Exhibit 4.7


 


EXECUTION COPY


 




	
   

  






 


 


 


SEMCO ENERGY, INC.


 


73⁄4% SENIOR NOTES DUE 2013


 


 


 


INDENTURE


 


Dated as of May 15, 2003


 


Fifth Third Bank


 


Trustee


 


 


 




	
   

  






 

















 


CROSS-REFERENCE
TABLE*


 


	
  Trust Indenture Act Section

  	
   

  	
  Indenture
  Section

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  7.10

  
	
  (b)

  	
   

  	
  7.10

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.05

  
	
  (b)

  	
   

  	
  12.03

  
	
  (c)

  	
   

  	
  12.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  7.06;
  7.07

  
	
  (c)

  	
   

  	
  7.06;
  12.02

  
	
  (d)

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
  4.03;
  12.02; 12.05

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  12.04

  
	
  (c)(2)

  	
   

  	
  12.04

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  12.05

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.01

  
	
  (b)

  	
   

  	
  7.05;
  12.02

  
	
  (c)

  	
   

  	
  7.01

  
	
  (d)

  	
   

  	
  7.01

  
	
  (e)

  	
   

  	
  6.11

  
	
  316(a) (last sentence)

  	
   

  	
  2.09

  
	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.07

  
	
  (c)

  	
   

  	
  2.12

  
	
  317(a)(1)

  	
   

  	
  6.08

  
	
  (a)(2)

  	
   

  	
  6.09

  
	
  (b)

  	
   

  	
  2.04

  
	
  318(a)

  	
   

  	
  12.01

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
  12.01

  



 












N.A.
means not applicable.


*  This Cross
Reference Table is not part of the Indenture.


 

















 


TABLE OF CONTENTS


 


 


	
  ARTICLE
  1.

  DEFINITIONS AND INCORPORATION 

  BY REFERENCE

  
	
  Section 1.01

  	
  Definitions.

  
	
  Section 1.02

  	
  Other Definitions.

  
	
  Section 1.03

  	
  Incorporation by Reference of Trust
  Indenture Act.

  
	
  Section 1.04

  	
  Rules of Construction.

  
	
   

  	
   

  
	
  ARTICLE 2.  

  THE
  NOTES

  
	
  Section 2.01

  	
  Form and Dating.

  
	
  Section 2.02

  	
  Execution and Authentication.

  
	
  Section 2.03

  	
  Registrar and Paying Agent.

  
	
  Section 2.04

  	
  Paying Agent to Hold Money in Trust.

  
	
  Section 2.05

  	
  Holder Lists.

  
	
  Section 2.06

  	
  Transfer and Exchange.

  
	
  Section 2.07

  	
  Replacement Notes.

  
	
  Section 2.08

  	
  Outstanding Notes.

  
	
  Section 2.09

  	
  Treasury Notes.

  
	
  Section 2.10

  	
  Temporary
  Notes.

  
	
  Section 2.11

  	
  Cancellation.

  
	
  Section 2.12

  	
  Defaulted Interest.

  
	
   

  	
   

  
	
  ARTICLE 3.  

  REDEMPTION AND PREPAYMENT

  
	
   

  
	
  Section 3.01

  	
  Notices to Trustee.

  
	
  Section 3.02

  	
  Selection of Notes to Be Redeemed or
  Purchased.

  
	
  Section 3.03

  	
  Notice of Redemption.

  
	
  Section 3.04

  	
  Effect of Notice of Redemption.

  
	
  Section 3.05

  	
  Deposit of Redemption or Purchase Price.

  
	
  Section 3.06

  	
  Notes Redeemed or Purchased in Part.

  
	
  Section 3.07

  	
  Optional Redemption.

  
	
  Section 3.08

  	
  Mandatory Redemption.

  
	
  Section 3.09

  	
  Offer to Purchase by Application of Excess
  Proceeds.

  
	
   

  	
   

  
	
  ARTICLE 4.  

  COVENANTS

  
	
   

  
	
  Section 4.01

  	
  Payment of Notes.

  
	
  Section 4.02

  	
  Maintenance of Office or Agency.

  
	
  Section 4.03

  	
  Reports.

  
	
  Section 4.04

  	
  Compliance Certificate.

  
	
  Section 4.05

  	
  Taxes.

  
	
  Section 4.06

  	
  Stay, Extension and Usury Laws.

  
	
  Section 4.07

  	
  Restricted Payments.

  
	
  Section 4.08

  	
  Dividend and Other Payment Restrictions
  Affecting Subsidiaries.

  
	
  Section 4.09

  	
  Incurrence of Indebtedness and Issuance
  of Preferred Stock.

  
	
  Section 4.10

  	
  Asset Sales.

  



 


i

















 


	
  Section 4.11

  	
  Transactions with Affiliates.

  
	
  Section 4.12

  	
  Liens.

  
	
  Section 4.13

  	
  Business Activities.

  
	
  Section 4.14

  	
  Corporate Existence.

  
	
  Section 4.15

  	
  Offer to Repurchase Upon Change of
  Control.

  
	
  Section 4.16

  	
  Limitation on Sale and Leaseback
  Transactions.

  
	
  Section 4.17

  	
  Payments for Consent.

  
	
  Section 4.18

  	
  Future Subsidiary Guarantees.

  
	
  Section 4.19

  	
  Designation of Restricted and
  Unrestricted Subsidiaries.

  
	
  Section 4.20

  	
  Changes in Covenants when Notes Rated
  Investment Grade.

  
	
   

  	
   

  
	
  ARTICLE 5. 

  SUCCESSORS

  
	
   

  
	
  Section 5.01

  	
  Merger, Consolidation or Sale of Assets.

  
	
  Section 5.02

  	
  Successor Corporation Substituted.

  
	
   

  	
   

  
	
  ARTICLE 6.  

  DEFAULTS AND REMEDIES

  
	
   

  	
   

  
	
  Section 6.01

  	
  Events of Default.

  
	
  Section 6.02

  	
  Acceleration.

  
	
  Section 6.03

  	
  Other Remedies.

  
	
  Section 6.04

  	
  Waiver of Past
  Defaults.

  
	
  Section 6.05

  	
  Control by Majority.

  
	
  Section 6.06

  	
  Limitation on Suits.

  
	
  Section
  6.07

  	
  Rights
  of Holders of Notes to Receive Payment.

  
	
  Section 6.08

  	
  Collection
  Suit by Trustee.

  
	
  Section
  6.09

  	
  Trustee
  May File Proofs of Claim.

  
	
  Section
  6.10

  	
  Priorities.

  
	
  Section 6.11

  	
  Undertaking for
  Costs.

  
	
   

  	
   

  
	
  ARTICLE
  7.  

  TRUSTEE

  
	
   

  	
   

  
	
  Section 7.01

  	
  Duties of Trustee.

  
	
  Section 7.02

  	
  Rights of Trustee.

  
	
  Section 7.03

  	
  Individual
  Rights of Trustee.

  
	
  Section 7.04

  	
  Trustee’s
  Disclaimer.

  
	
  Section 7.05

  	
  Notice of Defaults.

  
	
  Section
  7.06

  	
  Reports
  by Trustee to Holders of the Notes.

  
	
  Section 7.07

  	
  Compensation
  and Indemnity.

  
	
  Section 7.08

  	
  Replacement of
  Trustee.

  
	
  Section
  7.09

  	
  Successor
  Trustee by Merger, etc.

  
	
  Section
  7.10

  	
  Eligibility;
  Disqualification.

  
	
  Section
  7.11

  	
  Preferential
  Collection of Claims Against Company.

  
	
   

  	
   

  
	
  ARTICLE
  8.  

  LEGAL DEFEASANCE AND COVENANT DEFEASANCE

  
	
   

  	
   

  
	
  Section
  8.01

  	
  Option
  to Effect Legal Defeasance or Covenant Defeasance.

  
	
  Section
  8.02

  	
  Legal
  Defeasance and Discharge.

  
	
  Section 8.03

  	
  Covenant Defeasance.

  
	
  Section
  8.04

  	
  Conditions
  to Legal or Covenant Defeasance.

  



 


ii

















 


	
  Section
  8.05

  	
  Deposited
  Money and Government Securities to be Held in Trust; Other Miscellaneous
  Provisions.

  
	
  Section 8.06

  	
  Repayment to
  Company.

  
	
  Section 8.07

  	
  Reinstatement.

  
	
   

  	
   

  
	
  ARTICLE
  9.  

  AMENDMENT, SUPPLEMENT AND WAIVER

  
	
   

  	
   

  
	
  Section
  9.01

  	
  Without
  Consent of Holders of Notes.

  
	
  Section
  9.02

  	
  With
  Consent of Holders of Notes.

  
	
  Section
  9.03

  	
  Compliance
  with Trust Indenture Act.

  
	
  Section
  9.04

  	
  Revocation
  and Effect of Consents.

  
	
  Section
  9.05

  	
  Notation
  on or Exchange of Notes.

  
	
  Section
  9.06

  	
  Trustee
  to Sign Amendments, etc.

  
	
   

  	
   

  
	
  ARTICLE
  10.  

  SUBSIDIARY GUARANTEES

  
	
   

  	
   

  
	
  Section
  10.01

  	
  Guarantee.

  
	
  Section
  10.02

  	
  Limitation
  on Guarantor Liability.

  
	
  Section
  10.03

  	
  Execution
  and Delivery of Subsidiary Guarantee.

  
	
  Section
  10.04

  	
  Guarantors
  May Consolidate, etc., on Certain Terms.

  
	
  Section
  10.05

  	
  Releases.

  
	
  Section
  10.06

  	
  Operation.

  
	
   

  	
   

  
	
  ARTICLE
  11.  

  SATISFACTION AND DISCHARGE

  
	
   

  	
   

  
	
  Section 11.01

  	
  Satisfaction
  and Discharge.

  
	
  Section 11.02

  	
  Application
  of Trust Money.

  
	
   

  	
   

  
	
  ARTICLE
  12.  

  MISCELLANEOUS

  
	
   

  	
   

  
	
  Section
  12.01

  	
  Trust
  Indenture Act Controls.

  
	
  Section
  12.02

  	
  Notices.

  
	
  Section
  12.03

  	
  Communication
  by Holders of Notes with Other Holders of Notes.

  
	
  Section
  12.04

  	
  Certificate
  and Opinion as to Conditions Precedent.

  
	
  Section
  12.05

  	
  Statements
  Required in Certificate or Opinion.

  
	
  Section
  12.06

  	
  Rules by
  Trustee and Agents.

  
	
  Section
  12.07

  	
  No
  Personal Liability of Directors, Officers, Employees and Stockholders.

  
	
  Section 12.08

  	
  Governing Law.

  
	
  Section
  12.09

  	
  No
  Adverse Interpretation of Other Agreements.

  
	
  Section 12.10

  	
  Successors.

  
	
  Section 12.11

  	
  Severability.

  
	
  Section 12.12

  	
  Counterpart
  Originals.

  
	
  Section
  12.13

  	
  Table
  of Contents, Headings, etc.

  
	
   

  	
   

  
	
  EXHIBITS

  
	
   

  	
   

  
	
  Exhibit A

  	
  FORM OF NOTE

  
	
  Exhibit B

  	
  FORM OF CERTIFICATE OF TRANSFER

  
	
  Exhibit C

  	
  FORM OF CERTIFICATE OF EXCHANGE

  
	
  Exhibit D

  	
  FORM OF CERTIFICATE OF ACQUIRING
  INSTITUTIONAL ACCREDITED INVESTOR

  



 


iii

















 


 


	
  Exhibit E

  	
  FORM OF SUBSIDIARY GUARANTEE

  
	
  Exhibit F

  	
  FORM OF SUPPLEMENTAL INDENTURE

  



 


iv

















 


INDENTURE
dated as of May 15, 2003 between SEMCO Energy, Inc., a Michigan corporation
(the “Company”), and Fifth Third
Bank, as trustee (the “Trustee”).


 


The
Company and the Trustee agree as follows for the benefit of each other and for
the equal and ratable benefit of the Holders (as defined) of the 73⁄4% Senior
Notes due 2013 (the “Notes”):


 


ARTICLE 1.

DEFINITIONS AND INCORPORATION

BY REFERENCE


 


Section
1.01           Definitions.


 


“144A Global Note” means a Global Note substantially in the form of Exhibit A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with or on behalf of, and registered in the name of, the Depositary or its
nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.


 


“2008 Exchange Notes” means the 2008 Notes issued in the Exchange
Offer pursuant to Section 2.06(f) of the 2008 Notes Indenture.


 


“2008 Notes” means the 71/2  % Senior Notes due 2008 issued by the Company
pursuant to the 2008 Notes Indenture.


 


“2008 Notes Indenture” means the indenture, dated the date the 2008
Notes are initially issued, between the Company and Fifth Third Bank, as
trustee, relating to the 2008 Notes, as the same shall be amended or
supplemented from time to time.


 


“2008 Subsidiary Guarantee” means the Guarantee (as defined in the 2008
Notes Indenture) by the Guarantor (as defined in the 2008 Notes Indenture) of
the Company’s payment obligations under the 2008 Notes Indenture and on the
2008 Notes, executed pursuant to the provisions of the 2008 Notes Indenture.


 


“Acquired Debt” means, with respect to any specified Person:


 


(1)            Indebtedness
of any other Person existing at the time such other Person is merged with or
into or became a Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of, such other
Person merging with or into, or becoming a Subsidiary of, such specified
Person; and


 


(2)            Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.


 


“Additional Interest” means all additional interest then owing
pursuant to the Registration Rights Agreement.


 


“Additional Notes” means any Notes (other than the Initial
Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09
hereof, as part of the same series as the Initial Notes.


 


“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 purposes of this definition, “control,” as used with
respect to any Person, means the possession, directly or indirectly, of the


 


1

















 


power
to direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10%
or more of the Voting Stock of a Person will be deemed to be control. For
purposes of this definition, the terms “controlling,” “controlled by” and
“under common control with” have correlative meanings.


 


“Agent” means any Registrar, co-registrar, Paying Agent or additional paying
agent.


 


“APCO Sale Proceeds” means any Net Proceeds received in
connection with a sale or other disposition of the business or assets owned on
the date of this Indenture by Alaska Pipeline Company.


 


“Applicable Procedures” means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.


 


“Asset Sale” means:


 


(1)            the
sale, lease, conveyance or other disposition of any assets or rights; provided that the sale, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Subsidiaries taken as a whole will be governed by the provisions of Section
4.15 hereof and/or the provisions of Section 5.01 hereof and not by the
provisions of the Section 4.10 hereof; and


 


(2)            the
issuance of Equity Interests by any of the Company’s Restricted Subsidiaries or
the sale of Equity Interests in any of its Subsidiaries.


 


Notwithstanding
the preceding, none of the following items will be deemed to be an Asset Sale:


 


(1)            any
single transaction or series of related transactions that involves assets
having a fair market value of less than $2.0 million;


 


(2)            a
transfer of assets between or among the Company and its Subsidiaries,


 


(3)            an
issuance of Equity Interests by a Subsidiary to the Company or to another
Subsidiary;


 


(4)            the
sale or lease of equipment, inventory or accounts receivable in the ordinary
course of business;


 


(5)            the
sale or other disposition of cash or Cash Equivalents; and


 


(6)            a
Restricted Payment or Permitted Investment that is permitted by Section 4.07
hereof.


 


“Attributable Debt” in respect of a sale and leaseback transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental
payments during the remaining term of the lease included in such sale and
leaseback transaction including any period for which such lease has been
extended or may, at the option of the lessor, be extended. Such present value
shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.


 


2

















 


“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the
relief of debtors.


 


“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5
under the Exchange Act, except that in calculating the beneficial ownership of
any particular “person” (as that term is used in Section 13(d)(3) of the
Exchange Act), such “person” will be deemed to have beneficial ownership of all
securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
“Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.


 


“Board of Directors” means:


 


(1)            with
respect to a corporation, the board of directors of the corporation;


 


(2)            with
respect to a partnership, the Board of Directors of the general partner of the
partnership; and


 


(3)            with
respect to any other Person, the board or committee of such Person serving a
similar function.


 


“Broker-Dealer” has the meaning set forth in the Registration Rights Agreement.


 


“Business Day” means any day other than a Legal Holiday.


 


“Capital Lease Obligation” means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance
with GAAP.


 


“Capital Stock” means:


 


(1)            in
the case of a corporation, corporate stock;


 


(2)            in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;


 


(3)            in
the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and


 


(4)            any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.


 


“Cash Equivalents” means:


 


(1)            United
States dollars;


 


(2)            securities
issued or directly and fully guaranteed or insured by the United States government
or any agency or instrumentality of the United States government (provided that the full faith and credit of
the United States is pledged in support of those securities) having maturities
of not more than six months from the date of acquisition;


 


(3)            certificates
of deposit and eurodollar time deposits with maturities of six months or less
from the date of acquisition, bankers’ acceptances with maturities not
exceeding six


 


3

















 


months and overnight bank deposits, in each case, with any domestic
commercial bank having capital and surplus in excess of $500.0 million and a
Thomson Bank Watch Rating of “B” or better;


 


(4)            repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (2) and (3) above entered into with any
financial institution meeting the qualifications specified in clause (3) above;


 


(5)            commercial
paper having the highest rating obtainable from Moody’s or S&P and in each
case maturing within six months after the date of acquisition; and


 


(6)            money
market funds at least 95% of the assets of which constitute Cash Equivalents of
the kinds described in clauses (1) through (5) of this definition.


 


“Clearstream” means Clearstream Banking, S.A.


 


“Change of Control” means the occurrence of any of the following:


 


(1)            the
direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole to any “person” (as that term is used
in Section 13(d)(3) of the Exchange Act);


 


(2)            the
adoption of a plan relating to the liquidation or dissolution of the Company;


 


(3)            the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” (as defined above)
becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting
Stock of the Company, measured by voting power rather than number of shares; or


 


(4)            the
first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors.


 


“Company” means SEMCO Energy, Inc., and any and all successors thereto.


 


“Consolidated Cash Flow” means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus:


 


(1)            an
amount equal to any extraordinary loss plus any net loss realized by such
Person or any of its Restricted Subsidiaries in connection with an Asset Sale,
to the extent such losses were deducted in computing such Consolidated Net
Income; plus


 


(2)            provision
for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was
deducted in computing such Consolidated Net Income; plus


 


(3)            Consolidated
Interest Expense of such Person and its Restricted Subsidiaries for such period
to the extent that any such Consolidated Interest Expense was deducted in
computing such Consolidated Net Income; plus


 


4

















 


(4)            depreciation,
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash expense to the
extent that it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Restricted Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash expenses
were deducted in computing such Consolidated Net Income; plus


 


(5)            any
unusual or non-recurring items of loss or expense incurred in connection with
the initial offering of the Notes under this Indenture and the 2008 Notes under
the 2008 Notes Indenture and the use of proceeds therefrom; minus


 


(6)            non-cash
items increasing such Consolidated Net Income for such period, other than the
accrual of revenue in the ordinary course of business,


 


in
each case, on a consolidated basis and determined in accordance with GAAP.


 


“Consolidated Interest Expense” means, with respect to any Person for any
period, the sum of:


 


(1)            the
consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued (including, without limitation,
amortization or original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers’ acceptance
financings, and net of the effect of all payments (if any) made or received
pursuant to Hedging Obligations); plus


 


(2)            the
consolidated interest expense of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus


 


(3)            any
interest expense on Indebtedness of another Person that is guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries (whether or not such
Guarantee or Lien is called upon); plus


 


(4)            the
product of (a) all dividend payments on any series of preferred stock of such
Person or any of its Restricted Subsidiaries, times (b) (i) in the case of
trust preferred dividend payments, one and (ii) in the case of other dividend
payments, a fraction, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and local statutory
tax rate of such Person, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP.


 


“Consolidated Net Income” means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided
that:


 


(1)            the
Net Income (but not loss) of any Person that is not a Restricted Subsidiary or
that is accounted for by the equity method of accounting will be included only
to the extent of the amount of dividends or distributions paid in cash to the
specified Person or a Restricted Subsidiary of the Person;


 


5

















 


(2)            the
Net Income of any Restricted Subsidiary will be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders; and


 


(3)            the
cumulative effect of a change in accounting principles will be excluded.


 


“Construction Business Disposition” means the sale or other disposition of all
or a portion of the assets of the Company’s construction services business
segment; provided that:


 


(1)            The
Company would, at the time of such disposition and after giving pro forma
effect thereto as if such disposition had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness (other than Permitted Debt) pursuant to the Fixed
Charge Coverage Ratio test set forth in Section 4.09(a) hereof;


 


(2)            the
consideration received by the Company or a Restricted Subsidiary in connection
with such disposition is at least equal to the fair market value, as determined
in good faith by the Board of Directors and set forth in an Officers’
Certificate delivered to the Trustee, of the assets that are the subject of
that disposition;


 


(3)            such
disposition is not to a Person that would be an Affiliate of the Company
(otherwise as a result of the Company’s ownership interests in such Person);
and


 


(4)            the
fair market value of the assets disposed of does not exceed 10% of the total
fair market value of the Company on a consolidated basis, as determined in good
faith by the Board of Directors and set forth in an Officers’ Certificate
delivered to the Trustee.


 


“Continuing Directors” means, as of any date of determination, any
member of the Board of Directors of the Company who:


 


(1)            was
a member of such Board of Directors on the date of this Indenture; or


 


(2)            was
nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board at the
time of such nomination or election.


 


“Corporate Trust Office of the Trustee” will be at the address of the Trustee
specified in Section 12.02 hereof or such other address as to which the Trustee
may give notice to the Company.


 


“Credit Agreement” means that certain Credit Agreement, dated as of June 25, 2002, by and
among the Company, Standard Federal Bank N.A., as administrative agent, and the
several banks and other financial institutions party thereto, including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, restated,
modified, renewed, refunded, replaced or refinanced from time to time.


 


“Credit Facilities” means, one or more debt facilities (including, without limitation, the
Credit Agreement) or commercial paper facilities, in each case with banks or
other institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to


 


6

















 


such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.


 


“Custodian” means the Trustee, as custodian with respect to the Notes in global
form, or any successor entity thereto.


 


“Default” means any event that is, or with the passage of time or the giving of
notice or both would be, an Event of Default.


 


“Definitive Note” means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests
in the Global Note” attached thereto.


 


“Depositary” means, with respect to the Notes issuable or issued in whole or in
part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.


 


“Disqualified Stock” means any Capital Stock that, by its terms
(or by the terms of any security into which it is convertible, or for which it
is exchangeable, in each case at the option of the holder of the Capital
Stock), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder of the Capital Stock, in whole or in part, on or
prior to the date that is 91 days after the date on which the Notes mature.
Notwithstanding the preceding sentence, any Capital Stock that would constitute
Disqualified Stock solely because the holders of the Capital Stock have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a change of control or an asset sale will not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company may
not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.07 hereof.


 


“Equity Interests” means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).


 


“Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear system.


 


“Exchange Act” means the Securities Exchange Act of 1934,
as amended.


 


“Exchange Notes” means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.


 


“Exchange Offer” has the meaning set forth in the
Registration Rights Agreement.


 


“Exchange Offer Registration Statement” has the meaning set forth in the Registration
Rights Agreement.


 


“Existing Indebtedness” means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement), including
intercompany Indebtedness underlying the trust preferred securities of the
Company’s Subsidiaries, in existence on the date of this Indenture, until such
amounts are repaid.


 


7

















 


“Fixed Charge Coverage Ratio” means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Consolidated Interest Expense of such Person for such period. In
the event that the specified Person or any of its Restricted Subsidiaries
incurs, assumes, Guarantees, repays, repurchases or redeems any Indebtedness
(other than ordinary working capital borrowings) or issues, repurchases or
redeems preferred stock subsequent to the commencement of the period for which
the Fixed Charge Coverage Ratio is being calculated and on or prior to the date
on which the event for which the calculation of the Fixed Charge Coverage Ratio
is made (the “Calculation Date”),
then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect
to such incurrence, assumption, Guarantee, repayment, repurchase or redemption
of Indebtedness, or such issuance, repurchase or redemption of preferred stock,
and the use of the proceeds therefrom as if the same had occurred at the
beginning of the applicable four-quarter reference period.


 


In
addition, for purposes of calculating the Fixed Charge Coverage Ratio:


 


(1)            acquisitions
that have been made by the specified Person or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
will be given pro forma effect as if they had occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for such reference period
will be calculated on a pro forma basis in accordance with Regulation S-X under
the Securities Act;


 


(2)            the
Consolidated Cash Flow attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, will be excluded; and


 


(3)            the
Consolidated Interest Expense attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, will be excluded, but only to the extent that
the obligations giving rise to such Consolidated Interest Expense will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.


 


“GAAP” means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.


 


“Global Notes” means, individually and collectively, each
of the Restricted Global Notes and the Unrestricted Global Notes, substantially
in the form of Exhibit A hereto issued in accordance with Section 2.01,
2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.


 


“Global Note Legend” means the legend set forth in Section
2.06(g)(2) hereof, which is required to be placed on all Global Notes issued
under this Indenture.


 


“Government Securities” means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.


 


“Guarantee” means a guarantee other than by endorsement of negotiable instruments
for collection in the ordinary course of business, direct or indirect, in any
manner including, without limitation, by way of


 


8

















 


a
pledge of assets or through letters of credit or reimbursement agreements in
respect thereof, of all or any part of any Indebtedness.


 


“Guarantors” means each Restricted Subsidiary of the Company that executes a
Subsidiary Guarantee of the Notes in accordance with the provisions of this
Indenture, and its successors and assigns.


 


“Hedging Obligations” means, with respect to any specified Person,
the obligations of such Person under:


 


(1)            interest
rate, currency or commodity swap agreements, interest rate cap agreements and
interest rate collar agreements;


 


(2)            other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates, currency exchange rates or commodity prices; and


 


(3)            commodity
futures contracts, commodity options or other similar agreements or
arrangements designed to protect against fluctuations in the price of
commodities used by such Person at the time, including fixed price gas supply
purchase contracts.


 


“Holder” means a Person in whose name a Note is registered.


 


“IAI Global Note” means a Global Note substantially in the form of Exhibit A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with or on behalf of and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal to the outstanding principal amount
of the Notes sold to Institutional Accredited Investors.


 


“Indebtedness” means, with respect to any specified Person, any indebtedness of such
Person, whether or not contingent:


 


(1)            in
respect of borrowed money;


 


(2)            evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);


 


(3)            in
respect of banker’s acceptances;


 


(4)            representing
Capital Lease Obligations;


 


(5)            representing
the balance deferred and unpaid of the purchase price of any property, except
any such balance that constitutes an accrued expense or trade payable; or


 


(6)            representing
any Hedging Obligations,


 


if
and to the extent any of the preceding items (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
“Indebtedness” includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.


 


The
amount of any Indebtedness outstanding as of any date will be:


 


9

















 


(1)            the
accreted value of the Indebtedness, in the case of any Indebtedness issued with
original issue discount;


 


(2)            the
principal amount of the Indebtedness, in the case of any other Indebtedness;
and


 


(3)            in
the case of any Hedging Obligation, the net amount payable if such Hedging
Obligation is terminated at that time due to default by such Person (after
giving effect to any contractually permitted set-off).


 


“Indenture” means this Indenture, as amended or supplemented from time to time.


 


“Indirect Participant” means a Person who holds a beneficial
interest in a Global Note through a Participant.


 


“Initial Notes” means the first $94,641,000 in aggregate
principal amount of Notes issued under this Indenture on the date hereof.


 


“Initial Purchasers” means Credit Suisse First Boston LLC,
McDonald Investments Inc., ABN AMRO Incorporated, U.S. Bancorp Piper Jaffray
Inc. and NatCity Investments, Inc.


 


“Institutional Accredited Investor” means an institution that is an “accredited
investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act, who are not also QIBs.


 


“Investments” means, with respect to any Person, all
direct or indirect investments by such Person in other Persons (including
Affiliates) in the forms of loans (including Guarantees or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business and
excluding trade payables of the Company and its Subsidiaries arising in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. If the Company or any Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Subsidiary of the Company, the Company will be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Company’s Investments in such Subsidiary
that were not sold or disposed of in an amount determined as provided in the
final paragraph of Section 4.07 hereof. 
The acquisition by the Company or any Subsidiary of the Company of a
Person that holds an Investment in a third Person will be deemed to be an
Investment by the Company or such Subsidiary in such third Person in an amount
equal to the fair market value of the Investments held by the acquired Person
in such third Person in an amount determined as provided in the final paragraph
of Section 4.07 hereof.


 


“Legal Holiday” means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed.  If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue on such payment for
the intervening period.


 


“Letter of Transmittal” means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.


 


10

















 


“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.


 


“Moody’s” means Moody’s Investors Service, Inc.


 


“Net Income” means, with respect to any specified Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however:


 


(1)            any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with: (a) any Asset Sale; or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and


 


(2)            any
extraordinary gain (but not loss), together with any related provision for
taxes on such extraordinary gain (but not loss).


 


“Net Proceeds” means the aggregate cash proceeds received by the Company or any of
its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale, taxes paid or payable as a result of
the Asset Sale, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.


 


“Non-Recourse Debt” means Indebtedness:


 


(1)            as
to which neither the Company nor any of its Restricted Subsidiaries (a)
provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is directly or indirectly
liable as a guarantor or otherwise, or (c) constitutes the lender;


 


(2)            no
default with respect to which (including any rights that the holders of the
Indebtedness may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of any
other Indebtedness (other than the Notes) of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment of the Indebtedness to be accelerated or payable prior to its
Stated Maturity; and


 


(3)            as
to which the lenders have been notified in writing that they will not have any
recourse to the stock or assets of the Company or any of its Restricted
Subsidiaries.


 


“Non-U.S. Person” means a Person who is not a U.S. Person.


 


“Notes” has the meaning assigned to it in the preamble to this Indenture.  The Initial Notes and the Additional Notes
shall be treated as a single class for all purposes under this Indenture, and
unless the


 


11

















 


context
otherwise requires, all references to the Notes shall include the Initial Notes
and any Additional Notes.


 


“Obligations” means any principal, interest, penalties,
fees, indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Indebtedness.


 


“Officer” means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.


 


“Officers’ Certificate” means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.


 


“Opinion of Counsel” means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof.  The counsel may be an
employee of or counsel to the Company or any Subsidiary of the Company.


 


“Participant” means, with respect to the Depositary,
Euroclear or Clearstream, a Person who has an account with the Depositary,
Euroclear or Clearstream, respectively (and, with respect to DTC, shall include
Euroclear and Clearstream).


 


“Permitted Business” means the business of operating one or more
regulated utilities and other businesses that are ancillary, reasonably related
thereto, or which are a reasonable extension thereof as determined in good
faith by the Board of Directors of the Company, including, without limitation,
the businesses conducted by the Company and its Subsidiaries on the date of this
Indenture.


 


“Permitted Investments” means:


 


(1)            any
Investment in the Company or in a Restricted Subsidiary of the Company;


 


(2)            any
Investment in Cash Equivalents;


 


(3)            any
Investment by the Company or any Restricted Subsidiary of the Company in a
Person, if as a result of such Investment:


 


(A)          such Person becomes a
Restricted Subsidiary of the Company and, if required under Section 4.18
hereof, a Guarantor; or


 


(B)           such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a Restricted
Subsidiary of the Company that, if required under Section 4.18 hereof, is a
Guarantor;


 


(4)            any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.10
hereof;


 


(5)            any
Investment in any Person solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company;


 


12

















 


(6)            any
Investments received in compromise of obligations of such persons incurred in
the ordinary course of trade creditors or customers that were incurred in the
ordinary course of business, including pursuant to any plan of reorganization
or similar arrangement upon the bankruptcy or insolvency of any trade creditor
or customer; and


 


(7)            Hedging
Obligations.


 


“Permitted Liens” means:


 


(1)            Liens
in favor of the Company or any Guarantor;


 


(2)            Liens
on assets of the Company or any of its Restricted Subsidiaries to secure the
performance of statutory obligations, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary course of
business;


 


(3)            Liens
on assets of the Company or any Guarantor to secure Indebtedness (including
Capital Lease Obligations) or Attributable Debt permitted by Section 4.09(b)(4)
hereof covering only the assets acquired with such Indebtedness;


 


(4)            Liens
on assets of the Company or any of its Restricted Subsidiaries existing on the
date of this Indenture;


 


(5)            Liens
on assets of the Company or any of its Restricted Subsidiaries for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided
that any reserve or other appropriate provision as is required in conformity
with GAAP has been made therefor;


 


(6)            Liens
on assets of the Company or any of its Restricted Subsidiaries incurred or
deposits made in the ordinary course of business, including but not limited to,
(i) any mechanics,’ materialmens,’ carriers,’ workmens,’ vendors’ or other like
Liens and (ii) Liens securing amounts in connection with workers’ compensation,
unemployment insurance and other types of social security;


 


(7)            Liens
on assets of the Company or any of its Restricted Subsidiaries incurred or
deposits made securing the performance of tenders, bids, leases, trade
contracts (other than for borrowed money), government contracts,
return-of-money bonds and other obligations of like nature incurred in the
ordinary course of business;


 


(8)            rights
of financial institutions to offset credit balances in connection with the
operation of cash management programs established for the benefit of the
Company or a Restricted Subsidiary of the Company or in connection with the
issuance of letter of credit for the benefit of the Company or a Restricted
Subsidiary of the Company;


 


(9)            Liens
that arise pursuant to any order of attachment, distraint or similar legal
process arising in connection with court proceedings and Liens that secure the
reimbursement obligations for any bonds obtained in connection with an appeal
taken in any court proceeding, so long as the execution or other enforcement of
any such Lien arising pursuant to such legal process is effectively stayed and
the claims secured thereby are being contested in good faith and, if
appropriate, by appropriate legal proceedings, or Liens in favor of a plaintiff
or a defendant in any action before a court or tribunal as security for costs
and/or other expenses;


 


13

















 


(10)          any
extension, renewal or replacement (or successive extensions, renewals or
replacements), as a whole or in part, of any Liens referred to above, for
amounts not exceeding the principal amount of the Indebtedness secured by the
Lien so extended, renewed or replaced; provided
that such extension, renewal or replacement Lien is limited to all or a part of
the same assets that were covered by the Lien extended, renewed or replaced
(plus improvements on such assets);


 


(11)          minor
survey exceptions or minor encumbrances, easements or reservations, or rights
of others for rights-of-way, utilities and other similar purposes, or zoning or
other restrictions as to the use of real properties, which are necessary for
the conduct of the activities of the Company and its Restricted Subsidiaries of
which customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event materially
impair the operation of the business of the Company and its Restricted
Subsidiaries;


 


(12)          Liens
on assets of the Company or any of its Restricted Subsidiaries securing trade
payables for natural gas purchases but only to the extent such Liens are
required from suppliers generally in accordance with the then-customary market
practice; and


 


(13)          Liens
on assets of the Company or any of its Restricted Subsidiaries incurred in the
ordinary course of business of the Company with respect to obligations that do
not exceed $5.0 million at any one time outstanding.


 


“Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any
of its Restricted Subsidiaries issued in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); provided
that:


 


(1)            the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness extended, refinanced, renewed,
replaced, defeased or refunded (plus all accrued interest on the Indebtedness
and the amount of all expenses and premiums incurred in connection therewith);


 


(2)            such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded;


 


(3)            if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and


 


(4)            such
Indebtedness is incurred either by the Company or by the Restricted Subsidiary
who is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.


 


“Person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.


 


14

















 


“Private Placement Legend” means the legend set forth in Section
2.06(g)(1) hereof to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.


 


“QIB” means a “qualified institutional buyer” as defined in Rule 144A.


 


“Registration Rights Agreement” means the Registration Rights Agreement,
dated as of May 15, 2003, between the Company and the other parties named on
the signature pages thereof, relating to the Notes and the 2008 Notes, as such
agreement may be amended, modified or supplemented from time to time and, with
respect to any Additional Notes, one or more registration rights agreements
among the Company, the Guarantors, if any, and the other parties thereto, as
such agreement(s) may be amended, modified or supplemented from time to time,
relating to rights given by the Company to the purchasers of Additional Notes
to register such Additional Notes under the Securities Act.


 


“Regulation S” means Regulation S promulgated under the
Securities Act.


 


“Regulation S Global Note” means a Global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.


 


“Responsible Officer,” when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.


 


“Restricted Definitive Note” means a Definitive Note bearing the Private
Placement Legend.


 


“Restricted Global Note” means a Global Note bearing the Private
Placement Legend.


 


“Restricted Investment” means an Investment other than a Permitted
Investment.


 


“Restricted Period” means the 40-day distribution compliance
period as defined in Regulation S.


 


“Restricted Subsidiary” of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.


 


“Rule 144” means Rule 144 promulgated under the Securities Act.


 


“Rule 144A” means Rule 144A promulgated under the Securities Act.


 


“Rule 903” means Rule 903 promulgated under the Securities Act.


 


“Rule 904” means Rule 904 promulgated the Securities Act.


 


“S&P” means Standard & Poor’s Ratings Group.


 


“SEC” means the Securities and Exchange Commission.


 


“Securities Act” means the Securities Act of 1933, as
amended.


 


15

















 


“Shelf Registration Statement” means the Shelf Registration Statement as
defined in the Registration Rights Agreement.


 


“Significant Subsidiary” means any Subsidiary that would be a
“significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.


 


“Stated Maturity” means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which the
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and will not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.


 


“Subsidiary” means, with respect to any specified Person:


 


(1)            any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees of the corporation, association or other business entity is at the
time owned or controlled, directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person (or a combination thereof); and


 


(2)            any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person
(or any combination thereof).


 


“Subsidiary Guarantee” means the Guarantee by each Guarantor of the
Company’s payment obligations under this Indenture and on the Notes, executed
pursuant to the provisions of this Indenture.


 


“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as
in effect on the date on which this Indenture is qualified under the TIA.


 


“Trustee” means the party named as such in the preamble to this Indenture until
a successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.


 


“Unrestricted Global Note” means a permanent global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the “Schedule of Exchanges of Interests in the Global Note” attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.


 


“Unrestricted Definitive Note” means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.


 


“Unrestricted Subsidiary” means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to
a resolution of the Board of Directors, but only to the extent that such
Subsidiary:


 


(1)            has
no Indebtedness other than Non-Recourse Debt;


 


(2)            is
not party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless the terms of any
such agreement,


 


16

















 


contract, arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company;


 


(3)            is
a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results; and


 


(4)            has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries.


 


Any
designation of a Subsidiary of the Company as an Unrestricted Subsidiary will
be evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof.  If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted Subsidiary, it
will thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under Section 4.09
hereof, the Company will be in default of Section 4.09 hereof. The Board of
Directors of the Company may at any time designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided
that such designation will be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation will only be permitted if (1) such
Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period; and (2) no Default or Event of Default would be in existence
following such designation. Upon any such designation as a Restricted
Subsidiary, such Subsidiary will become a Guarantor and execute a supplemental
indenture if so required under Section 4.18 hereof.


 


“U.S. Person” means a U.S. Person as defined in Rule
902(o) under the Securities Act.


 


“Voting Stock” of any Person as of any date means the
Capital Stock of such Person that is at the time entitled to vote in the election
of the Board of Directors of such Person.


 


“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing:


 


(1)            the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect of the
Indebtedness, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment;
by


 


(2)            the
then outstanding principal amount of such Indebtedness.


 


Section
1.02           Other
Definitions.


 


	
  Term

  	
   

  	
  Defined
  in

  Section

  
	
   

  	
   

  	
   

  
	
  “Affiliate
  Transaction”

  	
   

  	
  4.11

  
	
  “Asset
  Sale Offer”

  	
   

  	
  3.09

  
	
  “Authentication
  Order”

  	
   

  	
  2.02

  
	
  “Change
  of Control Offer”

  	
   

  	
  4.15

  
	
  “Change
  of Control Payment”

  	
   

  	
  4.15

  
	
  “Change
  of Control Payment Date”

  	
   

  	
  4.15

  
	
  “Covenant
  Defeasance”

  	
   

  	
  8.03

  
	
  “DTC”

  	
   

  	
  2.03

  
	
  “Event
  of Default”

  	
   

  	
  6.01

  
	
  “Excess
  Proceeds”

  	
   

  	
  4.10

  
	
  “incur”

  	
   

  	
  4.09

  
	
  “Legal
  Defeasance”

  	
   

  	
  8.02

  
	
  “Offer
  Amount”

  	
   

  	
  3.09

  
	
  “Offer
  Period”

  	
   

  	
  3.09

  
	
  “Paying
  Agent”

  	
   

  	
  2.03

  
	
  “Permitted
  Debt”

  	
   

  	
  4.09

  
	
  “Purchase
  Date”

  	
   

  	
  3.09

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Restricted
  Payments”

  	
   

  	
  4.07

  



 


17

















 


Section
1.03           Incorporation
by Reference of Trust Indenture Act.


 


Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference in
and made a part of this Indenture.


 


The
following TIA terms used in this Indenture have the following meanings:


 


“indenture securities” means the Notes;


 


“indenture security Holder” means a Holder of a Note;


 


“indenture to be qualified” means this Indenture;


 


“indenture trustee” or “institutional
trustee” means the Trustee; and


 


“obligor” on the Notes and the Subsidiary Guarantees means the Company and the
Guarantors, respectively, and any successor obligor upon the Notes and the
Subsidiary Guarantees, respectively.


 


All
other terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule under the TIA have the
meanings so assigned to them.


 


Section
1.04           Rules
of Construction.


 


Unless
the context otherwise requires:


 


(1)           a term has the meaning assigned to
it;


 


(2)           an accounting term not otherwise
defined has the meaning assigned to it in accordance with GAAP;


 


(3)           “or” is not exclusive;


 


18

















 


(4)           words in the singular include the
plural, and in the plural include the singular;


 


(5)           “will” shall be interpreted to
express a command;


 


(6)           provisions apply to successive events
and transactions; and


 


(7)           references to sections of or rules
under the Securities Act will be deemed to include substitute, replacement of
successor sections or rules adopted by the SEC from time to time.


 


ARTICLE 2.

THE NOTES


 


Section
2.01           Form
and Dating.


 


(a)           General.  The Notes and the Trustee’s certificate of
authentication will be substantially in the form of Exhibit A hereto.  The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage.  Each Note will be dated the date of its
authentication.  The Notes shall be in
denominations of $1,000 and integral multiples thereof.


 


The terms and provisions
contained in the Notes will constitute, and are hereby expressly made, a part
of this Indenture and the Company, the Guarantors (if any) and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby. 
However, to the extent any provision of any Note conflicts with the
express provisions of this Indenture, the provisions of this Indenture shall
govern and be controlling.


 


(b)           Global
Notes.  Notes issued in
global form will be substantially in the form of Exhibit A attached hereto
(including the Global Note Legend thereon and the “Schedule of Exchanges of
Interests in the Global Note” attached thereto).  Notes issued in definitive form will be substantially in the form
of Exhibit A attached hereto (but without the Global Note Legend thereon and
without the “Schedule of Exchanges of Interests in the Global Note” attached
thereto).  Each Global Note will
represent such of the outstanding Notes as will be specified therein and each
shall provide that it represents the aggregate principal amount of outstanding
Notes from time to time endorsed thereon and that the aggregate principal
amount of outstanding Notes represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges and
redemptions.  Any endorsement of a
Global Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby will be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.


 


(c)           Euroclear
and Clearstream Procedures Applicable.  The provisions of the “Operating Procedures of the Euroclear
System” and “Terms and Conditions Governing Use of Euroclear” and the “General
Terms and Conditions of Clearstream Banking” and “Customer Handbook” of
Clearstream will be applicable to transfers of beneficial interests in the
Regulation S Global Notes that are held by Participants through Euroclear or
Clearsteam.


 


Section
2.02           Execution
and Authentication.


 


An Officer must sign the
Notes for the Company by manual or facsimile signature.


 


If the Officer whose
signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note will nevertheless be valid.


 


19

















 


A Note will not be valid
until authenticated by the manual signature of the Trustee.  The signature will be conclusive evidence
that the Note has been authenticated under this Indenture.


 


The
Trustee will, upon receipt of a written order of the Company signed by an
Officer (an “Authentication Order”),
authenticate Notes for issue up to the aggregate principal amount stated in
paragraph 4 of the Notes.


 


The
Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Notes.  An authenticating
agent may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights
as an Agent to deal with Holders or an Affiliate of the Company.


 


All
Notes issued under this Indenture shall be treated as a single class for all
purposes under this Indenture.


 


Section
2.03           Registrar
and Paying Agent.


 


The
Company will maintain an office or agency where Notes may be presented for
registration of transfer or for exchange (“Registrar”)
and an office or agency where Notes may be presented for payment (“Paying Agent”).  The Registrar will keep a register of the Notes and of their
transfer and exchange.  The Company may
appoint one or more co-registrars and one or more additional paying
agents.  The term “Registrar” includes
any co-registrar and the term “Paying Agent” includes any additional paying
agent.  The Company may change any
Paying Agent or Registrar without notice to any Holder.  The Company will notify the Trustee in
writing of the name and address of any Agent not a party to this
Indenture.  If the Company fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such.  The Company or any
of its Subsidiaries may act as Paying Agent or Registrar.


 


The
Company initially appoints The Depository Trust Company (“DTC”) to act as Depositary with respect
to the Global Notes.


 


The
Company initially appoints the Trustee to act as the Registrar and Paying Agent
and to act as Custodian with respect to the Global Notes.


 


Section
2.04           Paying
Agent to Hold Money in Trust.


 


The
Company will require each Paying Agent other than the Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal,
premium or Additional Interest, if any, or interest on the Notes, and will
notify the Trustee of any default by the Company in making any such
payment.  While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it
to the Trustee.  The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying
Agent (if other than the Company or a Subsidiary) will have no further
liability for the money.  If the Company
or a Subsidiary acts as Paying Agent, it will segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying
Agent.  Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee will serve as
Paying Agent for the Notes.


 


20

















 


Section
2.05           Holder
Lists.


 


The
Trustee will preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of all Holders and
shall otherwise comply with TIA § 312(a). 
If the Trustee is not the Registrar, the Company will furnish to the
Trustee at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes and the Company shall otherwise comply with
TIA § 312(a).


 


Section
2.06           Transfer
and Exchange.


 


(a)           Transfer
and Exchange of Global Notes. 
A Global Note may not be transferred as a whole except by the Depositary
to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.  All Global Notes will be
exchanged by the Company for Definitive Notes if:


 


(1)           the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by
the Company within 120 days after the date of such notice from the Depositary;


 


(2)           the Company in its sole discretion
determines that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and delivers a written notice to such effect to the
Trustee; or


 


(3)           there has not occurred and is
continuing a Default or Event of Default with respect to the Notes.


 


Upon
the occurrence of either of the preceding events in (1), (2) or (3) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee.  Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof.  Every Note authenticated
and delivered in exchange for, or in lieu of, a Global Note or any portion
thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note.  A Global Note may not be exchanged for
another Note other than as provided in this Section 2.06(a), however,
beneficial interests in a Global Note may be transferred and exchanged as
provided in Section 2.06(b), (c) or (f) hereof.


 


(b)           Transfer
and Exchange of Beneficial Interests in the Global Notes.  The transfer and exchange of beneficial
interests in the Global Notes will be effected through the Depositary, in
accordance with the provisions of this Indenture and the Applicable Procedures.  Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act.  Transfers of beneficial interests in the
Global Notes also will require compliance with either subparagraph (1) or (2)
below, as applicable, as well as one or more of the other following
subparagraphs, as applicable:


 


(1)           Transfer
of Beneficial Interests in the Same Global Note.  Beneficial interests in any Restricted
Global Note may be transferred to Persons who take delivery thereof in the form
of a beneficial interest in the same Restricted Global Note in accordance with
the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the
expiration of the Restricted Period, transfers of beneficial interests in the
Regulation S Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser).  Beneficial interests in any Unrestricted Global
Note may be transferred to


 


21

















 


Persons
who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note.  No written
orders or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(1).


 


(2)           All
Other Transfers and Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers and
exchanges of beneficial interests that are not subject to Section 2.06(b)(1)
above, the transferor of such beneficial interest must deliver to the Registrar
either:


 


(A)          both:


 


(i)            a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in another
Global Note in an amount equal to the beneficial interest to be transferred or
exchanged; and


 


(ii)           instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase; or


 


(B)           both:


 


(i)            a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged; and


 


(ii)           instructions
given by the Depositary to the Registrar containing information regarding the
Person in whose name such Definitive Note shall be registered to effect the
transfer or exchange referred to in (1) above. 
Upon consummation of an Exchange Offer by the Company in accordance with
Section 2.06(f) hereof, the requirements of this Section 2.06(b)(2) shall be
deemed to have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the Holder of such
beneficial interests in the Restricted Global Notes.  Upon satisfaction of all of the requirements for transfer or exchange
of beneficial interests in Global Notes contained in this Indenture and the
Notes or otherwise applicable under the Securities Act, the Trustee shall
adjust the principal amount of the relevant Global Note(s) pursuant to Section
2.06(h) hereof.


 


(3)           Transfer
of Beneficial Interests to Another Restricted Global Note.  A beneficial interest in any Restricted
Global Note may be transferred to a Person who takes delivery thereof in the
form of a beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(2) above and the Registrar
receives the following:


 


(A)          if the transferee
will take delivery in the form of a beneficial interest in the 144A Global
Note, then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;


 


22

















 


(B)           if the transferee
will take delivery in the form of a beneficial interest in the Regulation S
Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof; and


 


(C)           if the transferee
will take delivery in the form of a beneficial interest in the IAI Global Note,
then the transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and opinion of counsel required by
item (3) thereof, if applicable.


 


(4)           Transfer
and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial
Interests in an Unrestricted Global Note.  A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an Unrestricted
Global Note or transferred to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(2) above and:


 


(A)          such exchange or
transfer is effected pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is not (i)
a Broker-Dealer, (ii) a Person participating in the distribution of the
Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144)
of the Company;


 


(B)           such transfer is
effected pursuant to the Shelf Registration Statement in accordance with the
Registration Rights Agreement;


 


(C)           such transfer is effected
by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or


 


(D)          the Registrar
receives the following:


 


(i)            if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial interest in an Unrestricted
Global Note, a certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(a) thereof; or


 


(ii)           if
the holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;


 


and,
in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an opinion of counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.


 


If
any such transfer is effected pursuant to subparagraph (B) or (D) above at a
time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an


 


23

















 


Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall authenticate
one or more Unrestricted Global Notes in an aggregate principal amount equal to
the aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.


 


Beneficial
interests in an Unrestricted Global Note cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Note.


 


(c)           Transfer
or Exchange of Beneficial Interests for Definitive Notes.


 


(1)           Beneficial
Interests in Restricted Global Notes to Restricted Definitive Notes.  If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:


 


(A)          if the holder of such
beneficial interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Restricted Definitive Note, a certificate from such
holder in the form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;


 


(B)           if such beneficial
interest is being transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;


 


(C)           if such beneficial
interest is being transferred to a Non-U.S. Person in an offshore transaction
in accordance with Rule 903 or Rule 904, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (2) thereof;


 


(D)          if such beneficial
interest is being transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144, a certificate
to the effect set forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;


 


(E)           if such beneficial
interest is being transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and opinion of counsel required by item (3)
thereof, if applicable;


 


(F)           if such beneficial
interest is being transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto, including the certifications
in item (3)(b) thereof; or


 


(G)           if such beneficial
interest is being transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c) thereof,


 


the
Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount.  Any Definitive Note
issued in exchange for a beneficial interest in a Restricted Global


 


24

















 


Note
pursuant to this Section 2.06(c) shall be registered in such name or names and
in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant.  The Trustee shall deliver such Definitive
Notes to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section
2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.


 


(2)           Beneficial
Interests in Restricted Global Notes to Unrestricted Definitive Notes.  A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only if:


 


(A)          such exchange or
transfer is effected pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of such beneficial interest, in
the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the Exchange
Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the
Company;


 


(B)           such transfer is
effected pursuant to the Shelf Registration Statement in accordance with the
Registration Rights Agreement;


 


(C)           such transfer is
effected by a Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement; or


 


(D)          the Registrar
receives the following:


 


(i)            if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive Note that does not bear the
Private Placement Legend, a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(b) thereof; or


 


(ii)           if
the holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof
in the form of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;


 


and,
in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an opinion of counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.


 


(3)           Beneficial
Interests in Unrestricted Global Notes to Unrestricted Definitive Notes.  If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for a
Definitive Note or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Definitive Note, then, upon satisfaction of
the conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause
the aggregate principal


 


25

















 


amount
of the applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company will execute and the Trustee will authenticate
and deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount.  Any
Definitive Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(3) will be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest requests through instructions to the Registrar from or through the
Depositary and the Participant or Indirect Participant.  The Trustee will deliver such Definitive
Notes to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(3) will not bear the
Private Placement Legend.


 


(d)           Transfer
and Exchange of Definitive Notes for Beneficial Interests.


 


(1)           Restricted
Definitive Notes to Beneficial Interests in Restricted Global Notes.  If any Holder of a Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following
documentation:


 


(A)          if the Holder of such
Restricted Definitive Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item (2)(b) thereof;


 


(B)           if such Restricted
Definitive Note is being transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;


 


(C)           if such Restricted
Definitive Note is being transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item (2)
thereof;


 


(D)          if such Restricted
Definitive Note is being transferred pursuant to an exemption from the
registration requirements of the Securities Act in accordance with Rule 144, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;


 


(E)           if such Restricted Definitive
Note is being transferred to an Institutional Accredited Investor in reliance
on an exemption from the registration requirements of the Securities Act other
than those listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and opinion of counsel required by item (3) thereof, if
applicable;


 


(F)           if such Restricted
Definitive Note is being transferred to the Company or any of its Subsidiaries,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or


 


(G)           if such Restricted
Definitive Note is being transferred pursuant to an effective registration
statement under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c) thereof,


 


26

















 


the
Trustee will cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the Regulation S Global
Note, and in all other cases, the IAI Global Note.


 


(2)           Restricted
Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Restricted Definitive Note to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note only if:


 


(A)          such exchange or
transfer is effected pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the case of an exchange, or
the transferee, in the case of a transfer, certifies in the applicable Letter
of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating
in the distribution of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;


 


(B)           such transfer is
effected pursuant to the Shelf Registration Statement in accordance with the
Registration Rights Agreement;


 


(C)           such transfer is
effected by a Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement; or


 


(D)          the Registrar
receives the following:


 


(i)            if
the Holder of such Definitive Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; or


 


(ii)           if
the Holder of such Definitive Notes proposes to transfer such Notes to a Person
who shall take delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof;


 


and,
in each such case set forth in this subparagraph (D), if the Registrar so requests
or if the Applicable Procedures so require, an opinion of counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.


 


Upon
satisfaction of the conditions of any of the subparagraphs in this Section
2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause
to be increased the aggregate principal amount of the Unrestricted Global Note.


 


(3)           Unrestricted
Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note at any time.


 


27

















 


Upon
receipt of a request for such an exchange or transfer, the Trustee will cancel
the applicable Unrestricted Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Unrestricted Global
Notes.


 


If any such exchange or transfer from a Definitive
Note to a beneficial interest is effected pursuant to subparagraphs (2)(B),
(2)(D) or (3) above at a time when an Unrestricted Global Note has not yet been
issued, the Company will issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee will authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.


 


(e)           Transfer
and Exchange of Definitive Notes for Definitive Notes.  Upon request by a Holder of Definitive Notes
and such Holder’s compliance with the provisions of this Section 2.06(e), the
Registrar will register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. 
In addition, the requesting Holder must provide any additional
certifications, documents and information, as applicable, required pursuant to
the following provisions of this Section 2.06(e).


 


(1)           Restricted
Definitive Notes to Restricted Definitive Notes.  Any Restricted Definitive Note may be
transferred to and registered in the name of Persons who take delivery thereof
in the form of a Restricted Definitive Note if the Registrar receives the
following:


 


(A)          if the transfer will
be made pursuant to Rule 144A under the Securities Act, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;


 


(B)           if the transfer will
be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications in
item (2) thereof; and


 


(C)           if the transfer will
be made pursuant to any other exemption from the registration requirements of
the Securities Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications, certificates and opinion of
counsel required by item (3) thereof, if applicable.


 


(2)           Restricted
Definitive Notes to Unrestricted Definitive Notes.  Any Restricted Definitive Note may be
exchanged by the Holder thereof for an Unrestricted Definitive Note or
transferred to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:


 


(A)          such exchange or
transfer is effected pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the case of an exchange, or
the transferee, in the case of a transfer, certifies in the applicable Letter
of Transmittal that it is not (i) a broker-dealer, (ii) a Person participating
in the distribution of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;


 


(B)           any such transfer is
effected pursuant to the Shelf Registration Statement in accordance with the
Registration Rights Agreement;


 


28

















 


(C)           any such transfer is
effected by a Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement; or


 


(D)          the Registrar
receives the following:


 


(i)            if
the Holder of such Restricted Definitive Notes proposes to exchange such Notes
for an Unrestricted Definitive Note, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in item (1)(d) thereof; or


 


(ii)           if
the Holder of such Restricted Definitive Notes proposes to transfer such Notes
to a Person who shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;


 


and,
in each such case set forth in this subparagraph (D), if the Registrar so
requests, an opinion of counsel in form reasonably acceptable to the Company to
the effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance with
the Securities Act.


 


(3)           Unrestricted
Definitive Notes to Unrestricted Definitive Notes.  A Holder of Unrestricted Definitive Notes
may transfer such Notes to a Person who takes delivery thereof in the form of
an Unrestricted Definitive Note.  Upon
receipt of a request to register such a transfer, the Registrar shall register
the Unrestricted Definitive Notes pursuant to the instructions from the Holder
thereof.


 


(f)            Exchange
Offer.  Upon the occurrence
of the Exchange Offer in accordance with the Registration Rights Agreement, the
Company will issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee will authenticate:


 


(1)           one or more Unrestricted Global Notes
in an aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered into the Exchange Offer by
Persons that certify in the applicable Letters of Transmittal that (A) they are
not Broker-Dealers, (B) they are not participating in a distribution of the
Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the
Company; and


 


(2)           Unrestricted Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer.


 


Concurrently with the
issuance of such Notes, the Trustee will cause the aggregate principal amount
of the applicable Restricted Global Notes to be reduced accordingly, and the
Company will execute and the Trustee will authenticate and deliver to the Persons
designated by the Holders of Definitive Notes so accepted Unrestricted
Definitive Notes in the appropriate principal amount.


 


(g)           Legends.  The following legends will appear on the
face of all Global Notes and Definitive Notes issued under this Indenture
unless specifically stated otherwise in the applicable provisions of this
Indenture.


 


29

















 


(1)           Private
Placement Legend.


 


(A)          Except as permitted
by subparagraph (B) below, each Global Note and each Definitive Note (and all
Notes issued in exchange therefor or substitution thereof) shall bear the
legend in substantially the following form:


 


“THIS
NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES
ACT”) AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.


 


THE
HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES
IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH
(IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.”


 


(B)           Notwithstanding the
foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs
(b)(4), (c)(2), (c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this Section
2.06 (and all Notes issued in exchange therefor or substitution thereof) will
not bear the Private Placement Legend.


 


(2)           Global
Note Legend.  Each Global
Note will bear a legend in substantially the following form:


 


“THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.


 


UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM,
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITARY OR A


 


30

















 


NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.  UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”


 


(h)           Cancellation
and/or Adjustment of Global Notes. 
At such time as all beneficial interests in a particular Global Note
have been exchanged for Definitive Notes or a particular Global Note has been
redeemed, repurchased or canceled in whole and not in part, each such Global
Note will be returned to or retained and canceled by the Trustee in accordance
with Section 2.11 hereof.  At any time
prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount of Notes represented by such Global Note will be reduced
accordingly and an endorsement will be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.


 


(i)            General
Provisions Relating to Transfers and Exchanges.


 


(1)           To permit registrations of transfers
and exchanges, the Company will execute and the Trustee will authenticate
Global Notes and Definitive Notes upon receipt of an Authentication Order in
accordance with Section 2.02 hereof or at the Registrar’s request.


 


(2)           No service charge will be made to a
Holder of a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections
2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).


 


(3)           The Registrar will not be required to
register the transfer of or exchange any Note selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in part.


 


(4)           All Global Notes and Definitive Notes
issued upon any registration of transfer or exchange of Global Notes or
Definitive Notes will be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of transfer
or exchange.


 


(5)           The Company will not be required:


 


(A)          to issue, to register
the transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business on the
day of selection;


 


31

















 


(B)           to register the
transfer of or to exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part; or


 


(C)           to register the
transfer of or to exchange a Note between a record date and the next succeeding
interest payment date.


 


(6)           Prior to due presentment for the
registration of a transfer of any Note, the Trustee, any Agent and the Company
may deem and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of principal
of and interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the contrary.


 


(7)           The Trustee will authenticate Global
Notes and Definitive Notes in accordance with the provisions of Section 2.02
hereof.


 


(8)           All certifications, certificates and
Opinions of Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be submitted
by facsimile.


 


Section
2.07           Replacement
Notes.


 


If any mutilated Note is
surrendered to the Trustee or the Company and the Trustee receives evidence to
its satisfaction of the destruction, loss or theft of any Note, the Company
will issue and the Trustee, upon receipt of an Authentication Order, will
authenticate a replacement Note if the Trustee’s requirements are met.  If required by the Trustee or the Company,
an indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may
suffer if a Note is replaced.  The
Company may charge for its expenses in replacing a Note.


 


Every replacement Note is an
additional obligation of the Company and will be entitled to all of the
benefits of this Indenture equally and proportionately with all other Notes
duly issued hereunder.


 


Section
2.08           Outstanding
Notes.


 


The Notes outstanding at any
time are all the Notes authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation, those reductions in the interest
in a Global Note effected by the Trustee in accordance with the provisions
hereof, and those described in this Section 2.08 as not outstanding.  Except as set forth in Section 2.09 hereof,
a Note does not cease to be outstanding because the Company or an Affiliate of
the Company holds the Note; however,
Notes held by the Company or a Subsidiary of the Company shall not be deemed to
be outstanding for purposes of Section 3.07(b) hereof.


 


If a Note is replaced
pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Note is held by a protected
purchaser.


 


If the principal amount of
any Note is considered paid under Section 4.01 hereof, it ceases to be
outstanding and interest on it ceases to accrue.


 


If the Paying Agent (other
than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a
redemption date or maturity date, money sufficient to pay Notes payable on that
date, then on and after that date such Notes will be deemed to be no longer
outstanding and will cease to accrue interest.


 


32

















 


Section
2.09           Treasury
Notes.


 


In
determining whether the Holders of the required principal amount of Notes have
concurred in any direction, waiver or consent, Notes owned by the Company, or
by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned will be so disregarded.


 


Section 2.10           Temporary Notes.


 


Until
certificates representing Notes are ready for delivery, the Company may prepare
and the Trustee, upon receipt of an Authentication Order, will authenticate
temporary Notes.  Temporary Notes will
be substantially in the form of certificated Notes but may have variations that
the Company considers appropriate for temporary Notes and as may be reasonably
acceptable to the Trustee.  Without
unreasonable delay, the Company will prepare and the Trustee will authenticate
definitive Notes in exchange for temporary Notes.


 


Holders
of temporary Notes will be entitled to all of the benefits of this Indenture.


 


Section
2.11           Cancellation.


 


The
Company at any time may deliver Notes to the Trustee for cancellation.  The Registrar and Paying Agent will forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment.  The Trustee and no
one else will cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and will destroy canceled Notes
(subject to the record retention requirement of the Exchange Act).  Certification of the destruction of all
canceled Notes will be delivered to the Company.  The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.


 


Section
2.12           Defaulted
Interest.


 


If
the Company defaults in a payment of interest on the Notes, it will pay the
defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof.  The Company
will notify the Trustee in writing of the amount of defaulted interest proposed
to be paid on each Note and the date of the proposed payment.  The Company will fix or cause to be fixed
each such special record date and payment date; provided that no such special record date may be less than
10 days prior to the related payment date for such defaulted interest.  At least 15 days before the special record
date, the Company (or, upon the written request of the Company, the Trustee in
the name and at the expense of the Company) will mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.


 


ARTICLE 3.

REDEMPTION AND PREPAYMENT


 


Section
3.01           Notices
to Trustee.


 


If
the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers’
Certificate setting forth:


 


33

















 


(1)           the clause of this Indenture pursuant
to which the redemption shall occur;


 


(2)           the redemption date;


 


(3)           the principal amount of Notes to be
redeemed; and


 


(4)           the redemption price.


 


Section
3.02           Selection
of Notes to Be Redeemed or Purchased.


 


If
less than all of the Notes are to be redeemed or purchased in an offer to
purchase at any time, the Trustee will select Notes for redemption or purchase
as follows:


 


(1)           if the Notes are listed on any
national securities exchange, in compliance with the requirements of the
principal national securities exchange on which the Notes are listed; or


 


(2)           if the Notes are not listed on any
national securities exchange, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate.


 


In
the event of partial redemption or purchase by lot, the particular Notes to be
redeemed or purchased will be selected, unless otherwise provided herein, not
less than 30 nor more than 60 days prior to the redemption or purchase date by
the Trustee from the outstanding Notes not previously called for redemption or
purchase.


 


The
Trustee will promptly notify the Company in writing of the Notes selected for
redemption or purchase and, in the case of any Note selected for partial
redemption or purchase, the principal amount thereof to be redeemed or
purchased.  Notes and portions of Notes
selected will be in amounts of $1,000 or whole multiples of $1,000; except that
if all of the Notes of a Holder are to be redeemed or purchased, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed or purchased. 
Except as provided in the preceding sentence, provisions of this
Indenture that apply to Notes called for redemption or purchase also apply to
portions of Notes called for redemption or purchase.


 


Section
3.03           Notice
of Redemption.


 


Subject
to the provisions of Section 3.09 hereof, at least 30 days but not more than 60
days before a redemption date, the Company will mail or cause to be mailed, by
first class mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address, except that redemption notices may be
mailed more than 60 days prior to a redemption date if the notice is issued in
connection with a defeasance of the Notes or a satisfaction and discharge of
this Indenture pursuant to Articles 8 or 11 hereof.


 


The
notice will identify the Notes to be redeemed and will state:


 


(1)           the redemption date;


 


(2)           the redemption price;


 


(3)           if any Note is being redeemed in
part, the portion of the principal amount of such Note to be redeemed and that,
after the redemption date upon surrender of such Note, a new Note 


 


34

















 


or
Notes in principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;


 


(4)           the name and address of the Paying
Agent;


 


(5)           that Notes called for redemption must
be surrendered to the Paying Agent to collect the redemption price;


 


(6)           that, unless the Company defaults in
making such redemption payment, interest on Notes called for redemption ceases
to accrue on and after the redemption date;


 


(7)           the paragraph of the Notes and/or
Section of this Indenture pursuant to which the Notes called for redemption are
being redeemed; and


 


(8)           that no representation is made as to
the correctness or accuracy of the CUSIP number, if any, listed in such notice
or printed on the Notes.


 


At
the Company’s request, the Trustee will give the notice of redemption in the
Company’s name and at its expense; provided,
however, that the Company has delivered to the Trustee, at least 45
days prior to the redemption date, an Officers’ Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.


 


Section
3.04           Effect
of Notice of Redemption.


 


Once
notice of redemption is mailed in accordance with Section 3.03 hereof, Notes
called for redemption become irrevocably due and payable on the redemption date
at the redemption price.  A notice of
redemption may not be conditional.


 


Section
3.05           Deposit
of Redemption or Purchase Price.


 


Prior
to 10:00 a.m. Eastern Time on the redemption or purchase price date, the
Company will deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption or purchase price of and accrued interest and Additional
Interest, if any, on all Notes to be redeemed or purchased on that date.  The Trustee or the Paying Agent will
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption or purchase price of, and accrued interest and Additional Interest,
if any, on, all Notes to be redeemed or purchased.


 


If
the Company complies with the provisions of the preceding paragraph, on and
after the redemption or purchase date, interest will cease to accrue on the
Notes or the portions of Notes called for redemption or purchase.  If a Note is redeemed or purchased on or
after an interest record date but on or prior to the related interest payment
date, then any accrued and unpaid interest shall be paid to the Person in whose
name such Note was registered at the close of business on such record
date.  If any Note called for redemption
or purchase is not so paid upon surrender for redemption or purchase because of
the failure of the Company to comply with the preceding paragraph, interest
shall be paid on the unpaid principal, from the redemption or purchase date
until such principal is paid, and to the extent lawful on any interest not paid
on such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.


 


35

















 


Section 3.06                                 Notes Redeemed or Purchased
in Part.


 


Upon surrender of a Note
that is redeemed or purchased in part, the Company will issue and, upon receipt
of an Authentication Order, the Trustee will authenticate for the Holder at the
expense of the Company a new Note equal in principal amount to the unredeemed
or unpurchased portion of the Note surrendered.


 


Section
3.07                                Optional Redemption.


 


(a)                                  At any time prior to May 15, 2006, the
Company may on any one or more occasions redeem up to 35% of the aggregate
principal amount of Notes issued under this Indenture at a redemption price of
107.750% of the principal amount, plus accrued and unpaid interest and
Additional Interest, if any, to the redemption date, with the net cash proceeds
of one or more public or private offerings of its Equity Interests (other than
Disqualified Stock); provided
that:


 


(1)                                  at least 65% of the aggregate principal
amount of Notes issued under this Indenture remains outstanding immediately
after the occurrence of such redemption (excluding Notes held by the Company
and its Subsidiaries); and


 


(2)                                  the redemption must occur within 60 days of
the date of the closing of such offering.


 


(b)                                 Except pursuant to the preceding paragraph,
the Notes are not redeemable at the Company’s option prior to May 15, 2008.


 


(c)                                  On or after May 15, 2008, the Company may
redeem all or a part of the Notes upon not less than 30 nor more than 60 days’
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Additional Interest, if
any, on the Notes redeemed, to the applicable redemption date, if redeemed
during the twelve-month period beginning on May 15 of the years indicated
below:


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2008

  	
   

  	
  103.875

  	
  %

  
	
  2009

  	
   

  	
  102.583

  	
  %

  
	
  2010

  	
   

  	
  101.292

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


(d)                                 Any redemption pursuant to this Section 3.07
shall be made pursuant to the provisions of Section 3.01 through 3.06 hereof.


 


Section
3.08                                 Mandatory Redemption.


 


The Company is not required
to make mandatory redemption or sinking fund payments with respect to the
Notes.


 


Section
3.09                                Offer to Purchase by
Application of Excess Proceeds.


 


In the event that, pursuant
to Section 4.10 hereof, the Company is required to commence an offer to all
Holders to purchase Notes (an “Asset Sale
Offer”), it will follow the procedures specified below.


 


The Asset Sale Offer shall
be made to all Holders and all holders of other Indebtedness that is pari passu with the Notes  (including, without limitation, the 2008
Notes) containing provisions similar to those set forth in this Indenture with
respect to offers to purchase or redeem with the proceeds of sales


 


36

















 


and assets. 
The Asset Sale Offer will remain open for a period of at least 20
Business Days following its commencement and not more than 30 Business Days,
except to the extent that a longer period is required by applicable law (the “Offer Period”).  No later than three Business Days after the termination of the
Offer Period (the “Purchase Date”),
the Company will apply all Excess Proceeds (the “Offer Amount”) to the purchase of Notes and such other pari passu Indebtedness (on a pro rata
basis, if applicable) or, if less than the Offer Amount has been tendered, all
Notes and other Indebtedness tendered in response to the Asset Sale Offer.  Payment for any Notes so purchased will be
made in the same manner as interest payments are made.


 


If the Purchase Date is on
or after an interest record date and on or before the related interest payment
date, any accrued and unpaid interest, and Additional Interest, if any, will be
paid to the Person in whose name a Note is registered at the close of business
on such record date, and no additional interest will be payable to Holders who
tender Notes pursuant to the Asset Sale Offer.


 


Upon the commencement of an
Asset Sale Offer, the Company will send, by first class mail, a notice to the
Trustee and each of the Holders, with a copy to the Trustee.  The notice will contain all instructions and
materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer.  The notice, which
will govern the terms of the Asset Sale Offer, will state:


 


(1)                                  that the Asset Sale Offer is being made
pursuant to this Section 3.09 and Section 4.10 hereof and the length of time
the Asset Sale Offer will remain open;


 


(2)                                  the Offer Amount, the purchase price and the
Purchase Date;


 


(3)                                  that any Note not tendered or accepted for
payment will continue to accrue interest;


 


(4)                                  that, unless the Company defaults in making
such payment, any Note accepted for payment pursuant to the Asset Sale Offer
will cease to accrue interest after the Purchase Date;


 


(5)                                  that Holders electing to have a Note
purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in
integral multiples of $1,000 only;


 


(6)                                  that Holders electing to have a Note
purchased pursuant to any Asset Sale Offer will be required to surrender the
Note, with the form entitled “Option of Holder to Elect Purchase” attached to
the Note completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the address specified
in the notice at least three days before the Purchase Date;


 


(7)                                  that Holders will be entitled to withdraw
their election if the Company, the Depositary or the Paying Agent, as the case
may be, receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for purchase and
a statement that such Holder is withdrawing his election to have such Note
purchased;


 


(8)                                  that, if the aggregate principal amount of
Notes and other pari passu
Indebtedness surrendered by Holders exceeds the Offer Amount, the Company will
select the Notes and other pari passu
Indebtedness to be purchased on a pro rata
basis based on the principal amount of Notes and such other pari passu Indebtedness surrendered (with
such adjustments as may be deemed appropriate by the Company so that only Notes
in denominations of $1,000, or integral multiples thereof, will be purchased);
and


 


37

















 


(9)                                  that Holders whose Notes were purchased only
in part will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry transfer).


 


On or before the Purchase
Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and will deliver to the Trustee an Officers’ Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09.  The Company, the Depositary or the Paying Agent, as the case may
be, will promptly (but in any case not later than five days after the Purchase
Date) mail or deliver to each tendering Holder an amount equal to the purchase
price of the Notes tendered by such Holder and accepted by the Company for
purchase, and the Company will promptly issue a new Note, and the Trustee, upon
written request from the Company will authenticate and mail or deliver such new
Note to such Holder, in a principal amount equal to any unpurchased portion of
the Note surrendered.  Any Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof.  The Company will publicly
announce the results of the Asset Sale Offer on the Purchase Date.


 


Other than as specifically
provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall
be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.


 


ARTICLE 4.

COVENANTS


 


Section
4.01                                 Payment of Notes.


 


The Company shall pay or
cause to be paid the principal of, premium, if any, and interest and Additional
Interest, if any, on the Notes on the dates and in the manner provided in the
Notes.  Principal, premium, if any, and
interest and Additional Interest, if any will be considered paid on the date
due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 11:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due.  The Company shall pay all Additional
Interest, if any, in the same manner on the dates and in the amounts set forth
in the Registration Rights Agreement.


 


The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal at the rate equal to the then applicable
interest rate on the Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and Additional Interest (without regard to
any applicable grace period) at the same rate to the extent lawful.


 


Section
4.02                                 Maintenance of Office or
Agency.


 


The Company shall maintain
in the Borough of Manhattan, the City of New York, an office or agency (which
may be an office of, or on behalf of, the Trustee or an affiliate of the
Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served.  The Company shall give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency.  If at any time the Company
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.


 


38

















 


The Company may also from
time to time designate one or more other offices or agencies where the Notes
may be presented or surrendered for any or all such purposes and may from time
to time rescind such designations; provided,
however, that no such designation or rescission will in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes.  The Company shall give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.


 


The Company hereby
designates the Corporate Trust Office of the Trustee as one such office or
agency of the Company in accordance with Section 2.03 hereof.


 


Section
4.03                                 Reports.


 


(a)                                  Whether or not required by the rules and
regulations of the SEC, so long as any Notes are outstanding, the Company shall
furnish to the Holders of Notes, within the time periods specified in the SEC’s
rules and regulations:


 


(1)                                  all quarterly and annual financial
information that would be required to be contained in a filing with the SEC on
Forms 10-Q and 10-K if the Company were required to file such forms, including
a “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and, with respect to the annual information only, a report thereon
by the Company’s certified independent accountants; and


 


(2)                                  all current reports that would be required to
be filed with the SEC on Form 8-K if the Company were required to file such
reports.


 


In addition, following the
consummation of the Exchange Offer contemplated by the Registration Rights
Agreement, whether or not required by the SEC, the Company shall file a copy of
all of the information and reports referred to in clauses (1) and (2) above
with the SEC for public availability within the time periods specified in the
SEC’s rules and regulations (unless the SEC will not accept such a filing) and
make such information available to securities analysts and prospective investors
upon request.  The Company shall at all
times comply with TIA § 314(a).


 


(b)                                 For so long as any Notes remain outstanding,
the Company shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.


 


Section
4.04                                 Compliance Certificate.


 


(a)                                  The Company and each Guarantor, if any (to
the extent that such Guarantor is so required under the TIA) shall deliver to
the Trustee, within 90 days after the end of each fiscal year, an Officers’
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made in the course of
the signing Officers’ duties as such Officers in which they would normally
obtain knowledge of whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of his or her knowledge
the Company has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture
(or, if a Default or Event of Default has occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Company is taking or proposes to take with respect thereto).


 


39

















 


(b)                                 So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.03(a) above shall
be accompanied by a written statement of the Company’s independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial
statements, nothing has come to their attention that would lead them to believe
that the Company has violated any provisions of Article 4 or Article 5 hereof
or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain knowledge
of any such violation.


 


(c)                                  So long as any of the Notes are outstanding,
the Company shall deliver to the Trustee, forthwith upon any Officer becoming
aware of any Default or Event of Default, an Officers’ Certificate specifying
such Default or Event of Default and what action the Company is taking or
proposes to take with respect thereto.


 


Section
4.05                                 Taxes.


 


The Company shall pay, and
shall cause each of its Subsidiaries to pay, prior to delinquency, all material
taxes, assessments, and governmental levies except such as are contested in
good faith and by appropriate proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders of the Notes.


 


Section
4.06                                 Stay, Extension and Usury
Laws.


 


The Company and each of the
Guarantors, if any, covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants
or the performance of this Indenture; and the Company and each of the
Guarantors, if any (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will
not, by resort to any such law, hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution
of every such power as though no such law has been enacted.


 


Section
4.07                                 Restricted Payments.


 


(a)                                  The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly:


 


(1)                                  declare or pay any dividend or make any other
payment or distribution on account of the Company’s or any of its Restricted
Subsidiaries’ Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving the Company or any of its
Restricted Subsidiaries) or to the direct or indirect holders of the Company’s
or any of its Restricted Subsidiaries’ Equity Interests in their capacity as
such (other than dividends or distributions payable in Equity Interests (other
than Disqualified Stock) of the Company or to the Company or a Restricted
Subsidiary of the Company);


 


(2)                                  purchase, redeem or otherwise acquire or
retire for value (including, without limitation, in connection with any merger
or consolidation involving the Company) any Equity Interests of the Company or
any direct or indirect parent of the Company;


 


40

















 


(3)                                  make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness of the Company or any of its Restricted Subsidiaries that is by
its terms subordinated to the Notes or any Guarantees of the Notes, except a
payment of interest or principal at the Stated Maturity thereof; or


 


(4)                                  make any Restricted Investment (all such
payments and other actions set forth in these clauses (1) through (4) above
being collectively referred to as “Restricted
Payments”),


 


unless,
at the time of and after giving effect to such Restricted Payment:


 


(1)                                  no Default or Event of Default has occurred
and is continuing or would occur as a consequence of such Restricted Payment;


 


(2)                                  The Company would, at the time of such
Restricted Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional Indebtedness
(other than Permitted Debt) pursuant to the Fixed Charge Coverage Ratio test
set forth in Section 4.09(a) hereof; and


 


(3)                                  such Restricted Payment, together with the aggregate
amount of all other Restricted Payments declared or made after the date of this
Indenture shall not exceed, at the date of determination, the sum, without
duplication, of:


 


(A)                              an amount equal to the Company’s Consolidated
Cash Flow from the beginning of the first fiscal quarter commencing after the
date of this Indenture to the end of the Company’s most recently ended full
fiscal quarter for which internal financial statements are available, taken as
a single accounting period, less
the product of 1.75 times the Company’s Consolidated Interest Expense from the
beginning of the first fiscal quarter commencing after the date of this
Indenture to the end of the Company’s most recently ended full fiscal quarter
for which internal financial statements are available, taken as a single
accounting period, plus


 


(B)                                an amount equal to the net cash proceeds
received by the Company from the sale of Equity Interests since the date of
this Indenture (other than (i) sales of Disqualified Stock, and (ii) Equity Interests
sold to any of the Company’s Subsidiaries) or from the sale since the date of
this Indenture of convertible or exchangeable Disqualified Stock of the Company
or debt securities of the Company, in either case, that have been converted
into or exchanged for such Equity Interests, plus


 


(C)                                to the extent that any Restricted Investment
that was made after the date of this Indenture is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (i) the cash return of capital
with respect to such Restricted Investment (less the cost of disposition, if
any) and (ii) the initial amount of such Restricted Investment, plus


 


(D)                               to the extent that any Unrestricted
Subsidiary of the Company is redesignated as a Restricted Subsidiary after the
date of this Indenture, the lesser of (i) the fair market value of the
Company’s Investment in such Subsidiary as of the date of such redesignation or
(ii) such fair market value as of the date on which such Subsidiary was
originally designated as an Unrestricted Subsidiary, plus


 


41

















 


(E)                                 an amount equal to any dividends received by
the Company or any of its Restricted Subsidiaries since the date of this
Indenture from an Unrestricted Subsidiary to the extent that such dividends
were not otherwise included in the Company’s Consolidated Net Income.


 


(b)                                 The provisions of 4.07(a) will not prohibit:


 


(1)                                  the payment of any dividend within 60 days
after the date of declaration of the dividend, if at the date of declaration
the dividend payment would have complied with the provisions of this Indenture;


 


(2)                                  so long as no Default has occurred and is
continuing or would be caused thereby, the redemption, repurchase, retirement,
defeasance or other acquisition of any subordinated Indebtedness of the Company
or any of its Restricted Subsidiaries or of any Equity Interests of the Company
in exchange for, or out of the net cash proceeds of the substantially
concurrent sale (other than to a Restricted Subsidiary of the Company) of,
Equity Interests of the Company (other than Disqualified Stock); provided that the amount of any such net
cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition will be excluded from Section
4.07(a)(3)(B) hereof;


 


(3)                                  so long as no Default has occurred and is
continuing or would be caused thereby, the defeasance, redemption, repurchase
or other acquisition of subordinated Indebtedness of the Company or any of its
Restricted Subsidiaries with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness;


 


(4)                                  the payment of any dividend or distribution
by a Restricted Subsidiary of the Company to the holders of its Equity
Interests on a pro rata basis;


 


(5)                                  so long as no Default has occurred and is
continuing or would be caused thereby, the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Company or
any Restricted Subsidiary of the Company held by any member of the Company’s
(or any of its Restricted Subsidiaries’) management pursuant to any management
equity subscription agreement, stock option agreement or similar agreement; provided that the aggregate price paid for
all such repurchased, redeemed, acquired or retired Equity Interests may not
exceed $1.0 million in any twelve-month period;


 


(6)                                  so long as no Default has occurred and is
continuing or would be caused thereby, the payment of regular quarterly
dividends on Capital Stock of the Company in an aggregate amount not to exceed
$13.5 million in any twelve-month period; and


 


(7)                                  so long as no Default has occurred and is
continuing or would be caused thereby, the payment of other Restricted Payments
in an aggregate amount since the date of this Indenture not to exceed $15.0
million.


 


(c)                                  The amount of all Restricted Payments (other
than cash) will be the fair market value on the date of the Restricted Payment
of the asset(s) or securities proposed to be transferred or issued by the
Company or such Restricted Subsidiary, as the case may be, pursuant to the
Restricted Payment. The fair market value of any assets or securities that are
required to be valued by this Section 4.07 will be determined, in the case of
amounts under $5.0 million, by an officer of the Company and, in the case of
amounts $5.0 million or more, by the Board of Directors whose resolution with
respect thereto will be delivered to the Trustee.


 


42

















 


Section
4.08                                 Dividend and Other Payment
Restrictions Affecting Subsidiaries.


 


(a)                                  The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly, create or permit
to exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to:


 


(1)                                  pay dividends or make any other distributions
on its Capital Stock to the Company or any of its Restricted Subsidiaries, or
with respect to any other interest or participation in, or measured by, its
profits, or pay any Indebtedness owed to the Company or any of its Restricted
Subsidiaries;


 


(2)                                  make loans or advances to the Company or any
of its Restricted Subsidiaries; or


 


(3)                                  transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries.


 


(b)                                 The restrictions in Section 4.08(a) will not
apply to encumbrances or restrictions existing under or by reason of:


 


(1)                                  this Indenture, the 2008 Notes Indenture, the
Notes, the 2008 Notes, the Subsidiary Guarantees, the 2008 Subsidiary
Guarantees and other agreements existing on the date of this Indenture;


 


(2)                                  applicable law;


 


(3)                                  customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices;


 


(4)                                  any agreement for the sale or other
disposition of a Restricted Subsidiary that restricts distributions by that
Restricted Subsidiary pending its sale or other disposition;


 


(5)                                  Liens securing Indebtedness otherwise
permitted to be incurred under the provisions of Section 4.12 hereof that limit
the right of the debtor to dispose of the assets subject to such Liens;


 


(6)                                  provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, assets sale
agreements, stock sale agreements and other similar agreements entered into in
the ordinary course of business;


 


(7)                                  restrictions on cash or other deposits or net
worth imposed by customers under contracts entered into in the ordinary course
of business;


 


(8)                                  any restriction applicable to a Restricted
Subsidiary of the Company created to issue trust preferred securities; provided that such Restricted Subsidiary
does not own or operate all or any portion of the Company’s businesses; and


 


(9)                                  Permitted Refinancing Indebtedness; provided that the restrictions contained
in the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive in any material respect, taken as a whole, than those contained in
the agreements governing the Indebtedness being refinanced.


 


43

















 


Section
4.09                                  Incurrence of Indebtedness and Issuance of Preferred Stock.


 


(a)                                  The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including
Acquired Debt), and the Company shall not issue any Disqualified Stock and
shall not permit any of its Restricted Subsidiaries to issue any shares of
preferred stock; provided, however,
that the Company may incur Indebtedness (including Acquired Debt) or issue
Disqualified Stock, and any Guarantor may incur Indebtedness (including
Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for
the Company’s most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
Indebtedness is incurred or such Disqualified Stock is issued would have been
at least 2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the Disqualified Stock had been issued, as the case may
be, at the beginning of such four-quarter period.


 


(b)                                 The provisions of Section 4.09(a) will not
prohibit the incurrence of any of the following items of Indebtedness
(collectively, “Permitted Debt”):


 


(1)                                  the incurrence by the Company or any
Guarantor of additional Indebtedness and letters of credit under Credit
Facilities in an aggregate principal amount at any one time outstanding under
this clause (1)(with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Company and its Restricted
Subsidiaries thereunder) not to exceed $155.0 million) less the aggregate amount of all Net
Proceeds of Asset Sales applied by the Company or any of its Restricted
Subsidiaries since the date of this Indenture to repay any term Indebtedness
under a Credit Facility or to repay any revolving credit Indebtedness under a
Credit Facility and effect a corresponding commitment reduction thereunder
pursuant to Section 4.10 hereof (except that APCO Sale Proceeds may be applied
to repay Indebtedness under a Credit Facility without reducing the amount
available under this clause (1) for borrowing thereafter);


 


(2)                                  the incurrence by the Company or any of its
Restricted Subsidiaries of the Existing Indebtedness;


 


(3)                                  the incurrence by the Company of Indebtedness
represented by (A) the Notes and any related Subsidiary Guarantee and the 2008
Notes and any related 2008 Subsidiary Guarantee to be issued on the date of
this Indenture and on the date of the 2008 Notes Indenture, and (B) the Exchange
Notes and any related Subsidiary Guarantee and the 2008 Exchange Notes and any
related 2008 Subsidiary Guarantee to be issued pursuant to the Registration
Rights Agreement;


 


(4)                                  the incurrence by the Company or any
Guarantor of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations and/or Attributable Debt, in each
case, incurred for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant or equipment
used in the business of the Company or any Guarantor, in an aggregate principal
amount (or notional principal amount, in the case of Attributable Debt),
including all Permitted Refinancing Indebtedness incurred to refund, refinance
or replace any Indebtedness incurred pursuant to this clause (4), not to exceed
$10.0 million at any time outstanding;


 


(5)                                  the incurrence by the Company or any of its
Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for,
or the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted by


 


44

















 


this Indenture to be
incurred under Section 4.09(a) or clauses (2), (3), (4), (5) or (9) of this
Section 4.09(b);


 


(6)                                  the incurrence by the Company or any
Restricted Subsidiary of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; provided,
however, that:


 


(A)                              if the Company is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to the prior
payment in full in cash of all Obligations with respect to the Notes; and


 


(B)                                (i) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a Person
other than the Company or a Restricted Subsidiary of the Company and (ii) any
sale or other transfer of any such Indebtedness to a Person that is not either
the Company or a Restricted Subsidiary of the Company; will be deemed, in each
case, to constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be, that was not permitted by this
clause (6);


 


(7)                                  the incurrence by the Company or any
Guarantor of Hedging Obligations that are incurred in the ordinary course of
business and not for speculative purposes;


 


(8)                                  the accrual of interest, the accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, and
the payment of dividends on Disqualified Stock in the form of additional shares
of the same class of Disqualified Stock will not be deemed to be an incurrence
of Indebtedness or an issuance of Disqualified Stock for purposes of this
Section 4.09; provided, in each
such case, that the amount thereof is included in Consolidated Interest Expense
of the Company as accrued;


 


(9)                                  the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness in respect of bankers acceptances and
bid, performance or surety bonds issued for the account of the Company in the
ordinary course of business (in each case other than for an obligation for
money borrowed); and


 


(10)                            the incurrence by the Company or any
Guarantor of additional Indebtedness in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (10), not to exceed $15.0
million.


 


(c)                                  Neither the Company nor any Guarantor shall
incur any Indebtedness (including Permitted Debt) that is contractually
subordinated in right of payment to any other Indebtedness of the Company or
such Guarantor unless such Indebtedness is also contractually subordinated in
right of payment to the Notes and any Subsidiary Guarantees on substantially
identical terms; provided, however,
that no Indebtedness of the Company or any Guarantor shall be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the
Company or such Guarantor solely by virtue of being unsecured.


 


(d)                                 For purposes of determining compliance with
this Section 4.09, in the event that an item of proposed Indebtedness meets the
criteria of more than one of the categories of Permitted Debt described in
clauses (1) through (10) above, or is entitled to be incurred pursuant to
Section 4.09(a), the Company will be permitted to classify such item of
Indebtedness on the date of its incurrence, or later reclassify all


 


45

















 


or a portion of such item of Indebtedness, in any
manner that complies with this Section 4.09. 
Indebtedness under Credit Facilities outstanding on the date on which
Notes are first issued and authenticated under this Indenture will be deemed to
have been incurred on such date in reliance on the exemption provided by clause
(1) of the definition of Permitted Debt.


 


Section
4.10                                 Asset Sales.


 


(a)                                  The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale unless:


 


(1)                                  the Company (or the Restricted Subsidiary, as
the case may be) receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets or Equity Interests issued or sold
or otherwise disposed of;


 


(2)                                  the fair market value is determined by the
Company’s Board of Directors and evidenced by a resolution of the Board of
Directors set forth in an Officers’ Certificate delivered to the Trustee; and


 


(3)                                  except in the case of a Construction Business
Disposition, at least 75% of the consideration received in the Asset Sale by
the Company or such Restricted Subsidiary is in the form of cash.  For purposes of this provision, each of the
following shall be deemed to be cash:


 


(A)                              any liabilities, as shown on the Company’s
most recent consolidated balance sheet, of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed
by the transferee of any such assets pursuant to a customary novation agreement
that releases the Company or such Restricted Subsidiary from further liability;


 


(B)                                any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from such transferee
that are contemporaneously, subject to ordinary settlement periods, converted
by the Company or such Restricted Subsidiary into cash, to the extent of the
cash received in that conversion; and


 


(C)                                property or assets received as consideration
for such Asset Sale that would otherwise constitute a permitted application of
Net Proceeds under clauses (2), (3) or (4) of Section 4.10(b).


 


(b)                                 Within 360 days after the receipt of any Net
Proceeds from an Asset Sale, the Company or any such Restricted Subsidiary may
apply (or enter into a definitive agreement for such application within such
360-day period; provided that
such capital expenditure or acquisition is closed within 90 days after the end
of such 360-day period) those Net Proceeds as follows:


 


(1)                                  in the case of APCO Sale Proceeds only, to
repay Indebtedness of the Company that is pari
passu with the Notes (including, without limitation, the 2008
Notes);


 


(2)                                  in the case of Net Proceeds from the sale of
assets financed with Permitted Debt of the kind permitted by Section 4.09(b)(4)
hereof, to repay such Permitted Debt;


 


(3)                                  in the case of all Net Proceeds, to repay
Indebtedness and other Obligations under a Credit Facility and, if the
Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce
commitments with respect thereto;


 


46

















 


(4)                                  in the case of all Net Proceeds, to acquire
all or substantially all of the assets of, or a majority of the Voting Stock
of, another Permitted Business;


 


(5)                                  in the case of all Net Proceeds, to make a
capital expenditure; or


 


(6)                                  in the case of all Net Proceeds, to acquire
other long-term assets that are used or useful in a Permitted Business.


 


Pending
the final application of any Net Proceeds, the Company may temporarily reduce
revolving credit borrowings or otherwise invest the Net Proceeds in any manner
that is not prohibited by this Indenture.


 


Any Net Proceeds from Asset
Sales that are not applied or invested as provided in the preceding two
paragraphs of this Section 4.10(b), including, without limitation, any Net
Proceeds from a Construction Business Disposition, will constitute “Excess Proceeds.” 
When the aggregate amount of Excess Proceeds exceeds $15.0 million, the
Company will make an Asset Sale Offer to all Holders of Notes and all holders
of other Indebtedness that is pari passu
with the Notes (including, without limitation, the 2008 Notes) containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets in accordance with Section 3.09
hereof to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds. 
The offer price in any Asset Sale Offer will be equal to 100% of
principal amount plus accrued and unpaid interest and Additional Interest, if
any, to the date of purchase, and will be payable in cash.  If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such Excess Proceeds
for any purpose not otherwise prohibited by this Indenture.  If the aggregate principal amount of Notes
and such other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and such other pari
passu Indebtedness to be purchased on a pro rata basis.  Upon completion of each Asset Sale Offer,
the amount of Excess Proceeds shall be reset at zero.


 


The Company will comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with each repurchase of Notes pursuant to an Asset
Sale Offer.  To the extent that the
provisions of any securities laws or regulations conflict with the provisions
of Sections 3.09 or 4.10 hereof, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under those provisions of this Indenture by virtue of such
conflict.


 


Section
4.11                                 Transactions with
Affiliates.


 


(a)                                  The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each, an “Affiliate Transaction”), unless:


 


(1)                                  the Affiliate Transaction is on terms that
are no less favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person; and


 


(2)                                  the Company delivers to the Trustee:


 


47

















 


(A)                              with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $2.5 million, a resolution of the Board of Directors set forth in an
Officers’ Certificate certifying that such Affiliate Transaction complies with
this Section 4.11 and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors; and


 


(B)                                with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $7.5 million, an opinion as to the fairness to the Company of such
Affiliate Transaction from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing.


 


(b)                                 The following items will not be deemed to be
Affiliate Transactions and, therefore, will not be subject to the provisions of
Section 4.11(a):


 


(1)                                  any employment agreement entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business and consistent with the past practice of the Company or such
Restricted Subsidiary;


 


(2)                                  transactions between or among the Company
and/or its Restricted Subsidiaries;


 


(3)                                  transactions with a Person that is an
Affiliate of the Company solely because the Company owns an Equity Interest in,
or controls, such Person;


 


(4)                                  payment of reasonable directors fees and
provision to directors, officers and employees of customary indemnities and
customary benefits pursuant to employee benefits plans and similar
arrangements;


 


(5)                                  sales of Equity Interests (other than
Disqualified Stock) to Affiliates of the Company; and


 


(6)                                  Restricted Payments that are permitted by
Section 4.07 hereof.


 


Section
4.12                                 Liens.


 


The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, assume or suffer to exist or become effective any Lien of any
kind (other than Permitted Liens) on any of their property or assets, now owned
or hereafter acquired, unless all payments due under this Indenture and the
Notes are secured on an equal and ratable basis with the obligations so secured
until such time as such obligations are no longer secured by a Lien.


 


Section
4.13                                 Business Activities.


 


The
Company shall not, and shall not permit any of its Subsidiaries to, engage in
any business other than Permitted Businesses, except to such extent as would
not be material to the Company and its Subsidiaries taken as a whole.


 


Section
4.14                                 Corporate Existence.


 


Subject to Article 5 hereof,
the Company shall do or cause to be done all things necessary to preserve and
keep in full force and effect:


 


48

















 


(1)                                  its corporate existence, and the corporate,
partnership or other existence of each of its Restricted Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Company or any such Restricted Subsidiary;
and


 


(2)                                  the rights (charter and statutory), licenses
and franchises of the Company and its Restricted Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Restricted
Subsidiaries, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and its Restricted Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders of the Notes.


 


Section
4.15                                 Offer to Repurchase Upon
Change of Control.


 


(a)                                  Upon the occurrence of a Change of Control,
the Company shall make an offer (a “Change
of Control Offer”) to each Holder to repurchase all or any part
(equal to $1,000 or an integral multiple of $1,000) of each Holder’s Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Additional Interest, if any, on the Notes
repurchased, if any, to the date of purchase (the “Change of Control Payment”). Within ten Business Days
following any Change of Control, the Company will mail a notice to each Holder
describing the transaction or transactions that constitute the Change of
Control and stating:


 


(1)                                  that the Change of Control Offer is being made
pursuant to this Section 4.15 and that all Notes tendered will be accepted for
payment;


 


(2)                                  the purchase price and the purchase date,
which shall be no earlier than 30 days and no later than 60 days from the date
such notice is mailed (the “Change of
Control Payment Date”);


 


(3)                                  that any Note not tendered will continue to
accrue interest;


 


(4)                                  that, unless the Company defaults in the
payment of the Change of Control Payment, all Notes accepted for payment
pursuant to the Change of Control Offer will cease to accrue interest after the
Change of Control Payment Date;


 


(5)                                  that Holders electing to have any Notes
purchased pursuant to a Change of Control Offer will be required to surrender
the Notes, with the form entitled “Option of Holder to Elect Purchase” attached
to the Notes completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day preceding the
Change of Control Payment Date;


 


(6)                                  that Holders will be entitled to withdraw
their election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and


 


(7)                                  that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof.


 


49

















 


The Company will comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change in Control.  To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Section 4.15 hereof, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under this Section 4.15 by virtue of such conflict.


 


(b)                                 On the Change of Control Payment Date, the
Company will, to the extent lawful:


 


(1)                                  accept for payment all Notes or portions of
Notes properly tendered pursuant to the Change of Control Offer;


 


(2)                                  deposit with the Paying Agent an amount equal
to the Change of Control Payment in respect of all Notes or portions of Notes
properly tendered; and


 


(3)                                  deliver or cause to be delivered to the
Trustee the Notes properly accepted together with an Officers’ Certificate
stating the aggregate principal amount of Notes or portions of Notes being
purchased by the Company.


 


The Paying Agent will
promptly mail to each Holder of Notes properly tendered the Change of Control
Payment for such Notes, and the Trustee will promptly authenticate and mail (or
cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each new Note will be in a
principal amount of $1,000 or an integral multiple thereof.  The Company will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.


 


(c)                                  Notwithstanding anything to the contrary in
this Section 4.15, the Company will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.15 and purchases all Notes validly tendered
and not withdrawn under the Change of Control Offer.


 


Section
4.16                                 Limitation on Sale and
Leaseback Transactions.


 


(a)                                  The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, enter into any sale and leaseback
transaction; provided that the
Company may enter into a sale and leaseback transaction if:


 


(1)                                  the Company could have (A) incurred
Indebtedness in an amount equal to the Attributable Debt relating to such sale
and leaseback transaction under the Fixed Charge Coverage Ratio test in Section
4.09 hereof or pursuant to Section 4.09(b)(4) hereof and (B) incurred a Lien to
secure such Indebtedness pursuant to Section 4.12 hereof;


 


(2)                                  the gross cash proceeds of that sale and
leaseback transaction are at least equal to the fair market value, as
determined in good faith by the Board of Directors and set forth in an
Officers’ Certificate delivered to the Trustee, of the property that is the
subject of that sale and leaseback transaction; and


 


(3)                                  the transfer of assets in that sale and
leaseback transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with, Section 4.10 hereof.


 


50

















 


Section
4.17                                 Payments for Consent.


 


The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
pay or cause to be paid any consideration to or for the benefit of any Holder
of Notes for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Indenture or the Notes unless such
consideration is offered to be paid and is paid to all Holders of the Notes
that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.


 


Section
4.18                                 Future Subsidiary
Guarantees.


 


If any Restricted Subsidiary
of the Company incurs any Indebtedness (other than intercompany Indebtedness),
guarantees any Indebtedness of the Company, pledges any of its assets to secure
any Indebtedness of the Company or otherwise provides direct credit support for
any Indebtedness of the Company, then, in each case, such Restricted Subsidiary
shall become a Guarantor of the Notes and execute a supplemental indenture and
deliver an Opinion of Counsel satisfactory to the Trustee within 10 Business
Days of the date on which such Restricted Subsidiary so incurs Indebtedness,
guarantees, pledges its assets or otherwise provides direct credit support; provided, however, a Restricted Subsidiary
of the Company will not be required to become a Guarantor of the Notes solely
by reason of incurring Indebtedness under clauses (2) or (9) of Section 4.09(b)
hereof or by incurring Liens under clauses (2), (4), (5), (6), (7), (8), (9),
(11) or (13) of the definition of Permitted Liens. In addition, the Company may
elect that any Subsidiary of the Company become a Guarantor.


 


Section
4.19                                 Designation of Restricted
and Unrestricted Subsidiaries.


 


The
Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default; provided that in no event may any of the
Company’s regulated utility businesses, now or hereafter operating, be
transferred to or held by an Unrestricted Subsidiary. If a Restricted
Subsidiary is designated as an Unrestricted Subsidiary, the aggregate fair
market value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary properly designated will be deemed to
be an Investment made as of the time of the designation and will reduce the
amount available for Restricted Payments under Section 4.07(a) hereof or
Permitted Investments, as determined by the Company. That designation will only
be permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default. Upon
any such redesignation or other designation as a Restricted Subsidiary, such
Subsidiary will become a Guarantor and execute a supplemental indenture if so
required under Section 4.18 hereof.


 


Section
4.20                                 Changes in Covenants when
Notes Rated Investment Grade.


 


If
on any date following the date of this Indenture:


 


(1)                                  the Notes are rated Baa3 or better by Moody’s
and BBB- or better by S&P (or, if either such entity ceases to rate the
Notes for reasons outside of the control of the Company, the equivalent
investment grade credit rating from any other “nationally recognized
statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F)
under the Exchange Act selected by the Company as a replacement agency); and


 


(2)                                  no Default or Event of Default shall have
occurred and be continuing under this Indenture,


 


51

















 


then,
beginning on that day and continuing at all times thereafter regardless of any
subsequent changes in the ratings of the Notes, Sections 3.09, 4.07, 4.08,
4.09, 4.10, 4.11, 4.13, 4.16(a)(1)(A), 4.16(a)(3), 4.18, 4.19 and 5.01(a)(4)
hereof shall no longer be applicable to the Notes.


 


ARTICLE 5.

SUCCESSORS


 


Section
5.01                                 Merger, Consolidation or
Sale of Assets.


 


(a)                                  The Company shall not, directly or
indirectly, consolidate or merge with or into another Person (whether or not
the Company is the surviving corporation), or sell, assign, transfer, convey or
otherwise dispose of all or substantially all of the properties or assets of the
Company and its Restricted Subsidiaries taken as a whole, in one or more
related transactions, to another Person; unless:


 


(1)                                  either:


 


(A)                              the Company is the surviving corporation; or


 


(B)                                the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, conveyance or other disposition has been made is a
corporation organized or existing under the laws of the United States, any
state of the United States or the District of Columbia;


 


(2)                                  the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to which such
sale, assignment, transfer, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Notes, this Indenture
and the Registration Rights Agreement pursuant to agreements reasonably
satisfactory to the Trustee;


 


(3)                                   immediately after such transaction, no Default or Event of Default
exists; and


 


(4)                                  the Company or the Person formed by or
surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, conveyance or other disposition has been
made would, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had occurred at
the beginning of the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 4.09(a) hereof.


 


(b)                                 In addition, the Company will not, directly
or indirectly, lease all or substantially all of its properties or assets, in
one or more related transactions, to any other Person.  This Section 5.01 will not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or
among the Company and any of its Restricted Subsidiaries.


 


Section
5.02                                 Successor Corporation
Substituted.


 


Upon any consolidation or
merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in a
transaction that is subject to, and that complies with the provisions of,
Section 5.01 hereof, the successor corporation formed by such consolidation or
into or with which the Company is merged or to which such sale, assignment,
transfer, lease, conveyance or other disposition is made shall succeed to, and
be substituted for (so that from and


 


52

















 


after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Indenture
referring to the “Company” shall refer instead to the successor corporation and
not to the Company), and may exercise every right and power of the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; provided, however,
that the predecessor Company shall not be relieved from the obligation to pay
the principal of and interest on the Notes except in the case of a sale of all
of the Company’s assets in a transaction that is subject to, and that complies
with the provisions of, Section 5.01 hereof.


 


ARTICLE 6.

DEFAULTS AND REMEDIES


 


Section
6.01                                 Events of Default.


 


Each of the following is an
“Event of Default”:


 


(1)                                  the Company defaults for 30 days in the
payment when due of interest on, or Additional Interest with respect to, the
Notes;


 


(2)                                  the Company defaults in the payment when due
(at maturity, upon redemption or otherwise) of the principal of, or premium, if
any, on the Notes;


 


(3)                                  the Company fails to redeem, repurchase or
otherwise retire, on or before July 5, 2003, all of its 8.95% Remarketable or
Redeemable Securities due 2008;


 


(4)                                  the Company or any of its Subsidiaries fails
to comply with the provisions of Section 4.07, 4.09, 4.10, 4.15 or 5.01 hereof
for 30 days after notice to the Company by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding voting as
a single class;


 


(5)                                  the Company or any of its Subsidiaries fails
to observe or perform any other agreements in this Indenture or the Notes for
60 days after notice to the Company by the Trustee or the Holders of at least
25% in aggregate principal amount of the Notes then outstanding voting as a
single class;


 


(6)                                  a default occurs under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money borrowed by the Company or
any of its Restricted Subsidiaries (or the payment of which is guaranteed by
the Company or any of its Restricted Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of this Indenture, if that
default:


 


(A)                              is caused by a failure to pay principal of,
or interest or premium, if any, on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or


 


(B)                                results in the acceleration of such
Indebtedness prior to its express maturity,


 


and,
in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$10.0 million or more;


 


53

















 


(7)                                  failure by the Company or any of its
Restricted Subsidiaries to pay final judgments aggregating in excess of $10.0
million, which judgments are not paid, discharged or stayed for a period of 60
days;


 


(8)                                  except as permitted by this Indenture, any
Subsidiary Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Subsidiary Guarantee;


 


(9)                                  the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:


 


(A)                              commences a voluntary case;


 


(B)                                consents to the entry of an order for relief
against it in an involuntary case;


 


(C)                                consents to the appointment of a custodian of
it or for all or substantially all of its property; or


 


(D)                               makes a general assignment for the benefit of
its creditors; and


 


(10)                            a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:


 


(A)                              is for relief against the Company or any of
its Significant Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary in an involuntary
case;


 


(B)                                appoints a custodian of the Company or any of
its Significant Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary; or


 


(C)                                orders the liquidation of the Company or any
of its Significant Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary,


 


and
the order or decree remains unstayed and in effect for 60 consecutive days.


 


Section
6.02                                 Acceleration.


 


In the case of an Event of
Default specified in clause (9) or (10) of Section 6.01 hereof, with respect to
the Company or any of its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary,
all outstanding Notes will become due and payable immediately without further
action or notice.  If any other Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately.


 


54

















 


The
Holders of a majority in aggregate principal amount of the then outstanding
Notes by written notice to the Trustee may on behalf of all of the Holders
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default (except
nonpayment of principal, interest, Additional Interest, if any, or premium that
has become due solely because of the acceleration) have been cured or waived.


 


If
an Event of Default occurs on or after May 15, 2008 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent
premium shall also become and be immediately due and payable, to the extent
permitted by law, anything in this Indenture or in the Notes to the contrary
notwithstanding. If an Event of Default occurs prior to May 15, 2008 by reason
of any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding the prohibition on redemption of the
Notes prior to such date, then, upon acceleration of the Notes, an additional
premium shall also become and be immediately due and payable in an amount, for
each of the years beginning on May 15 of the years set forth below, as set
forth below (expressed as a percentage of the principal amount of the Notes on
the date of payment that would otherwise be due but for the provisions of this
sentence):


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2003

  	
   

  	
  107.750

  	
  %

  
	
  2004

  	
   

  	
  106.975

  	
  %

  
	
  2005

  	
   

  	
  106.200

  	
  %

  
	
  2006

  	
   

  	
  105.425

  	
  %

  
	
  2007

  	
   

  	
  104.650

  	
  %

  



 


Section 6.03                                Other Remedies.


 


If
an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium and Additional
Interest, if any, and interest on the Notes or to enforce the performance of
any provision of the Notes or this Indenture.


 


The
Trustee may maintain a proceeding even if it does not possess any of the Notes
or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Holder of a Note in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default.  All remedies are
cumulative to the extent permitted by law.


 


Section 6.04                                Waiver of Past Defaults.


 


Holders
of not less than a majority in aggregate principal amount of the then outstanding
Notes by notice to the Trustee may on behalf of the Holders of all of the Notes
waive an existing Default or Event of Default and its consequences hereunder,
except a continuing Default or Event of Default in the payment of the principal
of, premium and Additional Interest, if any, or interest on, the Notes
(including in connection with an offer to purchase); provided, however, that the Holders of a majority in
aggregate principal amount of the then outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration.  Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.


 


55

















 


Section 6.05                                Control by Majority.


 


Holders of a majority in
principal amount of the then outstanding Notes may direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it.  However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of other Holders of Notes or
that may involve the Trustee in personal liability.


 


Section 6.06                                Limitation on Suits.


 


A Holder of a Note may
pursue a remedy with respect to this Indenture or the Notes only if:


 


(1)                       the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;


 


(2)                       the Holders of
at least 25% in principal amount of the then outstanding Notes make a written
request to the Trustee to pursue the remedy;


 


(3)                       such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;


 


(4)                       the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and


 


(5)                       during such 60-day period the Holders of a majority in principal amount
of the then outstanding Notes do not give the Trustee a direction inconsistent
with the request.


 


A Holder of a Note may not
use this Indenture to prejudice the rights of another Holder of a Note or to
obtain a preference or priority over another Holder of a Note.


 


Section 6.07                                Rights of Holders of Notes
to Receive Payment.


 


Notwithstanding any other
provision of this Indenture, the right of any Holder of a Note to receive
payment of principal, premium and Additional Interest, if any, and interest on
the Note, on or after the respective due dates expressed in the Note (including
in connection with an offer to purchase), or to bring suit for the enforcement
of any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.


 


Section 6.08                                Collection Suit by Trustee.


 


If an Event of Default
specified in Section 6.01(1) or (2) hereof occurs and is continuing, the
Trustee is authorized to recover judgment in its own name and as trustee of an
express trust against the Company for the whole amount of principal of, premium
and Additional Interest, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.


 


Section 6.09                                Trustee May File Proofs of
Claim.


 


The Trustee is authorized to
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable 


 


56

















 


compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and the Holders of the Notes
allowed in any judicial proceedings relative to the Company (or any other
obligor upon the Notes), its creditors or its property and shall be entitled
and empowered to collect, receive and distribute any money or other property
payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee, and in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07 hereof.  To the
extent that the payment of any such compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or arrangement
or otherwise.  Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.


 


Section
6.10                                Priorities.


 


If the Trustee collects any
money pursuant to this Article 6, it shall pay out the money in the following
order:


 


First:                                   to the Trustee,
its agents and attorneys for amounts due under Section 7.07 hereof, including
payment of all compensation, expense and liabilities incurred, and
all advances made, by the Trustee and the costs and expenses of collection;


 


Second:                     to Holders of
Notes for amounts due and unpaid on the Notes for principal, premium and
Additional Interest, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
principal, premium and Additional Interest, if any, and interest, respectively;
and


 


Third:                               to the Company
or to such party as a court of competent jurisdiction shall direct.


 


The Trustee may fix a record
date and payment date for any payment to Holders of Notes pursuant to this
Section 6.10.


 


Section 6.11                                Undertaking for Costs.


 


In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit by the Trustee, a suit
by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of
more than 10% in principal amount of the then outstanding Notes.


 


57

















 


ARTICLE 7.

TRUSTEE


 


Section 7.01                                Duties of Trustee.


 


(a)                                  If an Event of Default has occurred and is
continuing, the Trustee will exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of such person’s own affairs.


 


(b)                                 Except during the continuance of an Event of
Default:


 


(1)                                  the duties of the Trustee will be determined
solely by the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and


 


(2)                                  in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture.  However, the Trustee will
examine the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.


 


(c)                                  The Trustee may not be relieved from
liabilities for its own negligent action, its own negligent failure to act, or
its own willful misconduct, except that:


 


(1)                                  this paragraph does not limit the effect of
paragraph (b) of this Section 7.01;


 


(2)                                  the Trustee will not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts; and


 


(3)                                  the Trustee will not be liable with respect
to any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.


 


(d)                                 Whether or not therein expressly so provided,
every provision of this Indenture that in any way relates to the Trustee is
subject to paragraphs (a), (b), and (c) of this Section 7.01.


 


(e)                                  No provision of this Indenture will require
the Trustee to expend or risk its own funds or incur any liability.  The Trustee will be under no obligation to
exercise any of its rights and powers under this Indenture at the request of
any Holders, unless such Holder has offered to the Trustee security and
indemnity satisfactory to it against any loss, liability or expense.


 


(f)                                    The Trustee will not be liable for interest
on any money received by it except as the Trustee may agree in writing with the
Company.  Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.


 


Section 7.02                                Rights of Trustee.


 


(a)                                  The Trustee may conclusively rely upon any
document believed by it to be genuine and to have been signed or presented by
the proper Person.  The Trustee need not
investigate any fact or matter stated in the document.


 


58

















 


(b)                                 Before the Trustee acts or refrains from
acting, it may require an Officers’ Certificate or an Opinion of Counsel or
both.  The Trustee will not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers’ Certificate or Opinion of Counsel. 
The Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel will be full and complete authorization and
protection from liability in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.


 


(c)                                  The Trustee may act through its attorneys and
agents and will not be responsible for the misconduct or negligence of any
agent appointed with due care.


 


(d)                                 The Trustee will not be liable for any action
it takes or omits to take in good faith that it believes to be authorized or
within the rights or powers conferred upon it by this Indenture.


 


(e)                                  Unless otherwise specifically provided in
this Indenture, any demand, request, direction or notice from the Company will
be sufficient if signed by an Officer of the Company.


 


(f)                                    The Trustee will be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders unless such Holders have offered to
the Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.


 


Section 7.03                                Individual Rights of
Trustee.


 


The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee.  However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. 
Any Agent may do the same with like rights and duties.  The Trustee is also subject to Sections 7.10
and 7.11 hereof.


 


Section 7.04                                Trustee’s Disclaimer.


 


The Trustee will not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company’s use
of the proceeds from the Notes or any money paid to the Company or upon the
Company’s direction under any provision of this Indenture, it will not be
responsible for the use or application of any money received by any Paying
Agent other than the Trustee, and it will not be responsible for any statement
or recital herein or any statement in the Notes or any other document in
connection with the sale of the Notes or pursuant to this Indenture other than
its certificate of authentication.


 


Section 7.05                                Notice of Defaults.


 


If a Default or Event of
Default occurs and is continuing and if it is known to the Trustee, the Trustee
will mail to Holders of Notes a notice of the Default or Event of Default
within 90 days after it occurs.  Except
in the case of a Default or Event of Default in payment of principal of,
premium or Additional Interest, if any, or interest on any Note, the Trustee
may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Notes.


 


59

















 


Section 7.06                                Reports by Trustee to
Holders of the Notes.


 


(a)                                  Within 60 days after each May 15 beginning
with the May 15 following the date of this Indenture, and for so long as Notes
remain outstanding, the Trustee will mail to the Holders of the Notes a brief
report dated as of such reporting date that complies with TIA § 313(a) (but if
no event described in TIA § 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted).  The Trustee also will comply with TIA §
313(b)(2).  The Trustee will also
transmit by mail all reports as required by TIA § 313(c).


 


(b)                                 A copy of each report at the time of its
mailing to the Holders of Notes will be mailed by the Trustee to the Company
and filed by the Trustee with the SEC and each stock exchange on which the
Notes are listed in accordance with TIA § 313(d).  The Company will promptly notify the Trustee when the Notes are
listed on any stock exchange.


 


Section 7.07                                Compensation and Indemnity.


 


(a)                                  The Company will pay to the Trustee from time
to time reasonable compensation for its acceptance of this Indenture and
services hereunder.  The Trustee’s
compensation will not be limited by any law on compensation of a trustee of an
express trust.  The Company will
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation
for its services.  Such expenses will
include the reasonable compensation, disbursements and expenses of the
Trustee’s agents and counsel.


 


(b)                                 The Company and the Guarantors will indemnify
the Trustee against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company and the Guarantors (including this Section 7.07)
and defending itself against any claim (whether asserted by the Company, the
Guarantors or any Holder or any other Person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith.  The Trustee
will notify the Company promptly of any claim for which it may seek
indemnity.  Failure by the Trustee to so
notify the Company will not relieve the Company or any of the Guarantors of
their obligations hereunder.  The
Company or such Guarantor will defend the claim and the Trustee will cooperate
in the defense.  The Trustee may have
separate counsel and the Company will pay the reasonable fees and expenses of
such counsel.  Neither the Company nor
any Guarantor need pay for any settlement made without its consent, which
consent will not be unreasonably withheld.


 


(c)                                  The obligations of the Company and the
Guarantors under this Section 7.07 will survive the satisfaction and discharge
of this Indenture.


 


(d)                                 To secure the Company’s payment obligations
in this Section 7.07, the Trustee will have a Lien prior to the Notes on all
money or property held or collected by the Trustee, except that held in trust
to pay principal and interest on particular Notes.  Such Lien will survive the satisfaction and discharge of this
Indenture.


 


(e)                                  When the Trustee incurs expenses or renders
services after an Event of Default specified in Section 6.01(7) or (8) hereof
occurs, the expenses and the compensation for the services (including the fees
and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.


 


(f)                                    The Trustee will comply with the provisions
of TIA § 313(b)(2) to the extent applicable.


 


60

















 


Section 7.08                                Replacement of Trustee.


 


(a)                                  A resignation or removal of the Trustee and
appointment of a successor Trustee will become effective only upon the
successor Trustee’s acceptance of appointment as provided in this Section 7.08.


 


(b)                                 The Trustee may resign in writing at any time
and be discharged from the trust hereby created by so notifying the
Company.  The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing.  The Company may remove the Trustee if:


 


(1)                                  the Trustee fails to comply with Section 7.10
hereof;


 


(2)                                  the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect to the Trustee under
any Bankruptcy Law;


 


(3)                                  a custodian or public officer takes charge of
the Trustee or its property; or


 


(4)                                  the Trustee becomes incapable of acting.


 


(c)                                  If the Trustee resigns or is removed or if a
vacancy exists in the office of Trustee for any reason, the Company will
promptly appoint a successor Trustee. 
Within one year after the successor Trustee takes office, the Holders of
a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.


 


(d)                                 If a successor Trustee does not take office
within 60 days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company, or the Holders of at least 10% in principal amount of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.


 


(e)                                  If the Trustee, after written request by any
Holder who has been a Holder for at least six months, fails to comply with
Section 7.10 hereof, such Holder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.


 


(f)                                    A successor Trustee will deliver a written
acceptance of its appointment to the retiring Trustee and to the Company.  Thereupon, the resignation or removal of the
retiring Trustee will become effective, and the successor Trustee will have all
the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee will mail a notice of
its succession to Holders.  The retiring
Trustee will promptly transfer all property held by it as Trustee to the successor
Trustee; provided all sums owing
to the Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.07 hereof.  Notwithstanding
replacement of the Trustee pursuant to this Section 7.08, the Company’s
obligations under Section 7.07 hereof will continue for the benefit of the
retiring Trustee.


 


Section 7.09                                Successor Trustee by
Merger, etc.


 


If the Trustee consolidates,
merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation, the successor corporation without any
further act will be the successor Trustee.


 


Section 7.10                                Eligibility;
Disqualification.


 


There will at all times be a
Trustee hereunder that is a corporation organized and doing business under the
laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to
supervision or examination by federal or state


 


61

















 


authorities and that has a combined capital
and surplus of at least $100.0 million as set forth in its most recent
published annual report of condition.


 


This Indenture will always
have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and
(5).  The Trustee is subject to TIA §
310(b).


 


Section 7.11                                Preferential Collection of
Claims Against Company.


 


The Trustee is subject to
TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removed
shall be subject to TIA § 311(a) to the extent indicated therein.


 


ARTICLE 8.

LEGAL DEFEASANCE AND COVENANT
DEFEASANCE


 


Section 8.01                                Option to Effect Legal
Defeasance or Covenant Defeasance.


 


The Company may, at the
option of its Board of Directors evidenced by a resolution set forth in an
Officers’ Certificate, at any time, elect to have either Section 8.02 or 8.03
hereof be applied to all outstanding Notes and the Subsidiary Guarantees upon
compliance with the conditions set forth below in this Article 8.


 


Section 8.02                                Legal Defeasance and
Discharge.


 


Upon the Company’s exercise
under Section 8.01 hereof of the option applicable to this Section 8.02, the
Company and each of the Guarantors will, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be deemed to have been discharged
from their obligations with respect to all outstanding Notes (including the
Subsidiary Guarantees) on the date the conditions set forth below are satisfied
(hereinafter, “Legal Defeasance”).  For this purpose, Legal Defeasance means
that the Company and the Guarantors will be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes (including the
Subsidiary Guarantees), which will thereafter be deemed to be “outstanding”
only for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in clauses (1) and (2) below, and to have satisfied all
their other obligations under such Notes, the Subsidiary Guarantees and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which will survive until otherwise terminated or
discharged hereunder:


 


(1)                                   the rights of Holders of outstanding Notes to
receive payments in respect of the principal of, or interest or premium and
Additional Interest, if any, on such Notes when such payments are due from the
trust referred to in Section 8.04 hereof;


 


(2)                                  the Company’s obligations with respect to
such Notes under Article 2 and Section 4.02 hereof;


 


(3)                                  the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company’s and the Guarantors’
obligations in connection therewith; and


 


(4)                                  this Article 8.


 


Subject to compliance with
this Article 8, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.


 


62

















 


Section 8.03                                Covenant Defeasance.


 


Upon the Company’s exercise
under Section 8.01 hereof of the option applicable to this Section 8.03, the
Company and the Guarantors will, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from each of their obligations
under the covenants contained in Sections 3.09, 4.03, 4.04, 4.05, 4.07, 4.08,
4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19 hereof and clause
(4) of Section 5.01(a) hereof with respect to the outstanding Notes on and
after the date the conditions set forth in Section 8.04 hereof are satisfied
(hereinafter, “Covenant Defeasance”),
and the Notes will thereafter be deemed not “outstanding” for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but will
continue to be deemed “outstanding” for all other purposes hereunder (it being
understood that such Notes will not be deemed outstanding for accounting
purposes).  For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes and Subsidiary
Guarantees, the Company and the Guarantors may omit to comply with and will
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Subsidiary Guarantees will be unaffected
thereby.  In addition, upon the
Company’s exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(4) through 6.01(8) hereof and, with respect
to Subsidiaries of the Company, Sections 6.01(9) and 6.01(10) hereof will not
constitute Events of Default.


 


Section 8.04                                Conditions to Legal or
Covenant Defeasance.


 


In
order to exercise either Legal Defeasance or Covenant Defeasance under either
Section 8.02 or 8.03 hereof:


 


(1)                                  The Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the Notes, cash in United
States dollars, non-callable Government Securities, or a combination of cash in
United States dollars and non-callable Government Securities, in amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, or interest and
premium and Additional Interest, if any, on the outstanding Notes on the Stated
Maturity or on the applicable redemption date, as the case may be, and the Company
must specify whether the Notes are being defeased to maturity or to a
particular redemption date;


 


(2)                                  in the case of Legal Defeasance, the Company
has delivered to the Trustee an Opinion of Counsel reasonably acceptable to
such Trustee confirming that:


 


(A)                              the Company has received from, or there has
been published by, the Internal Revenue Service a ruling; or


 


(B)                                since the date of this Indenture, there has
been a change in the applicable federal income tax law,


 


in
either case to the effect that, and based thereon such Opinion of Counsel will
confirm that, the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to 


 


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federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;


 


(3)                                  in the case of Covenant Defeasance, the
Company has delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;


 


(4)                                  no Default or Event of Default has occurred
and is continuing on the date of such deposit under this Indenture (other than
a Default or Event of Default resulting from the borrowing of funds to be
applied to such deposit);


 


(5)                                  such Legal Defeasance or Covenant Defeasance
will not result in a breach or violation of, or constitute a default under any
material agreement or instrument (other than this Indenture) to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;


 


(6)                                  the Company must deliver to the Trustee an
Officers’ Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of the Notes over the other creditors of
the Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and


 


(7)                                  the Company must deliver to the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.


 


Section 8.05                                Deposited Money and
Government Securities to be Held in Trust; Other Miscellaneous Provisions.


 


Subject to Section 8.06
hereof, all money and non-callable Government Securities (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 8.05, the “Trustee”) pursuant to
Section 8.04 hereof in respect of the outstanding Notes will be held in trust
and applied by the Trustee, in accordance with the provisions of such Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due thereon in respect
of principal, premium and Additional Interest, if any, and interest, but such
money need not be segregated from other funds except to the extent required by
law.


 


The Company will pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the cash or non-callable Government Securities deposited
pursuant to Section 8.04 hereof or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Notes.


 


Notwithstanding anything in
this Article 8 to the contrary, the Trustee will deliver or pay to the Company
from time to time upon the request of the Company any money or non-callable
Government Securities held by it as provided in Section 8.04 hereof which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which
may be the opinion delivered under Section 8.04(1) hereof), are in excess of
the amount thereof 


 


64

















 


that would then be required to be deposited
to effect an equivalent Legal Defeasance or Covenant Defeasance.


 


Section 8.06                                Repayment to Company.


 


Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium or Additional Interest, if any, or
interest on any Note and remaining unclaimed for two years after such
principal, premium or Additional Interest, if any, or interest has become due
and payable shall be paid to the Company on its request or (if then held by the
Company) will be discharged from such trust; and the Holder of such Note will
thereafter be permitted to look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, will thereupon
cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which will
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.


 


Section 8.07                                Reinstatement.


 


If the Trustee or Paying
Agent is unable to apply any United States dollars or non-callable Government
Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be,
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company’s and the Guarantors’ obligations under this Indenture and the Notes
and the Subsidiary Guarantees will be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium or Additional Interest, if any, or
interest on any Note following the reinstatement of its obligations, the Company
will be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.


 


ARTICLE 9.

AMENDMENT, SUPPLEMENT AND WAIVER


 


Section 9.01                                Without Consent of Holders
of Notes.


 


Notwithstanding Section 9.02
hereof, the Company, the Guarantors and the Trustee may amend or supplement
this Indenture, the Notes or the Subsidiary Guarantees without the consent of
any Holder of a Note:


 


(1)                                  to cure any ambiguity, defect or
inconsistency;


 


(2)                                  to provide for uncertificated Notes in
addition to or in place of certificated Notes or to alter the provisions of
Article 2 hereof (including the related definitions) in a manner that does not
materially adversely affect any Holder;


 


(3)                                  to provide for the assumption of the
Company’s obligations to the Holders of the Notes by a successor to the Company
pursuant to Article 5 hereof;


 


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(4)                                  to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Note;


 


(5)                                  to comply with the requirements of the SEC or
in order to effect or maintain the qualification of this Indenture under the
TIA;


 


(6)                                  to provide for the issuance of Additional
Notes in accordance with the limitations set forth in this Indenture as of the
date hereof;


 


(7)                                  to allow any Guarantor to execute a
supplemental indenture and/or a Subsidiary Guarantee with respect to the Notes;
or


 


(8)                                  to conform the text of
this Indenture, the Notes or the Subsidiary Guarantees to the description of
the Notes contained in the Company’s confidential offering circular, dated May
14, 2003, relating to the offering of the Notes, to the extent that the description
of the Notes was intended to be a verbatim recitation of a provision of this
Indenture, the Notes or the Subsidiary Guarantees.


 


Upon the request of the
Company, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.


 


Section 9.02                                With Consent of Holders of
Notes.


 


Except as provided below in this
Section 9.02, the Company, the Guarantors and the Trustee may amend or
supplement this Indenture (including, without limitation, Sections 3.09, 4.10
and 4.15 hereof), the Notes and the Subsidiary Guarantees with the consent of
the Holders of at least a majority in principal amount of the Notes (including,
without limitation, Additional Notes, if any) then outstanding voting as a
single class (including, without limitation, consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Notes), and,
subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of
Default (other than a Default or Event of Default in the payment of the
principal of, premium or Additional Interest, if any, or interest on the Notes,
except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture, the Subsidiary
Guarantees or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes, including
Additional Notes, if any, voting as a single class (including consents obtained
in connection with a tender offer or exchange offer for, or purchase of, the
Notes).  Section 2.08 hereof shall
determine which Notes are considered to be “outstanding” for purposes of this
Section 9.02.


 


Upon the request of the
Company, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt
by the Trustee of the documents described in Section 7.02 hereof, the Trustee
will join with the Company in the execution of such amended or supplemental
indenture unless such amended or supplemental indenture directly affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise,
in which case the Trustee may in its discretion, but will not be obligated to,
enter into such amended or supplemental indenture.


 


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It is not be necessary for
the consent of the Holders of Notes under this Section 9.02 to approve the
particular form of any proposed amendment or waiver, but it is sufficient if
such consent approves the substance thereof.


 


After an amendment,
supplement or waiver under this Section 9.02 becomes effective, the Company
will mail to the Holders of Notes affected thereby a notice briefly describing
the amendment, supplement or waiver. 
Any failure of the Company to mail such notice, or any defect therein,
will not, however, in any way impair or affect the validity of any such amended
or supplemental indenture or waiver. 
Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in
aggregate principal amount of the Notes then outstanding voting as a single
class may waive compliance in a particular instance by the Company with any
provision of this Indenture or the Notes. 
However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):


 


(1)                                  reduce the principal amount of Notes whose
Holders must consent to an amendment, supplement or waiver;


 


(2)                                  reduce the principal of or change the fixed
maturity of any Note or alter or waive any of the provisions with respect to
the redemption of the Notes except as provided above with respect to Sections
3.09, 4.10 and 4.15 hereof;


 


(3)                                  reduce the rate of or change the time for
payment of interest, including default interest, on any Note;


 


(4)                                  waive a Default or Event of Default in the
payment of principal of or premium or Additional Interest, if any, or interest
on the Notes (except a rescission of acceleration of the Notes by the Holders
of at least a majority in aggregate principal amount of the then outstanding
Notes and a waiver of the payment default that resulted from such
acceleration);


 


(5)                                  make any Note payable in money other than
that stated in the Notes;


 


(6)                                  make any change in the provisions of this
Indenture relating to waivers of past Defaults or the rights of Holders of
Notes to receive payments of principal of, or interest or premium or Additional
Interest, if any, on the Notes;


 


(7)                                  waive a redemption payment with respect to
any Note (other than a payment required under Section 3.09, 4.10 or 4.15
hereof);


 


(8)                                  release any Guarantor from any of its
obligations under its Subsidiary Guarantee or this Indenture, except in
accordance with the terms of this Indenture; or


 


(9)                                  make any change in the
foregoing amendment and waiver provisions.


 


Section 9.03                                Compliance with Trust
Indenture Act.


 


Every amendment or
supplement to this Indenture or the Notes will be set forth in a amended or
supplemental indenture that complies with the TIA as then in effect.


 


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Section 9.04                                Revocation and Effect of
Consents.


 


Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a Note
is a continuing consent by the Holder of a Note and every subsequent Holder of
a Note or portion of a Note that evidences the same debt as the consenting
Holder’s Note, even if notation of the consent is not made on any Note.  However, any such Holder of a Note or
subsequent Holder of a Note may revoke the consent as to its Note if the
Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. 
An amendment, supplement or waiver becomes effective in accordance with
its terms and thereafter binds every Holder.


 


Section 9.05                                Notation on or Exchange of
Notes.


 


The Trustee may place an
appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated.  The Company
in exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.


 


Failure to make the
appropriate notation or issue a new Note will not affect the validity and
effect of such amendment, supplement or waiver.


 


Section 9.06                                Trustee to Sign Amendments,
etc.


 


The Trustee will sign any
amended or supplemental indenture authorized pursuant to this Article 9 if the
amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. 
The Company may not sign an amendment or supplemental indenture until
the Board of Directors approves it.  In
executing any amended or supplemental indenture, the Trustee will be entitled
to receive and (subject to Section 7.01 hereof) will be fully protected in
relying upon, in addition to the documents required by Section 12.04 hereof, an
Officers’ Certificate and an Opinion of Counsel stating that the execution of
such amended or supplemental indenture is authorized or permitted by this
Indenture.


 


ARTICLE 10.

SUBSIDIARY GUARANTEES


 


Section
10.01                          Guarantee.


 


(a)                                  Subject to this Article 10, each of the
Guarantors hereby, jointly and severally, unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Notes or the obligations of the Company hereunder or
thereunder, that:


 


(1)                                 the principal of, premium and Additional
Interest, if any, and interest on the Notes will be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and


 


(2)                                 in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.


 


68

















 


Failing payment when due of
any amount so guaranteed or any performance so guaranteed for whatever reason,
the Guarantors will be jointly and severally obligated to pay the same
immediately.  Each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.


 


(b)                                 The Guarantors hereby agree that their
obligations hereunder are unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the Notes
with respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor.  Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever and covenant that this Subsidiary Guarantee will not be discharged except
by complete performance of the obligations contained in the Notes and this
Indenture.


 


(c)                                  If any Holder or the Trustee is required by
any court or otherwise to return to the Company, the Guarantors or any
custodian, trustee, liquidator or other similar official acting in relation to
either the Company or the Guarantors, any amount paid by either to the Trustee
or such Holder, this Subsidiary Guarantee, to the extent theretofore
discharged, will be reinstated in full force and effect.


 


(d)                                 Each Guarantor agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.  Each Guarantor
further agrees that, as between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (1) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for the
purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors
for the purpose of this Subsidiary Guarantee. 
The Guarantors will have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Subsidiary Guarantee.


 


Section 10.02                          Limitation on Guarantor
Liability.


 


Each Guarantor, and by its
acceptance of Notes, each Holder, hereby confirms that it is the intention of
all such parties that the Subsidiary Guarantee of such Guarantor not constitute
a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to any Subsidiary Guarantee.  To effectuate the foregoing intention, the
Trustee, the Holders and the Guarantors hereby irrevocably agree that the
obligations of such Guarantor will be limited to the maximum amount that will, after
giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 10, result in the
obligations of such Guarantor under its Subsidiary Guarantee not constituting a
fraudulent transfer or conveyance.


 


Section 10.03                          Execution and Delivery of
Subsidiary Guarantee.


 


To evidence its Subsidiary
Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that
a notation of such Subsidiary Guarantee substantially in the form attached as
Exhibit E hereto 


 


69

















 


will be endorsed by an Officer of such
Guarantor on each Note authenticated and delivered by the Trustee and that this
Indenture will be executed on behalf of such Guarantor by one of its Officers.


 


Each Guarantor hereby agrees
that its Subsidiary Guarantee set forth in Section 10.01 hereof will remain in
full force and effect notwithstanding any failure to endorse on each Note a
notation of such Subsidiary Guarantee.


 


If an Officer whose
signature is on this Indenture or on the Subsidiary Guarantee no longer holds
that office at the time the Trustee authenticates the Note on which a
Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will be valid
nevertheless.


 


The delivery of any Note by
the Trustee, after the authentication thereof hereunder, will constitute due
delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of
the Guarantors.


 


In the event that any
Restricted Subsidiary of the Company is required by Section 4.18 hereof to
become a Guarantor hereunder, or that the Company elects that any of its
Subsidiaries becomes a Guarantor hereunder, the Company will cause such
Subsidiary to comply with the provisions of Section 4.18 hereof and this
Article 10 to the extent applicable.


 


Section 10.04                          Guarantors May Consolidate,
etc., on Certain Terms.


 


Except as otherwise provided
in Section 10.05 hereof, no Guarantor may sell or otherwise dispose of all or
substantially all of its assets to, or consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) another Person, other
than the Company or another Guarantor, unless:


 


(1)                                 immediately
after giving effect to such transaction, no Default or Event of Default exists;
and


 


(2)                                 either:


 


(a)                                  subject to Section 10.05 hereof, the Person
acquiring the property in any such sale or disposition or the Person formed by
or surviving any such consolidation or merger unconditionally assumes all the
obligations of that Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Notes, this
Indenture and the Subsidiary Guarantee on the terms set forth herein or
therein; or


 


(b)                                 the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of this
Indenture, including without limitation, Section 4.10 hereof.


 


In case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantee
endorsed upon the Notes and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person will succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor.  Such successor Person thereupon may cause to
be signed any or all of the Subsidiary Guarantees to be endorsed upon all of
the Notes issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee. 
All the Subsidiary Guarantees so issued will in all respects have the
same legal rank and benefit under this Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this
Indenture as though all of such Subsidiary Guarantees had been issued at the
date of the execution hereof.


 


70

















 


Except as set forth in
Articles 4 and 5 hereof, and notwithstanding clauses (a) and (b) above, nothing
contained in this Indenture or in any of the Notes will prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or will prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company or another
Guarantor.


 


Section
10.05                          Releases.


 


(a)                                  The Subsidiary Guarantee of a Guarantor will
be released:


 


(1)                                 in connection with any sale or other
disposition of all or substantially all of the assets of that Guarantor
(including by way of merger or consolidation) to a Person that is not (either
before or after giving effect to such transaction) a Subsidiary of the Company,
if the sale or other disposition complies with Sections 3.09 and 4.10 hereof;


 


(2)                                 in connection with any sale of all of the
Capital Stock of a Guarantor to a Person that is not (either before or after
giving effect to such transaction) a Subsidiary of the Company; provided that such sale shall be subject
to Sections 3.09 and 4.10 hereof; or


 


(3)                                 if the Company properly designates any
Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary of the
Company in accordance with the provisions of this Indenture.


 


(b)                                 Upon delivery by the Company to the Trustee
of an Officers’ Certificate and an Opinion of Counsel to the effect that one of
the events described in Section 10.05(a) has occurred in accordance with the
provisions of this Indenture, including without limitation Section 4.10 hereof,
the Trustee will execute any documents reasonably required in order to evidence
the release of any Guarantor from its obligations under its Subsidiary
Guarantee.


 


(c)                                  Any Guarantor not released from its
obligations under its Subsidiary Guarantee will remain liable for the full amount
of principal of and interest on the Notes and for the other obligations of any
Guarantor under this Indenture as provided in this Article 10.


 


Section
10.06                          Operation.


 


Notwithstanding
anything in this Indenture to the contrary, the provisions of this Article 10
will not become operative unless and until, and only for so long as, any
Subsidiary of the Company becomes, and is, a Guarantor of the Notes pursuant to
the provisions of Section 4.18 hereof.


 


ARTICLE 11.

SATISFACTION AND DISCHARGE


 


Section 11.01                          Satisfaction and Discharge.


 


This Indenture will be
discharged and will cease to be of further effect as to all Notes issued
hereunder, when:


 


(1)                                 either:


 


(a)                                  all Notes that have been authenticated,
except lost, stolen or destroyed Notes that have been replaced or paid and
Notes for whose payment money has been deposited in trust and thereafter repaid
to the Company, have been delivered to the Trustee for cancellation; or


 


71

















 


(b)                                 all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason of the mailing
of a notice of redemption or otherwise or will become due and payable within
one year and the Company or any Guarantor has irrevocably deposited or caused
to be deposited with the Trustee as trust funds in trust solely for the benefit
of the Holders, cash in United States dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest, to pay and discharge the
entire indebtedness on the Notes not delivered to the Trustee for cancellation
for principal, premium and Additional Interest, if any, and accrued interest to
the date of maturity or redemption;


 


(2)                                 no Default or Event of Default has occurred
and is continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit)
and such deposit will not result in a breach or violation of, or constitute a
default under, any other material instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor is bound;


 


(3)                                 the Company or any Guarantor has paid or
caused to be paid all sums payable by it under this Indenture; and


 


(4)                                 the Company has delivered irrevocable
instructions to the Trustee under this Indenture to apply the deposited money
toward the payment of the Notes at maturity or the redemption date, as the case
may be.


 


In addition, the Company must deliver an
Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all
conditions precedent to satisfaction and discharge have been satisfied.


 


Notwithstanding
the satisfaction and discharge of this Indenture, if money has been deposited
with the Trustee pursuant to subclause (b) of clause (1) of this Section, the
provisions of Sections 11.02 and 8.06 hereof will survive.  In addition, nothing in this Section 11.01
will be deemed to discharge those provisions of Section 7.07 hereof, that, by
their terms, survive the satisfaction and discharge of this Indenture.


 


Section 11.02                          Application of Trust Money.


 


Subject to the provisions of
Section 8.06 hereof, all money deposited with the Trustee pursuant to Section
11.01 hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.


 


If the Trustee or Paying
Agent is unable to apply any money or Government Securities in accordance with
Section 11.01 hereof by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company’s and any Guarantor’s
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 11.01 hereof; provided that if the Company has made any
payment of principal of, premium, if any, or interest on any Notes because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.


 


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ARTICLE 12.

MISCELLANEOUS


 


Section 12.01                          Trust Indenture Act
Controls.


 


If
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by TIA §318(c), the imposed duties will control.


 


Section
12.02                          Notices.


 


Any notice or communication
by the Company, any Guarantor or the Trustee to the others is duly given if in
writing and delivered in Person or mailed by first class mail (registered or
certified, return receipt requested), telex, telecopier or overnight air
courier guaranteeing next day delivery, to the others’ address:


 


If
to the Company and/or any Guarantor:


 


SEMCO Energy, Inc.

405 Water Street

Port Huron, MI 48060

Telecopier No.: (810) 966-4217

Attention: Corporate Secretary


 


With a copy to:


 


Gibson,
Dunn & Crutcher LLP

200 Park Avenue, 47th Floor


New
York, NY 10166

Telecopier No.: (212) 351-4035

Attention: Steven Buffone, Esq.


 


If
to the Trustee:


 


Fifth
Third Bank


1000
Town Center, Suite 1400


Southfield,
MI 48075

Telecopier No.: (248) 603-0444

Attention: Rodney D. Weeks


 


The Company, any Guarantor
or the Trustee, by notice to the others may designate additional or different
addresses for subsequent notices or communications.


 


All notices and communications
(other than those sent to Holders) will be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.


 


Any notice or communication
to a Holder will be mailed by first class mail, certified or registered, return
receipt requested, or by overnight air courier guaranteeing next day delivery
to its address shown on the register kept by the Registrar.  Any notice or communication will also be so
mailed 


 


73

















 


to any Person described in TIA § 313(c), to
the extent required by the TIA.  Failure
to mail a notice or communication to a Holder or any defect in it will not
affect its sufficiency with respect to other Holders.


 


If a notice or communication
is mailed in the manner provided above within the time prescribed, it is duly
given, whether or not the addressee receives it.


 


If the Company mails a
notice or communication to Holders, it will mail a copy to the Trustee and each
Agent at the same time.


 


Section 12.03                          Communication by Holders of
Notes with Other Holders of Notes.


 


Holders may communicate
pursuant to TIA § 312(b) with other Holders with respect to their rights under
this Indenture or the Notes.  The
Company, the Trustee, the Registrar and anyone else shall have the protection
of TIA § 312(c).


 


Section 12.04                          Certificate and Opinion as
to Conditions Precedent.


 


Upon any request or
application by the Company to the Trustee to take any action under this
Indenture, the Company shall furnish to the Trustee:


 


(1)                                 an Officers’ Certificate in form and
substance reasonably satisfactory to the Trustee (which must include the
statements set forth in Section 12.05 hereof) stating that, in the opinion of
the signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and


 


(2)                                 an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which must include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of such counsel,
all such conditions precedent and covenants have been satisfied.


 


Section 12.05                          Statements Required in
Certificate or Opinion.


 


Each
certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (other than a certificate provided pursuant to TIA §
314(a)(4)) must comply with the provisions of TIA § 314(e) and must include:


 


(1)                                 a statement that the Person making such
certificate or opinion has read such covenant or condition;


 


(2)                                 a brief statement as to the nature and scope
of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;


 


(3)                                 a statement that, in the opinion of such
Person, he or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and


 


(4)                                 a statement as to whether or not, in the
opinion of such Person, such condition or covenant has been satisfied.


 


74

















 


Section 12.06                          Rules by Trustee and
Agents.


 


The Trustee may make
reasonable rules for action by or at a meeting of Holders.  The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.


 


Section 12.07                          No Personal Liability of
Directors, Officers, Employees and Stockholders.


 


No past, present or future
director, officer, employee, incorporator or stockholder of the Company or any
Guarantor, as such, will have any liability for any obligations of the Company
or any Guarantor under the Notes, this Indenture, the Subsidiary Guarantees or
for any claim based on, in respect of, or by reason of, such obligations or
their creation.  Each Holder of Notes by
accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Notes. 
The waiver may not be effective to waive liabilities under the federal
securities laws.


 


Section 12.08                          Governing Law.


 


THE INTERNAL LAW OF THE
STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES
AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.


 


Section 12.09                          No Adverse Interpretation
of Other Agreements.


 


This Indenture may not be
used to interpret any other indenture, loan or debt agreement of the Company or
its Subsidiaries or of any other Person. 
Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.


 


Section
12.10                          Successors.


 


All agreements of the
Company in this Indenture and the Notes will bind its successors.  All agreements of the Trustee in this
Indenture will bind its successors.  All
agreements of each Guarantor in this Indenture will bind its successors, except
as otherwise provided in Section 10.05 hereof.


 


Section 12.11                          Severability.


 


In case any provision in
this Indenture or in the Notes is invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions will not in
any way be affected or impaired thereby.


 


Section 12.12                          Counterpart Originals.


 


The parties may sign any
number of copies of this Indenture. 
Each signed copy will be an original, but all of them together represent
the same agreement.


 


Section 12.13                          Table of Contents,
Headings, etc.


 


The Table of Contents,
Cross-Reference Table and Headings of the Articles and Sections of this Indenture
have been inserted for convenience of reference only, are not to be considered
a part of this Indenture and will in no way modify or restrict any of the terms
or provisions hereof.


 


[Signatures
on following page]


 


75

















 


SIGNATURES


 


Dated
as of May 15, 2003


 


	
   

  	
   

  	
  SEMCO
  Energy, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
     /s/  Mark Prendeville

  
	
   

  	
   

  	
   

  	
  Name: Mark Prendeville

  
	
   

  	
   

  	
   

  	
  Title: V.P. and General
  Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fifth
  Third Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
     /s/  Rodney D. Weeks

  
	
   

  	
   

  	
   

  	
  Name: Rodney D. Weeks

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  
					



 


76

















 


	
  [Face of Note]

  
	
   

  
	
  CUSIP/CINS
  

  	
   

  



 


73⁄4%
Senior Notes due 2013


 


	
  No.

  	
  $

  	
   

  



 


SEMCO ENERGY, INC.


 


promises
to pay to CEDE & CO.


 


or
registered assigns, 


 


	
  the principal sum of

  	
   

  



 


Dollars on May 15, 2013.


 


Interest
Payment Dates: May 15 and November 15


 


Record
Dates: May 1 and November 1


 


	
  Dated:

  	
   

  	
  , 200

  	
   

  	
   

  



 


	
   

  	
  SEMCO ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  



 


	
  This is one of the Notes
  referred to in the within-mentioned Indenture:

  	
   

  
	
   

  	
   

  
	
  Fifth
  Third Bank,

  	
   

  
	
  as Trustee

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  
			



 


A-1

















 


[Back
of Note]


 


73⁄4%
Senior Notes due 2013


 


[Insert the Global Note Legend, if applicable pursuant to
the provisions of the Indenture]


 


[Insert the Private Placement Legend, if applicable pursuant
to the provisions of the Indenture]


 


Capitalized terms used
herein have the meanings assigned to them in the Indenture referred to below
unless otherwise indicated.


 


(1)                                 Interest. 
SEMCO Energy, Inc., a Michigan corporation (the “Company”), promises to
pay interest on the principal amount of this Note at 73⁄4% per annum from                   until maturity and shall
pay the Additional Interest, if any, payable pursuant to the Registration
Rights Agreement referred to below.  The
Company will pay interest and Additional Interest, if any, semi-annually in
arrears on May 15 and November 15 of each year, or if any such day is not a Business
Day, on the next succeeding Business Day (each, an “Interest Payment
Date”).  Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred
to on the face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be                 
..  The Company will pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue principal and premium, if any, from time to time on demand at a rate
that is equal to the rate then in effect; it will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Additional Interest, if any, (without regard to
any applicable grace periods) from time to time on demand at the same rate to
the extent lawful.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.


 


(2)                                 Method
of Payment.  The Company will pay interest on the Notes
(except defaulted interest) and Additional Interest, if any, to the Persons who
are registered Holders of Notes at the close of business on the May 1 or
November 1 next preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest.  The Notes will be payable as
to principal, premium and Additional Interest, if any, and interest at the
office or agency of the Company maintained for such purpose within or without
the City and State of New York, or, at the option of the Company, payment of
interest and Additional Interest, if any, may be made by check mailed to the
Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Additional Interest, if any, on, all Global Notes and all
other Notes the Holders of which will have provided wire transfer instructions
to the Company or the Paying Agent. 
Such payment will be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.


 


(3)                                 Paying
Agent and Registrar.  Initially, Fifth Third Bank, the Trustee
under the Indenture, will act as Paying Agent and Registrar.  The Company may change any Paying Agent or
Registrar without notice to any Holder. 
The Company or any of its Subsidiaries may act in any such capacity.


 


A-2

















 


(4)                                 Indenture.  The
Company issued the Notes under an Indenture dated as of May 15, 2003 (the
“Indenture”) between the Company and the Trustee.  The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code §§ 77aaa-77bbbb).  The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms.  To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. 
The Notes are unsecured obligations of the Company unlimited in
aggregate principal amount.


 


(5)                                 Optional
Redemption.


 


(a)                                  Except as set forth in subparagraph (b) of
this Paragraph 5, the Company will not have the option to redeem the Notes
prior to May 15, 2008.  Thereafter, the
Company will have the option to redeem all or a part of the Notes upon not less
than 30 nor more than 60 days’ notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Additional Interest, if any, on the Notes redeemed, to the
applicable redemption date, if redeemed during the twelve-month period
beginning on May 15 of the years indicated below:


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2008

  	
   

  	
  103.875

  	
  %

  
	
  2009

  	
   

  	
  102.583

  	
  %

  
	
  2010

  	
   

  	
  101.292

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


(b)                                 Notwithstanding the provisions of
subparagraph (a) of this Paragraph 5, at any time prior to May 15, 2006, the
Company may on any one or more occasions redeem up to 35% of the aggregate
principal amount of the Notes issued under the Indenture at a redemption price
of 107.750% of the principal amount, plus accrued and unpaid interest and
Additional Interest, if any, to the redemption date, with the net cash proceeds
of one or more public or private offerings of its Equity Interests (other than
Disqualified Stock); provided
that at least 65% of the aggregate principal amount of the Notes issued under
the Indenture remains outstanding immediately after the occurrence of such
redemption (excluding Notes held by the Company and its Subsidiaries) and the
redemption occurs within 60 days of the date of the closing of such offering.


 


(6)                                 Mandatory
Redemption.  The Company will not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.


 


(7)                                 Repurchase
at Option of Holder.


 


(a)                                  If there is a Change of Control, the Company
will be required to make an offer (a “Change of Control Offer”) to repurchase
all or any part (equal to $1,000 or an integral multiple thereof) of each
Holder’s Notes at a purchase price equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest and Additional Interest, if
any, on the Notes repurchased, if any, to the date of purchase (the “Change of
Control Payment”).  Within 10 Business
Days following any Change of Control, the Company will mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer as
required by the Indenture.


 


A-3

















 


(b)                                 If the Company or any Restricted Subsidiary
consummates any Asset Sales, and the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Company will commence an offer to all Holders of
Notes and all holders of other Indebtedness that is pari passu with the Notes (including, without limitation,
the 2008 Notes) containing provisions similar to those set forth in the
Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets (an “Asset Sale Offer”) pursuant to Section 3.09 of the
Indenture to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount plus accrued and unpaid interest and
Additional Interest, if any, to the date of purchase, in accordance with the
procedures set forth in the Indenture.  To the extent that the aggregate amount of Notes and other pari passu Indebtedness tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Company (or such
Restricted Subsidiary) may use such deficiency for any purpose not otherwise
prohibited by the Indenture.  If the
aggregate principal amount of Notes and other pari
passu Indebtedness surrendered by holders thereof exceeds the amount
of Excess Proceeds, the Trustee shall select the Notes and other pari passu Indebtedness to be purchased on
a pro rata basis.  Holders of Notes that are the subject of an
offer to purchase will receive an Asset Sale Offer from the Company prior to
any related purchase date and may elect to have such Notes purchased by
completing the form entitled “Option of Holder to Elect Purchase” attached to
this Note.


 


(8)                                 Notice
of Redemption.  Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address.  Notes in denominations larger than $1,000
may be redeemed in part but only in whole multiples of $1,000, unless all of
the Notes held by a Holder are to be redeemed. 
On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.


 


(9)                                 Denominations,
Transfer, Exchange.  The Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000.  The transfer of Notes may be registered and
Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture.  The Company
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note being
redeemed in part.  Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.


 


(10)                           Persons Deemed Owners.  The
registered Holder of a Note may be treated as its owner for all purposes.


 


(11)                           Amendment, Supplement and
Waiver.  Subject to certain exceptions, the
Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes and Additional Notes, if any,
voting as a single class, and any existing default or compliance with any
provision of the Indenture, the Subsidiary Guarantees or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes and Additional Notes, if any, voting as a single
class.  Without the consent of any
Holder of a Note, the Indenture, the Subsidiary Guarantees or the Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in 


 


A-4

















 


place
of certificated Notes, to alter the provisions of Article 2 of the Indenture
(including the related definitions) in a manner that does not materially
adversely affect any Holder, to provide for the assumption of the Company’s or
any Guarantor’s obligations to the Holders of the Notes by a successor to the
Company pursuant to Article 5 of the Indenture, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights hereunder of any Holder of the Note,
to comply with the requirements of the SEC or in order to effect or maintain the
qualification of the Indenture under the TIA, to provide for the issuance of
Additional Notes in accordance with the limitations set forth in the Indenture
as of the date thereof, to allow any Guarantor to execute a supplemental
indenture and/or a Subsidiary Guarantee with respect to the Notes or to conform the text of the Indenture, the Notes or
the Subsidiary Guarantees to any provision in “-Description of Notes” in the
offering circular, dated May 14, 2003, relating to the offering of the Notes,
to the extent that such provision in said “-Description of Notes” was intended
to be a verbatim recitation of a provision of the Indenture, the Notes or the
Subsidiary Guarantees.


 


(12)                           Defaults and Remedies. 
Events of Default include: (i) the Company defaults for 30 days in the
payment when due of interest on, or Additional Interest with respect to, the
Notes; (ii) the Company defaults in the payment when due (at maturity, upon
redemption or otherwise) of the principal of, or premium, if any, on the Notes;
(iii) the Company fails to redeem,
repurchase or otherwise retire, on or before July 5, 2003, all of its 8.95%
Remarketable or Redeemable Securities due 2008; (iv) the Company or any
of its Subsidiaries fails to comply with the provisions of Section 4.07, 4.09,
4.10, 4.15 or 5.01 of the Indenture for 30 days after notice to the Company by
the Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding voting as a single class; (v) the Company or any of its
Subsidiaries fails to observe or perform any other agreements in the Indenture
or the Notes for 60 days after notice to the Company by the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes then
outstanding voting as a single class; (vi) a default occurs under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money borrowed by the Company or
any of its Restricted Subsidiaries (or the payment of which is guaranteed by
the Company or any of its Restricted Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of the Indenture, if that
default (a) is caused by a failure to pay principal of, or interest or premium,
if any, on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a “Payment Default”); or (b) results in the
acceleration of such Indebtedness prior to its express maturity, and, in each
case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$10.0 million or more; (vii) failure by the
Company or any of its Restricted Subsidiaries to pay final judgments
aggregating in excess of $10.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days; (viii) certain final
judgments for the payment of money that remain undischarged for a period of 60
days; and (ix) certain events of bankruptcy or insolvency with respect to the
Company or any of its Restricted Subsidiaries. 
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable. 
Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, all outstanding Notes
will become due and payable without further action or notice.  Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. 
Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice
of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines that
withholding 


 


A-5

















 


notice
is in their interest.  The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest or
Additional Interest on, or the principal of, the Notes.  The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.


 


(13)                           Trustee Dealings with
Company.  The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee.


 


(14)                           No Recourse Against Others.  A
director, officer, employee, incorporator or stockholder, of the Company or any
of the Guarantors, as such, will not have any liability for any obligations of
the Company or any Guarantor under the Notes, the Indenture or the Subsidiary
Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation.  Each
Holder by accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for the issuance of the Notes.


 


(15)                           AUTHENTICATION.  This Note will not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.


 


(16)                           ABBREVIATIONS.  Customary abbreviations may
be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian) and
U/G/M/A (= Uniform Gifts to Minors Act).


 


(17)                           ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
NOTES AND RESTRICTED DEFINITIVE NOTES.  In addition to the rights
provided to Holders of Notes under the Indenture, Holders of Restricted Global
Notes and Restricted Definitive Notes will have all the rights set forth in the
Registration Rights Agreement dated as of May 15, 2003, between the Company and
the other parties named on the signature pages thereof or, in the case of
Additional Notes, Holders of Restricted Global Notes and Restricted Definitive
Notes will have the rights set forth in one or more registration rights
agreements, if any, among the Company, the Guarantors, if any, and the other
parties thereto, relating to rights given by the Company to the purchasers of
any Additional Notes to register such Additional Notes under the Securities Act
(collectively, the “Registration Rights Agreement”).


 


(18)                           CUSIP Numbers. 
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. 
No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.


 


The Company will furnish to
any Holder upon written request and without charge a copy of the Indenture
and/or the Registration Rights Agreement. 
Requests may be made to:


 


A-6

















 


SEMCO
Energy, Inc.

28470 13 Mile Road, Suite 300

Farmington Hills, MI 48334

Attention: Corporate Secretary


 


A-7

















 


ASSIGNMENT
FORM


 


To assign this Note, fill in
the form below:


 


	
  (I) or (we) assign and transfer this Note to:

  	
   

  
	
   

  	
  (Insert assignee’s legal name)

  
	
   

  
	
  (Insert assignee’s soc.
  sec. or tax I.D. no.)

  
	
   

  	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Print or type assignee’s
  name, address and zip code)

  
	
   

  
	
  and irrevocably appoint 

  	
   

  
	
  to transfer this Note on the books of the Company.  The agent may substitute another to act
  for him.

  
	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
  (Sign exactly as your name appears on the face of this Note)

  
	
   

  	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  
									



 












*                                         Participant in a recognized Signature
Guarantee Medallion Program (or other signature guarantor acceptable to the
Trustee).


 


A-8

















 


OPTION
OF HOLDER TO ELECT PURCHASE


 


If you want to elect to have
this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the
Indenture, check the appropriate box below:


 


Section
4.10                              Section 4.15


 


If you want to elect to have
only part of the Note purchased by the Company pursuant to Section 4.10 or
Section 4.15 of the Indenture, state the amount you elect to have purchased:


 


	
  $

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
  (Sign exactly as your name
  appears on the face of this Note)

  
	
   

  
	
   

  	
  Tax Identification No.:

  	
   

  
	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  
										



 












*                                         Participant in a recognized Signature
Guarantee Medallion Program (or other signature guarantor acceptable to the
Trustee).


 


A-9

















 


SCHEDULE
OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE


 


The following exchanges of a
part of this Global Note for an interest in another Global Note or for a
Definitive Note, or exchanges of a part of another Global Note or Definitive
Note for an interest in this Global Note, have been made:


 


	
  Date
  of Exchange

  	
   

  	
  Amount of decrease in

  Principal Amount 

  of this Global Note

  	
   

  	
  Amount of increase in

  Principal Amount

  of this Global Note

  	
   

  	
  Principal Amount

  of this Global Note 

  following such

  decrease 

  (or increase)

  	
   

  	
  Signature of authorized

  officer of Trustee or

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


A-10

















 


EXHIBIT B


 


FORM OF CERTIFICATE OF
TRANSFER


 


SEMCO Energy, Inc.

28470 13 Mile Road, Suite 300

Farmington Hills, MI 48334


 


Fifth Third Bank


Corporate Trust Department


1850 East Paris Avenue, SE


Grand Rapids, MI 49546-6210


 


Re:  73⁄4% Senior Notes due 2013


 


Reference is hereby made to
the Indenture, dated as of May 15, 2003 (the “Indenture”),
between SEMCO Energy, Inc., as issuer (the “Company”),
and Fifth Third Bank, as trustee. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.


 


                                   , (the “Transferor”) owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $                    
in such Note[s] or interests (the “Transfer”),
to                                           
(the “Transferee”), as
further specified in Annex A hereto.  In
connection with the Transfer, the Transferor hereby certifies that:


 


[CHECK
ALL THAT APPLY]


 


1.  o  Check if Transferee will take delivery of a beneficial
interest in the 144A Global Note or a Definitive Note Pursuant to Rule 144A.  The Transfer is being effected pursuant to
and in accordance with Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and
such Person and each such account is a “qualified institutional buyer” within
the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A
and such Transfer is in compliance with any applicable blue sky securities laws
of any state of the United States.  Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.


 


2.  o  Check if Transferee will take delivery of a beneficial
interest in the Regulation S Global Note or a Definitive Note pursuant to
Regulation S.  The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a Person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of
a designated offshore securities market and neither such Transferor nor any
Person acting on its behalf knows that the transaction was prearranged with a
buyer in the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act, (iii) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act and (iv) if the
proposed transfer is being made prior to the expiration of the Restricted
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other 


 


B-1

















 


than an Initial
Purchaser).  Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Note and/or the Definitive Note and in the Indenture
and the Securities Act.


 


3.  o  Check and complete if Transferee will take delivery of
a beneficial interest in the IAI Global Note or a Definitive Note pursuant to
any provision of the Securities Act other than Rule 144A or Regulation S.  The Transfer is being effected in compliance
with the transfer restrictions applicable to beneficial interests in Restricted
Global Notes and Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act and any applicable blue sky securities laws of any
state of the United States, and accordingly the Transferor hereby further
certifies that (check one):


 


(a)                                  o  such
Transfer is being effected pursuant to and in accordance with Rule 144 under
the Securities Act;


 


or


 


(b)                                 o  such
Transfer is being effected to the Company or a subsidiary thereof;


 


or


 


(c)                                  o  such
Transfer is being effected pursuant to an effective registration statement
under the Securities Act and in compliance with the prospectus delivery
requirements of the Securities Act;


 


or


 


(d)                                 o  such
Transfer is being effected to an Institutional Accredited Investor and pursuant
to an exemption from the registration requirements of the Securities Act other
than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further
certifies that it has not engaged in any general solicitation within the meaning
of Regulation D under the Securities Act and the Transfer complies with the
transfer restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and (2) if such Transfer
is in respect of a principal amount of Notes at the time of transfer of less
than $250,000, an opinion of counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this certification),
to the effect that such Transfer is in compliance with the Securities Act.  Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the IAI Global Note
and/or the Definitive Notes and in the Indenture and the Securities Act.


 


4.  o  Check if Transferee will take delivery of a beneficial
interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.


 


(a)  o  Check if
Transfer is pursuant to Rule 144. 
(i) The Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act.  Upon consummation of 


 


B-2

















 


the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.


 


(b)  o  Check if
Transfer is Pursuant to Regulation S.  (i) The Transfer is being effected pursuant to and in accordance
with Rule 903 or Rule 904 under the Securities Act and in compliance with the
transfer restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.


 


(c)  o  Check if
Transfer is Pursuant to Other Exemption.  (i) The Transfer is being effected pursuant to and in compliance
with an exemption from the registration requirements of the Securities Act
other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities
laws of any State of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will not be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes or Restricted
Definitive Notes and in the Indenture.


 


This certificate and the
statements contained herein are made for your benefit and the benefit of the
Company.


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Insert Name of
  Transferor]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
					



 


B-3

















 


ANNEX
A TO CERTIFICATE OF TRANSFER


 


1.                                       The Transferor owns and proposes to transfer
the following:


 


[CHECK
ONE OF (a) OR (b)]


 


(a)                                  o  a
beneficial interest in the:


 


(i)                               o  144A
Global Note (CUSIP                ), or


 


(ii)                            o 
Regulation S Global Note (CUSIP                ), or


 


(iii)                         o   IAI
Global Note (CUSIP                ); or


 


(b)   o   a
Restricted Definitive Note.


 


2.                                       After the Transfer the Transferee will hold:


 


[CHECK
ONE]


 


(a)    o  a
beneficial interest in the:


 


(i)                               o  144A
Global Note (CUSIP                ), or


 


(ii)                            o 
Regulation S Global Note (CUSIP                ), or


 


(iii)                         o  IAI
Global Note (CUSIP                ); or


 


(iv)                        o 
Unrestricted Global Note (CUSIP                ); or


 


(b)  o  a Restricted Definitive Note; or


 


(c)  o  an Unrestricted Definitive Note,


 


in accordance with the terms
of the Indenture.


 


B-4

















 


EXHIBIT C


 


FORM OF CERTIFICATE OF
EXCHANGE


 


SEMCO Energy, Inc.


28470 13 Mile Road, Suite
300


Farmington Hills, MI 48334


 


Fifth Third Bank


Corporate Trust Department


1850 East Paris Avenue, SE


Grand Rapids, MI 49546-6210


 


Re:  73⁄4% Senior Notes due 2013


 


(CUSIP               )


 


Reference is hereby made to
the Indenture, dated as of May 15, 2003 (the “Indenture”),
between SEMCO Energy, Inc., as issuer (the “Company”),
and Fifth Third Bank, as trustee. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.


 


                                        , (the “Owner”) owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount
of $                     in such Note[s]
or interests (the “Exchange”).  In connection with the Exchange, the Owner
hereby certifies that:


 


1.                                       Exchange of Restricted
Definitive Notes or Beneficial Interests in a Restricted Global Note for
Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global
Note


 


(a)  o                Check if Exchange is from
beneficial interest in a Restricted Global Note to beneficial interest in an
Unrestricted Global Note.  In connection with the Exchange of the
Owner’s beneficial interest in a Restricted Global Note for a beneficial
interest in an Unrestricted Global Note in an equal principal amount, the Owner
hereby certifies (i) the beneficial interest is being acquired for the Owner’s
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with the Securities Act of 1933, as amended (the
“Securities Act”), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any
state of the United States.


 


(b)  o               Check if Exchange is from
beneficial interest in a Restricted Global Note to Unrestricted Definitive Note.  In
connection with the Exchange of the Owner’s beneficial interest in a Restricted
Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i)
the Definitive Note is being acquired for the Owner’s own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the Definitive
Note is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.


 


(c)  o                Check if Exchange is from
Restricted Definitive Note to beneficial interest in an Unrestricted Global
Note.  In connection with the Owner’s Exchange of a
Restricted Definitive Note for 


 


C-1

















 


a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner’s own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.


 


(d)  o               Check if Exchange is from
Restricted Definitive Note to Unrestricted Definitive Note.  In
connection with the Owner’s Exchange of a Restricted Definitive Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted
Definitive Note is being acquired for the Owner’s own account without transfer,
(ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the Unrestricted
Definitive Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.


 


2.                                       Exchange of Restricted
Definitive Notes or Beneficial Interests in Restricted Global Notes for
Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes


 


(a)  o                Check if Exchange is from
beneficial interest in a Restricted Global Note to Restricted Definitive Note.  In
connection with the Exchange of the Owner’s beneficial interest in a Restricted
Global Note for a Restricted Definitive Note with an equal principal amount,
the Owner hereby certifies that the Restricted Definitive Note is being
acquired for the Owner’s own account without transfer.  Upon consummation of the proposed Exchange
in accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Definitive Note and
in the Indenture and the Securities Act.


 


(b)  o               Check if Exchange is from
Restricted Definitive Note to beneficial interest in a Restricted Global Note.  In
connection with the Exchange of the Owner’s Restricted Definitive Note for a
beneficial interest in the [CHECK ONE] o144A
Global Note, oRegulation S Global Note,  oIAI
Global Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any
applicable blue sky securities laws of any state of the United States.  Upon consummation of the proposed Exchange
in accordance with the terms of the Indenture, the beneficial interest issued
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.


 


This certificate and the
statements contained herein are made for your benefit and the benefit of the
Company.


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Insert Name of
  Transferor]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  



 


C-2

















 


	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
					



 


C-3

















 


EXHIBIT D


 


FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR


 


SEMCO Energy, Inc.


28470 13 Mile Road, Suite
300


Farmington Hills, MI 48334


 


Fifth Third Bank


Corporate Trust Department


1850 East Paris Avenue, SE


Grand Rapids, MI 49546-6210


 


Re:  73⁄4% Senior Notes due 2013


 


Reference is hereby made to
the Indenture, dated as of May 15, 2003 (the “Indenture”),
between SEMCO Energy, Inc., as issuer (the “Company”),
and Fifth Third Bank, as trustee. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.


 


In connection with our
proposed purchase of $                   
aggregate principal amount of:


 


(a)  o                a beneficial interest in a Global Note, or


 


(b)  o                 a Definitive Note,


 


we confirm that:


 


1.                                       We understand that any subsequent transfer of
the Notes or any interest therein is subject to certain restrictions and
conditions set forth in the Indenture and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer the Notes or any interest
therein except in compliance with, such restrictions and conditions and the
Securities Act of 1933, as amended (the “Securities
Act”).


 


2.                                       We understand that the offer and sale of the
Notes have not been registered under the Securities Act, and that the Notes and
any interest therein may not be offered or sold except as permitted in the
following sentence.  We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell the Notes or any interest therein, we will do so
only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule
144A under the Securities Act to a “qualified institutional buyer” (as defined
therein), (C) to an institutional “accredited investor” (as defined below)
that, prior to such transfer, furnishes (or has furnished on its behalf by a
U.S. broker-dealer) to you and to the Company a signed letter substantially in
the form of this letter and, if such transfer is in respect of a principal
amount of Notes, at the time of transfer of less than $250,000, an opinion of
counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (D) outside the United
States in accordance with Rule 904 of Regulation S under the Securities Act,
(E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and
we further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising
such purchaser that resales thereof are restricted as stated herein.


 


D-1

















 


3.                                       We understand that, on any proposed resale of
the Notes or beneficial interest therein, we will be required to furnish to you
and the Company such certifications, legal opinions and other information as
you and the Company may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. 
We further understand that the Notes purchased by us will bear a legend
to the foregoing effect.


 


4.                                       We are an institutional “accredited investor”
(as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act) and have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are acting are
each able to bear the economic risk of our or its investment.


 


5.                                       We are acquiring the Notes or beneficial
interest therein purchased by us for our own account or for one or more
accounts (each of which is an institutional “accredited investor”) as to each
of which we exercise sole investment discretion.


 


You and the Company are
entitled to rely upon this letter and are irrevocably authorized to produce
this letter or a copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters covered
hereby.


 


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Insert Name of Accredited
  Investor]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
						



 


D-2

















 


EXHIBIT E


 


FORM OF SUBSIDIARY GUARANTEE


 


For value received, each
Guarantor (which term includes any successor Person under the Indenture) has,
jointly and severally, unconditionally guaranteed, to the extent set forth in
the Indenture and subject to the provisions in the Indenture dated as of May
15, 2003 (the “Indenture”)
between SEMCO Energy, Inc., (the “Company”),
and Fifth Third Bank, as trustee (the “Trustee”),
(a) the due and punctual payment of the principal of, premium and Additional
Interest, if any, and interest on the Notes (as defined in the Indenture),
whether at maturity, by acceleration, redemption or otherwise, the due and
punctual payment of interest on overdue principal of and interest on the Notes,
if any, if lawful, and the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee all in accordance with
the terms of the Indenture and (b) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise.  The obligations of the
Guarantors to the Holders of Notes and to the Trustee pursuant to the
Subsidiary Guarantee and the Indenture are expressly set forth in Article 10 of
the Indenture and reference is hereby made to the Indenture for the precise
terms of the Subsidiary Guarantee.  Each
Holder of a Note, by accepting the same, agrees to and shall be bound by such
provisions.


 


	
   

  	
   

  	
  [NAME OF GUARANTOR(S)]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


E-1

















 


EXHIBIT F


 


FORM OF SUPPLEMENTAL
INDENTURE

TO BE DELIVERED BY
SUBSEQUENT GUARANTORS


 


SUPPLEMENTAL INDENTURE (this
“Supplemental Indenture”), dated
as of                               ,
200   , among                                       (the “Guaranteeing Subsidiary”), a subsidiary of
SEMCO Energy, Inc. (or its permitted successor), a Michigan corporation (the “Company”), the Company, the other
Guarantors (as defined in the Indenture referred to herein) and Fifth Third
Bank, as trustee under the indenture referred to below (the “Trustee”).


 


W
I T N E S S E T H


 


WHEREAS, the Company has
heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of May 15, 2003
providing for the issuance of 73⁄4% Senior Notes due 2013 (the “Notes”);


 


WHEREAS, the Indenture
provides that under certain circumstances the Guaranteeing Subsidiary shall
execute and deliver to the Trustee a supplemental indenture pursuant to which
the Guaranteeing Subsidiary shall unconditionally guarantee all of the
Company’s Obligations under the Notes and the Indenture on the terms and
conditions set forth herein (the “Subsidiary
Guarantee”); and


 


WHEREAS, pursuant to Section
9.01 of the Indenture, the Trustee is authorized to execute and deliver this
Supplemental Indenture.


 


NOW THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and
the Trustee mutually covenant and agree for the equal and ratable benefit of
the Holders of the Notes as follows:


 


1.                                       CAPITALIZED TERMS.  Capitalized terms used herein without definition shall have the
meanings assigned to them in the Indenture.


 


2.                                       AGREEMENT TO GUARANTEE.  The Guaranteeing Subsidiary hereby agrees to
provide an unconditional Guarantee on the terms and subject to the conditions
set forth in the Subsidiary Guarantee and in the Indenture, including, but not
limited to, Article 10 thereof.


 


3.                                       EXECUTION AND DELIVERY.  Each Guaranteeing Subsidiary agrees that the
Subsidiary Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.


 


4.                                       GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC.
ON CERTAIN TERMS.


 


(a)                                  Except as otherwise provided in Section 10.05
of the Indenture, no Guarantor may sell or otherwise dispose of all or
substantially all of its assets to, or consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) another Person, other
than the Company or another Guarantor, unless:


 


(1)                                  immediately after giving effect to such
transaction, no Default or Event of Default exists; and


 


(2)                                  either:


 


F-1

















 


(A)                              subject to Section 10.05 of the Indenture,
the Person acquiring the property in any such sale or disposition or the Person
formed by or surviving any such consolidation or merger unconditionally assumes
all the obligations of that Guarantor, pursuant to a supplemental indenture in
form and substance reasonably satisfactory to the Trustee, under the Notes, the
Indenture and the Subsidiary Guarantee on the terms set forth therein; or


 


(B)                                the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of the
Indenture, including without limitation, Section 4.10 thereof.


 


(b)                                 In case of any such consolidation, merger,
sale or conveyance and upon the assumption by the successor Person, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Subsidiary Guarantee endorsed upon the Notes and
the due and punctual performance of all of the covenants and conditions of the
Indenture to be performed by the Guarantor, such successor Person will succeed
to and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor.  Such
successor Person thereupon may cause to be signed any or all of the Subsidiary
Guarantees to be endorsed upon all of the Notes issuable thereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee.  All the Subsidiary Guarantees
so issued will in all respects have the same legal rank and benefit under the
Indenture as the Subsidiary Guarantees theretofore and thereafter issued in
accordance with the terms of the Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the execution thereof.


 


(c)                                  Except as set forth in Articles 4 and 5 of
the Indenture, and notwithstanding clauses (a) and (b) above, nothing contained
in the Indenture or in any of the Notes will prevent any consolidation or
merger of a Guarantor with or into the Company or another Guarantor, or will
prevent any sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company or another Guarantor.


 


5.                                       RELEASES.


 


(a)                                  The Subsidiary Guarantee of a Guarantor will
be released:


 


(1)                                  in connection with any sale or other
disposition of all or substantially all of the assets of that Guarantor
(including by way of merger or consolidation) to a Person that is not (either
before or after giving effect to such transaction) a Subsidiary of the Company,
if the sale or other disposition complies with Sections 3.09 and 4.10 of the
Indenture;


 


(2)                                  in connection with any sale of all of the
Capital Stock of a Guarantor to a Person that is not (either before or after
giving effect to such transaction) a Subsidiary of the Company; provided that such sale shall be subject
to Sections 3.09 and 4.10 of the Indenture; or


 


(3)                                  if the Company properly designates any Restricted
Subsidiary that is a Guarantor as an Unrestricted Subsidiary of the Company in
accordance with the provisions of the Indenture.


 


(b)                                 Upon delivery by the Company to the Trustee
of an Officers’ Certificate and an Opinion of Counsel to the effect that one of
the events described in Section clause (a) above has occurred in accordance
with the provisions of the Indenture, including without limitation Section 4.10
thereof, the Trustee will execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its Subsidiary
Guarantee.


 


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(c)                                  Any Guarantor not released from its
obligations under its Subsidiary Guarantee will remain liable for the full
amount of principal of and interest on the Notes and for the other obligations
of any Guarantor under the Indenture as provided in Article 10 thereof.


 


6.                                       NO RECOURSE AGAINST OTHERS.  No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the
Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation.  Each Holder of the Notes by accepting a Note
waives and releases all such liability. 
The waiver and release are part of the consideration for issuance of the
Notes.  Such waiver may not be effective
to waive liabilities under the federal securities laws and it is the view of
the SEC that such a waiver is against public policy.


 


7.                                       NEW YORK LAW TO GOVERN.  THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.


 


8.                                       COUNTERPARTS.  The parties may sign any number of copies of this Supplemental
Indenture.  Each signed copy shall be an
original, but all of them together represent the same agreement.


 


9.                                       EFFECT OF HEADINGS.  The Section headings herein are for convenience only and shall
not affect the construction hereof.


 


10.                                 THE TRUSTEE. 
The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Supplemental Indenture or for or
in respect of the recitals contained herein, all of which recitals are made
solely by the Guaranteeing Subsidiary and the Company.


 


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IN WITNESS WHEREOF, the
parties hereto have caused this Supplemental Indenture to be duly executed and
attested, all as of the date first above written.


 


	
  Dated:

  	
  , 20

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [GUARANTEEING SUBSIDIARY]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  SEMCO ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  [EXISTING GUARANTORS]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  FIFTH THIRD BANK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  



 


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