1
EXHIBIT 99(d)
Preferred
GUARANTEE AGREEMENT
BETWEEN
SEMCO ENERGY, INC. (AS GUARANTOR) AND BANK ONE TRUST COMPANY, NATIONAL
ASSOCIATION
(AS TRUSTEE)
DATED AS OF JUNE 16, 2000
2
TABLE OF CONTENTS*
PAGE
----
ARTICLE I DEFINITIONS .............................................................................. 1
SECTION 1.01. Definitions.................................................................. 1
ARTICLE II TRUST INDENTURE ACT.............................................................................. 3
SECTION 2.01. Trust Indenture Act; Application.............................................. 3
SECTION 2.02. Lists of Holders of Securities................................................ 3
SECTION 2.03. Reports by the Trustee........................................................ 4
SECTION 2.04. Periodic Reports to Trustee................................................... 4
SECTION 2.05. Evidence of Compliance with Conditions Precedent.............................. 4
SECTION 2.06. Events of Default; Waiver..................................................... 4
SECTION 2.07. Event of Default; Notice...................................................... 4
SECTION 2.08. Conflicting Interests........................................................ 5
ARTICLE III POWERS, DUTIES AND RIGHTS OF TRUSTEE............................................................ 5
SECTION 3.01. Powers and Duties of the Trustee.............................................. 5
SECTION 3.02. Certain Rights of Trustee..................................................... 6
SECTION 3.03. Compensation; Fees; Indemnity................................................. 8
ARTICLE IV TRUSTEE .............................................................................. 8
SECTION 4.01. Trustee; Eligibility.......................................................... 8
SECTION 4.02. Appointment, Removal and Resignation of Trustee............................... 9
ARTICLE V GUARANTEE .............................................................................. 9
SECTION 5.01. Guarantee..................................................................... 9
SECTION 5.02. Waiver of Notice and Demand................................................... 9
SECTION 5.03. Obligations Not Affected...................................................... 10
SECTION 5.04. Rights of Holders............................................................. 10
SECTION 5.05. Guarantee of Payment.......................................................... 11
SECTION 5.06. Subrogation................................................................... 11
SECTION 5.07. Independent Obligations....................................................... 11
ARTICLE VI SUBORDINATION .............................................................................. 11
SECTION 6.01. Subordination................................................................. 11
ARTICLE VII LIMITATIONS OF TRANSACTIONS; RANKING
SECTION 7.01 Limitation of Transactions....................................................
ARTICLE VIII TERMINATION .............................................................................. 12
SECTION 8.01. Termination................................................................... 12
ARTICLE IX MISCELLANEOUS .............................................................................. 12
SECTION 9.01. Successors and Assigns........................................................ 12
SECTION 9.02. Amendments.................................................................... 12
SECTION 9.03. Notices....................................................................... 12
SECTION 9.04. Benefit....................................................................... 13
SECTION 9.05. Interpretation................................................................ 13
SECTION 9.06. Governing Law................................................................. 14
----------
* This Table of Contents does not constitute part of the Indenture or
have any bearing upon the interpretation of any of its terms and
provisions.
3
CROSS-REFERENCE TABLE*
SECTION OF SECTION OF
TRUST INDENTURE ACT GUARANTEE
OF 1939, AS AMENDED AGREEMENT
------------------- ---------
310(a)................................................................................................. 4.01(a)
310(b)................................................................................................. 4.01(c), 2.08
310(c)................................................................................................. Inapplicable
311(a)................................................................................................. 2.02(b)
311(b)................................................................................................. 2.02(b)
311(c)................................................................................................. Inapplicable
312(a)................................................................................................. 2.02(a)
312(b)................................................................................................. 2.02(b)
313.................................................................................................... 2.03
314(a)................................................................................................. 2.04
314(b)................................................................................................. Inapplicable
314(c)................................................................................................. 2.05
314(d)................................................................................................. Inapplicable
314(e)................................................................................................. 1.01, 2.05, 3.02
314(f)................................................................................................. 2.01, 3.02
315(a)................................................................................................. 3.01(d)
315(b)................................................................................................. 2.07
315(c)................................................................................................. 3.01
315(d)................................................................................................. 3.01(d)
315(e)................................................................................................. Inapplicable
316(a)................................................................................................. 5.04(iii), 2.06
316(b)................................................................................................. 5.04
316(c)................................................................................................. 2.02
317(a)................................................................................................. 5.04(ii)
317(b)................................................................................................. Inapplicable
318(a)................................................................................................. 2.01(b)
318(b)................................................................................................. 2.01
318(c)................................................................................................. 2.01(a)
----------
* This Cross-Reference Table does not constitute part of the Guarantee Agreement
and shall not affect the interpretation of any of its terms or provisions.
4
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of June 16,
2000 is executed and delivered by SEMCO ENERGY, INC., a Michigan corporation
(the "Guarantor"), and Bank One Trust Company, National Association, a national
banking association, as trustee (the "Trustee"), for the benefit of the Holders
(as defined herein) from time to time of the Trust Preferred Securities (as
defined herein) of SEMCO CAPITAL TRUST II, a Delaware statutory business trust
(the "Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of June 16, 2000, among the Trustee, the other
Trustees named therein, and SEMCO Energy, Inc., as Depositor, and the holders of
undivided beneficial interests in the assets of the Trust, the Trust is issuing
as of the date hereof $90,000,000 aggregate liquidation amount of its 9% Trust
Preferred Securities (the "Trust Preferred Securities") representing preferred
undivided beneficial interests in the assets of the Trust and having the terms
set forth in the Trust Agreement;
WHEREAS, the Trust Preferred Securities will be issued by the Trust and
the proceeds thereof will be used to purchase Senior Deferrable Notes (as
defined in the Trust Agreement) of the Guarantor, which will be held by the
Trust as trust assets; and
WHEREAS, as incentive for the Holders to purchase the Trust Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Guarantee for the benefit of the holders of the Common Securities (as
defined herein), except that if an Event of Default (as defined in the Trust
Agreement), has occurred and is continuing, the rights of holders of the Common
Securities to receive Guarantee Payments under the Common Securities Guarantee
are subordinated to the rights of the Holders to receive Guarantee Payments
under this Guarantee.
NOW, THEREFORE, in consideration of the payment for Trust Preferred
Securities by each Holder thereof, which payment the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Trust
Preferred Securities.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.
5
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Trust.
"Event of Default" means a failure by the Guarantor to perform any of
its payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Trust Preferred
Securities, to the extent not paid or made by or on behalf of the Trust: (i) any
accrued and unpaid distributions which are required to be paid on such Trust
Preferred Securities but if and only if and to the extent the Trust has funds
legally and immediately available therefor to make such payment; (ii) the
redemption price, including all accrued and unpaid distributions to the date of
redemption (the "Redemption Price"), with respect to the Trust Preferred
Securities in respect of which the Senior Deferrable Notes have been redeemed by
the Guarantor upon the occurrence of a Tax Event Redemption but if and only if
and to the extent that the Trust has funds legally and immediately available
therefor sufficient to make such payment; and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Trust (other than in
connection with the distribution of Senior Deferrable Notes to the holders of
Trust Securities or the redemption of all of the Trust Preferred Securities),
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid distributions on the Trust Preferred Securities to the date of payment,
to the extent the Trust has funds legally and immediately available therefor,
and (b) the amount of assets of the Trust remaining available for distribution
to Holders in liquidation of the Trust (in either case, the "Liquidation
Distribution"). If an event of default under the Indenture has occurred and is
continuing, the rights of holders of the Common Securities to receive payments
under the Common Securities Guarantee Agreement are subordinated to the rights
of Holders to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Trust, of any Trust Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Trust Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indenture" means the Indenture, dated as of October 23, 1998, among
the Guarantor, as issuer, and Bank One Trust Company, National Association, as
trustee, as supplemented by the Supplemental Indenture between the Guarantor and
Bank One Trust Company, National Association as trustee.
2
6
"Majority in liquidation amount of Trust Preferred Securities" means a
vote by Holder(s) of Trust Preferred Securities, voting separately as a class,
of more than 50% of the liquidation amount of all Trust Preferred Securities
outstanding at the time of determination.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Guarantor, and
delivered to the Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:
(a) a statement that each officer signing the Officers' Certificate has
read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in the Officers'
Certificate are based;
(c) a statement that, in the opinion of each such officer, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Responsible Officer" means, with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
the Treasurer, any Assistant Treasurer, any Senior Trust Officer, Trust Officer
or Assistant Trust Officer or any other officer of the Corporate Trust
Department of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Senior Deferrable Notes" means the 9% Senior Deferrable Notes of the
Guarantor due August 16, 2005.
"Successor Trustee" means a successor Trustee possessing the
qualifications to act as Trustee under Section 4.01.
"Supplemental Indenture" means the First Supplemental Indenture, dated
as of June 16, 2000 to the Indenture.
"Tax Event Redemption" has the same meaning as defined in Annex I to
the Trust Agreement.
3
7
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Securities" means the Trust Preferred Securities and the Trust
Common Securities.
"Trustee" means Bank One Trust Company, National Association until a
Successor Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Trustee.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions; and
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.02. Lists of Holders of Securities; Record Date.
(a) The Guarantor shall furnish or cause to be furnished to the Trustee
(a) semiannually, not later than June 1 and December 1 in each year, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders ("List of Holders") as of a date not more than 15 days prior to the
time such list is furnished, and (b) at such other times as the Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished; provided that, the Guarantor shall not be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Trustee by the Guarantor or at
any time the Trustee is the Securities Registrar under the Trust Agreement. The
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Trustee shall comply with its obligations under Sections
311(a), 311(b), 312(b) and 316(c) of the Trust Indenture Act.
SECTION 2.03. Reports by the Trustee
Within 60 days after May 15 of each year commencing May 15, 2001, the Trustee
shall provide to the Holders of the Trust Preferred Securities such reports as
are required by Section 313(a) and (b) of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Trustee shall also comply with the other requirements of Section 313 of the
Trust Indenture Act.
4
8
SECTION 2.04. Periodic Reports to Trustee
The Guarantor shall provide to the Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act, and shall provide, within 120 days after the end of each fiscal
year of the Guarantor, the compliance certificate required by Section 314(a)(4)
of the Trust Indenture Act in the form and in the manner required by such
Section.
SECTION 2.05. Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.06. Events of Default; Waiver
The Holders of a Majority in liquidation amount of Trust Preferred
Securities may, by vote, on behalf of all of the Holders, waive any past Event
of Default and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured and not to have existed, for every purpose of this Guarantee
Agreement, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
SECTION 2.07. Event of Default; Notice.
(a) The Trustee shall, within 90 days after the occurrence of an Event
of Default actually known to the Trustee, transmit by mail, first class postage
prepaid, to the Holders, notices of all such Events of Default, unless such
defaults have been cured before the giving of such notice, provided that the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.
(b) The Trustee shall not be deemed to have knowledge of any Event of
Default unless the Trustee shall have received written notice, or a Responsible
Officer charged with the administration of the Trust Agreement shall have
obtained written notice, of such Event of Default.
5
9
SECTION 2.08. Conflicting Interests
The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TRUSTEE
SECTION 3.01. Powers and Duties of the Trustee.
(a) This Guarantee Agreement shall be held by the Trustee for the
benefit of the Holders, and the Trustee shall not transfer this Guarantee
Agreement to any Person except the Trustee shall assign rights hereunder to a
Holder to the extent such assignment is necessary to exercise such Holder's
rights pursuant to Section 5.04 or to a Successor Trustee upon acceptance by
such Successor Trustee of its appointment to act as Successor Trustee. The
right, title and interest of the Trustee shall automatically vest in any
Successor Trustee, and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Trustee.
(b) If an Event of Default has occurred and is continuing, the Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Trustee, before the occurrence of any Event of Default and
after the curing or waiving of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.06), the
Trustee shall exercise such of the rights and powers vested in it by this
Guarantee Agreement, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Guarantee Agreement; and
6
10
(B) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions
that by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Guarantee Agreement;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a Majority in liquidation amount
of the Trust Preferred Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee
under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
SECTION 3.02. Certain Rights of Trustee.
(a) Subject to the provisions of Section 3.01:
(i) the Trustee may rely and shall be fully protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor;
7
11
(iv) the Trustee may consult with counsel of its choice, and
the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion; such counsel
may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees; the Trustee shall have the right at any
time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction;
(v) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have
provided to the Trustee such adequate security and indemnity as would
satisfy a reasonable person in the position of the Trustee, against
the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Trustee; provided that nothing contained in this
Section 3.02(a)(v) shall be taken to relieve the Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee Agreement;
(vi) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(viii) whenever in the administration of this Guarantee
Agreement the Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Trustee (i) may request instructions from the
Holders, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and
(iii) shall be protected in acting in accordance with such
instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal, or in which the Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the Trustee shall be construed to be a duty.
8
12
SECTION 3.03. Compensation; Fees; Indemnity.
The Guarantor agrees:
(a) to pay to the Trustee from time to time reasonable compensation for
all services rendered by the Trustee hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Guarantee Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold the Trustee harmless
against, any and all loss, damage, claims, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this Guarantee Agreement, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
The provisions of this Section 3.03 shall survive the termination of
this Guarantee Agreement or the registration or removal of the Trustee.
ARTICLE IV
TRUSTEE
SECTION 4.01. Trustee; Eligibility.
(a) There shall at all times be a Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted
by the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for
the purposes of this Section 4.01(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
9
13
(b) If at any time the Trustee shall cease to be eligible to so act
under Section 4.01(a), the Trustee shall immediately resign in the manner and
with the effect set out in Section 4.02(c).
(c) If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and
Guarantor shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act, subject to the rights of the Trustee under the
penultimate paragraph thereof.
SECTION 4.02. Appointment, Removal and Resignation of Trustee.
(a) Subject to Section 4.02(b), the Trustee may be appointed or removed
without cause at any time by the Guarantor.
(b) The Trustee shall not be removed until a Successor Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Trustee and delivered to the Guarantor.
(c) The Trustee appointed to office shall hold office until a Successor
Trustee shall have been appointed or until its removal or resignation. The
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing executed by the Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Trustee has
been appointed and has accepted such appointment by instrument in writing
executed by such Successor Trustee and delivered to the Guarantor and the
resigning Trustee.
(d) If no Successor Trustee shall have been appointed and accepted
appointment as provided in this Section 4.02 within 60 days after delivery to
the Guarantor of an instrument of resignation, the resigning Trustee may
petition any court of competent jurisdiction for appointment of a Successor
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Trustee.
10
14
ARTICLE V
GUARANTEE
SECTION 5.01. Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Trust), as and when due, regardless of any defense,
right of set-off or counterclaim which the Guarantor may have or assert against
any person. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Trust to pay such amounts to the Holders.
SECTION 5.02. Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Trust or
any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.03. Obligations Not Affected
The obligation of the Guarantor to make the Guarantee Payments under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Trust Preferred Securities to be
performed or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Trust Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Trust Preferred Securities; provided, however,
that if the Guarantor has exercised its right under Section 2.8 of the
Supplemental Indenture to defer the interest payments on the Senior Deferrable
Notes, the Guarantor shall have no obligation hereunder until the expiration of
the Applicable Extension Period (as defined in the Supplemental Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Trust Preferred
Securities, or any action on the part of the Trust granting indulgence or
extension of any kind;
11
15
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Trust Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.03 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. Rights of Holders
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Trustee to be held for the benefit of the Holders;
(ii) the Trustee has the right to enforce this Guarantee Agreement on behalf of
the Holders; (iii) the Holders of a Majority in liquidation amount of the Trust
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee in respect of
this Guarantee Agreement or to direct the exercise of any trust or power
conferred upon the Trustee under this Guarantee Agreement, provided that such
direction shall not be in conflict with any rule of law or with this Guarantee
Agreement, and could not involve the Trustee in personal liability in
circumstances where reasonable indemnity would not be adequate; (iv) any Holder
may institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against or requesting or directing that action be taken by the
Trustee or any other person; it being understood and intended that no one or
more of such Holders shall have any right in any manner whatsoever by virtue of,
or by availing of, any provision of this Guarantee Agreement to affect, disturb
or prejudice the rights of any other of such Holders or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Guarantee Agreement, except in the manner herein provided and
for the equal and ratable benefit of all of such Holders; and (v) the Holders
have those rights set forth in Section 316(b) of the Trust Indenture Act.
SECTION 5.05. Guarantee of Payment
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication) or upon the distribution of
Senior Deferrable Notes to the Holders in exchange for all of the Trust
Preferred Securities.
12
16
SECTION 5.06. Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Trust in respect of any amounts paid to the Holders by the Guarantor
under this Guarantee Agreement; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to
enforce or exercise any rights which it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of payment
under this Guarantee Agreement, if, at the time of any such payment, any amounts
of Guarantee Payments are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.07. Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Trust Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.01. Subordination
This Guarantee Agreement will constitute a Deferrable obligation of the
Guarantor and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Guarantor, including the Senior Deferrable Notes,
except those obligations or liabilities made pari passu or subordinate by their
terms, (ii) pari passu with the most senior Deferrable obligations now or
hereafter issued or guaranteed by the Guarantor, and (iii) senior to all common
stock of the Guarantor.
ARTICLE VII
LIMITATION OF TRANSACTIONS; RANKING
SECTION 7.01 Limitation of Transactions
So long as any Trust Preferred Securities issued by the Trust remain
outstanding, if there shall have occurred an Event of Default or an Event of
Default under the Trust Agreement or this Guarantee Agreement and written notice
of such Event of Default has been given to the Guarantor, then the Guarantor
13
17
shall not (a) make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities that rank junior to the Senior
Deferrable Notes in the right of payment issued by the Guarantor, or (b) make
any guarantee payments with respect to any guarantee by the Guarantor of any
securities of any of its subsidiaries if such guarantee ranks junior to the
Senior Deferrable Notes in right of payment or (c) declare or pay any dividends
or distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Guarantor's capital stock, except for or as a result
of dividends or distributions in, or options, warrants or rights to subscribe
for or purchase, the Guarantor's common stock; any declaration of a dividend in
connection with the implementation of a shareholder's rights plan, or the
issuance of shares under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto; a reclassification of the
Guarantor's capital stock solely into shares of one or more classes or series of
the Guarantor's capital stock; or the exchange or conversion of one class or
series of the Guarantor's capital stock for or into another class or series of
the Guarantor's capital stock; the purchase of fractional interests in shares of
the Guarantor's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged; and the
purchase of the Guarantor's common stock in connection with the Guarantor's
normal course issuer bid-purchases for the satisfaction by the Guarantor of its
obligations under any benefit plans for the Guarantor and the Guarantor's
subsidiaries' directors, officers or employees of the Guarantor's dividend
reinvestment plans.
ARTICLE VIII
TERMINATION
SECTION 8.01. Termination
This Guarantee Agreement shall terminate and be of no further force and
effect upon: (i) full payment of the Redemption Price of all Trust Preferred
Securities in the case that the Guarantor repurchases all of the Senior
Deferrable Notes upon the occurrence of a Tax Event Redemption, (ii) the
distribution of Senior Deferrable Notes to the Holders in exchange for all of
the Trust Preferred Securities, or (iii) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Trust.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Trust Preferred Securities
or under this Guarantee Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Successors and Assigns
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders then outstanding.
Except in connection with a consolidation, merger, conveyance, transfer, or
lease involving the Guarantor that is permitted under Article Eight of the
Indenture, the Guarantor shall not assign its obligations hereunder.
14
18
SECTION 9.02. Amendments
Except with respect to any changes which do not materially and
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of a Majority in liquidation amount of Trust Preferred
Securities. The provisions of Article Six of the Trust Agreement concerning
meetings of Holders shall apply to the giving of such approval.
SECTION 9.03. Notices
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Trustee and the
Holders:
SEMCO Energy, Inc.
000 Xxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
(b) if given to the Trust, in care of the Trustee, or to the Trustee at
the Trust's (and the Trustee's) address set forth below or such other address as
the Trustee on behalf of the Trust may give notice of to the Holders:
Bank One Trust Company, National Association
Corporate Trust Administration,
00xx Xxxxx, Xxxxx XX0-0000
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
with a copy, in the case of a notice to the Trust (other than a notice
from the Guarantor), to the Guarantor.
(c) if given to any Holder, at the address set forth on the books and
records of the Trust.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
15
19
SECTION 9.04. Benefit
This Guarantee Agreement is solely for the benefit of the Holders and,
subject to Section 3.01(a), is not separately transferable from the Trust
Preferred Securities.
SECTION 9.05. Interpretation
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in Section
1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.
SECTION 9.06. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. THE
GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE
OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS
GUARANTEE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, AND TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE GUARANTOR HEREBY WAIVES AND AGREES NOT TO
ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR
PROCEEDING, ANY CLAIM THAT
16
20
IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT,
ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE
SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS GUARANTEE AGREEMENT OR ANY
DOCUMENT OR ANY INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER HEREOF MAY
NOT BE LITIGATED IN OR BY SUCH COURTS. THE GUARANTOR AGREES THAT SERVICE OF
PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR
NOTICES SET FORTH IN THIS GUARANTEE AGREEMENT OR ANY METHOD AUTHORIZED BY THE
LAWS OF NEW YORK.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
SEMCO ENERGY, INC.
By:
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
BANK ONE TRUST COMPANY, National
Association, as Trustee
By:
-----------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
17
21
AMENDMENT NO. 1 TO GUARANTEE AGREEMENT
This Amendment No. 1 to GUARANTEE AGREEMENT, dated as of July 26, 2000,
is executed and delivered by SEMCO ENERGY, INC., a Michigan corporation (the
"Guarantor") and Bank One Trust Company, National Association, a national
banking association, as trustee (the "Trustee") as of July 26, 2000, for the
benefit of the Holders (as defined in the Guarantee Agreement hereinafter
defined) from time to time of the Trust Preferred Securities (as defined in the
Guarantee Agreement hereinafter defined) of SEMCO CAPITAL TRUST II, a Delaware
statutory business trust (the "Trust").
WHEREAS, On June 16, 2000 the Guarantor entered into a Guarantee
Agreement (the "Guarantee Agreement") under which it irrevocably and
unconditionally agreed, to the extent set forth therein, to pay to the Holders
the Guarantee Payments (as defined in the Guarantee Agreement) and to make
certain other payments on the terms and conditions set forth therein.
WHEREAS as of this date, the Trust is issuing $11,000,000 additional
liquidation amount of 9% Trust Preferred Securities (the "Additional
Securities") representing undivided beneficial interests in the assets of the
Trust;
WHEREAS the Guarantor desires that all the provisions of the Guarantee
Agreement be applicable to the Additional Securities.
NOW THEREFORE the Guarantor executes and delivers this Amendment to
Guarantee Agreement for the benefit of the Holders from time to time of the 9%
Trust Preferred Securities.
Article I
Additional Guarantee
All of the provisions of the Guarantee Agreement, including Article V
thereof containing the Guarantee, shall apply with like force and effect to the
Additional Securities.
Article II
Miscellaneous
2.1 This Amendment No. 1 shall be governed by and construed and
interpreted in accordance with the internal laws of the State of New York.
2.2 This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
22
THIS AMENDED GUARANTEE AGREEMENT is executed as of the day and year
first above written.
SEMCO ENERGY, INC.
By:
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
