Document:

Exhibit 4.8

 

EXECUTION COPY

 

 

 

SEMCO
ENERGY, INC.

 

7
1/8% SENIOR NOTES DUE 2008

 

 

INDENTURE

 

Dated
as of May 21, 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
21, 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 7% Senior Notes due 2008 (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.

 

“2013 Exchange Notes” means the 2013 Notes issued in the Exchange
Offer pursuant to Section 2.06(f) of the 2013 Notes Indenture.

 

“2013 Notes” means the 73⁄4% Senior Notes due 2013 issued by the Company pursuant to
the 2013 Notes Indenture.

 

“2013 Notes Indenture” means the indenture, dated as of May 15,
2003, between the Company and Fifth Third Bank, as trustee, relating to the
2013 Notes, as the same shall be amended or supplemented from time to time.

 

“2013 Subsidiary Guarantee” means the Guarantee (as defined in the 2013
Notes Indenture) by the Guarantor (as defined in the 2013 Notes Indenture) of
the Company’s payment obligations under the 2013 Notes Indenture and on the
2013 Notes, executed pursuant to the provisions of the 2013 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 May 15, 2003 by Alaska Pipeline Company.

 

“Applicable Premium” means, with respect to
any Note on any Redemption Date, the greater of:

 

(1)                                  1.0% of the principal
amount of such Note; or

 

(2)                                  the excess of:

 

(A)                              the present value at such Redemption Date of
all required interest payments due on such Note through maturity (excluding
accrued but unpaid interest), computed using a discount rate equal to the
Treasury Rate as of such Redemption Date plus 50 basis points; over

 

(B)                                the principal amount of such Note, if
greater.

 

“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;

 

2

 

(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.

 

“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.

 

3

 

“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
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:

 

4

 

(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)                                  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 2013 Notes under the 2013
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

 

5

 

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;

 

(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 May 15, 2003; 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.

 

6

 

“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 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.

 

7

 

“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 May 15,
2003, until such amounts are repaid.

 

“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.

 

8

 

“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 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;

 

9

 

(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:

 

(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 $150,000,000 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 

 

10

 

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.

 

“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

 

11

 

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 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 May 15, 2003.

 

“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

 

12

 

(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;

 

(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 May 15, 2003;

 

(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;

 

13

 

(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;

 

(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;

 

14

 

(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.

 

“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 2013 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.

 

15

 

“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.

 

“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.

 

“Treasury Rate” means, as of any Redemption
Date, the yield to maturity as of such Redemption Date of United States
Treasury securities with a constant maturity (as compiled and published in the
most recent Federal Reserve Statistical Release H.15 (519) that has become
publicly available at least two Business Days prior to the Redemption Date (or,
if such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to the period from the
Redemption Date to maturity; provided,
however, that if the period from the Redemption Date to maturity is
less than one

 

16

 

year, the weekly average
yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year will be used.

 

“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,
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.

 

17

 

“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

  
	
  “Redemption
  Date”

  	
   

  	
  3.07

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Restricted
  Payments”

  	
   

  	
  4.07

  

 

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;

 

18

 

“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;

 

(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

 

19

 

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.

 

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.

 

20

 

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.

 

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

 

21

 

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 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

 

22

 

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;

 

(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:

 

23

 

(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 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

 

24

 

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 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

 

25

 

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 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;

 

26

 

(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,

 

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

 

27

 

(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.  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

 

28

 

(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;

 

(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:

 

29

 

(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.

 

(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.

 

30

 

(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 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.

 

(g)                                 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

 

31

 

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;

 

(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.

 

32

 

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.

 

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.

 

33

 

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:

 

(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

 

34

 

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 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.

 

35

 

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.

 

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, the Company may redeem all or a part
of the Notes, upon not less than 30 nor more than 60 days prior notice mailed
by first-class mail to each Holder’s registered address, at a redemption price
equal to 100% of the principal amount of Notes redeemed plus the Applicable
Premium as of, and accrued and unpaid interest and Additional Interest, if any,
to, the date of redemption (the “Redemption Date”).

 

(b)                                 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 107.125% 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.

 

(c)                                  Except
pursuant to Sections 3.07(a) or (b) above, the Notes are not redeemable at the
Company’s option prior to May 15, 2008.

 

36

 

(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 2013 Notes) containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales 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

 

37

 

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

 

(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.

 

38

 

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.

 

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).

 

39

 

(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).

 

(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.

 

40

 

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;

 

(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 May
15, 2003 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 May 15, 2003 (other than (i) sales of Disqualified
Stock,

 

41

 

and (ii) Equity Interests sold to any of the Company’s Subsidiaries) or
from the sale since May 15, 2003 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 May 15, 2003 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 May 15, 2003, 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

 

(E)         an
amount equal to any dividends received by the Company or any of its Restricted
Subsidiaries since May 15, 2003 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;

 

42

 

(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 May 15, 2003 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.

 

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 2013 Notes Indenture, the
Notes, the 2013 Notes, the Subsidiary Guarantees, the 2013 Subsidiary
Guarantees and other agreements existing on May 15, 2003;

 

(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;

 

43

 

(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.

 

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 May 15, 2003 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 2013
Notes and any related 2013 Subsidiary Guarantee

 

44

 

issued
on May 15, 2003 and to be issued on the date of this Indenture, and (B) the
Exchange Notes and any related Subsidiary Guarantee and the 2013 Exchange Notes
and any related 2013 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 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

 

45

 

(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 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

 

46

 

(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 2013
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;

 

(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 2013 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

 

47

 

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:

 

(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.

 

48

 

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:

 

(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;

 

49

 

(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.

 

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.

 

50

 

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.

 

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

 

51

 

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,

 

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

 

52

 

(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 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

 

53

 

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;

 

(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

 

54

 

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.

 

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.

 

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 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

 

56

 

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.

 

(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

 

58

 

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.

 

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

 

59

 

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.

 

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.

 

60

 

(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 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.

 

61

 

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 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;

 

63

 

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

 

64

 

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;

 

(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;

 

65

 

(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.

 

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,

 

66

 

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.

 

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.

 

67

 

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.

 

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

 

68

 

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 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.

 

69

 

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.

 

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

 

70

 

(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

 

(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;

 

71

 

(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.

 

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.

 

72

 

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 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.

 

73

 

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.

 

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.

 

74

 

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 21, 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                

 

7% Senior Notes due 2008

 

	
  No.

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  
	
  SEMCO ENERGY, INC.

  
	
   

  	
   

  	
   

  
	
  promises to pay to CEDE
  & CO.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  or registered assigns,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  the principal sum of

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollars on May 15, 2008.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  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]

7% Senior Notes due 2008

 

[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 7% 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 21, 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 subparagraphs (b) and (c) of this Paragraph 5, the Company will
not have the option to redeem the Notes.

 

(b)         Notwithstanding
the provisions of subparagraph (a) of this Paragraph 5, at any time, the
Company may redeem all or a part of the Notes, upon not less than 30 nor more
than 60 days prior notice mailed by first-class mail to each Holder’s
registered address, at a redemption price equal to 100% of the principal amount
of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest and Additional Interest, if any, to, the date of redemption (the
“Redemption Date”).

 

(c)          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 107.125% 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.

 

(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 2013 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

 

A-3

 

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 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

 

A-4

 

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 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

 

A-5

 

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:

 

SEMCO
Energy, Inc.

28470 13 Mile Road, Suite 300

Farmington Hills, MI 48334

Attention: Corporate Secretary

 

A-6

 

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-7

 

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-8

 

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

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

*                 This schedule should be
included only if the Note is issued in global form.

 

A-9

 

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:  71/8% Senior Notes due 2008

 

Reference is hereby made to
the Indenture, dated as of May 21, 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-1

 

EXHIBIT C

 

FORM OF CERTIFICATE OF
EXCHANGE

 

SEMCO
Energy, Inc.

28470
13 Mile Road, Suite 30

Farmington
Hills, MI 48334

 

Fifth
Third Bank

Corporate
Trust Department

1850
East Paris Avenue, SE

Grand
Rapids, MI 49546-6210

 

Re:  71/8  % Senior Notes due 2008

 

(CUSIP                   )

 

Reference is hereby made to
the Indenture, dated as of May 21, 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] o 144A
Global Note, o Regulation S Global Note, o IAI 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:  71/8% Senior Notes due 2008

 

Reference is hereby made to
the Indenture, dated as of May 21, 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
21, 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”).

 

WITNESSETH

 

WHEREAS, the Company has
heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of May 21, 2003
providing for the issuance of 71/8 % Senior Notes due 2008 (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.

 

F-2

 

(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.

 

F-3

 

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:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

F-4Exhibit
4.9

 

EXECUTION
COPY

 

$300,000,000

 

SEMCO
ENERGY, INC.

 

71/8  % Senior
Notes due 2008

73⁄4%
Senior Notes due 2013

 

 

REGISTRATION
RIGHTS AGREEMENT

 

 

May 15, 2003

 

Credit Suisse First Boston LLC

McDonald Investments Inc.

ABN AMRO Incorporated

US Bancorp Piper Jaffray Inc.

NatCity Investments, Inc.

c/o Credit Suisse First Boston LLC

Eleven Madison Avenue

New York, New York
10010-3629

 

Dear Sirs:

 

SEMCO Energy, Inc., a Michigan corporation (the “Company”), proposes to issue and sell to, and if applicable, exchange
with, Credit Suisse First Boston LLC, McDonald Investments Inc., ABN AMRO
Incorporated, US Bancorp Piper Jaffray Inc. and NatCity Investments, Inc.
(collectively, the “Initial Purchasers”),
upon the terms set forth in a purchase agreement dated May 14, 2003 (the “CSFB
Purchase Agreement”), $94,641,000 aggregate principal amount of its
73⁄4% Senior Notes due 2013 (the “2013
Securities”) and a purchase agreement dated May 14, 2003 (the “Other
Purchase Agreement”, and together with the CSFB Purchase Agreement,
the “Purchase
Agreements”), $150,000,000 aggregate principal amount of its 71/8  %
Senior Notes due 2008 (the “2008 Securities”, and together with the
2013 Securities, to the extent such 2013 Securities and 2008 Securities are
issued pursuant to the 2013 Indenture and the 2008 Indenture, respectively, the
“Initial
Securities”) and  $55,359,000
aggregate principal amount of its 2013 Securities.  The 2008 Securities will be issued pursuant to an Indenture, to
be dated as of the date of the initial issuance of the 2008 Securities (the “2008
Indenture”), between the Company and Fifth Third Bank, a Michigan
banking corporation, as trustee  (the “2008 Trustee”).  The 2013 Securities will be issued pursuant
to an Indenture, dated the date hereof (the “2013 Indenture”, and together
with the 2008 Indenture, the “Indentures”), between the Company and Fifth
Third Bank, a Michigan banking corporation, as trustee (the “2013
Trustee,” and together with the 2008 Trustee, the “Trustees”).  Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in the
Indentures.  As an inducement to the
Initial Purchasers to enter into the Purchase Agreement, the Company agrees
with the Initial Purchasers, for the benefit of the Initial Purchasers and the
holders of the Securities (as defined below) (collectively the “Holders”), as follows:

 

1.  Registered Exchange Offer.  Unless not permitted by applicable law
(after the Company and the Guarantors, if any, have complied with the ultimate
paragraph of this Section 1), the Company and the Guarantors, if any,
shall prepare and, not later than 90 days (such 90th day being a “Filing Deadline”) after the date on which
the Initial Purchasers purchase and, to the extent applicable, exchange for,
the Initial Securities pursuant to the Purchase Agreement (the “Closing Date”), file with the Securities
and Exchange Commission (the “Commission”)
a registration statement (the “Exchange Offer
Registration Statement”) on an appropriate form under the Securities
Act of 1933, as amended (the “Securities Act”),
with respect to a proposed offer (the “Registered
Exchange Offer”) to the Holders of Transfer Restricted

 

 

Securities (as defined in Section 6 hereof), who are not
prohibited by any law or policy of the Commission from participating in the
Registered Exchange Offer, to issue and deliver to such Holders, in exchange
for (a) the 2008 Securities, a like aggregate principal amount of debt
securities of the Company issued under the 2008 Indenture, identical in all
material respects to the 2008 Securities and registered under the Securities
Act (the “2008
Exchange Securities”) and (b) the 2013 Securities, a like aggregate
principal amount of debt securities of the Company issued under the 2013
Indenture, identical in all material respects to the 2013 Securities and
registered under the Securities Act (the “2013 Exchange Securities” and, together
with the 2008 Exchange Securities, the “Exchange Securities”).  The Company and the Guarantors, if any,
shall use their respective reasonable best efforts to (i) cause such Exchange
Offer Registration Statement to become effective under the Securities Act
within 180 days after the Closing Date (such 180th day being an “Effectiveness Deadline”) and (ii) keep the
Exchange Offer Registration Statement effective for not less than 30 days
(or longer, if required by applicable law) after the date notice of the
Registered Exchange Offer is mailed to the Holders (such period being called
the “Exchange Offer Registration Period”).  The Initial Securities and the Exchange
Securities are herein collectively called the “Securities.”

 

If the Company commences the Registered Exchange
Offer, the Company and the Guarantors, if any, shall use their respective
reasonable best efforts to consummate the Registered Exchange Offer no later
than 30 business days (or longer, if required by the federal securities laws)
after the date on which the Exchange Offer Registration Statement is declared
effective (such 30th day being the “Consummation
Deadline”).

 

Following the declaration of the effectiveness of the
Exchange Offer Registration Statement, the Company and the Guarantors, if any,
shall promptly commence the Registered Exchange Offer, it being the objective
of such Registered Exchange Offer to enable each Holder of Transfer Restricted
Securities electing to exchange the Transfer Restricted Securities for Exchange
Securities (assuming that such Holder is not an affiliate of the Company within
the meaning of the Securities Act, acquires the Exchange Securities in the
ordinary course of such Holder’s business and has no arrangements with any
person to participate in the distribution of the Exchange Securities and is not
prohibited by any law or policy of the Commission from participating in the
Registered Exchange Offer) to trade such Exchange Securities from and after
their receipt without any limitations or restrictions under the Securities Act
and without material restrictions under the securities laws of the several
states of the United States.

 

The Company acknowledges that, pursuant to current
interpretations by the Commission’s staff of Section 5 of the Securities
Act, in the absence of an applicable exemption therefrom, (i) each Holder that
is a broker-dealer electing to exchange Initial Securities, acquired for its
own account as a result of market-making activities or other trading
activities, for Exchange Securities (an “Exchanging
Dealer”), is required to deliver a prospectus containing the
information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in
the “Exchange Offer Procedures” section and the “Purpose of the Exchange Offer”
section, and (c) Annex C hereto in the “Plan of Distribution” section of such
prospectus in connection with a sale of any such Exchange Securities received
by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) an
Initial Purchaser that elects to sell Securities (as defined below) acquired in
exchange for Initial Securities constituting any portion of an unsold
allotment, is required to deliver a prospectus containing the information
required by Items 507 or 508 of Regulation S-K under the Securities Act, as
applicable, in connection with such sale.

 

The Company and the Guarantors, if any, shall use
their respective reasonable best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the prospectus
contained therein, in order to permit such prospectus to be lawfully delivered
by all persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as such persons must comply with such
requirements in order to resell the Exchange Securities; provided, however,
that (i) in the case where such prospectus and any amendment or supplement
thereto must be delivered by an Exchanging Dealer or an Initial Purchaser, such
period shall be the lesser of 180 days and the date on which all
Exchanging Dealers and the Initial Purchasers have sold all Exchange Securities
held by them (unless such period is extended pursuant to Section 3(j)
below) and (ii) the Company and the Guarantors, if any, shall

 

2

 

make such prospectus and any amendment or supplement thereto available
to any broker-dealer for use in connection with any resale of any Exchange
Securities for a period of not less than 180 days after the consummation
of the Registered Exchange Offer.

 

In connection with the Registered Exchange Offer, the
Company and the Guarantors, if any, shall:

 

(a) mail to each Holder a
copy of the prospectus forming part of the Exchange Offer Registration
Statement, together with an appropriate letter of transmittal and related
documents;

 

(b) use their respective
reasonable best efforts to keep the Registered Exchange Offer open for not less
than 30 days (or longer, if required by applicable law) after the date
notice thereof is mailed to the Holders;

 

(c) utilize the services
of a depositary for the Registered Exchange Offer with an address in the
Borough of Manhattan, The City of New York, which may be the Trustee or an
affiliate of the Trustee;

 

(d) permit Holders to
withdraw tendered Securities at any time prior to the close of business, New
York time, on the last business day on which the Registered Exchange Offer
shall remain open by sending to the institution specified in the notice a
telegram, telex, facsimile transmission or letter setting forth the name of
such Holder, the principal amount of Transfer Restricted Securities delivered
for exchange and a statement that such Holder is withdrawing such Holder’s
election to have such Transfer Restricted Securities exchanged; and

 

(e) otherwise comply with
all applicable laws.

 

As soon as practicable after the close of the
Registered Exchange Offer, the Company and the Guarantors, if any, shall:

 

(x) accept for exchange
all the Initial Securities validly tendered and not withdrawn pursuant to the
terms of the Registered Exchange Offer, including the letter of transmittal
which shall be an exhibit thereto;

 

(y) deliver to the
Trustee for cancellation all the Initial Securities so accepted for exchange;
and

 

(z) cause the Trustee to
authenticate and deliver promptly to each Holder of the Initial Securities,
Exchange Securities, equal in principal amount to the Initial Securities of
such Holder so accepted for exchange.

 

The Indentures will provide that the Exchange
Securities will not be subject to the transfer restrictions set forth in the
Indentures.  The 2008 Indenture will
provide that all of the 2008 Securities, the 2008 Exchange Securities and the
Private 2008 Securities will, collectively, vote and consent together on all
matters as one class and that none of the 2008 Securities, the 2008 Exchange
Securities and the Private 2008 Securities, will have the right to vote or
consent as a class separate from one another on any matter.  The 2013 Indenture will provide that all of
the 2013 Securities, the 2013 Exchange Securities and the Private 2013
Securities will, collectively, vote and consent together on all matters as one
class and that none of the 2013 Securities, the 2013 Exchange Securities and
the Private 2013 Securities, will have the right to vote or consent as a class
separate from one another on any matter.

 

Interest on each Exchange Security issued pursuant to
the Registered Exchange Offer will accrue from the last interest payment date
on which interest was paid on the Initial Securities surrendered in exchange
therefor or, if no interest has been paid on the Initial Securities, from the
date of original issue of the Initial Securities.

 

3

 

Each Holder participating in the Registered Exchange
Offer shall be required to represent to the Company that at the time of the
consummation of the Registered Exchange Offer (i) any Exchange Securities
received by such Holder will be acquired in the ordinary course of business,
(ii) such Holder will have no arrangements or understanding with any
person to participate in the distribution of the Securities or the Exchange
Securities within the meaning of the Securities Act, (iii) such Holder is
not an “affiliate,” as defined in Rule 405 of the Securities Act, of the
Company or if it is an affiliate, such Holder will comply with the registration
and prospectus delivery requirements of the Securities Act to the extent
applicable, (iv) if such Holder is not a broker-dealer, that it is not
engaged in, and does not intend to engage in, the distribution of the Exchange
Securities and (v) if such Holder is a broker-dealer, that it will receive
Exchange Securities for its own account in exchange for Initial Securities that
were acquired as a result of market-making activities or other trading
activities and that it will be required to acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities.

 

Notwithstanding any other provisions hereof, the
Company and the Guarantors, if any, will ensure that (i) any Exchange
Offer Registration Statement and any amendment thereto and any prospectus
forming part thereof and any supplement thereto complies in all material
respects with the Securities Act and the rules and regulations thereunder,
(ii) any Exchange Offer Registration Statement and any amendment thereto
does not, when it becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any
prospectus forming part of any Exchange Offer Registration Statement, and any
supplement to such prospectus, does not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

If following the date hereof there has been announced
a change in Commission policy with respect to exchange offers that in the
reasonable opinion of counsel to the Company raises a substantial question as
to whether the Registered Exchange Offer is permitted by applicable federal
law, the Company and the Guarantors, if any, will seek a no-action letter or
other favorable decision from the Commission allowing the Company and the
Guarantors, if any, to consummate the Registered Exchange Offer, unless the Company
makes a good faith determination based on the advice of counsel that such a
request would be denied in light of publicly available no-action letters, in
which case the Company shall proceed to file a Shelf Registration Statement
pursuant to the provisions of Section 2 hereof.  In the event the Company seeks a no-action letter or other
favorable decision from the Commission pursuant to the preceding sentence, the
Company and the Guarantors, if any, will pursue the issuance of such a decision
to the Commission staff level.  In
connection with the foregoing, the Company and the Guarantors, if any, will
take all such other actions as may be requested by the Commission or otherwise
required in connection with the issuance of such decision, including without limitation
(i) participating in telephonic conferences with the Commission,
(ii) delivering to the Commission staff an analysis prepared by counsel to
the Company setting forth the legal bases, if any, upon which such counsel has
concluded that the Registered Exchange Offer should be permitted and
(iii) diligently pursuing a resolution (which need not be favorable) by
the Commission staff.

 

2.  Shelf Registration.  If, (i) the Company and the Guarantors, if
any, are not required to file the Exchange Offer Registration Statement; (ii)
the Company and the Guarantors, if any, are not permitted to consummate the
Registered Exchange Offer because the Registered Exchange Offer is not
permitted by applicable law or Commission policy; or (iii) any Holder of Transfer
Restricted Securities notifies the Company prior to the 20th day
following consummation of the Registered Exchange Offer that (a) it is
prohibited by applicable law or Commission policy from participating in the
Registered Exchange Offer; or (b) it may not resell the Exchange Securities
acquired by it in the Registered Exchange Offer to the public without
delivering a prospectus and the prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by it;
or (c) it is a broker-dealer and owns Initial Securities acquired directly from
the Company or an affiliate of the Company (including any Initial Purchaser
that holds Initial Securities acquired by it as part of its initial
distribution), the Company and the Guarantors, if any, shall take the following
actions (the date on which any of the conditions described in the foregoing

 

4

 

clauses (i) through (iii) occur, including in the case of
clause (iii) the receipt of the required notice, being a “Trigger Date”):

 

(a)  The Company and the Guarantors, if any,
shall use their respective reasonable best efforts to promptly (but in no event
more than 45 days after the Trigger Date (such 45th day being a “Filing Deadline”)) file with the Commission
and thereafter use their respective reasonable best efforts to cause to be
declared effective no later than 105 days after the Trigger Date (such 105th
day being an “Effectiveness Deadline”)
a registration statement (the “Shelf
Registration Statement” and, together with the Exchange Offer
Registration Statement, a “Registration
Statement”) on an appropriate form under the Securities Act relating
to the offer and sale of the Transfer Restricted Securities by the Holders
thereof from time to time in accordance with the methods of distribution set
forth in the Shelf Registration Statement and Rule 415 under the
Securities Act (hereinafter, the “Shelf
Registration”); provided, however, that no Holder
(other than an Initial Purchaser) shall be entitled to have the Securities held
by it covered by such Shelf Registration Statement unless such Holder agrees in
writing to be bound by all the provisions of this Agreement applicable to such
Holder.

 

(b)  The Company and the Guarantors, if any,
shall use their respective reasonable best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the prospectus
included therein to be lawfully delivered by the Holders of the Transfer
Restricted Securities, for a period of two years (or for such longer period if
extended pursuant to Section 3(j) below) from the date of its
effectiveness or such shorter period that will terminate when all the
Securities covered by the Shelf Registration Statement (i) have been sold
pursuant thereto or (ii) are no longer restricted securities (as defined
in Rule 144 under the Securities Act, or any successor rule thereof)
(such period, the “Continuously Effective Period”).  The Company and the Guarantors, if any,
shall be deemed not to have used their respective reasonable best efforts to
keep the Shelf Registration Statement effective during the requisite period if
they voluntarily take any action that would result in Holders of Securities
covered thereby not being able to offer and sell such Securities during that
period, unless such action is required by applicable law; provided, however,
upon advising the Holders of the Transfer Restricted Securities and the Initial
Purchasers, the Company may suspend the use of the prospectus included in the
Shelf Registration Statement in the event that and for a period of time not to
exceed 45 consecutive days and no more than 90 days during any 365 day period
in which such suspensions are in effect (each such period, a “Suspension
Period”) if (i) an event or circumstance occurs and is
continuing as a result of which the Shelf Registration Statement, the related
prospectus or any document incorporated therein by reference as then amended or
supplemented or proposed to be filed would, in the good faith judgment of the
Company, contain an untrue statement of material fact or omit to state a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading and (ii) (A) the
Company determines in its good faith judgment that the disclosure of such event
at such time would have a material adverse effect on the business, operations
or prospects of the Company and its subsidiaries, taken as a whole or
(B) the disclosure otherwise relates to a material business transaction or
development which has not been publicly disclosed; provided, further,
that upon the termination of such Suspension Period, the Company shall promptly
advise the Initial Purchasers and each Holder of Transfer Restricted Securities
that such Suspension Period has been terminated; provided, further,
that if the Shelf  Registration
Statement ceases to be effective and/or the use of the related prospectus is
suspended pursuant to this Section 2(b), the Continuously Effective Period
shall be extended by the numbers of days such Suspension Period continued.

 

(c)  Notwithstanding any other provisions of this
Agreement to the contrary, the Company and the Guarantors, if any, shall cause
the Shelf Registration Statement and the related prospectus and any amendment
or supplement thereto, as of the effective date of the Shelf Registration
Statement, amendment or supplement, (i) to comply in all material respects with
the applicable requirements of the Securities Act and the rules and regulations
of the Commission and (ii) not to contain any untrue statement of a
material fact or omit to state a material fact required to

 

5

 

be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that clause (ii) shall
not apply to any information relating to any Initial Purchaser or any Holder
furnished to the Company in writing by such Initial Purchaser or Holder
expressly for use in the Shelf Registration Statement.

 

3.  Registration Procedures.  In connection with any Shelf Registration
contemplated by Section 2 hereof and, to the extent applicable, any
Registered Exchange Offer contemplated by Section 1 hereof, the following
provisions shall apply:

 

(a)  The Company shall (i) furnish to each
Initial Purchaser, prior to the filing thereof with the Commission, a copy of
the Registration Statement and each amendment thereof and each supplement, if
any, to the prospectus included therein and, in the event that an Initial
Purchaser (with respect to any portion of an unsold allotment from the original
offering) is participating in the Registered Exchange Offer or the Shelf
Registration Statement, the Company and the Guarantors, if any, shall use their
reasonable best efforts to reflect in each such document, when so filed with
the Commission, such comments as such Initial Purchaser reasonably may propose;
(ii) include the information set forth in Annex A hereto on the cover, in
Annex B hereto in the “Exchange Offer Procedures” section and the “Purpose of
the Exchange Offer” section and in Annex C hereto in the “Plan of Distribution”
section of the prospectus forming a part of the Exchange Offer Registration
Statement and include the information set forth in Annex D hereto in the Letter
of Transmittal delivered pursuant to the Registered Exchange Offer;
(iii) if requested by an Initial Purchaser, include the information
required by Items 507 or 508 of Regulation S-K under the Securities Act, as
applicable, in the prospectus forming a part of the Exchange Offer Registration
Statement; (iv) include within the prospectus contained in the Exchange
Offer Registration Statement a section entitled “Plan of Distribution,”
reasonably acceptable to the Initial Purchasers, that shall contain a summary
statement of the positions taken or policies made by the staff of the
Commission with respect to the potential “underwriter” status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of Exchange
Securities received by such broker-dealer in the Registered Exchange Offer (a “Participating Broker-Dealer”), whether such
positions or policies have been publicly disseminated by the staff of the
Commission or such positions or policies, in the reasonable judgment of the
Initial Purchasers based upon advice of counsel (which may be in-house
counsel), represent the prevailing views of the staff of the Commission; and
(v) in the case of a Shelf Registration Statement, include the names of
the Holders who propose to sell Securities pursuant to the Shelf Registration
Statement as selling securityholders.

 

(b)  The Company shall give written notice to the
Initial Purchasers, the Holders of the Transfer Restricted Securities and any
Participating Broker-Dealer from whom the Company has received prior written
notice that it will be a Participating Broker-Dealer in the Registered Exchange
Offer (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by
an instruction to suspend the use of the prospectus until the requisite changes
have been made):

 

(i) when the Registration
Statement or any amendment thereto has been filed with the Commission and when
the Registration Statement or any post-effective amendment thereto has become
effective;

 

(ii) of any request by
the Commission for amendments or supplements to the Registration Statement or
the prospectus included therein or for additional information;

 

(iii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;

 

6

 

(iv) of the receipt by
the Company or its legal counsel of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; and

 

(v) of the happening of
any event that requires the Company to make changes in the Registration
Statement or the prospectus in order that the Registration Statement or the
prospectus do not contain an untrue statement of a material fact nor omit to
state a material fact required to be stated therein or necessary to make the
statements therein (in the case of the prospectus, in light of the
circumstances under which they were made) not misleading.

 

(c)  The Company and the Guarantors, if any,
shall make every reasonable effort to obtain the withdrawal at the earliest
possible time, of any order suspending the effectiveness of the Registration
Statement.

 

(d)  The Company shall furnish to each Holder of
Securities included within the coverage of the Shelf Registration, without
charge, at least one copy of the Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits thereto (including
those, if any, incorporated by reference).

 

(e) 
The Company shall deliver to each Exchanging Dealer and each Initial
Purchaser, and to any other Holder who so requests, without charge, at least
one copy of the Exchange Offer Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if any
Initial Purchaser or any such Holder requests, all exhibits thereto (including
those, if any, incorporated by reference).

 

(f)  The Company shall, during the Shelf
Registration Period, deliver to each Holder of Securities included within the
coverage of the Shelf Registration, without charge, as many copies of the
prospectus (including each preliminary prospectus) included in the Shelf
Registration Statement and any amendment or supplement thereto as such person
may reasonably request.  The Company
consents, subject to the provisions of this Agreement, to the use of the
prospectus or any amendment or supplement thereto by each of the selling
Holders of the Transfer Restricted Securities in connection with the offering
and sale of the Securities covered by the prospectus, or any amendment or
supplement thereto, included in the Shelf Registration Statement.

 

(g)  The Company shall deliver to each Initial
Purchaser, any Exchanging Dealer, any Participating Broker-Dealer and such
other persons required to deliver a prospectus following the Registered
Exchange Offer, without charge, as many copies of the final prospectus included
in the Exchange Offer Registration Statement and any amendment or supplement
thereto as such persons may reasonably request.  The Company and the Guarantors, if any, consent, subject to the
provisions of this Agreement, to the use of the prospectus or any amendment or
supplement thereto by any Initial Purchaser, if necessary, any Participating
Broker-Dealer and such other persons required to deliver a prospectus following
the Registered Exchange Offer in connection with the offering and sale of the
Exchange Securities covered by the prospectus, or any amendment or supplement
thereto, included in such Exchange Offer Registration Statement.

 

(h)  Prior to any public offering of the
Securities pursuant to any Registration Statement the Company and the
Guarantors, if any, shall use their reasonable best efforts to register or qualify
or cooperate with the Holders of the Securities included therein and their
respective counsel in connection with the registration or qualification of the
Securities for offer and sale under the securities or “blue sky” laws of such
states of the United States as any Holder of the Securities reasonably requests
in writing and do any and all other acts or things that may be reasonably
necessary or advisable to enable the offer and sale in such jurisdictions of
the Securities covered by such Registration Statement; provided, however,
that the Company and each

 

7

 

of the Guarantors, if any, shall not be required to
(i) qualify generally to do business in any jurisdiction where it is not
then so qualified or (ii) take any action that would subject it to general
service of process or to taxation in any jurisdiction where it is not then so
subject.

 

(i)  The Company shall reasonably cooperate with
the Holders of the Securities to facilitate the timely preparation and delivery
of certificates representing the Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as the Holders may reasonably
request a reasonable period of time prior to sales of the Securities pursuant
to such Registration Statement.

 

(j)  Upon the occurrence of any event
contemplated by paragraphs (ii) through (v) of Section 3(b) above
during the period for which the Company and the Guarantors, if any, are
required to maintain an effective Registration Statement, other than during a
Suspension Period, the Company and the Guarantors, if any, shall use their
reasonable best efforts to promptly prepare and file a post-effective amendment
to the Registration Statement or a supplement to the related prospectus and any
other required document so that, as thereafter delivered to Holders of the
Securities or purchasers of Securities, the prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.  If the Company notifies the Initial Purchasers,
the Holders of the Transfer Restricted Securities and any known Participating
Broker-Dealer in accordance with paragraphs (ii) through (v) of
Section 3(b) above to suspend the use of the prospectus until the
requisite changes to the prospectus have been made, then the Initial Purchasers,
the Holders of the Transfer Restricted Securities and any such Participating
Broker-Dealers shall suspend use of such prospectus, and the period of
effectiveness of the Shelf Registration Statement provided for in
Section 2(b) above and the Exchange Offer Registration Statement provided
for in Section 1 above, if applicable, shall each be extended by the
number of days from and including the date of the giving of such notice to
and including the date when the Initial Purchasers, the Holders of the Transfer
Restricted Securities and any known Participating Broker-Dealer shall have
received such amended or supplemented prospectus pursuant to this
Section 3(j).

 

(k)  Not later than the effective date of the
applicable Registration Statement, the Company will provide a CUSIP number for
the Initial Securities or the Exchange Securities, as the case may be, and
provide the applicable trustee with printed certificates for the Initial
Securities or the Exchange Securities, as the case may be, in a form eligible
for deposit with The Depository Trust Company.

 

(l)  The Company and the Guarantors, if any, will
comply with all rules and regulations of the Commission to the extent and so
long as they are applicable to the Registered Exchange Offer or the Shelf
Registration and will make generally available to its security holders (or
otherwise provide in accordance with Section 11(a) of the Securities Act)
an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act, no later than 45 days after the end of a 12-month period
(or 90 days, if such period is a fiscal year) beginning with the first
month of the Company’s first fiscal quarter commencing after the effective date
of the Registration Statement, which statement shall cover such 12-month period.

 

(m)  The Company shall cause the Indentures to be
qualified under the Trust Indenture Act of 1939, as amended, in a timely manner
and containing such changes, if any, as shall be necessary for such
qualification.  In the event that such
qualification would require the appointment of new trustees under the
Indentures, the Company shall appoint new trustees thereunder pursuant to the
applicable provisions of the Indentures.

 

(n)  The Company may require each Holder of
Securities to be sold pursuant to the Shelf Registration Statement to furnish
to the Company such information regarding the Holder and the distribution of
the Securities as the Company may from time to time reasonably require for

 

8

 

inclusion in the Shelf Registration Statement, and the
Company may exclude from such registration the Securities of any Holder that
unreasonably fails to furnish such information within a reasonable time after
receiving such request.

 

(o)  The Company and the Guarantors, if any,
shall enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other action, if
any, as any Holder of the Securities shall reasonably request in order to
facilitate the disposition of the Securities pursuant to any Shelf
Registration.

 

(p)  In the case of any Shelf Registration, the
Company shall (i) make reasonably available for inspection by the Holders
of the Transfer Restricted Securities, any underwriter participating in any
disposition pursuant to the Shelf Registration Statement and any attorney,
accountant or other agent retained by the Holders of the Transfer Restricted
Securities or any such underwriter all relevant financial and other records,
pertinent corporate documents and properties of the Company reasonably
requested by such persons and (ii) cause the Company’s officers,
directors, employees, accountants and auditors to supply all relevant
information reasonably requested by the Holders of the Transfer Restricted Securities
or any such underwriter, attorney, accountant or agent in connection with the
Shelf Registration Statement, in each case of (i) and (ii), as shall be
reasonably necessary to enable such persons, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act; provided,
however, that the foregoing inspection and information gathering shall
be coordinated on behalf of the Initial Purchasers by Credit Suisse First
Boston LLC and on behalf of the other parties, by one counsel designated by and
on behalf of such other parties as described in Section 4 hereof; and provided,
further, that as to any information that is designated in writing by the
Company, in good faith, as confidential at the time of delivery, such
information shall be kept confidential by the Holder or by any such
underwriter, attorney, accountant or other agent.

 

(q)  In the case of any Shelf Registration, the
Company, if requested by any Holder of Transfer Restricted Securities covered
thereby, shall cause (i) its counsel to deliver an opinion and updates
thereof relating to the Securities in customary form addressed to such Holders
and the managing underwriters, if any, thereof and dated, in the case of the
initial opinion, the effective date of such Shelf Registration Statement (it
being agreed that the matters to be covered by such opinion shall include,
without limitation, the due incorporation and good standing of the Company and
its subsidiaries; the qualification of the Company and its subsidiaries to transact
business as foreign corporations; the due authorization, execution and delivery
of the relevant agreement of the type referred to in Section 3(o) hereof;
the due authorization, execution, authentication and issuance, and the validity
and enforceability, of the applicable Securities; the absence of material legal
or governmental proceedings involving the Company and its subsidiaries; the
absence of governmental approvals required to be obtained in connection with
the Shelf Registration Statement, the offering and sale of the applicable
Securities, or any agreement of the type referred to in Section 3(o)
hereof; the compliance as to form of such Shelf Registration Statement and any
documents incorporated by reference therein, if any, and of the Indenture with
the requirements of the Securities Act and the Trust Indenture Act,
respectively; and, as of the date of the opinion and as of the effective date
of the Shelf Registration Statement or most recent post-effective amendment
thereto, as the case may be, the absence from such Shelf Registration Statement
and the prospectus included therein, as then amended or supplemented, and from
any documents incorporated by reference therein, if any, of an untrue statement
of a material fact or the omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading
(in the case of any such documents, in the light of the circumstances existing
at the time that such documents were filed with the Commission under the
Securities Act or the Exchange Act); (ii) its officers to execute and
deliver all customary documents and certificates and updates thereof reasonably
requested by any underwriters of the applicable Securities; and (iii) its
independent public accountants and the independent public accountants with
respect to any other entity for which financial information is provided in the
Shelf Registration Statement to provide to the selling Holders of the
applicable Transfer Restricted

 

9

 

Securities and any underwriter therefor a comfort
letter in customary form and covering matters of the type customarily covered
in comfort letters in connection with primary underwritten offerings, subject
to receipt of appropriate documentation as contemplated, and only if permitted,
by Statement of Auditing Standards No. 72.

 

(r)  In the case of the Registered Exchange
Offer, if requested by any Initial Purchaser or any known Participating
Broker-Dealer, the Company shall cause (i) its counsels to deliver to such
Initial Purchaser or such Participating Broker-Dealer signed opinions in
the forms set forth in Section 6(c),(d),(f),(g) and (h) of the Purchase
Agreement with such changes as are customary in connection with the preparation
of a Registration Statement and (ii) its independent public accountants
and the independent public accountants with respect to any other entity for
which financial information is provided in the Registration Statement to
deliver to such Initial Purchaser or such Participating Broker-Dealer a comfort
letter, in form and substance satisfactory to the Initial Purchasers, with
appropriate date changes.

 

(s)  If a Registered Exchange Offer is to be
consummated, upon delivery of the Initial Securities by Holders to the Company
(or to such other Person as directed by the Company) in exchange for the
Exchange Securities, the Company shall mark, or caused to be marked, on the
Initial Securities so exchanged that such Initial Securities are being canceled
in exchange for the Exchange Securities; in no event shall the Initial
Securities be marked as paid or otherwise satisfied.

 

(t)  The Company will use its reasonable best
efforts to (a) if the Initial Securities have been rated prior to the
initial sale of such Initial Securities, confirm such ratings will apply to the
Securities covered by a Registration Statement; or (b) if the Initial
Securities were not previously rated, cause the Securities covered by a
Registration Statement to be rated with the appropriate rating agencies, if so
requested by Holders of a majority in aggregate principal amount of Transfer
Restricted Securities covered by such Registration Statement, or by the
managing underwriters, if any.

 

(u)  In the event that any broker-dealer registered
under the Exchange Act shall underwrite any Securities or participate as a
member of an underwriting syndicate or selling group or “assist in the
distribution” (within the meaning of the Conduct Rules (the “Rules”) of the National Association of
Securities Dealers, Inc. (“NASD”))
thereof, whether as a Holder of such Securities or as an underwriter, a
placement or sales agent or a broker or dealer in respect thereof, or
otherwise, the Company will assist such broker-dealer in complying with the
requirements of such Rules, including, without limitation, by (i) if such
Rules, including Rule 2720, shall so require, engaging a “qualified
independent underwriter” (as defined in Rule 2720) to participate in the
preparation of the Registration Statement relating to such Securities, to
exercise usual standards of due diligence in respect thereto and, if any
portion of the offering contemplated by such Registration Statement is an
underwritten offering or is made through a placement or sales agent, to
recommend the yield of such Securities; (ii) indemnifying any such
qualified independent underwriter to the extent of the indemnification of
underwriters provided in Section 5 hereof; and (iii) providing such
information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Rules.

 

(v)  The Company and the Guarantors, if any,
shall use their respective reasonable best efforts to take all other steps
necessary to effect the registration of the Securities covered by a
Registration Statement contemplated hereby.

 

4.  Registration Expenses.  (a) All expenses incident to the Company’s
and the Guarantors, if any, performance of and compliance with this Agreement
will be borne by the Company, regardless of whether a Registration Statement is
ever filed or becomes effective, including without limitation;

 

(i) all registration and
filing fees and expenses;

 

10

 

(ii) all fees and
expenses of compliance with federal securities and state “blue sky” or
securities laws;

 

(iii) all expenses of
printing (including printing certificates for the Securities to be issued in
the Registered Exchange Offer and printing of Prospectuses), messenger and
delivery services and telephone;

 

(iv) all fees and
disbursements of counsel for the Company and the Guarantors, if any;

 

 (v) all application and filing fees in
connection with listing the Exchange Securities on a national securities
exchange or automated quotation system pursuant to the requirements hereof; and

 

(vi) all fees and
disbursements of independent certified public accountants of the Company
(including the expenses of any special audit and comfort letters required by or
incident to such performance);

 

provided, however, each
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder’s Transfer
Restricted Securities pursuant to the Shelf Registration Statement.

 

The Company and the Guarantors, if any, will bear their internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any person, including special
experts, retained by the Company and the Guarantors, if any.

 

(b)  In
connection with any Registration Statement required by this Agreement, the
Company will reimburse the Initial Purchasers and the Holders of Transfer
Restricted Securities who are tendering Initial Securities in the Registered
Exchange Offer and/or selling or reselling Securities pursuant to the “Plan of
Distribution” contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Latham & Watkins
LLP unless another firm shall be chosen by the Holders of a majority in
principal amount of the Transfer Restricted Securities for whose benefit such
Registration Statement is being prepared.

 

5.  Indemnification.  (a)  The Company and the
Guarantors, if any, agree to indemnify and hold harmless each Holder of the
Securities, any Participating Broker-Dealer and each person, if any, who
controls such Holder or such Participating Broker-Dealer within the meaning of
the Securities Act or the Exchange Act (each Holder, any Participating
Broker-Dealer and such controlling persons are referred to collectively as the
“Indemnified Parties”) from and
against any losses, claims, damages or liabilities, joint or several, or any
actions in respect thereof (including, but not limited to, any losses, claims,
damages, liabilities or actions relating to purchases and sales of the
Securities) to which each Indemnified Party may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration, or arise out
of, or are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse, as incurred, the Indemnified
Parties for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage, liability
or action in respect thereof; provided, however, that
(i) the Company and the Guarantors, if any, shall not be liable in any
such case to the extent that such loss, claim, damage, liability or action
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in a Registration Statement or prospectus
or in any amendment or supplement thereto or in any preliminary prospectus
relating to a Shelf Registration in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company and the

 

11

 

Guarantors, if any, by or on behalf of such Holder specifically for
inclusion therein; and (ii) with respect to any untrue statement or
omission or alleged untrue statement or omission made in any preliminary
prospectus relating to a Shelf Registration Statement, the indemnity agreement
contained in this subsection (a) shall not inure to the benefit of any
Holder or Participating Broker-Dealer from whom the person asserting any such
losses, claims, damages, liabilities or actions purchased the Securities
concerned, to the extent that a prospectus relating to such Securities was
required to be delivered by such Holder or Participating Broker-Dealer under
the Securities Act in connection with such purchase and any such loss, claim,
damage, liability or action of such Holder or Participating Broker-Dealer
results from the fact that there was not sent or given to such person, at or
prior to the written confirmation of the sale of such Securities to such
person, a copy of the final prospectus, as it may be amended or supplemented,
if the Company had previously furnished copies thereof to such Holder or
Participating Broker-Dealer; provided  further, however,
that this indemnity agreement will be in addition to any liability that the
Company and the Guarantors, if any, may otherwise have to such Indemnified
Party.  The Company and the Guarantors,
if any, shall also indemnify underwriters, their officers and directors and
each person who controls such underwriters within the meaning of the Securities
Act or the Exchange Act to the same extent as provided above with respect to
the indemnification of the Holders of the Securities if requested by such
Holders.

 

(b)  Each
Holder of the Securities, severally and not jointly, will indemnify and hold
harmless (i) the Company and the Guarantors, if any, and each person, if
any, who controls the Company or the Guarantors, if any, within the meaning of
the Securities Act or the Exchange Act, (ii) each of their respective
directors and (iii) each of their respective officers who signs a
Registration Statement from and against any losses, claims, damages or
liabilities or any actions in respect thereof, to which the Company or the
Guarantors, if any, or any such controlling person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, but in
each case only to the extent that the untrue statement or omission or alleged
untrue statement or omission was made in reliance upon and in conformity with
written information pertaining to such Holder and furnished to the Company or
the Guarantors, if any, by or on behalf of such Holder specifically for
inclusion therein; and, subject to the limitation set forth immediately preceding
this clause, shall reimburse, as incurred, the Company and the Guarantors, if
any, for any legal or other expenses reasonably incurred by the Company and the
Guarantors, if any, or any such controlling person, director or officer in
connection with investigating or defending any loss, claim, damage, liability
or action in respect thereof.  This
indemnity agreement will be in addition to any liability that such Holder may
otherwise have to the Company or the Guarantors, if any, or any of their respective
controlling persons, directors or officers.

 

(c)  Promptly
after receipt by an indemnified party under this Section 5 of notice of
the commencement of any action or proceeding (including a governmental
investigation), such indemnified party will, if a claim in respect thereof is
to be made against the indemnifying party under this Section 5, notify the
indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above.  In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof the indemnifying party will not be liable to such
indemnified party under this Section 5 for any legal or other expenses,
other than reasonable costs of investigation prior to assumption of defenses,
subsequently incurred by such indemnified party in connection with the defense
thereof.  No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such

 

12

 

indemnified party unless such settlement includes an unconditional
release of such indemnified party from all liability on any claims that are the
subject matter of such action, and does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

 

(d)  If the
indemnification provided for in this Section 5 is unavailable or
insufficient to hold harmless an indemnified party under subsections (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in subsection (a)
or (b) above (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the exchange of the Securities,
pursuant to the Registered Exchange Offer; or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof) as well
as any other relevant equitable considerations.  The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company and the Guarantors, if any,
on the one hand or such Holder or such other indemnified party, as the case may
be, on the other, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.  The amount paid by an
indemnified party as a result of the losses, claims, damages, liabilities or
actions referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim that is the subject of this subsection (d).  Notwithstanding any other provision of this
Section 5(d), the Holders of the Securities shall not be required to
contribute any amount in excess of the amount by which the net proceeds
received by such Holders from the sale of the Securities pursuant to a
Registration Statement exceeds the amount of damages that such Holders have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. 
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.  For purposes of this paragraph (d), each
person, if any, who controls such indemnified party within the meaning of the
Securities Act or the Exchange Act shall have the same rights to contribution
as such indemnified party and each person, if any, who controls the Company or
the Guarantors, if any, within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as the Company and the
Guarantors, if any.

 

(e)  The
agreements contained in this Section 5 shall survive the sale of the
Securities pursuant to a Registration Statement and shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement or
any investigation made by or on behalf of any indemnified party.

 

6.  Additional Interest Under Certain
Circumstances. 
(a)  Additional interest (the “Additional Interest”) with respect to the Securities shall be
assessed as follows if any of the following events occur (each such event in
clauses (i) through (iv) below being herein called a “Registration Default”):

 

(i)                                     any
Registration Statement required by this Agreement is not filed with the
Commission on or prior to the applicable Filing Deadline;

 

(ii)                                  any
Registration Statement required by this Agreement is not declared effective by
the Commission on or prior to the applicable Effectiveness Deadline;

 

(iii)                               the
Registered Exchange Offer has not been consummated on or prior to the
Consummation Deadline; or

 

(iv)                              any
Registration Statement required by this Agreement has been declared effective
by the Commission but (A) such Registration Statement thereafter ceases to
be effective or

 

13

 

(B) such Registration Statement or the related
prospectus ceases to be usable in connection with resales of Transfer
Restricted Securities during the periods specified herein because either
(1) any event occurs as a result of which the related prospectus forming
part of such Registration Statement would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, other than during any Suspension Period, or (2) it shall
be necessary to amend such Registration Statement or supplement the related
prospectus, to comply with the Securities Act or the Exchange Act or the
respective rules thereunder.

 

Each of the foregoing will constitute a Registration Default whatever
the reason for any such event and whether it is voluntary or involuntary or is
beyond the control of the Company or the Guarantors, if any, or pursuant to
operation of law or as a result of any action or inaction by the Commission .

 

Additional Interest shall accrue on the Transfer
Restricted Securities over and above the interest set forth in the title of the
Securities from and including the date on which any such Registration Default
shall occur to but excluding the date on which all such Registration Defaults
have been cured, in an amount equal to $.05 per week per $1,000 principal
amount of Transfer Restricted Securities for the first 90-day period
immediately following the occurrence of such Registration Default.  The amount of Additional Interest shall
increase by an additional $.05 per week per $1,000 principal amount of Transfer
Restricted Securities with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of Additional
Interest for all Registration Defaults of $.50 per week per $1,000 principal
amount of Transfer Restricted Securities.

 

(b)  A
Registration Default referred to in Section 6(a)(iv) hereof shall be
deemed not to have occurred and be continuing in relation to a Shelf
Registration Statement or the related prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a post-effective
amendment to such Shelf Registration Statement to incorporate annual audited
financial information with respect to the Company where such post-effective
amendment is not yet effective and needs to be declared effective to permit
Holders to use the related prospectus or (y) other material events, with
respect to the Company that would need to be described in such Shelf
Registration Statement or the related prospectus or (z) the need to comply
with the Securities Act or the Exchange Act or the respective rules thereunder
that would require an amendment to the Shelf Registration Statement or a supplement
to the related prospectus; and (ii) in the case of clauses (y) or (z), the
Company is proceeding promptly and in good faith to amend or supplement such
Shelf Registration Statement and related prospectus to describe such events or
to comply; provided, however, that in any case if such
Registration Default occurs for a continuous period in excess of 30 days,
other than with respect to a Suspension Period, Additional Interest shall be
payable in accordance with the above paragraph from the day such Registration
Default occurs until such Registration Default is cured.  The Company shall not be required to pay
Additional Interest for more than one Registration Default at any given time.

 

(c)  Any
amounts of Additional Interest due pursuant to Section 6(a) hereof will be
payable in cash on the regular interest payment dates with respect to the
Securities.  Notwithstanding anything to
the contrary set forth herein, (i) upon filing of the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of clause (a)(i) of this Section 6, (ii) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of clause (a)(ii) of
this Section 6, (iii) upon consummation of the Registered Exchange Offer, in
the case of clause (a)(iii) of this Section 6, or (iv) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of clause (a)(iv) of this Section 6, the
Additional Interest payable with respect to the Transfer Restricted Securities
as a result of such clauses 6(a)(i), 6(a)(ii), 6(a)(iii) or 6(a)(iv), as
applicable, shall cease and such Registration Default shall be deemed to have
been cured.  For the avoidance of doubt,
such cure shall only apply to such existing Registration Default and shall not
be deemed to cure any Registration Defaults arising thereafter.

 

14

 

(d)  “Transfer
Restricted Securities” means each Security and the related Subsidiary
Guarantees, if any, until (i) the date on which such Security has been
exchanged by a person other than a broker-dealer for a freely transferable
Exchange Security in the Registered Exchange Offer; (ii) following the
exchange by a broker-dealer in the Registered Exchange Offer of an Initial
Security for an Exchange Note, the date on which such Exchange Note and the
related Subsidiary Guarantee, if any, is sold to a purchaser who receives from
such broker-dealer on or prior to the date of such sale a copy of the
prospectus contained in the Exchange Offer Registration Statement;
(iii) the date on which such Security has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement; or (iv) the date on which such Security is
distributed to the public pursuant to Rule 144 under the Securities Act or
is saleable pursuant to Rule 144(k) under the Securities Act.

 

7.  Rules 144 and 144A.  The Company and the Guarantors, if any,
shall use their respective reasonable best efforts to file the reports required
to be filed by them under the Securities Act and the Exchange Act in a timely
manner and, if at any time the Company or any of the Guarantors, if any, are
not required to file such reports, they will, upon the request of any Holder of
Securities, make publicly available other information so long as necessary to
permit sales of their securities pursuant to Rules 144 and 144A.  The Company and each of the Guarantors, if
any, covenants that they will take such further action as any Holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Securities without registration under the
Securities Act within the limitation of the exemptions provided by
Rules 144 and 144A (including the requirements of
Rule 144A(d)(4)).  The Company and
the Guarantors, if any, will provide a copy of this Agreement to prospective
purchasers of Initial Securities identified to the Company and the Guarantors,
if any, by the Initial Purchasers upon request.  Upon the request of any Holder of Initial Securities, the Company
and the Guarantors, if any, shall deliver to such Holder a written statement as
to whether they have complied with such requirements.  Notwithstanding the foregoing, nothing in this Section 7 shall
be deemed to require the Company or the Guarantors, if any, to register any of
its securities pursuant to the Exchange Act.

 

8.  Underwritten Registrations.  If any of the Transfer Restricted Securities
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
administer the offering (“Managing Underwriters”) will be selected by the
Holders of a majority in aggregate principal amount of such Transfer Restricted
Securities to be included in such offering.

 

No person may participate in any underwritten
registration hereunder unless such person (i) agrees to sell such person’s
Transfer Restricted Securities on the basis reasonably provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements; and (ii) completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.

 

9.   Future
Subsidiary Guarantees.  If, prior to the Consummation of the
Exchange Offer or prior to the effectiveness of the Shelf Registration
Statement, as the case may be, any subsidiary of the Company executes a
Subsidiary Guarantee in accordance with the terms and provisions of the
Indentures, the Company shall cause such subsidiary to execute and deliver to
the parties hereto a counterpart signature page to this Agreement, and such
subsidiary shall be bound by all of the provisions of this Agreement as a
“Guarantor.”

 

10.  Miscellaneous.

 

(a) 
Remedies.  The Company and the
Guarantors, if any, acknowledge and agree that any failure by the Company or
the Guarantors, if any, to comply with their respective obligations under
Sections 1 and 2 hereof may result in material irreparable injury to the
Initial Purchasers or the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, the Initial Purchasers or any Holder
may obtain such relief as may be required to specifically enforce the Company’s
and the Guarantors’, if any, obligations under Sections 1

 

15

 

and 2 hereof.  The Company and
the Guarantors, if any, further agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.

 

(b)  No Inconsistent Agreements.  The Company and the Guarantors, if any, will
not on or after the date of this Agreement enter into any agreement with
respect to their securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions
hereof.  The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company’s or the Guarantors’, if any,
securities under any agreement in effect on the date hereof.

 

(c)  Amendments and Waivers.  The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of the Holders of a majority in principal amount of the Securities affected
by such amendment, modification, supplement, waiver or consents.

 

(d)  Notices. 
All notices and other communications provided for or permitted hereunder
shall be made in writing by hand delivery, first-class mail, facsimile
transmission, or air courier that guarantees overnight delivery:

 

(1)  if to a
Holder of the Securities, at the most current address given by such Holder to
the Company.

 

(2)  if to the
Initial Purchasers;

 

Credit Suisse First Boston LLC

Eleven Madison Avenue

New York, NY 10010-3629

Fax No.: (212) 325-8278

Attention: Transactions Advisory Group

 

with a copy to:

 

Latham & Watkins LLP

885 Third Avenue

New York, NY 10022

Fax No.: (212) 751-4864

Attention: Kirk A. Davenport, Esq.

 

(3)                                  if
to the Company or any of the Guarantors, if any;

 

SEMCO Energy, Inc.

28470 13 Mile Road, Suite 300

Farmington Hills, MI 48334

Fax No.: (248) 702-6306

Attention: Mark Prendeville, Esq.

 

with a copy to:

 

Gibson, Dunn and Crutcher LLC

200 Park Avenue, 47th Floor

New York, NY 10166

Fax No.: (212) 351-5278

Attention: Steven Buffone, Esq.

 

16

 

All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if personally delivered;
three business days after being deposited in the mail, postage prepaid, if
mailed; when receipt is acknowledged by recipient’s facsimile machine operator,
if sent by facsimile transmission; and on the day delivered, if sent by
overnight air courier guaranteeing next day delivery.

 

(e) Third Party
Beneficiaries.  The Holders
shall be third party beneficiaries to the agreements made hereunder between the
Company and the Guarantors, if any, on the one hand, and the Initial
Purchasers, on the other hand, and shall have the right to enforce such agreements
directly to the extent they may deem such enforcement necessary or advisable to
protect their rights or the rights of Holders hereunder.

 

(f)  Successors and Assigns.  This Agreement shall be binding upon the
Company and the Guarantors, if any, and their respective successors and
assigns.

 

(g)  Counterparts.  This Agreement may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

 

(h)  Headings. 
The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

 

(i)  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.

 

(j)  Severability.  If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.

 

(k)  Securities Held by the Company.  Whenever the consent or approval of Holders
of a specified percentage of principal amount of Securities is required
hereunder, Securities held by the Company or its affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Securities) shall not be
counted in determining whether such consent or approval was given by the
Holders of such required percentage.

 

(l)   Submission to Jurisdiction.  The Company hereby submits to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in the City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.

 

17

 

If the foregoing is in accordance with your
understanding of our agreement, please sign and return to the Company a
counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the several Initial Purchasers and the
Company and the Guarantors, if any, in accordance with its terms.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  SEMCO Energy, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/  Mark Prendeville

  	
   

  
	
   

  	
  Name:  Mark Prendeville

  
	
   

  	
  Title:    V.P. and General Counsel

  

 

18

 

 

The foregoing Registration

Rights Agreement is hereby confirmed

and accepted as of the date first

above written.

 

CREDIT SUISSE FIRST BOSTON LLC

MCDONALD INVESTMENTS INC.

ABN AMRO INCORPORATED

US BANCORP PIPER JAFFRAY INC.

NATCITY INVESTMENTS, INC.

 

 

	
  By:  Credit
  Suisse First Boston LLC

  
	
   

  
	
   

  
	
  by

  
	
   

  	
   /s/  
  Joseph E. Reece

  	
   

  
	
  Name:  Joseph E. Reece

  
	
  Title:    Managing Director

  

 

19

 

ANNEX A

 

Each broker-dealer that receives Exchange Securities
for its own account pursuant to the Exchange Offer must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Securities.  The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an “underwriter” within the meaning of
the Securities Act.  This Prospectus, as
it may be amended or supplemented from time to time, may be used by
a broker-dealer in connection with resales of Exchange Securities received
in exchange for Initial Securities where such Initial Securities were acquired
by such broker-dealer as a result of market-making activities or other trading
activities.  The Company and the Guarantors,
if any, have agreed that, for a period of 180 days after the Expiration
Date (as defined herein), they will make this Prospectus available to any
broker-dealer for use in connection with any such resale.  See “Plan of Distribution.”

 

20

 

ANNEX B

 

Each broker-dealer that
receives Exchange Securities for its own account in exchange for Initial
Securities, where such Initial Securities were acquired by such broker-dealer
as a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Securities.  See “Plan of
Distribution.”

 

21

 

ANNEX C

 

PLAN OF DISTRIBUTION

 

Each broker-dealer that receives Exchange Securities
for its own account pursuant to the Exchange Offer must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Securities.  This Prospectus, as it may
be amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Securities received in exchange for Initial
Securities where such Initial Securities were acquired as a result of
market-making activities or other trading activities.  The Company and the Guarantors, if any, have agreed that, for a
period of 180 days after the Expiration Date, they will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale.  In
addition,
until                     ,
2003, all dealers effecting transactions in the Exchange Securities may be
required to deliver a prospectus.(1)

 

Neither the Company nor
the Guarantors, if any, will receive any proceeds from any sale of Exchange
Securities by broker-dealers. 
Exchange Securities received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the Exchange Securities or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices.  Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. 
Any broker-dealer that resells Exchange Securities that were received by
it for its own account pursuant to the Exchange Offer and any broker or dealer
that participates in a distribution of such Exchange Securities may be deemed
to be an “underwriter” within the meaning of the Securities Act and any profit
on any such resale of Exchange Securities and any commission or concessions
received by any such persons may be deemed to be underwriting compensation
under the Securities Act.  The Letter of
Transmittal states that, by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an “underwriter” within the meaning of the Securities Act.

 

For a period of
180 days after the Expiration Date the Company will promptly send
additional copies of this Prospectus and any amendment or supplement to this
Prospectus to any broker-dealer that requests such documents in the Letter of
Transmittal.  The Company and the
Guarantors, if any, have agreed to pay all expenses incident to the Exchange
Offer (including the expenses of one counsel for the Holders of the Securities)
other than commissions or concessions of any brokers or dealers and will
indemnify the Holders of the Securities (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act.

 

(1)  In addition, the legend
required by Item 502(c) of Regulation S-K will appear on the back cover page of
the Exchange Offer prospectus.

 

ANNEX D

 

o            CHECK
HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE
PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

 

	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  

 

 

If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
Exchange Securities.  If the undersigned
is a broker-dealer that will receive Exchange Securities for its own account in
exchange for Initial Securities that were acquired as a result of market-making
activities or other trading activities, it acknowledges that it will deliver a
prospectus in connection with any resale of such Exchange Securities; however,
by so acknowledging and by delivering a prospectus, the undersigned will not be
deemed to admit that it is an “underwriter” within the meaning of the
Securities Act.

 

22

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