
Section 3.3 Redemption....................................................................14
ARTICLE IV MISCELLANEOUS...................................................................................14
Section 4.1 Ratification of Indenture.....................................................15
Section 4.2 Trustee Not Responsible for Recitals..........................................15
Section 4.3 Governing Law.................................................................15
Section 4.4 Separability..................................................................15
Section 4.5 Counterparts..................................................................15
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SECOND SUPPLEMENTAL INDENTURE, dated as of June 29, 2000 (the "Second
Supplemental Indenture"), between SEMCO Energy, Inc., a corporation duly
organized and existing under the laws of the State of Michigan, (the "Company"),
and Bank One Trust Company, National Association, a national banking
association, as trustee (the "Trustee")
WHEREAS, the Company executed and delivered the indenture, dated as of
October 23, 1998 (the "Base Indenture"), to the Trustee to provide for the
future issuance of the Company's debentures, notes, bonds or other evidences of
indebtedness (the "Securities"), to be issued from time to time in one or more
series as might be determined by the Company under the Base Indenture; and
WHEREAS, the Company entered into a First Supplemental Indenture dated as
of June 16, 2000, to the Base Indenture; and
WHEREAS, pursuant to the terms of the Base Indenture, the Company desires
to provide for the establishment of a new series of its Securities to be known
as its 8.95% Remarketable or Redeemable Securities Due 2008 (the "ROARS(sm)" or
the "Securities"), the form and substance of such Securities and the terms,
provisions and conditions thereof to be set forth as provided in the Base
Indenture as heretofore supplemented and as further supplemented by this Second
Supplemental Indenture (together, the "Indenture"); and
WHEREAS, the Company has requested that the Trustee execute and deliver
this Second Supplemental Indenture and all requirements necessary to make this
Second Supplemental Indenture a valid instrument in accordance with its terms,
and to make the Securities, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company and all acts and
things necessary have been done and performed to make this Second Supplemental
Indenture enforceable in accordance with its terms, and the execution and
delivery of this Second Supplemental Indenture has been duly authorized in all
respects.
NOW THEREFORE, in consideration of the purchase and acceptance of the
Securities by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Securities and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in this
Second Supplemental Indenture;
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(b) a term defined anywhere in this Second Supplemental Indenture has the
same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect
interpretation;
(e) the following terms have the meanings given to them in this Section
1.1(e);
"Agent Members" has the meaning set forth in Section 2.4(b).
"Applicable Spread" has the meaning set forth in Section 3.2(b)(i).
"Beneficial Owners" has the meaning set forth in Section 3.2(b)(i).
"Bid" means the Fixed Rate Bid or the Floating Rate Bid, as the case may
be.
"Cedel" has the meaning set forth in Section 2.4(b).
"Comparable Treasury Issues" has the meaning set forth in Section
3.2(b)(i).
"Comparable Treasury Price" has the meaning set forth in Section 3.2(b)(i).
"Dollar Price" has the meaning set forth in Section 3.2(b)(i).
"Euroclear" has the meaning set forth in Section 2.4(b).
"Fixed Rate Bid" has the meaning set forth in Section 3.2(b)(i).
"Fixed Rate Determination Date" has the meaning set forth in Section 3
2(b)(i).
"Fixed Rate Remarketing Date" has the meaning set forth in Section 3.1.
"Floating Period Interest Rate" has the meaning set forth in Section 3
2(b)(ii).
"Floating Period Notification Date" has the meaning set forth in Section 3
2(b)(ii).
"Floating Period Option" has the meaning set forth in Section 3.2(b)(ii).
"Floating Period Termination Date" has the meaning set forth in Section
3,2(b)(ii).
"Floating Period Termination Notification Date" has the meaning set forth
it Section 3.2(b)(ii).
"Floating Rate Bid" has the meaning set forth in Section 3.2(b)(ii).
"Floating Rate Period" has the meaning set forth in Section 3.2(b)(ii).
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"Floating Rate Remarketing Date(s)" has the meaning set forth in Section
3.2(b)(ii).
"Floating Rate Reset Period" has the meaning set forth in Section 3.2
(b)(ii).
"Floating Rate Spread" has the meaning set forth in Section 3.2(b)(ii).
"Floating Rate Spread Determination Date" has the meaning set forth in
Section 3.2(b)(ii).
"Global Security" has the meaning set forth in Section 2.4(b).
"Original Issue Date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security or
portion thereof) in exchange for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.
"Reference Corporate Dealers" has the meaning set forth in Section 3
2(b)(i).
"Reference Money Market Dealer" has the meaning set forth in Section
3.2(b)(ii).
"Reference Rate" has the meaning set forth in Section 3.2(b)(ii).
"Reference Rate Determination Date" has the meaning set forth in Section
3.2(b)(ii).
"Reference Treasury Dealer" has the meaning set forth in Section 3.2(b)(i).
"Reference Treasury Dealer Quotations" has the meaning set forth in Section
3..2(b)(i).
"Remaining Scheduled Payments" has the meaning set forth in Section
3.2(b)(i).
"Remarketing Date(s)" has the meaning set forth in Section 3.1.
"Telerate Page 500" has the meaning set forth in Section 3.2(b)(i).
"Treasury Rate" has the meaning set forth in Section 3.2(b)(i).
"U.S. Depositary" means The Depository Trust Company.
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ARTICLE II
ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES
SECTION 2.1 AUTHENTICATION AND DELIVERY OF SECURITIES.
Upon the execution and delivery of this Indenture, or from time to time
thereafter, Securities in an aggregate principal amount not in excess of
$160,000,000 (or such higher amount as may be authorized by a resolution of the
Board of Directors of the Company or a committee thereof) may be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Securities to or upon the written order
of the Company, signed by both (a) its Chairman of the Board of Directors, or
its President or any Vice President and (b) by its Chief Financial Officer, or
its Secretary or any Assistant Secretary, or its Treasurer or any Assistant
Treasurer without any further action by the Company. The Securities shall be
direct, unconditional obligations of the Company and shall rank pari passu
without preference among themselves and equally in priority of payment with all
other present and future, unsecured senior indebtedness of the Company.
SECTION 2.2 EXECUTION OF SECURITIES.
The Securities shall be signed on behalf of the Company by both (a) its
Chairman of the Board of Directors or its President or any Vice President and
(b) by its Chief Financial Officer or its Secretary or its Assistant Secretary
or its Treasurer or any Assistant Treasurer, under its corporate seal which may,
but need not, be attested. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the Company
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any Security that
has been duly authenticated and delivered by the Trustee.
SECTION 2.3 CERTIFICATE OF AUTHENTICATION.
Only such Securities as shall bear thereon a certificate of authentication
substantially in the form recited in the form of Security attached as Exhibit A
hereto, executed by the Trustee by manual signature of one of its authorized
signatories, shall be entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such certificate by the Trustee upon any Security
executed by the Company shall be conclusive evidence that the Security so
authenticated has been duly authenticated and delivered hereunder and that the
Holder is entitled to the benefits of this Indenture.
SECTION 2.4 FORM, DENOMINATION AND DATE OF SECURITIES.
(a) The Securities and the Trustee's certificate of authentication shall be
substantially in the form set forth in the form of Security attached as Exhibit
A hereto. The Securities shall be numbered, lettered, or otherwise distinguished
in such manner or in accordance with such plans as the officers of the Company
executing the same may determine with the approval of the Trustee.
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Any of the Securities may be issued with appropriate insertions, omissions,
substitutions and variations and may have imprinted or otherwise reproduced
thereon such legend or legends, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law or with any rules or
regulations pursuant thereto, or with the rules of any securities market in
which the Securities are admitted to trading, or to conform to general usage.
(b) (i) This Section 2.4(b)(i) shall apply only to Securities in
global form ("Global Securities") deposited with the U.S. Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.4(b)(i), authenticate and deliver initially Global Securities that (a)
shall be registered in the name of the U.S. Depositary for such Global
Securities or the nominee of such U.S. Depositary, (b) shall be deposited on
behalf of Agent Members (as defined herein) with the Trustee as custodian for
the U.S. Depositary and (c) shall bear legends substantially to the following
effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
[INSERT NAME AND ADDRESS OF U.S. DEPOSITARY] TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IN EXCHANGE FOR THIS CERTIFICATE OR ANY PORTION HEREOF IS REGISTERED
IN THE NAME OF [INSERT NAME OF U.S. NOMINEE OF DEPOSITARY], OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF [INSERT
NAME OF U.S. DEPOSITARY], OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF [INSERT NAME OF U.S. DEPOSITARY] (AND ANY
PAYMENT HEREON IS MADE TO [INSERT NAME OF NOMINEE OF U.S. DEPOSITARY]), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON OTHER THAN (INSERT NAME OF U.S. DEPOSITARY OR A NOMINEE THEREOF] IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, [INSERT NAME OF NOMINEE
OF U.S. DEPOSITARY] HAS AN INTEREST HEREIN".
"TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF [INSERT NAME OF U.S. DEPOSITARY] OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTION 305 OF THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF".
Members of, or participants in, a U.S. Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the U.S. Depositary or under any Global Security, and the U.S.
Depositary may be treated by the Company, the Trustee, and any agent of the
Company or the Trustee as the absolute owner of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein
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shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the U.S. Depositary or impair, as between the U.S.
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of any security.
(ii) This Section 2.4(b)(ii) shall apply only to the Global Security
deposited on behalf of the purchasers of the Securities represented thereby with
the Trustee as custodian for the U.S. Depositary for credit to their respective
accounts (or to such other accounts as they may direct) at Euroclear System
("Euroclear") or Cedel, S.A. ("Cedel") insofar as interests in the Global
Security are held by the Agent Members for Euroclear or Cedel.
The provisions of the "Operating Procedures of the Euroclear System" and
the "Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations" and "Instructions to Participants" of Cedel, respectively, shall be
applicable to such Global Security insofar as interests therein are held by the
Agent Members for Euroclear and Cedel. Account holders or participants in
Euroclear and Cedel shall have no rights under this Indenture with respect to
the Global Security, and the nominee of the U.S. Depositary may be treated by
the Company and the Trustee and any agent of the Company or the Trustee as the
owner of the Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the U.S. Depositary or impair, as
between the U.S. Depositary and its Agent Members, the operation of customary
practices governing the exercise of the rights of a holder of any security.
(c) Each Security shall be dated the date of its authentication and shall
bear interest from the applicable date, and shall be payable on the dates
specified on the face of the form of Security attached as Exhibit A hereto.
(d) The Person in whose name any Security is registered at the close of
business on the record date specified in the Securities with respect to any
Interest Payment Date shall be entitled to receive the interest, if any, payable
on such Interest Payment Date notwithstanding any transfer or exchange of such
security subsequent to the record date and prior to such Interest Payment Date,
except if and to the extent the Company shall default in the payment of the
interest due on such Interest Payment Date, in which case such defaulted
interest shall be paid to the Persons in whose names Outstanding Securities are
registered at the close of business on a subsequent special record date, to be
established (together with the related payment date) by the Company with the
consent of the Trustee. Such special record date shall not be more than 15 nor
less than 10 Business Days prior to the payment date. Not more than 15 days
prior to the special record date, the Company (or the Trustee, in the name of
and the expense of the Company) shall mail to Holders a notice that states the
special record date, the related payment date and the amount of interest to be
paid. Notice of the proposed payment of such defaulted interest and the special
record date therefor having been mailed as aforesaid, such defaulted interest
shall be paid to the Persons in whose names the Securities are registered on
such special record date.
(e) The Securities shall be issuable in the denominations specified in the
form of Security attached as Exhibit A hereto.
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SECTION 2.5 GLOBAL SECURITIES.
(a) Portions of a Global Security deposited with the U.S. Depositary
pursuant to Section 2.4 shall be transferred in certificated form to the
beneficial owners thereof only if such transfer complies with Section 305 of the
Base Indenture and (i) the U.S. Depositary notifies the Company that it is
unwilling or unable to continue as U.S. Depositary for such Global Security or
if at any time such U.S. Depositary ceases to be a "clearing agency" registered
under the Exchange Act and a successor depositary is not appointed by the
Company within 90 days of such notice, or (ii) an Event of Default has occurred
and is continuing with respect to the Securities and payment of principal
thereof and interest thereon has been accelerated.
(b) Portions of any Global Security that are transferable to the
beneficial owners thereof pursuant to this Section 2.5 shall be surrendered by
the U.S. Depositary to the Trustee at its New York office for registration of
transfer, in whole or from time to time in part, without charge and the Trustee
shall authenticate and deliver, upon such registration of transfer of each
portion of such Global Security, an equal aggregate principal amount of
Securities of authorized denominations. Any portion of a Global Security whose
registration is transferred pursuant to this Section 2.5 shall be executed,
authenticated and delivered only in the denominations specified in the form of
Security attached as Exhibit A hereto and registered in such names as the U.S.
Depositary shall direct.
(c) Subject to the provisions of Section 2.4(b) above, the registered
Holder of any Global Security may grant proxies and otherwise authorize any
person, including Agent Members and persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
paragraph (a) of this Section 2.5, the Company shall promptly make available to
the Trustee a reasonable supply of certificated Securities in definitive fully,
registered form without interest coupons.
SECTION 2.6 ORIGINAL ISSUE DISCOUNT.
If the original issue discount rules are applicable, the Company shall file
with the Trustee promptly at the end of each calendar year (i) a written notice
specifying the amount of original issue discount (including daily rates and
accrual periods) accrued on Outstanding Securities as of the end of such year
and (ii) such other specific information relating to such original issue
discount as may then be relevant under the Internal Revenue Code of 1986, as
amended from time to time.
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ARTICLE III
TERMS OF ROARS
SECTION 3.1 INTEREST AND INTEREST PAYMENT DATES.
The ROARS shall bear interest at 8.95 % per annum, for the period from June
29, 2000 to but excluding July 1, 2003, which is the first Remarketing Date. The
Company shall pay interest on the ROARS semi-annually until the first
Remarketing Date on January 1 and July 1 of each year, commencing January 1,
2001. Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.
The ROARS shall accrue interest from the Fixed Rate Remarketing Date,
semi-annually on each day that is a six-month anniversary of such date. Interest
on the ROARS from the Fixed Rate Remarketing Date shall be computed on the basis
of a 360-day year consisting of twelve 30-day months. Interest on the ROARS
accruing during any Floating Rate Reset Period shall be payable on the next
following Reference Rate Reset Date if such date is a Business Day or on the
next following Business Day. Interest on the ROARS during the Floating Rate
Period shall be computed on the basis of the actual number of days in such
Floating Rate Reset Period over a 360-day year.
Interest on the ROARS payable on any Interest Payment Date shall be payable
to the persons in whose name the ROARS are registered, on the fifteenth calendar
day (whether or not a Business Day) immediately preceding the related Interest
Payment Date. Interest payments on the ROARS shall be in the amount of interest
accrued from and including the next preceding Interest Payment Date (or from and
including June 29, 2000 if no interest has been paid or duly provided with
respect to the ROARS) to but excluding the relevant Interest Payment Date,
Remarketing Date or Maturity Date, as the case may be.
For this purpose, the following terms shall have the following meanings:
"FIXED RATE REMARKETING DATE" means July 1, 2003 assuming the Remarketing
Dealer has elected to purchase the ROARS and the Company has not elected to
exercise its Floating Period Option, or the subsequent Remarketing Date in the
event that the Company has elected to exercise its Floating Period Option.
"REMARKETING DATE(S)" means July 1, 2003, assuming that the Remarketing
Dealer has elected to purchase the ROARS and the Company has not elected to
exercise its Floating Period Option on July 1, 2003 and one of the first days of
each month thereafter until July 1, 2004, if the Company has elected to exercise
its Floating Period Option.
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SECTION 3.2 REMARKETING AND DETERMINATION OF INTEREST RATE TO MATURITY.
The Remarketing Dealer's obligations set forth herein shall be performed
pursuant to the Remarketing Agreement.
(a) MANDATORY TENDER.
If the Remarketing Dealer gives notice to the Company and the Trustee no
earlier than 20 Business Days prior to the first Remarketing Date and not later
than 4:00 p.m., New York City time, on the 15th Business Day prior to the first
Remarketing Date, of its intention to purchase the ROARS for remarketing on such
Remarketing Date (the "Notification Date"), the ROARS shall be automatically
tendered, or deemed tendered, to the Remarketing Dealer for purchase on such
Remarketing Date, except in certain circumstances described in Section 3.3. If
the ROARS are tendered for remarketing, the Remarketing Dealer shall sell the
total aggregate principal amount of the ROARS at the Dollar Price, to the
Reference Corporate Dealer or the Reference Money Market Dealer, whichever is
applicable, providing the lowest Bid. If two or more of the applicable Reference
Dealers provide the lowest Bid, the Remarketing Dealer shall sell the ROARS to
one or more of such Reference Dealers, as it determines in its sole discretion.
If the Remarketing Dealer elects to remarket the ROARS, the obligation of the
Remarketing Dealer to purchase the ROARS on the applicable Remarketing Date is
subject to the conditions set forth in the Remarketing Agreement. If for any
reason the Remarketing Dealer does not purchase all of the ROARS on the first
Remarketing Date, the Company shall be required to redeem the ROARS at a price
equal to the principal amount thereof, plus all accrued and unpaid interest, if
any, if such Remarketing Date is the first Remarketing Date, or at the Dollar
Price, plus accrued and unpaid interest, if any, on any such subsequent
Remarketing Date.
(b) REMARKETING. The Interest Rate to Maturity shall be established by the
Remarketing Dealer in accordance with the following procedures:
(i) INTEREST RATE TO MATURITY.
If the Remarketing Dealer elects to purchase the ROARS, then by 3:30 p.m.,
New York City time, on the third Business Day immediately preceding any
Remarketing Date (a "Floating Rate Spread Determination Date" or the "Fixed Rate
Determination Date", depending on the following election, each a "Determination
Date") the Remarketing Dealer will determine the Floating Rate Spread in the
case that the Company has elected the Floating Period Option, or otherwise the
Interest Rate to Maturity to the nearest one hundredth (0.01) of one percent per
annum unless the Company has chosen to redeem, or is required to redeem, the
ROARS. Each Floating Period Interest Rate will equal the sum of a Reference Rate
and a Floating Rate Spread. The Interest Rate to Maturity shall be equal to the
sum of 6.50% (the "Base Rate") and the Applicable Spread, which will be based on
the Dollar Price of the ROARS. The Interest Rate to Maturity for the ROARS
announced by the Remarketing Dealer, absent manifest error, shall be binding and
conclusive upon the holders of beneficial interests in the ROARS (the
"Beneficial Owners"), the Company and the Trustee.
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For this purpose, the following terms shall have the following meanings:
"APPLICABLE SPREAD" shall be the lowest Bid, expressed as a spread (in the
form of a percentage or in basis points) above the Base Rate for the ROARS,
obtained by the Remarketing Dealer by 3:30 p.m., New York City time, on the
Fixed Rate Determination Date from the Bids quoted to the Remarketing Dealer by
five Reference Corporate Dealers. If fewer than five Reference Corporate Dealers
submit Bids as set forth in this section (b)(i) of Section 3.2, then the
Applicable Spread shall be the lowest such Bid obtained as set forth in this
subsection (b)(i) of Section 3.2. A "Fixed Rate Bid" will be an irrevocable
offer to purchase the total aggregate outstanding principal amount of the ROARS
at the Dollar Price, but assuming (i) a settlement date that is the Fixed Rate
Remarketing Date applicable to such ROARS, without accrued interest, (ii) a
maturity date that is the fifth anniversary of the Fixed Rate Remarketing Date
and (iii) a stated annual interest rate equal to the relevant Base Rate plus the
spread bid by the applicable Reference Corporate Dealer.
"COMPARABLE TREASURY ISSUES" for the ROARS means the U.S. Treasury security
or securities selected by the Remarketing Dealer, as of the first Remarketing
Date, as having an actual or interpolated maturity or maturities comparable to
the remaining term of the ROARS being purchased by the Remarketing Dealer.
"COMPARABLE TREASURY PRICE" means, with respect to the first Remarketing
Date, (i) the offer prices for the Comparable Treasury Issues (expressed, in
each case, as a percentage of its principal amount) at 12:00 noon, New York City
time, on the first Determination Date, as set forth on "Telerate Page 500" (or
such other page as may replace "Telerate Page 500"), or (ii) if such page (or
any successor page) is not displayed or does not contain such offer prices on
the first Determination Date, (A) the average of the Reference Treasury Dealer
Quotations for the first Remarketing Date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or (B) if the Remarketing
Dealer obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such Reference Treasury Dealer Quotations. "Telerate Page 500",
means the display designated as "Telerate Page 500" on Dow Xxxxx Markets (or
such other page as may replace Telerate Page 500 on such service) or such other
service displaying the offer prices specified in clause (i) above as may replace
Dow Xxxxx Markets. "Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and the Fixed Rate Remarketing Date, the offer
prices for the Comparable Treasury Issues (expressed in each case as a
percentage of its principal amount) quoted in writing to the Remarketing Dealer
by such Reference Treasury Dealer by 3:30 p.m., New York City time, on the first
Determination Date.
"DOLLAR PRICE" means, with respect to the ROARS, the present value, as of
the first Remarketing Date, of the Remaining Scheduled Payments for such ROARS
discounted to the first Remarketing Date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate.
"FIXED RATE DETERMINATION DATE" means the third Business Day prior to the
Fixed Rate Remarketing Date.
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"REFERENCE CORPORATE DEALER" means each of up to five leading dealers of
publicly traded debt securities, including debt securities of the Company, which
shall be selected by the Company. The Company shall advise the Remarketing
Dealer of its selection of Reference Corporate Dealers no later than five
Business Days prior to the Fixed Rate Remarketing Date. One of such Reference
Corporate Dealers selected by the Company shall be Banc of America Securities
LLC, if it is then the Remarketing Dealer.
"REFERENCE TREASURY DEALER" means each of up to five dealers to be selected
by the Company, and their respective successors; provided that if any of the
foregoing or their affiliates ceases to be a primary U.S. Government securities
dealer (a "Primary Treasury Dealer"), the Company shall substitute therefor
another Primary Treasury Dealer. One of such Reference Treasury Dealers selected
by the Company shall be Banc of America Securities LLC, if it is then the
Remarketing Dealer.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the ROARS, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate applicable to such ROARS, that would be due after
the first Remarketing Date to and including the Stated Maturity Date; provided
that if such Remarketing Date is not an Interest Payment Date with respect to
such ROARS, the amount of the next succeeding scheduled interest payment
thereon, calculated at the Base Rate, will be reduced by the amount of interest
accrued thereon, calculated at such Base Rate only, to the first Remarketing
Date.
"TREASURY RATE" for the ROARS means, with respect to the first Remarketing
Date, the rate per annum equal to the semi-annual equivalent yield to maturity
or interpolated (on a day count basis) yield to maturity of the Comparable
Treasury Issues, assuming a price for the Comparable Treasury Issues (expressed
as a percentage of their principal amounts) equal to the Comparable Treasury
Price for such Remarketing Date.
(ii) FLOATING RATE PERIOD.
Following the Remarketing Dealer's election to purchase the ROARS, but
prior to the fourth Business Day prior to the first Remarketing Date (the
"Floating Period Notification Date"), the Company may elect to exercise its
Floating Period Option. Under these circumstances, the ROARS shall be remarketed
at floating rate for a period of one year, or until such date which otherwise
would be the Reference Rate Reset Date following the date on which the Company
elects to terminate such Floating Rate Period (the "Floating Rate Period
Termination Notification Date"), whichever is sooner (the "Floating Period
Termination Date"). In the event that the Company elects to exercise its
Floating Period Option, the maturity of the ROARs will be extended to the fifth
anniversary of the Fixed Rate Remarketing Date, not to exceed July 1, 2009.
The amount of the interest for each day that the ROARS are outstanding
during the Floating Rate Period will be calculated by dividing the Floating
Period Interest Rate in effect for such day by 360 and multiplying the result by
the Dollar Price. The amount of interest to be paid for any Floating Rate Reset
Period will be calculated by adding the daily interest amounts for
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each day in the Floating Rate Reset Period. The Floating Period Interest Rate
for the ROARS announced by the Remarketing Dealer, absent manifest error, will
be binding and conclusive upon the holders of beneficial interests in such ROARS
(the "Beneficial Owners"), the Company and the Trustee.
For this purpose the following terms shall have the following meanings:
"FLOATING PERIOD INTEREST RATE" means the sum of the Reference Rate and the
Floating Rate Spread.
"FLOATING PERIOD OPTION" means the Company's right, on any date subsequent
to the Remarketing Dealer's election to purchase the ROARS but prior to the
fourth Business Day prior to the first Remarketing Date, to require the
Remarketing Dealer to remarket the ROARS at the Floating Period Interest Rate.
"FLOATING RATE PERIOD" means the period from (and including) the Floating
Rate Remarketing Date to (but excluding) the Floating Period Termination Date.
"FLOATING RATE REMARKETING DATE" means July 1, 2003 in the event the
Company has elected to exercise its Floating Period Option.
"FLOATING RATE RESET PERIOD" means the period from (and including) the
first Reference Rate Reset Date to (but excluding) the next following Reference
Rate Reset Date and thereafter the period from (and including) a Reference Rate
Reset Date to (but excluding) the next following Reference Rate Reset Date;
provided that the final Floating Rate Reset Period shall run to (but exclude)
the Floating Period Termination Date.
"FLOATING RATE SPREAD" shall be the lowest Bid expressed as a spread (in
the form of a percentage or in basis points) above the Reference Rate for the
ROARS, obtained by the Remarketing Dealer at 3:30 p.m., New York City time, on
the third Business Day prior to the Floating Rate Remarketing Date, from the
Bids quoted to the Remarketing Dealer by five Reference Money Market Dealers. If
fewer than five Reference Money Market Dealers submit Bids, as set forth in this
subsection (b)(ii) of Section 3.2, then the Floating Rate Spread shall be the
lowest such Bid obtained as set forth in this subsection (b)(ii) of Section 3.2.
A "Floating Rate Bid" will be an irrevocable offer to purchase the total
aggregate outstanding principal amount of the ROARS at the Dollar Price, but
assuming (i) a settlement date that is the Floating Rate Remarketing Date,
without accrued interest, (ii) a maturity date equal to the Floating Period
Termination Date, (iii) a stated annual interest rate equal to the Reference
Rate plus the Floating Rate Spread, (iv) that the ROARS are callable by the
Remarketing Dealer, at the Dollar Price, on any Reference Rate Reset Date after
the first Remarketing Date or on the Floating Period Termination Date and (v)
that the ROARS will be repurchased by the Company at the Dollar Price on the
Floating Period Termination Date, if not previously called by the Remarketing
Dealer.
"FLOATING RATE SPREAD DETERMINATION DATE" means the third Business Day
prior to the Floating Rate Remarketing Date.
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"REFERENCE MONEY MARKET DEALER" means each of up to five leading dealers of
publicly traded debt securities, including debt securities of the Company, which
shall be selected by the Company, who are also leading dealers in money market
instruments. The Company shall advise the Remarketing Dealer of its selection of
Reference Money Market Dealers no later than five Business Days prior to the
Floating Rate Remarketing Date. One of such Reference Money Market Dealers
selected by the Company shall be Banc of America Securities LLC, if it is then
the Remarketing Dealer.
"REFERENCE RATE" means the rate for each Floating Rate Reset Period which
shall be the rate for deposits in U.S. Dollars for a period of one month each
which appears on the Telerate Page 3750 (or any successor page) as of 11:00
a.m., London time, on the applicable Reference Rate Determination Date. If no
rate appears on Telerate Page 3750 on the Reference Rate Determination Date, the
Remarketing Dealer will request the principal London offices of four major
reference banks in the London Inter-Bank Market, to provide it with its offered
quotation for deposits in U.S. dollars for the period of one month, commencing
on the first day of the Floating Rate Reset Period, to prime banks in the London
Inter-Bank Market at approximately 11:00 a.m., London time, on that Reference
Rate Determination Date and in a principal amount that is representative for a
single transaction in U.S. Dollars in that market at that time. If at least two
quotations are provided, then the Reference Rate will be the average of those
quotations. If fewer than two quotations are provided, then the Reference Rate
will be the average (rounded, if necessary, to the nearest one hundredth of a
percent) of the rates quoted at approximately 11:00 a.m., New York City time, on
the Reference Rate Determination Date by three major banks in New York City
selected by the Remarketing Dealer for loans in U.S. Dollars to leading European
banks, having a one-month maturity and in a principal amount that is
representative for a single transaction in U.S. dollars in that market at that
time. If the banks selected by the Remarketing Dealer are not providing
quotations in the manner described by this paragraph, the rate for the Floating
Rate Reset Period following the Reference Rate Determination Date will be the
rate in effect on that Reference Rate Determination Date.
"REFERENCE RATE DETERMINATION DATE" shall be the second day preceding each
Reference Rate Reset Date. In the event the Reference Rate Determination Date
falls on a non-Business Day in London, the interest rate shall reset on the
following Business Day unless such Business Day would move the Reference Rate
Determination Date into the next calendar month, in which case it shall be the
immediately preceding Business Day.
"REFERENCE RATE RESET DATE" means July 1, 2003 and the first day of each
month thereafter until but excluding the Floating Period Termination Date.
(iii) NOTIFICATION OF RESULTS; SETTLEMENT.
Subject to the Remarketing Dealer's election to remarket the ROARS and to
the Company's election not to exercise its Floating Period Option, as set forth
in subsection (b)(ii) of this Section 3.2, the Remarketing Dealer shall notify
the Company, the Trustee and the U.S. Depository by telephone, confirmed in
writing (which may include facsimile or other electronic transmission), by 4:00
p.m., New York City time, on the Fixed Rate Determination Date of the Interest
Rate to Maturity of the ROARS effective from and including the Fixed Rate
Remarketing Date.
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SECTION 3.3 REDEMPTION.
(a) Mandatory Redemption.
The Company shall be required to redeem the ROARS in whole on the
applicable Remarketing Date at a price equal to 100% of the aggregate principal
amount of the ROARS, if such Remarketing Date is the first Remarketing Date, or
at the Dollar Price on any subsequent Remarketing Date, plus all accrued and
unpaid interest, if any, to such Remarketing Date, in the event that (i) the
Remarketing Dealer for any reason does not elect by notice to the Company and
the Trustee not later than such Notification Date, to purchase the ROARS for
remarketing on such Remarketing Date, (ii) prior to any Remarketing Date, the
Remarketing Dealer resigns and no successor has been appointed on or before such
Determination Date, (iii) at any time after the Remarketing Dealer elects on the
Notification Date to remarket such ROARS, the Remarketing Dealer elects to
terminate the Remarketing Agreement in accordance with its terms, (iv) the
Remarketing Dealer for any reason does not notify the Company of the Floating
Period Interest Rate or of the Interest Rate to Maturity by 4:00 p.m., New York
City time, on the applicable Determination Date, (v) the Remarketing Dealer for
any reason does not deliver the purchase price of such ROARS to the Trustee on
the Business Day immediately preceding such Remarketing Date or does not
purchase all tendered ROARS on such Remarketing Date, or (vi) the Company for
any reason fails to redeem the ROARS from the Remarketing Dealer following the
Company's election to effect such redemption as set forth in subsection (b) of
this Section 3.3 below.
(b) Optional Redemption.
If the Remarketing Dealer elects to remarket the ROARS, the Company shall
notify the Remarketing Dealer and the Trustee, not later than 4:00 p.m. New York
City time on the Business Day immediately preceding any Determination Date, if
the Company irrevocably elects to exercise its right to redeem the ROARS, in
whole but not in part, from the Remarketing Dealer on the first Remarketing Date
or on the Floating Period Termination Date immediately following such
Determination Date. If the Company so elects to redeem the ROARS, the Company
shall redeem the ROARS in whole on the first Remarketing Date or on the
subsequent Remarketing Date immediately following such Determination Date at the
Dollar Price, in each case, plus accrued and unpaid interest, if any, to such
Remarketing Date.
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ARTICLE IV
MISCELLANEOUS
SECTION 4.1. Ratification of Indenture.
The Indenture as supplemented by this Second Supplemental Indenture, is in
all respects ratified and confirmed, and this Second Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein and
therein provided.
SECTION 4.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
First Supplemental Indenture.
SECTION 4.3. Governing Law.
This Second Supplemental Indenture and each Security shall be deemed to be
a contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State, without
regard to conflicts of laws principles.
SECTION 4.4. Separability.
In case any one or more of the provisions contained in this Second
Supplemental Indenture or in the Securities shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Second
Supplemental Indenture or of the Securities, but this Second Supplemental
Indenture and the Securities shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
SECTION 4.5. Counterparts.
This Second Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental
Indenture to be duly executed by their respective officers thereunto duly
authorized, on the date or dates indicated in the acknowledgments and as of the
day and year first above written.
SEMCO ENERGY, INC.
as Issuer
By:
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman of the Board
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
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EXHIBIT A
FORM OF SECURITY
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS
CERTIFICATE OR ANY PORTION HEREOF IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OTHER THAN THE
DEPOSITORY TRUST COMPANY OR CEDE & CO. IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 305 OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
SEMCO ENERGY, INC.
8.95% REMARKETABLE OR REDEEMABLE SECURITIES (ROARS(sm))
DUE 2008 (REMARKETING DATE JULY 1, 2003)
CUSIP: 78412D AD1
NO. 01
ORIGINAL ISSUE DATE: June 29, 2000
INTEREST RATE TO
REMARKETING DATE: 8.95%
REMARKETING DATE July 1, 2003
INTEREST RATE TO MATURITY: See Further Provisions Set Forth Herein
MATURITY DATE: July 1, 2008
ISSUE PRICE: 99.759%
INTEREST PAYMENT DATES: January 1 and July 1, commencing
January 1, 2001
20
SEMCO Energy, Inc., a corporation duly organized and existing under the
laws of the State of Michigan (hereinafter referred to as the "Issuer"), for
value received hereby promises to pay to Cede & Co. or registered assigns the
principal sum of $ Dollars at the Issuer's office or agency for said
purpose initially at the designated corporate trust operations office of Bank
One Trust Company, National Association, as Trustee (the "Trustee") on July 1,
2008 (unless and to the extent earlier redeemed or repaid prior to such maturity
date), or at such other maturity date determined in accordance with the terms
hereof, in such coin or currency of the United States of America as the time of
payment shall be legal tender for the payment of public and private debts, and
to pay interest semi-annually in arrears on January 1 and July 1 of each year,
commencing January 1, 2001, to the Remarketing Date specified above, on said
principal sum in like coin or currency at the Interest Rate to Remarketing Date
specified above, and thereafter, subject to the terms and conditions set forth
herein, at the interest rate determined by the Remarketing Dealer (as defined on
the reverse hereof) in accordance with the procedures set forth on the reverse
hereof ("Floating Rate Spread" or "Interest Date to Maturity"), at said offices
or agencies from the most recent interest payment date to which interest on the
Securities has been paid or duly provided for, unless the date hereof is a date
to which interest on the Securities has been paid or duly provided for, in which
case from the date of this Security, or unless no interest has been paid or duly
provided for on the Securities, in such case from June 29, 2000. Notwithstanding
the foregoing, if the date hereof is after January 1 or July 1, as the case may
be, and before the following January 1 or July 1, this Security shall bear
interest from such January 1 or July 1; provided that if the Issuer shall
default in the payment of interest due on such January 1 or July 1, then this
Security shall bear interest from the immediately preceding January 1 or July 1
to which interest on the Securities has been paid or duly provided for, or, if
no interest has been paid or duly provided for on the Securities, from June 29,
2000.
The interest so payable on any Interest Payment Date will, except as
otherwise provided in the Indenture (as defined on the reverse hereof), be paid
to the Person in whose name this Security is registered at the close of business
on the fifteenth calendar day (whether or not a Business Day) immediately
preceding such Interest Payment Date; provided, that principal and interest
shall be paid by mailing a check for such to or upon the written order of the
registered Holders of Securities entitled thereto at their last address as it
appears on the Securities Register or, upon written application to the Trustee
by a Holder of $1,000,000 or more in aggregate principal amount of Securities,
by wire transfer of immediately available funds to an account maintained by such
Holder with a bank or other financial institution. Interest on this Security
shall be computed on the basis of a 360-day year of twelve 30-day months.
Interest on overdue principal and (to the extent permitted by applicable
law) on overdue installments of interest shall accrue at the then applicable
interest rate of this Security.
Reference is made to the further provisions set forth on the reverse
hereof. Such further provisions shall for all purposes have the same effect as
though fully set forth at this place.
This Security shall not be entitled to any benefit under the Indenture, or
be valid or obligatory, until the certificate of authentication hereof shall
have been duly signed by the Trustee acting under the Indenture.
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IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
under its corporate seal.
SEMCO ENERGY, INC., as Issuer
[Seal]
ATTEST: By
----------------------------------
Name:
----------------------------------
By: Title:
------------------------------- ----------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
Bank One Trust Company, National
Association
Dated:
--------------------------------------
Authorized Signatory
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REVERSE OF SECURITY
SEMCO ENERGY, INC.
8.95% Remarketable or Redeemable Securities (ROARS(sm))
Due 2008 (Remarketing date July 1, 2003)
This Security is one of a duly authorized issue of debt securities of the
Issuer, limited to the aggregate principal amount of $160,000,000 (except as
otherwise provided in the Indenture mentioned below), issued or to be issued
pursuant to an Indenture dated as of October 23, 1998, as supplemented by a
First and Second Supplemental Indenture (the "Indenture"), duly executed and
delivered by the Issuer to the Trustee. Reference is hereby made to the
Indenture and all indentures supplemental thereto for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Trustee, the Issuer and the Holders (the words "Holders" or "Holder" meaning
the registered holders or registered holder) of the Securities. Capitalized
terms used herein, but not otherwise defined herein, shall have the meanings
assigned to them in the Indenture.
Certain provisions relating to the remarketing of the Securities set forth
below are contained in a Remarketing Agreement (the "Remarketing Agreement")
between the Issuer and Banc of America Securities LLC, as Remarketing Dealer
(the "Remarketing Dealer").
The Securities shall accrue interest from the Fixed Rate Remarketing Date,
semi-annually on each day that is a six-month anniversary of such date. Interest
on the Securities from the Fixed Rate Remarketing Date shall be computed on the
basis of a 360-day year consisting of twelve 30-day months. Interest on the
Securities accruing during the Floating Rate Reset Period (as defined below)
shall be payable on the next following Reference Rate Reset Date. Interest on
the Securities during the Floating Rate Period shall be computed on the basis of
the actual number of days in such Floating Rate Period over a 360-day year.
"FIXED RATE REMARKETING DATE" means July 1, 2003, assuming the Remarketing
Dealer has elected to purchase the Securities and the Issuer has not elected to
exercise its Floating Period Option, or the subsequent Remarketing Date in the
event that the Issuer has elected to exercise its Floating Period Option.
"REMARKETING DATE(S)" means July 1, 2003 assuming that the Remarketing
Dealer has elected to purchase the ROARS and the Company has not elected to
exercise its Floating Period Option on July 1, 2003 and one of the first days of
each month thereafter, until July 1, 2004 if the Company has elected to exercise
its Floating Period Option.
If the Remarketing Dealer gives notice to the Company and the Trustee no
earlier than 20 Business Days prior to the first Remarketing Date and not later
than 4:00 p.m., New York City time, on the 15th Business Day prior to the first
Remarketing Date, of its intention to purchase the Securities for remarketing on
such Remarketing Date (the "Notification Date"), the Securities
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shall be subject to mandatory tender to the Remarketing Dealer, and the
Remarketing Dealer shall be obligated to purchase the Securities, for
remarketing on such Remarketing Date, subject in each case to the conditions
described herein and set forth in the Remarketing Agreement. The purchase price
for the tendered Securities shall equal 100% of the principal amount thereof and
the Issuer will pay accrued interest, if any, on the Securities to such
Remarketing Date. From and after the first Remarketing Date, the Securities
shall bear interest at either the Floating Rate Spread or the Interest Rate to
Maturity as specified herein. If the Remarketing Dealer elects to remarket the
Securities, the obligation of the Remarketing Dealer to purchase the Securities
on the applicable Remarketing Date is subject to the conditions specified in the
Remarketing Agreement. If for any reason the Remarketing Dealer does not
purchase all of the Securities on the first Remarketing Date, the Issuer shall
be required to repurchase from the registered holders thereof, and the
registered holders will be required to sell to the Issuer, all the Securities at
a price equal to the principal amount thereof plus all accrued and unpaid
interest, if any, if such Remarketing Date is the first Remarketing Date, or at
the Dollar Price, plus accrued and unpaid interest, if any, on any subsequent
Remarketing Date.
If the Remarketing Dealer elects to repurchase the Securities by 3:30 p.m.,
New York City time, on the third Business Day immediately preceding any
Remarketing Date (a "Floating Rate Spread Determination Date" or the "Fixed Rate
Determination Date" depending on the Issuer's election, each a "Determination
Date") the Remarketing Dealer shall determine the Floating Rate Spread in the
case that the Issuer has elected the Floating Period Option, or otherwise the
Interest Rate to Maturity to the nearest one hundredth (0.01) of one percent per
annum unless the Issuer has chosen to redeem, or is required to redeem, the
Securities. Each Floating Period Interest Rate will equal the sum of a Reference
Rate and a Floating Rate Spread. The Interest Rate to Maturity shall be equal to
the sum of 6.50% (the "Base Rate") and the Applicable Spread (as defined below),
which will be based on the Dollar Price (as defined below) of the Securities.
The Interest Rate to Maturity announced by the Remarketing Dealer, absent
manifest error, shall be binding and conclusive upon the holders of beneficial
interests in the Securities (the "Beneficial Owners"), the Issuer and the
Trustee.
"APPLICABLE SPREAD" will be the lowest Bid (as defined below), expressed as
a spread (in the form of a percentage or in basis points) above the Base Rate,
obtained by the Remarketing Dealer by 3:30 p.m., New York City time, on the
Fixed Rate Determination Date from the Bids quoted to the Remarketing Dealer by
five Reference Corporate Dealers (as defined below). If fewer than five
Reference Corporate Dealers submit Bids as described above, then the Applicable
Spread shall be the lowest such Bid obtained as described above. A "Fixed Rate
Bid" will be an irrevocable offer to purchase the total aggregate outstanding
principal amount of the Securities at the Dollar Price (as defined below), but
assuming (i) a settlement date that is the Fixed Rate Remarketing Date
applicable to such Securities, without accrued interest, (ii) a maturity date
that is the fifth anniversary of the Fixed Rate Remarketing Date and (iii) a
stated annual interest rate equal to the relevant Base Rate plus the spread bid
by the applicable Reference Corporate Dealer.
"COMPARABLE TREASURY ISSUES" means the U.S. Treasury security or securities
selected by the Remarketing Dealer, as of the first Remarketing Date, as having
an actual or interpolated maturity or maturities comparable to the remaining
term of the Securities being purchased by the Remarketing Dealer.
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"COMPARABLE TREASURY PRICE" means, with respect to the first Remarketing
Date, (i) the offer prices for the Comparable Treasury Issues (expressed, in
each case, as a percentage of its principal amount) at 12:00 noon, New York City
time, on the first Determination Date, as set forth on "Telerate Page 500" (or
such other page as may replace "Telerate Page 500"), or (ii) if such page (or
any successor page) is not displayed or does not contain such offer prices on
the first Determination Date, (A) the average of the Reference Treasury Dealer
Quotations (is defined below) for the first Remarketing Date, after excluding
the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the
Remarketing Dealer obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"Telerate Page 500" means the display designated as "Telerate Page 500" on Dow
Xxxxx Markets (or such other page as may replace Telerate Page 500 on such
service) or such other service displaying the offer prices specified in clause
(i) above as may replace Dow Xxxxx Markets. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and the Fixed
Rate Remarketing Date, the offer prices for the Comparable Treasury Issues
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Remarketing Dealer by such Reference Treasury Dealer by 3:30
p.m., New York City time, on the first Determination Date.
"DOLLAR PRICE" means, with respect to the Securities, the present value, as
of the first Remarketing Date, of the Remaining Scheduled Payments for such
Securities discounted to the Remarketing Date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate (as
defined below).
"FIXED RATE DETERMINATION DATE" means the third Business Day prior to the
Fixed Rate Remarketing Date.
"REFERENCE CORPORATE DEALER" means a leading dealer of publicly traded debt
securities, including debt securities of the Issuer, which shall be selected by
the Issuer. The Issuer shall advise the Remarketing Dealer of its selection of
Reference Corporate Dealers no later than five Business Days prior to the Fixed
Rate Remarketing Date. One of such Reference Corporate Dealers selected by the
Issuer shall be Banc of America Securities LLC if it is then the Remarketing
Dealer.
"REFERENCE TREASURY DEALER" means five dealers to be selected by the
Issuer, and their respective successors; provided that if any of the foregoing
on their affiliates ceases to be a primary U.S. Government securities dealer (a
"Primary Treasury Dealer"), the Issuer shall substitute therefor another Primary
Treasury Dealer. One of such Reference Treasury Dealers selected by the Issuer
shall be Banc of America Securities LLC if it is then the Remarketing Dealer.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Securities, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate applicable to such Securities, that would be due
after the first Remarketing Date to
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25
and including the Stated Maturity Date; provided that if such Remarketing Date
is not an Interest Payment Date with respect to such Securities, the amount of
the next succeeding scheduled interest payment thereon, calculated at the Base
Rate, will be reduced by the amount of interest accrued thereon, calculated at
such Base Rate only, to the first Remarketing Date.
"TREASURY RATE" means with respect to the first Remarketing Date, the rate
per annum equal to the semi-annual equivalent yield to maturity or interpolated
(on a day count basis) yield to maturity of the Comparable Treasury Issues,
assuming a price for the Comparable Treasury Issues (expressed as a percentage
of their principal amounts) equal to the Comparable Treasury Price for such
Remarketing Date.
Subject to the Remarketing Dealer's election to purchase the Securities,
but prior to the fourth Business Day prior to the first Remarketing Date (the
"Floating Period Notification Date"), the Issuer may elect to exercise its
Floating Period Option (as defined below). Under these circumstances, the
Securities shall be remarketed at a floating rate for a period of one year, or
until such date which otherwise would be the Reference Rate Reset Date following
the date on which the Issuer elects to terminate such Floating Rate Period (the
"Floating Rate Period Termination Notification Date"), whichever is sooner (the
"Floating Period Termination Date"). In the event that the Issuer elects to
exercise its Floating Period Option, the maturity of the Securities will be
extended to the fifth anniversary of the Fixed Rate Remarketing Date not to
exceed July 1, 2009.
The amount of the interest for each day that the Securities are outstanding
during the Floating Rate Period will be calculated by dividing the Floating Rate
Interest Rate in effect for such day by 360 and multiplying the result by the
Dollar Price. The amount of interest to be paid for any Floating Rate Reset
Period (as defined below) will be calculated by adding the daily interest
amounts for each day in the Floating Rate Reset Period. The Floating Period
Interest Rate for the Securities announced by the Remarketing Dealer, absent
manifest error, shall be binding and conclusive upon the holders of beneficial
interests in such Securities (the "Beneficial Owners"), the Issuer and the
Trustee.
"FLOATING PERIOD INTEREST RATE" means the sum of the Reference Rate and the
Floating Rate Spread.
"FLOATING PERIOD OPTION" means the Issuer's right, on any date subsequent
to the Remarketing Dealer's election to purchase the Securities but prior to the
fourth Business Day prior to the first Remarketing Date, to require the
Remarketing Dealer to remarket the Securities at the Floating Period Interest
Rate.
"FLOATING RATE PERIOD" means the period from (and including) the Floating
Rate Remarketing Date to (but excluding) the Floating Rate Termination Date.
"FLOATING RATE SPREAD DETERMINATION DATE" means the third Business Day
prior to the Floating Rate Remarketing Date.
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"FLOATING RATE REMARKETING DATE" means July 1, 2003 in the event the
Company has elected to exercise its Floating Period Option.
"FLOATING RATE RESET PERIOD" means the period from (and including) the
first Reference Rate Reset Date (as defined below) to (but excluding) the next
following Reference Rate Reset Date and thereafter the period from (and
including) a Reference Rate Reset Date to (but excluding) the next following
Reference Rate Reset Date; provided that the final Floating Rate Reset Period
shall run to (but exclude) the Floating Period Termination Date.
"FLOATING RATE SPREAD" shall be the lowest Bid expressed as a spread (in
the form of a percentage or in basis points) above the Reference Rate for the
Securities, obtained by the Remarketing Dealer at 3:30 p.m., New York City time,
on the third Business Day prior to the Floating Rate Remarketing Date, from the
Bids quoted to the Remarketing Dealer by five Reference Money Market Dealers. If
fewer than five Reference Money Market Dealers submit Bids, then the Floating
Rate Spread shall be the lowest such Bid obtained. A "Floating Rate Bid" will be
an irrevocable offer to purchase the total aggregate outstanding principal
amount of the Securities at the Dollar Price, but assuming (i) a settlement date
that is the Floating Rate Remarketing Date, without accrued interest, (ii) a
maturity date equal to the Floating Period Termination Date, (iii) a stated
annual interest rate equal to the Reference Rate plus the Floating Rate Spread,
(iv) that the Securities are callable by the Remarketing Dealer, at the Dollar
Price, on any Reference Rate Reset Date after the first Remarketing Date or on
the Floating Period Termination Date and (v) that the Securities will be
repurchased by the Issuer at the Dollar Price on the Floating Period Termination
Date, if not previously called by the Remarketing Dealer.
"REFERENCE MONEY MARKET DEALER" means each of up to five leading dealers of
publicly traded debt securities, including debt securities of the Issuer, which
shall be selected by the Issuer, who are also leading dealers in money market
instruments. The Issuer shall advise the Remarketing Dealer of its selection of
Reference Money Market Dealers no later than five Business Days prior to the
Floating Rate Remarketing Date. One of such Reference Money Market Dealers
selected by the Issuer shall be Banc of America Securities LLC, if it is then
the Remarketing Dealer.
"REFERENCE RATE" means the rate for each Floating Rate Reset Period which
shall be the rate for deposits in U.S. Dollars for a period of one month which
appears on the Telerate Page 3750 (or any successor page) as of 11:00 a.m.,
London time, on the applicable Reference Rate Determination Date (as defined
below). If no rate appears on Telerate Page 3750 on the Reference Rate
Determination Date, the Remarketing Dealer will request the principal London
offices of four major reference banks in the London Inter-Bank Market, to
provide it with its offered quotation for deposits in U.S. dollars for the
period of one month, commencing on the first day of the Floating Rate Reset
Period, to prime banks in the London Inter-Bank Market at approximately 11:00
a.m., London time, on that Reference Rate Determination Date and in a principal
amount that is representative for a single transaction in U.S. Dollars in that
market at that time. If at least two quotations are provided, then the Reference
Rate will be the average of those quotations. If fewer than two quotations are
provided, then the Reference Rate will be the average (rounded, if necessary, to
the nearest one hundredth of a percent) of the rates quoted at approximately
11:00 a.m., New York City time, on the Reference Rate Determination Date by
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three major banks in New York City selected by the Remarketing Dealer for loans
in U.S. Dollars to leading European banks, having a one-month maturity and in a
principal amount that is representative for a single transaction in U.S. Dollars
in that market at that time. If the banks selected by the Remarketing Dealer are
not providing quotations in the manner described by this paragraph, the rate for
the Floating Rate Reset Period following the Reference Rate Determination Date
will be the rate in effect on that Reference Rate Determination Date.
"REFERENCE RATE DETERMINATION DATE" shall be the second day preceding each
Reference Rate Reset Date. In the event the Reference Rate Determination Date
falls on a non-Business Day in London, the interest rate shall reset on the
following Business Day unless such Business Day would move the Reference Rate
Determination Date into the next calendar month, in which case it shall be the
immediately preceding Business Day.
"REFERENCE RATE RESET DATE" means July 1, 2003 and the first day of each
month thereafter until but excluding the Floating Period Termination Date.
Provided the Remarketing Dealer has previously notified the Issuer and the
Trustee on the Notification Date of its intention to purchase all Securities on
the first Remarketing Date and subject to the Issuer's right to redeem the
Securities from the Remarketing Dealer on such Remarketing Date as set forth
below, the Remarketing Dealer will notify the Issuer, the Trustee and the U.S.
Depository by telephone, confirmed in writing (which may include facsimile or
other electronic transmission), by 4:00 p.m., New York City time, on the Fixed
Rate Determination Date, of the Interest Rate to Maturity effective from and
including the Fixed Rate Remarketing Date. All of the tendered Securities shall
be automatically delivered to the account of the Trustee, by book-entry through
DTC pending payment of the purchase price therefor, on the first Remarketing
Date.
In the event that the Securities are remarketed as provided herein, the
Remarketing Dealer shall pay to the Trustee, not later than 12:00 noon, New York
City time, on the first Remarketing Date, an amount equal to 100% of the
aggregate principal amount of the Securities or on any subsequent Remarketing
Date, an amount equal to the Dollar Price. On any such Remarketing Date, the
Remarketing Dealer shall cause the Trustee to make payment to the DTC
participant of each Beneficial Owner of Securities, by book-entry through DTC of
such Beneficial Owner's tendered Securities, of 100% of the principal amount of
the tendered Securities that have been purchased for remarketing by the
Remarketing Dealer. If the Remarketing Dealer does not purchase all of the
Securities on the first Remarketing Date or any subsequent Remarketing Date, the
Issuer shall make or cause to be made such payment for the Securities as
provided herein. In any case, the Issuer shall make, or cause the Trustee to
make, payment of interest on the Securities due on a Remarketing Date in
accordance with the Indenture by book-entry through DTC no later than the close
of business on such Remarketing Date.
The transactions specified above shall be executed on any Remarketing Date
through DTC in accordance with the procedures of DTC, and the accounts of the
respective DTC participants will be debited and credited and the Securities
delivered by book-entry as necessary to effect the purchases and sales thereof.
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The tender and settlement procedures set forth above, including provisions
for payment by purchasers of Securities in the remarketing or for payment to
selling Beneficial Owners of Securities, may be modified to the extent required
by DTC or to the extent required to facilitate the tender and remarketing of
Securities at the time of the remarketing. In addition, the Remarketing Dealer
may, without the consent of holders or Beneficial Owners of the Securities,
modify the tender and settlement procedures specified above in order to
facilitate the tender and settlement process.
The Issuer shall be required to redeem the Securities in whole on the
applicable Remarketing Date at a price equal to 100% of the aggregate principal
amount of the Securities, if such Remarketing Date is the first Remarketing
Date, or at the Dollar Price on any subsequent Remarketing Date, plus all
accrued and unpaid interest, if any, to such Remarketing Date, in the event that
(i) the Remarketing Dealer for any reason does not elect by notice to the Issuer
and the Trustee not later than such Notification Date, to purchase the
Securities for remarketing on such Remarketing Date, (ii) prior to any
Remarketing Date, the Remarketing Dealer resigns and no successor has been
appointed on or before such Determination Date, (iii) at any time after the
Remarketing Dealer elects on the Notification Date to remarket such Securities,
the Remarketing Dealer elects to terminate the Remarketing Agreement in
accordance with its terms, (iv) the Remarketing Dealer for any reason does not
notify the Issuer of the Floating Period Interest Rate or of the Interest Rate
to Maturity by 4:00 p.m., New York City time, on the applicable Determination
Date, (v) the Remarketing Dealer for any reason does not deliver the purchase
price of such Securities to the Trustee on the Business Day immediately
preceding such Remarketing Date or does not purchase all tendered Securities on
such Remarketing Date, or (vi) the Issuer for any reason fails to redeem the
Securities from the Remarketing Dealer following the Issuer's election to effect
such redemption.
If the Remarketing Dealer elects to remarket the Securities on the first
Remarketing Date, then not later than 4:00 p.m., New York City time, on the
Business Day immediately preceding any Determination Date, the Issuer shall
notify the Remarketing Dealer and the Trustee if the Issuer irrevocably elects
to exercise its right to redeem the Securities, in whole but not in part, from
the Remarketing Dealer on the first Remarketing Date or on the Floating Period
Termination Date immediately following such Determination Date at the Dollar
Price. In any case, payment of the Dollar Price, plus accrued and unpaid
interest therefor, will be made by the Issuer to the account designated by the
Remarketing Dealer by wire transfer in same-day funds on such Remarketing Date.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all the Securities may be declared
due and payable, in the manner and with the effect, and subject to the
conditions, provided in the Indenture.
The Indenture contains provisions permitting the Insurer and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities of each series affected at the time
Outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of, among other things, adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
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supplemental indenture or of modifying in any manner the rights of the Holders
of the Securities; provided, however, that, among other things, no such
supplemental indenture shall (i) reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon, or reduce any
premium payable upon the redemption thereof, without the consent of the Holder
of each Security so affected, or (ii) reduce the aforesaid percentage of
Securities, the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of each Security then
outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding affected thereby, on behalf of
all of the Holders of the Securities of such series, to waive a Default or Event
of Default with respect to such series, and its consequences, except a Default
or Event of Default in the payment of the principal of or premium, if any, or
interest on any of the Securities of such series or a Default in respect of a
provision that under Article Nine of the Indenture cannot be modified or amended
without the consent of each holder affected thereby. Any such consent or waiver
by the registered Holder of this Security (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Security and of any Security issued in exchange for
or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of, and interest on, this
Security at the place, times, and rate, and in the currency, herein prescribed.
The Securities are issuable only as registered Securities without coupons
denominations of $1,000 and any integral multiple of $1,000 in excess thereof.
At the office or agency of the issuer referred to on the face hereof and in
the manner subject to the limitations provided in the Indenture, Securities may
be presented for exchange for a like aggregate principal amount of Securities of
other authorized denominations.
Upon due presentment for registration of transfer of this Security at the
above-mentioned office or agency of the Issuer, a new Security or Securities of
authorized denominations, for a like aggregate principal amount, will be issued
to the transferee as provided in the Indenture. No service charge shall be made
for any such transfer, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto.
The Issuer, the Trustee, and any authorized agent of the Issuer or the
Trustee, may deem and treat the registered Holder hereof as the absolute owner
of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Issuer or the Trustee or any authorized agent of the Issuer or
the Trustee), for the purpose of receiving payment of, or on account of, the
principal hereof and premium, if any, and, subject to the provisions on the face
hereof, interest hereon and for all other purposes, and neither the Issuer nor
the Trustee nor any authorized agent of the Issuer or the Trustee shall be
affected by any notice to the contrary.
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No recourse shall be had for the payment of the principal of, and interest
on, this Security, for any claim based hereon, or otherwise in respect hereof,
or based on or in respect of the Indenture or any indenture supplemental
thereto, against any incorporator, shareholder, officer or director, as such,
past, present or future, of the Issuer or of any successor corporation, either
directly or through the Issuer or any successor corporation, whether by virtue
of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
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FORM OF ASSIGNMENT
I or we assign and transfer this Security to:
(Insert assignee's social security or tax I.D. number)
(Print or type name, address and zip code of assignee) and irrevocably appoint:
Agent to transfer this Security on the books of the Issuer. The Agent may
substitute another to act for him.
Date: Your Signature
(Sign exactly as your name appears on
the other side of this Security)
*Signature Guarantee:
*Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include
membership or participation in STAMP or such other
"signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange
Act of 1934.
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