<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 24, 1997
REGISTRATION NO. 333-18809
333-18809-01
333-18809-02
333-18809-03
333-18809-04
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
<TABLE>
<S> <C> <C>
HAWAIIAN ELECTRIC INDUSTRIES, INC. HAWAII 99-0208097
(EXACT NAME OF EACH REGISTRANT AS SPECIFIED IN ITS CHARTER (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
OR CERTIFICATE OF TRUST OR LIMITED PARTNERSHIP) INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
900 RICHARDS STREET, HONOLULU, HAWAII 96813 (808) 543-5662
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
PRINCIPAL EXECUTIVE OFFICES)
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I DELAWARE 52-6829385
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST II DELAWARE 52-6829386
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST III DELAWARE 52-682387
(EXACT NAME OF EACH REGISTRANT AS SPECIFIED IN ITS CHARTER (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
OR CERTIFICATE OF TRUST OR LIMITED PARTNERSHIP) INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
C/O THE BANK OF NEW YORK, 101 BARCLAY STREET, 21ST FLOOR, NEW YORK, N.Y. 10286
(212) 815-5084
ATTENTION: CORPORATE TRUST TRUSTEE ADMINISTRATION
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
PRINCIPAL EXECUTIVE OFFICES)
<TABLE>
<S> <C> <C>
HEI PREFERRED FUNDING, LP DELAWARE 52-2007237
(EXACT NAME OF EACH REGISTRANT AS SPECIFIED IN ITS CHARTER (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
OR CERTIFICATE OF TRUST OR LIMITED PARTNERSHIP) INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
300 DELAWARE AVENUE, SUITE 1704, WILMINGTON, DELAWARE 19801 (302) 427-5738
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
PRINCIPAL EXECUTIVE OFFICES)
--------------
ROBERT F. MOUGEOT
FINANCIAL VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
HAWAIIAN ELECTRIC INDUSTRIES, INC.
900 RICHARDS STREET, HONOLULU, HAWAII 96813 (808) 543-5641
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------
COPIES TO:
<TABLE>
<S> <C>
DAVID J. REBER, ESQ. DAVID P. FALCK, ESQ.
GOODSILL ANDERSON QUINN & STIFEL WINTHROP, STIMSON, PUTNAM & ROBERTS
1099 ALAKEA STREET ONE BATTERY PARK PLAZA
HONOLULU, HI 96813 NEW YORK, NY 10004
(808) 547-5600 (212) 858-1000
</TABLE>
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
--------------
(Calculation of Registration Fee on following page)
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE>
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities of Hawaiian
Electric Industries, Inc.
("HEI") (3).................... (1) (2) (1) N/A
- --------------------------------------------------------------------------------------------
Trust Originated Preferred
Securities of Hawaiian Electric
Industries Capital Trust I..... (1) (2) (1) N/A
- --------------------------------------------------------------------------------------------
Trust Originated Preferred
Securities of Hawaiian Electric
Industries Capital Trust II.... (1) (2) (1) N/A
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Trust Originated Preferred
Securities of Hawaiian Electric
Industries Capital Trust III... (1) (2) (1) N/A
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Partnership Preferred Securities
of HEI Preferred Funding, LP
(3)............................ (1) (2) (1) N/A
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HEI Guarantees with respect to
Trust Preferred Securities..... (4) (4) (4) N/A
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HEI Guarantee with respect to
Partnership Preferred
Securities..................... (4) (4) (4) N/A
- --------------------------------------------------------------------------------------------
HEI Guarantees with respect to
certain debentures of its
wholly-owned subsidiaries (the
"Subsidiary Debentures")....... (4) (4) (4) N/A
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Preferred Stock of HEI.......... (1) (2) (1) N/A
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Common Stock of HEI............. (1) (2) (1) N/A
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Total......................... $300,000,000 N/A $300,000,000 $90,910
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- --------------------------------------------------------------------------------------------
</TABLE>
(1) Subject to the following sentence, there is being registered hereunder an
indeterminate principal amount of HEI Debt Securities (including Senior,
Senior Subordinated and Junior Subordinated Debt Securities), an
indeterminate number of shares of HEI Common Stock and Preferred Stock and
an indeterminate number of Preferred Securities of Hawaiian Electric
Industries Capital Trust I, Hawaiian Electric Industries Capital Trust II
and Hawaiian Electric Industries Capital Trust III (collectively, the
"Trusts"). In no event will the aggregate initial public offering price of
all securities issued under this Registration Statement exceed
$300,000,000, exclusive of accrued interest and dividends (if any). Junior
Subordinated Debt Securities (referred to as "Company Debentures" when
issued in connection with the sale of Trust Preferred Securities) may be
issued and sold by HEI to any of the Trusts in an aggregate principal
amount, or Partnership Preferred Securities may be issued and sold to any
of the Trusts in an aggregate stated liquidation preference amount, in
either case corresponding to the aggregate stated liquidation preference
of the Trust Preferred Securities issued by such Trust, in which event
such Company Debentures or Partnership Preferred Securities, as the case
may be, may later be distributed for no additional consideration to the
holders of the Trust Preferred Securities of such Trust upon a dissolution
of such Trust and the distribution of the assets thereof. The proposed
maximum aggregate offering price has been estimated solely for the purpose
of calculating the registration fee pursuant to Rule 457(o) under the
Securities Act of 1933.
(2) The proposed maximum offering price per unit will be determined from time
to time in connection with the issuance of the securities registered
hereunder.
(3) Company Debentures or Partnership Preferred Securities may be purchased by
any of the Trusts with the proceeds of the sale of the Trust Preferred
Securities of that Trust, together with the proceeds received from HEI in
respect of the common securities to be issued by that Trust to HEI. No
separate consideration will be received for such Company Debentures or
Partnership Preferred Securities.
(4) No separate consideration will be received for HEI Guarantees with respect
to the Trust Preferred Securities, the Partnership Preferred Securities or
any debt securities issued by subsidiaries of HEI (the "Subsidiary
Debentures"). Company Debentures and Subsidiary Debentures will be
purchased by HEI Preferred Funding, LP (the "Partnership") with the
proceeds of the sale of the Partnership Preferred Securities and the sale
to Hycap Management, Inc. of the general partner interests in the
Partnership. No separate consideration will be received for such Company
Debentures or Subsidiary Debentures.
<PAGE>
EXPLANATORY NOTE
The preliminary Prospectus Supplement filed with this registration statement
will be used as a supplement to the Prospectus forming a part of this
registration statement in connection with an offering of the securities
referenced therein and is included with this registration statement because of
the current plans of HEI, subject to market conditions and other factors, to
commence such an offering following effectiveness of this registration
statement.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT IS SUBJECT TO COMPLETION +
+OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN +
+FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT +
+BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION +
+STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS +
+SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY +
+NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH +
+SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR +
+QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JANUARY 24, 1997
PROSPECTUS SUPPLEMENT
- ---------------------
(TO PROSPECTUS DATED JANUARY , 1997)
4,000,000 TRUST PREFERRED SECURITIES
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
% TRUST ORIGINATED PREFERRED SECURITIES/SM/ ("TOPrS/SM/")
(LIQUIDATION AMOUNT $25 PER TRUST PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
HAWAIIAN ELECTRIC INDUSTRIES, INC.
----------
The % Trust Originated Preferred Securities/SM/ (the "TOPrS/SM/" or "Trust
Preferred Securities") offered hereby represent preferred undivided beneficial
ownership interests in the assets of Hawaiian Electric Industries Capital Trust
I, a statutory business trust formed under the laws of the State of Delaware
(the "Trust"). Hawaiian Electric Industries, Inc., a Hawaii corporation (the
"Company" or "HEI"), will own all the common securities (the "Trust Common
Securities" and, together with the Trust Preferred Securities, the "Trust
Securities") representing undivided beneficial ownership interests in the
assets of the Trust. The Trust exists for the sole purpose of issuing the Trust
Securities and investing the proceeds as described below and engaging in
activities incident thereto. The proceeds from the sale of the Trust Securities
will be used by the Trust to purchase partnership
(Continued on next page)
SEE "RISK FACTORS" BEGINNING ON PAGE S-13 OF THIS PROSPECTUS SUPPLEMENT FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE TRUST PREFERRED SECURITIES, INCLUDING CERTAIN UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES.
The Trust Preferred Securities have been approved for listing on the New York
Stock Exchange, Inc. (the "New York Stock Exchange"), subject to official
notice of issuance. Trading on the New York Stock Exchange is expected to
commence within the 30-day period after the initial delivery of the Trust
Preferred Securities. See "Underwriting."
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO THE
PUBLIC COMMISSION(1) TRUST(2)(3)
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<S> <C> <C> <C>
Per Trust Preferred Security....... $25.00 (2) $25.00
- --------------------------------------------------------------------------------
Total............................... $100,000,000 (2) $100,000,000
- --------------------------------------------------------------------------------
</TABLE>
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(1) HEI, the Trust and the Partnership have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) In view of the fact that the proceeds of the sale of the Trust Preferred
Securities will ultimately be invested in investment instruments of HEI and
certain of its subsidiaries, HEI has agreed to pay to the Underwriters as
compensation (the "Underwriters' Compensation") $ per Trust Preferred
Security (or $ in the aggregate); provided that such compensation for
sales of 10,000 or more Trust Preferred Securities to a single purchaser
will be $ per Trust Preferred Security. Therefore, to the extent of such
sales, the actual amount of Underwriters' Compensation will be less than
the aggregate amount specified in the preceding sentence. See
"Underwriting."
(3) Expenses of the offering that are payable by HEI are estimated at $500,000.
----------
The Trust Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that delivery of the Trust Preferred Securities will be made only in
book-entry form through the facilities of The Depository Trust Company ("DTC")
on or about February , 1997.
----------
MERRILL LYNCH & CO. GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
LEGG MASON WOOD WALKER
INCORPORATED
ROBERT W. BAIRD & CO.
INCORPORATED
----------
The date of this Prospectus Supplement is January , 1997.
- -----
/SM/ "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
<PAGE>
(Continued from cover page)
preferred securities (the "Partnership Preferred Securities"), representing
the limited partner interests in HEI Preferred Funding, LP, a Delaware limited
partnership (the "Partnership"). All of the partner interests in the
Partnership other than the limited partner interests represented by the
Partnership Preferred Securities are owned by Hycap Management, Inc.
("Hycap"), a Delaware corporation, which is a wholly-owned subsidiary of HEI
and the sole general partner of the Partnership (the "General Partner").
Substantially all of the proceeds from the sale of the Partnership Preferred
Securities and the capital contribution from the General Partner will be used
by the Partnership initially to purchase debt instruments of HEI (the "Company
Debentures") and debt instruments of one or more of its subsidiaries (the
"Subsidiary Debentures" and, together with the Company Debentures, the
"Debentures"). In addition, approximately one percent of the proceeds from the
sale of the Partnership Preferred Securities and of the capital contribution
from the General Partner will be used by the Partnership to purchase certain
U.S. government obligations and commercial paper of entities not affiliated
with HEI (the "Eligible Debt Securities"). See "Supplemental Description of
the Partnership Preferred Securities--Partnership Investments."
Holders of the Trust Preferred Securities will be entitled to receive
cumulative cash distributions accumulating from the date of original issuance
and payable quarterly in arrears on each March 31, June 30, September 30 and
December 31, commencing March 31, 1997, at an annual rate of % of the
liquidation amount of $25 per Trust Preferred Security (equivalent to $ per
Trust Preferred Security per annum) if, as and when the Trust has funds
available for payment. See "Supplemental Description of the Trust Preferred
Securities--Distributions." Distributions not paid on the scheduled payment
date will accumulate and compound quarterly at a rate per annum equal to %.
The distribution rate and the distribution payment dates and other payment
dates for the Trust Preferred Securities will correspond to the distribution
rate and distribution payment dates and other payment dates for the
Partnership Preferred Securities, which constitute the sole assets of the
Trust. As described above, the assets of the Partnership will initially
consist only of the Debentures and, to a limited extent, certain Eligible Debt
Securities. The payment of distributions by the Trust and payments on
liquidation of the Trust or the redemption of Trust Preferred Securities, as
described below, are guaranteed on a subordinated basis by HEI (the "Trust
Guarantee") to the extent the Trust has funds legally available therefor as
described under "Supplemental Description of the Trust Guarantee." The payment
of distributions by the Partnership (if, as and when declared by the General
Partner) and payments on liquidation of the Partnership or the redemption of
Partnership Preferred Securities, as described below, are also guaranteed on a
subordinated basis by HEI (the "Partnership Guarantee") to the extent the
Partnership has funds legally available therefor as described under
"Supplemental Description of the Partnership Guarantee." In addition, payments
in respect of the Subsidiary Debentures are fully and unconditionally
guaranteed, on a subordinated basis, by HEI (the "Investment Guarantees") for
the benefit of the holders of the Subsidiary Debentures.
The Trust Guarantee, the Partnership Guarantee and the Investment Guarantees
(individually, a "Guarantee" and collectively, the "Guarantees"), when taken
together with the Company Debentures and HEI's obligations to pay all fees and
expenses of the Trust and the Partnership, constitute a guarantee to the
extent set forth herein by HEI of the distribution, redemption and liquidation
payments payable to the holders of the Trust Preferred Securities. The
Guarantees do not apply, however, to current distributions by the Partnership
unless and until such distributions are declared by the General Partner out of
funds legally available for payment or to liquidating distributions unless
there are assets legally available for payment in the Partnership, each as
more fully described in the next succeeding paragraph and under "Risk
Factors--Insufficient Income or Assets Available to Partnership." HEI's
obligations under the Guarantees are subordinate and junior in right of
payment to all liabilities of HEI and rank pari passu with the most senior
preferred stock (if any) issued from time to time by HEI, with each other and
with any guarantee hereafter entered into by HEI in respect of any preferred
security of any affiliate of HEI, and its obligations under the Company
Debentures are subordinate and junior in right of payment to all senior
indebtedness of HEI. At September 30, 1996, HEI (holding company only) had
outstanding senior indebtedness aggregating approximately $246 million
(exclusive of contingent amounts under guarantees of approximately $17.5
million of subsidiary obligations), which would have ranked senior to HEI's
obligations under the Guarantees and the Company Debentures. In addition,
HEI's obligations under the
S-2
<PAGE>
Guarantees and the Company Debentures will be effectively subordinated to all
existing and future liabilities of its subsidiaries. See "Risk Factors--Ranking
of Subordinate Obligations Under the Guarantees and the Company Debentures."
Distributions on the Partnership Preferred Securities will be declared and
paid only as determined in the sole discretion of the General Partner of the
Partnership. In addition, the General Partner is not obligated to declare
distributions on the Partnership Preferred Securities at any time, including
upon or following a Partnership Enforcement Event (as defined herein). To the
extent that the issuers (including HEI as issuer and guarantor) of the
securities in which the Partnership invests defer or fail to make any payments
in respect of such securities (or, if applicable, guarantees), the Partnership
will not have sufficient funds to pay and will not declare or pay distributions
on the Partnership Preferred Securities. In addition, as described under "Risk
Factors--Insufficient Income or Assets Available to Partnership," the
Partnership may not have sufficient funds to pay current or liquidating
distributions on the Partnership Preferred Securities if (i) at any time that
the Partnership is receiving current payments in respect of the securities held
by the Partnership (including the Debentures), the General Partner, in its sole
discretion, does not declare distributions on the Partnership Preferred
Securities and the Partnership receives insufficient amounts to pay the
additional compounded distributions that will accumulate in respect of the
Partnership Preferred Securities, (ii) the Partnership reinvests the proceeds
received in respect of the Debentures upon their retirement or at their
maturities in Affiliate Investment Instruments (as defined herein) and Eligible
Debt Securities that do not generate income in an amount that is sufficient to
pay full distributions in respect of the Partnership Preferred Securities or
(iii) the Partnership invests in equity or debt securities of Investment
Affiliates (as defined herein) that are not guaranteed by HEI and that cannot
be liquidated by the Partnership for an amount sufficient to pay such
distributions in full. The Debentures will provide that payments of interest
may be deferred at any time, and from time to time, by the relevant issuer for
a period not exceeding six consecutive quarters. If an issuer were to so defer
the payment of interest on any Debenture, interest thereon would continue to
accrue and compound at the stated interest rate thereon. If the General Partner
does not declare and pay distributions on the Partnership Preferred Securities
out of funds legally available for distribution, the Trust will not have
sufficient funds to make distributions on the Trust Preferred Securities, in
which event the Trust Guarantee will not apply to such distributions until the
Trust has sufficient funds available therefor. See "Risk Factors--Distributions
Payable Only if Declared by General Partner; Restrictions on Certain Payments;
Tax Consequences," "--Insufficient Income or Assets Available to Partnership,"
"Supplemental Description of the Trust Preferred Securities--Distributions" and
"Supplemental Description of the Partnership Preferred Securities--
Distributions."
The Partnership may, from time to time and subject to the restrictions
described herein, reinvest payments received with respect to the Affiliate
Investment Instruments (including the Debentures) and the Eligible Debt
Securities in additional Affiliate Investment Instruments and Eligible Debt
Securities. As of the date of this Prospectus Supplement, the General Partner
does not intend to cause the Partnership to reinvest regularly scheduled
periodic payments of interest or dividends received by the Partnership in the
manner described herein, although there can be no assurance that the General
Partner's intention in respect of such reinvestments will not change in the
future.
If (i) for any distribution period full distributions on a cumulative basis
on any Trust Preferred Securities have not been paid or declared and set apart
for payment, (ii) an Investment Event of Default (as defined herein) by any
Investment Affiliate in respect of any Affiliate Investment Instrument has
occurred and is continuing and HEI is in default of its obligations with
respect thereto under an applicable Investment Guarantee or (iii) HEI is in
default of its obligations under the Trust Guarantee or the Partnership
Guarantee, then, during such period, (a) HEI shall not declare or pay dividends
on, make distributions or a liquidation payment with respect to, or redeem,
purchase or acquire, any of its capital stock (except for dividends or
distributions in shares of, or options, warrants or rights to subscribe for or
purchase shares of, its common stock and exchanges of common stock of one class
for common stock of another class and other exceptions set forth in the
accompanying Prospectus), (b) HEI shall not make any payment or cause any
payment to be made that would result in, and shall take such actions as shall
be necessary to prevent, the payment of any dividends on, any distribution or
liquidation payment
S-3
<PAGE>
with respect to, or any redemption, purchase or other acquisition of, any
Comparable Equity Interest, and (c) HEI shall not make any guarantee payments
with respect to the foregoing other than pursuant to the Trust Guarantee (or
any other guarantee by the Company with respect to any Comparable Equity
Interest).
The Partnership Preferred Securities are redeemable by the Partnership, in
whole or in part, from time to time, on or after February , 2002 at a
redemption price per Partnership Preferred Security equal to $25 plus
accumulated and unpaid distributions thereon to the date fixed for redemption.
The Partnership Preferred Securities may also be redeemed, in whole but not in
part, at any time upon the occurrence of a Partnership Special Event (as
defined herein) at an amount per Partnership Preferred Security equal to $25
plus accumulated and unpaid distributions thereon to the date fixed for
redemption. If the Partnership redeems the Partnership Preferred Securities,
the Trust must redeem Trust Preferred Securities on a pro rata basis having an
aggregate liquidation amount equal to the aggregate liquidation preference of
the Partnership Preferred Securities so redeemed at a redemption price
corresponding to the redemption price of the Partnership Preferred Securities
(which includes all accumulated and unpaid distributions thereon to the date
fixed for redemption) (the "Redemption Price"). See "Supplemental Description
of the Trust Preferred Securities--Redemption." Neither the Partnership
Preferred Securities nor the Trust Preferred Securities have any scheduled
maturity or are redeemable at any time at the option of the holders thereof.
Upon the occurrence of a Trust Special Event (as defined herein), except in
certain limited circumstances, the Trust may be dissolved. Upon dissolution of
the Trust, after satisfaction of obligations to creditors of the Trust, if
any, the Partnership Preferred Securities will be distributed to the holders
of the Trust Preferred Securities, on a pro rata basis, in lieu of any cash
distribution, unless the Partnership Preferred Securities are redeemed in the
limited circumstances described herein. If the Partnership Preferred
Securities are distributed to the holders of the Trust Preferred Securities,
HEI will use its best efforts to cause the Partnership Preferred Securities to
be listed on the New York Stock Exchange or such other national securities
exchange or similar organization as the Trust Preferred Securities are then
listed or quoted. See "Supplemental Description of the Trust Preferred
Securities--Trust Special Event Redemption or Distribution."
In the event of any liquidation, dissolution, winding up or termination of
the Trust, after satisfaction of obligations to creditors of the Trust, if
any, the holders of the Trust Preferred Securities will be entitled to receive
for each Trust Preferred Security a liquidation amount of $25 plus accumulated
and unpaid distributions thereon to the date of payment, except to the extent,
in connection with such dissolution, Partnership Preferred Securities are
distributed to the holders of the Trust Preferred Securities. Upon (i) the
occurrence and continuation of an Investment Event of Default by an Investment
Affiliate (including HEI) in respect of any Affiliate Investment Instrument
and the failure of HEI to perform its obligations under an applicable
Investment Guarantee or (ii) default by HEI on any of its obligations under
the Trust Guarantee or the Partnership Guarantee, the holders of the Trust
Preferred Securities will have a preference over the holder of the Trust
Common Securities with respect to payments upon liquidation of the Trust.
Under no circumstances will the Affiliate Investment Instruments or the
Eligible Debt Securities held by the Partnership be distributed in kind to the
holders of the Trust Preferred Securities or Partnership Preferred Securities.
See "Supplemental Description of the Trust Preferred Securities--Liquidation
Distribution Upon Dissolution."
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING TRANSACTIONS, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-4
<PAGE>
PROSPECTUS SUMMARY
The following is a summary of certain information contained in this
Prospectus Supplement and the accompanying Prospectus. It does not purport to
be complete and is qualified in its entirety by the more detailed information
contained elsewhere in this Prospectus Supplement and the accompanying
Prospectus. Capitalized terms which are not defined in this summary are used as
defined elsewhere in this Prospectus Supplement. See "Index of Selected Defined
Terms" for a cross reference to the location in this Prospectus Supplement
where such terms are defined.
THE COMPANY
HEI was incorporated in 1981 under the laws of the State of Hawaii and is a
holding company with subsidiaries engaged in the electric utility, savings
bank, freight transportation, real estate development and other businesses,
primarily in the State of Hawaii, and also engaged in the pursuit of
independent power projects and energy services projects in Asia and the
Pacific. HEI's predecessor, Hawaiian Electric Company, Inc. ("HECO"), was
incorporated under the laws of the Kingdom of Hawaii (now the State of Hawaii)
on October 13, 1891. As a result of a 1983 corporate reorganization, HECO
became an HEI subsidiary, and common shareholders of HECO became common
shareholders of HEI.
HECO and its subsidiaries, Maui Electric Company, Limited ("MECO") and Hawaii
Electric Light Company, Inc. ("HELCO"), are regulated operating public
utilities providing the only public utility electric service on the islands of
Oahu, Maui, Lanai, Molokai and Hawaii. HEI also owns directly or indirectly the
following principal subsidiaries which comprise its diversified companies: HEI
Diversified, Inc. ("HEIDI") and its subsidiary, American Savings Bank, F.S.B.
("ASB") and its subsidiaries; Hawaiian Tug & Barge Corp. ("HTB") and its
subsidiary, Young Brothers, Limited ("YB"); Malama Pacific Corp. ("MPC") and
its subsidiaries; HEI Power Corp. ("HEIPC") and its subsidiaries; and HEI
Investment Corp. ("HEIIC").
ASB, acquired in 1988, is the fourth largest financial institution in Hawaii
based on total assets and the third largest financial institution based on
deposits, in each case as of June 30, 1996, and has 48 retail branches. HTB was
acquired in 1986 and provides ship assist and charter towing services and owns
YB, a regulated intrastate public carrier of waterborne freight among the
Hawaiian Islands. MPC was formed in 1985 and directly or through subsidiaries
develops and invests in real estate. HEIIC was formed in 1984 and is a passive
investment company which primarily holds investments in leveraged leases and
currently plans no new investments. HEIPC was formed in March 1995 to pursue,
directly or through its subsidiaries or affiliates, independent power projects
and energy services projects in Asia and the Pacific.
THE OFFERING
The Trust................... Hawaiian Electric Industries Capital Trust I, a
Delaware statutory business trust. The sole
assets of the Trust will be the Partnership
Preferred Securities.
The Partnership............. HEI Preferred Funding, LP, a Delaware limited
partnership. The sole assets of the Partnership
will initially consist of the Debentures and, to
a limited extent, certain Eligible Debt
Securities.
Securities Offered.......... 4,000,000 % Trust Originated Preferred
Securities/SM/.
Distributions............... Distributions on the Trust Preferred Securities
will accumulate from the date of original
issuance of the Trust Preferred Securities and
will be payable at the annual rate of % of the
liquidation
S-5
<PAGE>
amount of $25 per Trust Preferred Security
(equivalent to $ per Trust Preferred Security
per annum) if, as, and when the Trust has funds
legally available for payment. Distributions will
be payable quarterly in arrears on each March 31,
June 30, September 30 and December 31, commencing
March 31, 1997. Distributions not made on the
scheduled payment date will accumulate and
compound quarterly at a rate per annum equal to
%. The distributions payable on March 31, 1997
will represent distributions accumulated from
February , 1997 and will equal $ for each
$25 Trust Preferred Security.
The ability of the Trust to pay distributions on
the Trust Preferred Securities is entirely depen-
dent on its receipt of corresponding distribu-
tions with respect to the Partnership Preferred
Securities. The ability of the Partnership to pay
distributions on the Partnership Preferred Secu-
rities is, in turn, dependent on its receipt of
payments with respect to the Debentures and the
Eligible Debt Securities held by the Partnership.
The Debentures will provide that payments of in-
terest may be deferred at any time, and from time
to time, by the relevant issuer for a period not
exceeding six consecutive quarters. Distributions
on the Partnership Preferred Securities will be
declared and paid only as determined in the sole
discretion of the General Partner of the Partner-
ship. However, in the event full distributions on
Trust Preferred Securities have not been paid,
the Company will be prohibited from, among other
things, making distributions with respect to its
capital stock or Comparable Equity Interests as
described below. See "Risk Factors--Distributions
Payable Only if Declared by General Partner; Re-
strictions on Certain Payments; Tax Conse-
quences," "Supplemental Description of the Trust
Preferred Securities--Distributions" and "Supple-
mental Description of the Partnership Preferred
Securities--Distributions" and "--Partnership In-
vestments."
Rights Upon Nonpayment of
Distributions and Certain
Defaults; Covenants of the
Company...............
If, at any time, (i) arrearages on distributions
on the Trust Preferred Securities shall exist for
six consecutive quarterly distribution periods,
(ii) an Investment Event of Default occurs and is
continuing on any Affiliate Investment Instrument
and the Company is in default of its obligations
with respect thereto under an applicable
Investment Guarantee or (iii) the Company is in
default on any of its obligations under the Trust
Guarantee or the Partnership Guarantee, then
(a) the Property Trustee (as defined herein), as
the holder of the Partnership Preferred
Securities, will have the right to enforce the
terms of the Partnership Preferred Securities,
including the right to direct the Special
Representative (as defined herein) to enforce
(1) to the fullest extent permitted by law, the
Partnership's creditors' rights and other rights
with respect to the Affiliate Investment
Instruments and the Investment Guarantees and (2)
the rights of the holders of the Partnership
Preferred Securities to receive distributions
(but only if, as and when declared by the
S-6
<PAGE>
General Partner) on the Partnership Preferred
Securities, and (b) the Trust Guarantee Trustee
(as defined herein) or the Special Representative
shall have the right to enforce the Trust
Guarantee and the Partnership Guarantee,
respectively, including the right to enforce the
covenant restricting certain distributions by the
Company described below.
Under no circumstances, however, shall the
Special Representative have authority to cause
the General Partner to declare distributions on
the Partnership Preferred Securities. If the
Partnership does not declare and pay
distributions on the Partnership Preferred
Securities out of funds legally available for
distribution, the Trust will not have sufficient
funds to make distributions on the Trust
Preferred Securities. See "Risk Factors--
Insufficient Income or Assets Available to
Partnership," "Supplemental Description of the
Trust Preferred Securities--Trust Enforcement
Events" and "Supplemental Description of the
Partnership Preferred Securities--Partnership
Enforcement Events."
The Company has agreed that if (a) for any
distribution period, full distributions on a
cumulative basis on any Trust Preferred
Securities have not been paid or declared and set
apart for payment, (b) an Investment Event of
Default by any Investment Affiliate in respect of
any Affiliate Investment Instrument has occurred
and is continuing and the Company is in default
of its obligations with respect thereto under an
applicable Investment Guarantee or (c) the
Company is in default of its obligations under
the Trust Guarantee or the Partnership Guarantee,
then, during such period, (i) the Company shall
not declare or pay dividends on, make
distributions or a liquidation payment with
respect to, or redeem, purchase or acquire, any
of its capital stock (except for dividends or
distributions in shares of, or options, warrants
or right to subscribe for or purchase shares of,
its common stock and exchanges of common stock of
one class for common stock of another class and
other exceptions set forth in the accompanying
Prospectus), (ii) the Company shall not make any
payment or cause any payment to be made that
would result in, and shall take such action as
shall be necessary to prevent, the payment of
dividends on, any distribution or liquidation
payment with respect to, or any redemption,
purchase or other acquisition of, any Comparable
Equity Interest, and (iii) the Company shall not
make any guarantee payments with respect to the
foregoing other than pursuant to the Trust
Guarantee (or any other guarantee by the Company
with respect to any Comparable Equity Interest).
Guarantees.................. The Company will irrevocably guarantee, on a
subordinated basis and to the extent set forth
herein, the payment in full of (i) any
accumulated and unpaid distributions on the Trust
Preferred Securities to the extent of funds of
the Trust legally available therefor, (ii) the
amount payable upon redemption of the Trust
Preferred Securities to the extent of funds of
the Trust legally available therefor and (iii)
generally, the liquidation amount of the Trust
Preferred Securities to the extent of the assets
of the Trust
S-7
<PAGE>
legally available for distribution to holders of
Trust Preferred Securities. See "Supplemental
Description of the Trust Guarantee."
The Company will also irrevocably guarantee, on a
subordinated basis and to the extent set forth
herein, the payment in full of (i) any
accumulated and unpaid distributions on the
Partnership Preferred Securities if, as and when
declared out of funds legally available therefor,
(ii) the amount payable upon redemption of the
Partnership Preferred Securities to the extent of
funds of the Partnership legally available
therefor and (iii) generally, the liquidation
preference of the Partnership Preferred
Securities to the extent of the assets of the
Partnership legally available for distribution to
holders of Partnership Preferred Securities. See
"Supplemental Description of the Partnership
Guarantee."
The Company will fully and unconditionally
guarantee, on a subordinated basis, payments in
respect of the Subsidiary Debentures as described
under "Supplemental Description of the
Partnership Preferred Securities--Investment
Guarantees."
The Guarantees, when taken together with the
Company Debentures and the Company's obligations
to pay all fees and expenses of the Trust and the
Partnership, constitute a guarantee to the extent
set forth herein by the Company of the
distribution, redemption and liquidation amounts
payable to the holders of the Trust Preferred
Securities. The Guarantees do not apply, however,
to current distributions by the General Partner
unless and until such distributions are declared
by the Partnership out of funds legally available
for payment or to liquidating distributions
unless there are assets legally available for
payment in the Partnership, each as more fully
described under "Risk Factors--Insufficient
Income or Assets Available to Partnership." The
Company's obligations under the Guarantees are
subordinate and junior in right of payment to all
other liabilities of the Company, and will be
effectively subordinated to all existing and
future liabilities of its subsidiaries and rank
pari passu with the most senior preferred stock
(if any) issued from time to time by the Company,
with each other and with any guarantee hereafter
entered into by the Company in respect of any
preferred security of any affiliate of the
Company.
Liquidation Amount..........
In the event of any liquidation of the Trust,
after satisfaction of obligations to creditors of
the Trust, if any, holders will be entitled to
receive the Trust Liquidation Distribution (as
defined herein), such amount being $25 per Trust
Preferred Security plus an amount equal to any
accumulated and unpaid distributions thereon to
the date of payment, unless Partnership Preferred
Securities are distributed to such holders in
connection with a Trust Special Event. If, upon a
liquidation of the Trust in which the Partnership
Preferred Securities are not distributed to
holders of the Trust Preferred Securities, the
Trust Liquidation Distribution can be paid only
in part because the Trust has insufficient assets
available to pay in full the aggregate Trust
Liquidation Distribution, then the amounts
S-8
<PAGE>
payable directly by the Trust on the Trust
Preferred Securities shall be paid on a pro rata
basis. The holder of the Trust Common Securities
will be entitled to receive distributions upon
any such liquidation pro rata with the holders of
the Trust Preferred Securities, except that upon
(i) the occurrence and continuation of an
Investment Event of Default by an Investment
Affiliate (including the Company) in respect of
any Affiliate Investment Instrument where the
Company has not performed its obligations under
an applicable Investment Guarantee or (ii)
default by the Company on any of its obligations
under the Trust Guarantee or the Partnership
Guarantee, the holders of the Trust Preferred
Securities will have a preference over the holder
of the Trust Common Securities with respect to
payments upon liquidation of the Trust. See
"Supplemental Description of the Trust Preferred
Securities--Subordination of Trust Common
Securities" and "--Liquidation Distribution Upon
Dissolution."
Optional Redemption.........
The Partnership Preferred Securities will be
redeemable for cash, at the option of the
Partnership, in whole or in part, from time to
time, after February , 2002, at a redemption
price per Partnership Preferred Security equal to
$25 plus accumulated and unpaid distributions
thereon to the date fixed for redemption. Upon
any redemption of the Partnership Preferred
Securities, the Trust Preferred Securities will
be redeemed, in whole or in part, as applicable,
at the Redemption Price. See "Supplemental
Description of the Partnership Preferred
Securities--Optional Redemption" and
"Supplemental Description of the Trust Preferred
Securities--Redemption." Neither the Partnership
Preferred Securities nor the Trust Preferred
Securities have any scheduled maturity or are
redeemable at any time at the option of the
holders thereof.
Special Event Redemptions
or Distributions...........
Upon the occurrence of a Trust Tax Event (which
event will generally be triggered upon the
occurrence of certain adverse tax consequences or
the denial of an interest deduction on Affiliate
Investment Instruments which are debt instruments
held by the Partnership) or a Trust Investment
Company Event (which event will generally be
triggered if the Trust is considered an
"investment company" under the 1940 Act (as
defined herein)), except in certain limited
circumstances, the Regular Trustees (as defined
herein) will have the right to dissolve the Trust
and, after satisfaction of obligations to
creditors of the Trust, if any, cause Partnership
Preferred Securities to be distributed to the
holders of the Trust Preferred Securities. In
certain circumstances involving a Partnership Tax
Event (which event will generally be triggered
upon the occurrence of certain adverse tax
consequences or the denial of an interest
deduction on the Debentures held by the
Partnership) or a Partnership Investment Company
Event (which event will generally be triggered if
the Partnership is considered an "investment
company" under the 1940 Act), the Partnership
will have the right to redeem the Partnership
Preferred Securities, in
S-9
<PAGE>
whole (but not in part), at $25 per Partnership
Preferred Security plus accumulated and unpaid
distributions thereon, regardless of the
occurrence of any Trust Tax Event or Trust
Investment Company Event and in lieu of any
distribution of the Partnership Preferred
Securities required in connection therewith, in
which event the Trust Preferred Securities will
be redeemed at the Redemption Price. See
"Supplemental Description of the Trust Preferred
Securities--Trust Special Event Redemption or
Distribution" and "Supplemental Description of
the Partnership Preferred Securities--Partnership
Special Event Redemption."
Voting Rights............... Generally, holders of the Trust Preferred
Securities will not have voting rights. The
holders of a majority in liquidation amount of
the Trust Preferred Securities, however, have the
right to direct the time, method and place of
conducting any proceeding for any remedy
available to the Property Trustee, or to direct
the exercise of any trust or other power
conferred upon the Property Trustee under the
Trust Agreement (as defined herein), including
the right to direct the Property Trustee, as the
holder of the Partnership Preferred Securities,
(i) to exercise its rights in the manner
described above under "Rights Upon Non-Payment of
Distributions and Certain Defaults; Covenants of
the Company" and (ii) to consent to any
amendment, modification or termination of the
Agreement of Limited Partnership (as defined
herein) or the Partnership Preferred Securities
where such consent shall be required. See
"Supplemental Description of the Trust Preferred
Securities--Voting Rights."
Form of Trust Preferred
Securities.................. The Trust Preferred Securities will be
represented by a global certificate registered in
the name of Cede & Co., as nominee for DTC.
Beneficial interests in the Trust Preferred
Securities will be evidenced by, and transfers
thereof will be effected only through, records
maintained by the participants in DTC. Except as
described herein, Trust Preferred Securities in
certificated form will not be issued in exchange
for such global certificate. See "Supplemental
Description of the Trust Preferred Securities--
Book-Entry Only Issuance--The Depository Trust
Company."
Use of Proceeds.............
All of the proceeds from the sale of the Trust
Securities will be invested by the Trust in the
Partnership Preferred Securities. The Partnership
will use the proceeds from the sale of the
Partnership Preferred Securities and the capital
contribution from the General Partner to make
investments in the Debentures and, to a limited
extent, certain Eligible Debt Securities. The
Company and any subsidiaries that are issuers of
the Debentures will use the proceeds from the
sale of such Debentures, after deduction of the
Underwriters' Compensation and other expenses of
this offering, principally to fund investments in
or to extend credit to HEI's subsidiaries, to
repay short-term and inter-company debt, and for
working capital and other corporate purposes.
Proceeds not immediately so applied by the
Company and its subsidiaries will be temporarily
invested in short-term money market securities.
See "Use of Proceeds."
S-10
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data should be read in
conjunction with HEI's consolidated financial statements and the notes thereto
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations," incorporated herein by reference to other documents (see
"Incorporation of Certain Documents by Reference" in the accompanying
Prospectus). The consolidated statement of income data for each of the years in
the three-year period ended December 31, 1995, are derived from, and are
qualified by reference to, the audited consolidated financial statements
incorporated herein by reference to other documents. The consolidated income
and capitalization data for the nine months ended September 30, 1996 and 1995
are derived from unaudited consolidated financial statements incorporated
herein by reference to other documents, which, in the opinion of management,
include all material adjustments, consisting only of normal recurring
adjustments, unless otherwise noted, necessary for a fair presentation of HEI's
consolidated financial position as of September 30, 1996 and results of
operations for the nine-month periods ended September 30, 1996 and 1995. The
results of operations for the nine months ended September 30, 1996 may not
necessarily be indicative of the results to be expected for the full fiscal
year. The historical results are not necessarily indicative of the results of
operations to be expected in the future.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
----------------------- ----------------------------------
1996 1995 1995 1994 1993
---------- --------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT
OF INCOME DATA:
Revenue................. $1,041,570 $ 963,052 $1,295,924 $1,188,523 $1,142,170
Operating income (loss)
from continuing
operations
Electric utility...... $ 132,246 $ 124,383 $ 159,043 $ 136,628 $ 119,565
Savings bank.......... 16,143(1) 29,757 40,044 42,525 44,117
Other................. (5,499) (7,086) (11,423) (5,020) (6,044)
---------- --------- ---------- ---------- ----------
$ 142,890 $ 147,054 $ 187,664 $ 174,133 $ 157,638
========== ========= ========== ========== ==========
Net income (loss)
Continuing operations. $ 57,604 $ 61,878 $ 77,493 $ 73,030 $ 61,684
Discontinued
operations (2)....... -- -- -- -- (13,025)
---------- --------- ---------- ---------- ----------
$ 57,604 $ 61,878 $ 77,493 $ 73,030 $ 48,659
========== ========= ========== ========== ==========
Earnings (loss) per
common share
Continuing operations. $ 1.91 $ 2.13 $ 2.66 $ 2.60 $ 2.38
Discontinued
operations (2)....... -- -- -- -- (0.50)
---------- --------- ---------- ---------- ----------
$ 1.91 $ 2.13 $ 2.66 $ 2.60 $ 1.88
========== ========= ========== ========== ==========
Dividends per common
share................... $ 1.80 $ 1.77 $ 2.37 $ 2.33 $ 2.29
Weighted average number
of common
shares outstanding..... 30,178 29,058 29,187 28,137 25,938
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1996
--------------------------------------
ACTUAL(3) AS ADJUSTED(3)(6)
---------------- --------------------
($ IN THOUSANDS)
<S> <C> <C> <C> <C>
CAPITALIZATION DATA:
Short-term borrowings.................... $ 170,174 9.2% $ 80,174 4.4%
Long-term debt (4)....................... 822,514 44.6 822,514 44.4
Company-obligated trust preferred
securities (5).......................... -- -- 100,000 5.4
Preferred stock of electric utility
subsidiaries (4)........................ 87,548 4.8 87,548 4.7
Common stock equity...................... 761,947 41.4 761,947 41.2
---------- ----- ----------- ------
$1,842,183 100.0% $1,852,183 100.0%
========== ===== =========== ======
</TABLE>
S-11
<PAGE>
- --------
(1) On September 30, 1996, President Clinton signed the omnibus appropriations
bill, which authorized a special one-time assessment by the Federal Deposit
Insurance Corporation on all deposits insured by the Savings Association
Insurance Fund held as of March 31, 1995. ASB's assessment was estimated to
be $13.8 million and was accrued in September 1996.
(2) Reflects losses from discontinued nonutility wind energy business and
insurance business.
(3) Excludes ASB's deposit liabilities, securities sold under agreements to
repurchase and advances from the Federal Home Loan Bank.
(4) Includes amounts of long-term debt due within one year and preferred stock
sinking fund requirements.
(5) As described herein, the sole assets of the Trust will be the Partnership
Preferred Securities with an aggregate stated liquidation preference of
approximately $103.1 million, and the sole assets of the Partnership will
consist of the Debentures and the Eligible Debt Securities. HEI will own
all of the Common Securities of the Trust and Hycap will own all of the
general partner interests of the Partnership. See "Accounting Treatment."
(6) Adjusted to reflect the consummation of the offering of the Trust Preferred
Securities and the application of the estimated net proceeds from the sale
of the Trust Preferred Securities. See "Use of Proceeds."
S-12
<PAGE>
RISK FACTORS
Prospective purchasers of the Trust Preferred Securities should consider
carefully the risk factors set forth below, as well as all other information
contained or incorporated by reference in this Prospectus Supplement and the
accompanying Prospectus, in evaluating an investment in the Trust Preferred
Securities. To the extent any of the information contained or incorporated by
reference in this Prospectus Supplement or the accompanying Prospectus
constitutes a "forward-looking statement" as defined in Section 27A(i)(1) of
the Securities Act of 1933, as amended (the "Securities Act"), the risk
factors set forth below are meaningful cautionary statements identifying
important factors that could cause actual results to differ materially from
those in the forward-looking statement.
DISTRIBUTIONS PAYABLE ONLY IF DECLARED BY GENERAL PARTNER; RESTRICTIONS ON
CERTAIN PAYMENTS; TAX CONSEQUENCES
Distributions on the Partnership Preferred Securities will be payable only
if, as and when declared by the General Partner in its sole discretion. Hycap,
a newly-formed, wholly-owned subsidiary of HEI, is the sole General Partner of
the Partnership, and the Debentures will constitute obligations of HEI and
certain of its subsidiaries. If interest payments on the Debentures are
deferred as permitted by their terms, or if such interest payments are not
paid to the Partnership according to their terms (and guarantee payments on
the Investment Guarantees are not made by the Company), the Partnership will
generally lack funds to pay distributions on the Partnership Preferred
Securities. If the Partnership does not make current distributions on the
Partnership Preferred Securities, either because the General Partner does not
declare distributions to be made or because the Partnership lacks sufficient
funds, the Trust will not have funds available to make current distributions
on the Trust Preferred Securities. As described under "Supplemental
Description of the Trust Guarantee--Certain Covenants of the Company," the
Company will be restricted (with certain exceptions) from paying dividends or
making other distributions with respect to its capital stock or Comparable
Equity Interests (as defined herein) if full distributions on the Trust
Preferred Securities have not been paid.
Should the Partnership fail to pay current distributions on the Partnership
Preferred Securities, each holder of Trust Preferred Securities will generally
be required to accrue income, for United States federal income tax purposes,
in respect of the cumulative deferred distributions (including interest
thereon) allocable to its proportionate share of the Partnership Preferred
Securities. As a result, each holder of Trust Preferred Securities will
recognize income for United States federal income tax purposes in advance of
the receipt of cash and will not receive the cash from the Trust related to
such income if such holder disposes of its Trust Preferred Securities prior to
the record date for the date on which distributions of such amount are made.
See "Certain Federal Income Tax Considerations--Income and Deductions."
INSUFFICIENT INCOME OR ASSETS AVAILABLE TO PARTNERSHIP
The Trust Preferred Securities are subject to the risk of a current or
liquidating distribution rate mismatch between the rate paid on the Trust
Preferred Securities and the rate paid on the securities held by the
Partnership, including the Debentures and any additional securities acquired
by the Partnership in the future. Such mismatch could occur if (i) at any time
that the Partnership is receiving current payments in respect of the
securities held by the Partnership (including the Debentures), the General
Partner, in its sole discretion, does not declare distributions on the
Partnership Preferred Securities and the Partnership receives insufficient
amounts to pay the additional compounded distributions that will accumulate in
respect of the Partnership Preferred Securities, (ii) the Partnership
reinvests the proceeds received in respect of the Debentures upon their
retirement or at their maturities in Affiliate Investment Instruments or
Eligible Debt Securities that do not generate income in an amount that is
sufficient to pay full distributions in respect of the Partnership Preferred
Securities at a rate of % per annum or (iii) the Partnership invests in
equity or debt securities of Investment Affiliates that are not guaranteed by
the Company and that cannot be liquidated by the Partnership for an amount
sufficient to pay such distributions in full. If the reinvestments in the
securities of the Investment Affiliates contemplated by the General Partner do
not meet the eligibility criteria for Affiliate Investment Instruments
described under "Supplemental Description of the Partnership Preferred
Securities--Partnership Investments," the Partnership
S-13
<PAGE>
shall invest funds available for reinvestment in Eligible Debt Securities
(subject to restrictions of applicable law, including the 1940 Act). To the
extent that the Partnership lacks sufficient funds to make current or
liquidating distributions on the Partnership Preferred Securities in full, the
Trust will not have sufficient funds available to pay full current or
liquidating distributions on the Trust Preferred Securities.
DEPENDENCE ON AFFILIATE INVESTMENT INSTRUMENTS
Approximately 99% of the proceeds from the issuance of the Partnership
Preferred Securities and of the General Partner's capital contribution will be
invested initially in the Debentures, which will consist of debt instruments
of HEI (i.e., the Company Debentures) and certain subsidiaries of HEI (i.e.,
the Subsidiary Debentures). See "Supplemental Description of the Partnership
Preferred Securities--Partnership Investments."
PROPOSED TAX LEGISLATION
On March 19, 1996, as part of President Clinton's Fiscal 1997 Budget
Proposal, the Treasury Department proposed legislation (the "Proposed
Legislation") that would, among other things, deny the borrower an interest
deduction with respect to certain types of debt instruments that are payable
in stock of the issuer or a related party. The Proposed Legislation also would
treat as equity for United States federal income tax purposes instruments with
a maximum term of more than 20 years that are not shown as indebtedness on the
consolidated balance sheet of the issuer. On March 29, 1996, Senate Finance
Committee Chairman William V. Roth and House Ways and Means Committee Chairman
Bill Archer issued a joint statement (the "Joint Statement") indicating their
intent that certain legislative proposals initiated by the Clinton
administration, including the Proposed Legislation, that may be adopted by
either of the tax-writing committees of Congress, would have an effective date
that is no earlier than the date of "appropriate Congressional action." In
addition, subsequent to the publication of the Joint Statement, Senator Daniel
Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel
wrote letters to the Treasury Department officials concurring with the view
expressed in the Joint Statement (the "Democrat Letters"). If the principles
contained in the Joint Statement and the Democrat Letters were followed and
the Proposed Legislation were enacted, such legislation would not apply to the
Debentures. There can be no assurances, however, that legislation enacted
after the date hereof will not adversely affect the tax treatment of the
Debentures, or whether such tax treatment would cause a Partnership Tax Event
(as defined herein) or a Trust Tax Event (as defined herein) that may result
in the redemption of the Partnership Preferred Securities and, consequently,
the Trust Preferred Securities.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Trust Special Event or a Partnership Special Event
(each of which will generally be triggered either upon (i) the occurrence of
certain adverse tax consequences to the Trust or the Partnership, as the case
may be, or the denial of an interest deduction with respect to the Affiliate
Investment Instruments that are debt instruments held by the Partnership or
(ii) the Trust or the Partnership, as the case may be, being considered an
"investment company" under the 1940 Act) (each, a "Special Event"), the Trust
will be dissolved with the result, except in the limited circumstances
described below, that the Partnership Preferred Securities will be distributed
to the holders of the Trust Preferred Securities in connection with the
liquidation of the Trust. In certain circumstances, the Partnership will have
the right to redeem the Partnership Preferred Securities, in whole but not in
part, in lieu of a distribution of the Partnership Preferred Securities by the
Trust, in which event the Trust will redeem the Trust Preferred Securities for
cash. See "Supplemental Description of the Trust Preferred Securities--Trust
Special Event Redemption or Distribution" and "Supplemental Description of the
Partnership Preferred Securities--Partnership Special Event Redemption."
Unless the liquidation of the Trust occurs as a result of the Trust being
subject to United States federal income tax with respect to income on the
Partnership Preferred Securities, under current United States federal income
tax law a distribution of the Partnership Preferred Securities upon the
dissolution of the Trust will not be a taxable event to holders of the Trust
Preferred Securities. If, however, the liquidation of the Trust were to occur
because the Trust is subject to United States federal income tax with respect
to income accumulated or received
S-14
<PAGE>
on the Partnership Preferred Securities, the distribution of Partnership
Preferred Securities to holders by the Trust would likely be a taxable event
to each such holder, and a holder would recognize gain or loss as if the
holder had exchanged its Trust Preferred Securities for the Partnership
Preferred Securities it received upon the liquidation of the Trust. Similarly,
the holders of the Trust Preferred Securities would recognize gain or loss if
the Trust were to dissolve upon an occurrence of a Partnership Special Event
and the holders of Trust Preferred Securities were to receive cash in exchange
for their Trust Preferred Securities. See "Certain Federal Income Tax
Considerations--Redemption of Trust Preferred Securities for Cash."
There can be no assurance as to the market prices for the Partnership
Preferred Securities that may be distributed in exchange for Trust Preferred
Securities if a dissolution or liquidation of the Trust were to occur.
Accordingly, the Trust Preferred Securities that an investor may purchase,
whether pursuant to the offer made hereby or in the secondary market, or the
Partnership Preferred Securities that a holder of Trust Preferred Securities
may receive upon dissolution and liquidation of the Trust, may trade at a
discount to the price that the investor paid to purchase the Trust Preferred
Securities offered hereby. Because holders of Trust Preferred Securities may
receive Partnership Preferred Securities upon the occurrence of a Special
Event, prospective purchasers of Trust Preferred Securities are also making an
investment decision with regard to the Partnership Preferred Securities and
should carefully review all the information regarding the Partnership
Preferred Securities contained herein. See "Supplemental Description of the
Partnership Preferred Securities."
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEES AND THE COMPANY
DEBENTURES
HEI's obligations under the Trust Guarantee, the Partnership Guarantee and
the Investment Guarantees are subordinate and junior in right of payment to
all liabilities of HEI and will rank pari passu with the most senior preferred
stock (if any) issued from time to time by HEI, with each other and with any
guarantee hereafter entered into by HEI in respect of any preferred security
issued by any affiliate of the Company, and its obligations under the Company
Debentures are subordinate and junior in right of payment to all senior
indebtedness of the Company. As of September 30, 1996, senior indebtedness of
HEI (holding company only) aggregated approximately $246 million (exclusive of
contingent amounts under guarantees of approximately $17.5 million of
subsidiary obligations).
HEI is a non-operating holding company and substantially all of the
operating assets of HEI and its consolidated subsidiaries are owned by such
subsidiaries. HEI relies primarily on interest and dividends from such
subsidiaries to meet its obligations for payment of principal of and interest
on its outstanding debt obligations and corporate expenses. Accordingly, HEI's
obligations under the Company Debentures, the Trust Guarantee, the Partnership
Guarantee and the Investment Guarantees will be subordinated to its senior
indebtedness and will be effectively subordinated to all existing and future
indebtedness and liabilities of its subsidiaries. Except for certain
limitations on additional Affiliate Investment Instruments that may be issued
to the Partnership, as described under "Supplemental Description of the
Partnership Preferred Securities--Partnership Investments," there are no terms
in the Trust Preferred Securities, the Partnership Preferred Securities, the
Guarantees or the Debentures that limit the ability of HEI or its subsidiaries
to incur additional indebtedness, including indebtedness that ranks senior to
the Guarantees and the Debentures. See "Supplemental Description of the
Partnership Preferred Securities--Partnership Investments" and "--Investment
Guarantees," "Supplemental Description of the Trust Guarantee" and
"Supplemental Description of the Partnership Guarantee."
ENFORCEMENT OF CERTAIN RIGHTS BY OR ON BEHALF OF HOLDERS OF TRUST PREFERRED
SECURITIES
If a Trust Enforcement Event (as defined herein) occurs and is continuing,
then (a) the holders of Trust Preferred Securities will rely on the
enforcement against HEI by the Property Trustee of its rights, as the holder
of the Partnership Preferred Securities, including the right to direct the
Special Representative (as defined herein) to enforce (i) to the fullest
extent permitted by law, the Partnership's creditors' rights and other rights
with respect to the Affiliate Investment Instruments and the Investment
Guarantees, (ii) the rights of the holders of the Partnership Preferred
Securities under the Partnership Guarantee, and (iii) the rights of the
holders of the Partnership Preferred Securities to receive distributions (only
if and to the extent declared by the General Partner out of funds legally
available therefor) on the Partnership Preferred Securities, and (b) the Trust
Guarantee
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Trustee shall have the right to enforce the terms of the Trust Guarantee,
including the right to enforce the covenant restricting payments by the
Company of dividends and other distributions with respect to any of its
capital stock or Comparable Equity Interests. Under no circumstances, however,
will the Special Representative have authority to cause the General Partner to
declare distributions on the Partnership Preferred Securities. As a result,
although the Special Representative may be able to enforce the Partnership's
creditors' rights to accelerate and receive payments in respect of the
Affiliate Investment Instruments and the Investment Guarantees, the
Partnership would be entitled to reinvest such payments in additional
Affiliate Investment Instruments (subject to satisfying the reinvestment
criteria described under "Supplemental Description of the Partnership
Preferred Securities--Partnership Investments") and in Eligible Debt
Securities, rather than declaring and making distributions on the Partnership
Preferred Securities. See "Supplemental Description of the Trust Preferred
Securities--Trust Enforcement Events."
LIMITED VOTING RIGHTS
Holders of the Trust Preferred Securities will have limited voting rights
and will not be entitled to vote to appoint, remove or replace the Regular
Trustees, or to increase or decrease the number of, Trustees, which voting
rights are vested exclusively in the holder of the Trust Common Securities.
See "Supplemental Description of the Trust Preferred Securities--Voting
Rights" and "Description of the Trust Preferred Securities" in the
accompanying Prospectus.
TRADING CHARACTERISTICS OF TRUST PREFERRED SECURITIES
The price at which the Trust Preferred Securities may trade may not fully
reflect the value of the accumulated but unpaid distributions on the Trust
Preferred Securities (which will equal the accumulated but unpaid
distributions on the Partnership Preferred Securities). In addition, as a
result of the right of the General Partner not to declare current
distributions on the Partnership Preferred Securities, the market price of the
Trust Preferred Securities (which represent undivided beneficial ownership
interests in the Partnership Preferred Securities) may be more volatile than
other similar securities where there is no such right to defer current
distributions. For United States federal income tax purposes, a holder who
disposes of its Trust Preferred Securities will be required to include in
income as ordinary income accumulated but unpaid distributions on the
Partnership Preferred Securities through the date of disposition (to the
extent not previously included in income) and to add such amount to its
adjusted tax basis in its pro rata share of the Partnership Preferred
Securities deemed disposed of. To the extent the selling price is less than
the holder's adjusted tax basis (which will include all accumulated but unpaid
distributions), a holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes. See "Certain Federal Income Tax
Considerations--Income and Deductions" and "--Disposition of Trust Preferred
Securities."
NO PRIOR MARKET FOR THE TRUST PREFERRED SECURITIES
The Trust Preferred Securities constitute a new issue of securities with no
established trading market. The Trust Preferred Securities have been approved
for listing on the New York Stock Exchange, subject to official notice of
issuance. There can be no assurance, however, that an active market for the
Trust Preferred Securities will develop or be sustained in the future.
Although the Underwriters have indicated to the Company that they intend to
make a market in the Trust Preferred Securities, as permitted by applicable
laws and regulations, they are not obligated to do so and may discontinue any
such market-making at any time without notice. Accordingly, no assurance can
be given as to the liquidity of, or trading markets for, the Trust Preferred
Securities.
CONSEQUENCES OF HIGHLY LEVERAGED TRANSACTION
Holders of the Trust Preferred Securities are afforded no protection in the
event of a highly leveraged transaction, a change of control or other similar
transactions involving HEI that may adversely affect such holders. See
"Description of the Junior Subordinated Debt Securities--General" in the
accompanying Prospectus.
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USE OF PROCEEDS
All of the proceeds from the sale of the Trust Securities will be invested
by the Trust in the Partnership Preferred Securities. The Partnership will use
the proceeds from the sale of the Partnership Preferred Securities and the
capital contribution from the General Partner to make investments in the
Debentures and, to a limited extent, certain Eligible Debt Securities. The
Company and any subsidiaries that are issuers of the Debentures will use the
proceeds from the sale of such Debentures to the Partnership, after payment of
the Underwriters' Compensation and other expenses of this offering,
principally to fund investments in or to extend credit to HEI's subsidiaries,
to repay short-term and inter-company debt, and for working capital and other
corporate purposes. Proceeds not immediately so applied by HEI and its
subsidiaries will be temporarily invested in short-term money market
securities.
ACCOUNTING TREATMENT
The financial statements of the Trust and the Partnership will be
consolidated into HEI's consolidated financial statements, with the Trust
Preferred Securities treated as minority interest and shown in HEI's
consolidated balance sheet as "Company-obligated trust preferred securities."
The financial statement footnotes of HEI will describe the terms of the
applicable securities and reflect that the sole asset of the Trust will be the
Partnership Preferred Securities and that the Partnership's principal assets
will consist of the Debentures. It is expected that all future reports filed
by HEI under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), will present information regarding the Trust and the Partnership and
other similar arrangements (if any) in the manner described above. In
addition, if Staff Accounting Bulletin 53 treatment is sought, a footnote to
HEI's audited consolidated financial statements will be added to reflect that
(i) the Common Securities of the Trust are wholly-owned by HEI; (ii) the sole
assets of the Trust are the Partnership Preferred Securities and the sole
assets of the Partnership will be the Debentures and certain Eligible Debt
Securities, in each case specifying principal amount, interest rate and
maturity date of the Debentures held; and (iii) the Guarantees, when taken
together with HEI's obligations under its Debentures and its obligations under
the Trust Agreement, including its obligations to pay costs, expenses, debts
and liabilities of the Trust (other than with respect to the Trust
Securities), and the corresponding obligations of HEI under the Partnership
Guarantee with respect to the Partnership, effectively provide a full and
unconditional guarantee, on a subordinated basis, of amounts due on the Trust
Preferred Securities. See "Selected Consolidated Financial Data."
DESCRIPTION OF HAWAIIAN ELECTRIC INDUSTRIES, INC.
GENERAL
HEI was incorporated in 1981 under the laws of the State of Hawaii and is a
holding company with subsidiaries engaged in the electric utility, savings
bank, freight transportation, real estate development and other businesses,
primarily in the State of Hawaii, and also engaged in the pursuit of
independent power projects and energy services projects in Asia and the
Pacific. HEI's predecessor, Hawaiian Electric Company, Inc. ("HECO"), was
incorporated under the laws of the Kingdom of Hawaii (now the State of Hawaii)
on October 13, 1891. As a result of a 1983 corporate reorganization, HECO
became an HEI subsidiary, and common shareholders of HECO became common
shareholders of HEI.
HECO and its subsidiaries, Maui Electric Company, Limited ("MECO") and
Hawaii Electric Light Company, Inc. ("HELCO"), are regulated operating public
utilities providing the only public utility electric service on the islands of
Oahu, Maui, Lanai, Molokai and Hawaii. HEI also owns directly or indirectly
the following subsidiaries which comprise its principal diversified companies:
HEI Diversified, Inc. ("HEIDI") and its subsidiary, American Savings Bank,
F.S.B. ("ASB") and its subsidiaries; Hawaiian Tug & Barge Corp. ("HTB") and
its subsidiary, Young Brothers, Limited ("YB"); Malama Pacific Corp. ("MPC")
and its subsidiaries; HEI Power Corp. ("HEIPC") and its subsidiaries; and HEI
Investment Corp. ("HEIIC").
ASB, acquired in 1988, is the fourth largest financial institution in Hawaii
based on total assets and the third largest financial institution based on
deposits, in each case as of June 30, 1996, and has 48 retail branches.
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HTB was acquired in 1986 and provides ship assist and charter towing services
and owns YB, a regulated intrastate public carrier of waterborne freight among
the Hawaiian Islands. MPC was formed in 1985 and directly or through
subsidiaries develops and invests in real estate. HEIIC was formed in 1984 and
is a passive investment company which primarily holds investments in leveraged
leases and currently plans no new investments. HEIPC was formed in March 1995
to pursue, directly or through its subsidiaries or affiliates, independent
power projects and energy services projects in Asia and the Pacific.
HEI is a legal entity separate and distinct from its various subsidiaries.
As a holding company with no significant operations of its own, the principal
sources of its funds are dividends or other distributions from its operating
subsidiaries, borrowings and sales of equity. The ability of certain of HEI's
direct and indirect subsidiaries to pay dividends or make other distributions
to HEI, or to make loans or extend credit to or purchase assets from HEI, is
subject to contractual, statutory and regulatory restrictions, including
without limitation the provisions of an agreement with the Hawaii Public
Utilities Commission and the capital requirements imposed by the Office of
Thrift Supervision, as well as restrictions and limitations set forth in debt
instruments, preferred stock resolutions and guarantees. However, HEI
currently does not expect that these restrictions will affect the ability of
HEI to pay its indebtedness or significantly affect the operations of HEI and
its subsidiaries as they are now being conducted.
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS CONCERNING HEI AND ITS SUBSIDIARIES DOES NOT PURPORT TO BE
COMPREHENSIVE. ADDITIONAL INFORMATION CONCERNING THE BUSINESSES AND AFFAIRS OF
HEI AND ITS PRINCIPAL SUBSIDIARIES, INCLUDING PENDING LEGAL AND REGULATORY
PROCEEDINGS, DESCRIPTIONS OF REGULATIONS TO WHICH THESE COMPANIES ARE SUBJECT
AND THEIR CAPITAL REQUIREMENTS AND RESOURCES, IS CONTAINED IN THE DOCUMENTS
INCORPORATED BY REFERENCE IN THE ACCOMPANYING PROSPECTUS. SEE "INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE" IN THE ACCOMPANYING PROSPECTUS.
THIRD QUARTER RESULTS
Consolidated Information. In its Form 10-Q for the quarterly period ended
September 30, 1996, HEI reported consolidated net income of $17.4 million for
the third quarter of 1996, a decrease of 31% compared to $25.2 million for the
same period in 1995, and reported consolidated earnings per common share of
$0.57 for the third quarter of 1996, a decrease of 34% compared to $0.86 per
common share for the third quarter of 1995. Consolidated net income for the
first nine months of 1996 was reported at $57.6 million, a decrease of 7%
compared to $61.9 million for the same period in 1995, and consolidated
earnings per common share for the first nine months of 1996 was $1.91, a
decrease of 10% compared to $2.13 per common share for the first nine months
of 1995.
On September 30, 1996, President Clinton signed into law the Deposit
Insurance Funds Act of 1996, which authorized a special, one-time deposit-
insurance premium assessment (the "FDIC Assesment") by the Federal Deposit
Insurance Corporation (the "FDIC"). In October 1996, the FDIC set the FDIC
Assessment for Savings Association Insurance Fund ("SAIF") insured deposits
held as of March 31, 1995 at 65.7 cents per $100 of deposits. ASB's assessment
was estimated to be $8.3 million after-tax and was accrued in September 1996.
Additionally, in December 1995, a rate order by the Public Utilities
Commission of the State of Hawaii (the "PUC Order") reduced the allowed return
on equity for HECO to 11.4% and required a refund to customers retroactive to
January 1, 1995. If the adjusted rates had been in effect at the beginning of
1995, net income for the third quarter and nine months ended September 30,
1995 would have been reduced by $1.5 million and $4.1 million, respectively.
Adjusted for the effects of the FDIC Assessment and the PUC Order discussed
above, HEI's consolidated net income for the third quarter of 1996 was $25.7
million, an increase of 9% compared to $23.7 million for the same period in
1995, and consolidated earnings per common share were $0.84 for the third
quarter of 1996 compared to $0.81 per common share for the third quarter of
1995. Also adjusted for the effects of the FDIC Assessment and the PUC Order
discussed above, HEI's consolidated net income for the first nine months of
1996 was $65.9 million, an increase of 14% compared to $57.8 million for the
same period in 1995, and consolidated earnings per common share for the first
nine months of 1996 was $2.18, compared to $1.99 per common share
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for the first nine months of 1995. These increases in adjusted consolidated
net income were primarily due to higher operating income for all segments,
partly offset by higher interest expense due to higher average borrowings and
lower allowance for funds used during construction.
For the first nine months of 1996, consolidated net cash provided by
operating activities was $121 million. Consolidated net cash used in investing
activities was $370 million, largely due to ASB's loan originations, net of
repayments, and consolidated HECO's capital expenditures. Consolidated net
cash provided by financing activities was $212 million, as a result of several
factors, including net increases in long-term debt, advances from Federal Home
Loan Bank of Seattle and securities sold under agreements to repurchase,
partly offset by decreases in deposit liabilities and short-term borrowings
and by common stock dividends.
HEI's total consolidated assets amounted to $5.9 billion as of September 30,
1996, compared to $5.6 billion as of December 31, 1995. Total consolidated
liabilities amounted to $5.1 billion as of September 30, 1996, compared to
$4.8 billion as of December 31, 1995. HEI's common stock equity increased from
$730 million as of December 31, 1995 to $762 million as of September 30, 1996.
Segment Information. Consolidated net income for the electric utilities,
adjusted for the effects of the PUC Order, increased 2% from $23.3 million for
the third quarter of 1995 to $23.8 million for the third quarter of 1996, and
increased 13% from $54.1 million for the first nine months of 1995 to $61.3
million for the first nine months of 1996. The increase in adjusted
consolidated net income is primarily attributable to higher revenues from
increased sales of kilowatthours of electricity and from higher rates allowed
by the PUC, partly offset by higher expenses and higher interest expense due
to higher average borrowings and lower allowance for funds used during
construction. Average fuel oil price per barrel increased from $21.26 for the
third quarter of 1995 to $24.31 for the third quarter of 1996, and from $20.57
for the first nine months of 1995 to $23.35 for the first nine months of 1996.
Under energy adjustment clauses in the rate schedules of the electric
utilities, changes in fuel oil costs are automatically passed on to customers.
Consolidated net income from ASB and its subsidiaries, adjusted to reverse
the effects of the FDIC Assessment, increased 1% from $5.6 million for the
third quarter of 1995 to $5.7 million for the third quarter of 1996, and
increased 1% from $17.3 million for the first nine months of 1995 to $17.4
million for the first nine months of 1996. The increase in adjusted
consolidated net income was primarily due to higher net interest income partly
offset by higher compensation expense and an increase in allowance for loan
losses. The increase in adjusted consolidated net income for ASB was achieved
despite a narrowing in ASB's interest rate spread from 2.84% for the third
quarter of 1995 to 2.76% for the third quarter of 1996 and from 2.93% for the
first nine months of 1995 to 2.80% for the first nine months of 1996. The
decrease in ASB's interest rate spread, the difference between the weighted
average yield on interest-earning assets and the weighted average rate on
interest-bearing liabilities, is due to several factors. One of the primary
factors is the flattening of the yield curve that began in 1995. Another
factor is the shift from deposit liabilities to more expensive alternatives,
such as borrowings from the Federal Home Loan Bank of Seattle or selling
securities under agreements to repurchase. Deposits have traditionally been
the principal source of ASB's funds for lending, meeting liquidity
requirements and making investments. However, deposits have declined in recent
years. Deposits at ASB decreased by $83 million and $48 million for the three
and nine months ended September 30, 1996, respectively, compared with
increases of $14 million and $48 million for the three and nine months ended
September 30, 1995, respectively.
The freight transportation subsidiaries recorded operating income of $1.1
million and $2.0 million for the third quarter and first nine months of 1996,
respectively, compared with $0.9 million and $2.4 million for the same periods
of 1995. The increase in operating income for the third quarter of 1996 was
primarily due to higher general freight and interstate revenue. However,
freight transportation income continues to be negatively impacted by the slow
economic activity and slow construction industry on the islands the freight
transportation subsidiaries serve in Hawaii.
The real estate subsidiaries recorded an operating loss of $0.3 million and
operating income of $37,000 for the third quarter and first nine months of
1996, respectively, compared with operating losses of $0.3 million and
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$0.9 million for the same periods of 1995. In April 1996, MPC sold land in
downtown Honolulu for a pretax gain of $1.1 million. Other real estate
development activities continue to be negatively impacted by the slow real
estate market in Hawaii, which is not expected to rebound in the near term.
MPC is focusing on reducing real estate investments while increasing cash flow
by developing and selling existing projects. There are currently no plans to
invest in new projects.
HEIPC and its subsidiaries continue to pursue independent power and energy
services projects in Asia and the Pacific. Consolidated operating losses,
including startup costs for the first nine months of 1996, were $1.6 million,
compared with $1.0 million for the same period of 1995. In September 1996, an
HEIPC subsidiary entered into an energy conversion agreement with the Guam
Power Authority to rehabilitate, operate and maintain for approximately 20
years, two 26.5-megawatt (50-megawatt net) units in Guam, with total
rehabilitation costs estimated at about $12 million, about $10 million of
which is planned to be funded through nonrecourse financing. HEIPC also
continues to pursue development of a 22-megawatt hydroelectric plant in the
Philippines and other projects in Asia and the Pacific.
FINANCING REQUIREMENTS
Total HEI consolidated financing requirements for 1997 through 2001,
including net capital expenditures (which excludes the allowance for funds
used during construction and capital expenditures funded by third-party cash
contributions in aid of construction), debt retirements (excluding ASB's
repayments of advances from FHLB of Seattle and securities sold under
agreements to repurchase) and sinking fund requirements, are currently
estimated to total $1.0 billion. Of this amount, approximately $0.8 billion is
for net capital expenditures (mostly relating to the electric utilities' net
capital expenditures described below). HEI's consolidated internal sources,
after the payment of HEI dividends, are expected to provide approximately 66%
of the consolidated financing requirements, with debt and equity financing
providing the remaining requirements.
Over the five-year period 1997 through 2001, HEI estimates that, in addition
to retained earnings and the proceeds from the sale of the Trust Preferred
Securities offered hereby, it will require approximately $157 million in
additional equity, which is expected to be provided by HEI's Dividend
Reinvestment and Stock Purchase Plan, the Hawaiian Electric Industries
Retirement Saving Plan and other offerings pursuant to the registration
statement of which this Prospectus Supplement is a part. The additional equity
will be used primarily to reduce HEI's overall borrowing level and to fund the
common equity requirements of its subsidiaries, such as the electric
utilities' common equity requirements related to their capital expenditure
programs. Additional equity in excess of the $157 million described above, and
additional debt financing, may be required by reason of activities of the
Company's subsidiaries not included in the 1997-2001 forecast, such as the
development of additional independent power projects and energy services
projects by HEIPC in Asia and the Pacific.
HEI's forecasts of financing requirements are reviewed periodically by
management and may change significantly as a result of many considerations,
including but not limited to changes in the operating results of its
subsidiaries and their respective financing requirements.
CAPITAL EXPENDITURE PROGRAMS
Capital expenditures of HEI's utility subsidiaries include costs of projects
which are required to meet expected load growth, to improve reliability, and
to replace and upgrade existing equipment.
HECO and its subsidiaries' current forecast of net capital expenditures for
1997 through 2001, which excludes the allowance for funds used during
construction and capital expenditures funded by third-party contributions in
aid of construction, is approximately $711 million. Approximately 65% of
forecast gross capital expenditures, including allowance for funds used during
construction and third-party contributions in aid of construction, is for
transmission and distribution projects, with the remaining 35% primarily for
generation projects.
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Capital expenditure estimates and the timing of construction projects are
reviewed periodically by management and may change significantly as a result
of many considerations, including changes in economic conditions, changes in
forecasts of kilowatthour sales and peak load, the availability of alternate
energy and purchased power, the availability of generating sites and
transmission and distribution corridors, the ability to obtain adequate and
timely rate relief, escalations in construction costs, demand-side management
programs and requirements of environmental and other regulatory and permitting
authorities.
DESCRIPTION OF THE TRUST
The Trust is a statutory business trust created under the Delaware Business
Trust Act, as amended (the "Trust Act"), pursuant to (i) a trust agreement,
dated as of December 19, 1996, executed by HEI, as sponsor, and the trustees
of the Trust (the "Trustees") and (ii) the filing of a certificate of trust
with the Secretary of State of the State of Delaware on December 23, 1996.
Such trust agreement will be amended and restated in its entirety (as so
amended and restated, the "Trust Agreement") substantially in the form filed
as an exhibit to the Registration Statement (the "Registration Statement") of
which this Prospectus Supplement and the accompanying Prospectus form a part.
The Trust Agreement will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Upon issuance
of the Trust Preferred Securities, the purchasers thereof will beneficially
own all of the Trust Preferred Securities. See "Supplemental Description of
the Trust Preferred Securities--Book-Entry Only Issuance--The Depository Trust
Company." HEI will acquire all of the Common Securities of the Trust in an
aggregate stated liquidation amount of not less than 3 percent of the total
capital of the Trust. The Trust will use all proceeds derived from the
issuance of the Trust Common Securities and the Trust Preferred Securities to
purchase the Partnership Preferred Securities from the Partnership, and
accordingly the assets of the Trust will consist solely of the Partnership
Preferred Securities. The Trust exists for the exclusive purposes of (i)
issuing the Trust Securities representing undivided beneficial interests in
the assets of the Trust, (ii) investing the gross proceeds of the Trust
Securities in the Partnership Preferred Securities and (iii) engaging in only
those other activities necessary or incidental thereto.
Pursuant to the Trust Agreement, there will be five Trustees. Three of the
Trustees (the "Regular Trustees") will be persons who are employees or
officers of, or who are affiliated with, HEI. Robert F. Clarke, President of
HEI, Robert F. Mougeot, Financial Vice President of HEI, and Constance H. Lau,
Treasurer of HEI, will be the initial Regular Trustees. The fourth trustee
will be a financial institution that is unaffiliated with HEI, which trustee
will serve as institutional trustee under the Trust Agreement and as indenture
trustee for the purposes of compliance with the provisions of the Trust
Indenture Act (the "Property Trustee"). Initially, The Bank of New York will
be the Property Trustee until removed or replaced by the holder of the Trust
Common Securities. For purposes of compliance with the provisions of the Trust
Indenture Act, The Bank of New York will also act as trustee under the Trust
Guarantee (the "Trust Guarantee Trustee"), as trustee under the indenture
applicable to the Company Debentures (the "Debt Trustee") and as trustee under
the Partnership Guarantee and the Investment Guarantees. The fifth trustee
will be an entity that maintains its principal place of business in the State
of Delaware (the "Delaware Trustee"). Initially, The Bank of New York
(Delaware), an affiliate of the initial Property Trustee, will act as Delaware
Trustee. The address of The Bank of New York is 101 Barclay Street, 21st
Floor, New York, N.Y. 10286--Attn: Corporate Trust Trustee Administration. The
address of The Bank of New York (Delaware) is White Clay Center, Route 273,
Newark, Delaware 19711--Attn: Corporate Trust Department. See "Description of
the Trust Guarantees" in the accompanying Prospectus and "Supplemental
Description of the Trust Preferred Securities--Voting Rights," "--Information
Concerning the Property Trustee" and "Supplemental Description of the Trust
Guarantee" herein.
The Property Trustee will hold legal title to the Partnership Preferred
Securities for the benefit of the holders of the Trust Securities and will
have the power to exercise all rights, powers and privileges with respect to
the Partnership Preferred Securities under the agreement of limited
partnership (as amended and restated, the "Agreement of Limited Partnership")
to be entered into by Hycap, as General Partner, and the Trust as the holder
of the limited partner interests consisting of the Partnership Preferred
Securities. In addition, the Property
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Trustee will maintain exclusive control of a segregated noninterest bearing
bank account (the "Property Account") to hold all payments made in respect of
the Partnership Preferred Securities for the benefit of the holders of the
Trust Securities. The Trust Guarantee Trustee will hold the Trust Guarantee
for the benefit of the holders of the Trust Preferred Securities. The Company,
as the holder of all the Trust Common Securities, will have the right to
appoint, remove or replace any of the Trustees and to increase or decrease the
number of trustees; provided, however, that there must be at least one
Delaware Trustee, at least one Property Trustee (which may also be the
Delaware Trustee) and at least one Regular Trustee. The Company will pay all
fees and expenses related to the organization and operations of the Trust
(including any taxes, duties, assessments or governmental charges of whatever
nature (other than withholding taxes or taxes or charges imposed by reason of
the transfer of the Trust Preferred Securities or beneficial interests
therein) imposed by the United States or any other domestic taxing authority
upon the Trust) and the offering of the Trust Preferred Securities. The
Company will also be responsible for all debts and obligations of the Trust
(other than with respect to the Trust Securities).
For so long as the Trust Preferred Securities remain outstanding, the
Company will covenant (i) to maintain direct ownership of 100% of the Trust
Common Securities, (ii) to cause the Trust to remain a statutory business
trust and not to voluntarily dissolve, wind-up, liquidate or be terminated,
except as permitted by the Trust Agreement, (iii) to use its commercially
reasonable efforts to ensure that the Trust will not be an "investment
company" for purposes of the 1940 Act and (iv) to take no action which would
be reasonably likely to cause the Trust to be classified as an association or
a publicly traded partnership taxable as a corporation for United States
federal income tax purposes.
The rights of the holders of the Trust Preferred Securities, including
economic rights, rights to information and voting rights, are set forth in the
Trust Agreement, the Trust Act and the Trust Indenture Act (which is
incorporated by reference in the Trust Agreement and the Trust Guarantee). See
"Supplemental Description of the Trust Preferred Securities."
The location of the principal executive office of the Trust is 101 Barclay
Street, 21st Floor, New York, New York 10286, telephone number (212) 815-5084.
Information concerning the Trust may also be obtained from Hawaiian Electric
Industries, Inc., Honolulu, Hawaii 96813, telephone number (808) 543-5662.
DESCRIPTION OF THE PARTNERSHIP
The Partnership, HEI Preferred Funding, LP, is a limited partnership formed
on December 23, 1996, under the Delaware Revised Uniform Limited Partnership
Act, as amended (the "Partnership Act"). Pursuant to the certificate of
limited partnership, as amended, and the Agreement of Limited Partnership,
Hycap is now the sole General Partner of the Partnership. The Agreement of
Limited Partnership will be substantially in the form filed as an exhibit to
the Registration Statement of which this Prospectus Supplement and the
accompanying Prospectus form a part. Upon the issuance of the Partnership
Preferred Securities, which securities represent limited partner interests in
the Partnership, the Trust will be the sole limited partner of the
Partnership. Contemporaneously with the issuance and sale of the Partnership
Preferred Securities, the General Partner will contribute capital to the
Partnership in an amount that will establish its initial capital account at a
level equal to at least 15% of the total capital of the Partnership.
The Partnership will be managed by the General Partner and exists for the
sole purpose of (i) issuing its partnership interests, (ii) investing the
proceeds thereof in securities of HEI and its subsidiaries (the "Affiliate
Investment Instruments," which initially will consist of the Debentures) and
certain Eligible Debt Securities, (iii) to receive interest and other payments
on the Affiliate Investment Instruments and the Eligible Debt Securities held
by the Partnership from time to time, (iv) to make distributions on the
Partnership Preferred Securities and distributions on the General Partner's
interest in the Partnership if, as and when declared by the General Partner in
its sole discretion, (v) subject to the restrictions and conditions contained
in the Agreement of Limited Partnership, to make additional investments in
Affiliate Investment Instruments and Eligible Debt
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Securities and to dispose of any such investments and (vi) except as otherwise
limited in the Agreement of Limited Partnership, to enter into, make and
perform all contracts and other undertakings, and engage in those activities
and transactions as the General Partner may reasonably deem necessary or
advisable for carrying out the purposes of the Partnership. The Partnership
may not engage in any other activities or operations except as contemplated by
the preceding sentence. To the extent that aggregate payments to the
Partnership on the Affiliate Investment Instruments and the Eligible Debt
Securities exceed distributions payable with respect to the Partnership
Preferred Securities, the Partnership may at times have excess funds which
will be allocated to and may, in the General Partner's sole discretion, be
distributed to the General Partner.
For so long as the Partnership Preferred Securities remain outstanding,
Hycap will covenant in the Agreement of Limited Partnership (i) to remain the
sole general partner of the Partnership and to maintain direct ownership of
100% of the General Partner's interest in the Partnership, which interest will
at all times represent at least 1% of the total capital of the Partnership,
(ii) to cause the Partnership to remain a limited partnership and not to
voluntarily dissolve, liquidate, wind-up or be terminated, except as permitted
by the Agreement of Limited Partnership, (iii) to use its commercially
reasonable efforts to ensure that the Partnership will not be an "investment
company" for purposes of the 1940 Act and (iv) to take no action that would be
reasonably likely to cause the Partnership to be classified as an association
or a publicly traded partnership taxable as a corporation for United States
federal income tax purposes. In the Partnership Guarantee, HEI will, among
other things, covenant to directly or indirectly maintain ownership of 100% of
the ownership of the General Partner's interest in the Partnership.
The rights of the holders of the Partnership Preferred Securities, including
economic rights, rights to information and voting rights, are set forth in the
Agreement of Limited Partnership and the Partnership Act. See "Supplemental
Description of the Partnership Preferred Securities."
The Agreement of Limited Partnership provides that the General Partner will
have liability for the fees and expenses of the Partnership (including any
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes or taxes or charges imposed by reason of the transfer
of the Partnership Preferred Securities) imposed by the United States or any
other domestic taxing authority upon the Partnership) and be responsible for
all debts and obligations of the Partnership (other than with respect to the
Partnership Preferred Securities). These obligations of the General Partner
will be guaranteed by HEI in the Partnership Guarantee. Under Delaware law,
assuming a limited partner in a Delaware limited partnership such as the
Partnership (i.e., a holder of the Partnership Preferred Securities) does not
participate in the control of the business of the limited partnership, such
limited partner will not be personally liable for the debts, obligations and
liabilities of such limited partnership, whether arising in contract, tort or
otherwise, solely by reason of being a limited partner of such limited
partnership (subject to any obligation such limited partner may have to repay
any funds that may have been wrongfully distributed to it).
The location of the principal executive offices of the Partnership is c/o
Hycap Management, Inc., 300 Delaware Avenue, Suite 1704, Wilmington, Delaware
19801, telephone number (302) 427-5738. Information concerning the Partnership
may also be obtained from Hawaiian Electric Industries, Inc., 900 Richards
Street, Honolulu, Hawaii 96813, telephone number (808) 543-5662.
SUPPLEMENTAL DESCRIPTION OF THE TRUST PREFERRED SECURITIES
The Trust Preferred Securities will be issued pursuant to the terms of the
Trust Agreement. The Trust Agreement will be qualified as an indenture under
the Trust Indenture Act. The Property Trustee, The Bank of New York, will act
as trustee for the Trust Preferred Securities under the Trust Agreement for
purposes of compliance with the provisions of the Trust Indenture Act. The
terms of the Trust Preferred Securities will include those stated in the Trust
Agreement and those made part of the Trust Agreement by the Trust Act and the
Trust Indenture Act.
The following summary of certain terms and provisions of the Trust Preferred
Securities does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the Trust Agreement (a copy of
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which is filed as an exhibit to the Registration Statement of which this
Prospectus Supplement and the accompanying Prospectus form a part), the Trust
Act and the Trust Indenture Act.
GENERAL
The Trust Preferred Securities will be issued in fully registered form
without coupons. Trust Preferred Securities will not be issued in bearer form.
See "--Book-Entry Only Issuance--The Depository Trust Company."
The Trust Agreement authorizes the Regular Trustees of the Trust to cause
the Trust to issue the Trust Preferred Securities, which represent undivided
beneficial ownership interests in the assets of the Trust. Legal title to the
Partnership Preferred Securities to be purchased by the Trust will be held by
the Property Trustee for the benefit of the holders of the Trust Securities.
The Trust Agreement does not permit the Trust to acquire any assets other than
the Partnership Preferred Securities, issue any securities other than the
Trust Securities or incur any indebtedness. The payment of distributions out
of money held by the Trust and payments out of money held by the Trust upon
redemption of the Trust Preferred Securities or liquidation of the Trust are
guaranteed by the Company to the extent described under "Supplemental
Description of the Trust Guarantee." The Trust Guarantee will be held by The
Bank of New York, the Trust Guarantee Trustee, for the benefit of the holders
of the Trust Preferred Securities. The Trust Guarantee does not cover payment
of distributions when the Trust does not have sufficient funds that are
legally available to pay such distributions. In such event, holders of Trust
Preferred Securities will have the remedies described below under "--Trust
Enforcement Events."
DISTRIBUTIONS
The distribution rate on Trust Preferred Securities will be fixed at a rate
per annum of % of the stated liquidation amount of $25 per Trust Preferred
Security and will be payable if, as and when the Trust has funds legally
available for payment. Distributions not paid on the scheduled payment date
will accumulate and compound quarterly at a rate per annum equal to %. The
term "distribution" as used herein includes any such compounded amounts unless
otherwise stated or the context otherwise requires. The amount of
distributions payable for any period will be computed on the basis of a 360-
day year of twelve 30-day months, except that, if such period is shorter than
a full 90-day quarter, distributions will be computed on the basis of the
actual number of days elapsed in such 90-day quarter.
Distributions on the Trust Preferred Securities will be cumulative, will
accumulate from the date of initial issuance and will be payable quarterly in
arrears on each March 31, June 30, September 30 and December 31, commencing
March 31, 1997, if, as and when the Trust has funds legally available for
payment, by the Property Trustee, except as otherwise described below. If
distributions are not paid when regularly scheduled, the accumulated
distributions shall be paid to the holders of record of Trust Preferred
Securities as they appear on the books and records of the Trust on the record
date with respect to the actual payment date for the Trust Preferred
Securities, which will correspond to the actual payment date fixed by the
Partnership with respect to the payment of cumulative distributions on the
Partnership Preferred Securities not declared and paid when regularly
scheduled. The initial holder of record of the Trust Preferred Securities will
be DTC or its nominee. See "--Book-Entry Only Issuance--The Depository Trust
Company."
Distributions on the Trust Preferred Securities will be made to the extent
that the Trust has funds legally available for the payment of such
distributions in the Property Account. Amounts available to the Trust for
distribution to the holders of the Trust Preferred Securities will be limited
to payments received by the Trust from the Partnership with respect to the
Partnership Preferred Securities or from the Company under the Partnership
Guarantee or the Trust Guarantee. Distributions on the Partnership Preferred
Securities will be paid only if, as and when declared in the sole discretion
of the General Partner of the Partnership. Pursuant to the Agreement of
Limited Partnership, the General Partner is not obligated to declare
distributions on the Partnership Preferred Securities at any time, including
upon or following a Partnership Enforcement Event. See
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"Supplemental Description of Partnership Preferred Securities--Partnership
Enforcement Events." If the Property Trustee, as the holder of the Partnership
Preferred Securities for the benefit of the holders of the Trust Securities,
receives written notice of any determination by the General Partner not to pay
distributions on the Partnership Preferred Securities, the Property Trustee
shall give notification of such determination to such holders.
The assets of the Partnership consist only of Affiliate Investment
Instruments (which initially will be the Debentures) and certain Eligible Debt
Securities. To the extent that the issuers (and, where applicable, the Company
as an issuer and as guarantor) of the securities in which the Partnership
invests, defer or fail to make any payment in respect of such securities (or,
if applicable, such guarantees), the Partnership may not have sufficient funds
legally available to pay and may not declare or pay distributions on the
Partnership Preferred Securities. To the extent that the Partnership does not
declare and pay distributions on the Partnership Preferred Securities out of
funds legally available for distribution, the Trust will not have sufficient
funds to make corresponding distributions on the Trust Preferred Securities,
in which event the Trust Guarantee will not apply to such distributions until
the Trust has sufficient funds legally available therefor. See "Supplemental
Description of the Partnership Preferred Securities--Distributions" and
"Supplemental Description of the Trust Guarantee." In addition, as described
under "Risk Factors--Insufficient Income or Assets Available to Partnership,"
the Partnership may not have sufficient funds legally available to pay current
or liquidating distributions on the Partnership Preferred Securities if (i) at
any time that the Partnership is receiving current payments in respect of the
securities held by the Partnership (including the Debentures), the General
Partner, in its sole discretion, does not declare distributions on the
Partnership Preferred Securities and the Partnership receives insufficient
amounts to pay the additional compounded distributions that will accumulate in
respect of the Partnership Preferred Securities, (ii) the Partnership
reinvests the proceeds received in respect of the Debentures upon their
retirement or at their maturities in Affiliate Investment Instruments that do
not generate income in an amount that is sufficient to pay full distributions
in respect of the Partnership Preferred Securities or (iii) the Partnership
invests in equity or debt securities of Investment Affiliates that are not
guaranteed by the Company and that cannot be liquidated by the Partnership for
an amount sufficient to pay such distributions in full.
Distributions on the Trust Preferred Securities will be payable to the
holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which will be one Business Day prior to the relevant
payment dates. Such distributions will be paid through the Property Trustee
who will hold amounts received in respect of the Partnership Preferred
Securities in the Property Account for the benefit of the holders of the Trust
Preferred Securities. Subject to any applicable laws and regulations and the
provisions of the Trust Agreement, each such payment will be made as described
under "--Book-Entry Only Issuance--The Depository Trust Company" below. In the
event that the Trust Preferred Securities do not remain in book-entry only
form, the relevant record dates shall be the 15th day of the month of the
relevant payment dates. In the event that any date on which distributions are
payable on the Trust Preferred Securities is not a Business Day, payment of
the distribution payable on such date will be made on the next succeeding day
which is a Business Day (without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day (without any reduction in interest or other payments in respect
of such early payment), in each case with the same force and effect as if made
on such date. A "Business Day" shall mean any day other than a day on which
banking institutions in the City of New York are authorized or required by law
to close.
TRUST ENFORCEMENT EVENTS
The occurrence, at any time, of (i) arrearages on distributions on the Trust
Preferred Securities that shall exist for six consecutive quarterly
distribution periods, (ii) a default by the Company in respect of any of its
obligations under the Trust Guarantee or (iii) a Partnership Enforcement Event
under the Agreement of Limited Partnership will constitute an enforcement
event under the Trust Agreement with respect to the Trust Preferred Securities
(a "Trust Enforcement Event"); provided, that pursuant to the Trust Agreement,
the holder of the Trust Common Securities will be deemed to have waived any
Trust Enforcement Event and its consequences with respect to the Trust Common
Securities until all Trust Enforcement Events with respect to the Trust
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Preferred Securities have been cured, waived or otherwise eliminated. Until
such Trust Enforcement Events with respect to the Trust Preferred Securities
have been so cured, waived or otherwise eliminated, the Property Trustee will
be deemed to be acting solely on behalf of the holders of the Trust Preferred
Securities, and only the holders of the Trust Preferred Securities will have
the right to direct the Property Trustee with respect to certain matters under
the Trust Agreement and, therefore, the Special Representative with respect to
certain matters under the Agreement of Limited Partnership. See "Supplemental
Description of the Partnership Preferred Securities--Partnership Enforcement
Events" for a description of the events which will trigger the occurrence of a
Partnership Enforcement Event.
Upon the occurrence of a Trust Enforcement Event, (a) the Property Trustee,
as the holder of the Partnership Preferred Securities, shall have the right to
enforce the terms of the Partnership Preferred Securities, including the right
to direct the Special Representative to enforce (i) to the fullest extent
permitted by law, the Partnership's creditors' rights and other rights with
respect to the Affiliate Investment Instruments and the Investment Guarantees,
(ii) the rights of the holders of the Partnership Preferred Securities under
the Partnership Guarantee and (iii) the rights of the holders of the
Partnership Preferred Securities to receive distributions (only if and to the
extent declared by the General Partner in its sole discretion out of funds
legally available therefor) on the Partnership Preferred Securities, and (b)
the Trust Guarantee Trustee shall have the right to enforce the terms of the
Trust Guarantee, including the right to enforce the covenant restricting the
payment of dividends and certain other distributions by the Company.
If the Property Trustee fails to enforce its rights under the Partnership
Preferred Securities after a holder of Trust Preferred Securities has made a
written request, such holder of Trust Preferred Securities may, to the fullest
extent permitted by law, directly institute a legal proceeding against the
General Partner and the Special Representative to enforce the Property
Trustee's rights under the Partnership Preferred Securities without first
instituting any legal proceeding against the Property Trustee, the Trust or
any other person or entity. In addition, for so long as the Trust holds any
Partnership Preferred Securities, if the Special Representative fails to
enforce its rights on behalf of the Partnership under the Affiliate Investment
Instruments or the Investment Guarantees after a holder of record of Trust
Preferred Securities has made a written request, such holder of Trust
Preferred Securities, to the fullest extent permitted by law, may on behalf of
the Partnership directly institute a legal proceeding against the Investment
Affiliates to enforce the rights of the Special Representative and the
Partnership under the Affiliate Investment Instruments and against the Company
under the applicable Investment Guarantee, without first instituting any legal
proceeding against the Property Trustee, the Trust, the Special
Representative, the Partnership or any other person or entity. In any event,
for so long as the Trust is the holder of any Partnership Preferred
Securities, if a Trust Enforcement Event has occurred and is continuing and
such event is attributable to the failure of an Investment Affiliate to make
any required payment when due on any applicable Affiliate Investment
Instrument or the failure of the Company to make any required payment when due
on any Investment Guarantee, then a holder of Trust Preferred Securities may,
to the fullest extent permitted by law, on behalf of the Partnership directly
institute a proceeding against such Investment Affiliate with respect to such
Affiliate Investment Instrument or against the Company with respect to any
such Investment Guarantee, in each case for enforcement of payment.
Under no circumstances, however, shall the Special Representative have
authority to cause the General Partner to declare distributions on the
Partnership Preferred Securities. As a result, although the Special
Representative may be able to enforce the Partnership's creditors' rights to
accelerate and receive payments in respect of the Affiliate Investment
Instruments and the Investment Guarantees, the Partnership would be entitled
to reinvest such payments in additional Affiliate Investment Instruments,
subject to satisfying the reinvestment criteria described under "Supplemental
Description of the Partnership Preferred Securities--Partnership Investments,"
and in Eligible Debt Securities, rather than declaring and making
distributions on the Partnership Preferred Securities.
The Company and the Trust are each required to file annually with the
Property Trustee an officer's certificate as to its compliance with all
conditions and covenants under the Trust Agreement.
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REDEMPTION
The Partnership Preferred Securities may be redeemed by the Partnership at
the option of the General Partner, in whole or in part, subject to
satisfaction of certain conditions, at any time on or after February , 2002,
or at any time in certain circumstances, in whole, upon the occurrence of a
Partnership Special Event, in either case at an amount per Partnership
Preferred Security of $25 plus accumulated and unpaid distributions thereon to
the date fixed for redemption. Upon the redemption of the Partnership
Preferred Securities (either at the option of the General Partner or pursuant
to a Partnership Special Event), the proceeds from such redemption shall
simultaneously be applied pro rata to redeem Trust Securities having an
aggregate liquidation amount equal to the aggregate liquidation preference of
the redeemed Partnership Preferred Securities at the Redemption Price;
provided, that holders of the Trust Preferred Securities shall be given not
less than 30 nor more than 60 days' notice of such redemption. See
"Supplemental Description of the Partnership Preferred Securities--Optional
Redemption," "--Partnership Special Event Redemption" and"--Redemption
Procedures."
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), the Company or its subsidiaries may at
any time and from time to time purchase outstanding Trust Preferred Securities
by tender, in the open market or by private agreement.
TRUST SPECIAL EVENT REDEMPTION OR DISTRIBUTION
If, at any time, a Trust Tax Event or a Trust Investment Company Event (each
as defined below, and each a "Trust Special Event") shall occur and be
continuing, the Regular Trustees shall, unless the Partnership Preferred
Securities are redeemed in the limited circumstances described below, within
90 days following the occurrence of such Trust Special Event elect to either
(i) dissolve the Trust upon not less than 30 nor more than 60 days' notice
with the result that, after satisfaction of creditors of the Trust, if any,
Partnership Preferred Securities (which will have an aggregate liquidation
preference equal to the aggregate stated liquidation amount of, a distribution
rate identical to the distribution rate of, accumulated and unpaid
distributions equal to accumulated and unpaid distributions on, and a record
date for payment the same as, the Trust Preferred Securities and the Trust
Common Securities outstanding at such time) will be distributed on a pro rata
basis to the holders of the Trust Preferred Securities and the Trust Common
Securities in liquidation of such holders' interests in the Trust; provided,
however, that if at the time there is available to the Trust the opportunity
to eliminate, within such 90-day period, the Trust Special Event by taking
some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure which in the sole judgment of
the Company has or will cause no adverse effect on the Trust, the Partnership,
the Company or the holders of the Trust Preferred Securities and will involve
no material cost, the Trust will pursue such measure in lieu of dissolution or
(ii) cause the Trust Preferred Securities to remain outstanding, provided that
in the case of this clause (ii), the Company shall pay any and all expenses
incurred by or payable by the Trust attributable to the Trust Special Event.
Furthermore, if in the case of the occurrence of a Trust Tax Event, the
Regular Trustees have received an opinion (a "Trust Redemption Tax Opinion")
of recognized independent tax counsel (which may be counsel for the Company)
experienced in such matters that there has been a Trust Tax Event and,
following such Trust Tax Event, there is more than an insubstantial risk that
interest payable by one or more of the Investment Affiliates with respect to
the Affiliate Investment Instrument that is a debt instrument issued by such
Investment Affiliate is not, or will not be, deductible by such Investment
Affiliate for United States federal income tax purposes even if the
Partnership Preferred Securities were distributed to the holders of the Trust
Preferred Securities and Trust Common Securities in liquidation of such
holders' interests in the Trust as described above, then the General Partner
shall have the right, within 90 days following the occurrence of such Trust
Tax Event, to elect to cause the Partnership to redeem the Partnership
Preferred Securities in whole (but not in part) for cash upon not less than
30 nor more than 60 days' notice, and promptly following such redemption the
Trust Preferred Securities and Trust Common Securities will be redeemed by the
Trust at the Redemption Price.
"Trust Tax Event" means that the Company shall have requested and received
and shall have delivered to the Regular Trustees an opinion of recognized
independent tax counsel (which may be counsel to the Company) experienced in
such matters (a "Trust Dissolution Tax Opinion") to the effect that there has
been (a) an amendment to, change in or announced proposed change in the laws
(or any regulations thereunder) of the
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United States or of any State or the District of Columbia or of any political
subdivision or taxing authority thereof or therein, (b) a judicial decision
interpreting, applying or clarifying such laws or regulations, (c) an
administrative pronouncement or action that represents an official position
(including a clarification of an official position) of the governmental
authority or regulatory body making such administrative pronouncement or taking
such action, or (d) a threatened challenge asserted in connection with an audit
of the Company or any of its subsidiaries, the Partnership or the Trust, or a
threatened challenge asserted in writing against any other taxpayer that has
raised capital through the issuance of securities that are substantially
similar to the Debentures, the Partnership Preferred Securities or the Trust
Preferred Securities, that occurs on or after the date of this Prospectus
Supplement (collectively a "Tax Action") and that results in there being more
than an insubstantial risk that (i) the Trust is or will be subject to United
States federal income tax with respect to income accumulated or received on the
Partnership Preferred Securities, (ii) the Trust is or will be subject to more
than a de minimis amount of other taxes, duties or other governmental charges
or (iii) interest payable by an Investment Affiliate with respect to the
Affiliate Investment Instrument that is a debt instrument issued by such
Investment Affiliate is not, or will not be, deductible by such Investment
Affiliate for United States federal income tax purposes.
"Trust Investment Company Event" means that the Company shall have requested
and received and shall have delivered to the Regular Trustees an opinion of
recognized independent legal counsel (which may be counsel to the Company)
experienced in such matters to the effect that, as a result of the occurrence
on or after the date of this Prospectus Supplement of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an "investment company" which is required to be
registered under the Investment Company Act of 1940, as amended (the "1940
Act").
If the Partnership Preferred Securities are distributed to the holders of the
Trust Preferred Securities, the Company will use its best efforts to cause the
Partnership Preferred Securities to be listed on the New York Stock Exchange or
on such other national securities exchange or similar organization as the Trust
Preferred Securities are then listed or quoted.
On the date fixed for any distribution of Partnership Preferred Securities,
upon dissolution of the Trust, (i) the Trust Preferred Securities and the Trust
Common Securities will no longer be deemed to be outstanding and
(ii) certificates representing Trust Securities will be deemed to represent the
Partnership Preferred Securities so distributed having a liquidation preference
equal to the stated liquidation amount of, and bearing accumulated and unpaid
distributions equal to accumulated and unpaid distributions on, such Trust
Securities until such certificates are presented to the Company or its agent
for transfer or reissuance.
There can be no assurance as to the market price for the Partnership
Preferred Securities which may be distributed in exchange for Trust Preferred
Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Partnership Preferred Securities which an investor may
subsequently receive on dissolution and liquidation of the Trust may trade at a
discount to the price of the Trust Preferred Securities exchanged.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Trust Preferred
Securities unless all accumulated and unpaid distributions have been paid on
all Trust Preferred Securities for all quarterly distribution periods
terminating on or prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Trust Preferred
Securities (which notice will be irrevocable), and if the Company has paid to
the Property Trustee a sufficient amount of cash in connection with the related
redemption of the Partnership Preferred Securities, then, by 12:00 noon, New
York time, on the redemption date, the Property Trustee will irrevocably
deposit with DTC funds sufficient to pay the amount payable on redemption of
all book-entry certificates and will give DTC irrevocable instructions and
authority to pay such amount to holders of the Trust Preferred Securities. See
"--Book-Entry Only Issuance--The Depository Trust Company." If notice of
redemption shall have been given and funds are deposited as required,
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then upon the date of such deposit all rights of holders of such Trust
Preferred Securities so called for redemption will cease, except the right of
the holders of such Trust Preferred Securities to receive the Redemption
Price, but without interest on such Redemption Price, and, from and after the
date fixed for redemption, such Trust Preferred Securities will not accumulate
distributions or bear interest. In the event that any date fixed for
redemption of Trust Preferred Securities is not a Business Day, then payment
of the amount payable on such date will be made on the next succeeding day
which is a Business Day (without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day
(without any reduction in interest or other payments in respect of such early
payments), in each case with the same force and effect as if made on such
date. In the event that payment of the Redemption Price in respect of Trust
Preferred Securities is improperly withheld or refused and not paid either by
the Property Trustee or by the Company pursuant to the Trust Guarantee
described under "Supplemental Description of the Trust Guarantee,"
distributions on such Trust Preferred Securities will continue to accumulate
at the then applicable rate, from the original redemption date to the date of
payment.
In the event that fewer than all of the outstanding Trust Preferred
Securities are to be redeemed, the Trust Preferred Securities will be redeemed
in accordance with the procedures of DTC. See "--Book-Entry Only Issuance--The
Depository Trust Company."
SUBORDINATION OF TRUST COMMON SECURITIES
Payment of amounts upon liquidation of the Trust Securities (as described
below) shall be made pro rata based on the liquidation amount of the Trust
Securities; provided, however, that if (i) an Investment Event of Default by
an Investment Affiliate (including the Company) in respect of any Affiliate
Investment Instrument has occurred and is continuing and the Company is in
default of its obligations under an applicable Investment Guarantee or
(ii) the Company is in default under any of its obligations under the Trust
Guarantee or the Partnership Guarantee, then the holders of the Trust
Preferred Securities will have a preference over the holders of the Trust
Common Securities with respect to distributions and payments upon liquidation
of the Trust.
In the case of any Trust Enforcement Event, the holder of Trust Common
Securities will be deemed to have waived any such Trust Enforcement Event
until all such Trust Enforcement Events with respect to the Trust Preferred
Securities have been cured, waived or otherwise eliminated. Until all Trust
Enforcement Events with respect to the Trust Preferred Securities have been so
cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the holders of the Trust Preferred Securities and not on behalf
of the holder of the Trust Common Securities, and only the holders of the
Trust Preferred Securities will have the right to direct the Property Trustee
to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Trust Liquidation"), the
holders of the Trust Preferred Securities on the date of the Trust Liquidation
will be entitled to receive out of the assets of the Trust available for
distributions to holders of Trust Securities, after satisfaction of
obligations to creditors of the Trust, if any, distributions in cash or other
immediately available funds in an amount equal to the aggregate of the stated
liquidation amount of $25 per Trust Security plus accumulated and unpaid
distributions thereon to the date of payment (the "Trust Liquidation
Distribution"), unless, in connection with such Trust Liquidation, Partnership
Preferred Securities (which will have an aggregate liquidation preference
equal to the aggregate stated liquidation amount of, a distribution rate
identical to the distribution rate of, and accumulated and unpaid
distributions equal to accumulated and unpaid distributions on, the Trust
Securities) have been distributed on a pro rata basis to the holders of the
Trust Securities in exchange for such Trust Securities.
If, upon any such Trust Liquidation, the Trust Liquidation Distribution can
be paid only in part because the Trust has insufficient assets legally
available to pay in full the aggregate Trust Liquidation Distribution, then
the amounts payable directly by the Trust on the Trust Preferred Securities
shall be paid on a pro rata basis, and the
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holders of the Trust Common Securities will be entitled to receive
distributions upon any such liquidation as described above under "--
Subordination of Trust Common Securities."
Pursuant to the Trust Agreement, the Trust shall dissolve (i) upon the
bankruptcy, insolvency or dissolution of the Company, (ii) upon the filing of
a certificate of dissolution or the equivalent with respect to the Company,
the filing of a certificate of cancellation with respect to the Trust after
having obtained the consent of at least a majority in liquidation amount of
the Trust Securities, voting together as a single class, to file such
certificate of cancellation, or the revocation of the charter of the Company
and the expiration of 90 days after the date of revocation without a
reinstatement thereof, (iii) upon the distribution of all of the Partnership
Preferred Securities upon the occurrence of a Trust Special Event, (iv) upon
the entry of a decree of a judicial dissolution of the Company or the Trust,
or (v) upon the redemption of all the Trust Preferred Securities. A merger,
amalgamation, conversion or consolidation of the Company with or into another
entity will not constitute one of the foregoing events.
VOTING RIGHTS
Except as described herein and under "Supplemental Description of the Trust
Guarantee--Amendments and Assignment," and except as provided in the Trust
Act, the Trust Indenture Act or as otherwise required by law or the Trust
Agreement, the holders of the Trust Preferred Securities will have no voting
rights.
Subject to the requirement of the Property Trustee obtaining a tax opinion
as set forth in the last sentence of this paragraph, the holders of a majority
in liquidation amount of the Trust Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or direct the exercise of any trust or
power conferred upon the Property Trustee under the Trust Agreement, including
the right to direct the Property Trustee, as holder of the Partnership
Preferred Securities, to (i) exercise the remedies available to it under the
Agreement of Limited Partnership as a holder of the Partnership Preferred
Securities, including the right to direct the Special Representative to
exercise its rights in the manner described above under "--Trust Enforcement
Events" and (ii) consent to any amendment, modification or termination of the
Agreement of Limited Partnership or the Partnership Preferred Securities where
such consent shall be required; provided, however, that where a consent or
action under the Agreement of Limited Partnership would require the consent or
act of the holders of more than a majority of the aggregate liquidation
preference of Partnership Preferred Securities affected thereby, only the
holders of the percentage of the aggregate stated liquidation amount of the
Trust Preferred Securities which is at least equal to the percentage required
under the Agreement of Limited Partnership may direct the Property Trustee to
give such consent or take such action on behalf of the Trust. See
"Supplemental Description of the Partnership Preferred Securities--Voting
Rights." The Property Trustee shall notify all holders of the Trust Preferred
Securities of any notice of any Partnership Enforcement Event received from
the General Partner with respect to the Partnership Preferred Securities and
the Affiliate Investment Instruments. Such notice shall state that such
Partnership Enforcement Event also constitutes a Trust Enforcement Event.
Except with respect to directing the time, method, and place of conducting a
proceeding for a remedy as described above, the Property Trustee shall be
under no obligation to take any of the actions described in clause (i) or (ii)
above unless the Property Trustee has obtained an opinion of independent tax
counsel to the effect that, as a result of such action, for United States
federal income tax purposes the Trust will not be classified as an association
or a publicly traded partnership taxable as a corporation and that after such
action each holder of Trust Securities will continue to be treated as owning
an undivided beneficial ownership interest in the Partnership Preferred
Securities.
In the event the consent of the Property Trustee, as the holder of the
Partnership Preferred Securities, is required under the Agreement of Limited
Partnership with respect to any amendment, modification or termination of the
Agreement of Limited Partnership, the Property Trustee shall request the
direction of the holders of the Trust Securities with respect to such
amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a majority in
liquidation amount of the Trust Securities voting together as a single class;
provided, however, that where a consent under the Agreement of Limited
Partnership would require the consent of the holders of more than a majority
in aggregate liquidation preference
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of the Partnership Preferred Securities, the Property Trustee may only give
such consent at the direction of the holders of at least the same proportion in
aggregate stated liquidation amount of the Trust Securities. The Property
Trustee shall not take any such action in accordance with the directions of the
holders of the Trust Securities unless the Property Trustee has obtained an
opinion of tax counsel to the effect that such action is not inconsistent with
the Trust being classified as a grantor trust for United States federal income
tax purposes.
Subject to certain exceptions, the holders of a majority in liquidation
amount of the Trust Preferred Securities may waive any past Trust Enforcement
Event in respect of the Trust Preferred Securities. A waiver of a Partnership
Enforcement Event with respect to the Partnership Preferred Securities held by
the Property Trustee will constitute a waiver of the corresponding Trust
Enforcement Event. See "Supplemental Description of the Partnership Preferred
Securities--Voting Rights."
Any required approval or direction of holders of Trust Preferred Securities
may be given at a separate meeting of holders of Trust Preferred Securities
convened for such purpose, at a meeting of all of the holders of Trust
Preferred Securities or pursuant to written consent. The Regular Trustees will
cause a notice of any meeting at which holders of Trust Preferred Securities
are entitled to vote, or of any matter upon which action by written consent of
such holders is to be taken, to be mailed to each holder of record of Trust
Preferred Securities. Each such notice will include a statement setting forth
the following information: (i) the date of such meeting or the date by which
such action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents. No vote or consent of the holders of Trust
Preferred Securities will be required for the Trust to redeem and cancel Trust
Preferred Securities or distribute Partnership Preferred Securities in
accordance with the Trust Agreement.
Notwithstanding that holders of Trust Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Trust Preferred Securities that are owned beneficially at such time by the
Company or any entity directly or indirectly controlled by, or under direct or
indirect common control with, the Company, will not be entitled to vote or
consent and will, for purposes of such vote or consent, be treated as if such
Trust Preferred Securities were not outstanding; provided, however, that
persons (other than affiliates of the Company) to whom the Company or any of
its subsidiaries have pledged Trust Preferred Securities may vote or consent
with respect to such pledged Trust Preferred Securities under any of the
circumstances described herein.
The procedures by which holders of Trust Preferred Securities represented by
global certificates may exercise their voting rights are described below. See
"--Book-Entry Only Issuance--The Depository Trust Company."
Holders of the Trust Preferred Securities will have no rights to appoint or
remove the Regular Trustees, who may be appointed, removed or replaced solely
by the Company, as the holder of all of the Trust Common Securities.
MERGER, CONSOLIDATION OR AMALGAMATION OF THE TRUST
The Trust may not consolidate, amalgamate, merge with or into, or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to, any corporation or other entity, except as described below. The
Trust may, with the consent of a majority of the Regular Trustees and without
the consent of the holders of the Trust Securities, the Property Trustee or the
Delaware Trustee, consolidate, amalgamate, merge with or into, or be replaced
by a trust organized as such under the laws of any state of the United States;
provided, that (i) if the Trust is not the survivor, such successor entity
either (x) expressly assumes all of the obligations of the Trust under the
Trust Securities or (y) substitutes for the Trust Preferred Securities other
securities having substantially the same terms as the Trust Preferred
Securities (the "Successor Securities"), so long as the Successor Securities
rank the same as the Trust Securities rank with respect to distributions,
assets and payments upon liquidation, redemption and otherwise, (ii) the
Company expressly acknowledges a trustee of
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such successor entity possessing the same powers and duties as the Property
Trustee as the holder of the Partnership Preferred Securities, (iii) the Trust
Preferred Securities or any Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or with another organization on which the Trust Preferred
Securities are then listed or quoted, (iv) such merger, consolidation,
amalgamation or replacement does not cause the Trust Preferred Securities
(including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization, (v) such merger, consolidation,
amalgamation or replacement does not adversely affect the rights, preferences
and privileges of the holders of the Trust Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has
a purpose substantially identical to that of the Trust, (vii) the Company
guarantees the obligations of such successor entity under the Successor
Securities to the same extent as provided by the Trust Guarantee and (viii)
prior to such merger, consolidation, amalgamation or replacement, the Company
has received an opinion of a independent counsel to the Trust (which may be
counsel for the Company) experienced in such matters to the effect that: (A)
such merger, consolidation, amalgamation or replacement will not adversely
affect the rights, preferences and privileges of the holders of the Trust
Preferred Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the holders' interest in
the new entity), (B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor such successor entity will be required to
register as an investment company under the 1940 Act, (C) following such
merger, consolidation, amalgamation or replacement, the Trust (or such
successor trust) will not be treated as an association or a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes and (D) following such merger, consolidation, amalgamation or
replacement, the Partnership will not be treated as an association or a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes. Notwithstanding the foregoing, the Trust shall not,
except with the consent of holders of 100% in stated liquidation preference of
the Trust Preferred Securities, consolidate, amalgamate, merge with or into,
or be replaced, if such consolidation, amalgamation, merger or replacement
would cause the Trust or the successor entity to be classified as an
association or a publicly traded partnership taxable as a corporation for
United States federal income tax purposes.
MODIFICATION OF THE TRUST AGREEMENT
The Trust Agreement may be modified and amended if approved by a majority of
the Regular Trustees (and in certain circumstances the Property Trustee and
the Delaware Trustee), provided, that if any proposed amendment provides for,
or the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the holders of
Trust Securities, whether by way of amendment to the Trust Agreement or
otherwise or (ii) the dissolution, winding-up or termination of the Trust
other than pursuant to the terms of the Trust Agreement, then the holders of
the Trust Securities voting together as a single class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the holders of at least a majority in
liquidation amount of the Trust Securities affected thereby; provided,
further, that if any amendment or proposal referred to in clause (i) above
would adversely affect only the Trust Preferred Securities or the Trust Common
Securities, then only the affected class of security holders will be entitled
to vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of a majority in liquidation amount of
such class of Trust Securities.
The Trust Agreement may be amended without the consent of any holders of the
Trust Preferred Securities to (i) cure any ambiguity, (ii) correct or
supplement any provision in the Trust Agreement that may be defective or
inconsistent with any other provision of the Trust Agreement, (iii) add to the
covenants, restrictions or obligations of the Company, (iv) conform to any
change in the 1940 Act, the Trust Indenture Act or the rules or regulations
promulgated under either such Act and (v) modify, eliminate and add to any
provision of the Trust Agreement to such extent as may be necessary or
desirable; provided that no such amendment shall have a material adverse
effect on the rights, preferences or privileges of the holders of the Trust
Preferred Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Trust Agreement if such amendment or modification would (i) cause the
Trust to be classified as an association or a publicly traded
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partnership taxable as a corporation for United States federal income tax
purposes, (ii) cause the Partnership to be classified as an association or a
publicly traded partnership taxable as a corporation for such purposes,
(iii) reduce or otherwise adversely affect the powers of the Property Trustee
in contravention of the Trust Indenture Act or (iv) cause the Trust or the
Partnership to be deemed an "investment company" which is required to be
registered under the 1940 Act.
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
DTC will act as securities depository (the "Depository") for the Trust
Preferred Securities and, to the extent distributed to the holders of Trust
Preferred Securities, the Partnership Preferred Securities. The Trust Preferred
Securities will be issued only as fully-registered securities registered in the
name of Cede & Co. as nominee for DTC. One or more fully-registered global
Trust Preferred Securities certificates ("Global Certificates"), representing
the total aggregate number of Trust Preferred Securities, will be issued and
will be deposited with DTC or its custodian.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Participants in DTC
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
Participants and by the New York Stock Exchange, the American Stock Exchange,
Inc., and the National Association of Securities Dealers, Inc. Access to the
DTC system is also available to others such as securities brokers and dealers,
banks and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission (the "Commission").
Purchases of Trust Preferred Securities within the DTC system must be made by
or through Participants, which will receive a credit for the Trust Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
Trust Preferred Securities ("Beneficial Owner") is in turn to be recorded on
the Participants' and Indirect Participants' records. Beneficial Owners will
not receive written confirmation from DTC of their purchases, but Beneficial
Owners are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the
Participants or Indirect Participants through which the Beneficial Owners
purchased Trust Preferred Securities. Transfers of ownership interests in the
Trust Preferred Securities are to be accomplished by entries made on the books
of Participants and Indirect Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Trust Preferred Securities, except in the event that use
of the book-entry system for the Trust Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Trust Preferred
Securities; DTC's records reflect only the identity of the Participants to
whose accounts such Trust Preferred Securities are credited, which may or may
not be the Beneficial Owners. The Participants and Indirect Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
So long as DTC, or its nominee, is the registered owner or holder of a Global
Certificate, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the Trust Preferred Securities represented thereby for
all purposes under the Trust Agreement and the Trust Preferred Securities. No
Beneficial Owner of an interest in a Global Certificate will be able to
transfer that interest except in accordance with DTC's applicable procedures,
in addition to those provided for under the Trust Agreement.
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DTC has advised the Company that it will take any action permitted to be
taken by a holder of Trust Preferred Securities (including the presentation of
Trust Preferred Securities for exchange as described below) only at the
direction of one or more Participants to whose account the DTC interests in the
Global Certificates are credited and only in respect of such portion of the
aggregate liquidation amount of Trust Preferred Securities as to which such
Participant or Participants has or have given such direction. However, if there
is a Trust Enforcement Event under the Trust Preferred Securities, DTC will
exchange the Global Certificates for Certificated Securities, which it will
distribute to its Participants in accordance with its customary procedures.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices in respect of the Trust Preferred Securities held in book-
entry form will be sent to Cede & Co. If less than all of the Trust Preferred
Securities are being redeemed, DTC will determine the amount of the interest of
each Participant to be redeemed in accordance with its procedures.
Although voting with respect to the Trust Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Trust Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Participants to whose accounts the Trust Preferred
Securities are allocated on the record date (identified in a listing attached
to the Omnibus Proxy).
Distributions on the Trust Preferred Securities held in book-entry form will
be made to DTC in immediately available funds. DTC's practice is to credit
Participants' accounts on the relevant payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason to believe
that it will not receive payments on such payment date. Payments by
Participants and Indirect Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be the responsibility of
such Participants and Indirect Participants and not of DTC, the Trust or the
Company, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of any distributions to DTC is the
responsibility of the Trust, disbursement of such payments to Participants is
the responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Participants and Indirect Participants.
Except as described herein, a Beneficial Owner of an interest in a Global
Certificate will not be entitled to receive physical delivery of Trust
Preferred Securities. Accordingly, each Beneficial Owner must rely on the
procedures of DTC to exercise any rights under the Trust Preferred Securities.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Certificates among Participants of DTC,
DTC is under no obligation to perform or continue to perform such procedures,
and such procedures may be discontinued at any time. Neither the Company nor
the Trust will have any responsibility for the performance by DTC or its
Participants or Indirect Participants under the rules and procedures governing
DTC. DTC may discontinue providing its services as securities depository with
respect to the Trust Preferred Securities at any time by giving notice to the
Trust. Under such circumstances, in the event that a successor securities
depository is not obtained, Trust Preferred Security certificates are required
to be printed and delivered to the Property Trustee. Additionally, the Trust
(with the consent of the Company) may decide to discontinue use of the system
of book-entry transfers through DTC or any successor depository. In that event,
and in the event of certain Trust Enforcement Events, certificates for the
Trust Preferred Securities will be printed and delivered to the Property
Trustee. In each of the above circumstances, the Company will appoint a paying
agent with respect to the Trust Preferred Securities.
The laws of some jurisdictions may require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global Trust
Preferred Securities as represented by a Global Certificate.
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PAYMENT
Payments in respect of the Trust Preferred Securities represented by the
Global Certificates shall be made to DTC, which shall credit the relevant
accounts at DTC on the scheduled payment dates or, in the case of certificated
securities, if any, such payments shall be made by check mailed to the address
of the holder entitled thereto as such address shall appear on the register.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
The Property Trustee will act as registrar, transfer agent and, if required,
paying agent for the Trust Preferred Securities.
Registration of transfers of Trust Preferred Securities will be effected
without charge by or on behalf of the Trust, but upon payment (with the giving
of such indemnity as the Trust or the Company may require) in respect of any
tax or other government charges which may be imposed in relation to it.
The Trust will not be required to register or cause to be registered the
transfer of Trust Preferred Securities after such Trust Preferred Securities
have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, during the period prior to the occurrence of any Trust
Enforcement Event and during the period after the curing or waiver of all Trust
Enforcement Events that may have occurred, undertakes to perform only such
duties as are specifically set forth in the Trust Agreement and, after a Trust
Enforcement Event, shall exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
such provisions, the Property Trustee is under no obligation to exercise any of
the powers vested in it by the Trust Agreement at the request of any holder of
Trust Preferred Securities, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby.
The holders of Trust Preferred Securities will not be required to offer such
indemnity in the event such holders, by exercising their voting rights, direct
the Property Trustee to take any action following a Trust Enforcement Event.
GOVERNING LAW
The Trust Agreement and the Trust Preferred Securities will be governed by,
and construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to conduct the affairs of
and to operate the Trust in such a way that the Trust will not be deemed to be
an "investment company" required to be registered under the 1940 Act or
characterized as an association or a publicly traded partnership taxable as a
corporation for United States federal income tax purposes. In this connection,
the Regular Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust or the Trust Agreement that the
Regular Trustees determine in their discretion to be necessary or desirable for
such purposes as long as such action does not materially adversely affect the
interests of the holders of the Trust Preferred Securities.
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SUPPLEMENTAL DESCRIPTION OF THE TRUST GUARANTEE
Set forth below is a summary of information concerning the Trust Guarantee
which will be executed and delivered by the Company for the benefit of the
holders from time to time of Trust Preferred Securities. The summary does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the Trust Guarantee, which is
filed as an exhibit to the Registration Statement of which this Prospectus
Supplement and the accompanying Prospectus form a part. The Trust Guarantee
incorporates by reference the terms of, and will be qualified as an indenture
under, the Trust Indenture Act. The Bank of New York, as the Trust Guarantee
Trustee, will hold the Trust Guarantee for the benefit of the holders of the
Trust Preferred Securities and will act as indenture trustee for the purposes
of compliance with the Trust Indenture Act.
GENERAL
Pursuant to the Trust Guarantee, the Company will irrevocably agree, on a
subordinated basis and to the extent set forth therein, to pay in full to the
holders of the Trust Preferred Securities (except to the extent paid by the
Trust), as and when due, regardless of any defense, right of set off or
counterclaim which the Trust may have or assert, the following payments (the
"Trust Guarantee Payments"), without duplication: (i) any accumulated and
unpaid distributions on the Trust Preferred Securities that are required to be
paid on such Trust Preferred Securities to the extent the Trust has funds
available therefor, (ii) the Redemption Price with respect to any Trust
Preferred Securities called for redemption by the Trust to the extent the Trust
has funds available therefor and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Partnership Preferred Securities to the holders of
Trust Preferred Securities or the redemption of all of the Trust Preferred
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accumulated and unpaid distributions on the Trust Preferred Securities to the
date of payment and (b) the amount of assets of the Trust remaining available
after satisfaction of all obligations of creditors of the Trust, if any, for
distribution to holders of Trust Preferred Securities in liquidation of the
Trust. The Company's obligation to make a Trust Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of Trust Preferred Securities or by causing the Trust to pay such
amounts to such holders.
The Trust Guarantee will be a guarantee on a subordinated basis with respect
to the Trust Preferred Securities from the time of issuance of such Trust
Preferred Securities but will only apply to any payment of distributions or
Redemption Price, or to payments upon the dissolution, winding-up or
termination of the Trust, to the extent the Trust shall have funds available
therefor. If the Partnership fails to declare distributions on Partnership
Preferred Securities, the Trust would lack available funds for the payment of
distributions or amounts payable on redemption of the Trust Preferred
Securities or otherwise, and in such event holders of the Trust Preferred
Securities would not be able to rely upon the Trust Guarantee for payment of
such amounts. Instead, holders of the Trust Preferred Securities will have the
remedies described above under "Supplemental Description of the Trust Preferred
Securities--Trust Enforcement Events," including the right to direct the Trust
Guarantee Trustee to enforce the covenant restricting certain distributions by
the Company. See "--Certain Covenants of the Company."
The Trust Guarantee, when taken together with the Company Debentures, the
Partnership Guarantee, the Investment Guarantees, and the Company's obligations
to pay all fees and expenses of the Trust, constitute a guarantee to the extent
described herein by the Company of the distribution, redemption and liquidation
payments payable to the holders of the Trust Preferred Securities. The
Guarantees do not apply, however, to current distributions by the Partnership
unless and until such distributions are declared by the General Partner out of
funds legally available for payment or to liquidating distributions unless
there are assets available for payment in the Partnership, each as more fully
described under "Risk Factors--Insufficient Income or Assets Available to
Partnership."
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CERTAIN COVENANTS OF THE COMPANY
The Company will covenant in the Trust Guarantee that so long as any Trust
Preferred Securities are outstanding if, (a) for any distribution period, full
distributions on a cumulative basis on any Trust Preferred Securities have not
been paid or declared and set apart for payment, (b) an Investment Event of
Default by any Investment Affiliate in respect of any Affiliate Investment
Instrument has occurred and is continuing and the Company is in default under
its obligations with respect thereto under an applicable Investment Guarantee
or (c) the Company is in default of its obligations under the Trust Guarantee
or the Partnership Guarantee, then, during such period, (i) the Company shall
not declare or pay dividends on, make distributions or liquidation payments
with respect to, or redeem, purchase or acquire, any of its capital stock
(except for dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, its common stock and conversions
and exchanges of common stock of one class for common stock of another class
and other exceptions set forth in the accompanying Prospectus), (ii) the
Company shall not make any payment or cause any payment to be made that would
result in, and shall take such actions as shall be necessary to prevent, the
payment of any dividends on, any distribution or liquidation payment with
respect to, or any redemption, purchase or other acquisition of, any Comparable
Equity Interest, and (iii) the Company will not make any guarantee payments
with respect to the foregoing (other than pursuant to the Trust Guarantee or
any other guarantee by the Company with respect to any Comparable Equity
Interest). "Comparable Equity Interest" means any preferred security issued by
any finance subsidiary of the Company, the principal purpose of which is to
lend the proceeds of the sale thereof to the Company or to eligible affiliates
of the Company.
EVENTS OF DEFAULT; ENFORCEMENT OF TRUST GUARANTEE
An event of default under the Trust Guarantee will occur upon the failure of
the Company to perform any of its payment or other obligations thereunder.
The holders of a majority in liquidation amount of the Trust Preferred
Securities have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trust Guarantee Trustee or to
direct the exercise of any trust or power conferred upon the Trust Guarantee
Trustee under the Trust Guarantee. If the Trust Guarantee Trustee fails to
enforce its rights under the Trust Guarantee after a holder of record of Trust
Preferred Securities has made a written request, such holder may institute a
legal proceeding directly against the Company to enforce the Trust Guarantee
Trustee's rights under the Trust Guarantee, without first instituting a legal
proceeding against the Trust, the Trust Guarantee Trustee or any other person
or entity. In any event, if the Company has failed to make a guarantee payment
under the Trust Guarantee, a holder of Trust Preferred Securities may directly
institute a proceeding in such holder's own name against the Company for
enforcement of the Trust Guarantee for such payment.
STATUS OF THE TRUST GUARANTEE; SUBORDINATION
The Trust Guarantee will constitute an unsecured obligation of the Company
and will rank subordinate and junior to all other existing liabilities of the
Company and will rank pari passu with the most senior preferred stock (if any)
issued from time to time by the Company, with the Partnership Guarantee and the
Investment Guarantees and with any guarantee hereafter entered into by the
Company in respect of any preferred security of the Company or any affiliate of
the Company. Accordingly, the rights of the holders of Trust Preferred
Securities to receive payments under the Trust Guarantee will be subject to the
rights of the holders of any obligations of the Company that are senior in
priority to the obligations under the Trust Guarantee. Furthermore, the holders
of obligations of the Company that are senior to the obligations under the
Trust Guarantee (including, but not limited to, obligations constituting senior
indebtedness of the Company) will be entitled to the same rights upon payment
default or dissolution, liquidation and reorganization in respect of the Trust
Guarantee that inure to the holders of senior indebtedness of the Company as
against the holders of the Company Debentures. In addition, the Trust Guarantee
will be effectively subordinated to all future indebtedness and liabilities of
the Company's subsidiaries. See "Risk Factors--Ranking of Subordinate
Obligations Under the Guarantees and the Company
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Debentures." The terms of the Trust Preferred Securities provide that each
holder of Trust Preferred Securities by acceptance thereof agrees to the
subordination provisions and other terms of the Trust Guarantee.
The Trust Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may directly institute a legal
proceeding against the Company to enforce its rights under the Trust Guarantee
without instituting a legal proceeding against any other person or entity).
AMENDMENTS AND ASSIGNMENT
Except with respect to any amendments that may be made without the consent of
the holders of Trust Preferred Securities, as described above under "--
Modification of the Trust Agreement," the Trust Guarantee may be amended only
with the prior approval of the holders of at least a majority in liquidation
amount of all the outstanding Trust Preferred Securities. The manner of
obtaining any such approval of holders of the Trust Preferred Securities will
be as set forth under "Supplemental Description of the Trust Preferred
Securities--Voting Rights." All guarantees and agreements contained in the
Trust Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the Trust Preferred Securities then outstanding. Except in connection with any
permitted merger or consolidation of the Company with or into another entity or
any permitted sale, transfer or lease of the Company's assets to another
entity, the Company may not assign its rights or delegate its obligations under
the Trust Guarantee without the prior approval of the holders of at least a
majority of the aggregate stated liquidation amount of the Trust Preferred
Securities then outstanding.
TERMINATION OF THE TRUST GUARANTEE
The Trust Guarantee will terminate as to each holder of Trust Preferred
Securities upon (i) full payment of the Redemption Price of all Trust Preferred
Securities, (ii) distribution of the Partnership Preferred Securities held by
the Trust to the holders of the Trust Preferred Securities or (iii) full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Trust. The Trust Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of Trust
Preferred Securities must restore payment of any sum paid under such Trust
Preferred Securities or such Trust Guarantee.
INFORMATION CONCERNING THE TRUST GUARANTEE TRUSTEE
The Trust Guarantee Trustee, prior to the occurrence of a default with
respect to the Trust Guarantee, undertakes to perform only such duties as are
specifically set forth in the Trust Guarantee and, after default with respect
to the Trust Guarantee, shall exercise the same degree of care as a prudent
person would exercise in the conduct of such person's own affairs. Subject to
such provision, the Trust Guarantee Trustee is under no obligation to exercise
any of the powers vested in it by the Trust Guarantee at the request of any
holder of Trust Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
GOVERNING LAW
The Guarantee will be governed by, and construed in accordance with, the
internal laws of the State of New York.
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SUPPLEMENTAL DESCRIPTION OF THE PARTNERSHIP PREFERRED SECURITIES
GENERAL
All of the partnership interests in the Partnership other than the
Partnership Preferred Securities acquired by the Trust are owned directly by
Hycap, the sole General Partner of the Partnership. The Agreement of Limited
Partnership authorizes and creates the Partnership Preferred Securities, which
represent limited partner interests in the Partnership. The limited partner
interests represented by the Partnership Preferred Securities will have a
preference with respect to distributions and amounts payable on redemption or
liquidation over the General Partner's interest in the Partnership. Except as
otherwise described herein or provided in the Agreement of Limited Partnership,
the Agreement of Limited Partnership does not permit the issuance of any
additional partner interests or the incurrence of any indebtedness by the
Partnership.
The summary of certain terms and provisions of the Partnership Preferred
Securities set forth below does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the Agreement of Limited
Partnership, which is filed as an exhibit to the Registration Statement of
which this Prospectus Supplement and the accompanying Prospectus form a part,
and the Partnership Act.
DISTRIBUTIONS
Holders of Partnership Preferred Securities will be entitled to receive
cumulative cash distributions, if, as and when declared by the General Partner
in its sole discretion out of assets of the Partnership legally available for
payment. The distributions payable on each Partnership Preferred Security will
be fixed at a rate per annum of % of the stated liquidation preference
of $25 per Partnership Preferred Security. Distributions not paid on the
scheduled payment date will accumulate and compound quarterly at the rate per
annum equal to %. The amount of distributions payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months, except
that, if such period is shorter than a full 90-day quarter, distributions will
be calculated on the basis of the actual number of days elapsed in such 90-day
quarter.
Distributions on the Partnership Preferred Securities will accumulate from
the date of original issuance and will be payable quarterly in arrears if, as
and when declared by the General Partner on March 31, June 30, September 30 and
December 31 of each year, commencing March 31, 1997. If distributions are not
declared and paid when regularly scheduled, the accumulated distributions shall
be paid to the holders of record of Partnership Preferred Securities as they
appear on the books and records of the Partnership on the record date with
respect to the actual payment date for such accumulated distributions.
The Partnership's funds available for distribution to the holders of the
Partnership Preferred Securities will be limited to payments received by the
Partnership on the Affiliate Investment Instruments, the Investment Guarantees
and the Eligible Debt Securities in which the Partnership has invested from
time to time. See "--Partnership Investments." To the extent that the issuers
(and, where applicable, the Company as issuer of its Debentures and as
guarantor) of the securities in which the Partnership invests fail to make any
payment in respect of such securities (or, if applicable, such guarantees), the
Partnership will not have sufficient funds to pay and will not declare or pay
distributions on the Partnership Preferred Securities, in which event the
Partnership Guarantee will not apply to such distributions until the
Partnership has sufficient funds available therefor and declares such
distributions. See "Supplemental Description of the Partnership Guarantee"
herein. In addition, distributions on the Partnership Preferred Securities may
be declared and paid only if, as and when determined in the sole discretion of
the General Partner of the Partnership. If the General Partner determines that
a distribution will not be made on a regularly scheduled payment date, the
General Partner shall give notice of such determination to holders of the
Partnership Preferred Securities as of the record date for such distribution,
and the General Partner may not declare a distribution on its General Partner
interest unless all accumulated and unpaid distributions have been paid in full
for all previous payment periods.
If the Partnership fails to declare and pay distributions on the Partnership
Preferred Securities out of funds legally available for distribution, the Trust
will not have sufficient funds to make distributions on the Trust
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Preferred Securities, in which event the Trust Guarantee will not apply to
such distributions until the Trust has sufficient funds legally available
therefor. In addition, as described under "Risk Factors--Insufficient Income
or Assets Available to Partnership," the Partnership may not have sufficient
funds to pay current or liquidating distributions on the Partnership Preferred
Securities if (i) at any time that the Partnership is receiving current
payments in respect of the securities held by the Partnership (including the
Debentures), the General Partner, in its sole discretion, does not declare
distributions on the Partnership Preferred Securities and the Partnership
receives insufficient amounts to pay the additional compounded distributions
that will accumulate in respect of the Partnership Preferred Securities,
(ii) the Partnership reinvests the proceeds received in respect of the
Debentures upon their retirement or at their maturities in Affiliate
Investment Instruments that do not generate income in an amount that is
sufficient to pay full distributions in respect of the Partnership Preferred
Securities or (iii) the Partnership invests in equity or debt securities of
Investment Affiliates that are not guaranteed by the Company and that cannot
be liquidated by the Partnership for an amount sufficient to pay such
distributions in full.
Distributions on the Partnership Preferred Securities will be payable to the
holders thereof as they appear on the books and records of the Partnership on
the relevant record dates, which, as long as the Trust Preferred Securities
remain (or, in the event that the Trust is liquidated in connection with a
Trust Special Event and Partnership Preferred Securities are distributed to
holders of the Trust Preferred Securities, as long as the Partnership
Preferred Securities remain) in book-entry only form, will be one Business Day
prior to the relevant payment dates. In the event the Trust Preferred
Securities (or in the event that the Trust is liquidated in connection with a
Trust Special Event and Partnership Preferred Securities are distributed to
holders of the Trust Preferred Securities, the Partnership Preferred
Securities) shall not continue to remain in book-entry only form, the relevant
record dates shall be the 15th day of the month of the relevant payment dates.
In the event that any date on which distributions are payable on the
Partnership Preferred Securities is not a Business Day, then payment of the
distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day (without any reduction in interest on payments in respect of such
early payments), in each case with the same force and effect as if made on
such date.
PARTNERSHIP ENFORCEMENT EVENTS
If one or more of the following events shall occur and be continuing (each a
"Partnership Enforcement Event"): (i) arrearages on distributions on the
Partnership Preferred Securities shall exist for six consecutive quarterly
distribution periods, (ii) the Company is in default on any of its obligations
under the Partnership Guarantee or (iii) an Investment Event of Default (as
defined below) occurs and is continuing on any Affiliate Investment Instrument
and the Company is in default under its obligations with respect thereto under
an applicable Investment Guarantee, then holders of the Partnership Preferred
Securities, by the vote of a majority in aggregate liquidation preference of
such holders (or, for so long as the Partnership Preferred Securities are held
by the Property Trustee, the Property Trustee, as the holder of the
Partnership Preferred Securities), will have the right (a) under the Agreement
of Limited Partnership to enforce the terms of the Partnership Preferred
Securities, including the right to appoint and authorize a special
representative of the Partnership and the limited partners (a "Special
Representative") to enforce (1) to the fullest extent permitted by law, the
Partnership's creditors' rights and other rights with respect to the Affiliate
Investment Instruments and the Investment Guarantees, (2) the rights of the
holders of the Partnership Preferred Securities under the Partnership
Guarantee and (3) the rights of the holders of the Partnership Preferred
Securities to receive distributions (only if and to the extent declared by the
General Partner in its sole discretion out of funds legally available
therefor) on the Partnership Preferred Securities, and (b) under the
Partnership Guarantee to enforce the terms of the Partnership Guarantee,
including the right to enforce the covenant restricting the payment of
dividends and certain other distributions by the Company.
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The Special Representative, in its own name, in the name of the Partnership,
in the name of the holders of the Partnership Preferred Securities, or
otherwise, may, to the fullest extent permitted by law, institute, or cause to
be instituted, an appropriate proceeding to enforce on behalf of the
Partnership the Partnership's rights directly against HEI or any other obligor
(including the General Partner) in connection with its obligations to the
Partnership, and may prosecute such proceeding to judgment or final decree, and
enforce the same against HEI or any other obligor in connection with such
obligations and collect, out of the property, wherever situated, of HEI or any
such other obligor upon such obligations, the monies adjudged or decreed to be
payable in the manner provided by law. The General Partner agrees to execute
and deliver such documents as may be necessary, appropriate or convenient for
the Special Representative to enforce the foregoing rights and obligations on
behalf and in the name of the Partnership.
If the Special Representative fails to enforce its rights on behalf of the
Partnership under the Affiliate Investment Instruments and the Investment
Guarantees after a holder of Partnership Preferred Securities has made a
written request, such holder of record of Partnership Preferred Securities may,
to the fullest extent permitted by law, directly institute a legal proceeding
against the applicable Investment Affiliate to enforce the rights of the
Special Representative and the Partnership under the Affiliate Investment
Instruments and against the Company under any applicable Investment Guarantees
without first instituting any legal proceeding against the Special
Representative, the Partnership or any other person or entity. In any event, if
a Partnership Enforcement Event has occurred and is continuing and such event
is attributable to the failure of an Investment Affiliate to make any required
payment when due on any Affiliate Investment Instrument, then a holder of
Partnership Preferred Securities may on behalf of the Partnership directly
institute a proceeding against such Investment Affiliate with respect to such
Affiliate Investment Instrument for enforcement of payment. A holder of
Partnership Preferred Securities may also bring a direct action against the
Company to enforce such holder's right under the Partnership Guarantee. See
"Supplemental Description of the Partnership Guarantee--Events of Default;
Enforcement of Partnership Guarantee."
Under no circumstances, however, shall the Special Representative, any holder
of Partnership Preferred Securities or any holder of the Trust Preferred
Securities have authority to cause the General Partner to declare distributions
on the Partnership Preferred Securities. As a result, although the Special
Representative may be able to enforce the Partnership's creditors' rights to
accelerate and receive payments in respect of the Affiliate Investment
Instruments and the Investment Guarantees, the Partnership would be entitled to
reinvest such payments in additional Affiliate Investment Instruments, subject
to satisfying the reinvestment criteria described under "--Partnership
Investments," and in Eligible Debt Securities, rather than declaring and making
distributions on the Partnership Preferred Securities. The Special
Representative shall not, by virtue of acting in such capacity, be admitted as
a general or limited partner in the Partnership or otherwise be deemed to be a
general or limited partner in the Partnership and shall have no liability for
the debts, obligations or liabilities of the Partnership.
PARTNERSHIP INVESTMENTS
Approximately 99% of the proceeds from the issuance of the Partnership
Preferred Securities and Hycap's purchase of the general partner interests in
the Partnership (the "Initial Partnership Proceeds") will be used by the
Partnership to purchase debt or equity securities of HEI and its subsidiaries
("Affiliate Investment Instruments," which initially will be the Debentures)
and the remaining 1% of the Initial Partnership Proceeds will be used to
purchase Eligible Debt Securities. The purchase of the initial Affiliate
Investment Instruments by the Partnership will occur contemporaneously with the
issuance of the Partnership Preferred Securities.
The initial Affiliate Investment Instruments purchased by the Partnership
will consist of the Debentures. Approximately 85% of the Initial Partnership
Proceeds will be used to purchase the Company Debentures, which will be issued
pursuant to the Junior Indenture described in the accompanying Prospectus, and
approximately 14% of the Initial Partnership Proceeds will be used to purchase
the Subsidiary Debentures. Each of the Debentures is expected to have a term of
20 years and to provide for interest accruing from the date of original
issuance and payable quarterly in arrears on each March 31, June 30, September
30 and December 31,
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commencing March 31, 1997. The Debentures will be general unsecured debt
obligations of the relevant issuer and will rank subordinate and junior to all
senior indebtedness of the relevant issuer.
The payment of interest on each of the Debentures may be deferred at any
time, and from time to time, by the relevant issuer for a period not exceeding
six consecutive quarters. If an issuer were so to defer the payment of
interest, interest would continue to accrue and compound at the stated interest
rate on such Debenture. The Debentures will contain covenants appropriate for
comparable unsecured debt securities issued by similar borrowers pursuant to a
public offering or private placement under Rule 144A under the Securities Act.
See "Description of the Junior Subordinated Debt Securities" in the
accompanying Prospectus. The Debentures will contain redemption provisions that
correspond to the redemption provisions applicable to the Partnership Preferred
Securities, including an option to redeem the Debentures by the relevant
issuer, in whole or in part, from time to time, on or after February , 2002,
and at any time, in whole, following the occurrence of a Partnership Special
Event, in each case, in the same manner described under "--Optional Redemption"
and "--Partnership Special Event Redemption." Each of the indentures for the
Debentures will provide that, in certain specified circumstances, the
Debentures may be assumed by another subsidiary of the Company that meets
certain criteria. The Debentures, and any other Affiliate Investment
Instruments that are debt instruments acquired by the Partnership in the
future, will also contain customary events of default (the "Investment Events
of Default"), including events of default for defaults in payments on such
securities when due (provided that no default shall occur upon a valid deferral
of an interest payment by an issuer), defaults in the performance of the
relevant issuer's obligations under its Debentures or other Affiliate
Investment Instruments, as the case may be, and certain bankruptcy, insolvency
or reorganization events (subject to customary exceptions and grace periods).
The payment of interest and principal when due and other payment terms of the
Subsidiary Debentures will be fully and unconditionally guaranteed by the
Company for the benefit of the holders of the Subsidiary Debentures. Debentures
(including Company Debentures) that are transferred to and assumed by a
subsidiary of the Company will be covered by Investment Guarantees. See "--
Investment Guarantees."
Approximately 1% of the Initial Partnership Proceeds will be invested in
Eligible Debt Securities. "Eligible Debt Securities" means cash or book-entry
securities, negotiable instruments, or other securities of entities not
affiliated with the Company represented by instruments in registered form which
evidence any of the following: (a) any security issued or guaranteed as to
principal or interest by the United States, or by a person controlled or
supervised by and acting as an instrumentality of the Government of the United
States pursuant to authority granted by the Congress of the United States, or
any certificate of deposit for any of the foregoing; (b) commercial paper
issued pursuant to Section 3(a)(3) of the Securities Act and having, at the
time of the investment or contractual commitment to invest therein, a rating
from each of Standard & Poor's Ratings Services ("S&P") and Moody's Investors
Service, Inc. ("Moody's") in the highest investment rating category granted by
such rating agency and having a maturity not in excess of nine months; (c)
demand deposits, time deposits and certificates of deposit which are fully
insured by FDIC; (d) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the Government of the United
States of America or any agency or instrumentality thereof, the obligations of
which are backed by the full faith and credit of the United States of America,
in either case entered into with a depository institution or trust company
which is an Eligible Institution (as defined below) and the deposits of which
are insured by the FDIC; and (e) any other security which is identified as a
permitted investment of a finance subsidiary pursuant to Rule 3a-5 under the
1940 Act at the time it is acquired by the Partnership.
"Eligible Institution" means a depository institution organized under the
laws of the United States or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), (a)(i) which has either
(A) a long-term unsecured debt rating of AA or better by S&P and Aa or better
by Moody's or (B) a short-term unsecured debt rating or a certificate of
deposit rating of A-1+ by S&P and P-1 by Moody's and (ii) whose deposits are
insured by the FDIC or (b)(i) the parent of which has a long-term or short-term
unsecured debt rating which signifies investment grade and (ii) whose deposits
are insured by the FDIC.
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The Partnership may, from time to time and subject to the restrictions
described below, reinvest payments received with respect to the Affiliate
Investment Instruments (including the Debentures) and the Eligible Debt
Securities in additional Affiliate Investment Instruments and Eligible Debt
Securities. As of the date of this Prospectus Supplement, the General Partner
does not intend to cause the Partnership to reinvest regularly scheduled,
periodic payments of interest or dividends received by the Partnership in the
manner described below, although there can be no assurance that the General
Partner's intention in respect of such reinvestments will not change in the
future.
Certain financial terms of all Affiliate Investment Instruments (including
the Debentures) will be reviewed by a nationally recognized investment banking
firm designated by the Company that does not (and whose directors, officers,
employees and affiliates do not) have a direct or indirect material equity
interest in the Company or any of its subsidiaries or another entity which is
an investment banking, accounting or financial services firm selected by the
Company and approved by the holders of a majority in liquidation preference of
the Partnership Preferred Securities (the "Independent Financial Advisor").
Merrill Lynch & Co. will serve as the initial Independent Financial Advisor.
The Partnership may reinvest in additional Affiliate Investment Instruments
only if certain procedures and criteria are satisfied with respect to such
Affiliate Investment Instrument, including the satisfaction of the following
conditions: (i) the Partnership did not hold Affiliate Investment Instruments
of the requesting Investment Affiliate that will issue the proposed Affiliate
Investment Instrument within the three-year period ending on the date of such
proposed investment; (ii) there was never a default on any debt obligation of,
or arrearages of dividends on preferred stock issued by, the requesting
Investment Affiliate that will issue the proposed Affiliate Investment
Instrument that was previously owned by the Partnership; (iii) the applicable
financial terms with respect to the proposed Affiliate Investment Instrument
have been determined by the Independent Financial Advisor to be at least as
favorable as terms which could be obtained by the Partnership in a public
offering or private placement under Rule 144A under the Securities Act of a
comparable security issued by the requesting Investment Affiliate that is
supported by a full and unconditional guarantee issued by an entity comparable
to HEI; and (iv) the requesting Investment Affiliate shall not be deemed to be
an investment company by reason of Section 3(a) or 3(b) of the 1940 Act. The
term "Investment Affiliate" means the Company or any corporation, partnership,
limited liability company or other entity (other than the Partnership or the
Trust) that is controlled by the Company and is not an investment company by
reason of Section 3(a) or 3(b) of the 1940 Act. If the Partnership is unable
to reinvest payments and proceeds from Affiliate Investment Instruments in
additional Affiliate Investment Instruments meeting the above criteria, the
Partnership may only invest such funds in Eligible Debt Securities (subject to
restrictions of applicable law, including the 1940 Act).
INVESTMENT GUARANTEES
General. The Company will agree, on a subordinated basis, to execute and
deliver an Investment Guarantee for the benefit of the holders of the
Debentures issued by each Investment Affiliate (other than the Company
Debentures, unless HEI's obligations under the Company Debentures are
transferred to and assumed by another Investment Affiliate) to the extent set
forth below. The Investment Guarantees shall be enforceable regardless of any
defense, right of set-off or counterclaim that the Company may have or assert.
The Investment Guarantees will be full and unconditional guarantees on a
subordinated basis with respect to the applicable Debentures from the time of
issuance (or, in the case of the Company Debentures, from the time of transfer
to and assumption by an Investment Affiliate other than the Company). To the
extent that, as described above, the Partnership invests in additional
Affiliate Investment Instruments, the determination as to whether such
Affiliate Investment Instrument will contain an Investment Guarantee will be
made at the date of its issuance and will be based, among other things, upon
its approval by the Independent Financial Advisor in accordance with the
reinvestment criteria described above.
The Investment Guarantees will constitute guarantees of payment and not of
collection (that is, the guaranteed party may directly institute a legal
proceeding against the Company to enforce its rights under the applicable
Investment Guarantee without instituting a legal proceeding against any other
person or entity). If no
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Special Representative has been appointed to enforce any Investment Guarantee,
the General Partner has the right to enforce such Investment Guarantee on
behalf of the holders of the Partnership Preferred Securities. The holders of
not less than a majority in aggregate liquidation preference of the
Partnership Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available in respect of any
Investment Guarantee, including the giving of directions to the General
Partner or the Special Representative, as the case may be. If the General
Partner or the Special Representative fails to enforce any Investment
Guarantee as above provided, any holder of Trust Preferred Securities may
institute its own legal proceeding to enforce such Investment Guarantee. No
Investment Guarantee will be discharged except by payment in full of all
amounts guaranteed by such Investment Guarantee (without duplication of
amounts theretofore paid by the relevant Investment Affiliate).
Amendments and Assignment. Except with respect to any changes that do not
materially adversely affect the rights of holders of the Subsidiary Debentures
(in which case no consent will be required), the Investment Guarantees may be
amended only with the prior approval of the holders of not less than a
majority in liquidation preference of the outstanding Partnership Preferred
Securities, provided that for so long as the Property Trustee of the Trust is
the holder of the Partnership Preferred Securities, such amendment will not be
effective without the prior written approval of a majority in liquidation
amount of the outstanding Trust Preferred Securities. All guarantees and
agreements contained in the Investment Guarantees shall bind the successors,
assigns, receivers, trustees and representatives of the Company and shall
inure to the benefit of the holders of Partnership Preferred Securities. In
the event of the transfer or assignment of the obligations under an Affiliate
Investment Instrument to another Investment Affiliate (other than the
Company), and the assumption thereof by such Investment Affiliate, the
Investment Guarantee will continue to apply to such Affiliate Investment
Instrument.
Status of the Investment Guarantees. The Company's obligations under the
Investment Guarantees will constitute unsecured obligations of the Company and
will rank subordinate and junior to all other existing liabilities of the
Company and will rank pari passu with the most senior preferred stock (if any)
issued from time to time by the Company, with the Trust Guarantee and the
Partnership Guarantee and with any guarantee hereafter entered into by the
Company in respect of any preferred security of the Company or any affiliate
of the Company. Accordingly, the rights of the Partnership and the holders of
the Partnership Preferred Securities to receive payments under the Investment
Guarantees will be subject to the rights of the holders of any obligations of
the Company that are senior in priority to the obligations under the
Investment Guarantees. Furthermore, the holders of obligations of the Company
that are senior to the obligations under the Investment Guarantees (including,
but not limited to, obligations constituting senior indebtedness of the
Company) will be entitled to the same rights upon payment default or
dissolution, liquidation and reorganization in respect of the Investment
Guarantees that inure to the holders of senior indebtedness of the Company as
against the holders of the Company Debentures. In addition, the Investment
Guarantees will be effectively subordinated to all future indebtedness and
liabilities of the Company's subsidiaries. See "Risk Factors--Ranking of
Subordinate Obligations Under the Guarantees and the Company Debentures." The
terms of the Debentures provide that each holder of Debentures, by acceptance
thereof, agrees to the subordination provisions and other terms of the
Investment Guarantees.
Governing Law. The Investment Guarantees will be governed by, and construed
in accordance with, the internal laws of the State of New York.
OPTIONAL REDEMPTION
The Partnership Preferred Securities are redeemable, at the option of the
General Partner, in whole or in part, from time to time, on or after February
, 2002, upon not less than 30 nor more than 60 days' notice, at an amount per
Partnership Preferred Security of $25 plus accumulated and unpaid
distributions thereon to the date fixed for redemption. If the Partnership
redeems Partnership Preferred Securities in accordance with the terms thereof,
Trust Preferred Securities will be mandatorily redeemed at the Redemption
Price. See "Supplemental Description of the Trust Preferred Securities--
Redemption." If a partial redemption would result in the delisting
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of the Trust Preferred Securities (or, if the Partnership Preferred Securities
have been distributed in connection with a Trust Special Event, the delisting
of the Partnership Preferred Securities), the Partnership may only redeem the
Partnership Preferred Securities in whole.
PARTNERSHIP SPECIAL EVENT REDEMPTION
If, at any time, a Partnership Tax Event or a Partnership Investment Company
Event (each as hereinafter defined, and each a "Partnership Special Event")
shall occur and be continuing, the General Partner shall, within 90 days
following the occurrence of such Partnership Special Event, elect to either
(i) redeem the Partnership Preferred Securities in whole (but not in part),
upon not less than 30 or more than 60 days' notice at the Redemption Price,
provided that, if at the time there is available to the Partnership the
opportunity to eliminate, within such 90-day period, the Partnership Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing another reasonable measure that in the sole judgment of
the General Partner has or will cause no adverse effect on the Partnership,
the General Partner, the Trust or the Company, the General Partner will pursue
such measure in lieu of redemption; or (ii) cause the Partnership Preferred
Securities to remain outstanding, provided that in the case of this clause
(ii), the General Partner shall pay any and all costs and expenses incurred by
or payable by the Partnership attributable to the Partnership Special Event.
The General Partner may elect to redeem the Partnership Preferred Securities
upon the occurrence of any Partnership Special Event (subject to certain
conditions), regardless of the occurrence of any Trust Tax Event or Trust
Investment Company Event.
"Partnership Tax Event" means that the General Partner shall have requested
and received an opinion of recognized independent tax counsel (which may be
counsel to the Company) experienced in such matters to the effect that there
has been a Tax Action that results in there being more than an insubstantial
risk that (i) the Partnership is, or will be, subject to United States federal
income tax with respect to income accrued or received on the Affiliate
Investment Instruments or the Eligible Debt Securities, (ii) the Partnership
is, or will be, subject to more than a de minimis amount of other taxes,
duties or other governmental charges or (iii) interest payable by an
Investment Affiliate with respect to the Affiliate Investment Instruments that
are debt instruments issued by such Investment Affiliate to the Partnership is
not, or will not be, deductible for United States federal income tax purposes.
"Partnership Investment Company Event" means that the General Partner shall
have requested and received an opinion of recognized independent legal counsel
experienced in such matters to the effect that, as a result of the occurrence
on or after the date of this Prospectus Supplement of a Change in 1940 Act
Law, there is more than an insubstantial risk that the Partnership is or will
be considered an "investment company" which is required to be registered under
the 1940 Act.
REDEMPTION PROCEDURES
The Partnership may not redeem fewer than all the outstanding Partnership
Preferred Securities unless all accumulated and unpaid distributions have been
paid on all Partnership Preferred Securities for all quarterly distribution
periods terminating on or prior to the date of redemption.
If the Partnership gives a notice of redemption in respect of Partnership
Preferred Securities (which notice will be irrevocable), then, by 12:00 noon,
New York City time, on the redemption date, the General Partner, on behalf of
the Partnership, (i) if the Partnership Preferred Securities are in book-entry
only form with DTC, will deposit irrevocably with DTC funds sufficient to pay
the applicable Redemption Price and will give DTC irrevocable instructions and
authority to pay the Redemption Price in respect of the Partnership Preferred
Securities held through DTC in global form or (ii) if the Partnership
Preferred Securities are held in certificated form, will deposit with the
paying agent for the Partnership Preferred Securities funds sufficient to pay
such amount in respect of any Partnership Preferred Securities in certificated
form and will give such paying agent irrevocable instructions and authority to
pay such amounts to the holders of Partnership Preferred Securities upon
surrender of their certificates. See "--Book-Entry Only Issuance--The
Depository Trust Company."
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If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of holders of such
Partnership Preferred Securities so called for redemption will cease, except
the right of the holders of such Partnership Preferred Securities to receive
the Redemption Price, but without interest on such Redemption Price and, from
and after the date fixed for redemption, such Partnership Preferred Securities
will not accumulate distributions or bear interest. In the event that any date
fixed for redemption of Partnership Preferred Securities is not a Business Day,
then payment of the Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (without any interest or other
payment in respect of any such delay) except that, if such Business Day falls
in the next calendar year, the payment will be made on the immediately
preceding Business Day (without any reduction in interest or other payments in
respect of such early payment), in each case with the same force and effect as
if made on the date fixed for redemption. In the event that payment of the
Redemption Price in respect of Partnership Preferred Securities is improperly
withheld or refused and not paid either by the Partnership or by the Company
pursuant to the Partnership Guarantee described under "Supplemental Description
of the Partnership Guarantee," distributions on such Partnership Preferred
Securities will continue to accumulate at the then applicable rate from the
original redemption date to the date of payment.
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), the Company or any of its subsidiaries
may at any time and from time to time purchase outstanding Partnership
Preferred Securities by tender offer, in the open market or by private
agreement.
In the event that the Partnership Preferred Securities have been distributed
and fewer than all of the outstanding Partnership Preferred Securities are to
be redeemed, the Partnership Preferred Securities will be redeemed in
accordance with the procedures of DTC. See "--Book-Entry Only Issuance--The
Depository Trust Company."
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Partnership, the holders of the Partnership Preferred
Securities at the time will be entitled to receive out of the assets of the
Partnership available for distribution to partners after satisfaction of
liabilities of creditors as required by the Partnership Act, before any
distribution of assets is made to the General Partner, an amount equal to, in
the case of holders of Partnership Preferred Securities, the aggregate of the
stated liquidation preference of $25 per Partnership Preferred Security plus
accumulated and unpaid distributions thereon to the date of payment (such
amount being the "Partnership Liquidation Distribution").
The Agreement of Limited Partnership provides that the Partnership shall be
dissolved and its affairs shall be wound up: (i) upon the bankruptcy,
insolvency or dissolution of the General Partner, (ii) upon the assignment by
the General Partner of its entire interest in the Partnership when the assignee
is not admitted to the Partnership as a general partner of the Partnership in
accordance with the Agreement of Limited Partnership, or the filing of a
certificate of dissolution or its equivalent with respect to the General
Partner, or the revocation of the General Partner's charter and the expiration
of 90 days after the date of notice to the General Partner of revocation
without a reinstatement of its charter, or if any other event occurs that
causes the General Partner to cease to be a general partner of the Partnership
under the Partnership Act, unless the business of the Partnership is continued
in accordance with the Partnership Act, (iii) if the Partnership has redeemed
or otherwise purchased all of the Partnership Preferred Securities, (iv) upon
the entry of a decree of judicial dissolution or (v) upon the written consent
of all partners of the Partnership.
VOTING RIGHTS
Except as provided below and under "Supplemental Description of the
Partnership Guarantee--Amendments and Assignment" and as otherwise required by
law and the Agreement of Limited Partnership, the holders of the Partnership
Preferred Securities will have no voting rights.
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Not later than 30 days after any Partnership Enforcement Event occurs, the
General Partner will convene a meeting for the purpose of appointing a Special
Representative. If the General Partner fails to convene such meeting within
such 30-day period, the holders of 10% in liquidation preference of the
outstanding Partnership Preferred Securities will be entitled to convene such
meeting. The provisions of the Agreement of Limited Partnership relating to
the convening and conduct of the meetings of the partners will apply with
respect to any such meeting. In the event that, at any such meeting, holders
of less than a majority in aggregate liquidation preference of Partnership
Preferred Securities entitled to vote for the appointment of a Special
Representative vote for such appointment, no Special Representative shall be
appointed. Any Special Representative appointed will cease to be a Special
Representative of the Partnership and the limited partners if (i) the
Partnership (or the Company pursuant to the Partnership Guarantee) shall have
paid in full all accumulated and unpaid distributions on the Partnership
Preferred Securities, (ii) any Investment Event of Default giving rise to the
Partnership Enforcement Event shall have been cured, and (iii) the Company is
in compliance with all its obligations under the Partnership Guarantee and the
General Partner will continue the activities of the Partnership without
dissolution. Notwithstanding the appointment of any such Special
Representative, Hycap will continue as General Partner and will retain all
rights under the Agreement of Limited Partnership, including the right to
declare, in its sole discretion, the payment of distributions on the
Partnership Preferred Securities for which the failure of such declaration
would not constitute a default under the Agreement of Limited Partnership.
If any proposed amendment to the Agreement of Limited Partnership provides
for, or the General Partner otherwise proposes to effect, (i) any action that
would materially adversely affect the powers, preferences or special rights of
the Partnership Preferred Securities, whether by way of amendment to the
Agreement of Limited Partnership or otherwise (including, without limitation,
the authorization or issuance of any limited partner interests in the
Partnership ranking, as to participation in the profits or distributions or in
the assets of the Partnership, senior to the Partnership Preferred
Securities), or (ii) the dissolution, winding-up or termination of the
Partnership, other than (x) in connection with the occurrence of a Partnership
Special Event or (y) in certain limited circumstances described under "--
Merger, Consolidation or Amalgamation of the Partnership," then the holders of
outstanding Partnership Preferred Securities will be entitled to vote on such
amendment or proposal of the General Partner (but not on any other amendment
or proposal) as a class, and such amendment or proposal will not be effective
except with the approval of the holders of a majority in liquidation
preference of such outstanding Partnership Preferred Securities having a right
to vote on the matter; provided, however, that if the Property Trustee on
behalf of the Trust is the holder of the Partnership Preferred Securities, any
such amendment or proposal not excepted by clauses (x) and (y) above will not
be effective without the prior or concurrent approval of the holders of a
majority in liquidation amount of the outstanding Trust Preferred Securities
having a right to vote on such matters and provided, further, that no such
approval shall be required if the dissolution, winding-up or termination of
the Partnership is proposed or initiated upon or after the initiation of
proceedings for the dissolution, winding-up, liquidation or termination of the
General Partner or the Company.
Subject to certain exceptions, the holders of a majority in liquidation
preference of the Partnership Preferred Securities may waive any past
Partnership Enforcement Event with respect to the Partnership Preferred
Securities. A waiver of an Investment Event of Default by the Special
Representative, acting at the direction of the holders of Partnership
Preferred Securities, constitutes a waiver of the corresponding Partnership
Enforcement Event.
Neither the General Partner nor the Special Representative will (i) direct
the time, method and place of conducting any proceeding for any remedy
available, (ii) waive any Investment Event of Default that is waivable under
the Affiliate Investment Instruments, (iii) exercise any right to rescind or
annul a declaration that the principal of any Affiliate Investment Instruments
which are debt instruments shall be due and payable, (iv) waive the breach of
the covenant by the Company in the Partnership Guarantee to restrict certain
payments by the Company, or (v) consent to any amendment, modification or
termination of any Affiliate Investment Instrument, where such consent shall
be required from the holder thereof, without, in each case, obtaining the
prior approval of the holders of at least a majority in liquidation preference
of the Partnership Preferred Securities; provided, however, that if the
Property Trustee on behalf of the Trust is the holder of the Partnership
Preferred Securities,
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such waiver, consent or amendment or other action shall not be effective
without the prior or concurrent approval of at least a majority in liquidation
amount of the outstanding Trust Preferred Securities having a right to vote on
such matters. The General Partner will not revoke any action previously
authorized or approved by a vote of the holders of the Partnership Preferred
Securities. The General Partner will notify all holders of the Partnership
Preferred Securities of any notice of an Investment Event of Default received
with respect to any Affiliate Investment Instrument.
Any required approval of holders of Partnership Preferred Securities may be
given at a separate meeting of holders of Partnership Preferred Securities
convened for such purpose, at a meeting of all of the partners in the
Partnership or pursuant to written consent. The General Partner will cause a
notice of any meeting at which holders of Partnership Preferred Securities are
entitled to vote, or of any matter upon which action by written consent of such
holders is to be taken, to be mailed to each holder of record of Partnership
Preferred Securities. Each such notice will include a statement setting forth
(i) the date of such meeting or the date by which such action is to be taken,
(ii) a description of any matter proposed for adoption at such meeting on which
such holders are entitled to vote or of such matters upon which written consent
is sought and (iii) instruction for the delivery of proxies or consents. No
vote or consent of the holders of Partnership Preferred Securities will be
required for the Partnership to redeem and cancel Partnership Preferred
Securities in accordance with the Agreement of Limited Partnership.
Notwithstanding that holders of Partnership Preferred Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Partnership Preferred Securities at such time that are owned by the Company or
by any entity more than 50% of which is owned by the Company, directly or
indirectly, shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding; provided,
however, that persons otherwise eligible to vote to whom the Company or any of
its subsidiaries have pledged Partnership Preferred Securities may vote or
consent with respect to such pledged Partnership Preferred Securities under any
of the circumstances described herein.
Holders of the Partnership Preferred Securities will have no rights to remove
or replace the General Partner.
MERGER, CONSOLIDATION OR AMALGAMATION OF THE PARTNERSHIP
The Partnership may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other entity, except as
described below. The Partnership may, without the consent of the holders of the
Partnership Preferred Securities, consolidate, amalgamate, merge with or into,
or be replaced by a limited partnership, limited liability company or trust
organized under the laws of any state of the United States of America;
provided, that (i) such successor entity either (x) expressly assumes all of
the obligations of the Partnership under the Partnership Preferred Securities
or (y) substitutes for the Partnership Preferred Securities other securities
having substantially the same terms as the Partnership Preferred Securities
(the "Partnership Successor Securities"), so long as the Partnership Successor
Securities are not junior to any other equity securities of the successor
entity with respect to participation in the profits and distributions, and in
the assets, of the successor entity, (ii) the Investment Affiliates expressly
acknowledge such successor entity as the holder of the Affiliate Investment
Instruments, (iii) if the Partnership Preferred Securities are then so listed,
the Partnership Preferred Securities continue to be listed, or any Partnership
Successor Securities are or will be listed upon notification of issuance, on
any national securities exchange or with another organization on which the
Partnership Preferred Securities are then listed or quoted, (iv) such merger,
consolidation, amalgamation or replacement does not cause the Trust Preferred
Securities (or, in the event that the Trust is liquidated in connection with a
Trust Special Event, the Partnership Preferred Securities (including any
Partnership Successor Securities)) to be downgraded by any nationally
recognized statistical securities rating organization, (v) such merger,
consolidation, amalgamation or replacement does not adversely affect the
powers, preferences and other special rights of the holders of the Trust
Preferred Securities or Partnership Preferred Securities (including any
Partnership Successor Securities) in any material respect (other than, in the
case of Partnership Preferred Securities or Partnership Successor Securities,
with respect to any dilution of the holders' interest in the new resulting
entity), (vi) such successor entity has a purpose substantially
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identical to that of the Partnership, (vii) the Company guarantees the
obligations of such successor entity under the Partnership Successor Securities
to the same extent as provided by the Partnership Guarantee and (viii) prior to
such merger, consolidation, amalgamation or replacement, the Company has
received an opinion of a nationally recognized independent counsel to the
Partnership experienced in such matters to the effect that: (A) such successor
entity will be treated as a partnership for United States federal income tax
purposes, (B) such merger, consolidation, amalgamation or replacement will not
adversely affect the limited liability of the holders of the Partnership
Preferred Securities (or the Partnership Successor Securities), (C) following
such merger, consolidation, amalgamation or replacement, neither the Company
nor such successor entity will be required to register as an investment company
under the 1940 Act, and (D) such merger, consolidation, amalgamation or
replacement would not cause the Trust to be classified as an association or a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
BOOK-ENTRY AND SETTLEMENT
If the Partnership Preferred Securities are distributed to holders of Trust
Preferred Securities in connection with the involuntary or voluntary
dissolution, winding-up or liquidation of the Trust as a result of the
occurrence of a Trust Special Event, the Partnership Preferred Securities will
be issued in the form of one or more global certificates (each a "Global
Partnership Security") registered in the name of DTC as the depository or its
nominee. For a description of DTC and the specific terms of the Depository
arrangements, see "Supplemental Description of the Trust Preferred Securities--
Book-Entry Only Issuance--The Depository Trust Company." As of the date of this
Prospectus Supplement, the description therein of DTC's book-entry system and
DTC's practices as they relate to purchases, transfers, notices and payments
with respect to the Trust Preferred Securities apply in all material respects
to any Partnership Preferred Securities represented by one or more Global
Partnership Securities.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
The General Partner will act as registrar, transfer agent and paying agent
for the Partnership Preferred Securities for so long as the Partnership
Preferred Securities are held by the Property Trustee or, if the Trust is
liquidated in connection with a Trust Special Event, for so long as the
Partnership Preferred Securities remain in book-entry only form. In the event
the Partnership Preferred Securities are distributed in connection with a Trust
Special Event and the book-entry system for the Partnership Preferred
Securities is discontinued, it is anticipated that The Bank of New York or one
of its affiliates will act as registrar, transfer agent and paying agent for
the Partnership Preferred Securities.
Registration of transfers of Partnership Preferred Securities will be
effected without charge by or on behalf of the Partnership, but upon payment
(with the giving of such indemnity as the Partnership or the General Partner
may require) in respect of any tax or other governmental charges that may be
imposed in relation to it.
The Partnership will not be required to register or cause to be registered
the transfer of Partnership Preferred Securities after such Partnership
Preferred Securities have been called for redemption.
GOVERNING LAW
The Agreement of Limited Partnership and the Partnership Preferred Securities
will be governed by, and construed in accordance with, the internal laws of the
State of Delaware.
MISCELLANEOUS
The General Partner is authorized and directed to conduct its affairs and to
operate the Partnership in such a way that (i) the Partnership will not be
deemed to be an "investment company" required to be registered under the 1940
Act, (ii) the Affiliate Investment Instruments that are debt instruments will
be treated as indebtedness of the issuer of such debt instruments for United
States federal income tax purposes and (iii) the Partnership will
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not be treated as an association or a publicly traded partnership (within the
meaning of Section 7704 of the Code) taxable as a corporation for federal
income tax purposes. In this connection, the General Partner is authorized to
take any action, not inconsistent with applicable law, the certificate of
limited partnership of the Partnership or the Agreement of Limited Partnership,
that the General Partner determines in its discretion to be necessary or
desirable for such purposes as long as such action does not materially
adversely affect the interests of the holders of the Partnership Preferred
Securities.
Holders of the Partnership Preferred Securities have no preemptive or similar
rights.
SUPPLEMENTAL DESCRIPTION OF THE PARTNERSHIP GUARANTEE
Set forth below is a summary of certain information concerning the
Partnership Guarantee that will be executed and delivered by the Company for
the benefit of the holders from time to time of Partnership Preferred
Securities. The summary does not purport to be complete and is subject in all
respects to the provisions of, and is qualified in its entirety by reference
to, the Partnership Guarantee, which is filed as an exhibit to the Registration
Statement of which this Prospectus Supplement and the accompanying Prospectus
form a part. The Partnership Guarantee incorporates by reference the terms of,
and will be qualified as an indenture under, the Trust Indenture Act. The Bank
of New York, as trustee (the "Partnership Guarantee Trustee") will hold the
Partnership Guarantee for the benefit of the holders of the Partnership
Preferred Securities and will act as indenture trustee for the purpose of
compliance with the Trust Indenture Act.
GENERAL
Pursuant to the Partnership Guarantee, the Company will irrevocably agree, on
a subordinated basis to the extent set forth therein, to pay in full to the
holders of the Partnership Preferred Securities (without duplication of amounts
theretofore paid by the Partnership), as and when due, regardless of any
defense, right of set-off or counterclaim that the Partnership may have or
assert, the following payments (the "Partnership Guarantee Payments"): (i) any
accumulated and unpaid distributions that have theretofore been declared by the
General Partner on the Partnership Preferred Securities out of funds legally
available therefor, (ii) the Redemption Price with respect to any Partnership
Preferred Securities called for redemption by the Partnership out of funds
legally available therefor, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Partnership, the lesser of
(a) the aggregate of the liquidation preference and all accumulated and unpaid
distributions on the Partnership Preferred Securities to the date of payment
and (b) the amount of assets of the Partnership remaining available for
distribution to holders of Partnership Preferred Securities in liquidation of
the Partnership after satisfaction of all liabilities of the Partnership.
Pursuant to the Partnership Guarantee, the Company, to the extent not paid by
the General Partner, will fully and irrevocably agree to pay in full the
obligations of the General Partner under the Agreement of Limited Partnership,
including but not limited to the obligations to pay the fees and expenses of
the Partnership (including any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes or taxes or charges
imposed by reason of the transfer of the Partnership Preferred Securities)
imposed by the United States or any other domestic taxing authority upon the
Partnership) and to be responsible for all debts and obligations of the
Partnership (other than with respect to the Partnership Preferred Securities).
The Company's obligation to make a Partnership Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of Partnership Preferred Securities or by causing the Partnership to
pay such amounts to such holders.
The Partnership Guarantee will be a guarantee on a subordinated basis with
respect to the Partnership Preferred Securities from the time of issuance of
such Partnership Preferred Securities but will not apply to any payment of
distributions or Redemption Price, or to payments upon the dissolution,
winding-up or termination of the Partnership, except to the extent the
Partnership shall have funds legally available therefor. If Investment
Affiliates (including, where applicable, the Company, as issuer of the Company
Debentures and as guarantor) fail to make any payment in respect of the
Affiliate Investment Instruments in which the Partnership invests (or, if
applicable, payments in respect of an Investment Guarantee), the General
Partner may not declare or pay
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dividends on the Partnership Preferred Securities. In such event, holders of
the Partnership Preferred Securities would not be able to rely upon the
Partnership Guarantee for payment of such amounts. Instead, holders of the
Partnership Preferred Securities will have the remedies described under
"Supplemental Description of the Partnership Preferred Securities--Partnership
Enforcement Events," including the right to direct the Partnership Guarantee
Trustee or the Special Representative, as the case may be, to enforce the
covenant restricting payment of dividends and certain other distributions by
the Company. See "--Certain Covenants of the Company."
The Partnership Guarantee, when taken together with the Trust Guarantee, the
Investment Guarantees, the Company Debentures and the Company's obligations to
pay all fees and expenses of the Trust, constitute a guarantee to the extent
described herein by the Company of the distribution, redemption and liquidation
amounts payable to the holders of the Trust Preferred Securities and the
Partnership Preferred Securities. The Guarantees do not apply, however, to
current distributions by the Partnership unless and until such distributions
are declared by the General Partner out of funds legally available for payment
or to liquidating distributions unless there are assets available for payment
in the Partnership, each as more fully described under "Risk Factors--
Insufficient Income or Assets Available to Partnership."
CERTAIN COVENANTS OF THE COMPANY
The Company will covenant in the Partnership Guarantee that so long as any
Partnership Preferred Securities are outstanding if, (a) for any distribution
period, full distributions on a cumulative basis on any Partnership Preferred
Securities have not been paid or declared and set apart for payment, (b) an
Investment Event of Default by any Investment Affiliate in respect of any
Affiliate Investment Instrument has occurred and is continuing and the Company
is in default of its obligations with respect thereto under an applicable
Investment Guarantee or (c) the Company is in default of its obligations under
the Trust Guarantee or the Partnership Guarantee, then, during such period, (i)
the Company shall not declare or pay dividends on, make distributions or
liquidation payments with respect to, or redeem, purchase or acquire, any of
its capital stock (except for dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of, its common
stock and exchanges or conversions of common stock of one class for common
stock of another class and other exceptions set forth in the accompanying
Prospectus), (ii) the Company shall not make any payment or cause any payment
to be made that would result in, and shall take such action as shall be
necessary to prevent, the payment of dividends on, any distribution or
liquidation payment with respect to, or any redemption, purchase or other
acquisition of, any Comparable Equity Interest, and (iii) the Company shall not
make any guarantee payments with respect to the foregoing other than pursuant
to the Partnership Guarantee or any other guarantee by the Company with respect
to any Comparable Equity Interest.
EVENTS OF DEFAULT; ENFORCEMENT OF PARTNERSHIP GUARANTEE
An event of default under the Partnership Guarantee will occur upon the
failure of the Company to perform any of its payment or other obligations
thereunder.
The holders of a majority in liquidation preference of the Partnership
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Partnership Guarantee
Trustee or the Special Representative in respect of the Partnership Guarantee
or to direct the exercise of any trust or power conferred under the Partnership
Guarantee. If the Partnership Guarantee Trustee or the Special Representative
fails to enforce its rights under the Partnership Guarantee, after a holder of
record of Partnership Preferred Securities has made a written request, such
holder of Partnership Preferred Securities may institute a legal proceeding
directly against the Company to enforce the rights under the Partnership
Guarantee without first instituting a legal proceeding against the Partnership,
the General Partner, the Partnership Guarantee Trustee, the Special
Representative or any other person or entity. Notwithstanding the foregoing, if
the Company has failed to make a guarantee payment under the Partnership
Guarantee, a holder of Partnership Preferred Securities may directly institute
a proceeding against the Company for enforcement of the Partnership Guarantee
for such payment.
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STATUS OF THE PARTNERSHIP GUARANTEE; SUBORDINATION
The Partnership Guarantee will constitute an unsecured obligation of the
Company and will rank subordinate and junior to all other existing liabilities
of the Company and will rank pari passu with the most senior preferred stock
(if any) issued from time to time by the Company with the Trust Guarantee and
the Investment Guarantees and with any guarantee hereafter entered into by the
Company in respect of any preferred security of the Company or any affiliate
of the Company. Accordingly, the rights of the holders of Partnership
Preferred Securities to receive payments under the Partnership Guarantee will
be subject to the rights of the holders of any obligations of the Company that
are senior in priority to the obligations under the Partnership Guarantee.
Furthermore, the holders of the obligations of the Company that are senior to
the obligations under the Partnership Guarantee (including, but not limited
to, obligations constituting senior indebtedness of the Company) will be
entitled to the same rights upon payment default or dissolution, liquidation
and reorganization in respect of the Partnership Guarantee that inure to the
holders of senior indebtedness of the Company as against the holders of the
Company Debentures. In addition, the Partnership Guarantee will be effectively
subordinated to all future indebtedness and liabilities of the Company's
subsidiaries. See "Risk Factors--Ranking of Subordinate Obligations Under the
Guarantees and the Company Debentures." The Agreement of Limited Partnership
provides that each holder of Partnership Preferred Securities by acceptance
thereof agrees to the subordination provisions and other terms of the
Partnership Guarantee.
The Partnership Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may directly institute a legal
proceeding against the Company to enforce its rights under the Partnership
Guarantee without instituting a legal proceeding against any other person or
entity).
The Partnership Guarantee will be deposited with the Partnership Guarantee
Trustee to be held for the benefit of the holders of the Partnership Preferred
Securities. In the event of the appointment of a Special Representative to,
among other things, enforce the Partnership Guarantee, the Special
Representative may take possession of the Partnership Guarantee for such
purpose. If no Special Representative has been appointed to enforce the
Partnership Guarantee, the Partnership Guarantee Trustee has the right to
enforce the Partnership Guarantee on behalf of the holders of the Partnership
Preferred Securities.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of Partnership Preferred Securities (in which case no
consent will be required), the Partnership Guarantee may be amended only with
the prior approval of the holders of not less than a majority in liquidation
preference of the outstanding Partnership Preferred Securities, provided that
for so long as the Property Trustee is the holder of the Partnership Preferred
Securities, such amendment will not be effective without the prior written
approval of a majority in liquidation amount of the Trust Preferred
Securities. All guarantees and agreements contained in the Partnership
Guarantee will bind the successors, assigns, receivers, trustees and
representatives of the Company and will inure to the benefit of the holders of
the Partnership Preferred Securities then outstanding. Except in connection
with any permitted merger or consolidation of the Company with or into another
entity or any permitted sale, transfer or lease of the Company's assets to
another entity as described above under "Supplemental Description of the
Partnership Preferred Securities--Merger, Consolidation or Amalgamation of the
Partnership," the Company may not assign its rights or delegate its
obligations under the Partnership Guarantee without the prior approval of the
holders of at least a majority of the aggregate stated liquidation preference
of the Partnership Preferred Securities then outstanding.
TERMINATION OF THE PARTNERSHIP GUARANTEE
The Partnership Guarantee will terminate and be of no further force and
effect as to the Partnership Preferred Securities upon (i) full payment of the
redemption price of all Partnership Preferred Securities or (ii) payment of
the amounts payable in accordance with the Agreement of Limited Partnership
upon liquidation of the Partnership. The Partnership Guarantee will continue
to be effective or will be reinstated, as the case may
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be, if at any time any holder of Partnership Preferred Securities must in
accordance with the Partnership Act restore payment of any sums paid under the
Partnership Preferred Securities or the Partnership Guarantee. The Partnership
Act provides that a limited partner of a limited partnership who wrongfully
receives a distribution may be liable to the limited partnership for the amount
of such distribution.
GOVERNING LAW
The Partnership Guarantee will be governed by, and construed in accordance
with, the internal laws of the State of New York.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
The following is a summary of certain United States federal income tax
considerations that may be relevant to the purchase, ownership and disposition
of Trust Preferred Securities and represents the opinion of Goodsill Anderson
Quinn & Stifel, counsel to the Company, the Trust and the Partnership ("Tax
Counsel"), insofar as it relates to matters of law and legal conclusions.
Unless otherwise stated, this summary deals only with Trust Preferred
Securities held as capital assets by United States Persons (defined below) who
purchase the Trust Preferred Securities upon original issuance. As used herein,
a "United States Person" means a person that is a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States or any political subdivision thereof,
or an estate or trust which is not treated as a foreign estate or foreign trust
for United States federal tax purposes. The tax treatment of a holder may vary
depending on its particular situation. This summary does not address all the
tax consequences that may be relevant to holders who may be subject to special
tax treatment, such as banks, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities or currencies,
tax-exempt investors, or foreign investors. This summary does not include any
description of any alternative minimum tax consequences or the tax laws of any
state or local government or of any foreign government that may be applicable
to the Trust Preferred Securities. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), the Treasury regulations
promulgated thereunder and administrative and judicial interpretations thereof,
as of the date hereof, all of which are subject to change, possibly on a
retroactive basis.
The Trust Preferred Securities are not being marketed to persons that are not
United States Persons ("non-United States Persons") and, consequently, the
following discussion does not discuss the tax consequences that might be
relevant to non-United States Persons. Moreover, in order to protect the Trust
and the Partnership from potential adverse consequences, non-United States
Persons may be subject to withholding on distributions on the Trust Preferred
Securities held by such non-United States Persons at a rate of 30%. In
determining a holder's status, the United States entity otherwise required to
withhold taxes may rely on an IRS form W-8, an IRS form W-9, or a holder's
certification of its non-foreign status signed under penalty of perjury. NON-
UNITED STATES PERSONS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP, AND
DISPOSITION OF TRUST PREFERRED SECURITIES.
Tax Counsel has advised that there is no authority directly on point dealing
with securities such as the Trust Preferred Securities or transactions of the
type described herein and that the opinions of Tax Counsel are not binding on
the Internal Revenue Service ("IRS") or the courts, either of which could take
a contrary position. No rulings have been or will be sought from the IRS.
Accordingly, there can be no assurance that the IRS will not challenge the
opinions expressed herein or that a court would not sustain such a challenge.
Nevertheless, Tax Counsel has advised that it is of the view that, if
challenged, the opinions expressed herein would be sustained by a court with
jurisdiction in a properly presented case.
HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
S-53
<PAGE>
TRUST PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN, AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED
STATES FEDERAL OR OTHER TAX LAWS. FOR A DISCUSSION OF THE POSSIBLE REDEMPTION
OF THE TRUST PREFERRED SECURITIES OR REDEMPTION OF THE PARTNERSHIP PREFERRED
SECURITIES UPON THE OCCURRENCE OF CERTAIN TAX EVENTS, SEE "SUPPLEMENTAL
DESCRIPTION OF THE TRUST PREFERRED SECURITIES--TRUST SPECIAL EVENT REDEMPTION
OR DISTRIBUTION" AND "SUPPLEMENTAL DESCRIPTION OF THE PARTNERSHIP PREFERRED
SECURITIES--PARTNERSHIP SPECIAL EVENT REDEMPTION," RESPECTIVELY.
CLASSIFICATION OF THE TRUST
Tax Counsel is of the opinion that, under current law, and based on certain
representations, facts and assumptions set forth in such opinion, the Trust
will not be classified for United States federal income tax purposes as an
association or a publicly traded partnership taxable as a corporation.
Accordingly, for United States federal income tax purposes, each holder of
Trust Preferred Securities will be required to include in its gross income its
distributive share of income attributable to the Partnership, which generally
will be equal to such holder's allocable share of amounts accrued on the
Partnership Preferred Securities. Unless the Partnership invests in the equity
securities of certain Investment Affiliates (for example, after repayment of
the Debentures), no amount included in income with respect to the Trust
Preferred Securities will be eligible for the corporate dividends-received
deduction.
CLASSIFICATION OF THE PARTNERSHIP
Tax Counsel is of the opinion that, under current law, and based on certain
representations, facts and assumptions set forth in such opinion, the
Partnership will be classified for United States federal income tax purposes as
a partnership and not as an association or a publicly traded partnership
taxable as a corporation.
Tax Counsel's opinion is based on certain factual assumptions relating to the
organization and operation of the Partnership and is conditioned upon certain
representations made by the General Partner and the Partnership as to factual
matters, such as the organization and operation of the Partnership and the type
and frequency of investments made by the Partnership.
The General Partner has represented that it intends to operate the
Partnership in a manner such that it will continue to constitute a partnership
for all future taxable years in which any Partnership Preferred Securities
remain outstanding. In particular, pursuant to the Agreement of Limited
Partnership, the General Partner is prohibited from taking any action that
would cause the Partnership to constitute a "publicly traded partnership"
taxable as a corporation under Section 7704(a) of the Code. Accordingly, it is
expected that the Partnership will continue to qualify as a partnership, and
therefore will not constitute a publicly traded partnership taxable as a
corporation, for all taxable years in which the Partnership Preferred
Securities remain outstanding. If, however, the Partnership were to constitute
a publicly traded partnership taxable as a corporation with respect to a future
taxable year, the Partnership's net income would be subject to United States
federal income tax at the applicable corporate rates.
CLASSIFICATION OF THE DEBENTURES
The Partnership, the Company, the relevant Investment Affiliates and the
holders of the Trust Securities (by acceptance of a beneficial interest in a
Trust Security) will agree to treat the Debentures as indebtedness of the
relevant issuer for all United States federal income tax purposes. Tax Counsel
will issue its opinion that, under current law, and based on certain
representations, facts and assumptions set forth in such opinion, the
Debentures will be classified as indebtedness of the relevant issuer for United
States federal income tax purposes.
S-54
<PAGE>
INCOME AND DEDUCTIONS
A holder's distributive share of income attributable to the Partnership
generally will be substantially equal to the amount of the cash distributions
that accumulate with respect to the Trust Preferred Securities. Accordingly, if
quarterly distributions on the Trust Preferred Securities are paid currently,
the amount of income recognized by a holder during a taxable year generally
will be substantially equal to the cash distributions received by the holder
with respect to its Trust Preferred Securities.
The nature and timing of the income that is allocated to holders of Trust
Preferred Securities will, however, depend on the United States federal income
tax characterization of the investments held by the Partnership during the
period in question. Because the Partnership will be an accrual basis taxpayer
for United States federal income tax purposes, income will accrue on the Trust
Preferred Securities and will be allocated to holders of Trust Preferred
Securities on a daily accrual basis, generally at a rate that is expected to be
equal to (and that will not be greater than) the distribution rate on the Trust
Preferred Securities, regardless of the holders' method of accounting. Actual
cash distributions on the Trust Preferred Securities will not, however, be
separately reported as taxable income to the holders at the time they are
received.
If, however, distributions on the Partnership Preferred Securities are not
made currently, the corresponding distributions on the Trust Preferred
Securities will not be made currently. Because the Partnership is an accrual
basis taxpayer it can be expected that during a period in which interest
payments on the Debentures or distributions on the Partnership Preferred
Securities are deferred (for whatever reason), holders will generally recognize
income in advance of their receipt of any cash distributions with respect to
their Trust Preferred Securities. The amount of income that will be allocated
to holders of Trust Preferred Securities during any such deferral period will
equal their pro rata share of the amount accruing on the Partnership Preferred
Securities during such deferral period.
The Partnership does not presently intend to make an election under Section
754 of the Code. Accordingly, a subsequent purchaser of Trust Preferred
Securities will not be permitted to adjust the tax basis in his allocable share
of the Partnership's assets so as to reflect any difference between such
purchaser's purchase price for the Trust Preferred Securities and such
purchaser's share of the Partnership's underlying tax basis in its assets. As a
result, a holder of Trust Preferred Securities may be required to report a
larger or smaller amount of income from holding the Trust Preferred Securities
than would otherwise be appropriate based upon the holder's purchase price for
the Trust Preferred Securities.
RECEIPT OF PARTNERSHIP PREFERRED SECURITIES UPON LIQUIDATION OF THE TRUST
Under certain circumstances, as described under the caption "Supplemental
Description of the Trust Preferred Securities--Trust Special Event Redemption
or Distribution," Partnership Preferred Securities may be distributed to
holders of Trust Preferred Securities in liquidation of the Trust. Unless the
liquidation of the Trust occurs as a result of the Trust's being subject to
United States federal income tax with respect to income accrued or received on
the Partnership Preferred Securities, such a distribution to holders would be
treated as a nontaxable event to each holder, each holder would receive an
aggregate tax basis in the Partnership Preferred Securities equal to such
holder's aggregate tax basis in its Trust Preferred Securities, and a holder's
holding period for the Partnership Preferred Securities so received in
liquidation of the Trust would include the period during which the Trust
Preferred Securities were held by such holder. If, however, the liquidation of
the Trust were to occur because the Trust is subject to United States federal
income tax with respect to income accrued or received on the Partnership
Preferred Securities, the distribution of Partnership Preferred Securities to
holders by the Trust would likely be a taxable event to each holder, and a
holder would recognize gain or loss measured by the difference between the
holder's tax basis in the Trust Preferred Securities surrendered and the fair
market value of the Partnership Preferred Securities received in exchange
therefor upon the liquidation of the Trust.
S-55
<PAGE>
REDEMPTION OF TRUST PREFERRED SECURITIES FOR CASH
Under certain circumstances, as described under the caption "Supplemental
Description of the Trust Preferred Securities--Redemption," "Supplemental
Description of the Trust Preferred Securities--Trust Special Event Redemption
or Distribution" and "Supplemental Description of the Partnership Preferred
Securities--Partnership Special Event Redemption," the General Partner may
cause the Partnership to redeem the Partnership Preferred Securities for cash,
in which event the Trust would use the proceeds of such redemption to redeem
the Trust Preferred Securities. Under current law, such a redemption would
constitute, for United States federal income tax purposes, a taxable
disposition, and a holder would recognize gain or loss as if it sold the
holder's proportionate interest in the redeemed Partnership Preferred
Securities for an amount of cash equal to the proceeds received upon
redemption. See "--Disposition of Trust Preferred Securities."
DISPOSITION OF TRUST PREFERRED SECURITIES
A holder that sells Trust Preferred Securities will recognize gain or loss
equal to the difference between the amount realized on the sale of the Trust
Preferred Securities and the holder's tax basis in such Trust Preferred
Securities. Such gain or loss will be a capital gain or loss and will be a
long-term capital gain or loss if the Trust Preferred Securities have been held
for more than one year at the time of the sale. A holder will be required to
include accrued but unpaid distributions on the Partnership Preferred
Securities through the date of disposition in income as ordinary income (to the
extent not previously included in income), and to add such amount to the
adjusted tax basis of its Trust Preferred Securities. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes.
A holder's tax basis in its Trust Preferred Securities generally will be
equal to (i) the amount paid by such holder for its Trust Preferred Securities,
(ii) increased by the amount includible in income by such holder with respect
to its Trust Preferred Securities, and (iii) reduced by the amount of cash or
other property distributed to such holder with respect to its Trust Preferred
Securities. A holder who acquires Trust Preferred Securities at different
prices may be required to maintain a single aggregate adjusted tax basis in all
of his Trust Preferred Securities and, upon sale or other disposition of some
of such Trust Preferred Securities, to allocate a pro rata portion of such
aggregate tax basis to the Trust Preferred Securities sold or disposed of
(rather than maintaining a separate tax basis in each Trust Preferred Security
for purposes of computing gain or loss upon a sale or other disposition of that
Trust Preferred Security).
OTHER PARTNERSHIP PROVISIONS
Section 708. Under Section 708 of the Code, the Partnership will be deemed to
terminate for United States federal income tax purposes if 50% or more of the
capital and profits interests in the Trust are sold or exchanged within a 12-
month period. If such a deemed termination were to occur, the Partnership would
be considered to have distributed its assets to the partners who would then be
treated as having recontributed those assets to a new partnership. If any such
constructive termination occurs, the General Partner may be unable to comply
with certain technical requirements that might be applicable for various
reasons including the likely lack of relevant data. As a result, the
Partnership may be subject to certain tax penalties and may incur additional
expenses, which would be the obligation of the General Partner. Proposed
Treasury regulations, should they become effective, would mitigate some of the
effects of a constructive termination.
Section 701. The Department of Treasury has promulgated regulations under
Section 701 of the Code that permit it to disregard a partnership or recast a
transaction if a partnership is formed or availed of with a principal purpose
to reduce substantially the present value of the partners' aggregate tax
liability in a manner inconsistent with the intent of the partnership
provisions of the Code. Although there is no precedent that applies to the
transactions contemplated herein, in as much as The Partnership has been formed
for, and will engage in, activities typical for partnerships, Tax Counsel
believes that the Partnership is not of the type intended to fall within the
scope of these regulations.
S-56
<PAGE>
INFORMATION REPORTING AND BACKUP WITHHOLDING
Income on the Trust Preferred Securities will be reported to holders on an
IRS Form 1099, which should be mailed to holders of Trust Preferred Securities
by January 31 following each calendar year. Payments made on and proceeds from
the sale of Trust Preferred Securities may be subject to a "back-up"
withholding tax of 31% unless the holder complies with certain identification
requirements. Any withheld amount generally will be allowed as a credit
against the holder's United States federal income tax, provided the required
information is timely filed with the IRS.
PROPOSED LEGISLATION
On March 19, 1996, as part of President Clinton's Fiscal 1997 Budget
Proposal, the Treasury Department released the Proposed Legislation which
would, among other things, deny the borrower an interest deduction with
respect to certain types of debt instruments that are payable in stock of the
issuer or a related party. The Proposed Legislation also would treat as equity
for United States federal income tax purposes instruments with a maximum term
of more than 20 years that are not shown as indebtedness on the consolidated
balance sheet of the issuer. On March 29, 1996, Senate Finance Committee
Chairman William V. Roth and House Ways and Means Committee Chairman Bill
Archer issued a joint statement (the "Joint Statement") indicating their
intent that certain legislative proposals initiated by the Clinton
administration, including the Proposed Legislation, that may be adopted by
either of the tax-writing committees of Congress, would have an effective date
that is no earlier than the date of "appropriate Congressional action." In
addition, subsequent to the publication of the Joint Statement, Senator Daniel
Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel
wrote letters to the Treasury Department officials concurring with the view
expressed in the Joint Statement (the "Democrat Letters"). If the principles
contained in the Joint Statement and the Democrat Letters were followed and
the Proposed Legislation were enacted, such legislation would not apply to the
Debentures. There can be no assurances, however, that legislation enacted
after the date hereof will not adversely affect the tax treatment of the
Debentures, or whether such tax treatment would cause a Partnership Tax Event
or a Trust Tax Event that may result in the redemption of the Partnership
Preferred Securities and, consequently, the Trust Preferred Securities.
S-57
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), the Trust has agreed to sell to each of the
Underwriters named below, and each of the Underwriters, for whom Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Goldman Sachs & Co., Dean Witter
Reynolds Inc., A.G. Edwards & Sons, Inc., Legg Mason Wood Walker Incorporated
and Robert W. Baird & Co. Incorporated is acting as representatives (the
"Representatives"), has severally agreed to purchase, the number of Trust
Preferred Securities set forth opposite its name below. In the Purchase
Agreement, the several Underwriters have agreed, subject to the terms and
conditions set forth therein, to purchase all the Trust Preferred Securities
offered hereby if any of the Trust Preferred Securities are purchased. In the
event of default by an Underwriter, the Purchase Agreement provides that, in
certain circumstances, the purchase commitments of the nondefaulting
Underwriters may be increased or the Purchase Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
TRUST PREFERRED
UNDERWRITER SECURITIES
----------- ---------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................................
Goldman, Sachs & Co. ........................................
Dean Witter Reynolds Inc. ...................................
A.G. Edwards & Sons, Inc. ...................................
Legg Mason Wood Walker, Incorporated.........................
Robert W. Baird & Co., Incorporated..........................
---------
Total...................................................... 4,000,000
=========
</TABLE>
The Underwriters propose to offer the Trust Preferred Securities, in part,
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and, in part, to certain securities
dealers at such price less a concession of $ per Trust Preferred Security.
The Underwriters may allow, and such dealers may re-allow, a concession not in
excess of $ per Trust Preferred Security to certain brokers and dealers.
After the Trust Preferred Securities are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
Representatives.
In view of the fact that the proceeds of the sale of the Trust Preferred
Securities will ultimately be used to purchase the Debentures of the Company
and its subsidiaries, the Purchase Agreement provides that the Company will
pay as compensation ("Underwriters' Compensation") to the Underwriters
arranging the investment therein of such proceeds, an amount in immediately
available funds of $ per Trust Preferred Security (or $ in the
aggregate) for the accounts of the several Underwriters; provided that, such
compensation for sales of 10,000 or more Trust Preferred Securities to any
single purchaser will be $ per Trust Preferred Security. Therefore, to the
extent of such sales, the actual amount of Underwriters' Compensation will be
less than the aggregate amount specified in the preceding sentence.
During a period of 30 days from the date of this Prospectus Supplement, none
of the Trust, the Partnership and the Company will, without the prior written
consent of the Underwriters, (i) directly or indirectly, sell, offer to sell,
grant any option for sale of, or otherwise dispose of, any Trust Preferred
Securities, any Partnership Preferred Securities, any preferred stock of the
Company or any security convertible into or exchangeable into or exercisable
for Trust Preferred Securities or Partnership Preferred Securities or any
preferred stock of the Company or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of any Trust Preferred
Securities, Partnership Preferred Securities, any preferred stock of the
Company or any security convertible into or exchangeable into or exercisable
for Trust Preferred Securities or Partnership Preferred Securities or any
preferred stock of the Company, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery
S-58
<PAGE>
of Trust Preferred Securities, Partnership Preferred Securities, any preferred
stock of the Company or such other securities, in cash or otherwise.
The Trust Preferred Securities have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance. Trading of the Trust
Preferred Securities on the New York Stock Exchange is expected to commence
within a 30-day period after the initial delivery of the Trust Preferred
Securities. The Representatives have advised the Trust that the Underwriters
intend to make a market in the Trust Preferred Securities prior to the
commencement of trading on the New York Stock Exchange. The Underwriters will
have no obligation to make a market in the Trust Preferred Securities, however,
and may cease market making activities, if commenced, at any time.
Prior to this offering there has been no public market for the Trust
Preferred Securities. In order to meet one of the requirements for listing the
Trust Preferred Securities on the New York Stock Exchange, the Underwriters
will undertake to sell lots of 100 or more Trust Preferred Securities to a
minimum of 400 beneficial holders.
The Company, the Trust and the Partnership have agreed to indemnify the
Underwriters against, or contribute to payments that the Underwriters may be
required to make in respect of, certain liabilities, including liabilities
under the Securities Act.
The Underwriters and/or their affiliates have provided investment banking and
financial advisory services to HEI and its subsidiaries in the past, for which
they have received customary compensation and expense reimbursement, and may do
so again in the future.
ERISA CONSIDERATIONS
HEI, the obligor with respect to the Company Debentures held by the Trust,
and its affiliates and the Property Trustee may be considered a "party in
interest" (within the meaning of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) or a "disqualified person" (within the meaning of
Section 4975 of the Code) with respect to many employee benefit plans (each a
"Plan") that are subject to ERISA. The purchase and/or holding of Trust
Preferred Securities by a Plan that is subject to the fiduciary responsibility
provisions of ERISA or the prohibited transaction provisions of Section 4975 of
the Code (including individual retirement arrangements and other plans
described in Section 4975(e)(1) of the Code) and with respect to which HEI, the
Property Trustee or any affiliate is a service provider (or otherwise is a
party in interest or a disqualified person) may constitute or result in a
prohibited transaction under ERISA or Section 4975 of the Code, unless such
Trust Preferred Securities are acquired pursuant to and in accordance with an
applicable exemption, such as Prohibited Transaction Class Exemption ("PTCE")
84-14 (an exemption for certain transactions determined by an independent
qualified professional asset manager), PTCE 91-38 (an exemption for certain
transactions involving bank collective investment funds), PTCE 90-1 (an
exemption for certain transactions involving insurance companies pooled
separate accounts) or PTCE 95-60 (an exemption for transactions involving
certain insurance company general accounts).
Any purchaser proposing to acquire Trust Preferred Securities with assets of
any Plan should consult with its ERISA counsel.
S-59
<PAGE>
INDEX OF SELECTED DEFINED TERMS
<TABLE>
<S> <C>
1940 Act............................................................. S-28
Affiliate Investment Instruments..................................... S-22
Agreement of Limited Partnership..................................... S-21
ASB.................................................................. S-17
Beneficial Owner..................................................... S-33
Business Day......................................................... S-25
Change in 1940 Act Law............................................... S-28
Code................................................................. S-53
Commission........................................................... S-33
Company.............................................................. S-1
Company Debentures................................................... S-2
Comparable Equity Interest........................................... S-37
Debentures........................................................... S-2
Debt Trustee......................................................... S-21
Delaware Trustee..................................................... S-21
Democrat Letters..................................................... S-14; S-57
Depository........................................................... S-33
DTC.................................................................. S-1
Eligible Debt Securities............................................. S-2; S-42
Eligible Institution................................................. S-42
ERISA................................................................ S-59
Exchange Act......................................................... S-17
FDIC................................................................. S-18
General Partner...................................................... S-2
Global Certificates.................................................. S-33
Global Partnership Security.......................................... S-49
Guarantees........................................................... S-2
HECO................................................................. S-17
HEI.................................................................. S-1; S-17
HEIDI................................................................ S-17
HEIIC................................................................ S-17
HEIPC................................................................ S-17
HELCO................................................................ S-17
HTB.................................................................. S-17
Hycap................................................................ S-2
Independent Financial Advisor........................................ S-43
Indirect Participants................................................ S-33
Initial Partnership Proceeds......................................... S-41
Investment Affiliate................................................. S-41
Investment Events of Default......................................... S-42
Investment Guarantees................................................ S-2
IRS.................................................................. S-53
Joint Statement...................................................... S-14; S-57
MECO................................................................. S-17
MPC.................................................................. S-17
New York Stock Exchange.............................................. S-1
non-United States Persons............................................ S-53
Participants......................................................... S-33
Partnership.......................................................... S-2
Partnership Act...................................................... S-22
</TABLE>
S-60
<PAGE>
<TABLE>
<S> <C>
Partnership Enforcement Event......................................... S-40
Partnership Guarantee................................................. S-2
Partnership Guarantee Payments........................................ S-50
Partnership Guarantee Trustee......................................... S-50
Partnership Investment Company Event.................................. S-45
Partnership Liquidation Distribution.................................. S-46
Partnership Preferred Securities...................................... S-2
Partnership Special Event............................................. S-45
Partnership Successor Securities...................................... S-48
Partnership Tax Event................................................. S-45
Property Account...................................................... S-22
Property Trustee...................................................... S-21
Proposed Legislation.................................................. S-14
PUC Order............................................................. S-18
Purchase Agreement.................................................... S-58
Redemption Price...................................................... S-4
Registration Statement................................................ S-21
Regular Trustees...................................................... S-21
Representatives....................................................... S-58
SAIF.................................................................. S-18
Securities Act........................................................ S-13
Special Event......................................................... S-14
Special Representative................................................ S-40
Subsidiary Debentures................................................. S-2
Successor Securities.................................................. S-31
Tax Action............................................................ S-28
Tax Counsel........................................................... S-53
TOPrSSM............................................................... S-1
Trust................................................................. S-1
Trust Act............................................................. S-21
Trust Agreement....................................................... S-21
Trust Common Securities............................................... S-1
Trust Dissolution Tax Opinion......................................... S-27
Trust Enforcement Event............................................... S-25
Trust Guarantee....................................................... S-2
Trust Guarantee Payments.............................................. S-36
Trust Guarantee Trustee............................................... S-21
Trust Indenture Act................................................... S-21
Trust Investment Company Event........................................ S-28
Trust Liquidation..................................................... S-29
Trust Liquidation Distribution........................................ S-29
Trust Preferred Securities............................................ S-1
Trust Redemption Tax Opinion.......................................... S-27
Trust Securities...................................................... S-1
Trust Special Event................................................... S-27
Trust Tax Event....................................................... S-27
Trustees.............................................................. S-21
Underwriters' Compensation............................................ S-1; S-58
United States Person.................................................. S-53
YB.................................................................... S-17
</TABLE>
S-61
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
+INFORMATION CONTAINED IN THIS PROSPECTUS IS SUBJECT TO COMPLETION OR +
+AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN +
+FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT +
+BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION +
+STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO +
+SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF +
+THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR +
+SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE +
+SECURITIES LAWS OF ANY SUCH JURISDICTION. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JANUARY 24, 1997
PROSPECTUS
- ----------
HAWAIIAN ELECTRIC INDUSTRIES, INC.
SENIOR DEBT SECURITIES
SENIOR SUBORDINATED DEBT SECURITIES
JUNIOR SUBORDINATED DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
-----------
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST II
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST III
TRUST PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
HAWAIIAN ELECTRIC INDUSTRIES, INC.
Hawaiian Electric Industries, Inc. ("HEI" or the "Company"), a Hawaii
corporation, may from time to time offer (i) its unsecured senior debt
securities ("Senior Debt Securities"), unsecured senior subordinated debt
securities ("Senior Subordinated Debt Securities") or unsecured junior
subordinated debt securities ("Junior Subordinated Debt Securities"),
consisting of debentures, notes or other evidences of indebtedness, each in one
or more series (collectively, "Debt Securities"), (ii) shares of its preferred
stock, without par value, in one or more series (the "Preferred Stock"), and
(iii) shares of its common stock, without par value (the "Common Stock"). Such
securities may be offered in one or more separate classes or series, in such
amounts, in such numbers of securities, at such prices and on such terms to be
determined by market conditions at the time of sale and to be set forth in a
supplement or supplements to this Prospectus (each, a "Prospectus Supplement").
Such securities may be sold for U.S. dollars, foreign denominated currency or
currency units; amounts payable with respect to any such securities may
likewise be payable in U.S. dollars, foreign denominated currency or currency
units--in each case as the Company specifically designates. The Company's
obligations under the Senior Subordinated Debt Securities and Junior
Subordinated Debt Securities will be subordinate and junior in right of payment
to Senior Debt Securities (if any) and to certain other indebtedness of HEI and
its subsidiaries, as described herein and as may be described in an
accompanying Prospectus Supplement.
Each of Hawaiian Electric Industries Capital Trust I, Hawaiian Electric
Industries Capital Trust II and Hawaiian Electric Industries Capital Trust III
(severally, a "Trust" and, collectively, the "Trusts") is a statutory business
trust created under the laws of the State of Delaware, which may offer, from
time to time, preferred securities representing undivided beneficial interests
in the assets of the respective Trust ("Trust Preferred Securities"). HEI will
own all the common securities (the "Trust Common Securities" and, together with
the Trust Preferred Securities, the "Trust Securities") representing undivided
beneficial ownership interests in the assets of the Trust. The Trust exists for
the sole purpose of issuing the Trust Securities and investing the proceeds as
described below and engaging in activities incident thereto. The payment of
periodic cash distributions ("distributions") with respect to the Trust
Preferred Securities of each of the Trusts out of moneys held by each of the
Trusts, and payments on liquidation, redemption or otherwise with respect to
such Trust Preferred Securities, will be guaranteed by HEI to the extent
described herein (each a "Trust Guarantee"). See "Description of the Trust
Guarantees."
(continued on next page)
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
The date of this Prospectus is January , 1997
<PAGE>
(Continued from previous page)
The proceeds from the sale of the Trust Securities will be used by the
relevant Trust to purchase either Junior Subordinated Debt Securities from HEI
(the "Company Debentures") or to purchase partnership preferred securities
("Partnership Preferred Securities"), representing the limited partner
interests in HEI Preferred Funding, LP, a Delaware limited partnership (the
"Partnership"). All of the partner interests in the Partnership other than the
limited partner interests represented by the Partnership Preferred Securities
will be owned by Hycap Management, Inc. ("Hycap"), a wholly-owned subsidiary
of HEI and the sole general partner of the Partnership (the "General
Partner"). If the relevant Trust uses the proceeds from the sale of Trust
Preferred Securities to purchase Partnership Preferred Securities,
substantially all of the proceeds from the sale of the Partnership Preferred
Securities and the capital contribution from the General Partner will be used
by the Partnership to purchase Company Debentures and debt securities of
certain of HEI's subsidiaries ("Subsidiary Debentures"). The payment of
distributions by the Partnership (if, as and when declared by the General
Partner) and payments on liquidation of the Partnership or the redemption of
Partnership Preferred Securities and the performance of the payment and
certain other obligations of the General Partner, will be guaranteed by HEI
(the "Partnership Guarantee"). See "Description of the Partnership Guarantee."
In addition, payments in respect of the Subsidiary Debentures may also be
fully and unconditionally guaranteed, on a subordinated basis, by HEI (the
"Investment Guarantees") for the benefit of the holders of the Partnership
Preferred Securities.
The Trust Guarantees, the Partnership Guarantee and the Investment
Guarantees (collectively, the "Guarantees") will be subordinate and junior in
right of payment to all other liabilities of HEI and rank pari passu with the
most senior preferred stock (if any) issued from time to time by HEI, with
each other and with any guarantee hereafter entered into by HEI in respect of
any preferred security of any affiliate of HEI.
The Company Debentures in one or more series may be issued and sold from
time to time to a Trust in connection with the investment of the proceeds from
the offering of Trust Securities of such Trust. The Company Debentures
purchased by a Trust may subsequently be distributed pro rata to holders of
Trust Securities in connection with the dissolution of such Trust upon the
occurrence of certain events to be described in an accompanying Prospectus
Supplement.
Specific terms of the particular Senior Debt Securities, Senior Subordinated
Debt Securities, Junior Subordinated Debt Securities, Trust Preferred
Securities, Partnership Preferred Securities, Guarantees, Preferred Stock and
Common Stock, in respect of which this Prospectus is being delivered (the
"Offered Securities"), will be set forth in an accompanying Prospectus
Supplement or Supplements, which will describe the terms of the offering of
the Offered Securities, the initial price thereof and the net proceeds from
the sale thereof. The Prospectus Supplement will set forth with regard to the
particular Offered Securities, certain terms thereof, including, where
applicable, (i) in the case of Senior Debt Securities, Senior Subordinated
Debt Securities and Junior Subordinated Debt Securities, the ranking as
senior, senior subordinated or junior subordinated Debt Securities, the
specific designation, aggregate principal amount, purchase price,
denomination, currency or currency unit for which the Debt Securities may be
purchased, currency or currency unit in which the principal of and any
interest on the Debt Securities is payable, maturity, the right of HEI, if
any, to extend or shorten the maturity after issuance, any premium that may be
payable, any exchange, conversion or redemption provisions, the interest rate
(which may be fixed or variable), if any, the time and method of calculating
interest payments, if any, dates on which premium, if any, and interest, if
any, will be payable, the right of HEI, if any, to defer payment of interest
on the Debt Securities and the maximum length of such deferral period, the
initial public offering price, subordination terms, and any listing on a
securities exchange and other specific terms of the offering; (ii) in the case
of Preferred Stock, the specific designation of the offering, number of
shares, purchase price and the rights, preferences and privileges thereof and
any qualifications or restrictions thereon (including dividends, liquidation
value, voting rights, terms for the redemption, conversion or exchange thereof
and any other specific terms of the Preferred Stock), and any listing on a
securities exchange and whether the Company has elected to offer the Preferred
Stock in the form of depositary shares; (iii) in the case of Common Stock, the
number of shares offered, the initial offering price, the market price and
dividend information; and (iv) in the case of Trust Preferred Securities of a
Trust, the designation, number of securities, liquidation preference per
security, initial public offering price, any listing on a securities exchange,
distribution rate (or method of
2
<PAGE>
calculation thereof), dates on which distributions shall be payable and dates
from which distributions shall accrue, any voting rights, terms for any
conversion or exchange into other securities, any redemption, exchange or
sinking fund provisions, any other rights, preferences, privileges,
limitations or restrictions relating to the Trust Preferred Securities and the
terms upon which the proceeds of the sale of the Trust Preferred Securities
shall be used to purchase Company Debentures or Partnership Preferred
Securities.
The Offered Securities may be offered in one or more series and in amounts,
at prices and on terms to be determined at the time of offering; provided,
however, that the aggregate initial public offering price to the public of the
Offered Securities will be limited to $300,000,000. The Prospectus Supplement
relating to any Offered Securities will contain information concerning certain
United States federal income tax considerations, if applicable to the Offered
Securities.
----------------
HEI and/or each of the Hawaiian Electric Industries Capital Trusts may sell
the Offered Securities directly, through agents designated from time to time,
or through underwriters or dealers. See "Plan of Distribution" below. If any
agents of HEI and/or any Hawaiian Electric Industries Capital Trust or any
underwriters or dealers are involved in the sale of the Offered Securities,
the names of such agents, underwriters or dealers and any applicable
commissions and discounts will be set forth in any related Prospectus
Supplement.
This Prospectus may not be used to consummate sales of securities unless
accompanied by a Prospectus Supplement.
3
<PAGE>
AVAILABLE INFORMATION
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by HEI, the Partnership and the Trusts with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Offered Securities.
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission, although it does include a
summary of certain terms of the Debt Securities and the indentures pursuant to
which such Debt Securities will be issued; the Trust Securities and the Trust
Agreements creating the Trusts; the Partnership and the Agreement of Limited
Partnership pursuant to which the Partnership is created; the Partnership
Preferred Securities; and the Guarantees. Reference is made to the
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company, the Trusts, the Partnership and the
Offered Securities. Any statements contained herein concerning the provisions
of any document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission or incorporated by reference herein are not
necessarily complete, and, in each instance, reference is made to the copy of
such document so filed for a more complete description of the matter involved.
Each such statement is qualified in its entirety by such reference.
HEI is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith,
files reports, proxy statements and other information with the Commission.
Reports, proxy statements and other information concerning HEI can be
inspected and copied at prescribed rates at the Commission's Public Reference
Room, Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, as well as the following Regional Offices of the Commission: 7 World
Trade Center, 13th Floor, New York, New York 10048; and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may be obtained by mail from the Commission's Public Reference
Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
If available, such reports and other information may also be accessed through
the Commission's electronic data gathering, analysis and retrieval system
("EDGAR") via electronic means, including the Commission's Web site on the
Internet (http://www.sec.gov). Such reports, proxy statements and other
information may also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, and the Pacific Stock
Exchange, 301 Pine Street, San Francisco, California 94104, on which exchanges
HEI's common stock is listed.
No separate financial statements of any of the Trusts or the Partnership
have been included herein. HEI does not believe that such financial statements
would be material to holders of the Trust Preferred Securities because (i) all
of the voting securities of each of the Trusts will be owned by, and the sole
General Partner of the Partnership will be a wholly-owned subsidiary of, HEI,
a reporting company under the Exchange Act, (ii) none of the Trusts nor the
Partnership has independent operations but exists for the sole purpose of
issuing securities representing undivided beneficial interests in the assets
of such Trust and the Partnership, respectively, and investing the proceeds
thereof in Company Debentures and, in the case of the Partnership, also in the
Subsidiary Debentures and other qualified investments, and (iii) HEI's
obligations described herein and in any accompanying Prospectus Supplement to
provide certain indemnities in respect of, and be responsible for, certain
costs, expenses, debts and liabilities of each of the Trusts under any
indenture and any supplemental indenture thereto and pursuant to the trust
agreements for each Trust, the Trust Guarantee issued with respect to Trust
Preferred Securities issued by that Trust, the Company Debentures purchased by
that Trust and the related indenture, or, in the case of the Partnership, the
Partnership Preferred Securities purchased by such Trust, the Company
Debentures and Subsidiary Debentures purchased by the Partnership and the
Guarantees, in either case taken together, effectively constitute a full and
unconditional guarantee, on a subordinated basis, of payments due on the Trust
Preferred Securities. See "Description of the Junior Subordinated Debt
Securities," "Description of the Trust Guarantees," and "Description of the
Investment Guarantees."
4
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-8503) by HEI
pursuant to Section 13 of the Exchange Act are incorporated by reference in
this Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1995, as amended by HEI's Annual Report on Form 10-K/A dated April 30, 1996
for the fiscal year ended December 31, 1995;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996,
June 30, 1996, and September 30, 1996; and
(c) Current Reports on Form 8-K dated February 21, 1996, April 30, 1996
and January 3, 1997.
All documents filed by HEI pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Offered Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in this Prospectus
or in a document incorporated or deemed to be incorporated by reference herein
or in any Prospectus Supplement (each an "Incorporated Document") shall be
deemed to be modified or superseded for purposes of this Prospectus and any
Prospectus Supplement to the extent that a statement contained herein or
therein (or in any subsequently filed Incorporated Document) modifies or
supersedes such statement. Such incorporation by reference shall not be deemed
to specifically incorporate by reference the information referred to in Item
402(a)(8) of Regulation S-K. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus or any Prospectus Supplement.
Certain information contained in this Prospectus and in any Prospectus
Supplement summarizes, is based upon or refers to information and financial
statements contained in one or more of the Incorporated Documents;
accordingly, such information contained herein or in any Prospectus Supplement
is qualified in its entirety by reference to such Incorporated Documents and
should be read in conjunction therewith.
HEI WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS
PROSPECTUS HAS BEEN DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE
BEEN OR MAY BE INCORPORATED BY REFERENCE HEREIN (OTHER THAN EXHIBITS TO SUCH
DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE IN
SUCH DOCUMENTS). REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO TREASURER,
HAWAIIAN ELECTRIC INDUSTRIES, INC., P.O. BOX 730, HONOLULU, HAWAII 96808-0730,
TELEPHONE: (808) 543-7383.
5
<PAGE>
HAWAIIAN ELECTRIC INDUSTRIES, INC.
HEI was incorporated in 1981 under the laws of the State of Hawaii and is a
holding company with subsidiaries engaged in the electric utility, savings
bank, freight transportation, real estate development and other businesses,
primarily in the State of Hawaii, and also engaged in the pursuit of
independent power projects and energy services projects in Asia and the
Pacific. HEI's predecessor, Hawaiian Electric Company, Inc. ("HECO"), was
incorporated under the laws of the Kingdom of Hawaii (now the State of Hawaii)
on October 13, 1891. As a result of a 1983 corporate reorganization, HECO
became an HEI subsidiary, and common shareholders of HECO became common
shareholders of HEI. The principal office of HEI is located at 900 Richards
Street, Honolulu, Hawaii 96813 and its telephone number is (808) 543-5662.
HECO and its subsidiaries, Maui Electric Company, Limited ("MECO") and
Hawaii Electric Light Company, Inc. ("HELCO"), are regulated operating
electric public utilities engaged in the production, purchase, transmission,
distribution and sale of electricity on the islands of Oahu, Maui, Lanai,
Molokai and Hawaii. These five islands had a combined population estimated at
1,130,000 as of July 1, 1995, or approximately 95 percent of the State's total
population, and a service area of approximately 5,766 square miles. HECO and
its subsidiaries provide the only electric public utility service on these
islands.
HEI also owns directly or indirectly the following operating subsidiaries
which comprise its diversified companies: HEI Diversified, Inc. ("HEIDI") and
its subsidiary, American Savings Bank, F.S.B. ("ASB") and its subsidiaries;
Hawaiian Tug & Barge Corp. ("HTB") and its subsidiary, Young Brothers, Limited
("YB"); Malama Pacific Corp. ("MPC") and its subsidiaries; HEI Power Corp.
("HEIPC") and its subsidiaries; and HEI Investment Corp. ("HEIIC").
ASB, acquired in 1988, is the fourth largest financial institution in Hawaii
based on total assets and the third largest financial institution in Hawaii
based on deposits, in each case as of June 30, 1996, and has 48 retail
branches. HTB was acquired in 1986 and provides ship assist and charter towing
services and owns YB, a regulated intrastate public carrier of waterborne
freight among the Hawaiian Islands. MPC was formed in 1985 and directly or
through subsidiaries develops and invests in real estate. HEIIC was formed in
1984 and is a passive investment company which primarily holds investments in
leveraged leases and currently plans no new investments. HEIPC was formed in
March 1995 to pursue, directly or through its subsidiaries or affiliates,
independent power projects and energy services projects in Asia and the
Pacific.
HEI is a legal entity separate and distinct from its various subsidiaries.
As a holding company with no significant operations of its own, the principal
sources of its funds are dividends or other distributions from its operating
subsidiaries, borrowings and sales of equity. The ability of certain of HEI's
direct and indirect subsidiaries to pay dividends or make other distributions
to HEI, or to make loans or extend credit to or purchase assets from HEI, is
subject to contractual, statutory and regulatory restrictions, including
without limitation the provisions of an agreement with the Hawaii Public
Utilities Commission (pertaining to the electric public utility subsidiaries)
and the capital requirements imposed on ASB by the Office of Thrift
Supervision, as well as restrictions and limitations set forth in debt
instruments, preferred stock resolutions and guarantees.
THE INFORMATION IN THIS PROSPECTUS CONCERNING HEI AND ITS SUBSIDIARIES DOES
NOT PURPORT TO BE COMPREHENSIVE. ADDITIONAL INFORMATION CONCERNING THE
BUSINESSES AND AFFAIRS OF HEI AND ITS SUBSIDIARIES, INCLUDING WITHOUT
LIMITATION PENDING LEGAL AND REGULATORY PROCEEDINGS, DESCRIPTIONS OF
REGULATIONS TO WHICH THESE COMPANIES ARE SUBJECT AND THEIR CAPITAL
REQUIREMENTS AND RESOURCES, IS CONTAINED IN THE INCORPORATED DOCUMENTS. SEE
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
6
<PAGE>
THE HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUSTS
Each of the Trusts is a statutory business trust created under Delaware law
pursuant to (a) a separate trust agreement (each, a "Trust Agreement")
executed by HEI, as sponsor for such trust (the "Sponsor"), and the Trustees
(as defined herein) for such trust and (b) the filing of a certificate of
trust with the Delaware Secretary of State. Each Trust exists for the
exclusive purposes of (i) issuing the Trust Securities, (ii) investing the
gross proceeds of the Trust Securities in Company Debentures or in Partnership
Preferred Securities, and (iii) engaging in only those other activities
necessary or incidental thereto. All of the Trust Common Securities will be
owned by HEI. The Trust Common Securities of each Trust will rank pari passu,
and payments will be made thereon pro rata, with the Trust Preferred
Securities of such Trust except that upon an event of default under the Trust
Agreement with respect thereto, the rights of the holders of the Trust Common
Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of
the holders of the Trust Preferred Securities. HEI will acquire Trust Common
Securities of each Trust in an aggregate liquidation preference amount equal
to not less than 3 percent of the total capital of each Trust.
Each Trust Agreement may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Property Trustee) (as defined
herein), provided that, if any proposed amendment provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would materially
adversely affect the powers, preferences or special rights of the Trust
Securities, whether by way of amendment to such Trust Agreement or otherwise
or (ii) the dissolution, winding-up or termination of the related Trust other
than pursuant to the terms of such Trust Agreement, then the holders of record
of the Trust Securities voting together as a single class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of at least a majority in liquidation
amount of the Trust Securities affected thereby; provided, that, if any
amendment or proposal referred to in clause (i) above would materially
adversely affect only the Trust Preferred Securities or the Trust Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a majority in liquidation amount of such class of
Trust Securities.
Each Trust shall be subject to termination as provided in the applicable
Trust Agreement. Each Trust's business and affairs will be conducted by the
trustees (the "Trustees") appointed by HEI, as the holder of record of all the
Trust Common Securities. The holder of record of the Trust Common Securities
will be entitled to appoint, remove or replace any of, or increase or reduce
the number of, the Trustees of a Trust. The duties and obligations of the
Trustees shall be governed by the Trust Agreement of their respective Trust.
One or more of the Trustees for each Trust will be persons who are employees
or officers of or affiliated with HEI (the "Regular Trustees"). One Trustee of
each Trust will be a financial institution which will be unaffiliated with HEI
and which shall act as institutional trustee under the Trust Agreement and as
indenture trustee for purposes of the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), pursuant to the terms set forth in a Prospectus
Supplement (the "Property Trustee"). In addition, unless the Property Trustee
maintains a principal place of business in the State of Delaware, and
otherwise meets the requirements of applicable law, one Trustee of each Trust
will have its principal place of business or reside in the State of Delaware
(the "Delaware Trustee"). HEI will pay all fees and expenses related to each
of the Trusts and the offering of Trust Securities. The initial Property
Trustee and the initial Delaware Trustee for each Trust will be The Bank of
New York and The Bank of New York (Delaware). The principal office of the
Property Trustee is 101 Barclay St., 21st Floor, New York, N.Y. 10286. The
office of the Delaware Trustee for each Trust in the State of Delaware, and
its principal place of business is, White Clay Center, Route 273, Newark,
Delaware 19711. The principal place of business of each Trust is 101 Barclay
St., 21st Floor, New York, N.Y. 10286.
7
<PAGE>
THE PARTNERSHIP
The following description sets forth certain general information concerning
the Partnership. In the event Partnership Preferred Securities are to be
purchased by a Trust with the proceeds from the sale of its Trust Securities,
the Prospectus Supplement relating to such offering will contain additional
information concerning the Partnership. The information set forth below and in
any Prospectus Supplement relating to the Partnership does not purport to be
complete and is subject to and qualified in its entirety by reference to the
Agreement of Limited Partnership relating to the Partnership which, as amended
and restated, is in substantially the form filed as an exhibit to the
Registration Statement of which this Prospectus is a part.
HEI Preferred Funding, LP is a limited partnership formed under the Delaware
Revised Uniform Limited Partnership Act, as amended (the "Partnership Act").
Pursuant to the certificate of limited partnership and the Agreement of
Limited Partnership for the Partnership, Hycap is the sole General Partner of
the Partnership. Upon the issuance of the Partnership Preferred Securities to
a Trust, which securities represent limited partner interests in the
Partnership, the Trust will be the sole limited partner of the Partnership.
Contemporaneously with the issuance of the Partnership Preferred Securities,
the General Partner will contribute capital to the Partnership in an amount
that will establish its initial capital account at a level equal to at least
15% of the total capital of the Partnership.
The Partnership will be managed by the General Partner and exists for the
sole purpose of (i) issuing the Partnership Preferred Securities, (ii)
investing the proceeds thereof in securities of HEI and its subsidiaries (the
"Affiliate Investment Instruments," including the Company Debentures and the
Subsidiary Debentures) and certain U.S. government obligations and commercial
paper of entities not affiliated with HEI (the "Eligible Debt Securities") and
(iii) engaging in only those other activities necessary or incidental thereto.
The rights of the holders of the Partnership Preferred Securities, including
economic rights, rights to information and voting rights, are set forth in the
Agreement of Limited Partnership and the Partnership Act. See "Description of
the Partnership Preferred Securities."
The location of the principal executive offices of the Partnership is Hycap
Management, Inc., 300 Delaware Avenue, Suite 1704, Wilmington, Delaware 19801
(302) 427-5738.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following tables set forth the ratios of earnings to fixed charges for
HEI and its subsidiaries for the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER
30, YEARS ENDED DECEMBER 31,
----------- ------------------------
1996 1995 1995 1994 1993 1992 1991
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
(excluding interest on ASB deposits)...... 1.90 2.03 1.94 2.22 2.25 2.08 1.99
Ratio of earnings to fixed charges
(including interest on ASB deposits)...... 1.54 1.62 1.57 1.69 1.65 1.50 1.46
</TABLE>
For purposes of calculating the ratio of HEI's consolidated earnings to
fixed charges, "earnings" represent the sum of (a) pretax income from
continuing operations (excluding undistributed net income or net loss from
less than fifty-percent-owned persons) and (b) fixed charges (as hereinafter
defined, but excluding capitalized interest). "Fixed charges" are calculated
both excluding and including interest on ASB's deposits during the applicable
periods and represent the sum of (i) interest, whether capitalized or
expensed, incurred by HEI and its subsidiaries plus their proportionate share
of interest on debt to outsiders incurred by fifty-percent-owned persons, but
excluding interest on nonrecourse debt from leveraged leases which is not
included in interest
8
<PAGE>
expense in HEI's consolidated statements of income, (ii) amortization of debt
expense and discount or premium related to any indebtedness, whether
capitalized or expensed, (iii) the interest factor in rental expense and
(iv) the preferred stock dividend requirements of HEI's subsidiaries,
increased to an amount representing the pretax earnings required to cover such
dividend requirements. HEI has not issued Preferred Stock and consequently
pays no preferred stock dividends.
The following table sets forth the ratio of earnings to fixed charges for
HECO and its subsidiaries for the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
------------- ------------------------
1996 1995 1995 1994 1993 1992 1991
------ ------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges....... 3.67 3.66 3.46 3.47 3.25 3.03 2.82
</TABLE>
For purposes of calculating the ratio of HECO's consolidated earnings to
fixed charges, "earnings" represent the sum of (a) pretax income before
preferred stock dividends of HECO and (b) fixed charges (as hereinafter
defined, reduced by the allowance for borrowed funds used during
construction). "Fixed charges" represent the sum of (i) interest, whether
capitalized or expensed, incurred by HECO and its subsidiaries,
(ii) amortization of debt expense and discount or premium related to any
indebtedness, whether capitalized or expensed, (iii) the estimated interest
component in rental expense and (iv) the preferred stock dividend requirements
of HELCO and MECO, increased to an amount representing the pretax earnings
required to cover such dividend requirements.
USE OF PROCEEDS
Each Trust will use all proceeds from the sale of the Trust Securities to
purchase Company Debentures or Partnership Preferred Securities. The
Partnership will use all proceeds received from HEI's capital contribution and
the sale of Partnership Preferred Securities to purchase Company Debentures,
Subsidiary Debentures and Eligible Debt Securities. Unless otherwise indicated
in the applicable Prospectus Supplement, HEI intends to use the net proceeds
received by it from the sale of the Offered Securities principally to fund
investments in, or extend credit, to its subsidiaries, for repayment of
outstanding indebtedness and for general corporate purposes. The precise
amounts and timing of investments in, and extensions of credit to, HEI's
subsidiaries will depend upon the subsidiaries' funding requirements and the
availability of other funds. Accordingly, the net proceeds to HEI from the
sale of Offered Securities may be temporarily invested in marketable
securities or applied to the reduction of HEI's short-term indebtedness. Based
upon the historic and anticipated future growth of HEI and the financial needs
of its subsidiaries, HEI may engage in additional financings of a character
and amount to be determined as the need arises.
DESCRIPTION OF SENIOR DEBT SECURITIES
AND SENIOR SUBORDINATED DEBT SECURITIES
HEI may issue unsecured Senior Debt Securities and Senior Subordinated Debt
Securities (collectively, for purposes of this Section only, the "Debt
Securities"), consisting of notes, debentures or other evidences of
indebtedness issued from time to time in one or more series. Prior to issuing
any Senior Debt Securities or Senior Subordinated Debt Securities, HEI will
enter into a senior debt indenture (the "Senior Indenture"), in the case of
Senior Debt Securities, and a senior subordinated debt indenture (the "Senior
Subordinated Indenture"), in the case of Senior Subordinated Debt Securities.
For purposes of this Section only, the Senior Indenture and the Senior
Subordinated Indenture are sometimes hereinafter referred to individually as
an "Indenture" and collectively as the "Indentures." HEI will select the
trustee under each of the Indentures (each, a "Debt Trustee"). The forms of
the contemplated Indentures are included as exhibits to the Registration
Statement of
9
<PAGE>
which this Prospectus is a part and are described below. The terms of the Debt
Securities will include those stated in the applicable Indenture and any
supplemental indenture thereto, and those made part of the Indenture by
reference to the Trust Indenture Act.
The following summary of certain of the terms of the Indentures and the Debt
Securities does not purport to be complete and is subject in all respects to
the provisions of, and is qualified in its entirety by reference to, the
applicable Indenture, an initial form of which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the Trust
Indenture Act. Numerical references in parentheses below are to sections in
the applicable Indenture. Wherever particular sections or defined terms of the
applicable Indenture are referred to, such sections or defined terms are
incorporated herein by reference. The Indentures are substantially identical
except for provisions relating to subordination and those relating to HEI's
covenants. Any Debt Securities offered by this Prospectus will be accompanied
by a Prospectus Supplement which will indicate that the securities being
offered thereby are Senior Debt Securities or Senior Subordinated Debt
Securities and will set forth the designation and describe the specific terms
and provisions thereof, which description will supplement and, when
inconsistent, supersede the description in this Section.
GENERAL
Neither of the Indentures will limit the amount of additional indebtedness
HEI or any of its subsidiaries may incur. The Debt Securities will be
unsecured senior or senior subordinated obligations of HEI. Since HEI is a
holding company, the Debt Securities effectively will be subordinate to all
obligations of HEI's subsidiaries, and HEI's rights and the rights of its
creditors, including the holders of Debt Securities, to participate in the
assets of any subsidiary upon such subsidiary's liquidation or
recapitalization will be subject to the prior claims of such subsidiary's
creditors, except to the extent that HEI may itself be a creditor with
recognized claims against such subsidiary. Claims on HEI's subsidiaries by
creditors other than HEI include obligations arising out of short and long-
term indebtedness, as well as other liabilities incurred in the ordinary
course of business. In addition, since HEI's principal subsidiaries are
subject to state or federal regulatory control, the ability of such
subsidiaries to pay dividends or to make distributions, loans or advances to
HEI without prior regulatory approval is limited by applicable laws,
regulations and agreements with regulatory agencies.
The Indentures do not limit the aggregate principal amount of indebtedness
that may be issued thereunder and provide that Debt Securities may be issued
from time to time in one or more series and may be denominated and payable in
foreign currencies or units based on or related to foreign currencies,
including European Currency Units. Special United States federal income tax
considerations applicable to any Debt Securities so denominated will be
described in the relevant Prospectus Supplement.
Reference is made to the applicable Prospectus Supplement which will
accompany this Prospectus for the following terms of and information relating
to the Senior Debt and Senior Subordinated Debt Securities offered thereby (to
the extent such terms are applicable to such Debt Securities): (i)
classification as Senior or Senior Subordinated Debt Securities, and the
specific designation, aggregate principal amount, purchase price and
denominations; (ii) if other than U.S. Dollars, the currency or units based on
or relating to currencies in which the Debt Securities are denominated and/or
in which principal, premium, if any, and/or any interest will or may be
payable; (iii) any date of maturity; (iv) interest rate or rates (or the
method by which such rate or rates will be determined), if any; (v) the dates
on which any such interest will be payable and from which such interest will
accrue; (vi) the place or places where the principal of and premium, if any,
and interest, if any, on the Debt Securities will be payable; (vii) any
redemption, repayment or sinking fund provisions; (viii) whether, in the case
of Senior Subordinated Debt Securities, such Debt Securities are convertible
into Common Stock of HEI; (ix) whether the Debt Securities will be issuable in
registered form ("Registered Debt Securities") or bearer form ("Bearer Debt
Securities") or both and, if Bearer Debt Securities are issuable, any
restrictions applicable to the place of payment of any principal of and
premium, if any, and interest on such Bearer Debt Securities, to the exchange
of one form for another and to the offer, sale and delivery of such Bearer
Debt Securities (including the requirement that under current United States
federal income tax law, Registered Debt Securities will not be exchangeable
into Bearer Debt Securities); (x) any applicable United States federal income
tax consequences,
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including whether and under what circumstances HEI will pay additional amounts
on Debt Securities held by a person who is not a U.S. person (as hereinafter
defined) in respect of any tax, assessment or governmental charge withheld or
deducted and, if so, whether HEI will have the option to redeem such Debt
Securities rather than pay such additional amounts; (xi) the proposed listing,
if any, of the Debt Securities on any securities exchange; and (xii) any other
specific terms of the Debt Securities, including any modifications of or
additions to the events of default or covenants provided for with respect to
such Debt Securities, and any terms which may be required by or advisable under
applicable laws or regulations not inconsistent with the applicable Indenture.
Debt Securities may be presented for exchange and Registered Debt Securities
may be presented for transfer in the manner, at the places and subject to the
restrictions set forth in the Debt Securities and the applicable Prospectus
Supplement. Such services will be provided without charge, other than any tax
or other governmental charge payable in connection therewith, but subject to
the limitations provided in the applicable Indenture. Bearer Debt Securities
and the coupons, if any, appertaining thereto will be transferable by delivery.
Debt Securities will bear interest at a fixed rate or a floating rate. Debt
Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate will be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Debt Securities or to certain
Debt Securities issued at par which are treated as having been issued at a
discount for United States federal income tax purposes will be described in the
relevant Prospectus Supplement.
Debt Securities may be issued, from time to time, with the principal amount
payable on any principal payment date, or the amount of interest payable on any
interest payment date, to be determined by reference to one or more currency
exchange rates, commodity prices, equity indices or other factors. Holders of
such Debt Securities may receive a principal amount on any principal payment
date, or a payment of interest on any interest payment date, that is greater
than or less than the amount of principal or interest otherwise payable on such
dates, depending upon the value on such dates of the applicable currency,
commodity, equity index or other factors. Information as to the methods for
determining the amount of principal or interest payable on any date, the
currencies, commodities, equity indices or other factors to which the amount
payable on such date is linked and certain additional tax considerations will
be set forth in the applicable Prospectus Supplement.
GLOBAL DEBT SECURITIES
The registered Debt Securities of a series may be issued in the form of one
or more global securities ("Global Securities") that will be deposited with, or
on behalf of, a depositary (the "Global Depositary"), or its nominee,
identified in the Prospectus Supplement relating to such series. In such a
case, one or more Global Securities will be issued in a denomination or
aggregate denomination equal to the aggregate principal amount of outstanding
Debt Securities of the series to be represented by such Global Security or
Securities. Unless and until it is exchanged in whole or in part for Debt
Securities in definitive registered form, a Global Security may not be
transferred or exchanged except as a whole by the Global Depositary for such
Global Security to a nominee for such Global Depositary and except in the
circumstances described in the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security and a
description of the Global Depositary will be provided in the applicable
Prospectus Supplement.
SENIOR DEBT SECURITIES
Payment of the principal of and premium, if any, and interest on Senior Debt
Securities issued under the Senior Indenture will rank pari passu with all
other unsecured and unsubordinated debt of HEI. The Senior Debt Securities
effectively will be subordinate to all obligations of HEI's subsidiaries. See
discussion above under "--General." If this Prospectus is being delivered in
connection with the offer and sale of a series of Senior
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Debt Securities, the accompanying Prospectus Supplement will set forth the
approximate amount of HEI (holding company only) secured debt and
unsubordinated debt, if any, outstanding as of the end of the most recent
quarter.
SENIOR SUBORDINATED DEBT SECURITIES
Subordination. Payment of the principal of and premium, if any, and interest
on Senior Subordinated Debt Securities issued under the Senior Subordinated
Indenture will be subordinate and junior in right of payment, to the extent
and in the manner set forth in the Senior Subordinated Indenture, to all
"Senior Indebtedness" of HEI. The Senior Subordinated Indenture defines
"Senior Indebtedness" as the principal of and premium, if any, and interest on
(a) all indebtedness of HEI, whether outstanding on the date of the Senior
Subordinated Indenture or thereafter created, (i) for money borrowed by HEI,
(ii) for money borrowed by, or obligations of, others and either assumed or
guaranteed, directly or indirectly, by HEI, (iii) in respect of letters of
credit and acceptances issued or made by banks, or (iv) constituting purchase
money indebtedness, or indebtedness secured by property included in the
property, plant and equipment accounts of HEI at the time of the acquisition
of such property by HEI, for the payment of which HEI is directly liable, and
(b) all deferrals, renewals, extensions and refundings of, and amendments,
modifications and supplements to, any such indebtedness. As used in the
preceding sentence the term "purchase money indebtedness" means indebtedness
evidenced by a note, debenture, bond or other instrument (whether or not
secured by any lien or other security interest) issued or assumed as all or a
part of the consideration for the acquisition of property, whether by
purchase, merger, consolidation or otherwise, unless by its terms such
indebtedness is subordinate to other indebtedness of HEI. Notwithstanding
anything to the contrary in the Senior Subordinated Indenture or the Senior
Subordinated Debt Securities, Senior Indebtedness shall not include, (i) any
indebtedness of HEI which, by its terms or the terms of the instrument
creating or evidencing it, is subordinate in right of payment to or pari passu
with the Senior Subordinated Debt Securities or (ii) any indebtedness of HEI
to a subsidiary of HEI. (Senior Subordinated Indenture, Section 1.1) The
Senior Subordinated Debt Securities effectively will also be subordinate to
all obligations of HEI's subsidiaries. See discussion above under "--General."
The Senior Subordinated Indenture does not contain any limitation on the
amount of Senior Indebtedness that can be incurred by HEI. Junior Subordinated
Debt Securities issued by HEI pursuant to the Junior Indenture (as defined in
"Description of the Junior Subordinated Debt Securities" below) will be
subordinate in right of payment to the Senior Subordinated Debt Securities.
In the event (a) of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings in
respect of HEI or its property, or (b) that Senior Subordinated Debt
Securities of any series are declared due and payable before their expressed
maturity because of the occurrence of an Event of Default pursuant to Section
5.1 of the Senior Subordinated Indenture (under circumstances other than as
set forth in clause (a) above), then the holders of all Senior Indebtedness
shall first be entitled to receive payment of the full amount due thereon in
money or money's worth, before the holders of any of such Senior Subordinated
Debt Securities or coupons appertaining thereto are entitled to receive a
payment on account of the principal of or premium, if any, or interest on the
indebtedness evidenced by such Senior Subordinated Debt Securities or of such
coupons appertaining thereto. In the event and during the continuation of any
default in payment of any Senior Indebtedness or if any Event of Default shall
exist under any Senior Indebtedness, as "Event of Default" is defined therein
or in the agreement under which the same is outstanding, no payment of the
principal of or interest on the Senior Subordinated Debt Securities or coupons
shall be made. (Senior Subordinated Indenture, Article 13) If this Prospectus
is being delivered in connection with the offer and sale of a series of Senior
Subordinated Debt Securities, the accompanying Prospectus Supplement will set
forth the approximate amount of Senior Indebtedness (holding company only) and
Senior Subordinated Debt Securities outstanding as of the end of the most
recent fiscal quarter.
Conversion Rights. The terms and conditions, if any, on which Senior
Subordinated Debt Securities are convertible into Common Stock of HEI will be
set forth in the Prospectus Supplement relating thereto. Such terms will
include the conversion price, the conversion period, provisions as to whether
conversion will be at the option of the holder or HEI, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of the convertible Senior Subordinated Debt
Securities; and such terms
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may include provisions under which the number of shares of Common Stock to be
received by the holders of the Senior Subordinated Debt Securities would be
calculated according to the market price of the Common Stock as of a time
stated in the Prospectus Supplement.
CERTAIN COVENANTS OF HEI
Restriction on Liens. The Senior Indenture provides that, so long as any
Senior Debt is issued and outstanding thereunder, and except as otherwise
provided in any applicable supplemental indenture as described in the relevent
Prospectus Supplement, HEI will not create, incur, issue or assume any
Indebtedness (as defined below) secured after the date of the Senior Indenture
by any security interest on any property of HEI (holding company only)
(including, without limitation, property of HEI consisting of any share or
shares of capital stock of or any indebtedness owed to HEI by any subsidiary
of HEI), whether such property, shares or indebtedness are owned by HEI at the
date of the Indenture or thereafter acquired, without effectively providing
concurrently therewith that the Senior Debt (together, at the option of HEI,
with any other indebtedness ranking equally with the Senior Debt and then
existing or thereafter created) shall be secured equally and ratably with (or
prior to) the Indebtedness so created, incurred, issued or assumed; provided,
however, that the foregoing does not apply to:
(1) security interests on any property acquired, constructed or improved
by HEI or on any shares of capital stock or indebtedness of any subsidiary
acquired by HEI after the date of the Indenture which security interests
are created or assumed at the time of or within 270 days after the
acquisition of, or the expenditure of the costs of construction or
improvements of, and which secure the payment of all or any part of the
purchase price of, such property, shares of capital stock or indebtedness,
or which secure payment of all or any part of the cost of any such
construction or improvements, provided that, in the case of any such
acquisition, construction or improvement, such security interest does not
apply to any property or shares of capital stock or indebtedness owned
theretofore by HEI other than, in the case of any such construction or
improvement, any real property on which the property is so constructed or
the improvement is located;
(2) security interests on any property, shares of capital stock or
indebtedness, which security interests exist at the time of acquisition of
such property, shares or indebtedness by HEI;
(3) security interests on any property of a corporation or other Person,
which interests exist at the time such corporation is merged with or into
or consolidated with HEI or which interests exist at the time of a sale or
transfer of the properties of such corporation or other Person as an
entirety or substantially as an entirety to HEI;
(4) security interests in favor of the United States of America or any
State thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any State thereof, or in
favor of any other country or political subdivision, (A) to secure partial
progress, advance or other payments pursuant to any contract or statute,
(B) to secure any indebtedness incurred or guaranteed for the purpose of
financing or refinancing all or any part of the purchase price of the
property, shares of capital stock or indebtedness subject to such security
interests, or (C) to secure the cost of constructing or improving the
property subject to such security interests (including, without limitation,
security interests incurred in connection with pollution control,
industrial revenue or similar financings);
(5) security interests on any property arising in connection with any
defeasance, covenant defeasance or in substance defeasance of any
Indebtedness pursuant to express contractual provision or generally
accepted accounting principles;
(6) security interests on any capital stock of any corporation which is
registered in the name of HEI or otherwise owned by or held for the benefit
of HEI which may constitute "margin stock" as such term is defined in
Section 207.2(i) of Title 12 of the Code of Federal Regulations (or any
successor provisions); and
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(7) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any security interest
referred to above in clauses (1)-(6), inclusive; provided, however, that
the principal amount of Indebtedness secured thereby shall not exceed the
original principal amount of Indebtedness and that such extension, renewal
or replacement shall be limited to all or a part of the property (plus
improvements and construction on such property), shares of capital stock or
indebtedness which was subject to the security interest so extended,
renewed or replaced.
Notwithstanding the foregoing, under the Senior Indenture as supplemented,
HEI may, without equally and ratably securing the Senior Debt Securities,
create, incur, issue, and assume Indebtedness secured by any security interest
not excepted by the foregoing clauses (1) through (7), inclusive, if the
aggregate amount of such Indebtedness, together with all other Indebtedness of
HEI (holding company only) existing at such time and secured by security
interests not so excepted, does not exceed 10% of HEI's Consolidated Net
Assets. (Senior Indenture, Section 3.9)
"Indebtedness" means (i) any indebtedness, whether or not represented by
bonds, debentures, notes or other securities, for the repayment of money
borrowed, (ii) all deferred indebtedness (including, without limitation,
capitalized leases) for the payment of the purchase price of property or
assets purchased, and (iii) all guaranties, endorsements, assumptions or other
contingent obligations in respect of, or to purchase or otherwise to acquire,
indebtedness of the types described in clauses (i) and (ii) above.
"Consolidated Net Assets" means the total amount of assets appearing on the
consolidated balance sheet of HEI and its subsidiaries less, without
duplication: (a) all current liabilities (excluding current liabilities of ASB
and any current liabilities which are by their terms extendable or renewable
at the sole option of the obligor thereon without requiring the consent of the
obligee to a date more than 12 months after the date of determination); (b)
all reserves for depreciation and other asset valuation reserves but excluding
any reserves for deferred Federal income taxes arising from accelerated
amortization or otherwise; and (c) all appropriate adjustments on account of
minority interests of other persons holding common stock in any subsidiary and
TOPrSSM. Consolidated Net Assets are determined in accordance with generally
accepted accounting principles and as of a date not more than 90 days prior to
the happening of the event for which such determination is being made.
Restrictions on Dispositions of HECO Shares. HEI currently holds 100% of the
outstanding common stock of HECO. The Senior Indenture provides that, so long
as any Senior Debt Security is issued and outstanding under the Senior
Indenture, HEI will not sell, transfer or otherwise dispose of, and will not
permit HECO to issue, sell, transfer or otherwise dispose of, any shares of
capital stock of any class or classes of HECO ordinarily having voting power
for the election of HECO's board of directors. This covenant will not restrict
the issuance, sale, transfer or other disposition of HECO's voting shares to
HEI or to any of HEI's direct or indirect wholly-owned subsidiaries. The
covenant also will not restrict (i) sales, transfers or other dispositions by
HECO of any securities, including the capital stock of its subsidiaries, (ii)
consolidations of HECO or mergers of HECO with or into HEI or any of its
direct or indirect wholly-owned subsidiaries, or (iii) consolidations or
mergers of HECO with or into any other corporation if the corporation formed
by such consolidation or merger is a direct or indirect wholly-owned
subsidiary of HEI. (Senior Indenture, Section 9.3)
Consolidation, Merger, Conveyance, Transfer or Lease. Each Indenture
provides that, so long as any Debt Security is issued and outstanding
thereunder, HEI will not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person or permit any Person to consolidate with or merge into
HEI or convey, transfer or lease its properties and assets substantially as an
entirety to HEI unless certain conditions are met, including the conditions
that (a) the corporation formed by such consolidation or into which HEI is
merged or the Person which acquires by conveyance or transfer, or which
leases, the property and assets of HEI substantially as an entirety is a
Person organized and existing in corporate form under the laws of the United
States of America, any State thereof or the District of Columbia, and such
Person expressly assumes, by supplemental indenture, the due and punctual
payment of the principal of (and premium, if any) and interest (if any) on all
the Debt Securities and the performance of all of the covenants of HEI under
the Indenture, (b) immediately after giving effect to such transaction no
Event of Default by HEI,
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and no event which after notice and lapse of time would become an Event of
Default by HEI, has occurred and is continuing, and (c) HEI has delivered to
the Debt Trustee an Officers' Certificate and an Opinion of Counsel as provided
in the Indentures. (Senior and Senior Subordinated Indenture, Section 9.1)
ABSENCE OF RESTRICTIONS ON CERTAIN TRANSACTIONS
Other than the restrictions on liens and disposition of HECO shares, as set
forth in the Senior Indenture, and restrictions on mergers, consolidations,
conveyances, transfers and leases set forth in each Indenture as described
above, neither the Senior Indenture nor the Senior Subordinated Indenture
contains any covenants or other provisions designed to afford holders of Senior
Debt Securities or Senior Subordinated Debt Securities protection in the event
of a highly leveraged transaction involving HEI, or in the event of a
recapitalization, merger or other transaction (leveraged or otherwise)
involving HEI, its affiliates or its management, or in the event of a change in
control of HEI.
EVENTS OF DEFAULT
An Event of Default is defined under each Indenture with respect to Debt
Securities of any series issued under such Indenture as being: (a) default in
payment of all or any part of the principal of the Debt Securities of such
series when due, whether at maturity (or upon any redemption), by declaration
or otherwise; (b) default for 30 days in payment of any interest on any Debt
Securities of such series; (c) default in payment of any sinking fund
installment when due; (d) default for 60 days after written notice, as provided
in such Indenture, in the observance or performance of any other covenant or
agreement in the Debt Securities of such series or such Indenture other than a
covenant included in such Indenture solely for the benefit of a series of Debt
Securities other than such series; (e) certain events of bankruptcy, insolvency
or reorganization with respect to HEI; or (f) an Event of Default with respect
to any other indebtedness for borrowed money (other than nonrecourse
obligations) of HEI in an aggregate principal amount exceeding $10,000,000, if
such Event of Default shall result in the acceleration of such other
indebtedness under the terms of the instrument under which such indebtedness is
issued or secured, so long as such acceleration is not cured, waived, rescinded
or annulled, or such indebtedness is not discharged, within 20 days after
written notice thereof as provided in such Indenture; provided that if any such
acceleration shall cease or be cured, waived, rescinded or annulled, then the
Event of Default by reason thereof shall be deemed likewise to have been
thereupon cured. (Senior and Senior Subordinated Indentures, Section 5.1)
Each Indenture provides that (a) if an Event of Default due to the default in
payment of principal of or premium, if any, or interest on, any series of Debt
Securities issued under such Indenture or due to the default in the performance
or breach of any other covenant or agreement of HEI applicable to the Debt
Securities of such series but not applicable to all outstanding Debt Securities
issued under such Indenture shall have occurred and be continuing, either the
Debt Trustee or the holders of not less than 25% in principal amount of the
Debt Securities of each affected series (treated as one class) issued under
such Indenture and then outstanding may then declare the principal of all Debt
Securities of each such affected series and interest accrued thereon to be due
and payable immediately; and (b) if any Event of Default due to a default in
the performance of any other of the covenants or agreements in such Indenture
applicable to all outstanding Debt Securities issued thereunder and then
outstanding or due to certain events of bankruptcy, insolvency and
reorganization of HEI shall have occurred and be continuing, either the Debt
Trustee or the holders of record of not less than 25% in principal amount of
all Debt Securities issued under such Indenture and then outstanding (treated
as one class) may declare the principal of all such Debt Securities and
interest accrued thereon to be due and payable immediately, but upon certain
conditions such declarations may be annulled and past defaults may be waived
(except a continuing default in payment of principal of (or premium, if any) or
interest on such Debt Securities) by the holders of record of a majority in
principal amount of the Debt Securities of all such affected series then
outstanding but no such annulment or waiver will apply to subsequent defaults.
(Senior and Senior Subordinated Indentures, Sections 5.1 and 5.10)
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Each Indenture contains a provision entitling the Debt Trustee, subject to
the duty of the Debt Trustee during a default to act with the required standard
of care, to be indemnified by the holders of record of Debt Securities issued
under such Indenture requesting the Debt Trustee to exercise any right or power
under such Indenture before proceeding to exercise any such right or power at
the request of such holders. (Senior and Senior Subordinated Indentures,
Sections 6.1 and 6.2) Subject to such provisions in each Indenture for the
indemnification of the Debt Trustee and certain other limitations, the holders
of record of a majority in principal amount of the outstanding Debt Securities
of each affected series (treated as one class) issued under such Indenture may
direct the time, method and place of conducting any proceedings for any remedy
available to the Debt Trustee, or exercising any trust or power conferred on
the Debt Trustee. (Senior and Senior Subordinated Indentures, Section 5.9)
Each Indenture provides that no holder of Debt Securities issued under such
Indenture may institute any action against HEI under such Indenture (except
actions for payment of overdue principal, premium, if any, or interest) unless
such holder previously shall have given to the Debt Trustee written notice of
default and continuance thereof and unless the holders of not less than 25% in
principal amount of the Debt Securities of each affected series (treated as one
class) issued under such Indenture and then outstanding shall have requested
the Debt Trustee to institute such action and shall have offered the Debt
Trustee reasonable indemnity, the Debt Trustee shall not have instituted such
action within 60 days of such request and the Debt Trustee shall not have
received direction inconsistent with such written request by the holders of a
majority in principal amount of the Debt Securities of each affected series
(treated as one class) issued under such Indenture and then outstanding.
(Senior and Senior Subordinated Indentures, Sections 5.6, 5.7 and 5.9)
Each Indenture contains a covenant that HEI will file annually with the Debt
Trustee a certificate of no default or a certificate stating that a default
exists. (Senior and Senior Subordinated Indentures, Section 3.5)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
HEI can discharge or defease its obligations under each Indenture, including
its obligations under the covenants set forth therein, as set forth below.
(Senior and Senior Subordinated Indentures, Section 10.1)
Upon satisfying certain conditions, HEI may discharge certain obligations to
holders of any series of Debt Securities issued under such Indentures which
have not already been delivered to the Debt Trustee for cancellation and which
have either become due and payable or are by their terms due and payable within
one year (or scheduled for redemption within one year) by irrevocably
depositing with the Debt Trustee cash or, in the case of Debt Securities
payable only in U.S. dollars, U.S. Government Obligations (as defined in such
Indenture), as trust funds in an amount certified to be sufficient to pay when
due, whether at maturity, upon redemption or otherwise, the principal of and
premium, if any, and interest on such Debt Securities and sinking fund
payments.
HEI may also discharge any and all of its obligations to holders of any
series of Debt Securities issued under an Indenture at any time ("defeasance"),
but may not thereby avoid its duty to register the transfer or exchange of such
series of Debt Securities, to replace any temporary, mutilated, destroyed, lost
or stolen series of Debt Securities or to maintain an office or agency in
respect of such series of Debt Securities or certain other obligations. Upon
satisfying certain conditions, HEI may instead be released with respect to any
outstanding series of Debt Securities issued under the relevant Indenture from
the obligations imposed by certain provisions of such Indenture including
Sections 3.6, 3.7, 3.8, 3.9, 3.10, 9.1 and 9.3, in the case of the Senior
Indenture, and Sections 3.6, 3.7, 3.8 and 9.1, in the case of the Senior
Subordinated Indenture (which contain, among other things, the covenants
described above limiting liens, consolidations, mergers, transfers and leases
and certain dispositions) and omit to comply with such Sections without
creating an Event of Default ("covenant defeasance"). Defeasance or covenant
defeasance may be effected only if, among other things: (i) HEI irrevocably
deposits with the Debt Trustee cash or, in the case of Debt Securities payable
only in U.S. dollars, U.S. Government Obligations, as trust funds in an amount
certified to be sufficient to pay at maturity (or upon redemption) the
principal of and premium, if any, and interest on and any sinking fund for all
outstanding Debt
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Securities of such series issued under such Indenture; (ii) HEI delivers to the
Debt Trustee an opinion of counsel to the effect that the holders of such
series of Debt Securities will not recognize income, gain or loss for United
States federal income tax purposes as a result of such defeasance or covenant
defeasance and that such defeasance or covenant defeasance will not otherwise
alter such holders' United States federal income tax treatment of principal,
premium and interest payments on such series of Debt Securities (in the case of
a defeasance, such opinion must be based on a ruling of the Internal Revenue
Service or a change in United States federal income tax law occurring after the
date of such Indenture, since such a result would not occur under current tax
law); and (iii) in the case of the Senior Subordinated Indenture no event or
condition shall exist that, pursuant to certain provisions described under "--
Senior Subordinated Debt Securities" above, would prevent HEI from making
payments of principal of and premium, if any, and interest on the Senior
Subordinated Debt Securities at the date of the irrevocable deposit referred to
above or at any time during the period ending on the 91st day after the date of
such deposit.
MODIFICATION OF THE INDENTURES
Each Indenture provides that HEI and the Debt Trustee may enter into
supplemental indentures without the consent of the holders of Debt Securities
to, among other things: (a) secure any Debt Securities, (b) evidence the
assumption by a successor corporation of the obligations of HEI, (c) add
covenants for the protection of the holders of Debt Securities, (d) cure any
ambiguity or correct any inconsistency in such Indenture, provided that such
cure or correction does not adversely affect the holders of such Debt
Securities, (e) establish the forms or terms of Debt Securities of any series
and (f) evidence the acceptance of appointment by a successor trustee or
facilitate any administration by more than one trustee. (Senior and Senior
Subordinated Indentures, Section 8.1)
Each Indenture also contains provisions permitting HEI and the Debt Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of Debt Securities of all series issued under such Indenture
then outstanding and affected (voting as one class), to add any provisions to,
or change in any manner or eliminate any of the provisions of, such Indenture
or modify in any manner the rights of the holders of the Debt Securities of
each series so affected; provided that HEI and the Debt Trustee may not,
without the consent of the holder of each outstanding Debt Security affected
thereby, (a) extend the stated maturity of the principal of any Debt Security,
or reduce the principal amount thereof or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof
or change the currency in which the principal thereof (including any amount in
respect of original issue discount), premium, if any, or interest thereon is
payable or reduce the amount of any original issue discount Debt Security that
is payable upon acceleration or provable in bankruptcy or alter certain
provisions of such Indenture relating to the Debt Securities issued thereunder
not denominated in U.S. dollars or impair the right to institute suit for the
enforcement of any payment on any Debt Security when due or (b) reduce the
aforesaid percentage in principal amount of Debt Securities of any series
issued under such Indenture, the consent of the holders of which is required
for any such modification. (Senior and Senior Subordinated Indentures, Section
8.2)
The Senior Subordinated Indenture may not be amended to alter the
subordination of any outstanding Senior Subordinated Debt Securities without
the consent of each holder of Senior Indebtedness then outstanding that would
be adversely affected thereby. (Senior Subordinated Indenture, Section 8.6)
CONCERNING THE DEBT TRUSTEE
HEI and its subsidiaries maintain ordinary banking and trust relationships
with a number of banks that could serve as trustee under the Indentures.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
HEI may issue unsecured notes, debentures or other evidences of indebtedness
from time to time in one or more series (the "Junior Subordinated Debt
Securities"). Prior to issuing any Junior Subordinated Debt Securites, HEI will
enter into a Junior Indenture (the "Junior Indenture"). HEI will select the
trustee under the
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Junior Indenture (the "Junior Debt Trustee"). The form of the contemplated
Junior Indenture is included as an exhibit to the Registration Statement of
which this Prospectus is a part and is described below. The terms of the
Junior Subordinated Debt Securities will include those stated in the Junior
Indenture, those stated in any supplemental indenture supplementing the Junior
Indenture and those made part of the Junior Indenture by reference to the
Trust Indenture Act. Junior Subordinated Debt Securities which are issued to a
Trust or the Partnership in connection with a sale of Trust Preferred
Securities are referred to in this Prospectus as "Company Debentures."
The following summary of the terms of the Junior Indenture does not purport
to be complete and is subject in all respects to the provisions of, and is
qualified in its entirety by reference to, the Junior Indenture, which is
filed as an exhibit to the Registration Statement of which this Prospectus
forms a part, and the Trust Indenture Act. Whenever particular provisions or
defined terms in the Junior Indenture are referred to herein, such provisions
or defined terms are incorporated by reference herein. Section and Article
references used herein are references to provisions of the Junior Indenture
unless otherwise noted. Any Junior Subordinated Debt Securities offered by
this Prospectus will be accompanied by a Prospectus Supplement which will set
forth the designation and describe the specific terms and provisions thereof,
which description will supplement and, when inconsistent, supersede the
description in this Section.
GENERAL
The Junior Indenture will not limit the amount of additional indebtedness
HEI or any of its subsidiaries may incur, nor does the Junior Indenture limit
the aggregate principal amount of Junior Subordinated Debt Securities which
may be issued thereunder. The Junior Subordinated Debt Securities will be
unsecured, fully subordinated obligations of HEI. Since HEI is a holding
company, the Junior Subordinated Debt Securities effectively will be
subordinate to all obligations of HEI's subsidiaries, HEI's rights and the
rights of its creditors, including the holders of Junior Subordinated Debt
Securities, to participate in the assets of any subsidiary upon such
subsidiary's liquidation or recapitalization will be subject to the prior
claims of such subsidiary's creditors, except to the extent that HEI may
itself be a creditor with recognized claims against such subsidiary. Claims on
HEI's subsidiaries by creditors other than HEI include obligations arising out
of short and long-term indebtedness, as well as other liabilities incurred in
the ordinary course of business. In addition, since HEI's principal
subsidiaries are subject to state or federal regulatory control, the ability
of such subsidiaries to pay dividends or to make distributions, loans or
advances to HEI without prior regulatory approval is limited by applicable
laws, regulations and agreements with regulatory agencies. The Junior
Subordinated Debt Securities will also be subordinate to Senior Indebtedness,
including the Senior Debt Securities, and to the Senior Subordinated Debt
Securities.
In the event Junior Subordinated Debt Securities (i.e., Company Debentures)
are purchased by a Trust or a trustee of such Trust with the proceeds of the
issuance of Trust Securities by such Trust, the Company Debentures may be
subsequently distributed pro rata to the holders of such Trust Securities if
the Trust dissolves. Such dissolution may occur upon the occurrence of certain
events which will be described in the Prospectus Supplement relating to such
Trust Securities. Only one series of Company Debentures will be issued to a
Trust or a trustee of such trust in connection with the issuance of Trust
Securities by that Trust.
Reference is made to the Prospectus Supplement relating to the particular
Junior Subordinated Debt Securities being offered thereby for the following
terms: (1) the designation of such Junior Subordinated Debt Securities; (2)
the aggregate principal amount and denomination (if other than multiples of
$25) of such Junior Subordinated Debt Securities; (3) the percentage of the
principal amount at which such Junior Subordinated Debt Securities will be
issued; (4) the date or dates on which such Junior Subordinated Debt
Securities will mature and HEI's right, if any, to shorten or extend such date
or dates; (5) the rate or rates, if any, per annum, at which such Junior
Subordinated Debt Securities will bear interest, or the method of
determination of such rate or rates; (6) the date or dates from which such
interest shall accrue, the interest payment dates on which such interest will
be payable or the manner of determination of such interest payment dates and
the record dates for the determination of holders to whom interest is payable
on any such interest payment dates; (7) the right, if any, to
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extend the interest payment periods and the duration of such extension; (8)
provisions, if any, for a sinking, purchase or other analogous fund; (9) the
period or periods, if any, within which, the price or prices at which, and the
terms and conditions upon which such Junior Subordinated Debt Securities may
be redeemed, in whole or in part, at the option of HEI or the holder; (10) the
form of such Junior Subordinated Debt Securities; and (11) any other specific
terms of the Junior Subordinated Debt Securities.
If a Prospectus Supplement specifies that a series of Junior Subordinated
Debt Securities is denominated in a currency or currency unit other than
United States dollars, such Prospectus Supplement shall also specify the
denomination in which such Junior Subordinated Debt Securities will be issued
and the coin or currency in which the principal, premium, if any, and
interest, if any, on such Junior Subordinated Debt Securities will be payable,
which may be United States dollars based upon the exchange rate for such other
currency or currency unit existing on or about the time a payment is due.
The Junior Indenture does not contain any covenants or other provisions
designed to afford holders of Junior Subordinated Debt Securities protection
in the event of a highly leveraged transaction involving HEI, or in the event
of a recapitalization, merger or other transaction (leveraged or otherwise)
involving HEI, its affiliates or its management or in the event of a change in
control.
ADDITIONAL INTEREST
If, at any time while the Property Trustee is the holder of any Junior
Subordinated Debt Securities issued to the related Trust, or the Property
Trustee is a holder of Partnership Preferred Securities in the Partnership
which is in turn a holder of any Junior Subordinated Debt Securities, such
Trust, the Property Trustee or the Partnership shall be required to pay any
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes or taxes or charges imposed by reason of the transfer
of the Trust Preferred Securities or beneficial interests therein) imposed by
the United States, or any other taxing authority, then, in any such case, HEI
will pay as additional interest ("Additional Interest") on the Junior
Subordinated Debt Securities held by the Property Trustee or the Partnership,
such additional amounts as shall be required so that the net amounts received
and retained by such Trust and by the Property Trustee or by the Partnership
after paying any such taxes, duties, assessments or other governmental charges
will be equal to the amounts such Trust and the Property Trustee or the
Partnership would have received had no such taxes, duties, assessments or
other governmental charges been imposed. (Section 4.05)
FORM, EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Junior Subordinated Debt Securities will be issued in fully registered form
without coupons and in denominations of $25 and multiples of $25. (Section
2.03) No service charge will be made for any transfer or exchange of the
Junior Subordinated Debt Securities, but the Company or the Junior Debt
Trustee may require payment of a sum sufficient to cover any tax or other
government charge payable in connection therewith. (Section 2.07)
Unless otherwise provided in the applicable Prospectus Supplement,
principal, premium, if any, and interest, will be payable and the Junior
Subordinated Debt Securities may be surrendered for payment or transferred at
an office or agency maintained for that purpose or the corporate trust office
of the Junior Debt Trustee as paying and authenticating agent in New York, New
York, provided that payment of interest, if any, on registered Junior
Subordinated Debt Securities that are not issued to a Trust or the Partnership
may be made at the option of HEI by check mailed to the address of the person
entitled thereto as it appears in the Security Register or by wire transfer to
an account appropriately designated by the person entitled thereto. (Section
2.03 and 4.02)
BOOK-ENTRY JUNIOR SUBORDINATED DEBT SECURITIES
The Junior Subordinated Debt Securities of a series may be issued in whole
in the form of one or more Global Securities that will be deposited with, or
on behalf of, a depositary (the "Global Depositary"), or its nominee,
identified in the Prospectus Supplement relating to such series. In such a
case, one or more Global Securities will be issued in a denomination or
aggregate denomination equal to the aggregate principal amount
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of outstanding Junior Subordinated Debt Securities of the series to be
represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Junior Subordinated Debt Securities in
definitive registered form, a Global Security may not be registered for
transfer or exchange except as a whole by the Global Depositary for such Global
Security to a nominee for such Global Depositary and except in the
circumstances described in the applicable Prospectus Supplement. (Section 2.11)
The specific terms of the depositary arrangement with respect to any portion
of a series of Junior Subordinated Debt Securities to be represented by a
Global Security and a description of the Global Depositary will be provided in
the applicable Prospectus Supplement.
SUBORDINATION
The Junior Subordinated Debt Securities will be subordinate and junior in
right of payment to Senior Debt Securities, Senior Indebtedness, Senior
Subordinated Debt Securities and to certain other indebtedness of HEI to the
extent set forth in the applicable Prospectus Supplement. The Junior
Subordinated Debt Securities effectively will also be subordinate to all debts
and other obligations of HEI's subsidiaries. See "--General" and "Description
of Senior Debt Securities and Senior Subordinated Debt Securities--Senior
Subordinated Debt Securities--Subordination." The Junior Indenture does not
contain any limitation on the amount of Senior Debt Securities, Senior
Indebtedness and Senior Subordinated Debt Securities that can be issued by HEI.
CERTAIN COVENANTS OF HEI
If (i) there shall have occurred any event that would constitute a Junior
Indenture Event of Default (as defined herein) or (ii) HEI shall be in default
with respect to its payment of any obligations under a related Trust or
Partnership Guarantee or (iii) HEI shall have given notice of its election to
defer payments of interest on any series of such Junior Subordinated Debt
Securities by extending the interest payment period as provided in and
permitted by a supplemental indenture to the Junior Indenture or appropriate
officer's certificate pursuant thereto, and such period, or any extension
thereof, shall be continuing, then (a) HEI shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
(except for dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, its common stock and other than
(x) purchases or acquisitions of shares of HEI Common Stock in connection with
the satisfaction by HEI of its obligations under any employee benefit plans or
any other contractual obligation of HEI (other than a contractual obligation
ranking pari passu with or junior to the Junior Subordinated Debt Securities),
(y) as a result of a reclassification of HEI capital stock or the exchange or
conversion of one class or series of HEI capital stock for another class or
series of HEI capital stock or (z) the purchase of fractional interests in
shares of HEI capital stock pursuant to the conversion or exchange provisions
of such HEI capital stock or the security being converted or exchanged), (b)
HEI shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by HEI which rank pari
passu with or junior to such Junior Subordinated Debt Securities, provided
that, if only the event referred to in clause (iii) above (and not the events
referred to in clause (i) and (ii)) has occurred, this restriction shall apply
only to other series of Junior Subordinated Debt Securities or debt securities
with equivalent deferral options, and (c) HEI shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Trust
Guarantee or Partnership Guarantee or any other guarantee by HEI with respect
to comparable securities). (Section 6.09)
In the event Junior Subordinated Debt Securities are issued to a Trust or a
trustee of such trust, or to the Partnership, in connection with the issuance
of Trust Securities of a Trust, for so long as such Trust Securities remain
outstanding, HEI will covenant (i) to directly or indirectly maintain 100
percent ownership of the Trust Common Securities of such Trust; provided,
however, that any permitted successor of HEI under the Junior Indenture may
succeed to HEI's ownership of such Trust Common Securities, (ii) to use its
reasonable efforts to cause such Trust (a) to remain a statutory business
trust, except in connection with the distribution of Junior Subordinated Debt
Securities to the holders of Trust Securities in liquidation of such Trust, the
redemption of all of the Trust Securities of such Trust, or certain mergers,
consolidations or amalgamations, each as permitted by
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the Trust Agreement of such Trust, and (b) to otherwise continue not to be
treated as an association taxable as a corporation or a partnership for United
States federal income tax purposes and (iii) to use its reasonable efforts to
cause each holder of Trust Securities to be treated as owning an undivided
beneficial interest in the Junior Subordinated Debt Securities. (Section 4.06)
LIMITATION ON MERGERS AND SALES OF ASSETS
HEI shall not consolidate with, or merge into, any corporation or convey or
transfer its properties and assets substantially as an entirety to any entity
unless (a) the successor entity shall be a legal entity organized under the
laws of any domestic jurisdiction and shall expressly assume the obligations of
HEI under the Junior Indenture and (b) after giving effect thereto, no Default,
and no event which after notice or a lapse of time or both would become a
Default, shall have occurred and be continuing under the Junior Indenture.
(Section 10.01)
EVENTS OF DEFAULT, WAIVER AND NOTICE
The Junior Indenture provides that any one or more of the following described
events which has occurred and is continuing constitutes a "Junior Indenture
Event of Default" with respect to each series of Junior Subordinated Debt
Securities:
(a) default for 30 days in payment of any interest on the Junior
Subordinated Debt Securities of that series, including any Additional
Interest in respect thereof, when due; provided, however, that a valid
extension of the interest payment period by HEI shall not constitute a
default in the payment of interest for this purpose; or
(b) default in payment of principal of or premium, if any, on the Junior
Subordinated Debt Securities of that series when due whether at maturity,
upon redemption, by declaration or otherwise; provided, however, that a
valid extension of the maturity of such Junior Subordinated Debt Securities
shall not constitute a default for this purpose; or
(c) default by the Company in the performance of any other of the
covenants or agreements in the Junior Indenture (other than a covenant or
agreement expressly included solely for the benefit of one or more other
series than such series) which shall not have been remedied for a period of
90 days after notice; or
(d) certain events of bankruptcy, insolvency or reorganization of HEI; or
(e) in the event Junior Subordinated Debt Securities are issued to a
Trust or a trustee of such trust, or to the Partnership, in connection with
the issuance of Trust Securities by such Trust, the voluntary or
involuntary dissolution, winding-up or termination of such Trust, except in
connection with the distribution of Junior Subordinated Debt Securities to
the holders of Trust Securities in liquidation of such Trust, the
redemption of all of the Trust Securities of such Trust, or certain
mergers, consolidations or amalgamations, each as permitted by the Trust
Agreement of such Trust.
The Junior Indenture provides that, if a Junior Indenture Event of Default on
any series of Junior Subordinated Debt Securities shall have occurred and be
continuing, either the Junior Debt Trustee or the holders of record of not less
than 25 percent in aggregate principal amount of the Junior Subordinated Debt
Securities of such series then outstanding by proper notice may declare the
principal of all such Junior Subordinated Debt Securities of such series to be
due and payable immediately. The holders of a majority in aggregate outstanding
principal amount of such series of Junior Subordinated Debt Securities may
annul such declaration and waive the default if the default (other than the
non-payment of the principal of such series of Junior Subordinated Debt
Securities which has become due solely by reason of such acceleration) has been
cured and a sum sufficient to pay all matured installments of interest and
principal and premium, if any due otherwise than by acceleration has been
deposited with the Junior Debt Trustee. (Section 6.01)
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The holders of record of a majority in principal amount of the Junior
Subordinated Debt Securities of any series affected and then outstanding and,
in the case of Junior Subordinated Debt Securities issued to a Trust or the
Partnership, the holders of a majority in aggregate liquidation amount of the
related Trust Preferred Securities, shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Junior Debt Trustee under the Junior Indenture with respect to such series,
provided that such direction shall not be in conflict with any rule of law or
the Junior Indenture or unduly prejudicial to the rights of holders of any
other series of the Junior Subordinated Debt Securities and subject to the
right of the Junior Debt Trustee to require reasonable indemnity against
expenses and liabilities. Notwithstanding the foregoing, subject to the
subordination provisions set forth in a Prospectus Supplement, the right of
any holder of Junior Subordinated Debt Securities to receive payment of the
principal of and premium (if any) and interest on such Junior Subordinated
Debt Securities on or after the due dates therefor, as the same may be
extended in accordance with the terms of such Junior Subordinated Debt
Securities, or to institute suit for the enforcement of any such payment
provisions, shall not be impaired or affected without the consent of such
holder. (Sections 6.04, 6.06 and 7.02)
The Junior Indenture requires the annual filing by HEI with the Junior Debt
Trustee of a certificate as to compliance by HEI with certain conditions and
covenants under the Junior Indenture. (Section 5.03)
The Junior Indenture provides that the Junior Debt Trustee may withhold
notice of a Junior Indenture Event of Default from the holders of a series of
Junior Subordinated Debt Securities (except a Junior Indenture Event of
Default in payment of principal of or premium (if any) or interest on the
Junior Subordinated Debt Securities) if the Trustee considers it in the
interest of such holders to do so. (Section 6.07)
MODIFICATION OF THE INDENTURE
The Junior Indenture contains provisions permitting the Company and the
Junior Debt Trustee, with the consent of the holders of not less than a
majority in principal amount of the Junior Subordinated Debt Securities of all
series affected by such modification at the time outstanding, and, in the case
of Junior Subordinated Debt Securities issued to a Trust or the Partnership,
the holders of a majority in aggregate liquidation preference amount of the
related Trust Preferred Securities, to modify the Junior Indenture or any
supplemental indenture or the rights of the holders of the Junior Subordinated
Debt Securities of such series; provided that no such modification shall,
without the consent of the holders of each Junior Subordinated Debt Security
(and each Trust Preferred Security, if applicable) affected thereby, (i)
extend the fixed maturity of any Junior Subordinated Debt Security, or reduce
the principal amount thereof (including in the case of a discounted Junior
Subordinated Debt Security the amount payable thereon in the event of
acceleration or the amount provable in bankruptcy) or any premium thereon, or
reduce any amount payable on redemption thereof, or reduce the rate or extend
the time of payment of interest thereon, or make the principal of or interest
or premium, if any, on the Junior Subordinated Debt Securities payable in any
coin or currency other than that provided in the Junior Subordinated Debt
Securities, or impair or affect the right of any holder of Junior Subordinated
Debt Securities to institute suit for the payment thereof or the right of
prepayment, if any, at the option of the holder, (ii) reduce the aforesaid
percentage of Junior Subordinated Debt Securities the consent of the holders
of which is required for any such modification or (iii) otherwise adversely
affect the interest of the holders of any series of Junior Subordinated Debt
Securities. (Section 9.02)
DEFEASANCE AND DISCHARGE
HEI may discharge certain obligations to holders of any series of Junior
Debt Securities which have not already been delivered to the Junior Debt
Trustee for cancellation and which either become due and payable or are by
their terms due and payable within one year (or scheduled for redemption
within one year) by irrevocably depositing with the Junior Debt Trustee or
Defeasance Agent Governmental Obligations (as defined in the Junior Indenture)
as trust funds in an amount certified to be sufficient to pay when due,
whether at maturity, upon redemption or otherwise, the principal of, premium
on, if any, and interest on such Junior Subordinated Debt Securities.
The Indenture provides that HEI, at HEI's option: (a) will be discharged
from any and all obligations in respect of the Junior Subordinated Debt
Securities of a series (except for certain obligations to register the
transfer or exchange of Junior Subordinated Debt Securities, replace stolen,
lost or mutilated Junior Subordinated
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Debt Securities, maintain paying agencies and hold moneys for payment in trust)
or (b) need not comply with certain restrictive covenants of the Indenture
(including those described herein under "--Certain Covenants of HEI"), in each
case if HEI deposits, in trust with the Junior Debt Trustee or the Defeasance
Agent, money or U.S. Government Obligations which, through the payment of
interest thereon and principal thereof in accordance with their terms, will
provide money in an amount certified to be sufficient to pay all the principal
(including any mandatory sinking fund payments) and premium, if any, of and
interest on, the Junior Subordinated Debt Securities of such series on the
dates such payments are due in accordance with the terms of such Junior
Subordinated Debt Securities. To exercise any such option, among other things,
HEI is required to deliver to the Junior Debt Trustee and the Defeasance Agent,
if any, an opinion of counsel to the effect that (i) the deposit and related
defeasance would not cause the holders of the Junior Subordinated Debt
Securities of such series to recognize income, gain or loss for U.S. federal
income tax purposes and, in the case of any such discharge pursuant to clause
(a), such opinion must be accompanied by a ruling to that effect received by
HEI from the United States Internal Revenue Service, or a ruling pertaining to
a comparable form of transaction to that effect published by the United States
Internal Revenue Service, or must otherwise be based on a change in United
States federal income tax law, since such a result would not occur under
current tax law and (ii) if listed on any national securities exchange, such
Junior Subordinated Debt Securities would not be delisted from such exchange as
a result of the exercise of such option. (Section 11.01)
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed certain tax law changes that
would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations, such as the Junior
Subordinated Debt Securities, issued on or after December 7, 1995 (the
"Proposed Legislation") if such debt obligations have a maximum term in excess
of forty years or a maximum term in excess of twenty years and are not shown as
indebtedness on the issuer's applicable consolidated balance sheet. On March
29, 1996, Senate Finance Committee Chairman William V. Roth, Jr. and House Ways
and Means Committee Chairman Bill Archer issued a joint statement (the "Joint
Statement") indicating their intent that the Proposed Legislation, if adopted
by either of the tax-writing committees of Congress, would have an effective
date that is no earlier than the date of "appropriate Congressional action." In
addition, subsequent to the publication of the Joint Statement, Senator Daniel
Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote
letters to Treasury Department officials concurring with the view expressed in
the Joint Statement (the "Democrat Letters"). If the principles contained in
the Joint Statement and the Democrat Letters were followed and if the Proposed
Legislation were enacted, such legislation would not apply to the Junior
Subordinated Debt Securities. There can be no assurance, however, that the
effective date guidance contained in the Joint Statement will be incorporated
into the Proposed Legislation, if enacted, or that other legislation enacted
after the date hereof will not otherwise adversely affect the ability of HEI to
deduct the interest payable on the Junior Subordinated Debt Securities or the
treatment of the Hawaiian Electric Industries Capital Trusts as grantor trusts
not subject to federal income tax with respect to income received or accrued on
the Junior Subordinated Debt Securities.
GOVERNING LAW
The Junior Indenture and the Junior Subordinated Debt Securities will be
governed by, and construed in accordance with, the internal laws of the State
of New York. (Section 13.05)
THE JUNIOR DEBT TRUSTEE
The Bank of New York shall be the initial Junior Debt Trustee. HEI or its
affiliates maintain certain accounts and other banking relationships with the
Junior Debt Trustee and its affiliates in the ordinary course of business.
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DESCRIPTION OF THE TRUST PREFERRED SECURITIES
Each Trust may issue, from time to time, a series of Trust Preferred
Securities having terms described in the Prospectus Supplement relating
thereto. The Trust Agreement of each Trust authorizes the Regular Trustees of
such Trust to issue on behalf of the Trust only one series of Trust Preferred
Securities. Each Trust Agreement will be qualified as an indenture under the
Trust Indenture Act. Unless otherwise specified in the applicable Prospectus
Supplement, The Bank of New York will act as Property Trustee for purposes of
the Trust Indenture Act. The Trust Preferred Securities will have such terms,
including distribution, redemption, voting, and liquidation rights and such
other preferred, deferral or other special rights, and such restrictions, as
shall be set forth in the Trust Agreement or made part of the Trust Agreement
by the Trust Indenture Act.
Reference is made to the Prospectus Supplement for the specific terms of the
Trust Preferred Securities of each Trust, including (i) the distinctive
designation of such Trust Preferred Securities; (ii) the number of Trust
Preferred Securities issuable by such Trust; (iii) the annual distribution rate
(or method of determining such rate) for Trust Preferred Securities issued by
the Trust and the date or dates upon which such distributions shall be payable;
(iv) whether distributions on Trust Preferred Securities issued by such Trust
shall be cumulative, and, in the case of Trust Preferred Securities having such
cumulative distribution rights, the date or dates or method of determining the
date or dates from which distributions on Trust Preferred Securities issued by
such Trust shall be cumulative; (v) the amount or amounts which shall be paid
out of the assets of such Trust to the holders of Trust Preferred Securities of
such Trust upon voluntary or involuntary dissolution, winding-up or termination
of the Trust; (vi) the obligation, if any, of such Trust to purchase or redeem
Trust Preferred Securities issued by the Trust and the price or prices at
which, the period or periods within which, and the terms and conditions upon
which, Trust Preferred Securities issued by such Trust shall be purchased or
redeemed, in whole or in part, pursuant to such obligation; (vii) the voting
rights and the rights to direct action by the Property Trustee, if any, of
holders of Trust Preferred Securities issued by the Trust, in addition to those
required by law, including the number of votes per Preferred Security and any
requirement for the approval by the holders of Trust Preferred Securities as a
condition to specified action or amendments to the Trust Agreement of such
Trust; (viii) the terms and conditions, if any, upon which the Junior
Subordinated Debt Securities or the Partnership Preferred Securities, as the
case may be, owned by such Trust may be distributed to holders of Trust
Preferred Securities of such Trust; (ix) if applicable, any securities exchange
upon which the Trust Preferred Securities shall be listed; (x) the manner in
which holders of the Trust Preferred Securities may enforce their rights
through the Property Trustee, through the Partnership and directly; and (xi)
any other relevant rights, preferences, privileges, limitations or restrictions
of the Trust Preferred Securities issued by such Trust not inconsistent with
the Trust Agreement of such Trust or with applicable law.
The rights of Trust Preferred Securities to receive certain distributions
will be guaranteed by HEI to the extent set forth below under "Description of
the Trust Guarantees." Certain United States federal income tax considerations
applicable to any offering of Trust Preferred Securities will be described in
the Prospectus Supplement relating thereto.
Holders of the Trust Preferred Securities will have no rights to appoint or
remove the Regular Trustees, who may be appointed, removed or replaced solely
by HEI as the holder of all of the Trust Common Securities.
The Trust Agreement of each Trust authorizes the Regular Trustees of such
trust to issue on behalf of such Trust one series of Trust Common Securities
having such terms including distribution, redemption, voting, and liquidation
rights or such restrictions as shall be set forth therein. Except for voting
rights, the terms of the Trust Common Securities issued by a Trust will be
substantially identical to the terms of the Trust Preferred Securities issued
by such Trust and the Trust Common Securities will rank pari passu, and
payments will be made thereon pro rata, with the Trust Preferred Securities
except that, upon an event of default under the Trust Agreement, the rights of
the holders of the Trust Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the Trust Preferred Securities.
Except in certain limited circumstances, the Trust Common Securities of a Trust
will also carry the right to vote to appoint, remove or replace any of the
Trustees of such Trust.
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DESCRIPTION OF THE TRUST GUARANTEES
Set forth below is a summary of certain information concerning the Trust
Guarantees which will be executed and delivered by HEI for the benefit of the
holders from time to time of Trust Preferred Securities. Each Trust Guarantee
will be qualified as an indenture under the Trust Indenture Act. Unless
otherwise specified in the applicable Prospectus Supplement, The Bank of New
York will act as indenture trustee under each Trust Guarantee for purposes of
the Trust Indenture Act (the "Trust Guarantee Trustee"). The terms of each
Trust Guarantee will be those set forth in such Trust Guarantee and those made
part of such Trust Guarantee by the Trust Indenture Act. The following summary
of the Trust Guarantees does not purport to be complete and is subject in all
respects to the provisions of, and is qualified in its entirety by reference
to, the form of Trust Guarantee, which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the Trust
Indenture Act, and this summary of the terms of the Trust Guarantee is subject
to supplementation and modification in any Prospectus Supplement relating to
the particular Trust Preferred Securities being offered thereby. Each Trust
Guarantee will be held by the Property Trustee for the benefit of the holders
of the Trust Preferred Securities of the applicable Trust.
GENERAL
Pursuant to each Trust Guarantee, HEI will agree, to the extent set forth
therein, to pay in full, to the holders of the Trust Preferred Securities
issued by a Trust, the Trust Guarantee Payments (as defined herein) (except to
the extent paid by such Trust), as and when due, regardless of any defense,
right of set-off or counterclaim which such Trust may have or assert. The
following payments with respect to Trust Preferred Securities issued by a
Trust, to the extent not paid by such Trust (the "Guarantee Payments"), will
be subject to the Trust Guarantee thereon (without duplication): (i) any
accrued and unpaid distributions which are required to be paid on such Trust
Preferred Securities, to the extent such Trust shall have funds legally
available therefor; (ii) the redemption price, including all accrued and
unpaid distributions to the date of payment (the "Redemption Price"), to the
extent such Trust has funds legally available therefor with respect to any
Trust Preferred Securities called for redemption by the Trust; and (iii) upon
a voluntary or involuntary dissolution, winding-up or termination of the Trust
(other than in connection with the distribution of Junior Subordinated Debt
Securities to the holders of Trust Preferred Securities or the redemption of
all of the Trust Preferred Securities), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on such Trust
Preferred Securities to the date of payment, to the extent the Trust has funds
legally available therefor and (b) the amount of assets of the Trust remaining
legally available for distribution to holders of such Trust Preferred
Securities in liquidation of such Trust. The redemption price and liquidation
amount will be fixed at the time the Trust Preferred Securities are issued.
HEI's obligation to make a Trust Guarantee Payment may be satisfied by direct
payment of the required amounts by HEI to the holders of Trust Preferred
Securities or by causing the applicable Trust to pay such amounts to such
holders.
The Trust Guarantees will not apply to any payment of distributions except
to the extent a Trust shall have funds available therefor. If HEI does not
make interest payments on the Junior Subordinated Debt Securities purchased by
a Trust, or if HEI or its subsidiaries do not make payments on the Company
Debentures or on the Subsidiary Debentures issued to the Partnership,
respectively, and as a result the Partnership does not make distributions on
Partnership Preferred Securities purchased by the Trust, the Trust will not
pay distributions on the Trust Preferred Securities issued by such Trust and
will not have sufficient funds legally available therefor.
HEI has also agreed separately irrevocably and unconditionally to guarantee
the obligations of each Trust with respect to the Trust Common Securities (the
"Trust Common Securities Guarantees") to the same extent as the Trust
Guarantees, except that upon an event of default under the Indenture, holders
of Trust Preferred Securities shall have priority over holders of Trust Common
Securities with respect to distributions and payments on liquidation,
redemption or otherwise.
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CERTAIN COVENANTS OF HEI
In each Trust Guarantee, HEI will covenant that, so long as any Trust
Preferred Securities issued by the applicable Trust remain outstanding, if
there shall have occurred any event that would constitute an event of default
under such Trust Guarantee or the Trust Agreement of such Trust, or if HEI has
exercised its option to defer interest payments on the Junior Subordinated
Debt Securities by extending the interest payment period and such period or
extension thereof shall be continuing, then (a) HEI shall not declare or pay
any dividend (other than a stock dividend) on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (except for dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, its common stock) and other than (i) purchases or acquisitions of shares
of HEI Common Stock in connection with the satisfaction by HEI of its
obligations under any employee benefit plans or any other contractual
obligation of HEI (other than a contractual obligation ranking pari passu with
or junior to the Junior Subordinated Debt Securities), (ii) as a result of a
reclassification of HEI capital stock or the exchange or conversion of one
class or series of HEI capital stock for another class or series of HEI
capital stock or (iii) the purchase of fractional interests in shares of HEI
capital stock pursuant to the conversion or exchange provisions of such HEI
capital stock or the security being converted or exchanged), (b) HEI shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by HEI which rank pari passu
with or junior to such Junior Subordinated Debt Securities, and (c) HEI shall
not make any guarantee payments with respect to the foregoing (other than
pursuant to such Trust Guarantee or any other guarantee by HEI with respect to
comparable securities).
MODIFICATION OF THE TRUST GUARANTEES; ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of Trust Preferred Securities (in which case no vote
will be required), each Trust Guarantee may be amended only with the prior
approval of the holders of at least a majority in liquidation amount of the
outstanding Trust Preferred Securities issued by the applicable Trust. The
manner of obtaining any such approval of holders of such Trust Preferred
Securities will be as set forth in an accompanying Prospectus Supplement. All
guarantees and agreements contained in a Trust Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of HEI and shall
inure to the benefit of the holders of the Trust Preferred Securities of the
applicable Trust then outstanding. Except in connection with any merger or
consolidation of HEI with or into another entity or any sale, transfer or
lease of HEI's assets to another entity, each as permitted by the Junior
Indenture, HEI may not assign its rights or delegate its obligations under
such Trust Guarantee without the prior approval of the holders of at least a
majority in liquidation preference amount of the outstanding Trust Preferred
Securities issued by the applicable Trust.
TERMINATION
Each Trust Guarantee will terminate as to the Trust Preferred Securities
issued by the applicable Trust (a) upon full payment of the Redemption Price
of all Trust Preferred Securities of such Trust, (b) upon distribution of the
Junior Subordinated Debt Securities or Partnership Preferred Securities, as
the case may be, held by such Trust to the holders of the Trust Securities of
such Trust or (c) upon full payment of the amounts payable in accordance with
the Trust Agreement of such Trust upon liquidation of Trust. Notwithstanding
the foregoing, each Trust Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Trust Preferred
Securities issued by the applicable Trust must restore payment of any sums
paid under such Trust Preferred Securities or such Trust Guarantee.
EVENTS OF DEFAULT
An event of default under a Trust Guarantee will occur upon the failure of
HEI to perform any of its payment obligations thereunder.
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The holders of a majority in liquidation amount of the Trust Preferred
Securities relating to such Trust Guarantee have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trust Guarantee Trustee in respect of the Trust Guarantee or to direct the
exercise of any trust or power conferred upon the Trust Guarantee Trustee under
such Trust Guarantee. Any holder of record of Trust Preferred Securities
relating to such Trust Guarantee may institute a legal proceeding directly
against HEI to enforce the Trust Guarantee Trustee's rights and the obligations
of HEI under such Trust Guarantee, without first instituting a legal proceeding
against the relevant Trust, the Trust Guarantee Trustee or any other person or
entity.
STATUS OF THE TRUST GUARANTEES
The Trust Guarantees will constitute unsecured obligations of HEI and will
rank (i) subordinate and junior in right of payment to all other liabilities of
HEI, except those made pari passu or subordinate by their terms, (ii) pari
passu with the most senior preferred or preference stock now or hereafter
issued by HEI, with the Partnership Guarantee and the Investment Guarantees and
with any guarantee hereafter entered into by HEI in respect of any preferred or
preference stock of any affiliate of HEI, and (iii) senior to HEI Common Stock.
The terms of the Trust Preferred Securities provide that each holder of Trust
Preferred Securities issued by the applicable Trust, by acceptance thereof,
agrees to the subordination provisions and other terms of the Trust Guarantee
relating thereto.
The Trust Guarantees will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may institute a legal proceeding
directly against the guarantor to enforce its rights under the Trust Guarantee
without instituting a legal proceeding against any other person or entity).
INFORMATION CONCERNING THE TRUST GUARANTEE TRUSTEE
The Trust Guarantee Trustee, prior to the occurrence of a default with
respect to a Trust Guarantee, undertakes to perform only such duties as are
specifically set forth in such Trust Guarantee and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provisions, the Trust
Guarantee Trustee is under no obligation to exercise any of the powers vested
in it by a Trust Guarantee at the request of any holder of Trust Preferred
Securities, unless offered reasonable indemnity against the costs, expenses and
liabilities which might be incurred thereby.
HEI or its affiliates maintain certain accounts and other banking
relationships with The Bank of New York, which shall be the initial Trust
Guarantee Trustee, and its affiliates in the ordinary course of business.
GOVERNING LAW
The Trust Guarantees will be governed by, and construed in accordance with,
the internal laws of the State of New York.
DESCRIPTION OF THE PARTNERSHIP PREFERRED SECURITIES
The summary of certain of the terms and provisions of the Partnership
Preferred Securities set forth below and in any Prospectus Supplement does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the Agreement of Limited Partnership, which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part,
and the Partnership Act.
The Partnership may issue to a Trust, a series of Partnership Preferred
Securities having terms to be described in the Prospectus Supplement relating
thereto. All of the partnership interests in the Partnership, other than the
Partnership Preferred Securities acquired by the Trust, will be owned by Hycap,
as the sole General Partner of the Partnership. The Agreement of Limited
Partnership will authorize and create the Partnership
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Preferred Securities, which represent limited partner interests in the
Partnership. The limited partner interests represented by the Partnership
Preferred Securities will have a preference with respect to distributions and
amounts payable on redemption or liquidation over the General Partner's
interest in the Partnership. Except as otherwise described herein or in any
Prospectus Supplement, the Agreement of Limited Partnership does not permit
the issuance of any additional partnership interests or the incurrence of any
indebtedness by the Partnership. Reference is made to the Prospectus
Supplement relating to the Partnership Preferred Securities for specific
terms, including, if applicable, provisions concerning (i) distributions to
holders of Partnership Preferred Securities, (ii) liquidation preferences of
holders of Partnership Preferred Securities, (iii) enforcement of the
Agreement of Limited Partnership, (iv) investments by the Partnership in
Company Debentures, Subsidiary Debentures and Eligible Debt Securities, (v)
Investment Guarantees, (vi) redemption rights and procedures relating to the
Partnership Preferred Securities, (vii) liquidation and dissolution of the
Partnership, (viii) voting rights of holders of Partnership Preferred
Securities, and (ix) any other relevant rights, preferences, privileges,
limitations or restrictions relating to the Partnership Preferred Securities
issued by the Partnership.
DESCRIPTION OF THE PARTNERSHIP GUARANTEE
Set forth below is a summary of certain information concerning the
Partnership Guarantee that will be executed and delivered by HEI for the
benefit of the holders from time to time of Partnership Preferred Securities.
The summary does not purport to be complete and is subject in all respects to
the provisions of, and is qualified in its entirety by reference to, the
Partnership Guarantee, which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
Pursuant to the Partnership Guarantee, HEI will irrevocably agree, on a
subordinated basis to the extent set forth therein, to pay in full to the
holders of the Partnership Preferred Securities (without duplication of
amounts theretofore paid by the Partnership), as and when due, regardless of
any defense, right of set-off or counterclaim that the Partnership may have or
assert, certain payments, including certain distribution, redemption,
liquidation preference, and other payments, all as will be described in more
detail in the Prospectus Supplement relating to the Partnership Guarantee.
The Partnership Guarantee will be a guarantee on a subordinated basis with
respect to the Partnership Preferred Securities from the time of issuance of
such Partnership Preferred Securities but will not apply to any payment of
distributions or redemption price, or to payments upon the dissolution,
winding-up or termination of the Trust, except to the extent the Partnership
shall have funds legally available therefor.
Reference is made in an applicable Prospectus Supplement for the specific
terms of the Partnership Guarantee, including, if applicable, provisions
concerning (i) certain covenants of HEI, (ii) events of default under and
enforcement of the Partnership Guarantee, (iii) status of the Partnership
Guarantee and subordination provisions, (iv) termination of the Partnership
Guarantee, and (v) any other relevant provisions relating to the Partnership
Guarantee.
DESCRIPTION OF THE INVESTMENT GUARANTEES
The Company will guarantee, on a subordinated basis, payments in respect of
each Debenture issued by an Investment Affiliate (other than the Company,
unless HEI's obligation under the Company Debentures are transferred to and
assumed by another Investment Affiliate) to the extent set forth below and in
any accompanying Prospectus Supplement (the "Investment Guarantees"). The
Investment Guarantees will be enforceable regardless of any defense, right of
set-off or counterclaim that the Company may have or assert. The Investment
Guarantees will be full and unconditional guarantees with respect to the
applicable Subsidiary Debentures from the time of issuance. To the extent that
the Partnership invests in additional Affiliate Investment Instruments as
described in an accompanying Prospectus Supplement, the determination as to
whether such Affiliate Investment Instrument will contain an Investment
Guarantee will be made at the date of its issuance or upon its transfer to an
Investment Affiliate (other than the Company).
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The Company's obligations under the Investment Guarantees will constitute
unsecured obligations of the Company and will rank subordinate and junior to
all other existing liabilities of the Company and will rank pari passu with the
most senior preferred stock (if any) issued from time to time by the Company
and with any guarantee now or hereafter entered into by the Company in respect
of any preferred security of any affiliate of the Company. Accordingly, the
rights of the holders of the Subsidiary Debentures to receive payments under
the Investment Guarantees will be subject to the rights of the holders of any
obligations that are senior in priority to the obligations under the Investment
Guarantees. Furthermore, the holders of obligations of the Company that are
senior to the obligations under the Investment Guarantees (including, but not
limited to, obligations constituting senior indebtedness of the Company) will
be entitled to the same rights upon payment default or dissolution, liquidation
and reorganization in respect of the Investment Guarantees that inure to the
holders of senior indebtedness of the Company as against the holders of the
Company Debentures. The terms of the Debentures provide that each holder of
Debentures, by acceptance thereof, agrees to the subordination provisions and
other terms of the Investment Guarantees.
DESCRIPTION OF THE PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of the
Preferred Stock offered by any Prospectus Supplement will be described in such
Prospectus Supplement. The description of certain provisions of the Preferred
Stock set forth below and in any Prospectus Supplement does not purport to be
complete and is subject to and qualified in its entirety by reference to HEI's
Restated Articles of Incorporation, as amended (the "Articles"), and the
rights, preferences and privileges of the particular series of the Preferred
Stock which will be set forth in a board resolution or articles of amendment to
be filed with the Hawaii Department of Commerce and Consumer Affairs and
incorporated by reference as an exhibit to the Registration Statement of which
this Prospectus is a part at or prior to the time of issuance of such series of
Preferred Stock.
Under the Articles, HEI is authorized to issue 10,000,000 shares of Preferred
Stock without par value ("Preferred Stock").
Preferred Stock may be issued by the Board of Directors in one or more
series, without action by stockholders and with such preferences, voting
powers, restrictions and qualifications as may be fixed by resolution of the
Board of Directors authorizing the issuance of such shares. Under current
Hawaii law, the terms and provisions of all shares of Preferred Stock must be
identical except with respect to dividend rates, redemption and redemption
prices, amounts payable in liquidation, sinking fund provisions, conversion
privileges, if any, and voting rights, if any.
If and when authorized by the Board of Directors, any such Preferred Stock
may be preferred as to dividends or in liquidation, or both, over the Common
Stock. For example, the terms of the Preferred Stock, if and when authorized,
could prohibit dividends on shares of Common Stock until all dividends and any
mandatory redemptions have been paid with respect to shares of Preferred Stock.
In addition, the Board of Directors may, without stockholder approval, issue
Preferred Stock with voting and conversion rights which could adversely affect
the voting power or economic rights of the holders of Common Stock. Issuance of
Preferred Stock by HEI could thus have the effect of delaying, deferring or
preventing a change of control of HEI.
DESCRIPTION OF THE COMMON STOCK
GENERAL
Under the Articles, HEI is authorized to issue 100,000,000 shares of Common
Stock without par value ("Common Stock").
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The outstanding shares of HEI's Common Stock are fully paid and
nonassessable. Additional shares of Common Stock, when issued, will be fully
paid and nonassessable when the consideration for which HEI's board of
directors authorizes their issuance has been received. The holders of Common
Stock have no preemptive rights and there are no conversion, redemption or
sinking fund provisions applicable thereto. Unless otherwise specified in the
applicable Prospectus Supplement, HEI's Common Stock is transferable at the
Stock Transfer Division of the Company, Transfer Agent, P.O. Box 730, Honolulu,
Hawaii 96808-0730, and at the office of First Chicago Trust Company of New
York, Co-Transfer Agent and Registrar, 30 West Broadway, New York, New York
10007.
DIVIDENDS
Stock and cash dividends may be issued and paid to the holders of Common
Stock as and when declared by the Board of Directors, provided that, after
giving effect to the payment of cash dividends, HEI is able to pay its debts as
they become due in the usual course of its business and HEI's total assets are
not less than the sum of its total liabilities plus the maximum amount that
then would be payable in any liquidation in respect of all outstanding shares
having preferential rights in liquidation. All shares of Common Stock will
participate equally with respect to dividends.
HEI's ability to pay dividends is limited by the restrictions and limitations
set forth in debt instruments.
LIQUIDATION RIGHTS
In the event of any liquidation, dissolution, receivership, bankruptcy,
disincorporation or winding-up of the affairs of the Company, voluntarily or
involuntarily, holders of HEI's Common Stock are entitled to any assets of HEI
available for distribution to HEI's stockholders after the payment in full of
any preferential amounts to which holders of any Preferred Stock may be
entitled. All shares of Common Stock will rank equally in the event of
liquidation.
VOTING RIGHTS
Holders of Common Stock are entitled to one vote per share, subject to such
limitation or loss of right as may be provided in resolutions which may be
adopted from time to time creating issues of Preferred Stock or otherwise. At
annual and special meetings of stockholders, a majority of the outstanding
shares of Common Stock constitute a quorum and the affirmative vote of a
majority of such quorum so present is sufficient to approve of any action
except as otherwise required by law and except with respect to the amendment of
certain provisions of HEI's By-laws.
Under HEI's current By-laws, one-third (as nearly as possible) of the total
number of directors is elected at each annual meeting of stockholders and no
holder of Common Stock is entitled to cumulate votes in an election of
directors so long as HEI shall have a class of equity securities registered
pursuant to the Exchange Act which are listed on a national securities exchange
or traded over-the-counter on the National Market of the National Association
of Securities Dealers, Inc. Automated Quotation System. Directors may be
removed from office only for cause.
An amendment to the provisions in the By-laws relating to (1) matters which
may be brought before an annual meeting, (2) matters which may be brought
before a special meeting, (3) cumulative voting, (4) the number and staggered
terms of members of the Board of Directors, (5) removal of directors and (6)
amendment of the By-laws must in each case be approved either (a) by the
affirmative vote of 80% of the shares entitled to vote generally with respect
to election of directors voting together as a single class, or (b) by the
affirmative vote of a majority of the entire Board of Directors plus a
concurring vote of a majority of the "continuing directors" (as that term is
defined in Article XVIII of the By-laws) voting separately and as a subclass of
directors.
The provisions of HEI's By-laws referred to in the foregoing two paragraphs,
and the statutory provisions referred to below, may have the effect of
delaying, deferring or preventing a change in control of HEI.
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RESTRICTION ON PURCHASE OF SHARES AND CONSEQUENCES OF SUBSTANTIAL HOLDINGS
UNDER CERTAIN HAWAII AND FEDERAL LAWS
The Hawaii Control Share Acquisition Act places restrictions on the
acquisition of ranges of voting power (starting at 10% and at 10% intervals up
to a majority) for the election of directors of HEI unless the acquiring person
obtains approval of the acquisition by the affirmative vote of the holders of a
majority of the voting power of all shares entitled to vote exclusive of the
shares beneficially owned by the acquiring person and consummates the proposed
control share acquisition within 180 days after shareholder approval. If such
approval is not obtained, the statute provides that the shares acquired may not
be voted for a period of one year from the date of acquisition, the shares will
be nontransferable on HEI's books for one year after acquisition and HEI,
during the one-year period, shall have the right to call the shares for
redemption either at the prices at which the shares were acquired or at book
value per share as of the last day of the fiscal quarter ended prior to the
date of the call for redemption.
Under the Hawaii Public Utilities Commission ("PUC") statute, not more than
25% of the issued and outstanding voting stock of certain public utility
corporations, including HECO and its wholly-owned electric utility
subsidiaries, may be held, directly or indirectly, by any single foreign
corporation or any single nonresident alien, or held by any person, without the
prior approval of the PUC. The acquisition of more than 25% of the issued and
outstanding voting stock of HEI in one or more transactions might be deemed to
result in the holding of more than 25% of the voting stock of its electric
utility subsidiaries. In addition, HEI is subject to an agreement (the "PUC
Agreement") entered into with the PUC when HECO became a wholly-owned
subsidiary of HEI. The PUC Agreement provides that the acquisition of HEI by a
third party, whether by purchase, merger, consolidation or otherwise, requires
the prior written approval of the PUC.
Under the Hawaii Environmental Disclosure Law, a person and that person's
affiliates who in the aggregate beneficially own 10% or more but less than 50%
of securities entitled to vote for the election of directors of HEI may not
acquire more than 5% of such securities during any 12-month period without
first filing an environmental disclosure statement with the Hawaii Office of
Environmental Quality Control.
The Savings and Loan Holding Company Act, the Financial Institutions Reform,
Recovery and Enforcement Act, the Change in Bank Control Act and the Office of
Thrift Supervision ("OTS") regulations place restrictions on certain types of
acquisitions of control of a savings bank and its holding company. Generally,
no company, or any director or officer of a savings and loan holding company,
or person who owns, or controls or holds with power to vote more than 25% of
the voting stock of such holding company, may acquire control of a savings bank
insured by the Federal Deposit Insurance Corporation or its holding company,
without the prior written approval of the OTS. In addition, no person (with
certain exceptions) may acquire control of a savings bank or savings and loan
holding company, unless the OTS has been given 60 days' prior written notice of
the acquisition and has not objected to it. As a result of HEI's ownership of
ASB, the acquisition of control of HEI, HEIDI or ASB may be subject to the
requirement of prior written OTS approval or 60 days' prior written notice to
the OTS, unless such transaction would be exempt from such requirements under
federal law or regulation. "Control" in this context means the acquisition of,
control of, or holding proxies representing, more than 25% of the voting shares
of HEI, HEIDI or ASB, or the power to control in any manner the election of a
majority of the directors thereof. However, under OTS regulations, one would be
determined, subject to rebuttal, to have acquired control if one acquires more
than 10% of the voting shares of HEI, HEIDI or ASB and is subject to one of
certain specified "control factors." Anyone acquiring more than 10%, or
additional stock above 10%, of any class of shares of HEI, HEIDI or ASB may be
required to file a certification with the OTS.
Under the Jones Act, it is unlawful to transport merchandise between points
in the U.S. except in vessels owned by U.S. citizens. For corporations to
demonstrate U.S. citizenship, a majority of the officers and directors must be
citizens, 75% of its voting stock must be owned by U.S. citizens and certain
additional requirements must be met. If less than 75% of the Common Stock of
HEI (which is the only class of voting stock presently outstanding) is owned by
U.S. citizens, the vessels of HTB and YB would not be permitted to engage in
transport between points in Hawaii.
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Under the Public Utility Holding Company Act of 1935 (the "1935 Act"), any
company (as defined in the 1935 Act) which directly or indirectly owns,
controls or holds with power to vote 10% or more of the outstanding voting
securities of HEI may be a public utility holding company, subject to
regulation under the 1935 Act, unless an exemption is available under the 1935
Act or the Securities and Exchange Commission, upon application, declares such
a company not to be a holding company. In addition, under the 1935 Act, unless
an exemption is available, no person who directly or indirectly owns, controls
or holds 5% or more of the Common Stock or other voting securities of HEI may,
without approval of the Commission, become the owner of 5% or more of the
outstanding voting securities of any other public utility or public utility
holding company. In addition, no person who directly or indirectly owns,
controls, or holds 5% or more of the outstanding voting securities of any
public utility holding company may, without the approval of the Commission,
become the owner of 5% or more of HEI's Common Stock, unless there is an
applicable exemption.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The holders of record of Common Stock of HEI and of Preferred Stock of HEI's
electric utility subsidiaries (HECO, MECO or HELCO) and any residents of Hawaii
who are of legal age are eligible to participate in the HEI Dividend
Reinvestment and Stock Purchase Plan (the "Plan"). Stockholders participating
in the Plan automatically reinvest their dividends to purchase Common Stock at
market price (as defined in the Plan). Stockholders and residents of Hawaii are
also eligible to purchase shares of Common Stock at market price (as defined in
the Plan) by making cash contributions. Participants do not pay brokerage
commissions or service charges in connection with such purchases. HEI reserves
the right to suspend, modify or terminate the Plan at any time.
PLAN OF DISTRIBUTION
HEI may sell the Debt Securities, Preferred Stock or Common Stock and any
Trust may sell Trust Preferred Securities in any of, or any combination of, the
following ways: (i) directly to purchasers, (ii) through agents, (iii) to or
through underwriters or (iv) through dealers. Such underwriters, dealers or
agents may be affiliates of HEI, and offers or sales of such securities may
include secondary market transactions by affiliates of HEI.
Offers to purchase Offered Securities may be solicited directly by HEI and/or
any Trust, as the case may be, or by agents designated by HEI and/or a Trust,
as the case may be, from time to time. Any such agent, who may be deemed to be
an underwriter as that term is defined in the Securities Act, involved in the
offer or sale of the Offered Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by HEI to such agent will
be set forth, in the applicable Prospectus Supplement. Unless otherwise
indicated in the related Prospectus Supplement, any such agency will be acting
on a best efforts basis for the period of its appointment.
If an underwriter or underwriters are utilized in the sale of Offered
Securities in respect of which this Prospectus is delivered, such Offered
Securities will be acquired by such underwriter or underwriters for its own
account or their own accounts and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
underwriter or underwriters with respect to a particular underwritten offering
of such Offered Securities will be named in, and if an underwriting syndicate
is used the managing underwriter or underwriters will be set forth on the cover
page of, the applicable Prospectus Supplement. In connection with the sale of
such Offered Securities, underwriters may receive compensation from HEI in the
form of underwriting discounts or commissions and may also receive commissions
from purchasers of any such Offered Securities for whom they may act as agent.
Unless otherwise set forth in such Prospectus Supplement, the obligations of
such underwriter or underwriters will be subject to certain conditions
precedent, and such underwriters will be obligated to purchase all such Offered
Securities if any are purchased.
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If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, HEI and/or any Trust, as the case may be,
will sell such Offered Securities to the dealer, as principal. The dealer may
then resell such Offered Securities to the public at varying prices to be
determined by such dealer at the time of resale. The name of the dealer
involved in the offer or sale of such Offered Securities will be named, and any
discounts or commissions allowed or reallowed or paid to the dealer will be set
forth, in the Prospectus Supplement.
Agents, underwriters, and dealers may be entitled under the relevant
agreements to indemnification by HEI and/or any Trust, as the case may be,
against certain liabilities, including liabilities under the Securities Act, or
to contribution payments in respect thereof.
Certain of the underwriters, agents and their controlling persons may engage
in transactions with or perform services for HEI or its affiliates in the
ordinary course of business.
LEGAL MATTERS
The validity of the Debt Securities, the Guarantees, the Preferred Stock and
the Common Stock offered by this Prospectus and any applicable Prospectus
Supplement, and certain matters relating thereto, will be passed upon for HEI,
and certain United States federal income taxation matters will be passed upon
for HEI, the Trusts and the Partnership, by Goodsill Anderson Quinn & Stifel,
1800 Alii Place, 1099 Alakea Street, Honolulu, Hawaii 96801. Certain matters of
Delaware law relating to the validity of the Trust Preferred Securities and the
Partnership Preferred Securities will be passed upon on behalf of each of the
Trusts by Richards, Layton & Finger, special Delaware counsel to the Trusts,
the Partnership and HEI. Certain legal matters will be passed upon for the
Underwriters by Winthrop, Stimson, Putnam & Roberts, New York, New York.
EXPERTS
The consolidated financial statements and schedules of HEI and its
subsidiaries as of December 31, 1995 and 1994, and for each of the years in the
three-year period ended December 31, 1995, which financial statements and
schedules have been incorporated by reference and included, respectively, in
HEI's most recent Annual Report on Form 10-K, for its fiscal year ended
December 31, 1995, as amended by Form 10-K/A dated April 30, 1996, which is
incorporated by reference herein (and elsewhere in the Registration Statement),
have been incorporated by reference herein (and elsewhere in the Registration
Statement) in reliance upon the reports of KPMG Peat Marwick LLP, independent
certified public accountants, also incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
33
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY HAWAIIAN ELECTRIC INDUSTRIES,
INC., THE TRUSTS, THE PARTNERSHIP OR THE UNDERWRITERS. NEITHER THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND
THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF HAWAIIAN ELECTRIC INDUSTRIES, INC., THE
TRUSTS OR THE PARTNERSHIP SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
Prospectus Summary........................................................ S-5
Selected Consolidated Financial Data...................................... S-11
Risk Factors.............................................................. S-13
Use of Proceeds........................................................... S-17
Accounting Treatment...................................................... S-17
Description of Hawaiian Electric Industries, Inc. ........................ S-17
Description of the Trust.................................................. S-21
Description of the Partnership............................................ S-22
Supplemental Description of the Trust Preferred Securities................ S-23
Supplemental Description of the Trust Guarantee........................... S-36
Supplemental Description of the Partnership Preferred Securities.......... S-39
Supplemental Description of the Partnership Guarantee..................... S-50
Certain Federal Income Tax Considerations................................. S-53
Underwriting ............................................................. S-58
ERISA Considerations...................................................... S-59
Index of Selected Defined Terms........................................... S-60
PROSPECTUS
Available Information..................................................... 4
Incorporation of Certain Documents by Reference........................... 5
Hawaiian Electric Industries, Inc. ....................................... 6
The Hawaiian Electric Industries Capital Trusts........................... 7
The Partnership........................................................... 8
Consolidated Ratios of Earnings to Fixed Charges.......................... 8
Use of Proceeds........................................................... 9
Description of Senior Debt Securities and Senior Subordinated Debt
Securities............................................................... 9
Description of the Junior Subordinated Debt Securities.................... 17
Description of the Trust Preferred Securities............................. 24
Description of the Trust Guarantees....................................... 25
Description of the Partnership Preferred Securities....................... 27
Description of the Partnership Guarantee.................................. 28
Description of the Investment Guarantees.................................. 28
Description of the Preferred Stock........................................ 29
Description of the Common Stock........................................... 29
Plan of Distribution...................................................... 32
Legal Matters............................................................. 33
Experts................................................................... 33
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
4,000,000
TRUST PREFERRED SECURITIES
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
% TRUST ORIGINATED
PREFERRED SECURITIES/SM/ ("TOPrS/SM/")
GUARANTEED TO THE EXTENT
SET FORTH HEREIN BY
HAWAIIAN ELECTRIC
INDUSTRIES, INC.
---------------------
PROSPECTUS SUPPLEMENT
---------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
LEGG MASON WOOD WALKER
INCORPORATED
ROBERT W. BAIRD & CO.
INCORPORATED
JANUARY , 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting compensation, are:
<TABLE>
<S> <C>
Filing Fee for Registration Statement.............................. $ 90,910
Legal Fees and Expenses*........................................... 100,000
Accounting Fees and Expenses*...................................... 50,000
Blue Sky Fees and Expenses*........................................ 5,000
Printing and Engraving Fees*....................................... 50,000
Fees and Expenses of Registrars, Transfer Agents, Paying Agents and
Trustees*......................................................... 15,000
Fees of Rating Agencies*........................................... 130,000
Listing Fees*...................................................... 45,000
Miscellaneous*..................................................... 14,090
--------
Total*........................................................... $500,000
========
</TABLE>
- --------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Restated Articles of Incorporation of HEI provide that HEI will
indemnify any person against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred in
connection with any threatened, pending or completed action, suit or
proceeding to which such person is a party or is threatened to be made a party
by reason of being or having been a director, officer, employee or agent of
HEI, provided that such person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of HEI, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. With respect to an action brought by or in
the right of HEI in which such person is adjudged to be liable for negligence
or misconduct in performance of that person's duty to HEI, indemnification may
be made under the Restated Articles of Incorporation only to the extent deemed
fair and reasonable in view of all the circumstances of the case by the court
in which the action was brought or any other having jurisdiction. The
indemnification provisions in the Restated Articles of Incorporation were
authorized at the time of their adoption by the applicable provisions of the
Hawaii Revised Statutes, and substantially similar authorizing provisions are
currently set forth in Section 415-5 of the Hawaii Revised Statutes.
At HEI's annual meeting of stockholders held on April 18, 1989, the
stockholders adopted a proposal authorizing HEI to enter into written
indemnity agreements with its officers and directors. Pursuant to such
authority, HEI has entered into agreements of indemnity with certain of its
officers and directors. The agreements provide for mandatory indemnification
of officers and directors to the fullest extent authorized or permitted by
law, which could among other things protect officers and directors from
certain liabilities under the Securities Act of 1933. Indemnification under
the agreements may be provided without a prior determination that an officer
or director acted in good faith or in the best interests of HEI, and without
prior court approval of indemnification of an officer or director adjudicated
liable in a shareholder's derivative action. The agreements provide for
indemnification against expenses (including attorneys' fees), judgments, fines
and settlement amounts in connection with any action by or in the right of
HEI.
Under a directors' and officers' liability insurance policy, directors and
officers are insured against certain liabilities, including certain
liabilities under the Securities Act of 1933.
The Trust Agreement of each Trust provides that no Trustee, affiliate of any
Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee, or any employee
II-1
<PAGE>
or agent of the Trust or its affiliates (each an "Indemnified Person") shall
be liable, responsible or accountable in damages or otherwise to the Trust or
any employee or agent of the Trust of its affiliates for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by the Trust Agreement or by law, except
that an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or, in the
case of the Institutional Trustee, negligence) or willful misconduct with
respect to such acts or omissions. The Trust Agreement also provides that to
the fullest extent permitted by applicable law, HEI shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage or claim
incurred by such Indemnified Person by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by such Trust Agreement,
except that no Indemnified Person shall be entitled to be indemnified in
respect of any loss, damage or claim incurred by such Indemnified Person by
reason of gross negligence (or, in the case of the Institutional Trustee,
negligence) or willful misconduct with respect to such acts of omissions. The
Trust Agreement further provides that, to the fullest extent permitted by
applicable law, expenses (including legal fees) incurred by an Indemnified
Person in defending any claim, demand, action, suit or proceeding shall, from
time to time, be advanced by the Trust prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by or an undertaking by
or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified for
the underlying cause of action as authorized by the Trust Agreement.
The Limited Partnership Agreement provides that no General Partner, Special
Representative (if any), affiliate of the General Partner or any Special
Representative, or any officers, directors, shareholders, members, partners,
employees, representatives or agents of any of the foregoing of the
Partnership or its affiliates (each an "Indemnified Person") shall be liable,
responsible or accountable in damages or otherwise to the Partnership or any
employee or agent of the Partnership or its affiliates for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Partnership and in a manner
such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by the Limited Partnership
Agreement or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
gross negligence or willful misconduct with respect to such acts or omissions.
The Limited Partnership Agreement also provides that to the fullest extent
permitted by applicable law, the Partnership shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of the Partnership and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by such Limited Partnership
Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence or willful misconduct with
respect to such acts of omissions. The Limited Partnership Agreement further
provides that, to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Partnership prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by or an undertaking by or on
behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified for
the underlying cause of action as authorized by the Limited Partnership
Agreement.
II-2
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
---------- -----------
<C> <S>
1 Form of Purchase Agreement for offering of Preferred Securities
4(a)(i) Certificate of Trust of Hawaiian Electric Industries Capital
Trust I.*
4(a)(ii) Certificate of Trust of Hawaiian Electric Industries Capital
Trust II.*
4(a)(iii) Certificate of Trust of Hawaiian Electric Industries Capital
Trust III.*
4(b)(i) Trust Agreement for Hawaiian Electric Industries Capital Trust
I.*
4(b)(ii) Trust Agreement for Hawaiian Electric Industries Capital Trust
II.*
4(b)(iii) Trust Agreement for Hawaiian Electric Industries Capital Trust
III.*
4(c) Amended and Restated Certificate of Limited Partnership for HEI
Preferred Funding, LP.
4(d)(i) Agreement of Limited Partnership for HEI Preferred Funding,
LP.*
4(d)(ii) Assignment of General Partner Interest and Amendment of
Agreement of Limited Partnership.
4(e) Form of Amended and Restated Agreement of Limited Partnership
of HEI Preferred Funding, LP.
4(f) Form of Amended and Restated Trust Agreement to be used in
connection with the issuance of the Preferred Securities by
Hawaiian Electric Industries Capital Trusts I, II and III.
4(g) Form of Senior Indenture to be used in connection with issuance
of Senior Debt Securities by HEI.
4(h) Form of Senior Subordinated Indenture to be used in connection
with issuance of Subordinated Debt Securities by HEI.
4(i) Form of Junior Indenture between HEI and The Bank of New York,
as Trustee, to be used in connection with issuance of Junior
Subordinated Debentures by HEI.
4(j) Form of Officer's Certificate to be used in connection with the
issuance by HEI of Senior Debt Securities.
4(k) Form of Officer's Certificate to be used in connection with the
issuance by HEI of Subordinated Debt Securities.
4(l) Form of Officers' Certificate to be used in connection with the
issuance by HEI of Junior Subordinated Debentures.
4(m) Form of Preferred Security for issuance by Hawaiian Electric
Industries Capital Trusts I, II and III (included in Exhibit
4(f)).
4(n) Form of Junior Subordinated Debenture for issuance by HEI
(included in Exhibit 4(l)).
4(o) Form of Trust Preferred Securities Guarantee Agreement for
issuance by HEI.
4(p) Form of Partnership Guarantee Agreement.
4(q) Form of Affiliate Investment Instruments Guarantee Agreement.
5(a) Opinion of Goodsill Anderson Quinn & Stifel
5(b) Opinion of Richards, Layton & Finger
8 Tax Opinion of Goodsill Anderson Quinn & Stifel
12(a) Computation of Ratio of Earnings to Fixed Charges. (1)
12(b) Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends. (1)
23(a) Consent of KPMG Peat Marwick LLP.
23(b) Consent of Goodsill Anderson Quinn & Stifel as to opinion
(included in Exhibit 5(a)).
23(c) Consent of Richards, Layton & Finger as to opinion (included in
Exhibit 5(b)).
23(d) Consent of Goodsill Anderson Quinn & Stifel as to opinion re
tax matters (included in Exhibit 8).
24(a) Power of Attorney for HEI officers and directors.*
24(b) Power of Attorney for Hawaiian Electric Industries Capital
Trust I (included in Exhibit 4(b)(i)).
24(c) Power of Attorney for Hawaiian Electric Industries Capital
Trust II (included in Exhibit 4(b)(ii)).
24(d) Power of Attorney for Hawaiian Electric Industries Capital
Trust III (included in Exhibit 4(b)(iii)).
25(a) Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee under the
Preferred Securities Guarantee with respect to Hawaiian
Electric Industries Capital Trust I.
25(b) Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee under the
Preferred Securities Guarantee with respect to Hawaiian
Electric Industries Capital Trust II.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------- -----------
<C> <S>
25(c) Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Preferred
Securities Guarantee with respect to Hawaiian Electric Industries
Capital Trust III.
25(d) Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee with respect to the
Trust Preferred Securities of Hawaiian Electric Industries Capital
Trust I.
25(e) Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee with respect to the
Trust Preferred Securities of Hawaiian Electric Industries Capital
Trust II.
25(f) Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee with respect to the
Trust Preferred Securities of Hawaiian Electric Industries Capital
Trust III.
25(g) Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Junior
Indenture.
25(h) Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Partnership
Guarantee with respect to HEI Preferred Funding, LP.
25(i) Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Bank of New York, as Trustee with respect to the
Partnership Preferred Securities of HEI Preferred Funding, LP.
</TABLE>
- --------
* Previously filed with this Registration Statement.
(1) Incorporated by reference to Exhibit 12 of HEI's Quarterly Report on Form
10-Q for the quarter ended September 30, 1996. HEI has no preferred stock
outstanding.
ITEM 17. UNDERTAKINGS.
Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, unless the information required to be included
in such post-effective amendment is contained in a periodic report
filed with or furnished to the Securities and Exchange Commission by
the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 and incorporated by reference in this
Registration Statement;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement, unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed with or furnished to the Securities and Exchange
Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 and incorporated by reference in
this Registration Statement; provided, however that any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Securities and Exchange Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in the Registration Statement;
II-4
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of HEI's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) To provide to the underwriter at the closing specified in the
underwriting agreements, certificates in such denominations and registered
in such names as required by the underwriter to permit prompt delivery to
each purchaser.
(6) That, for the purposes of determining any liability under the
Securities Act of 1933:
(i) The information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained
in the form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.
(ii) Each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of each
registrant pursuant to the provisions described under Item 15 above, or
otherwise, each registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by a registrant of expenses incurred or paid by a director, officer or
controlling person of a registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the respective registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
HEI hereby undertakes to file an application for the purpose of determining
the eligibility of the trustee under the Indenture relating to the Senior Debt
Securities and the Indenture relating to the Senior Subordinated Debt
Securities to act under subsection (a) of Section 310 of the Trust Indenture
Act in accordance with the rules and regulations prescribed by the Commission
under Section 305(b)(2) of the Trust Indenture Act.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Hawaiian
Electric Industries, Inc. certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Amendment No. 1 to this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City and County
of Honolulu, State of Hawaii, on the 24th day of January, 1997.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
By /s/ Robert F. Mougeot
_____________________________________
Robert F. Mougeot
Financial Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Robert F. Clarke* President and Director January 24, 1997
____________________________________ (Chief Executive Officer)
Robert F. Clarke
/s/ Robert F. Mougeot* Financial Vice President January 24, 1997
____________________________________ and Chief Financial
Robert F. Mougeot Officer (Principal
Financial Officer)
/s/ Curtis Y. Harada* Controller (Principal January 24, 1997
____________________________________ Accounting Officer)
Curtis Y. Harada
/s/ Don E. Carroll* Director January 24, 1997
____________________________________
Don E. Carroll
/s/ Edwin L. Carter* Director January 24, 1997
____________________________________
Edwin L. Carter
/s/ John D. Field* Director January 24, 1997
____________________________________
John D. Field
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Richard Henderson* Director January 24, 1997
____________________________________
Richard Henderson
/s/ Victor Hao Li* Director January 24, 1997
____________________________________
Victor Hao Li
/s/ T. Michael May* Director January 24, 1997
____________________________________
T. Michael May
/s/ Bill D. Mills* Director January 24, 1997
____________________________________
Bill D. Mills
/s/ Director
____________________________________
A. Maurice Myers
/s/ Ruth M. Ono* Director January 24, 1997
____________________________________
Ruth M. Ono
/s/ Diane J. Plotts* Director January 24, 1997
____________________________________
Diane J. Plotts
/s/ James K. Scott* Director January 24, 1997
____________________________________
James K. Scott
/s/ Director
____________________________________
Oswald K. Stender
/s/ Kelvin H. Taketa* Director January 24, 1997
____________________________________
Kelvin H. Taketa
/s/ Jeffrey N. Watanabe* Director January 24, 1997
____________________________________
Jeffrey N. Watanabe
*By /s/ Robert F. Mougeot
____________________________________
Robert F. Mougeot
For himself and as Attorney-In-Fact
for the above mentioned officers
and directors
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of Hawaiian
Electric Industries Capital Trust I, Hawaiian Electric Industries Capital
Trust II and Hawaiian Electric Industries Capital Trust III has duly caused
this Amendment No. 1 to this Registration Statement on Form S-3 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Honolulu, State of Hawaii, on January 24, 1997.
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL
TRUST I
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL
TRUST II
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL
TRUST III
By Hawaiian Electric Industries,
Inc., as Depositor
By: /s/ Robert F. Mougeot
Robert F. Mougeot
Financial Vice President
and Chief Financial Officer
By: /s/ Constance H. Lau
Constance H. Lau
Treasurer
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, HEI Preferred
Funding, LP certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to this Registration Statement or amendment to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Honolulu and State of Hawaii, on the 24th day of January, 1997.
HEI PREFERRED FUNDING, LP
By Hycap Management, Inc.
General Partner
By: /s/ Robert F. Clarke
Robert F. Clarke
President
By: /s/ Betty Ann M. Splinter
Betty Ann M. Splinter
Secretary
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
----------- ----------- ----------
<C> <S> <C>
1 Form of Purchase Agreement for offering of
Preferred Securities
4(a)(i) Certificate of Trust of Hawaiian Electric
Industries Capital Trust I.*
4(a)(ii) Certificate of Trust of Hawaiian Electric
Industries Capital Trust II.*
4(a)(iii) Certificate of Trust of Hawaiian Electric
Industries Capital Trust III.*
4(b)(i) Trust Agreement for Hawaiian Electric Industries
Capital Trust I.*
4(b)(ii) Trust Agreement for Hawaiian Electric Industries
Capital Trust II.*
4(b)(iii) Trust Agreement for Hawaiian Electric Industries
Capital Trust III.*
4(c) Amended and Restated Certificate of Limited
Partnership for HEI Preferred Funding, LP.
4(d)(i) Agreement of Limited Partnership for HEI
Preferred Funding, LP.*
4(d)(ii) Assignment of General Partner Interest and
Amendment of Agreement of Limited Partnership.
4(e) Form of Amended and Restated Agreement of Limited
Partnership of HEI Preferred Funding, LP.
4(f) Form of Amended and Restated Trust Agreement to
be used in connection with the issuance of the
Preferred Securities by Hawaiian Electric
Industries Capital Trusts I, II and III.
4(g) Form of Senior Indenture to be used in connection
with issuance of Senior Debt Securities by HEI.
4(h) Form of Senior Subordinated Indenture to be used
in connection with issuance of Subordinated Debt
Securities by HEI.
4(i) Form of Junior Indenture between HEI and The Bank
of New York, as Trustee, to be used in connection
with issuance of Junior Subordinated Debentures
by HEI.
4(j) Form of Officer's Certificate to be used in
connection with the issuance by HEI of Senior
Debt Securities.
4(k) Form of Officer's Certificate to be used in
connection with the issuance by HEI of
Subordinated Debt Securities.
4(l) Form of Officers' Certificate to be used in
connection with the issuance by HEI of Junior
Subordinated Debentures.
4(m) Form of Preferred Security for issuance by
Hawaiian Electric Industries Capital Trusts I, II
and III (included in Exhibit 4(f)).
4(n) Form of Junior Subordinated Debenture for
issuance by HEI (included in Exhibit 4(l)).
4(o) Form of Trust Preferred Securities Guarantee
Agreement for issuance by HEI.
4(p) Form of Partnership Guarantee Agreement.
4(q) Form of Affiliate Investment Instruments
Guarantee Agreement.
5(a) Opinion of Goodsill Anderson Quinn & Stifel
5(b) Opinion of Richards, Layton & Finger
8 Tax Opinion of Goodsill Anderson Quinn & Stifel
12(a) Computation of Ratio of Earnings to Fixed
Charges. (1)
12(b) Computation of Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividends. (1)
23(a) Consent of KPMG Peat Marwick LLP.
23(b) Consent of Goodsill Anderson Quinn & Stifel as to
opinion (included in Exhibit 5(a)).
23(c) Consent of Richards, Layton & Finger as to
opinion (included in Exhibit 5(b)).
23(d) Consent of Goodsill Anderson Quinn & Stifel as to
opinion re tax matters (included in Exhibit 8).
24(a) Power of Attorney for HEI officers and
directors.*
</TABLE>
<PAGE>
EXHIBIT INDEX--(CONTINUED)
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
----------- ----------- ----------
<C> <S> <C>
24(b) Power of Attorney for Hawaiian Electric Industries
Capital Trust I (included in Exhibit 4(b)(i)).
24(c) Power of Attorney for Hawaiian Electric Industries
Capital Trust II (included in Exhibit 4(b)(ii)).
24(d) Power of Attorney for Hawaiian Electric Industries
Capital Trust III (included in Exhibit 4(b)(iii)).
25(a) Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Trustee under the Preferred Securities Guarantee with
respect to Hawaiian Electric Industries Capital Trust
I.
25(b) Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Trustee under the Preferred Securities Guarantee with
respect to Hawaiian Electric Industries Capital Trust
II.
25(c) Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Trustee under the Preferred Securities Guarantee with
respect to Hawaiian Electric Industries Capital Trust
III.
25(d) Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Trustee with respect to the Trust Preferred
Securities of Hawaiian Electric Industries Capital
Trust I.
25(e) Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Trustee with respect to the Trust Preferred
Securities of Hawaiian Electric Industries Capital
Trust II.
25(f) Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Trustee with respect to the Trust Preferred
Securities of Hawaiian Electric Industries Capital
Trust III.
25(g) Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Trustee under the Junior Indenture.
25(h) Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Trustee under the Partnership Guarantee with respect
to HEI Preferred Funding, LP.
25(i) Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of the Bank of New York, as
Trustee with respect to the Partnership Preferred
Securities of HEI Preferred Funding, LP.
</TABLE>
- --------
* Previously filed with this Registration Statement.
(1) Incorporated by reference to Exhibit 12 of HEI's Quarterly Report on Form
10-Q for the quarter ended September 30, 1996. HEI has no preferred stock
outstanding.
<PAGE>
WSP&R
DRAFT
1/23/97
Exhibit 1
4,000,000 Trust Preferred Securities
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
____% Trust Originated Preferred Securities/SM/ ("TOPrS/SM/")/*/
(Liquidation Amount $25 per Trust Preferred Security)
guaranteed to the extent set forth herein by
HAWAIIAN ELECTRIC INDUSTRIES, INC.
PURCHASE AGREEMENT
------------------
January __, 1997
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Goldman, Sachs & Co.
Dean Witter Reynolds Inc.
A.G. Edwards & Sons, Inc.
Legg Mason Wood Walker Incorporated
Robert W. Baird & Co. Incorporated
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Hawaiian Electric Industries Capital Trust I (the "Trust"), a
statutory business trust organized under the Business Trust Act (the "Delaware
Trust Act") of the State of Delaware (Chapter 38, Title 12, of the Delaware
Code, 12 Del. C. Sections 3801 et seq.), HEI Preferred
- -------------------------------
/*/ "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
<PAGE>
Funding, LP (the "Partnership"), a limited partnership organized under the
Revised Uniform Limited Partnership Act (the "Delaware Partnership Act") of the
State of Delaware (Chapter 17, Title 6, of the Delaware Code, 6 Del. C. Sections
17101 et seq.), and Hawaiian Electric Industries, Inc. (the "Company" and,
together with the Trust and the Partnership, the "Offerors"), a Hawaii
corporation, confirm their agreement (this "Agreement") with Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and
each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill Lynch, Goldman,
Sachs & Co., Dean Witter Reynolds Inc., A.G. Edwards & Sons, Inc., Legg Mason
Wood Walker Incorporated and Robert W. Baird & Co. Incorporated are acting as
representatives (in such capacity, they shall hereinafter be referred to as the
"Representatives"), with respect to the issue and sale by the Trust and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of ___% Trust Originated Preferred Securities (Liquidation
Amount $25 per Trust Preferred Security) representing preferred undivided
beneficial ownership interests in the assets of the Trust ("TOPrS" or the "Trust
Preferred Securities") set forth in said Schedule A. The Company will own all
the common securities representing undivided beneficial ownership interests in
the assets of the Trust (the "Trust Common Securities" and, together with the
Trust Preferred Securities, the "Trust Securities"). The Trust Securities will
be issued pursuant to an Amended and Restated Trust Agreement dated as of
January __, 1997 among the Company, as Sponsor, Robert F. Clarke, Robert F.
Mougeot and Constance H. Lau, as regular trustees (the "Regular Trustees"), The
Bank of New York, a national banking association, as initial institutional
trustee (the "Property Trustee"), and The Bank of New York (Delaware), a
Delaware corporation, as Delaware trustee (the "Delaware Trustee" and, together
with the Regular Trustees and the Property Trustee, the "Issuer Trustees"), and
the holders from time to time of undivided beneficial interests in the assets of
the Trust (the "Trust Agreement"). The Trust Preferred Securities will be
guaranteed by the Company, to the extent set forth in the applicable Prospectus
Supplement (as defined herein), with respect to distributions and payments upon
liquidation, redemption and otherwise pursuant to, and to the extent set forth
in, the Trust Preferred Securities Guarantee Agreement dated as of January __,
1997 between The Bank of New York, as trustee (the "Trust Guarantee Trustee"),
and the Company (the "Trust Guarantee").
The proceeds from the sale of the Trust Securities will be used by the
Trust to purchase partnership preferred securities representing all of the
limited partner interests of the Partnership (the "Partnership Preferred
Securities"). All of the general partner interests of the Partnership will be
owned by Hycap Management, Inc. (the "General Partner"), a Delaware corporation
and wholly owned subsidiary of the Company. The Partnership Preferred
Securities will be issued pursuant to an Amended and Restated Agreement of
Limited Partnership dated as of January __, 1997 among the General Partner, the
Trust, as initial limited partner, and such other persons who become limited
partners thereto (the "Partnership Agreement"), and will be guaranteed by the
Company, to the extent set forth in the applicable Prospectus Supplement, with
respect to distributions and payments upon liquidation, redemption and otherwise
pursuant to, and to the extent set forth in, the Partnership Guarantee Agreement
dated as of January __, 1997 between The Bank of New York, as trustee, and the
Company (the "Partnership Guarantee" and, together with the Trust Guarantee, the
"Guarantees"). The Trust Preferred Securities and the
-2-
<PAGE>
Trust Guarantee, together with the Partnership Preferred Securities and the
Partnership Guarantee, are referred to herein as the "Offered Securities."
The Partnership will use the proceeds from the sale of the Partnership
Preferred Securities and the capital contribution of the General Partner to
initially acquire (i) debt instruments of the Company (the "Company
Debentures"), (ii) debt instruments of a subsidiary of the Company (such
subsidiary, the "Investment Subsidiary" and, together with the Company, the
"Investment Affiliates"; such debt instruments of the Investment Subsidiary, the
"Subsidiary Debentures" and, together with the Company Debentures, the
"Affiliate Debentures") and (iii) certain U.S. government obligations and
commercial paper of entities not affiliated with the Company. The Subsidiary
Debentures are to be fully and unconditionally guaranteed, on a subordinated
basis, by the Company pursuant to, and to the extent set forth in, the Affiliate
Investment Instruments Guarantee Agreement dated as of January __, 1997 between
The Bank of New York, as trustee (the "Investment Guarantee Trustee"), and the
Company (the "Investment Guarantee"). Each of the Affiliate Debentures shall be
issued pursuant to an Indenture dated as of January __, 1997 among The Bank of
New York, as trustee (the "Debt Trustee"), and the applicable Investment
Affiliate (each, an "Indenture").
The Offerors understand that the Underwriters propose to make a public
offering of the Offered Securities as soon as the Representatives deem advisable
after this Agreement has been executed and delivered.
The Offerors have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File Nos. 333-18809,
333-18809-01, 333-18809-02, 333-18809-03 and 333-18809-04) covering the
registration under the Securities Act of 1933, as amended (the "1933 Act"), of,
among other securities, (a) the Trust Preferred Securities, (b) the Trust
Guarantee, (c) the Partnership Preferred Securities, (d) the Partnership
Guarantee and (e) the Investment Guarantee. The prospectus forming a part of
such registration statement, at the time such registration statement (or the
most recent amendment thereto filed prior to the time of effectiveness of this
Agreement) became effective under the 1933 Act, including all documents
incorporated by reference therein at that time pursuant to Item 12 of Form S-3
under the 1933 Act, is hereinafter referred to as the "Basic Prospectus." In
the event that (i) the Basic Prospectus shall have been amended, revised or
supplemented (but excluding any amendments, revisions or supplements to the
Basic Prospectus relating solely to securities other than the Offered
Securities) prior to the time of effectiveness of this Agreement, including
without limitation by any preliminary prospectus supplement relating to the
Offered Securities, or (ii) the Company shall have filed documents pursuant to
Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), after the time such registration statement became effective under
the 1933 Act and prior to the time of effectiveness of this Agreement (but
excluding documents incorporated therein by reference relating solely to
securities other than the Offered Securities), which documents are deemed to be
incorporated by reference in the Basic Prospectus pursuant to Item 12 of Form S-
3 under the 1933 Act, the term "Basic Prospectus" as used herein shall also mean
such prospectus as so amended, revised or supplemented and reflecting such
incorporation by reference. Such registration statement in the form in which it
became effective under the 1933 Act and as it may have been amended by all
amendments thereto as of the time
-3-
<PAGE>
of effectiveness of this Agreement (including, for these purposes, as an
amendment any document incorporated by reference in the Basic Prospectus
pursuant to Item 12 of Form S-3 under the 1933 Act), and the Basic Prospectus as
it shall be supplemented to reflect the terms of the offering and sale of the
Offered Securities by a prospectus supplement (a "Prospectus Supplement") to be
filed with, or transmitted for filing to, the Commission pursuant to Rule 424(b)
under the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"), are hereinafter referred to as the "Registration Statement"
and the "Prospectus," respectively. For purposes of this Agreement, all
references to the Registration Statement or the Prospectus or any amendment or
supplement thereto shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR"). The Trust Agreement, the Trust Guarantee, the Indenture relating to
the Company Debentures, the Partnership Guarantee and the Investment Guarantee
has been qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act").
All references in this Agreement to financial statements and schedules
and other information that is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (or other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information that is incorporated or deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act that is incorporated by reference in
the Registration Statement or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by Company. The Company represents
-----------------------------------------
and warrants to each Underwriter as of the date hereof, and as of the Closing
Time referred to in Section 2(b) hereof, as follows:
(i) Compliance with Registration Requirements. The Offerors meet
-----------------------------------------
the requirements for use of Form S-3 under the 1933 Act. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with. The Registration Statement at the
Effective Date (as defined herein) complied in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and the 1939
Act and the rules and regulations of the Commission under the 1939 Act (the
"1939 Act Regulations"), and did not contain any 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. At the
time the Prospectus is delivered to the Underwriters for their use in
making confirmations of sales of the Trust Preferred Securities and at the
Closing Time, the Prospectus and any
-4-
<PAGE>
amendments or supplements thereto will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and will not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties in this paragraph (i) shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or the Prospectus.
The Prospectus delivered to the Underwriters for use in making
confirmations of sales of Trust Preferred Securities will be identical to
the electronically transmitted copy thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T. As
used in this Agreement, the term "Effective Date" shall mean the later of
(i) the date the Registration Statement, or any post-effective amendment
thereto, was declared effective by the Commission under the 1933 Act and
(ii) the date that the Company's most recent Annual Report on Form 10-K was
filed with the Commission under the 1934 Act.
(ii) Incorporated Documents. The documents incorporated or
----------------------
deemed to be incorporated by reference in the Registration Statement and
the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectus, at the Effective Date, at the
time the Prospectus was delivered to the Underwriters for their use in
making confirmations of sales of Trust Preferred Securities and at the
Closing Time, did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(iii) Independent Accountants. The accountants who have
-----------------------
certified the consolidated financial statements of the Company and
Subsidiaries (as defined herein) that are incorporated by reference in the
Registration Statement and the Prospectus are independent certified public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) No Material Adverse Change in Business. Otherwise than as
--------------------------------------
set forth or contemplated in the Registration Statement and the Prospectus,
neither the Company nor any Subsidiaries has sustained since the date of
the most recent audited financial statements incorporated by reference in
the Registration Statement and the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, which loss or interference would have a material
adverse effect on the consolidated financial position, stockholders' equity
or results of operations of the Company and Subsidiaries taken as a whole;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus,
-5-
<PAGE>
there has not been any change in the capital stock of the Company or any
Significant Subsidiary (as defined herein) (except for (i) issuances of
capital stock of the Company pursuant to dividend reinvestment, stock
purchase, director or employee benefit plans, (ii) issuances of capital
stock by Hawaiian Electric Company, Inc. ("HECO") or its subsidiaries that
have been approved by the Public Utilities Commission of the State of
Hawaii or by any other Significant Subsidiary as disclosed in writing to
the Underwriters and (iii) redemptions by HECO, Hawaii Electric Light
Company, Inc. ("HELCO") and Maui Electric Company, Limited ("MECO") of
their respective preferred stock in accordance with the terms thereof) or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and Subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Registration Statement and the Prospectus.
(v) Good Standing of Company and Subsidiaries. The Company has
-----------------------------------------
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Hawaii, with corporate power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus; the Company
does not itself conduct any business or own or lease any property in any
jurisdiction outside the State of Hawaii that would require it to qualify
to do business as a foreign corporation and where the failure to be so
qualified would subject the Company to any material liability or
disability; the General Partner has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement and the
Prospectus. Each Subsidiary of the Company, other than American Savings
Bank, F.S.B. ("ASB"), the General Partner, the Trust and the Partnership,
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. As used in
this Agreement, the term "Subsidiary" means each corporation, at least a
majority of the outstanding voting stock of which is owned by the Company,
by one or more Subsidiaries or by the Company and one or more Subsidiaries.
(vi) Good Standing of ASB. ASB has been duly formed and is
--------------------
validly existing as a federal savings bank duly chartered and in good
standing under the laws of the United States; and, since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, there have not been any increases in total non-accruing
loans or the provision for loan losses of ASB and its subsidiaries, which
increase or increases, individually or in the aggregate, would have a
material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and
Subsidiaries taken as a whole.
(vii) Capitalization. The Company has an authorized
--------------
capitalization as set forth in the Prospectus, and all of the issued shares
of capital stock of the Company have been duly and validly authorized
-6-
<PAGE>
and issued and are fully paid and nonassessable; all of the issued shares
of capital stock of each Subsidiary has been duly and validly authorized
and issued and is fully paid and nonassessable; and all of such shares of
Subsidiaries, other than shares of preferred stock, including the existing
preferred stock of HECO and its subsidiaries, is owned directly or
indirectly by the Company, free and clear of any liens, encumbrances or
security interests (other than the pledge by HECO of the shares of common
stock of HELCO and MECO under the indenture securing HECO's first mortgage
bonds), except as described in the Registration Statement and the
Prospectus. The General Partner is the sole owner of general partner
interests of the Partnership.
(viii) Indentures and Affiliate Debentures. Each Indenture has been
-----------------------------------
duly authorized, and at the Closing Time, will have been duly executed and
delivered by the applicable Investment Affiliate and, when duly executed
and delivered by the Debt Trustee, will constitute a valid and binding
agreement of such Investment Affiliate enforceable against such Investment
Affiliate in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and by general
principles of equity (whether considered in a proceeding in equity or at
law) (the "Exceptions"). The Indenture relating to the Company Debentures
has been duly qualified under the 1939 Act. The Affiliate Debentures have
been duly authorized for issuance and sale pursuant to this Agreement and,
at the Closing Time, will have been duly executed by the applicable
Investment Affiliate and, when authenticated, issued and delivered in the
manner provided for in the applicable Indenture and delivered against
payment of the purchase price therefor as provided in this Agreement, will
constitute valid and legally binding obligations of such Investment
Affiliate enforceable against such Investment Affiliate in accordance with
their terms, except as may be limited by the Exceptions.
(ix) Trust Guarantee. The Trust Guarantee has been duly
---------------
authorized and, at the Closing Time, will have been duly executed and
delivered by the Company and, when duly executed and delivered by the Trust
Guarantee Trustee, will constitute a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms,
except as may be limited by the Exceptions. The Trust Guarantee has been
duly qualified under the 1939 Act.
(x) Partnership Guarantee. The Partnership Guarantee has been
---------------------
duly authorized and, at the Closing Time, will have been duly executed and
delivered by the Company and, when duly executed and delivered by the
Partnership Guarantee Trustee, will constitute a valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as may be limited by the Exceptions. The
Partnership Guarantee has been duly qualified under the 1939 Act.
(xi) Investment Guarantee. The Investment Guarantee has been
--------------------
duly authorized and, at the Closing Time, will have been duly executed and
delivered by the Company and, when duly executed and delivered by the
Investment Guarantee Trustee, will constitute a valid and binding
obligation of the Company enforceable against the
-7-
<PAGE>
Company in accordance with its terms, except as may be limited by the
Exceptions. The Investment Guarantee has been duly qualified under the 1939
Act.
(xii) Prospectus Descriptions. The Offered Securities, the
-----------------------
Trust Agreement, the Partnership Agreement, the Indentures and the
Investment Guarantee will conform in all material respects to the
respective statements relating thereto contained in the Prospectus.
(xiii) Absence of Defaults and Conflicts. The execution,
---------------------------------
delivery and performance of the Trust Agreement, the Partnership Agreement,
the Guarantees and the Investment Guarantee by the Company, the Affiliate
Debentures and the Indentures by the applicable Investment Affiliate, the
Partnership Agreement by the General Partner and any other agreement or
instrument entered into or issued or to be entered into or issued by the
Company, the Investment Subsidiary or the General Partner in connection
with the transactions contemplated hereby or thereby or in the Registration
Statement and the Prospectus (including the issuance and sale of the
Offered Securities and the use of the proceeds from the sale of the Offered
Securities as described in the Prospectus under the caption "Use of
Proceeds") and the consummation of the transactions contemplated herein and
in the Registration Statement and the Prospectus and compliance by each of
the Company, the Investment Subsidiary or the General Partner with its
obligations hereunder and thereunder do not and will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the imposition of a lien or
security interest under, any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of the property or assets used in the
conduct of its business is subject, nor will such action result in any
violation of the provisions of its charter or by-laws or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any Subsidiary or any of their
properties; and no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the performance by each of the Company, the Investment
Subsidiary and the General Partner of its obligations under this Agreement
or in connection with the transactions contemplated under this Agreement,
except such as have been obtained or as may be required under the 1933 Act,
the 1933 Act Regulations, the 1934 Act, the 1934 Act Regulations, the 1939
Act, the 1939 Act Regulations or otherwise and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or blue sky laws, as the case may be.
(xiv) Legal Proceedings. Other than as set forth or
-----------------
contemplated in the Registration Statement and the Prospectus, there are no
legal or governmental proceedings pending or, to the knowledge of the
Company, threatened to which the Company or any Subsidiary is a party or to
which any property of the Company or any Subsidiary is the subject that is
reasonably expected to have a material adverse effect on the Company and
Subsidiary taken as a whole.
-8-
<PAGE>
(xv) Licenses, Franchises, Trademarks, Easements, etc. The
-------------------------------------------------
Company and each of HECO, HELCO, MECO, HEI Diversified, Inc., ASB, Hawaiian
Tug & Barge Corp., Young Brothers, Limited, Malama Pacific Corp., HEI Power
Corp. and HEI Investment Corp. (each, a "Significant Subsidiary") have all
requisite power and authority, and possess all necessary authorizations,
approvals, orders, licenses, franchises, certificates and permits of and
from, and to the extent required by law are duly registered with, all
governmental and regulatory officials, commissions, departments and bodies
in, and are in compliance with all applicable laws, rules and regulations
of or under, each jurisdiction in which any of them owns properties or
assets or conducts any business as described in the Registration Statement
and the Prospectus, where the failure to possess such authorization,
approval, order, license, franchise, certificate or permit, or where the
failure so to register or so to comply, would have a material adverse
effect on the consolidated financial position, stockholders' equity or
results of operations of the Company and Subsidiaries taken as a whole.
Each such authorization, approval, order, license, franchise, certificate
and permit is valid and in full force and effect, and there is no
proceeding pending or, to the Company's knowledge, threatened that may lead
to the revocation, termination, suspension or non-renewal of any such
authorization, approval, order, license, franchise, certificate or permit;
the Company and Significant Subsidiaries have taken appropriate actions to
maintain in effect or renew each such authorization, approval, order,
license, franchise, certificate or permit; the Company and Significant
Subsidiaries own, or possess adequate rights to use, all patents,
trademarks, service marks and rights necessary for or material to the
conduct of their respective business as described in the Registration
Statement and the Prospectus; and the Company and Significant Subsidiaries
possess adequate easements, rights-of-way and other rights to use of land
not owned by the Company and Significant Subsidiaries, with such exceptions
and defects as are described in the Registration Statement and the
Prospectus or as do not materially interfere with the use made of such land
by the Company and Significant Subsidiaries or as do not have a material
adverse effect on the consolidated financial position, stockholders' equity
or results of operations of the Company and Subsidiaries taken as a whole.
(xvi) Public Utility Holding Company Act. The Company and HECO
----------------------------------
are holding companies within the meaning of the Public Utility Holding
Company Act of 1935, as amended; however, by virtue of having filed an
appropriate application under the provisions of Section 3(a) of such Act,
the Company and HECO are exempt from all of the provisions of such Act,
except Section 9(a)(2) thereof, and will remain so exempt, subject to
future timely filing of annual exemption statements, unless and except
insofar as the Commission shall find such exception detrimental to the
public interest or interest of investors or consumers.
(xvii) 1940 Act. Neither the Company or HEI Investment Corp.
--------
("HEIIC") is nor, after giving effect to the offering and sale of the
Offered Securities and the application of the proceeds thereof as described
in the Prospectus, will be an "investment company" or "controlled" by an
"investment company," in each case within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act").
-9-
<PAGE>
(b) Officers' Certificates. Any certificate signed by any officer of
----------------------
any of the Offerors or the Investment Subsidiary and delivered to any
Underwriter or to counsel for the Underwriters in connection with the offering
of the Offered Securities shall be deemed a representation and warranty by such
Offeror or the Investment Subsidiary to each Underwriter as to the matters
covered thereby on the date of such certificate.
(c) Representations and Warranties by Offerors. The Offerors, jointly
------------------------------------------
and severally, represent and warrant to each Underwriter as of the date hereof,
and as of the Closing Time, as follows:
(i) Good Standing of Trust. The Trust has been duly created and
----------------------
is validly existing in good standing as a business trust under the Delaware
Trust Act with the power and authority to own property and to conduct its
business as described in the Registration Statement and the Prospectus and
to enter into and perform its obligations under this Agreement, the Trust
Securities and the Trust Agreement; the Trust is duly qualified to transact
business as a foreign business trust and is in good standing in any other
jurisdiction in which such qualification is necessary, except to the extent
that the failure to so qualify or be in good standing would not have a
material adverse effect on the Trust; the Trust is not a party to or
otherwise bound by any agreement other than those described in the
Registration Statement and the Prospectus; and the Trust is and will be
treated as a consolidated subsidiary of the Company pursuant to generally
accepted accounting principles.
(ii) Trust Agreement. The Trust Agreement has been duly
---------------
authorized by the Company and, at the Closing Time, will have been duly
executed and delivered by the Company, as Sponsor, and, when executed and
delivered by the Property Trustee, the Delaware Trustee and the Regular
Trustees, will be a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as may be limited
by the Exceptions and by the effect of applicable public policy on the
enforceability of provisions relating to contribution or indemnification,
and will conform in all material respects to the statements relating
thereto in the Prospectus. The Trust Agreement has been duly qualified
under the 1939 Act.
(iii) Trust Common Securities. The Trust Common Securities have
-----------------------
been duly authorized by the Trust Agreement and, when issued and delivered
by the Trust to the Company against payment therefor as described in the
Registration Statement and Prospectus, will be validly issued undivided
beneficial interests in the assets of the Trust and will conform in all
material respects to the statements relating thereto contained in the
Prospectus; the issuance of the Trust Common Securities is not subject to
preemptive or other similar rights; and at the Closing Time; all of the
issued and outstanding Trust Common Securities will be directly owned by
the Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
-10-
<PAGE>
(iv) Trust Preferred Securities. The Trust Preferred Securities
--------------------------
have been duly authorized by the Trust Agreement and, when issued and
delivered against payment of the consideration set forth in this Agreement,
will be validly issued and (subject to the terms of the Trust Agreement)
fully paid and nonassessable undivided beneficial interests in the Trust,
will be entitled to the benefits of the Trust Agreement and will conform in
all material respects to the statements relating thereto contained in the
Prospectus; the issuance of the Trust Preferred Securities is not subject
to preemptive or other similar rights; and (subject to the terms of the
Trust Agreement) holders of Trust Preferred Securities will be entitled to
the same limitation of personal liability under Delaware law as extended to
stockholders of private corporations for profit.
(v) Regular Trustees. Each of the Regular Trustees of the Trust
----------------
is an officer of the Company; at the Closing Time, the Trust Agreement will
have been duly executed and delivered by the Regular Trustees and, when
executed and delivered by the Company, the Property Trustee and the
Delaware Trustee, will be a valid and binding obligation of each Regular
Trustee enforceable against such Regular Trustee in accordance with its
terms, except as may be limited by the Exceptions.
(vi) Good Standing of Partnership. The Partnership has been duly
----------------------------
formed and is validly existing in good standing as a limited partnership
under the Delaware Partnership Act with the power and authority to own
property and to conduct its business as described in the Registration
Statement and the Prospectus and to enter into and perform its obligations
under this Agreement, the Partnership Preferred Securities and the
Partnership Agreement; the Partnership is duly qualified to transact
business as a foreign limited partnership and is in good standing in any
other jurisdiction in which such qualification is necessary, except to the
extent that the failure to so qualify or be in good standing would not have
a material adverse effect on the Partnership; the Partnership is not a
party to or otherwise bound by any agreement other than those described in
the Registration Statement and the Prospectus; and the Partnership is and
will be treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.
(vii) Partnership Agreement. The Partnership Agreement has been
---------------------
duly authorized by the General Partner and, on the Closing Time, will have
been duly executed and delivered by the General Partner and will be a valid
and legally binding obligation of the General Partner enforceable against
the General Partner in accordance with its terms, except as may be limited
by the Exceptions and by the effect of applicable public policy on the
enforceability of provisions relating to contribution or indemnification,
and will conform in all material respects to the statements relating
thereto in the Prospectus.
(viii) Partnership Preferred Securities. The Partnership
--------------------------------
Preferred Securities have been duly authorized by the Partnership Agreement
and, when issued and delivered pursuant to the Partnership Agreement
against payment of the consideration set forth therein, will be duly issued
and fully paid and not subject to assessment for additional capital
contributions, will be entitled to the benefits of the Partnership
-11-
<PAGE>
Agreement and will conform in all material respects to the statements
relating thereto in the Prospectus; the issuance of the Partnership
Preferred Securities is not subject to preemptive or other similar rights;
assuming that the holders of Partnership Preferred Securities in their
capacities as such do not participate in the control of the business of the
Company, the holders of the Partnership Preferred Securities, in their
capacities as such, will have no liability in excess of their obligations
to make payments provided for in the Partnership Agreement (subject to the
obligation of a holder of Partnership Preferred Securities to repay any
funds distributed to it).
(ix) 1940 Act. Neither the Trust or the Partnership is nor,
--------
after giving effect to the offering and sale of the Offered Securities and
the application of the proceeds thereof as described in the Prospectus,
will be an "investment company" or "controlled" by an "investment company,"
in each case within the meaning of the 1940 Act.
(x) Absence of Conflicts. The Trust is not in violation of the
--------------------
Trust Agreement or its certificate of trust filed with the State of
Delaware, dated as of December 19, 1996 (the "Certificate of Trust"); the
Partnership is not in violation of the Partnership Agreement or its amended
and restated certificate of limited partnership, dated as of January __,
1997 (the "Certificate of Partnership"); and the execution, delivery and
performance of this Agreement, the Trust Securities and the Partnership
Preferred Securities by the Partnership and the Trust and the consummation
of the transactions contemplated herein and therein and compliance by the
Partnership and the Trust with their respective obligations hereunder and
thereunder have been duly authorized by all necessary action on the part of
the Partnership and the Trust and do not and will not result in any
violation of the Trust Agreement or Certificate of Trust or the Partnership
Agreement or the Certificate of Partnership and do not and will not
conflict with, or result in a breach of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Trust or
the Partnership under any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental instrumentality
or court, domestic or foreign, or any regulatory body or administrative
agency or other governmental body having jurisdiction over the Trust or the
Partnership of their respective properties.
(xi) Absence of Further Requirements. No authorization,
-------------------------------
approval, consent or order of any court or governmental authority or agency
is necessary in connection with the issuance, offer and sale of the Trust
Securities and the Partnership Preferred Securities, the consummation of
the transactions contemplated by this Agreement by the Partnership or the
Trust, or the execution, delivery and performance by the Partnership or the
Trust of this Agreement, the Trust Securities and the Partnership Preferred
Securities, except such as may be required under the 1933 Act or the 1933
Act Regulations, the 1934 Act or the 1934 Act Regulations or state
securities laws and the qualification of the Trust Agreement and the Trust
Guarantee under the 1939 Act and the 1939 Act Regulations.
-12-
<PAGE>
(xii) Absence of Proceedings. Except as disclosed in the
----------------------
Registration Statement and the Prospectus, there is no action, suit or
proceeding before or by any government, governmental instrumentality or
court, domestic or foreign, now pending or, to the knowledge of the Trust
or the Partnership, threatened against or affecting the Trust or the
Partnership that is required to be disclosed in the Registration Statement
and the Prospectus or that would result in any material adverse change in
the condition (financial or otherwise), earnings or business affairs of the
Trust, the Partnership or the Company and Subsidiaries taken as a whole, or
that would materially and adversely affect the properties or assets of the
Trust or the Partnership, or that could adversely affect the consummation
of the transactions contemplated in this Agreement.
(xiii) Agreement. This Agreement has been duly authorized,
---------
executed and delivered by each of the Offerors.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Securities. On the basis of the representations and warranties
----------
herein contained and subject to the terms and conditions herein set forth, the
Trust agrees to sell to each Underwriter named in Schedule A hereto, severally
and not jointly, and each Underwriter agrees, severally and not jointly, to
purchase from the Trust, at the initial public offering price set forth in
Schedule B hereto, the number of Trust Preferred Securities set forth in
Schedule A hereto opposite the name of such Underwriter, plus any additional
number of Trust Preferred Securities that such Underwriter may become obligated
to purchase pursuant to the provisions of Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of the
-------
Trust Preferred Securities shall be made through the facilities of The
Depository Trust Company ("DTC") at the offices of (i) [________________], or at
such other place as shall be agreed upon by the Representatives and the Company,
at 9:00 A.M. (Eastern time) on the third (unless the pricing occurs after 4:30
P.M. (Eastern time) on any given day, in which case on the fourth) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10 hereof), or such other time not later than ten business days after
such date as shall be agreed upon by the Representatives and the Company (such
time and date of payment and delivery being herein called the "Closing Time").
For purposes of this Agreement, "business day" means any day on which the New
York Stock Exchange, Inc. (the "NYSE") is open for bidding.
Payment shall be made to the Trust by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
such persons designated by the Representatives for the respective accounts of
the Underwriters of a certificate in global form for the Trust Preferred
Securities to be purchased by them. It is understood that each Underwriter has
authorized the Representatives, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Trust Preferred Securities
that it has agreed to purchase. Merrill Lynch, individually and not as a
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Trust Preferred Securities to be
-13-
<PAGE>
purchased by any Underwriter whose funds have not been received by the Closing
Time, but such payment shall not relieve such Underwriter from its obligations
hereunder.
The purchase price per Trust Preferred Security to be paid by the
several Underwriters for the Trust Preferred Securities shall be an amount equal
to the initial public offering price as set forth in Schedule B hereto. The
initial public offering price per Trust Preferred Security shall be a fixed
price to be determined by agreement between the Representatives and the
Offerors. The initial public offering price and the purchase price per Trust
Preferred Security, when so determined, shall be set forth in Schedule B hereto.
As compensation to the Underwriters for their commitments hereunder
and in view of the fact that the proceeds of the sale of the Trust Preferred
Securities will ultimately be used to purchase the Affiliate Debentures, the
Company hereby agrees to pay, or cause to be paid, at Closing Time to the
Representatives, for the accounts of the several Underwriters, a commission per
Trust Preferred Security set forth on Schedule B hereto by wire transfer of
immediately available funds to a bank account designated by Merrill Lynch.
(c) Denominations; Registration. The certificates for the Trust
---------------------------
Preferred Securities shall be registered in the name of "Cede & Co.," as nominee
of DTC, and delivered to DTC in such denominations as the Representatives may
reasonably request in writing at least two full business days prior to the
Closing Time or, to the extent not so requested, in such authorized
denominations as the Trust shall determine. For the purpose of expediting the
checking of the certificates for the Trust Preferred Securities by the
Representatives on behalf of the Underwriters, the Trust agrees to make such
certificates available to the Representatives for such purpose at the offices of
DTC in New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Closing Time or at such other time and place as may be
agreed upon by the Trust and the Representatives.
SECTION 3. Covenants of Offerors. The Offerors covenant with each
---------------------
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
--------------------------------------------------------------
The Offerors, subject to Section 3(b) hereof, will cause the Prospectus to be
filed with, or transmitted for filing to, the Commission pursuant to and in
compliance with Rule 424(b) of the 1933 Act Regulations, and will notify the
Representatives immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become effective,
or any supplement to the Prospectus or any amended Prospectus shall have been
filed, under the 1933 Act, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement under the 1933
Act or of any order preventing or suspending the use of any preliminary
prospectus supplement, or of the suspension of the qualification of the Offered
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
-14-
<PAGE>
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. During any period when a prospectus is
--------------------
required to be delivered under the 1933 Act or the 1934 Act in connection with
sales of any of the Offered Securities, the Offerors will give the
Representatives notice of their intention to file or prepare any amendment to
the Registration Statement or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective under the 1933 Act or to the Prospectus, whether pursuant to the 1933
Act, the 1934 Act or otherwise, will furnish the Representatives with copies of
any such documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Offerors have furnished
-----------------------------------
or will deliver to the Representatives and counsel for the Underwriters, without
charge, conformed copies of the Registration Statement as originally filed and
of each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and conformed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Offerors have delivered to each
------------------------
Underwriter, without charge, as many copies of each preliminary prospectus
supplement as such Underwriter reasonably requested, and the Offerors hereby
consent to the use of such copies for purposes permitted by the 1933 Act. The
Offerors will furnish to each Underwriter, without charge, during any period
when a prospectus is required to be delivered under the 1933 Act or the 1934 Act
in connection with sales of any of the Offered Securities, such number of copies
of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Offerors will
-----------------------------------------
comply with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations and the 1939 Act and the 1939 Act Regulations with respect to
the offer of the Offered Securities so as to permit the completion of the
distribution of the Trust Preferred Securities as contemplated in this Agreement
and in the Prospectus. If at any time when a prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of any of
the Offered Securities, any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the Underwriters
and for the Company, to amend the Registration Statement or amend or supplement
the Prospectus in order that the Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the
-15-
<PAGE>
statements therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b) hereof, such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Registration Statement or the Prospectus comply with such requirements, and
the Company will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will take such action as the
-----------------------
Underwriters may reasonably request to cooperate with the Underwriters to
qualify the Offered Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions as the Representatives
may designate so that such qualifications are in effect for a period of not less
than one year from the effective date of the Registration Statement under the
1933 Act and during any period when a prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of any of the
Offered Securities; provided, however, that the Company shall not be obligated
to file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified. In each jurisdiction in which the Offered Securities have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction so that such qualification is in effect for a
period of not less than one year from the effective date of the Registration
Statement under the 1933 Act and during any period when a prospectus is required
to be delivered under the 1933 Act or the 1934 Act in connection with sales of
any of the Offered Securities.
(g) Rule 158. The Company will, on behalf of the Trust, timely file
--------
such reports pursuant to the 1934 Act as are necessary in order to make
generally available to the Trust's securityholders as soon as practicable an
earning statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act and Rule 158 under the
1933 Act Regulations.
(h) Use of Proceeds. The Company will use or cause to be used the net
---------------
proceeds received by and from the sale of the Offered Securities in the manner
specified in the Prospectus under "Use of Proceeds."
(i) Listing. The Offerors will use their best efforts to cause the
-------
Trust Preferred Securities to be duly authorized for listing on the NYSE,
subject to notice of issuance, and to be registered under the 1934 Act; if the
Trust Preferred Securities are exchanged for Partnership Preferred Securities,
the Company will use its best efforts to have the Partnership Preferred
Securities listed on the exchange or other organization on which the Trust
Preferred Securities were then listed, and to have the Partnership Preferred
Securities registered under the 1934 Act.
(j) Prohibition on Sales. During a period of 30 days from the date of
--------------------
the Prospectus, none of the Offerors will, without the prior written consent of
the Underwriters, (i)
-16-
<PAGE>
directly or indirectly, sell, offer to sell, grant any option for sale of, or
otherwise dispose of, any Trust Preferred Securities, Partnership Preferred
Securities, any preferred stock of the Company or any security convertible into
or exchangeable into or exercisable for Trust Preferred Securities or
Partnership Preferred Securities or any preferred stock of the Company or (ii)
enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of any Trust Preferred Securities, Partnership Preferred Securities, any
preferred stock of the Company or any security convertible into or exchangeable
into or exercisable for Trust Preferred Securities or Partnership Preferred
Securities or any preferred stock of the Company, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Trust Preferred Securities, Partnership Preferred Securities, any preferred
stock of the Company or such other securities, in cash or otherwise.
(k) Reporting Requirements. The Company, during any period when a
----------------------
prospectus is required to be delivered under the 1933 Act or the 1934 Act in
connection with sales of any of the Offered Securities, will file all documents
required to be filed with the Commission pursuant to the 1934 Act within the
time periods required by the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay all expenses incident to the
--------
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, the Trust Agreement, the Partnership Agreement, and the Indentures
and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Offered Securities, (iii) the
preparation, issuance and delivery of the certificates for the Trust Preferred
Securities to the Underwriters, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Offered
Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the reasonable fees (but not in excess of
$15,000) and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the blue sky survey and any
supplement thereto, (vi) the printing and delivery to the Underwriters of copies
of each preliminary prospectus supplement, and of the Prospectus and any
amendments or supplements thereto, (vii) the preparation, printing and delivery
to the Underwriters of copies of the blue sky survey and any supplement thereto,
(viii) the fees and expenses of the Issuer Trustees, the Debt Trustee, the
Partnership Guarantee Trustee, the Trust Guarantee Trustee and the Investment
Guarantee Trustee, including the fees and disbursements of counsel for the
Issuer Trustees, the Debt Trustee, the Partnership Guarantee Trustee, the Trust
Guarantee Trustee and the Investment Guarantee Trustee in connection with the
Indentures and the Affiliate Debentures, the Partnership Guarantee, the Trust
Guarantee and the Investment Guarantee, (ix) any fees payable in connection with
the rating of the Trust Preferred Securities and (x) the fees and expenses
incurred in connection with the listing of the Offered Securities on the NYSE
and the registration thereof under the 1934 Act in accordance with Section 3(i)
hereof; provided, however,
-17-
<PAGE>
that the Underwriters shall reimburse the Company for certain expenses incurred
in connection with the transactions contemplated by this Agreement as may be
agreed upon in writing.
(b) Termination of Agreement. If this Agreement is terminated by the
------------------------
Representatives in accordance with the provisions of Section 5 or 9(a) hereof,
the Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations
---------------------------------------
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Offerors contained in Section 1 hereof or
in certificates of any officer of the Offerors or any Investment Subsidiary
delivered pursuant to the provisions hereof, to the performance by the Offerors
of their covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
---------------------------------------
Statement has become effective and at the Closing Time no stop order suspending
the effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. The Prospectus shall have been filed with, or transmitted for
filing to, the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Offerors. At the Closing Time, the
-------------------------------
Representatives shall have received an opinion of Goodsill Anderson Quinn &
Stifel, counsel for the Offerors, dated the Closing Time, to the effect that:
(i) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Hawaii,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) the Company has an authorized capitalization as set forth in
the Prospectus and all of the issued and outstanding shares of capital
stock of the Company have been duly and validly authorized and issued and
are fully paid and nonassessable;
(iii) to the best of such counsel's knowledge, the Company does not
itself conduct any business or own or lease any property in any
jurisdiction outside the State of Hawaii that would require it to qualify
to do business as a foreign corporation and where the failure to be so
qualified would subject the Company to any material liability or
disability;
-18-
<PAGE>
power and authority to own its properties and conduct its business as
described in the Prospectus;
(iv) each Significant Subsidiary, other than ASB, has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; ASB has been duly
formed and is duly chartered as a federal savings bank under the laws of
the United States; all of the issued and outstanding shares of capital
stock of each Significant Subsidiary has been duly and validly authorized
and issued and is fully paid and nonassessable; and, to the best of such
counsel's knowledge, all of such shares, other than shares of preferred
stock of HECO and its subsidiaries, is owned directly or indirectly by the
Company, free and clear of any perfected encumbrance or security interest
or any other encumbrance, claim or equity, other than the pledge by HECO of
the shares of common stock of HELCO and MECO under the indenture securing
HECO's first mortgage bonds, and with such exceptions as are described in
the Prospectus or as are otherwise disclosed to the Underwriters;
(v) the Company and HECO are holding companies within the meaning
of the Public Utility Holding Company Act of 1935, as amended; however, by
virtue of having filed an appropriate application under the provisions of
Section 3(a) of such Act, the Company and HECO are exempt from all of the
provisions of such Act except Section 9(a)(2) thereof, and will remain so
exempt, subject to the future timely filings of annual exemption
statements, unless and except insofar as the Commission shall find such
exemption detrimental to the public interest or the interest of investors
or consumers;
(vi) except as indicated in the Prospectus, to the best of such
counsel's knowledge, (A) neither the Company nor any Significant Subsidiary
is engaged in, or threatened with, any litigation and (B) there are no
proceedings, or any proceedings threatened, with respect to the Company or
any Significant Subsidiary or their property that, in the case of either
clause (A) or (B) above, such counsel (or other counsel as to litigation or
proceedings that are not principally handled by their firm) has concluded
is reasonably expected to have a material adverse effect on the Company and
Subsidiaries taken as a whole;
(vii) neither any of the Offerors, the General Partner or HEIIC is
nor, after giving effect to the offering and sale of the Offered Securities
and the application of the proceeds thereof as described in the Prospectus,
will be an "investment company" or "controlled" by an "investment company,"
in each case within the meaning of the 1940 Act;
(viii) the Registration Statement, at the Effective Date, and the
Prospectus, at the time it was filed with, or transmitted for filing to,
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations,
complied as to form in all material respects with the 1933 Act, the 1933
Act Regulations and the 1939 Act and the 1939 Act Regulations; each
document incorporated by reference in the Prospectus as originally filed
pursuant to the 1934 Act complied as to form when so filed in all material
respects with the 1934 Act and
-19-
<PAGE>
the 1934 Act Regulations; and, to the best of such counsel's knowledge, the
Registration Statement has been declared, and on the Closing Time is,
effective under the 1933 Act and no proceedings for a stop order with
respect thereto are threatened or pending under Section 8 of the 1933 Act;
(ix) nothing has come to the attention of such counsel to cause them
to believe that the Registration Statement, at the Effective Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, at the time it
was filed with, or transmitted for filing to, the Commission pursuant to
Rule 424(b) of the 1933 Act Regulations or on the Closing Time, included or
includes any untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading;
(x) the statements summarizing certain provisions of the Offered
Securities and the Affiliate Debentures (other than any such statements
describing DTC's book-entry system), the Indentures, the Trust Agreement,
the Partnership Agreement, and the Investment Guarantee, and the statements
relating to the Company and involving matters of law or legal conclusions,
contained in the Prospectus are accurate summaries of such documents and
matters in all material respects;
(xi) this Agreement has been duly authorized by all necessary
corporate action of and duly executed and delivered by the Company; this
Agreement has been duly executed and delivered, on behalf of the Trust, by
the Regular Trustees and, on behalf of the Partnership, by the General
Partner; and the Trust Preferred Securities have been duly executed and
delivered by the Regular Trustees;
(xii) the Partnership Agreement has been duly authorized by all
necessary corporate action of the General Partner and duly executed and
delivered by the General Partner;
(xiii) the Trust Agreement has been duly qualified under the 1939
Act and has been duly authorized by all necessary corporate action of the
Company and duly executed and delivered by the Company and the Regular
Trustees;
(xiv) the Trust Guarantee has been duly qualified under the 1939
Act, has been duly authorized by all necessary corporate action of and duly
executed and delivered by the Company and constitutes a valid and binding
instrument of the Company enforceable against the Company in accordance
with its terms;
(xv) the Partnership Guarantee has been duly qualified under the
1939 Act, has been duly authorized by all necessary corporate action of and
duly executed and delivered by the Company and constitutes a valid and
binding instrument of the Company enforceable against the Company in
accordance with its terms;
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(xvi) the Investment Guarantee has been duly qualified under the
1939 Act, has been duly authorized by all necessary corporate action of and
duly executed and delivered by the Company and constitutes a valid and
binding instrument of the Company enforceable against the Company in
accordance with its terms;
(xvii) each Indenture has been duly authorized by all necessary
corporate action of and duly executed and delivered by the applicable
Investment Affiliate and constitutes a valid and binding agreement of such
Investment Affiliate enforceable against such Investment Affiliate in
accordance with its terms; the Indenture relating to the Company Debentures
has been duly qualified under the 1939 Act; the Affiliate Debentures have
been duly authorized by all necessary corporate action of and duly executed
and delivered by the applicable Investment Affiliate and constitute valid
and binding obligations of such Investment Affiliate enforceable against
such Investment Affiliate in accordance with their terms;
(xviii) the execution, delivery and performance of the Trust
Agreement, the Partnership Agreement, the Guarantees and the Investment
Guarantee by the Company, the Affiliate Debentures and the Indentures by
the applicable Investment Affiliate and any other agreement or instrument
entered into or issued by the Company in connection with the transactions
contemplated hereby or thereby or in the Registration Statement and the
Prospectus (including the issuance and sale of the Offered Securities and
the use of proceeds from the sale of the Offered Securities as described in
the Prospectus under the caption "Use of Proceeds") and the consummation of
the transactions contemplated herein and in the Registration Statement and
the Prospectus and compliance by the Company with its obligations hereunder
and thereunder do not and will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, any
material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or any
Significant Subsidiary is a party or by which the Company or any
Significant Subsidiary is bound or to which any of the material property or
assets of the Company or any Significant Subsidiary is subject, nor will
such action result in any violation of the provisions of the Restated
Articles of Incorporation of the Company or the By-Laws of the Company or
any statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the Company
or any of its properties, except that such counsel need not express an
opinion with respect to compliance with state securities or blue sky law;
(xix) no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the performance by the Company of its obligation under this
Agreement or in connection with the transactions contemplated by this
Agreement, except such as have been obtained or made under the 1933 Act,
the 1933 Act Regulations, the 1934 Act, the 1934 Act Regulations, the 1939
Act, the 1939 Act Regulations or otherwise and such consents, approvals,
authorizations, registrations, or qualifications as may be required under
state securities or blue sky laws;
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(xx) such counsel shall confirm (A) its opinion set forth under
"Certain Federal Income Tax Considerations" in the Prospectus and (B) that,
subject to the qualifications set forth therein, the description of such
opinion therein is an accurate summary of the United States federal income
tax matters described therein; and
(xxi) all of the issued and outstanding Trust Common Securities
are directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; and the General
Partner is the sole owner of general partner interests of the Partnership.
In rendering such opinion, (A) such counsel may state that it is expressing an
opinion only as to the federal laws of the United States and the laws of the
State of Hawaii, (B) such counsel may rely, as to matters involving the
application of laws of the State of Delaware, upon the opinion of special
Delaware counsel for the offerors rendered pursuant to Section 5(c) hereof and,
as to matters involving the application of laws of the State of New York, upon
the opinion of counsel for the Underwriters rendered pursuant to Section 5(d)
hereof, (C) such counsel may rely, as to matters of good standing and valid
existence and as to matters of fact (to the extent deemed proper), upon
certificates of government officials (provided that copies of such certificates
will be furnished to counsel for the Underwriters), (D) such counsel may rely,
as to matters of fact (to the extent deemed proper), upon certificates and
representations of officers and employees of the Offerors (provided that copies
of such certificates will be furnished to counsel for the Underwriters upon its
reasonable request), (E) such counsel may rely, with respect to matters
involving litigation or proceedings not principally handled by such counsel's
firm, upon opinions and information upon which such counsel has been permitted
to rely by other counsel representing the Offerors in such litigation or
proceedings (provided that copies of such opinions are furnished to counsel for
the Underwriters), (F) for purposes of the opinion expressed in paragraph (vii)
above, "material" shall mean $15,000,000, (G) such counsel may state that it has
not been requested to, and does not, express any opinion with respect to the
financial statements and notes thereto and the schedules and other financial and
statistical data and information included or incorporated by reference in the
Registration Statement and the Prospectus, (H) such counsel may state, with
respect to the matters set forth in paragraph (x) above, that they have not
independently verified and assume no responsibility for the accuracy,
completeness or fairness of the statements in the Prospectus or in any document
incorporated by reference therein, except insofar as such statements relate to
such counsel or as set forth in paragraphs (xi) and (xxi) above), (I) such
counsel may limit the matters set forth in paragraphs (xv) through (xviii) above
by the effect of the Exceptions and, in the case of paragraph (xvi) above, by
the effect of applicable public policy on the enforceability of provisions
relating to contribution or indemnification, (J) such counsel may state that,
whenever such opinion is qualified by the phrases "known to such counsel," "to
the best of our knowledge," "to our knowledge" or "nothing has come to our
attention," or other phrases of similar import, such phrases are intended to
mean the actual knowledge of information by the lawyers in such counsel's firm
after due inquiry who have been principally involved in drafting the Prospectus
and supervising the issuance, sale and delivery of the Trust Preferred
Securities and preparing the pertinent documents and the lawyers having
supervisory responsibility for the client relationship with the Offerors and
general transaction representation, but does not include other information
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that might be revealed if there were to be undertaken a canvass of all lawyers
in such counsel's firm, a general search of all files or any other type of
independent investigation (other than, with respect to the matters set forth in
paragraph (vii) above, such review of internal litigation files or inquiries of
other counsel as such counsel deems necessary), and (K) such counsel may include
therein such other customary qualifications reasonably acceptable to the
Representatives and counsel for the Underwriters. References to the Registration
Statement and the Prospectus in this Section 5(b) shall include any amendments
or supplements thereto at the Closing Time.
(c) Opinion of Special Counsel for the Offerors. At the Closing Time,
-------------------------------------------
the Representatives shall have received an opinion of Richards, Layton & Finger,
P.A., special Delaware counsel for the Offerors, dated the Closing Time, to the
effect that:
(i) the Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Trust Act; and all filings
required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been
made;
(ii) under the Trust Agreement and the Delaware Trust Act, the Trust
has the trust power and authority (A) to own property and to conduct its
business, all as described in the Prospectus, (B) to issue and sell the
Trust Securities in accordance with the Trust Agreement, and as described
in the Prospectus, and to perform its other obligations under the Trust
Agreement, this Agreement and the Trust Securities, (C) to execute and
deliver this Agreement and (D) to consummate the transactions contemplated
by this Agreement;
(iii) assuming that the Trust Agreement has been duly authorized,
executed and delivered by the parties thereto, the Trust Agreement
constitutes a valid and binding obligation of each of the Company and the
Regular Trustees, and is enforceable against the Company and the Regular
Trustees, in accordance with its terms;
(iv) the Trust Common Securities have been duly authorized by the
Trust Agreement and are validly issued undivided beneficial interests in
the assets of the Trust;
(v) the Trust Preferred Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and, subject to the
qualifications set forth in paragraph (vi) below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust;
(vi) the holders of the Trust Preferred Securities, as beneficial
owners of the Trust, will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware (in
this regard, such counsel may note that the holders of the Trust Preferred
Securities may be obligated, pursuant to the Trust Agreement, to provide
(A) indemnity or security in connection with and pay taxes or governmental
charges arising from transfers or exchanges of certificates for Trust
Preferred Securities and the issuance
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of replacement certificates for Trust Preferred Securities and (B) security
or indemnity in connection with requests of or directions to the Trust
Property Trustee to exercise its rights and powers under the Trust
Agreement);
(vii) under the Trust Agreement and the Delaware Trust Act, the
issuance of the Trust Securities is not subject to preemptive rights;
(viii) the Partnership has been duly formed and is validly existing
in good standing as a limited partnership under the Delaware Partnership
Act; and all filings required under the laws of the State of Delaware with
respect to the formation and valid existence of the Partnership as a
limited partnership have been made;
(ix) the General Partner has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(x) under the Partnership Agreement and the Delaware Partnership
Act, the Partnership has the partnership power and authority (A) to own
property and to conduct its business, all as described in the Prospectus,
(B) to issue and sell the Partnership Preferred Securities in accordance
with the Partnership Agreement, and as described in the Prospectus, and to
perform its other obligations under the Partnership Agreement, this
Agreement and the Partnership Preferred Securities, (C) to execute and
deliver this Agreement and (D) to consummate the transactions contemplated
by this Agreement;
(xi) assuming that the Partnership Agreement has been duly
authorized, executed and delivered by the parties thereto, the Partnership
Agreement constitutes a valid and binding obligation of the General Partner
and is enforceable against the General Partner in accordance with its
terms;
(xii) the Partnership Preferred Securities have been duly authorized
by the Partnership Agreement and represent valid and, subject to
qualifications set forth in paragraph (xii) below, fully paid and
nonassessable limited partner interests in the Partnership;
(xiii) assuming that, the holders of Partnership Preferred
Securities, in their capacities as such, do not participate in the control
of the business of the Company, the holders of the Partnership Preferred
Securities, in their capacities as such, will have no liability in excess
of their obligations to make payments provided for in the Partnership
Agreement and their share of the Partnership's assets and undistributed
profits (subject to the obligation of a holder of Partnership Preferred
Securities to repay any funds wrongfully distributed to it);
(xiv) under the Partnership Agreement and the Delaware Partnership
Act, the issuance of the Partnership Preferred Securities is not subject to
preemptive rights;
(xv) the issuance and sale by the Trust of the Trust Securities,
the execution, delivery and performance by the Trust of this Agreement, and
the consummation of the transactions contemplated by this Agreement, do not
violate (A) the Certificate of Trust or the Trust Agreement or (B) any
applicable Delaware law, rule or regulation;
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(xvi) under the Trust Agreement and the Delaware Trust Act, the
issuance and sale by the Trust of the Trust Securities and the execution
and delivery by the Trust of this Agreement, and the performance by the
Trust of its obligations hereunder, have been duly authorized by all
necessary trust action on the part of the Trust, and, upon the due
execution and delivery of this Agreement by the Company as Sponsor under
the Trust Agreement and the certificates for the Trust Preferred Securities
by the Regular Trustees on behalf of the Trust, and if executed by the
facsimile signatures of the Regular Trustees, the due authentication of
the Trust Preferred Securities by an authorized officer of the Property
Trustee in accordance with the Trust Agreement, this Agreement and the
Trust Preferred Securities will have been duly executed and delivered by
the Trust;
(xvii) the issuance and sale by the Partnership of the Partnership
Preferred Securities, the execution, delivery and performance by the
Partnership of this Agreement, and the consummation of the transactions
contemplated by this Agreement, do not violate (A) the Certificate of
Limited Partnership or the Partnership Agreement or (B) any applicable
Delaware law, rule or regulation; and
(xviii) under the Partnership Agreement and the Delaware
Partnership Act, the issuance and sale by the Partnership of the
Partnership Preferred Securities and the execution and delivery by the
Partnership of this Agreement, and the performance by the Partnership of
its obligations hereunder, have been duly authorized by all necessary
partnership action on the part of the Partnership, and, upon the due
execution and delivery of this Agreement by the General Partner under the
Partnership Agreement and the certificates for the Partnership Preferred
Securities by the General Partner, this Agreement and the Partnership
Preferred Securities will have been duly executed and delivered by the
Partnership.
In rendering such opinion, (A) such counsel may rely, as to matters of good
standing and valid existence and as to matters of fact (to the extent deemed
proper), upon certificates of government officials (provided that copies of such
certificates will be furnished to counsel for the Underwriters), (B) such
counsel may rely, as to matters of fact (to the extent deemed proper), upon
certificates and representations of the Trust and the Partnership (provided that
copies of such certificates will be furnished to counsel for the Underwriters
upon its reasonable request), (C) such counsel may state that it is expressing
an opinion only as to the laws of the State of Delaware, (D) such counsel may
limit the matters set forth in paragraphs (iii) and (x) above by the effect of
the Exceptions and the effect of applicable public policy on the enforceability
of provisions relating to contribution or indemnification and (E) such counsel
may include therein such other customary qualifications reasonably acceptable to
the Representatives and counsel for the Underwriters. References to the
Prospectus in this Section 5(c) shall include any amendments or supplements
thereto at the Closing Time.
(d) Opinion of Counsel for Underwriters. At the Closing Time, the
-----------------------------------
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Winthrop, Stimson, Putnam & Roberts, New York, New York,
counsel for the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters in form and substance satisfactory to
the Underwriters. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the State of
New York and the federal law of the United States and the General Corporation
Law of the State of Delaware, upon the opinions of counsel satisfactory to the
Representatives. Such counsel may
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<PAGE>
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and Subsidiaries and certificates of public officials.
(e) Opinion of Counsel for the Property Trustee. At the Closing Time,
-------------------------------------------
the Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Emmet, Marvin & Martin, counsel for the Property Trustee in
form and substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letters for each of the other Underwriters.
(f) Company Officers' Certificate. At the Closing Time, since the
-----------------------------
date hereof or since the respective dates as of which information is given in
the Registration Statement and the Prospectus except as stated therein, neither
the Company nor any Subsidiary shall have sustained any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree and there shall not have been any material adverse change, or
any development involving a prospective material adverse change, in or affecting
the general affairs, management, financial position, stockholders' equity or
results of operations of the Company and Subsidiaries taken as a whole, and the
Representatives shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of the Closing Time, to the effect that (i) there has
been no such loss or interference or change, (ii) the representations and
warranties in Sections 1(a) and 1(c) (to the extent they relate to the Company)
hereof are true and correct with the same force and effect as though expressly
made at and as of the Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to such officers' knowledge, are
pending or are contemplated by the Commission.
(g) Trust Officer's Certificate. At the Closing Time, there shall not
---------------------------
have been, since the date hereof or since the respective dates as of which
information is given in the Registration Statement and the Prospectus except as
stated therein, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Trust, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of an authorized
representative of the Trust, dated as of the Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the representations and
warranties in Section 1(c) hereof (to the extent they relate to the Trust) are
true and correct with the same force and effect as though expressly made at and
as of the Closing Time and (iii) the Trust has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
the Closing Time.
(h) Partnership Officer's Certificate. At the Closing Time, there
---------------------------------
shall not have been, since the date hereof or since the respective dates as of
which information is given in the Registration Statement and the Prospectus
except as stated therein, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects
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of the Partnership, whether or not arising in the ordinary course of business,
and the Representatives shall have received a certificate of an authorized
representative of the Partnership, dated as of the Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(c) hereof (to the extent they relate
to the Partnership) are true and correct with the same force and effect as
though expressly made at and as of the Closing Time and (iii) the Partnership
has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time.
(i) Comfort Letter. At the time of the execution of this Agreement,
--------------
the Representatives shall have received from KPMG Peat Marwick LLP, a letter
dated such date, in form and substance satisfactory to the Representatives,
together with signed or reproduced copies of such letter for each of the other
Underwriters, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus, based upon certain procedures carried
out through a date not more than five business days prior to the date of such
letter, in a form acceptable to the Representatives.
(j) Bring-Down Comfort Letter. At the Closing Time, the
-------------------------
Representatives shall have received from KPMG Peat Marwick LLP a letter, dated
as of the Closing Time, to the effect that they reaffirm the statements made in
the letter furnished pursuant to Section 5(i) hereof, except that the specified
date referred to therein shall be a date not more than three business days prior
to the Closing Time.
(k) Maintenance of Rating. At the Closing Time, the Trust Preferred
---------------------
Securities shall be rated at least "Baa3" by Moody's Investors Service, Inc. and
"BBB-" by Standard & Poor's, and the Company shall have delivered to the
Representatives a letter dated on or prior to the Closing Time, from each such
rating agency, or other evidence satisfactory to the Representatives, confirming
that the Trust Preferred Securities have such ratings; and since the date of
this Agreement, there shall not have occurred a downgrading in the rating
assigned to the Trust Preferred Securities or any of the Company's debt
securities by any "nationally recognized statistical rating agency," as that
term is defined by the Commission for purposes of Rule 436(g)(2) of the 1933 Act
Regulations, and no such organization shall have publicly announced that it has
under surveillance or review its rating of the Trust Preferred Securities or any
of the Company's debt securities.
(l) Approval of Listing. At the Closing Time, (i) the Trust Preferred
-------------------
Securities shall have been approved for listing on the NYSE, subject only to
official notice of issuance and (ii) the Company's registration statement on
Form 8-A relating to the Trust Preferred Securities shall have become effective
under the 1934 Act.
(m) Guarantee of Company's Performance. At the Closing Time, the
----------------------------------
Representatives shall have received a letter from the Investment Subsidiary,
dated the Closing Time, to the effect that it agrees to guarantee the timely
performance by the Offerors of the indemnity and contribution obligations
contained in Sections 6 and 7 hereof and certain other obligations of the
Offerors under this Agreement.
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(n) No Special Events. At the Closing Time, neither a Partnership
-----------------
Special Event (as defined in the Partnership Agreement) nor a Trust Special
Event (as defined in the Trust Agreement) shall have occurred and be continuing.
(o) Additional Documents. At the Closing Time, counsel for the
--------------------
Underwriters shall have been furnished with such documents and opinions as they
may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Offered Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Offerors in connection with the issuance and sale of the Offered
Securities as herein contemplated shall be reasonably satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(p) Termination of Agreement. If any condition specified in this
------------------------
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Representatives by notice to the Company
at any time at or prior to the Closing Time, and such termination shall be
without liability of any party to any other party except as provided in Section
4 hereof and except that Sections 1, 6, 7 and 8 hereof shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. The Offerors will jointly and
-------------------------------
severally indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933 Act
and Section 20 of the 1934 Act against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such person may
become subject, under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Basic Prospectus (if used prior to
the date the Prospectus is filed with, or transmitted for filing to, the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations), the Prospectus,
the Prospectus as amended or supplemented or any other prospectus relating to
the Offered Securities, or any amendment or supplement thereto, 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 to the extent of the aggregate amount paid in settlement of
any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
provided that (subject to Section 6(d) hereof) any such settlement is effected
with the written consent of the Company, and will reimburse such Underwriter or
such person for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Offerors shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement,
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the Basic Prospectus (if used prior to the date the Prospectus is filed with, or
transmitted for filing to, the Commission pursuant to Rule 424(b) of the 1933
Act Regulations), the Prospectus, the Prospectus as amended or supplemented or
any other prospectus relating to the Offered Securities, or any such amendment
or supplement, in reliance upon and in conformity with written information
furnished to the Offerors by any Underwriters through Merrill Lynch expressly
for use therein; provided further, however, that the Offerors shall not be
required to reimburse any Underwriter or such person for fees and expenses of
counsel other than one counsel for all Underwriters and one counsel for all
Underwriters in each jurisdiction in which proceedings are or are threatened to
be brought or of which matters of law are or may be at issue, unless and to the
extent that there are actual or potential conflicts of interest between or among
Underwriters or defenses available to one or more Underwriters that are not
available to other Underwriters.
(b) Indemnification of Offerors, Directors and Officers. Each
---------------------------------------------------
Underwriter severally agrees to indemnify and hold harmless the Offerors, each
of the directors of the Company, each of the officers of the Offerors who signed
the Registration Statement, and each person, if any, who controls any of the
Offerors within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, against any losses, claims, damages or liabilities to which the
Offerors, such directors, such officers or such persons may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Basic Prospectus (if used prior to the date the
Prospectus is filed with, or transmitted for filing to, the Commission pursuant
to Rule 424(b) of the 1933 Act Regulations), the Prospectus, the Prospectus as
amended or supplemented or any other prospectus relating to the Offered
Securities, or any amendment or supplement thereto, 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,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, the Basic Prospectus (if used prior to the date the
Prospectus is filed with, or transmitted for filing to, the Commission pursuant
to Rule 424(b) of the 1933 Act Regulations), the Prospectus, the Prospectus as
amended or supplemented or any other prospectus relating to the Offered
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Offerors by any Underwriter
through Merrill Lynch expressly for use therein; and will reimburse the
Offerors, such directors, such officers or such persons for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Actions Against Parties; Notification. Promptly after receipt by
-------------------------------------
an indemnified party under Section 6(a) or (b) hereof of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under Section 6(a) or (b)
hereof, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party shall not relieve it from
any liability that it may have to any indemnified party unless and only to the
extent that such indemnifying party is prejudiced by such omission nor relieve
it from any liability that it may have to any indemnified party otherwise than
under Section 6(a) or (b) hereof. In case any such action
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shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel 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 shall
not be liable to such indemnified party under Section 6(a) or (b) hereof for any
legal expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) 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) Settlement Without Consent If Failure To Reimburse. If at any
--------------------------------------------------
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a) hereof effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is unavailable to or insufficient to hold harmless an
indemnified party thereunder in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Offerors on the one hand and the Underwriters
on the other from the offering of the Trust Preferred Securities to which such
loss, claim, damage or liability (or action in respect thereof) relates. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party omitted to give the
notice required under Section 6(c) hereof and such indemnifying party was
prejudiced by such omission, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Offerors on the one hand and the Underwriters 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 benefits received by the
Offerors on
-30-
<PAGE>
the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the sale of the Trust
Preferred Securities (before deducting expenses) received by the Offerors bear
to the total commissions or discounts received by the Underwriters in respect
thereof. The relative fault shall be determined by reference to, among other
things, whether the untrue statement of a material fact or the omission or
alleged omission to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading relates to
information supplied by the Offerors on the one hand or by the Underwriters on
the other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Offerors and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to above in this Section 7. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
public offering price at which the Trust Preferred Securities purchased by or
through it were sold exceeds the amount of any damages that such Underwriter has
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 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of each of the Underwriters under this
Section 7 to contribute are several in proportion to the respective purchases
made by or through it to which such loss, claim, damage or liability (or action
in respect thereof) relates and are not joint. The obligations of the Offerors
under this Section 7 shall be in addition to any liability that the Offerors may
otherwise have.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Offerors who signed the
Registration Statement, and each person, if any, who controls any of the
Offerors within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
- --------
Agreement or in certificates of officers of the Offerors or any Subsidiary
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Offerors, and shall survive
delivery of the Trust Preferred Securities to the Underwriters.
SECTION 9. Termination of Agreement.
------------------------
-31-
<PAGE>
(a) Termination; General. The Representatives may terminate this
--------------------
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Registration
Statement or the Prospectus any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and Subsidiaries taken as a whole, or (ii) if there
has occurred any material adverse change in the financial markets in the United
States, any outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case, such as
to make it, in the judgment of the Representatives, impracticable to market the
Trust Preferred Securities or to enforce contracts for the sale of the Trust
Preferred Securities, or (iii) if trading in any securities of the Company has
been suspended or materially limited by the Commission, the NYSE or the Pacific
Stock Exchange, or if there has been a suspension or material limitation in
trading in securities generally on the NYSE, or (iv) if a general moratorium on
commercial banking activities in New York or Hawaii has been declared by either
Federal or New York or Hawaii State authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
-----------
Section 9, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 hereof shall survive such termination and remain in full force and
effect.
SECTION 10. Default by one or more Underwriters. If one or more of
-----------------------------------
the Underwriters shall fail at the Closing Time to purchase the Trust Preferred
Securities that it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate number of the Trust Preferred Securities to be purchased hereunder,
each of the non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
number of the Trust Preferred Securities to be purchased hereunder, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
-32-
<PAGE>
In the event of any such default that does not result in a termination
of this Agreement, either the Representatives or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Merrill Lynch at North Tower, World Financial
Center, New York, New York 10281, attention of James McBurney, Director; and
notice to the Offerors shall be directed to Hawaiian Electric Industries, Inc.
at 900 Richards Street, Honolulu, Hawaii 96813, attention of the Treasurer.
SECTION 12. Parties. This Agreement shall inure to the benefit of
-------
and be binding upon the Underwriters and the Offerors and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Offerors and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters and the Offerors
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Trust Preferred Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. Governing Law and Time. This Agreement shall be governed
----------------------
by and construed in accordance with the laws of the State of New York. Except
as otherwise set forth herein, specified times of day refer to New York City
time.
SECTION 14. Effect of Headings. The Article and Section headings
------------------
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
-33-
<PAGE>
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
between the Underwriters and the Offerors in accordance with its terms.
Very truly yours,
Hawaiian Electric Industries, Inc.
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
HEI Preferred Funding, LP
By: Hycap Management, Inc.,
as General Partner
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
Hawaiian Electric Industries
Capital Trust I
By: Hawaiian Electric Industries, Inc.
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
-34-
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Goldman, Sachs & Co.
Dean Witter Reynolds Inc.
A.G. Edwards & Sons, Inc.
Legg Mason Wood Walker Incorporated
Robert W. Baird & Co. Incorporated
By: Merrill Lynch, Pierce, Fenner & Smith Incorporated
By:______________________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
<PAGE>
SCHEDULE A
Number of
Trust Preferred
Name of Underwriter Securities
- ------------------- ---------------
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Goldman, Sachs & Co.
Dean Witter Reynolds Inc.
A.G. Edwards & Sons, Inc.
Legg Mason Wood Walker Incorporated
Robert W. Baird & Co. Incorporated
Total.............................................. 4,000,000
=========
SCHEDULE A-1
<PAGE>
SCHEDULE B
1. The initial public offering price per security for the Trust
Preferred Securities, determined as provided in Section 2 of this Agreement,
shall be $25.00.
2. The purchase price per security for the Trust Preferred
Securities to be paid by the several Underwriters shall be $25.00, being an
amount equal to the initial public offering price set forth above.
3. The compensation per Trust Preferred Security to be paid by the
Company to the several Underwriters in respect of their commitments hereunder
shall be $.[____]; provided, however, that the compensation per Trust Preferred
Security for sales of 10,000 or more Trust Preferred Securities to a single
purchaser shall be $.[___].
SCHEDULE B-1
<PAGE>
Exhibit 4(c)
------------
AMENDED AND RESTATED
CERTIFICATE OF LIMITED PARTNERSHIP
OF
HEI PREFERRED FUNDING, LP
THIS Amended and Restated Certificate of Limited Partnership of HEI
Preferred Funding, LP (the "Partnership"), dated as of January 23, 1997, has
been duly executed and is being filed by the undersigned in accordance with the
provisions of 6 Del. C. (S)17-210, to amend and restate the original Certificate
of Limited Partnership of the Partnership, which was filed on December 23, 1996,
with the Secretary of the State of Delaware (the "Certificate"), to form a
limited partnership under the Delaware Revised Uniform Limited Partnership Act
(6 Del. C. (S)17-101, et seq.).
The Certificate is hereby amended and restated in its entirety to read as
follows:
1. Name. The name of the limited partnership formed and continued hereby
is HEI Preferred Funding, LP.
2. Registered Office. The address of the registered office of the
Partnership in the State of Delaware is c/o PNC Bank, Delaware, 300 Delaware
Avenue, Suite 1704, Wilmington, Delaware 19801.
3. Registered Agent. The name and address of the registered agent for
service of process on the Partnership in the State of Delaware are PNC Bank,
Delaware, 300 Delaware Avenue, Suite 1704, Wilmington, Delaware 19801.
4. General Partner. The name and the mailing address of the sole general
partner of the Partnership are:
Hycap Management, Inc.
300 Delaware Avenue, Suite 1704
Wilmington, Delaware 19801
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Certificate of Limited Partnership as of the date first-above written.
HYCAP MANAGEMENT, INC.
By: /s/ Robert F. Mougeot
---------------------------------
Name: Robert F. Mougeot
Title: Vice President
By: /s/ Constance H. Lau
---------------------------------
Name: Constance H. Lau
Title: Treasurer
<PAGE>
Exhibit 4(d)(ii)
----------------
ASSIGNMENT OF GENERAL PARTNER INTEREST AND
AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP
OF
HEI PREFERRED FUNDING, LP
THIS Assignment of General Partner Interest and Amendment to Agreement of
Limited Partnership of HEI Preferred Funding, LP dated as of January 23, 1997
(this "Assignment and Amendment Agreement"), is entered into by and among
Hawaiian Electric Industries, Inc., a Hawaii corporation ("HEI"), Hawaiian
Electric Industries Capital Trust I, a statutory business trust created under
Delaware law (the "Trust") and Hycap Management, Inc., a Delaware corporation
("HYCAP").
WITNESSETH:
WHEREAS, HEI Preferred Funding, LP (the "Partnership") has been formed as a
limited partnership under the Delaware Revised Uniform Limited Partnership Act
(6 Del. C. (S) 17-101, et seq.) (the "Act") pursuant to a Certificate of Limited
Partnership of the Partnership, as filed in the office of the Secretary of State
of the State of Delaware (the "Secretary of State") on December 23, 1996 (the
"Certificate"), and an Agreement of Limited Partnership of the Partnership,
dated as of December 23, 1996 (the "Agreement");
WHEREAS, HEI is the sole general partner of the Partnership and the Trust
is the sole limited partner of the Partnership;
WHEREAS, HEI desires to assign, transfer and convey all of its interest in
the Partnership as a general partner of the Partnership (the "General Partner
Interest") to HYCAP, and HEI desires to withdraw from the Partnership as a
general partner of the Partnership;
<PAGE>
WHEREAS, HYCAP desires to purchase the General Partner Interest presently
held by HEI, and HYCAP desires to be admitted to the Partnership as a successor
general partner of the Partnership; and
WHEREAS, the undersigned, being all of the partners of the Partnership, to
accomplish the foregoing, desire to amend the Agreement in the manner set forth
herein.
NOW, THEREFORE, the undersigned, in consideration of the premises,
covenants and agreements contained herein, do hereby agree as follows:
1. Assignment. Notwithstanding any provision in the Agreement to the
contrary, for value received, the receipt and sufficiency of which are hereby
acknowledged, upon the execution of this Assignment and Amendment Agreement by
the parties hereto, HEI does hereby assign, transfer and convey the General
Partner Interest to HYCAP.
2. Admission. Notwithstanding any provision in the Agreement to the
contrary, HYCAP is hereby admitted to the Partnership as a general partner of
the Partnership. The admission shall be effective upon the filing of an
amendment to the Certificate in the office of the Secretary of State which
reflects the fact that HYCAP is a general partner of the Partnership, and shall
occur, and for all purposes shall be deemed to have occurred, immediately prior
to the withdrawal of HEI from the Partnership as a general partner of the
Partnership.
3. Withdrawal. Notwithstanding any provision in the Agreement to the
contrary, HEI hereby withdraws from the Partnership as a general partner of the
Partnership. The withdrawal shall be effective upon the filing of an amendment
to the Certificate in the office of the Secretary of State which reflects the
fact that HEI is not a general partner of the Partnership.
4. Continuation. The parties hereto agree that following the withdrawal
of HEI from the Partnership as a general partner of the Partnership, HYCAP is
authorized to and hereby agrees to continue the business of the Partnership
without dissolution.
<PAGE>
5. Books and Records. The general partner of the Partnership shall take
all actions necessary under the Act and the Agreement, including causing the
amendment of the Agreement, to evidence the withdrawal of HEI from the
Partnership as a general partner of the Partnership and the admission of HYCAP
to the Partnership as a general partner of the Partnership.
6. Future Cooperation. Each of the parties hereto agrees to cooperate at
all times from and after the date hereof with respect to all of the matters
described herein, and to execute such further assignments, releases,
assumptions, amendments of the Agreement, notifications and other documents as
may be reasonably requested for the purpose of giving effect to, or evidencing
or giving notice of, the transactions contemplated by this Assignment and
Amendment Agreement.
7. Payment. HYCAP has paid $25.00 and other good and valuable
consideration to HEI for the General Partner Interest.
8. Binding Effect. This Assignment and Amendment Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns.
9. Execution in Counterparts. This Assignment and Amendment Agreement
may be executed in counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same instrument.
10. Agreement in Effect. Except as hereby amended, the Agreement shall
remain in full force and effect.
11. Governing Law. This Assignment and Amendment Agreement shall be
governed by, and interpreted in accordance with, the laws of the State of
Delaware, all rights and remedies being governed by such laws.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Amendment Agreement to be duly executed, as of the day and year first-above
written.
HYCAP MANAGEMENT, INC.,
as General Partner
By: /s/ Robert F. Clarke
---------------------------------
Name: Robert F. Clarke
Title: President
By: /s/ Betty Ann M. Splinter
---------------------------------
Name: Betty Ann M. Splinter
Title: Secretary
HAWAIIAN ELECTRIC INDUSTRIES
CAPITAL TRUST I, as Limited Partner
By HAWAIIAN ELECTRIC INDUSTRIES, INC.,
as Depositor
By: /s/ Robert F. Mougeot
---------------------------------
Name: Robert F. Mougeot
Title: Financial Vice President
& Chief Financial Officer
By: /s/ Constance H. Lau
---------------------------------
Name: Constance H. Lau
Title: Treasurer
HAWAIIAN ELECTRIC INDUSTRIES, INC.,
as Withdrawing General Partner
By: /s/ Robert F. Mougeot
---------------------------------
Name: Robert F. Mougeot
Title: Financial Vice President
& Chief Financial Officer
By: /s/ Constance H. Lau
---------------------------------
Name: Constance H. Lau
Title: Treasurer
<PAGE>
Exhibit 4(e)
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
HEI PREFERRED FUNDING, LP
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I--DEFINED TERMS
1.1 DEFINITIONS.................................. 2
ARTICLE II--CONTINUATION OF THE PARTNERSHIP;
ADMISSION OF PARTNERSHIP PREFERRED
SECURITIES HOLDERS
2.1 CONTINUATION OF THE PARTNERSHIP.............. 13
2.2 NAME......................................... 13
2.3 PURPOSES OF THE PARTNERSHIP.................. 13
2.4 TERM......................................... 14
2.5 REGISTERED AGENT AND OFFICE.................. 14
2.6 PRINCIPAL PLACE OF ACTIVITY.................. 14
2.7 NAME AND ADDRESS OF GENERAL PARTNER.......... 14
2.8 QUALIFICATION TO CONDUCT ACTIVITIES.......... 14
2.9 ADMISSION OF HOLDERS OF PARTNERSHIP
PREFERRED SECURITIES......................... 15
ARTICLE III--CAPITAL CONTRIBUTIONS; REPRESENTATION OF
PARTNERSHIP PREFERRED SECURITY HOLDER'S
INTEREST; CAPITAL ACCOUNTS
3.1 CAPITAL CONTRIBUTIONS........................ 15
3.2 PARTNERSHIP PREFERRED SECURITY
HOLDER'S INTEREST REPRESENTED BY
PARTNERSHIP PREFERRED SECURITIES............. 16
3.3 CAPITAL ACCOUNTS............................. 16
3.4 INTEREST ON CAPITAL CONTRIBUTIONS............ 17
3.5 WITHDRAWAL AND RETURN OF CAPITAL
CONTRIBUTIONS................................ 17
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE IV--ALLOCATIONS
4.1 PROFITS AND LOSSES......................... 17
4.2 SPECIAL ALLOCATION......................... 19
4.3 WITHHOLDING................................ 20
ARTICLE V--DISTRIBUTIONS
5.1 DISTRIBUTIONS.............................. 20
5.2 LIMITATIONS ON DISTRIBUTIONS............... 22
ARTICLE VI--ISSUANCE OF PARTNERSHIP
PREFERRED SECURITIES
6.1 GENERAL PROVISIONS REGARDING
PARTNERSHIP PREFERRED SECURITIES........... 22
6.2 PARTNERSHIP PREFERRED SECURITIES........... 23
ARTICLE VII--PARTNERSHIP INVESTMENTS
7.1 AFFILIATE INVESTMENT INSTRUMENTS;
ELIGIBLE DEBT SECURITIES................... 36
7.2 REINVESTMENT OF PAYMENTS RECEIVED
BY THE PARTNERSHIP......................... 37
7.3 ASSUMPTION OF OBLIGATIONS AND
RELEASE OF INVESTMENT AFFILIATE............ 38
ARTICLE VIII--BOOKS OF ACCOUNT, RECORDS AND REPORTS
8.1 BOOKS AND RECORDS.......................... 39
8.2 ACCOUNTING METHOD.......................... 40
ARTICLE IX--PAYMENT OF EXPENSES
9.1 PAYMENT OF TRUST EXPENSES AND
PARTNERSHIP TAXES.......................... 40
9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES...... 41
ARTICLE X--POWERS, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS
10.1 LIMITATIONS................................ 41
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
10.2 LIABILITY.................................. 42
10.3 PRIORITY................................... 42
ARTICLE XI--POWERS, RIGHTS, DUTIES AND COVENANTS
OF THE GENERAL PARTNER
11.1 AUTHORITY.................................. 42
11.2 POWERS AND DUTIES OF GENERAL PARTNER....... 43
11.3 OBLIGATIONS AND EXPENSES PAYABLE BY AND
COVENANTS OF THE GENERAL PARTNER........... 45
11.4 LIABILITY.................................. 46
11.5 OUTSIDE ACTIVITIES......................... 46
11.6 LIMITS ON GENERAL PARTNER'S POWERS......... 46
11.7 EXCULPATION................................ 48
11.8 FIDUCIARY DUTY............................. 48
11.9 INDEMNIFICATION............................ 49
11.10 TAX MATTERS................................ 50
11.11 CONSOLIDATION, AMALGAMATION, MERGER,
CONVERSION OR SALE OF ASSETS............... 51
ARTICLE XII--TRANSFERS OF INTERESTS BY PARTNERS
12.1 TRANSFER OF INTERESTS...................... 52
12.2 TRANSFER OF L.P. CERTIFICATES.............. 54
12.3 DEFINITIVE L.P. CERTIFICATES;
PERSONS DEEMED PARTNERSHIP
PREFERRED SECURITY HOLDERS................. 54
12.4 BOOK-ENTRY PROVISIONS...................... 55
12.5 REGISTRAR, TRANSFER AGENT AND
PAYING AGENT............................... 58
ARTICLE XIII--WITHDRAWAL, DISSOLUTION;
LIQUIDATION AND DISTRIBUTION
OF ASSETS
13.1 WITHDRAWAL OF PARTNERS..................... 59
13.2 DISSOLUTION OF THE PARTNERSHIP............. 59
13.3 LIQUIDATION................................ 60
13.4 DISTRIBUTION IN LIQUIDATION................ 61
13.5 RIGHTS OF LIMITED PARTNERS................. 62
13.6 TERMINATION................................ 62
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE XIV--AMENDMENTS AND MEETINGS
14.1 AMENDMENTS................................. 62
14.2 AMENDMENT OF CERTIFICATE................... 63
14.3 MEETINGS OF PARTNERS....................... 63
ARTICLE XV--MISCELLANEOUS
15.1 NOTICES.................................... 65
15.2 POWER OF ATTORNEY.......................... 66
15.3 ENTIRE AGREEMENT........................... 66
15.4 GOVERNING LAW.............................. 67
15.5 EFFECT..................................... 67
15.6 PRONOUNS AND NUMBER........................ 67
15.7 CAPTIONS................................... 67
15.8 PARTIAL ENFORCEABILITY..................... 67
15.9 COUNTERPARTS............................... 67
15.10 WAIVER OF PARTITION........................ 67
15.11 REMEDIES................................... 68
SCHEDULE 1 LIST OF PARTNERS
ANNEX A FORM OF L.P. CERTIFICATE
</TABLE>
<PAGE>
Exhibit 4(e)
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
HEI PREFERRED FUNDING, LP
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF HEI PREFERRED
FUNDING, LP, a Delaware limited partnership (the "PARTNERSHIP"), dated as of
_____________, 1997, among HYCAP MANAGEMENT, INC., a Delaware corporation (the
"COMPANY"), as the general partner, HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST
I, a Delaware statutory business trust, as the initial limited partner (the
"INITIAL LIMITED PARTNER"), and such other Persons (as defined herein) who
become Limited Partners (as defined herein) as provided herein.
WHEREAS, HAWAIIAN ELECTRIC INDUSTRIES, INC., a Hawaii corporation
("HEI"), and the Initial Limited Partner entered into an Agreement of Limited
Partnership, dated as of December 23, 1996 (the "ORIGINAL PARTNERSHIP
AGREEMENT");
WHEREAS, the Certificate of Limited Partnership of the Partnership was
filed with the Office of the Secretary of State of the State of Delaware on
December 23, 1996;
WHEREAS, pursuant to that certain Assignment of General Partner
Interest and Amendment of Agreement of Limited Partnership dated as of January
23, 1997 (the "Amendment"), HEI assigned its general partner interest in the
Partnership to the Company, which is a wholly-owned subsidiary of HEI;
WHEREAS, the Partners (as defined herein) desire to continue the
Partnership under the Act (as defined herein) and to amend and restate the
Original Partnership Agreement, as amended by the Amendment, in its entirety;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and
1
<PAGE>
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to amend and restate the Original
Partnership Agreement, as amended by the Amendments, in its entirety as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 DEFINITIONS. Unless the context otherwise requires, the
terms defined in this Article I shall, for the purposes of this Agreement, have
the meanings herein specified. Terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed to such terms in the Trust
Agreement.
"ACT" means the Delaware Revised Uniform Limited Partnership Act, Del.
Code Ann. tit. 6, Section 17-101 et seq., as amended from time to time, and any
successor statute thereto.
"AFFILIATE" has the meaning set forth in Section 1.1 of the Trust
Agreement.
"AFFILIATE INVESTMENT INSTRUMENTS" has the meaning set forth in
Section 7.1 of this Agreement.
"AGREEMENT" means this Amended and Restated Agreement of Limited
Partnership, as it may be amended or supplemented from time to time.
"ASSUMING INVESTMENT AFFILIATE" has the meaning set forth in Section
7.3 of this Agreement.
"BENEFICIARIES" has the meaning set forth in Section 11.3 of this
Agreement.
"BOOK-ENTRY INTEREST" means a beneficial interest in the L.P.
Certificates, ownership and transfers of which shall be maintained and made
through book-entries of a Depository as set forth in Section 12.4 of this
Agreement.
2
<PAGE>
"BUSINESS DAY" means a day other than a day on which banking
institutions in The City of New York are authorized or required by law to close.
"CAPITAL ACCOUNT" has the meaning set forth in Section 3.3(a) of this
Agreement.
"CERTIFICATE" means the Certificate of Limited Partnership of the
Partnership filed with the Secretary of State of the State of Delaware on
December 23, 1996, as it may be amended and/or restated from time to time.
"CHANGE IN 1940 ACT LAW" has the meaning set forth in Section 1.1 of
the Trust Agreement.
"CLOSING DATE" has the meaning set forth in Section 1.1 of the Trust
Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"COMPANY" means HYCAP MANAGEMENT, INC., a Delaware corporation.
"COMPOUNDED DISTRIBUTIONS" has the meaning set forth in Section 6.2(b)
of this Agreement.
"DEFINITIVE L.P. CERTIFICATES" has the meaning set forth in Section
12.4(a) of this Agreement.
"DELAWARE TRUSTEE" has the meaning set forth in Section 6.2 of the
Trust Agreement.
"DEPOSITORY" means the DTC, another clearing agency, or any successor
registered as a clearing agency under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation.
"DISTRIBUTION PAYMENT DATE" has the meaning set forth in Section
6.2(b) of this Agreement.
"DISTRIBUTIONS" means the right to receive the amount of the
cumulative cash distributions payable by the Partnership with respect to the
Interests represented by the Partnership Preferred Securities, which amounts
will accrue on the $25 stated liquidation preference of each Partnership
Preferred
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Security from the Closing Date and are payable quarterly in arrears in
accordance with Sections 5.1 and 6.2(b) of this Agreement.
"DTC" means The Depository Trust Company, the initial Depository.
"ELIGIBLE DEBT SECURITIES" means cash or book-entry securities,
negotiable instruments, or other securities of entities not affiliated with HEI
or the Company represented by instruments in registered form which evidence any
of the following: (a) any security issued or guaranteed as to principal or
interest by the United States, or by a Person controlled or supervised by and
acting as an instrumentality of the Government of the United States pursuant to
authority granted by the Congress of the United States, or any certificate of
deposit for any of the foregoing; (b) commercial paper issued pursuant to
Section 3(a)(3) of the Securities Act of 1933, as amended (the "SECURITIES
ACT"), and having, at the time of the investment or contractual commitment to
invest therein, a rating from each of S&P and Moody's in the highest rating
category granted by such rating agency and having a maturity not in excess of
nine months; (c) demand deposits, time deposits and certificates of deposit
which are fully insured by the FDIC; (d) repurchase obligations with respect to
any security that is a direct obligation of, or fully guaranteed by, the
Government of the United States of America or any agency or instrumentality
thereof, the obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a depository
institution or trust company which is an Eligible Institution and the deposits
of which are insured by the FDIC; and (e) any other security which is identified
as a permitted investment of a finance subsidiary pursuant to Rule 3a-5 under
the 1940 Act at the time it is acquired by the Partnership.
"ELIGIBLE INSTITUTION" means a depository institution organized under
the laws of the United States of America or any one of the states thereof or the
District of Columbia (or any domestic branch of a foreign bank), (1)(i) which
has either (A) a long-term unsecured debt rating of AA or better by S&P and Aa
or better by Moody's or (B) a short-term unsecured debt rating
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or a certificate of deposit rating of A-1+ or better by S&P and P-1 or better by
Moody's and (ii) whose deposits are insured by the FDIC or (2)(i) the parent of
which has a long-term or short-term unsecured debt rating which signifies
investment grade and (ii) whose deposits are insured by the FDIC.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FISCAL PERIOD" means each calendar quarter.
"FISCAL YEAR" means (i) the period commencing upon the formation of
the Partnership and ending on December 31, 1996 and (ii) any subsequent calendar
year.
"GENERAL PARTNER" means the Company in its capacity as the general
partner of the Partnership, its permitted successors, or any successor general
partner in the Partnership admitted as such pursuant to the terms of this
Agreement.
"GENERAL PARTNER CAPITAL CONTRIBUTION" means the contribution by the
General Partner to the Partnership made contemporaneously with the issuance of
the Partnership Preferred Securities in an amount that will establish its
initial capital account at a level equal to at least 15% of the total capital of
the Partnership.
"GENERAL PARTNER INTEREST" means the Interest of the General Partner
in the Partnership.
"HOLDER" or "PARTNERSHIP PREFERRED SECURITY HOLDER" means a Limited
Partner in whose name an L.P. Certificate representing Partnership Preferred
Securities is registered.
"INDENTURES" means those certain Indentures between HEI or certain of
its subsidiaries, as the case may be, and The Bank of New York, as Indenture
Trustee, each dated as of ____________, 1997.
"INDEPENDENT FINANCIAL ADVISER" shall mean (i) Merrill Lynch, Pierce,
Fenner & Smith Incorporated or (ii) such
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other nationally recognized investment banking firm which shall be designated by
the Company and which firm does not (and whose directors, officers, employees
and affiliates do not) have a direct or indirect material equity interest in the
Company or any of its subsidiaries or (iii) another entity which is an
investment banking, accounting or financial services firm selected by the
Company and approved by the Holders of a Majority in Liquidation Preference of
Partnership Preferred Securities.
"INITIAL AFFILIATE DEBENTURES" has the meaning set forth in Section
7.1(b) of this Agreement.
"INITIAL HEI DEBENTURES" has the meaning set forth in Section 7.1(b)
of this Agreement.
"INITIAL DEBENTURES" means collectively, the Initial HEI Debentures
and the Initial Affiliate Debentures.
"INITIAL LIMITED PARTNER" means HAWAIIAN ELECTRIC INDUSTRIES CAPITAL
TRUST I, a Delaware statutory business trust, in its capacity as a limited
partner of the Partnership.
"INITIAL PARTNERSHIP PROCEEDS" means the aggregate proceeds received
by the Partnership from the sale of the Partnership Preferred Securities and the
General Partner Capital Contribution.
"INTEREST" means the entire ownership interest of a Partner in the
Partnership at any particular time, including, without limitation, its interest
in the capital, profits, and losses of, and distributions from, the Partnership.
"INVESTMENT AFFILIATE" means HEI or any corporation, partnership,
limited liability company or other entity (other than the Partnership or the
Trust) that is controlled by HEI and is not an investment company by reason of
Section 3(a) or 3(b) of the 1940 Act.
"INVESTMENT EVENT OF DEFAULT" means an event of default under any
Affiliate Investment Instrument that is a debt instrument or the breach by an
Investment Affiliate of its
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obligations under any Affiliate Investment Instrument that is an equity
instrument.
"INVESTMENT GUARANTEE" has the meaning specified in Section 1.1 of the
Trust Agreement.
"INVESTMENT OFFER" has the meaning specified in Section 7.2(b) of this
Agreement.
"LIMITED PARTNER" means any Person who is admitted to the Partnership
as a limited partner pursuant to the terms of this Agreement, in such Person's
capacity as a limited partner of the Partnership.
"LIQUIDATOR" has the meaning specified in Section 13.3 of this
Agreement.
"L.P. CERTIFICATE" means a certificate substantially in the form
attached hereto as Annex A, evidencing the Partnership Preferred Securities held
by a Limited Partner.
"MAJORITY IN LIQUIDATION PREFERENCE" means Holders of the Partnership
Preferred Securities, voting as a single class, representing more than 50% of
the aggregate liquidation preference (including for this purpose the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all Partnership Preferred Securities then
outstanding.
"MOODY'S" means Moody's Investors Service, Inc. or any successor
thereto.
"NET INCOME" and "NET LOSS", respectively, for any Fiscal Period mean
the income and loss, respectively, of the Partnership for such Fiscal Period as
determined in accordance with the method of accounting followed by the
Partnership for United States federal income tax purposes, including, for all
purposes, the net income, if any, from the Affiliate Investment Instruments,
Eligible Debt Securities and any income exempt from tax and any noncapital,
nondeductible expenditures of the Partnership which are described in the Code.
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"1940 ACT" has the meaning set forth in Section 1.1 of the Trust
Agreement.
"ORIGINAL PARTNERSHIP AGREEMENT" has the meaning set forth in the
recitals to this Agreement.
"PARTNERS" means the General Partner and the Limited Partners,
collectively, where no distinction is required by the context in which the term
is used.
"PARTNERSHIP COVERED PERSON" means any Partner, any Affiliate of a
Partner or any officers, directors, shareholders, partners, members, employees,
representatives or agents of a Partner or its respective Affiliates, or any
employee or agent of the Partnership or its Affiliates or any Special
Representative.
"PARTNERSHIP ENFORCEMENT EVENT" has the meaning set forth in Section
6.2(h) of this Agreement.
"PARTNERSHIP GUARANTEE" means the Partnership Guarantee Agreement
between HEI and the Bank of New York, as trustee, dated as of ______________,
1997 by HEI in favor of the Partnership Preferred Security Holders with respect
to the Partnership Preferred Securities, as amended or supplemented from time to
time.
"PARTNERSHIP INDEMNIFIED PERSON" means the General Partner, any
Special Representative, any Affiliate of the General Partner or any Special
Representative or any officers, directors, shareholders, members, partners,
employees, representatives or agents of the General Partner or any Special
Representative, or any of their respective Affiliates, or any employee or agent
of the Partnership or its Affiliates.
"PARTNERSHIP INVESTMENT COMPANY EVENT" means that the General Partner
shall have requested and received an opinion of independent legal counsel
experienced in such matters to the effect that, as a result of the occurrence on
or after the date of the prospectus supplement relating to the Trust Preferred
Securities of a Change in 1940 Act Law, there is more than an
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insubstantial risk that the Partnership is or will be considered an "investment
company" which is required to be registered under the 1940 Act.
"PARTNERSHIP LIQUIDATION DISTRIBUTION" has the meaning set forth in
Section 6.2(g) of this Agreement.
"PARTNERSHIP PREFERRED SECURITIES" represent the Interests of Limited
Partners and have the stated liquidation preference and designation set forth in
Section 6.2(a) of this Agreement.
"PARTNERSHIP PREFERRED SECURITY BENEFICIAL OWNER" means, with respect
to a Book-Entry Interest, a Person who is the beneficial owner of such Book-
Entry Interest as reflected on the books of DTC, or on the books of a Person
maintaining an account with DTC (directly as a participant or as an indirect
participant, in each case in accordance with the rules of DTC or such
participant).
"PARTNERSHIP SPECIAL EVENT" means either a Partnership Tax Event or a
Partnership Investment Company Event.
"PARTNERSHIP SUCCESSOR SECURITIES" has the meaning set forth in
Section 11.11 of this Agreement.
"PARTNERSHIP TAX EVENT" means that the General Partner shall have
requested and received an opinion of independent tax counsel experienced in such
matters to the effect that there has been a Tax Action that results in there
being more than an insubstantial risk that (i) the Partnership is, or will be,
subject to United States federal income tax with respect to income accrued or
received on the Affiliate Investment Instruments or the Eligible Debt
Securities, (ii) the Partnership is, or will be, subject to more than a de
minimis amount of other taxes, duties or other governmental charges or (iii)
interest payable by an Investment Affiliate with respect to any Affiliate
Investment Instrument that is a debt security issued by such Investment
Affiliate to the Partnership is not, or will not be, deductible for United
States federal income tax purposes.
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"PAYING AGENT" shall have the meaning set forth in Section 12.5 of
this Agreement.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"POWER OF ATTORNEY" means the Power of Attorney granted pursuant to
Section 15.2 of this Agreement.
"PROPERTY TRUSTEE" has the meaning set forth in Section 1.1 of the
Trust Agreement.
"RECORD DATE" means (i) as long as the Trust Preferred Securities
remain (or, in the event that the Trust is liquidated in connection with a Trust
Special Event and Partnership Preferred Securities are distributed to holders of
the Trust Preferred Securities, as long as the Partnership Preferred Securities
remain) in book-entry only form, one Business Day prior to the relevant payment
dates and (ii) in the event that the Trust Preferred Securities (or in the event
that the Trust is liquidated in connection with a Trust Special Event and
Partnership Preferred Securities are distributed to holders of the Trust
Preferred Securities, the Partnership Preferred Securities) shall not continue
to remain in book-entry only form, the 15th day of the month of the relevant
payment date.
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"REDEMPTION NOTICE" has the meaning set forth in Section 6.2(e) of
this Agreement.
"REDEMPTION PRICE" has the meaning set forth in Section 6.2(c) of this
Agreement.
"REGISTRAR" has the meaning set forth in Section 12.5 of this
Agreement.
"REGULAR TRUSTEES" has the meaning set forth in Section 6.1 of the
Trust Agreement.
"REINVESTMENT CRITERIA" has the meaning specified in Section 7.2(d) of
this Agreement.
"RELEASED INVESTMENT AFFILIATE" has the meaning set forth in Section
7.3 of this Agreement.
"S&P" means Standard & Poor's or any successor thereof.
"66-2/3% IN LIQUIDATION PREFERENCE" means Holders of the Partnership
Preferred Securities, voting together as a single class, representing 66-2/3% or
more of the aggregate liquidation preference (including for this purpose the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all Partnership Preferred Securities then
outstanding.
"SPECIAL REPRESENTATIVE" has the meaning set forth in Section 6.2(h)
of this Agreement.
"TAX ACTION" has the meaning set forth in Section 1.1 of the Trust
Agreement.
"TAX MATTERS PARTNER" means the General Partner designated as such in
Section 11.10 of this Agreement.
"10% IN LIQUIDATION PREFERENCE" means Holders of the Partnership
Preferred Securities, voting together as a single class, representing 10% or
more of the aggregate liquidation
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preference (including for this purpose the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all Partnership
Preferred Securities then outstanding.
"TREASURY REGULATIONS" has the meaning set forth in Section 1.1 of the
Trust Agreement.
"TRUST" means HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I, a Delaware
business trust, created and continued under the Trust Agreement.
"TRUST AGREEMENT" means the Amended and Restated Trust Agreement by
and among HEI, as Sponsor, the Delaware Trustee, the Property Trustee, the
Regular Trustees and the holders, from time to time, of undivided beneficial
interests in the assets of the Trust dated as of _____________, 1997 as it may
be amended or supplemented from time to time.
"TRUST COMMON SECURITIES" has the meaning specified in Section 8.1 of
the Trust Agreement.
"TRUST COMMON SECURITIES GUARANTEE" means the Trust Common Securities
Guarantee Agreement dated as of ____________, 1997, entered into by HEI, as
Guarantor, for the benefit of the holders of the Trust Common Securities, as it
may be amended or supplemented from time to time.
"TRUST PREFERRED SECURITIES" has the meaning specified in Section 8.1
of the Trust Agreement.
"TRUST PREFERRED SECURITIES GUARANTEE" means the Trust Preferred
Securities Guarantee Agreement dated as of _____________, 1997, entered into by
HEI, as Guarantor, with The Bank of New York, as trustee, for the benefit of the
holders of the Trust Preferred Securities, as it may be amended or supplemented
from time to time.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated
_____________, 1997 among HEI, the Trust, the Partnership and Merrill Lynch &
Co., Merrill, Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co.,
Dean Witter Reynolds Inc., A.G. Edwards & Sons, Inc., Legg Mason Wood Walker
Incorporated and Robert W. Baird & Co. Incorporated, as representatives of the
other underwriters named in Schedule A thereto.
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ARTICLE II
CONTINUATION OF THE PARTNERSHIP; ADMISSION
OF PARTNERSHIP PREFERRED SECURITIES HOLDERS
SECTION 2.1 CONTINUATION OF THE PARTNERSHIP. The parties hereto
agree to continue the Partnership in accordance with the terms of this
Agreement. The General Partner, for itself and as agent for the Limited
Partners, shall make every reasonable effort to assure that all certificates and
documents are properly executed and shall accomplish all filing, recording,
publishing and other acts necessary or appropriate for compliance with all the
requirements for the continuation of the Partnership as a limited partnership
under the Act and under all other laws of the State of Delaware or such other
jurisdictions in which the General Partner determines that the Partnership may
conduct activities. The rights and duties of the Partners shall be as provided
herein and, subject to the terms hereof, under the Act.
SECTION 2.2 NAME. The name of the Partnership is "HEI PREFERRED
FUNDING, LP", as such name may be modified from time to time by the General
Partner following written notice to the Limited Partners.
SECTION 2.3 PURPOSES OF THE PARTNERSHIP. The Partnership will be
managed by the General Partner and the sole purposes of the Partnership are (a)
to issue limited partner interests in the Partnership in the form of Partnership
Preferred Securities, (b) to receive the General Partner Capital Contribution,
(c) to use substantially all of the Initial Partnership Proceeds to purchase, as
an investment, the Initial Debentures, (d) to invest, at all times, an amount
equal to at least 1% of the Initial Partnership Proceeds in Eligible Debt
Securities, (e) to receive interest and other payments on the Affiliate
Investment Instruments and the Eligible Debt Securities held by the Partnership
from time to time, (f) to make Distributions on the Partnership Preferred
Securities and distributions on the General Partner Interest if, as and when
declared by the General Partner in its sole discretion, (g) subject to the
restrictions and conditions contained in this Agreement, to make additional
investments in
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Affiliate Investment Instruments and Eligible Debt Securities and to dispose of
any such investments and (h) except as otherwise limited herein, to enter into,
make and perform all contracts and other undertakings, and engage in those
activities and transactions as the General Partner may reasonably deem necessary
or advisable for the carrying out of the foregoing purposes of the Partnership.
The Partnership may not engage in any other activities or operations except as
contemplated by the preceding sentence.
SECTION 2.4 TERM. The term of the Partnership commenced upon the
filing of the Certificate in the Office of the Secretary of State of the State
of Delaware and shall continue until the Partnership is dissolved in accordance
with the provisions of this Agreement.
SECTION 2.5 REGISTERED AGENT AND OFFICE. The Partnership's
registered agent and office in Delaware shall be c/o RL&F Service Corp., One
Rodney Square, 10th Floor, Tenth and King Streets, Wilmington, New Castle
County, Delaware 19801. At any time, the General Partner may designate another
registered agent and/or registered office.
SECTION 2.6 PRINCIPAL PLACE OF ACTIVITY. The principal place of
activity of the Partnership shall be 300 Delaware Avenue, Suite 1704,
Wilmington, Delaware 19806. Upon ten days' written notice to the Partners, the
General Partner may change the location of the Partnership's principal place of
activity, provided that such change has no material adverse effect upon any
Partner.
SECTION 2.7 NAME AND ADDRESS OF GENERAL PARTNER. The name and
address of the General Partner are as follows:
HYCAP MANAGEMENT, INC.
300 Delaware Avenue, Suite 1704
Wilmington, Delaware 19806
The General Partner may change its name or address from time to time, in which
event the General Partner shall promptly notify the Limited Partners of any such
change.
SECTION 2.8 QUALIFICATION TO CONDUCT ACTIVITIES. The General Partner
shall cause the Partnership to become
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qualified, formed or registered under the applicable qualification, fictitious
name or similar laws of any jurisdiction in which the Partnership conducts
activities.
SECTION 2.9 ADMISSION OF HOLDERS OF PARTNERSHIP PREFERRED SECURITIES.
(a) Without execution of this Agreement, upon the receipt of an L.P.
Certificate by a Person, whether by purchase, gift, devise or other valid
transfer, which receipt shall be deemed to constitute a request by such Person
that the books and records of the Partnership reflect such Person's admission as
a Limited Partner, such Person shall be admitted to the Partnership as a Limited
Partner and shall become bound by this Agreement.
(b) The name and mailing address of each Partner and the amount
contributed by such Partner to the capital of the Partnership shall be listed on
the books and records of the Partnership. The General Partner shall be required
to update the books and records from time to time as necessary to accurately
reflect such information.
ARTICLE III
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST;
CAPITAL ACCOUNTS
SECTION 3.1 CAPITAL CONTRIBUTIONS.
(a) Contemporaneous with the issuance of the Partnership Preferred
Securities, the General Partner shall make the General Partner Capital
Contribution. The General Partner shall, from time to time, make such
additional capital contributions as are necessary to maintain at all times a
positive Capital Account balance equal to at least one percent (1%) of the
aggregate positive Capital Account balances of all Partners at the end of such
period.
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(b) On the Closing Date, the Trust shall, in exchange for a definitive
L.P. Certificate, contribute to the capital of the Partnership on behalf of the
Trust an amount in cash equal to the gross proceeds from the sale of the Trust
Preferred Securities and the Trust Common Securities (such amount being a
capital contribution to the Partnership). On such date, the Trust shall
continue to be the sole Limited Partner.
(c) No Limited Partner shall at any time be required to make any
additional capital contributions to the Partnership, except as may be required
by law.
SECTION 3.2 PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST
REPRESENTED BY PARTNERSHIP PREFERRED SECURITIES. A Partnership Preferred
Security Holder's Interest shall be represented by the Partnership Preferred
Securities held by or on behalf of such Partner. Each Partnership Preferred
Security Holder's respective ownership of Partnership Preferred Securities shall
be set forth on the books and records of the Partnership. Each Partner hereby
agrees that its Interest in the Partnership shall for all purposes be personal
property. No Partner shall have an interest in specific Partnership property.
SECTION 3.3 CAPITAL ACCOUNTS.
(a) ESTABLISHMENT AND MAINTENANCE OF CAPITAL ACCOUNTS. The
Partnership shall establish and maintain a separate account (the "CAPITAL
ACCOUNT") for each Partner. The initial balance of the Capital Account for each
Partner shall be the amount as set out opposite the name of each of the Partners
on Schedule 1 attached hereto. The Capital Account of each Partner shall be
increased by (i) the dollar amount of any additional contributions made by such
Partner and (ii) allocations to such Partner of income and gain (including
income exempt from tax). The Capital Account of each Partner shall be decreased
by (i) the dollar amount of any distributions made to such Partner, and (ii)
allocations to such Partner of loss and deduction (including noncapital,
nondeductible expenditures not deductible in computing the
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Partnership's income or loss for United States federal income tax purposes).
(b) COMPLIANCE WITH REGULATIONS. Notwithstanding any other provision
of this Agreement to the contrary, the provisions of Section 3.3(a) hereof
regarding the maintenance of Capital Accounts shall be construed so as to comply
with the Treasury Regulations promulgated under section 704 of the Code. The
General Partner, in its sole discretion, is authorized to modify such provisions
to the minimum extent necessary to comply with such Treasury Regulations.
SECTION 3.4 INTEREST ON CAPITAL CONTRIBUTIONS. Except as provided
herein, no Partner shall be entitled to interest on, or with respect to, any
capital contribution to the Partnership.
SECTION 3.5 WITHDRAWAL AND RETURN OF CAPITAL CONTRIBUTIONS. No
Partner shall be entitled to withdraw any part of such Partner's capital
contribution to the Partnership. No Partner shall be entitled to receive any
distributions from the Partnership, except as provided in this Agreement.
ARTICLE IV
ALLOCATIONS
SECTION 4.1 PROFITS AND LOSSES. After giving effect to the special
allocation provisions set forth in Section 4.2, which special allocations shall
take precedence over any allocations made pursuant to this Section 4.1:
(a) the Partnership's Net Income for each Fiscal Period of the
Partnership shall be allocated as follows:
(i) First, to each Holder of a Partnership Preferred Security in an
amount equal to the excess, if any, of (x) all Net Losses, if any, allocated to
each such Holder from the date of issuance of the Partnership Preferred Security
through and including the close of such Fiscal Period pursuant to Section
4.1(b)(ii) below over (y) the amount of Net Income,
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if any, allocated to each such Holder pursuant to this Section 4.1(a)(i) in all
prior Fiscal Periods.
(ii) Second, to the Holders of the Partnership Preferred
Securities, an amount of Net Income equal to the excess, if any, of (x) the
Distributions accrued on the Partnership Preferred Securities from the date of
their issuance through and including the last day of such Fiscal Period,
including any Compounded Distributions payable with respect thereto, over (y)
the amount of Net Income allocated to the Holders of the Partnership Preferred
Securities pursuant to this Section 4.1(a)(ii) in all prior Fiscal Periods.
Amounts allocated to all Partnership Preferred Security Holders shall be
allocated among such Holders in proportion to the number of Partnership
Preferred Securities held by such Holders.
(iii) Any remaining Net Income shall be allocated to the General
Partner.
(b) The Partnership's Net Loss for any Fiscal Period shall be
allocated as follows:
(i) First, to the General Partner until the balance of the General
Partner's Capital Account is reduced to zero, provided, however, that the
aggregate amount of Net Losses allocated to the General Partner pursuant to this
Section 4.1(b)(i) shall not exceed the sum of 14% of the total capital
contributions of all Partners plus the aggregate Net Income allocated to the
General Partner pursuant to this Section 4.1.
(ii) Second, among the Holders in proportion to their respective
aggregate Capital Account balances, until the Capital Account balances of such
Holders are reduced to zero.
(iii) Any remaining Net Loss shall be allocated to the General
Partner.
(c) DAILY DETERMINATION. For purposes of determining the profits,
losses or any other items allocable to any period, profits, losses and any such
other items shall be determined on a daily basis, unless the General Partner
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determines that another method is permissible under Section 704 of the Code and
the Treasury Regulations promulgated thereunder. Unless otherwise specified,
such profits, losses or other items shall be determined for each Fiscal Period.
SECTION 4.2 SPECIAL ALLOCATION.
(a) All expenditures that are (i) incurred by, or on behalf of, the
Partnership and (ii) paid, or otherwise reimbursed, by the General Partner out
of its own funds (or by HEI pursuant to the Partnership Guarantee) shall be
allocated entirely to the General Partner.
(b) In the event any Partner unexpectedly receives any adjustments,
allocations or distributions described in Treasury Regulation Section 1.704-
1(b)(2)(ii)(d)(4), (5) or (6), items of the Partnership's Net Income shall be
specially allocated to such Partner in a manner sufficient to eliminate the
deficit, if any, in the balance of the Capital Account of such Partner as
quickly as possible. The foregoing is intended to be a "QUALIFIED INCOME
OFFSET" provision as described in Treasury Regulation Section 1.704-
1(b)(2)(ii)(d) and shall be interpreted and applied in all respects in
accordance with such Treasury Regulation.
(c) SECTION 704 COMPLIANCE. While this Agreement does not
specifically provide for certain provisions required by Treasury Regulation
Sections 1.704-1(b) and 1.704-2 because those provisions apply to transactions
that are not expected to occur as regards the Partnership, the Partners intend
that the allocations under Section 4.1 conform to Treasury Regulations Sections
1.704-1(b) and 1.704-2 (including, without limitation, the minimum gain
chargeback, chargeback of partner nonrecourse debt minimum gain and partner
nonrecourse debt provisions of such Treasury Regulations), and, to the extent
necessary due to the occurrence of unexpected events, the General Partner shall
make such changes in the allocations under Section 4.1 as it believes are
reasonably necessary to meet the requirements of such Treasury Regulations.
(d) ADJUSTMENT OF ALLOCATIONS. If the allocations set forth in this
Article IV are adjusted by the Internal
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Revenue Service and the Tax Matters Partner agrees to such adjustments, such
allocations shall be amended to the minimum extent necessary to conform with
such adjustments.
(e) ADDITIONAL ALLOCATIONS. Notwithstanding the foregoing, if, upon
the final dissolution and termination of the Partnership and after taking into
account all allocations of Net Income and Net Losses (and other tax items) under
this Article IV, the distributions to be made in accordance with the positive
Capital Account balances would result in a distribution that would be different
from a distribution under Article XIII, then gross items of income and gain (and
other tax items) for the taxable year of the final dissolution and termination
(and, to the extent permitted under section 761(c) of the Code, gross items of
income and gain, and other tax items, for the immediately preceding taxable
year) shall be allocated to the Partners to increase or decrease their
respective Capital Account balances so that the final distribution will occur to
the fullest extent possible in the same manner as a distribution under Section
13.4.
(f) GENERAL PARTNER ALLOCATIONS. Notwithstanding any provision of
this Agreement to the contrary, the interest of the General Partner in each item
of Partnership income, gain, loss, deduction, or credit shall, at all times
during the existence of the Partnership, be equal to at least (A) at any time
that the aggregate capital contributions to the Partnership are equal to or less
than $50,000,000, one percent (1%) of each such item and (B) at any time that
the aggregate capital contributions to the Partnership are greater than
$50,000,000, at least a percentage equal to the product of (i) one percent (1%)
and (ii) a fraction (not exceeding 1 and not less than 0.2), the numerator of
which is $50,000,000 and the denominator of which is the lesser of (x) the
aggregate Capital Account balances of the Capital Accounts of all Partners at
such time and (y) the aggregate capital contributions to the Partnership of all
Partners at such time.
SECTION 4.3 WITHHOLDING. The Partnership shall comply with
withholding requirements under federal, state and local law and shall remit
amounts withheld to and file required forms with applicable jurisdictions. To
the extent that the
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Partnership is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Partner, the amount withheld
shall be deemed to be a distribution in the amount of the withholding to the
Partner. In the event of any claimed over-withholding, Partners shall be limited
to an action against the applicable jurisdiction. If the amount withheld was not
withheld from actual distributions, the Partnership may reduce subsequent
distributions by the amount of such withholding. Each Partner agrees to furnish
the Partnership with any representations and forms as shall reasonably be
requested by the Partnership to assist it in determining the extent of, and in
fulfilling, its withholding obligations.
ARTICLE V
DISTRIBUTIONS
SECTION 5.1 DISTRIBUTIONS. Limited Partners shall receive periodic
Distributions and Compounded Distributions, if any, redemption payments and
liquidation distributions in accordance with the terms of the Partnership
Preferred Securities set forth in Article VI. The General Partner shall in its
sole discretion determine whether and when Distributions shall be payable;
provided, however, that if the General Partner shall determine a Distribution
will not be paid on a scheduled Distribution Payment Date, the General Partner
shall give notice of its determination not to pay such Distribution to Limited
Partners of record as of the Record Date for the payment of such Distribution;
provided, further, however, that the General Partner shall not declare
distributions, and no distributions shall be payable by the Partnership to the
General Partner in respect of its General Partner Interest, unless all
accumulated and unpaid Distributions, including any Compounded Distributions,
have been paid in full for all prior Fiscal Periods. Subject to the immediately
preceding sentence, to the extent that the aggregate payments of interest (or
dividends) received by the Partnership in respect of Affiliate Investment
Instruments and Eligible Debt Securities for each Fiscal Period exceed the
amount of Distributions, including any Compounded Distributions, paid on the
Partnership Preferred
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Securities for such Fiscal Period, the General Partner, in its sole discretion,
may declare and distribute such excess funds to the General Partner in respect
of its General Partner Interest.
SECTION 5.2 LIMITATIONS ON DISTRIBUTIONS. The Partnership shall not
make a Distribution to any Partner on account of such Partner's Interest if such
Distribution would violate Section 17-607 of the Act or other applicable law.
ARTICLE VI
ISSUANCE OF PARTNERSHIP PREFERRED SECURITIES
SECTION 6.1 GENERAL PROVISIONS REGARDING PARTNERSHIP PREFERRED
SECURITIES.
(a) There is hereby authorized for issuance and sale Partnership
Preferred Securities having an aggregate liquidation preference not greater than
$103,093,000 and having the designation, annual distribution rate, liquidation
preference, redemption terms, and other powers, preferences and special rights
and limitations set forth in this Article VI.
(b) The payment of Distributions (including payments of distributions
by the Partnership in liquidation or in redemption in respect of Partnership
Preferred Securities) shall be guaranteed by HEI pursuant to and to the extent
set forth in the Partnership Guarantee. The Partnership Preferred Security
Holders hereby authorize the General Partner to hold the Guarantee on behalf of
the Partnership Preferred Security Holders. In the event of an appointment of a
Special Representative pursuant to Section 6.2(h)(i), among other things, to
enforce the Partnership Guarantee, the Special Representative may take
possession of the Partnership Guarantee for such purpose. If no Special
Representative has been appointed to enforce the Partnership Guarantee, the
General Partner has the right to enforce the Partnership Guarantee on behalf of
the Partnership Preferred Security Holders. The Partnership Preferred Security
Holders, by acceptance of such Partnership Preferred Securities, acknowledge and
agree to the
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subordination provisions in, and other terms of, the Partnership Guarantee.
(c) The Partnership may not issue any interests in the Partnership
other than the Partnership Preferred Securities and the General Partner
Interest, provided that the Partnership may accept consideration for additional
capital contributions from the General Partner with respect to the General
Partner Interest. All Partnership Preferred Securities shall rank senior to all
other Interests in the Partnership in respect of the right to receive
Distributions. All Partnership Preferred Securities redeemed, purchased or
otherwise acquired by the Partnership shall be canceled. The Partnership
Preferred Securities will be issued in registered form only.
(d) No Holder shall be entitled as a matter of right to subscribe for
or purchase, or have any preemptive or similar right with respect to, any part
of any new or additional limited partner interests, or of securities convertible
into any Partnership Preferred Securities or other limited partner interests,
whether now or hereafter authorized and whether issued for cash or other
consideration or by way of a distribution.
SECTION 6.2 PARTNERSHIP PREFERRED SECURITIES.
(a) DESIGNATION. A total of 4,123,720 Partnership Preferred
Securities, stated liquidation preference $25 per Partnership Preferred
Security, are hereby designated as "____% PARTNERSHIP PREFERRED SECURITIES".
(b) DISTRIBUTIONS.
(i) Partnership Preferred Security Holders shall be entitled to
receive cumulative Distributions and Compounded Distributions (as defined below)
(if any), if, as and when declared by the General Partner, in its sole
discretion, out of the assets of the Partnership legally available therefor, at
a rate per annum of ____% of the stated liquidation preference of $25 per
Partnership Preferred Security, calculated on the basis of a 360-day year
consisting of twelve 30-day months. For any period shorter than a full
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90-day quarter, Distributions will be computed on the basis of the actual number
of days elapsed in such 90-day quarter. Such Distributions shall, from the date
of original issue, accumulate and be cumulative and shall be payable quarterly,
when, if, and as declared by the General Partner on the dates specified in
Section 6.2(b)(ii) below. Distributions and Compounded Distributions (as defined
below) (if any) on the Partnership Preferred Securities shall be cumulative from
the Closing Date. Distributions not paid on the scheduled Distribution Payment
Date will accumulate and compound quarterly at the rate of ____% per annum
("COMPOUNDED DISTRIBUTIONS"). In the event that any date on which Distributions
are payable on the Partnership Preferred Securities is not a Business Day, then
payment of the Distribution payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day (without any reduction in interest or other amounts in
respect of such early payment), in each case with the same force and effect as
if made on such date.
(ii) Distributions on the Partnership Preferred Securities will be
payable quarterly in arrears if, as and when, declared by the General Partner on
March 31, June 30, September 30 and December 31 of each year, commencing on
March 31, 1997 (each a "DISTRIBUTION PAYMENT DATE").
Distributions will be payable to the Holders as they appear on the
books and records of the Partnership on the relevant Record Date.
If the Trust or the Property Trustee is the Holder of the Partnership
Preferred Securities, all Distributions shall be made by wire transfer of same
day funds to such Holder by 10:00 a.m., New York City time, on the applicable
Distribution Payment Date. Distributions payable on any Partnership Preferred
Securities that are not punctually paid on any Distribution Payment Date will
cease to be payable to the Person in whose name such Partnership Preferred
Securities are registered on the relevant record date, and such Distribution
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will instead be payable to the Person in whose name such Partnership Preferred
Securities are registered on the record date for payment of such defaulted or
accumulated Distribution.
(c) OPTIONAL REDEMPTION. Partnership Preferred Securities shall be
redeemable at the option of the General Partner, in whole or in part, from time
to time, on or after January ____, 2002, upon not less than 30 nor more than 60
days' notice, at an amount per Partnership Preferred Security equal to $25 plus
accrued and unpaid Distributions thereon, including any Compounded
Distributions, by the date fixed for redemption (the "REDEMPTION PRICE"). The
Partnership may not redeem the Partnership Preferred Securities in part unless
all accumulated and unpaid Distributions, including any Compounded
Distributions, have been paid in full on all Partnership Preferred Securities
for all quarterly distribution periods terminating on or prior to the date of
redemption. If a partial redemption of the Partnership Preferred Securities
would result in the delisting of the Trust Preferred Securities (or, if the
Trust is liquidated in connection with a Trust Special Event, the delisting of
the Partnership Preferred Securities), the Partnership may only redeem the
Partnership Preferred Securities in whole but not in part.
(d) SPECIAL EVENT REDEMPTIONS. (i) If, at any time, a Partnership
Special Event shall occur and be continuing, the General Partner shall, within
90 days following the occurrence of such Partnership Special Event, elect to
either (i) redeem the Partnership Preferred Securities in whole (but not in
part), upon not less than 30 or more than 60 days' notice at the Redemption
Price, provided that if at the time there is available to the Partnership the
opportunity to eliminate, within such 90-day period, such Partnership Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure that in the sole
judgment of the General Partner has or will cause no adverse effect on the
Partnership, the Trust, HEI or the Company, the General Partner will pursue such
measure in lieu of redemption; or (ii) cause the Partnership Preferred
Securities to remain outstanding, provided that in the case of this clause (ii),
the General Partner shall pay any and all
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costs and expenses incurred by or payable by the Partnership which are
attributable to such Partnership Special Event.
(e) REDEMPTION PROCEDURES.
(i) Notice of any redemption of Partnership Preferred Securities (a
"REDEMPTION NOTICE") will be given by the General Partner on behalf of the
Partnership by mail to each Holder of Partnership Preferred Securities to be
redeemed not fewer than 30 nor more than 60 days before the date fixed for
redemption. For purposes of the calculation of the date of redemption and the
dates on which notices are given pursuant to this Section 6.2(e)(i), a
Redemption Notice shall be deemed to be given on the day such notice is first
mailed, by first-class mail, postage prepaid, to Holders of Partnership
Preferred Securities. Each Redemption Notice shall be addressed to the Holders
of Partnership Preferred Securities at the address of each such Holder appearing
in the books and records of the Partnership. No defect in the Redemption Notice
or in the mailing thereof with respect to any Holder shall affect the validity
of the redemption proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Partnership
Preferred Securities are to be redeemed, the Partnership Preferred Securities to
be redeemed shall be redeemed pro rata, provided, however, that in the event
Partnership Preferred Securities are registered in the name of and held of
record by DTC or its nominee (or any successor Depository or its nominee), DTC
will reduce, in accordance with DTC's customary procedures, the amount of the
interest of each Depository Participant in the Partnership Preferred Securities
to be redeemed.
(iii) If the Partnership gives a Redemption Notice (which notice
will be irrevocable), then by 12:00 noon, New York City time, on the redemption
date, the General Partner on behalf of the Partnership (A) if the Partnership
Preferred Securities are in book-entry only form with DTC, will deposit
irrevocably with DTC funds sufficient to pay the applicable Redemption Price and
will give DTC irrevocable instructions and authority to pay the Redemption Price
in respect of the
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Partnership Preferred Securities held through DTC in book-entry only form or (B)
if the Partnership Preferred Securities are held in certificated form, will
deposit with the Paying Agent funds sufficient to pay the applicable Redemption
Price of the amount of any such Partnership Preferred Securities and will give
to the Paying Agent irrevocable instructions and authority to pay such amounts
to the Holders of Partnership Preferred Securities, upon surrender of their
certificates, by check, mailed to the address of the relevant Holder appearing
on the books and records of the Partnership on the redemption date; provided,
however, that for so long as the Trust or the Property Trustee shall hold the
Partnership Preferred Securities, payment of cash shall be made by wire in same
day funds to the Holder by 12:00 Noon, New York City time, on the redemption
date. For these purposes, the applicable Redemption Price shall not include
Distributions which are being paid to Holders who were Holders on a relevant
record date. Upon satisfaction of the foregoing conditions, then immediately
prior to the close of business on the date of such deposit or payment, all
rights of Holders of such Partnership Preferred Securities so called for
redemption will cease, except the right of the Holders to receive the Redemption
Price, but without interest on such Redemption Price, and from and after the
date fixed for redemption, such Partnership Preferred Securities will not accrue
Distributions or bear interest.
In the event that any date fixed for redemption of Partnership
Preferred Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding Business Day (and
without any interest in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day (without any reduction in interest on other
amounts in respect of any such early payment), in each case with the same force
and effect as if made on the date fixed for redemption. In the event that
payment of the Redemption Price is improperly withheld or refused and not paid
by either the Partnership or HEI pursuant to the Partnership Guarantee,
Distributions on the Partnership Preferred Securities called for redemption will
continue to accumulate, to the extent that payment of such Distributions is
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legally permissible, at the then applicable rate from the original redemption
date until the Redemption Price is actually paid, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
The Partnership shall not be required to register or cause to be
registered the transfer of any Partnership Preferred Securities which have been
called for redemption.
(f) COMPANY PURCHASES. Subject to the provisions of this Section 6.2
and applicable law (including, without limitation, Federal securities laws), if
Partnership Preferred Securities have been distributed to the Holders (as
defined in the Trust Agreement) of Trust Preferred Securities, HEI or any of its
subsidiaries, including the Company, may at any time and from time to time
purchase outstanding Partnership Preferred Securities by tender, in the open
market, or by private agreement.
(g) LIQUIDATION DISTRIBUTION UPON DISSOLUTION. In the event of any
voluntary or involuntary liquidation, dissolution, winding-up or termination of
the Partnership, the Holders of Partnership Preferred Securities at the time
outstanding will be entitled to receive out of the assets of the Partnership
such amount as is determined in accordance with Section 13.4 (the "PARTNERSHIP
LIQUIDATION DISTRIBUTION") payable in cash.
(h) VOTING RIGHTS.
(i) SPECIAL REPRESENTATIVE.
(1) If one or more of the following events shall occur and be
continuing (each a "PARTNERSHIP ENFORCEMENT EVENT"): (i) arrearages on
distributions on the Partnership Preferred Securities shall exist for six
consecutive quarterly distribution periods, (ii) HEI is in default on any of its
obligations under the Partnership Guarantee or (iii) an Investment Event of
Default on any Affiliate Investment Instrument and an HEI default on any of its
obligations with respect thereto under any applicable Investment Guarantee, the
Holders of the Partnership Preferred Securities, upon the affirmative vote of at
least a Majority in Liquidation Preference of the Partnership Preferred
Securities (or, for so
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long as the Partnership Preferred Securities are held by the Property Trustee,
the Property Trustee as the Holder of the Partnership Preferred Securities),
shall have the right, to the exclusion of the General Partner, (a) to enforce
the terms of the Partnership Preferred Securities, including the right to
appoint and authorize a special representative of the Partnership and the
Limited Partners (a "SPECIAL REPRESENTATIVE") to enforce (1) to the fullest
extent permitted by applicable law, the Partnership's creditors' rights and
other rights with respect to the Affiliate Investment Instruments and the
Investment Guarantees, (2) the rights of the Holders of the Partnership
Preferred Securities under the Partnership Guarantee, and (3) the rights of the
Holders of the Partnership Preferred Securities to receive Distributions (only
if, and to the extent, declared by the General Partner, in its sole discretion,
out of funds legally available therefor) on the Partnership Preferred
Securities, and (b) under the Partnership Guarantee to enforce the terms of the
Partnership Guarantee, including the right to enforce the covenant restricting
certain payments and distributions by HEI. Under no circumstances, however,
shall the Special Representative have authority to cause the General Partner to
declare Distributions on the Partnership Preferred Securities or have any
authority concerning the selection of Partnership Investments. When the Special
Representative acts to enforce the Partnership's creditors' rights and other
rights with respect to the Affiliate Investment Instruments and the Investment
Guarantees, the Special Representative acts as an agent of the Partnership. When
the Special Representative acts to enforce the rights of the Holders of the
Partnership Preferred Securities under the Partnership Guarantee or their rights
to receive Distributions on the Partnership Preferred Securities, the Special
Representative acts as an agent of the Holders of the Partnership Preferred
Securities. In addition, the Special Representative shall not, by virtue of
acting in such capacity, be admitted as a general or limited partner in the
Partnership or otherwise be deemed to be a general or limited partner in the
Partnership and shall have no liability for the debts, obligations, or
liabilities of the Partnership.
(2) In furtherance of the foregoing, and without limiting the powers
of any Special Representative so
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appointed and to avoid any doubt concerning the powers of the Special
Representative, any Special Representative, in its own name, in the name of the
Partnership, in the name of the Limited Partners, or otherwise, may, to the
fullest extent permitted by law, institute, or cause to be instituted, a
proceeding, including, without limitation, any suit in equity, an action at law
or other judicial or administrative proceeding, to enforce on behalf of the
Partnership the Partnership's rights directly against HEI or any other obligor
(including the General Partner) in connection with its obligations to the
Partnership, and may prosecute such proceeding to judgment or final decree, and
enforce the same against HEI or any other obligor in connection with such
obligations and collect, out of the property, wherever situated, of HEI or any
such other obligor upon such obligations, the monies adjudged or decreed to be
payable in the manner provided by law. The General Partner agrees to execute and
deliver such documents as may be necessary, appropriate or convenient for the
Special Representative to enforce the foregoing rights and obligations on behalf
and in the name of the Partnership.
(3) If the Special Representative fails to enforce its rights on
behalf of the Partnership under any Affiliate Investment Instrument after a
holder of Partnership Preferred Securities has made a written request, such
holder of record of Partnership Preferred Securities may, to the fullest extent
permitted by law directly institute a legal proceeding against the applicable
Investment Affiliate to enforce the rights of the Special Representative and the
Partnership under Affiliate Investment Instruments without first instituting any
legal proceeding against the Special Representative, the Partnership or any
other Person. In any event, if a Partnership Enforcement Event has occurred and
is continuing and such event is attributable to the failure of an Investment
Affiliate to make any required payment when due on any Affiliate Investment
Instrument, then a holder of Partnership Preferred Securities may, to the
fullest extent permitted by law on behalf of the Partnership directly, institute
a proceeding against such Investment Affiliate with respect to such Affiliate
Investment Instrument for enforcement of payment. In addition, the Partnership
acknowledges that, for
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so long as the Trust holds any Partnership Preferred Securities, if the Special
Representative fails to enforce its rights on behalf of the Partnership under
the Affiliate Investment Instruments after a holder of record of Trust
Securities has made a written request, such holder of Trust Securities may, to
the fullest extent permitted by law, on behalf of the Partnership, directly
institute a legal proceeding against the Investment Affiliates to enforce the
rights of the Special Representative and the Partnership under the Affiliate
Investment Instruments, without first instituting any legal proceeding against
the Property Trustee, the Trust, the Special Representative, the Partnership or
any other Person. In any event, for so long as the Trust is the holder of any
Partnership Preferred Securities, if a Trust Enforcement Event has occurred and
is continuing and such event is attributable to the failure of an Investment
Affiliate to make any required payment when due on any Affiliate Investment
Instrument or the failure of HEI to make any required payment when due on any
Investment Guarantee, then the Partnership acknowledges that a holder of Trust
Securities may, to the fullest extent permitted by law on behalf of the
Partnership, directly institute a proceeding against such Investment Affiliate
with respect to such Affiliate Investment Instrument or against HEI with respect
to any such Investment Guarantee, in each case for enforcement of payment. Under
no circumstances shall the Special Representative, any holder of Partnership
Preferred Securities or any holder of Trust Preferred Securities have authority
to cause the General Partner to declare distributions on the Partnership
Preferred Securities.
(4) For purposes of determining whether the Partnership has deferred
payment of Distributions for six consecutive quarters, Distributions shall be
deemed to remain in arrears, notwithstanding any payments in respect thereof,
until full cumulative Distributions, including Compounded Distributions, have
been or contemporaneously are paid with respect to all quarterly Distribution
periods terminating on or prior to the date of payment of such full cumulative
Distributions. Not later than 30 days after such right to appoint a Special
Representative arises, the General Partner will convene a meeting for election
of a Special Representative. If the General Partner fails to convene such
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meeting within such 30-day period, the Holders of not less than 10% in
Liquidation Preference of the Outstanding Partnership Preferred Securities will
be entitled to convene such meeting. The provisions of Section 14.3 relating to
the convening and conduct of meetings of the Partners will apply with respect to
any such meeting. In the event that, at any such meeting, Holders of less than
a Majority in Liquidation Preference of Partnership Preferred Securities
entitled to vote for the appointment of a Special Representative vote for such
appointment, no Special Representative shall be appointed. Any Special
Representative appointed shall cease to be a Special Representative of the
Partnership and/or the Limited Partners if (x) the Partnership (or HEI pursuant
to the Partnership Guarantee) shall have paid in full all accumulated and unpaid
Distributions on the Partnership Preferred Securities, (y) the relevant
Investment Event of Default giving rise to the Partnership Enforcement Event
shall have been cured, and (z) HEI is in compliance with all its obligations
under the Partnership Guarantee, and the Company, in its capacity as the General
Partner, shall continue the activities of the Partnership without dissolution.
Notwithstanding the appointment of any such Special Representative, the Company
shall continue as General Partner and shall retain all rights under this
Agreement, including the right to determine whether to declare, in its sole
discretion, the payment of Distributions on the Partnership Preferred Securities
for which the failure of such declaration will not constitute a default
hereunder.
(ii) Certain Amendments; Waiver. (1) If any proposed amendment of
this Agreement provides for, or the General Partner otherwise proposes to
effect, (x) any action that would adversely affect the powers, preferences or
special rights of the Holders of the Partnership Preferred Securities, whether
by way of amendment of this Agreement or otherwise (including, without
limitation, the authorization or issuance of any limited partner interests in
the Partnership ranking, as to participation in profits or distributions, or in
the assets of the Partnership, senior to the Partnership Preferred Securities);
or (y) the dissolution, winding-up or termination of the Partnership, other than
(1) in connection with the occurrence of a Partnership Special Event or (2) as
described
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under Sections 11.11 and 13.2 of this Agreement, then the Holders of outstanding
Partnership Preferred Securities will be entitled to vote on such amendment or
proposal of the General Partner (but not on any other amendment or proposal) as
a class and such amendment or proposal shall not be effective except with the
approval of Holders of a Majority in Liquidation Preference of such outstanding
Partnership Preferred Securities having a right to vote on the matter; provided,
however, that if the Property Trustee on behalf of the Trust is the Holder of
the Partnership Preferred Securities, any such amendment or proposal not
excepted by clause (1) or (2) above shall not be effective without the prior or
concurrent approval of the Holders of a majority in liquidation amount of the
outstanding Trust Preferred Securities having a right to vote on such matters;
provided, further that no such approval shall be required if the dissolution,
winding-up or termination of the Partnership is proposed or initiated upon the
initiation of proceedings, or after proceedings have been initiated, for the
dissolution, winding-up, liquidation or termination of the Company.
(2) The Holders of a Majority in Liquidation Preference of Partnership
Preferred Securities may, by vote, on behalf of the Holders of all of the
Partnership Preferred Securities, waive any past Partnership Enforcement Event
with respect to the Partnership Preferred Securities and its consequences;
provided that, if the underlying Investment Event of Default:
(A) is not waivable under the related Affiliate Investment Instrument,
such Partnership Enforcement Event shall also not be waivable; or
(B) requires the consent or vote of the Holders of greater than a
majority in principal amount or liquidation preference of the Affiliate
Investment Instruments (a "SUPER MAJORITY") to be waived under the related
Affiliate Investment Instrument, the Partnership Enforcement Event may only be
waived by the vote of the Holders of the relevant Super Majority in liquidation
amount of the Partnership Preferred Securities.
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Upon such waiver, any such Partnership Enforcement Event shall cease
to exist, and shall be deemed to have been cured, for every purpose of this
Agreement, but no such waiver shall extend to any subsequent or other
Partnership Enforcement Event or impair any right consequent thereon.
(3) A waiver of an Investment Event of Default by the Special
Representative, acting at the direction of the Holders of the Partnership
Preferred Securities, constitutes a waiver of the corresponding Partnership
Enforcement Event.
(iii) GENERAL VOTING. (1) Neither the General Partner nor the
Special Representative shall (i) direct the time, method and place of conducting
any proceeding for any remedy available, (ii) waive any Investment Event of
Default that is waivable under the Affiliate Investment Instruments, (iii)
exercise any right to rescind or annul a declaration that the principal of any
Affiliate Investment Instruments that are debt instruments shall be due and
payable, (iv) waive the breach of the covenant by HEI in the Partnership
Guarantee to restrict certain payments, or (v) consent to any amendment,
modification or termination of any Affiliate Investment Instrument, where such
consent shall be required from the holder thereof, without, in each case,
obtaining the prior approval of the Holders of at least a Majority in
Liquidation Preference of the Partnership Preferred Securities; provided,
however, that if the Property Trustee on behalf of the Trust is the Holder of
the Partnership Preferred Securities, such waiver, consent or amendment or other
action shall not be effective without the prior or concurrent approval of at
least a majority in liquidation amount of the outstanding Trust Preferred
Securities having a right to vote on such matters. The General Partner shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Partnership Preferred Securities. The General Partner shall notify all
Holders of the Partnership Preferred Securities of any notice of an Investment
Event of Default received with respect to any Affiliate Investment Instrument.
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(2) Any required approval of Holders of Partnership Preferred
Securities may be given at a separate meeting of such Holders convened for such
purpose, at a meeting of all Partners, or pursuant to written consent. The
General Partner will cause a notice of any meeting at which Holders of
Partnership Preferred Securities are entitled to vote, or of any matter upon
which the action by written consent of such Holders is to be taken, to be mailed
to each Holder of record of Partnership Preferred Securities. Each such notice
will include a statement setting forth (x) the date of such meeting or the date
by which such action is to be taken, (y) a description of any matter proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matters upon which written consent is sought and (z) instructions for the
delivery of proxies or consents. No vote or consent of the Holders of
Partnership Preferred Securities will be required for the Partnership to redeem
and cancel Partnership Preferred Securities in accordance with this Agreement.
(3) Notwithstanding that Holders of Partnership Preferred Securities
are entitled to vote or consent under any of the circumstances described above,
any of the Partnership Preferred Securities at such time that are owned by HEI
or by any entity more than 50% of which is owned by HEI, either directly or
indirectly, shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding; provided,
however, that Persons otherwise eligible to vote to whom HEI or any of its
subsidiaries have pledged Partnership Preferred Securities may vote or consent
with respect to such pledged Partnership Preferred Securities under any of the
circumstances described herein.
(4) Holders of the Partnership Preferred Securities shall
have no rights to remove or replace the General Partner.
(5) Holders of Partnership Preferred Securities shall have
no preemptive or similar rights.
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ARTICLE VII
PARTNERSHIP INVESTMENTS
SECTION 7.1 AFFILIATE INVESTMENT INSTRUMENTS; ELIGIBLE DEBT
SECURITIES.
(a) All Partnership funds will be invested in the securities of
Investment Affiliates (the "AFFILIATE INVESTMENT INSTRUMENTS") and Eligible Debt
Securities. No more than 99% of the Initial Partnership Proceeds will be used
by the Partnership to purchase the Initial Debentures meeting the criteria set
forth in this Section 7.1. The remaining funds from the Initial Partnership
Proceeds will be used to purchase Eligible Debt Securities in accordance with
the terms of this Agreement.
(b) The Partnership shall apply approximately 99% of the Initial
Partnership Proceeds to purchase (1) junior subordinated debentures of HEI (the
"INITIAL HEI DEBENTURES") in the aggregate principal amount of $___________ and
(2) junior subordinated debentures of one or more United States subsidiaries of
HEI in an aggregate principal amount of $___________ (such debentures referred
to as the "INITIAL AFFILIATE DEBENTURES"). The Initial HEI Debentures and the
Initial Affiliate Debentures are collectively referred to as the "INITIAL
DEBENTURES". The Partnership may purchase the Initial Debentures only upon
receipt of an opinion of the Independent Financial Advisor to the effect that
(i) each Investment Affiliate will have the wherewithal to make the scheduled
payments of principal of and interest on the Initial Debentures as they come
due, (ii) each Investment Affiliate which is issuing the Initial
Affiliate Debentures would have been capable of issuing and selling debt
instruments with the same terms and conditions as the applicable Initial
Debentures to unrelated third party investors, (iii) the terms and conditions of
the Initial Debentures taken as a whole are
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not more favorable to the relevant Investment Affiliate than could have been
obtained by such Investment Affiliate from unrelated third party investors
pursuant to a contemporaneous public offering or private placement pursuant to
Rule 144A under the Securities Act of such Initial Debentures. On the Closing
Date, the Partnership shall invest at least 1% of such Initial Partnership
Proceeds in Eligible Debt Securities. The terms of the Initial Debentures will
be as set forth in the Indentures.
SECTION 7.2 REINVESTMENT OF PAYMENTS RECEIVED BY THE PARTNERSHIP.
(a) The Partnership must at all times invest an amount equal to at
least 1% of the Initial Partnership Proceeds in Eligible Debt Securities.
(b) The Partnership may reinvest any payments it receives in respect
of its investments in (i) Eligible Debt Securities without limitation or (ii)
additional Affiliate Investment Instruments but only upon (A) the acceptance of
a written offer setting forth the terms and conditions on which an Investment
Affiliate would be willing to issue an Affiliate Investment Instrument to the
Partnership (an "INVESTMENT OFFER") and (B) the receipt of an opinion of the
Independent Financial Advisor that the terms of such Affiliate Investment
Instrument set forth in such Investment Offer satisfy the Reinvestment Criteria
(as defined below).
(c) If the Independent Financial Advisor determines that the terms of
an Affiliate Investment Instrument (as set forth in the Investment Offer) do not
satisfy the Reinvestment Criteria, the Partnership shall be prohibited from
making any investment in such Affiliate Investment Instrument.
(d) Each Affiliate Investment Instrument shall satisfy the following
criteria (the "REINVESTMENT CRITERIA"): (i) the applicable terms and conditions
of each Affiliate Investment Instrument taken as a whole shall be no more
favorable to the relevant Investment Affiliate than could otherwise be
obtainable through a contemporaneous public offering or private placement
under Rule 144A of the Securities Act to unrelated third party investors;
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(ii) the Partnership shall not have held any Affiliate Investment Instruments of
the Investment Affiliate submitting the Investment Offer within the three-year
period ending on the date of the Investment Offer; (iii) there shall not have
been a default on any debt obligation of the Investment Affiliate submitting the
Investment Offer that was previously owned by the Partnership; (iv) no dividend
arrearages shall have existed on any equity security of the Investment Affiliate
submitting the Investment Offer that was previously owned by the Partnership;
and (v) the Investment Affiliate submitting the Investment Offer shall not be
deemed to be an investment company by reason of Section 3(a) or 3(b) of the 1940
Act.
(e) Any payments received by the Partnership in respect of its
investments that are not invested in additional Affiliate Investment
Instruments, may be reinvested only in Eligible Debt Securities (subject to
restrictions of applicable law, including the 1940 Act).
SECTION 7.3 ASSUMPTION OF OBLIGATIONS AND RELEASE OF INVESTMENT
AFFILIATE. The General Partner, on behalf of the Partnership, may without the
approval of the Holders of Partnership Preferred Securities, release any
Investment Affiliate other than HEI (a "RELEASED INVESTMENT AFFILIATE") from its
obligations under an Affiliate Investment Instrument but only upon (A) the
receipt of a written instrument of assumption evidencing the assumption by
another Investment Affiliate (an "ASSUMING INVESTMENT AFFILIATE") of all
obligations of the Released Investment Affiliate under such Affiliate Investment
Instrument, (B) the receipt of a written instrument of HEI evidencing its
agreement that its Investment Guarantee will continue to be applicable to such
Affiliate Investment Instrument following the assumption and release and (C) the
receipt of an opinion of the Independent Financial Advisor that the terms of
such Affiliate Investment Instrument would satisfy the Reinvestment Criteria if
such Affiliate
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Investment Instrument were entered into de novo by the Assuming Investment
Affiliate on the date of such assumption.
ARTICLE VIII
BOOKS OF ACCOUNT, RECORDS AND REPORTS
SECTION 8.1 BOOKS AND RECORDS.
(a) Proper and complete records and books of account of the
Partnership shall be kept by the General Partner, in which shall be entered
fully and accurately all transactions and other matters relative to the
Partnership's investments. The books and records of the Partnership, together
with a certified copy of this Agreement and of the Certificate, shall at all
times be maintained at the principal office of the General Partner and shall be
open to the inspection and examination of the Partners or their duly authorized
representatives for any proper purpose reasonably related to its Interest during
reasonable business hours.
(b) Notwithstanding any other provision of this Agreement to the
contrary, the General Partner may, to the maximum extent permitted by applicable
law, keep confidential from the Partners any information with respect to the
Partnership, the disclosure of which the General Partner reasonably believes is
not in the best interests of the Partnership, or is adverse to the interests of
the Partnership, or which the Partnership or the General Partner is required by
law or by an agreement with any Person to keep confidential.
(c) (i) For so long as the Partnership Preferred Securities are held
by the Property Trustee on behalf of the Trust, within one month after the close
of each Fiscal Year, the General Partner shall transmit (or cause to be
transmitted) to each Partner a statement indicating such Partner's share of each
item of Partnership income, gain, loss, deduction or credit, for United States
federal income tax purposes, for such Fiscal Year.
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(ii) In the event that the Partnership Preferred Securities are no
longer held by the Property Trustee on behalf of the Trust, as soon as
reasonably possible after the close of the Fiscal Year, the General Partner
shall transmit to each Partner the statement referred to in Section 8.1(c)(i)
hereof.
SECTION 8.2 ACCOUNTING METHOD. For both financial and tax reporting
purposes, the books and records of the Partnership shall be kept on the accrual
method of accounting applied on a consistent basis and shall reflect all
Partnership transactions.
ARTICLE IX
PAYMENT OF EXPENSES
SECTION 9.1 PAYMENT OF TRUST EXPENSES AND PARTNERSHIP TAXES. Since
the Trust is being formed solely to facilitate a direct investment in the
Partnership Preferred Securities, the General Partner on behalf of the
Partnership hereby agrees, at any time while the Property Trustee is the Holder
of any Partnership Preferred Securities, to pay all the expenses of the Trust,
including, but not limited to, any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed on the Trust
by the United States, or any other taxing authority, so that the net amounts
received and retained by the Trust and the Property Trustee after paying such
expenses will be equal to the amounts the Trust and the Property Trustee would
have received had no such costs or expenses been incurred by or imposed on the
Trust. The General Partner shall be liable for and shall pay all such expenses
on behalf of the Partnership solely out of its own funds. In addition, if the
Partnership is required to pay any taxes, duties, assessments or governmental
charges of whatever nature (other than federal, state and local withholding
taxes and taxes or charges imposed by reason of the transfer of the Partnership
Preferred Securities) imposed by the United States, or any other taxing
authority, then, in any case, the General Partner will pay such taxes, duties,
assessments or other governmental charges on behalf of the Partnership out of
its own funds.
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SECTION 9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES. In connection
with the offering, sale and issuance of the Partnership Preferred Securities by
the Partnership, the General Partner shall:
(a) pay all costs and expenses of the Partnership (including, but not
limited to, costs and expenses relating to the organization of the Partnership,
the offering, sale and issuance of the Partnership Preferred Securities
(including commissions to the underwriters in connection therewith)), the fees
and expenses of the Special Representatives (if any), and the costs and expenses
relating to the operation of the Partnership, including, without limitation,
costs and expenses of accountants, attorneys, statistical or bookkeeping
services, expenses for printing and engraving and computing or accounting
equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel
and telephone and other telecommunications expenses; and
(b) be primarily and fully liable for any indemnification obligations
arising with respect to this Agreement.
ARTICLE X
POWERS, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS
SECTION 10.1 LIMITATIONS. The Limited Partners shall not participate
in the management or control of the Partnership's investment activity, property
or other assets, nor shall the Limited Partners engage in any activities for the
Partnership, nor shall the Limited Partners have the power to act for or bind
the Partnership, such powers being vested solely and exclusively in the General
Partner (and, upon appointment, and to the extent set forth herein, the Special
Representative). The Limited Partners shall have such rights as are set forth
herein and in the Partnership Guarantee. The Limited Partners shall have no
interest in the properties or assets of the General Partner, or any equity
therein, or in any proceeds of any sales thereof (which sales shall not be
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restricted in any respect), by virtue of acquiring or owning an Interest in the
Partnership.
SECTION 10.2 LIABILITY. Subject to the provisions of the Act, no
Limited Partner shall be liable for the repayment, satisfaction or discharge of
any debts or other obligations of the Partnership in excess of the Capital
Account balance of such Limited Partner.
SECTION 10.3 PRIORITY. No Limited Partner shall have priority over
any other Limited Partner as to Partnership allocations or distributions.
ARTICLE XI
POWERS, RIGHTS, DUTIES AND COVENANTS
OF THE GENERAL PARTNER
SECTION 11.1 AUTHORITY. Subject to the provisions of Section
6.2(h)(i) with respect to the Special Representative, the General Partner shall
have exclusive and complete authority and discretion to manage the operations
and affairs of the Partnership and to make all decisions regarding the
investment activity of the Partnership. Any action taken by the General Partner
shall constitute the act of and serve to bind the Partnership. In dealing with
the General Partner acting on behalf of the Partnership no Person shall be
required to inquire into the authority of the General Partner to bind the
Partnership. Persons dealing with the Partnership are entitled to rely
conclusively on the power and authority of the General Partner as set forth in
this Agreement.
SECTION 11.2 POWERS AND DUTIES OF GENERAL PARTNER. Subject to the
provisions of Section 6.2(h)(i) with respect to the Special Representative, the
General Partner shall have all rights and powers of a general partner under the
Act, and shall have all authority, rights and powers in the management of the
Partnership's investment activity to do any and all other acts and things
necessary, proper, convenient or advisable to effectuate the purposes of this
Agreement, including by way of illustration but not by way of limitation, the
following:
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(a) to secure the necessary goods and services required in performing
the General Partner's duties for the Partnership;
(b) to exercise all powers of the Partnership, on behalf of the
Partnership, in connection with enforcing the Partnership's rights under the
Affiliate Investment Instruments and the Partnership Guarantee;
(c) to issue Partnership Preferred Securities and to admit Limited
Partners in connection therewith in accordance with this Agreement;
(d) to act as registrar and transfer agent for the Partnership
Preferred Securities or designate an entity to act as registrar and transfer
agent;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date to be established, including with respect
to Distributions and voting rights and to make determinations as to the payment
of Distributions, and make or cause to be made all other required payments to
Holders of the Partnership Preferred Securities and to the General Partner;
(f) to open, maintain and close bank accounts and to draw checks and
other orders for the payment of money;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the
Partnership;
(h) to deposit, withdraw, invest, pay, retain and distribute the
Partnership's funds in a manner consistent with the provisions of this
Agreement;
(i) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Partnership's valid existence, rights,
franchises and privileges as a limited partnership under the laws of the State
of Delaware and of each other jurisdiction in which such
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existence is necessary to protect the limited liability of the Limited Partners
or to enable the Partnership to invest in the Affiliate Investment Instruments
and Eligible Debt Securities;
(j) to take all action not inconsistent with applicable law, the
Certificate or this Agreement, that the General Partner or, upon appointment
pursuant to Section 6.2(h)(i), the Special Representative, determines in its
sole discretion to be necessary or desirable, as long as such action does not
materially adversely affect the interests of the Partnership Preferred Security
Holders, to ensure or cause (i) the Partnership not to be deemed to be an
"investment company" required to be registered under the 1940 Act, (ii) any
Initial Debentures (or any subsequent Affiliate Investment Instrument that is
intended to be classified as debt) to be treated as indebtedness for United
States federal income tax purposes, or (iii) the Partnership not to be treated
as an association or as a publicly traded partnership taxable as a corporation;
(k) to cause the Partnership to enter into and perform the Purchase
Agreement and to purchase Eligible Debt Securities and Affiliate Investment
Instruments, as the case may be, without any further act, vote or approval of
any Partner; and
(l) to execute and deliver any and all documents or instruments,
perform all duties and powers and do all things for and on behalf of the
Partnership in all matters necessary or desirable or incidental to the
foregoing.
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SECTION 11.3 OBLIGATIONS AND EXPENSES PAYABLE BY AND COVENANTS OF THE
GENERAL PARTNER
(a) The General Partner hereby assumes and shall be liable for the
debts, obligations and liabilities of the Partnership, including, but not
limited to, any liabilities arising under the Securities Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and all costs and expenses
relating to the investment by the Partnership in any Affiliate Investment
Instruments (but not with respect to any losses related to any nonpayment with
respect to such investments), and agrees to pay on behalf of the Partnership and
solely out of its own funds to each Person to whom the Partnership is now or
hereafter becomes indebted or liable (the "Beneficiaries"), whether such
indebtedness, obligations or liabilities arise in contract, tort or otherwise
(excluding payment obligations of HEI to Holders of the Partnership Preferred
Securities in such Holders' capacities as Holders of such Partnership Preferred
Securities, such obligations being separately guaranteed under the Partnership
Guarantee to the extent set forth therein), the full payment of such
indebtedness and any and all liabilities, when and as due. This Agreement is
intended to be for the benefit of and to be enforceable by all such
Beneficiaries whether or not such Beneficiaries have received notice hereof.
(b) The General Partner agrees to pay on behalf of the Partnership and
solely out of its own funds the expenses described in Sections 9.1 and 9.2 of
this Agreement.
(c) The General Partner covenants (i) subject to Section 12.1(b) of
this Agreement to remain the sole general partner of the Partnership and to
maintain direct ownership of 100% of the General Partner's interest in the
Partnership, which interest will at all times represent at least 1% of the total
capital of the Partnership, (ii) to cause the Partnership to remain a limited
partnership and not to voluntarily dissolve, liquidate, wind-up or be
terminated, except as permitted by this Agreement, (iii) to use its commercially
reasonable efforts to ensure that the Partnership will not be an "investment
company" for purposes of the 1940 Act and (iv) to take no action that would be
reasonably likely
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to cause the Partnership to be classified as an association or a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes.
SECTION 11.4 LIABILITY. Except as expressly set forth in this
Agreement, (a) the General Partner shall not be personally liable for the return
of any portion of the capital contributions (or any return thereon) of the
Limited Partners; (b) the return of such capital contributions (or any return
thereon) shall be made solely from assets of the Partnership; and (c) the
General Partner shall not be required to pay to the Partnership or to any
Limited Partner any deficit in any Limited Partner's Capital Account upon
dissolution, winding-up or otherwise. Other than as expressly provided in this
Agreement or under the Act, no Limited Partner shall have the right to demand or
receive property other than cash for its respective Interest in the Partnership.
The General Partner shall be liable to an unlimited extent for the debts and
other obligations of the Partnership.
SECTION 11.5 OUTSIDE ACTIVITIES. Any Partner or Affiliate thereof
may engage in or possess an interest in other ventures of any nature or
description, independently or with others, similar or dissimilar to the
activities of the Partnership, and the Partnership and the Partners shall have
no rights by virtue of this Agreement in and to such independent ventures or the
income or profits derived therefrom, and the pursuit of any such venture, even
if competitive with the activities of the Partnership, shall not be deemed
wrongful or improper. No Partner or Affiliate thereof shall be obligated to
present any particular investment opportunity to the Partnership even if such
opportunity is of a character that, if presented to the Partnership, could be
taken by the Partnership, and any Partner or Affiliate thereof shall have the
right to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment opportunity.
SECTION 11.6 LIMITS ON GENERAL PARTNER'S POWERS. Anything in this
Agreement to the contrary notwithstanding, the General Partner shall not cause
or permit the Partnership to:
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(i) acquire any assets other than as expressly provided herein;
(ii) do any act which would make it impractical or impossible to carry
on the ordinary activity of the Partnership as set forth in Section 2.3 of this
Agreement;
(iii) possess Partnership property for other than a Partnership
purpose;
(iv) admit a Person as a Partner, except as expressly provided in this
Agreement;
(v) make any advances of funds to the General Partner or its
Affiliates, other than such as represented by the Affiliate Investment
Instruments;
(vi) perform any act that would subject any Limited Partner to
liability as a general partner in any jurisdiction;
(vii) engage in any activity that is not consistent with the purposes
of the Partnership, as set forth in Section 2.3 of this Agreement;
(viii) without the written consent of the Holders of 66-2/3% in
Liquidation Preference of the Partnership Preferred Securities, have an order
for relief entered with respect to the Partnership or commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of the Partnership's property, or make any assignment for the benefit of
creditors of the Partnership; or
(ix) borrow money or become liable for the borrowings of any third
party or to engage in any financial or other trade or business.
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SECTION 11.7 EXCULPATION.
(a) No Partnership Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Partnership or any Partnership
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Partnership Indemnified Person in good
faith on behalf of the Partnership and in a manner such Partnership Indemnified
Person reasonably believed to be within the scope of the authority conferred on
such Partnership Indemnified Person by this Agreement or by law, except that a
Partnership Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Partnership Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions.
(b) A Partnership Indemnified Person shall be fully protected in
relying in good faith upon the records of the Partnership and upon such
information, opinions, reports or statements presented to the Partnership by any
Person as to matters the Partnership Indemnified Person reasonably believes are
within such other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Partnership, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which distributions to Partners might
properly be paid.
SECTION 11.8 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, a Partnership Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Partnership or to any other Partnership Covered Person, a Partnership
Indemnified Person acting under this Agreement shall not be liable to the
Partnership or to any other Partnership Covered Person for its good faith
reliance on the provisions of this Agreement. The provisions of this Agreement,
to the extent that they restrict the duties and liabilities of a Partnership
Indemnified Person otherwise existing at law or in equity, are
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agreed by the parties hereto to replace such other duties and liabilities of
such Partnership Indemnified Person.
(b) Unless otherwise expressly provided herein, (i) whenever a
conflict of interest exists or arises between Partnership Covered Persons and
Partnership Indemnified Persons, or (ii) whether this Agreement or any other
agreement contemplated herein or therein provides that a Partnership Indemnified
Person shall act in a manner that is, or provides terms that are, fair and
reasonable to the Partnership or any Partner, the Partnership Indemnified Person
shall resolve such conflict of interest, take such action or provide such terms,
considering in each case the relative interest of each party (including its own
interest) to such conflict, agreement, transaction or situation and the benefits
and burdens relating to such interests, any customary or accepted industry
practices, and any applicable generally accepted accounting practices or
principles. In the absence of bad faith by the Partnership Indemnified Person,
the resolution, action or term so made, taken or provided by the Partnership
Indemnified Person shall not constitute a breach of this Agreement or any other
agreement contemplated herein or of any duty or obligation of the Partnership
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Agreement a Partnership Indemnified Person is
permitted or required to make a decision (i) in its "discretion" or under a
grant of similar authority, the Partnership Indemnified Person shall be entitled
to consider such interests and factors as it desires, including its own
interest, and shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Partnership or any other Person, or (ii) in
its "good faith" or under another express standard, the Partnership Indemnified
Person shall act under such express standard and shall not be subject to any
other or different standard imposed by this Agreement or by applicable law.
SECTION 11.9 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the Partnership
shall indemnify and hold harmless each
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Partnership Indemnified Person from and against any loss, damage or claim
incurred by such Partnership Indemnified Person by reason of any act or omission
performed or omitted by such Partnership Indemnified Person in good faith on
behalf of the Partnership and in a manner such Partnership Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Partnership Indemnified Person by this Agreement, except that no Partnership
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Partnership Indemnified Person by reason of
gross negligence or willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by a Partnership Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Partnership prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Partnership of an
undertaking by or on behalf of the Partnership Indemnified Person to repay such
amount if it shall be determined that the Partnership Indemnified Person is not
entitled to be indemnified as authorized in Section 11.9(a).
SECTION 11.10 TAX MATTERS.
(a) For purposes of section 6231(a)(7) of the Code, the "TAX MATTERS
PARTNER" shall be the Company as long as it remains the general partner of the
Partnership. The Tax Matters Partner shall keep the Limited Partners fully
informed of any inquiry, examination or proceeding.
(b) Neither the Partnership, nor the Tax Matters Partner on behalf of
the Partnership, shall make an election under section 754 of the Code.
(c) The General Partner and the Partnership Preferred Security Holders
acknowledge that they intend, for United States federal income tax purposes,
that the Partnership shall be treated as a "partnership" (other than a publicly
traded partnership taxable as a corporation) and that the
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General Partner and the Partnership Preferred Security Holders shall be treated
as "partners" of the Partnership.
(d) The General Partner shall retain, at the expense of the
Partnership and at its sole discretion, a nationally recognized firm of
certified public accountants which shall prepare all United States federal,
state, local or other tax and information returns of the Partnership, as
required by law, and the Schedule K-1's or any successor or similar forms or
schedules.
SECTION 11.11 CONSOLIDATION, AMALGAMATION, MERGER, OR SALE OF ASSETS.
The Partnership may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any Person, except as permitted pursuant to
this Section 11.11. The Partnership may, without the consent of the Holders of
the Partnership Preferred Securities, consolidate, amalgamate, merge with or
into, or be replaced by a limited partnership, limited liability company or
trust organized as such under the laws of any state of the United States of
America, provided that (i) such successor entity either (x) expressly assumes
all of the obligations of the Partnership under the Partnership Preferred
Securities or (y) substitutes for the Partnership Preferred Securities other
securities having substantially the same terms as the Partnership Preferred
Securities (the "PARTNERSHIP SUCCESSOR SECURITIES") so long as the Partnership
Successor Securities are not junior to any other equity securities of the
successor entity, with respect to participation in the profits and
distributions, and in the assets, of the successor entity, (ii) the Investment
Affiliates expressly acknowledge such successor entity as the holder of the
Affiliate Investment Instruments, (iii) if the Partnership Preferred Securities
are then so listed, the Partnership Preferred Securities continue to be listed,
or any Partnership Successor Securities are or will be listed, upon notification
of issuance, on any national securities exchange or other organization on which
the Partnership Preferred Securities, if so listed, are then listed or quoted,
(iv) such merger, consolidation, amalgamation or replacement does not cause the
Trust Preferred Securities (or, in the event that the Trust is liquidated in
connection with a Trust Special Event, the Partnership Preferred Securities
(including any
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Partnership Successor Securities)) to be downgraded by any nationally recognized
statistical securities rating organization, (v) such merger, consolidation,
amalgamation or replacement does not adversely affect the powers, preferences
and other special rights of the holders of the Trust Preferred Securities or the
Holders of the Partnership Preferred Securities (including any Partnership
Successor Securities) in any material respect (other than, in the case of the
Partnership Preferred Securities, with respect to any dilution of the Holders'
interest in the new resulting entity), (vi) such successor entity has a purpose
substantially identical to that of the Partnership, (vii) prior to such merger,
consolidation, amalgamation or replacement, the Company has received an opinion
of independent counsel to the Partnership experienced in such matters to the
effect that (A) such successor entity will be treated as a "partnership" for
United States federal income tax purposes and not as an association or a
publicly traded partnership taxable as a corporation, (B) such merger,
consolidation, amalgamation or replacement will not cause the Trust to be
classified as an association or a publicly traded partnership taxable as a
corporation for United States federal income tax purposes, (C) following such
merger, consolidation, amalgamation or replacement, the Company and such
successor entity will be in compliance with the 1940 Act without registering
thereunder as an investment company, and (D) such merger, consolidation,
amalgamation or replacement will not adversely affect the limited liability of
the Holders of the Partnership Preferred Securities (or the Partnership
Successor Securities) and (viii) HEI guarantees the obligations of such
successor entity under the Partnership Successor Securities at least to the same
extent provided by the Partnership Guarantee.
ARTICLE XII
TRANSFERS OF INTERESTS BY PARTNERS
SECTION 12.1 TRANSFER OF INTERESTS.
(a) Partnership Preferred Securities shall be freely transferable by a
Holder.
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(b) Except as provided in the next sentence, the General Partner may
not assign or transfer its Interest in the Partnership in whole or in part
unless, prior to such assignment or transfer, the General Partner has obtained
the consent of the Holders of not less than 66-2/3% in Liquidation Preference of
the Partnership Preferred Securities. The General Partner may assign or transfer
its Interest in the Partnership without such consent only to HEI (or to a
wholly-owned subsidiary of HEI whose obligations are guaranteed by HEI to the
same extent as the General Partner's obligations are then guaranteed by HEI
pursuant to the Partnership Agreement) or to an entity that is the survivor of a
merger, amalgamation, conversion or consolidation of the General Partner in a
transaction that meets the requirements of Section 11.11 and only if prior to
such assignment or transfer the Company has received an opinion of independent
tax counsel to the Partnership experienced in such matters to the effect that
after such assignment or transfer the Partnership will continue to be treated as
a partnership for United States federal income tax purposes and will not be
treated as an association or a publicly traded partnership taxable as a
corporation. "PERMITTED SUCCESSOR" shall mean an entity that is an assignee or
transferee of the Interest of the General Partner as permitted by this Section
12.1(b). The admission of a Permitted Successor as a general partner of the
Partnership shall be effective upon the filing of an amendment to the
Certificate with the Secretary of State of the State of Delaware which indicates
that the Permitted Successor has been admitted as a general partner of the
Partnership. If the General Partner assigns its entire Interest, the General
Partner shall cease to be a general partner of the Partnership simultaneously
with the admission of the Permitted Successor as a general partner of the
Partnership. Any such Permitted Successor is hereby authorized to and shall
continue the business of the Partnership without dissolution.
(c) Except as provided above, no Interest shall be transferred, in
whole or in part, except in accordance with the terms and conditions set forth
in this Agreement. Any transfer or purported transfer of any Interest not made
in accordance with this Agreement shall be null and void.
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SECTION 12.2 TRANSFER OF L.P. CERTIFICATES. The General Partner
shall provide for the registration of L.P. Certificates and of transfers of L.P.
Certificates. Upon surrender for registration of transfer of any L.P.
Certificate, the General Partner shall cause one or more new L.P. Certificates
to be issued in the name of the designated transferee or transferees. Every
L.P. Certificate surrendered for registration of transfer shall be accompanied
by a written instrument of transfer in form satisfactory to the General Partner
duly executed by the Partnership Preferred Security Holder or his or her
attorney duly authorized in writing. Each L.P. Certificate surrendered for
registration of transfer shall be canceled by the General Partner. A transferee
of an L.P. Certificate shall be admitted to the Partnership as a Limited
Partner, shall become bound by this Agreement and shall be entitled to the
rights and subject to the obligations of a Partnership Preferred Security Holder
hereunder upon the receipt by the transferee of an L.P. Certificate, which
receipt shall be deemed to constitute a request by such transferee that the
books and records of the Partnership reflect such transferee's admission as a
limited partner. The transferor of an L.P. Certificate, in whole, shall cease
to be a Limited Partner at the time that the transferee of such L.P. Certificate
is admitted to the Partnership as a Limited Partner in accordance with this
Section 12.2.
SECTION 12.3 DEFINITIVE L.P. CERTIFICATES; PERSONS DEEMED PARTNERSHIP
PREFERRED SECURITY HOLDERS.
(a) Unless and until the Partnership issues a global L.P. Certificate
pursuant to Section 12.4(a), the Partnership shall only issue definitive L.P.
Certificates to the Partnership Preferred Security Holders.
(b) The Partnership may treat the Person in whose name any L.P.
Certificate shall be registered on the books and records of the Partnership as
the sole holder of such L.P. Certificate and of the Partnership Preferred
Securities represented by such L.P. Certificate for purposes of receiving
Distributions and for all other purposes whatsoever (including without
limitation, tax returns and information reports) and, accordingly, shall not be
bound to recognize any equitable or
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other claim to or interest in such L.P. Certificate or in the Partnership
Preferred Securities represented by such L.P. Certificate on the part of any
other Person, whether or not the Partnership shall have actual or other notice
thereof.
SECTION 12.4 BOOK-ENTRY PROVISIONS.
(a) GENERAL. The provisions of this Section 12.4 shall apply only in
the event that the Partnership Preferred Securities are distributed to the
Holders of Trust Securities in connection with the involuntary or voluntary
dissolution, winding-up or liquidation of the Trust as a result of the
occurrence of a Trust Special Event. Upon the occurrence of such event, a global
L.P. Certificate representing the Book-Entry Interests and executed on behalf of
the Partnership by the manual signature of the General Partner, or by facsimile
signature of the General Partner with the authentication by the Registrar (as
defined herein) or the Transfer Agent (as defined herein) shall be delivered to
DTC, the initial Depository, by, or on behalf of, the Partnership and any
previously issued and still outstanding definitive L.P. Certificates shall be of
no further force and effect. The global L.P. Certificate shall initially be
registered on the books and records of the Partnership in the name of Cede &
Co., the nominee of DTC, and no Partnership Preferred Security Beneficial Owner
will receive a new definitive L.P. Certificate representing such Holder's
interests in such L.P. Certificate, except as provided in Section 12.4(c). In
connection with the involuntary or voluntary dissolution, winding-up or
liquidation of the Trust as a result of the occurrence of a Trust Special Event,
Cede & Co., the nominee of DTC, or the successor nominee of DTC or of any
successor Depository, shall automatically be admitted to the Partnership as a
Limited Partner. Receipt of the global L.P. Certificate shall be deemed to
constitute a request by Cede & Co., the nominee of DTC, or the successor nominee
of DTC or of any successor Depository, that the books and records of the
Partnership reflect its admission as a Limited Partner. After the provisions of
this Section 12.4 begin to apply in accordance with this Agreement, unless and
until new definitive, fully registered L.P. Certificates (the "DEFINITIVE L.P.
CERTIFICATES") have been issued to the Partnership Preferred Security Beneficial
Owners pursuant to Section 12.4(c):
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(i) The provisions of this Section 12.4 shall be in full force and
effect and to the extent the provisions of this Section 12.4 conflict with any
other provisions of this Agreement, the provisions of this Section 12.4 shall
control;
(ii) The Partnership, the General Partner and any Special
Representative shall be entitled to deal with the Depository for all purposes of
this Agreement (including the payment of Distributions, Redemption Price and
liquidation proceeds on the L.P. Certificates and receiving approvals, votes or
consents hereunder) as the Partnership Preferred Security Holder and the sole
Holder of the L.P. Certificates and shall have no obligation to the Partnership
Preferred Security Beneficial Owners;
(iii) None of the Partnership, the Trust, the General Partner, any
Special Representative or any agents of any of the foregoing shall have any
liability or responsibility for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a global L.P.
Certificate for such beneficial ownership interests or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests; and
(iv) Except as provided in Section 12.4(c) below, the Partnership
Preferred Security Beneficial Owners will not be entitled to receive physical
delivery of the Partnership Preferred Securities in definitive form and will not
be considered Holders thereof for any purpose under this Agreement, and no
global L.P. Certificate representing Partnership Preferred Securities shall be
exchangeable, except for another global L.P. Certificate of like denomination
and tenor to be registered in the name of DTC or Cede & Co., or to a successor
Depository or its nominee. Accordingly, each Partnership Preferred Security
Beneficial Owner must rely on the procedures of DTC or if such person is not a
Participant, on the procedures of the Participant through which such person owns
its interest to exercise any rights of a Holder under the Agreement.
(b) NOTICES TO DEPOSITORY. Whenever a notice or other communication
to the Partnership Preferred Security
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Holders is required under this Agreement, unless and until Definitive L.P.
Certificates shall have been issued to the Partnership Preferred Security
Beneficial Owners pursuant to Section 12.4(c), the General Partner and any
Special Representative shall give all such notices and communications specified
herein to be given to the Partnership Preferred Security Holders to the
Depository, and shall have no obligations to the Partnership Preferred Security
Beneficial Owners.
(c) DEFINITIVE L.P. CERTIFICATES. Definitive L.P. Certificates shall
be prepared by the Partnership and exchangeable for the global L.P. Certificate
or L.P. Certificates if and only if (i) the Depository notifies the General
Partner that it is unwilling or unable to continue its services as a securities
depository and no successor depository shall have been appointed, (ii) the
Depository, at any time, ceases to be a clearing agency registered under the
Exchange Act at such time as the Depository is required to be so registered to
act as such depository and no successor depository shall have been appointed, or
(iii) the General Partner, in its sole discretion, determines that such global
L.P. Certificate shall be so exchangeable. Upon surrender of the global L.P.
Certificate or L.P. Certificates representing the Book-Entry Interests by the
Depository, accompanied by registration instructions, the General Partner shall
cause Definitive L.P. Certificates to be delivered to Partnership Preferred
Security Beneficial Owners in accordance with the instructions of the
Depository. Neither the General Partner nor the Partnership shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Any Person receiving a
Definitive L.P. Certificate in accordance with this Section 12.4 shall be
admitted to the Partnership as a Limited Partner upon receipt of such Definitive
L.P. Certificate and shall be registered on the books and records of the
Partnership as a Partnership Preferred Security Holder. The Depository or the
nominee of the Depository, as the case may be, shall cease to be a Limited
Partner under this Section 12.4(c) at the time that at least one additional
Person is admitted to the Partnership as a Limited Partner in accordance
herewith. The Definitive L.P. Certificates shall be printed, lithographed or
engraved or may
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be produced in any other manner as may be required by any national securities
exchange on which Partnership Preferred Securities may be listed and is
reasonably acceptable to the General Partner, as evidenced by its execution
thereof, which execution shall be by manual signature of the General Partner, or
by facsimile signature of the General Partner with the authentication by the
Registrar (as defined herein) or the Transfer Agent (as defined herein).
SECTION 12.5 REGISTRAR, TRANSFER AGENT AND PAYING AGENT.
(a) The General Partner will act as Registrar, Transfer Agent and
Paying Agent for the Partnership Preferred Securities for so long as the
Partnership Preferred Securities are held by the Trust or, if the Trust is
liquidated in connection with a Trust Special Event, for so long as the
Partnership Preferred Securities remain in book-entry only form.
(b) Except in such case where the General Partner shall act as
Registrar or Paying Agent pursuant to Section 12.5(a) hereof, the Partnership
shall maintain in the Borough of Manhattan, City of New York, State of New York
(i) an office or agency where Partnership Preferred Securities may be presented
for registration of transfer or for exchange ("REGISTRAR") and (ii) an office or
agency where Partnership Preferred Securities may be presented for payment
("PAYING AGENT"). The Registrar shall keep a register of the Partnership
Preferred Securities and of their transfer and exchange. The Partnership may
appoint the Registrar and the Paying Agent and may appoint one or more co-
registrars and one or more additional paying agents in such other locations as
it shall determine. The term "PAYING AGENT" includes any additional paying
agent. The Partnership may change any Paying Agent, Registrar or co-registrar
without prior notice to any Holder. If the Partnership fails to appoint or
maintain another entity as Registrar or Paying Agent, the General Partner shall
act as such.
(c) Registration of transfers of Partnership Preferred Securities
shall be effected without charge by or on
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behalf of the Partnership, but upon payment (with the giving of such indemnity
as the Partnership or the General Partner may require) in respect of any tax or
other governmental charges that may be imposed.
(d) The Partnership will not be required to register or cause to be
registered the transfer of Partnership Preferred Securities after such
Partnership Preferred Securities have been called for redemption.
ARTICLE XIII
WITHDRAWAL, DISSOLUTION;
LIQUIDATION AND DISTRIBUTION OF ASSETS
SECTION 13.1 WITHDRAWAL OF PARTNERS. The General Partner shall not
at any time retire or withdraw from the Partnership except as otherwise
permitted hereunder. If the General Partner retires or withdraws in
contravention of this Section 13.1, it shall indemnify, defend and hold harmless
the Partnership and the other Partners from and against any losses, expenses,
judgments, fines, settlements or damages suffered or incurred by the Partnership
or such other Partners arising out of or resulting from such retirement or
withdrawal.
SECTION 13.2 DISSOLUTION OF THE PARTNERSHIP.
(a) The Partnership shall not be dissolved by the admission of
Partners in accordance with the terms of this Agreement. The death, withdrawal,
bankruptcy or dissolution of a Limited Partner, or the occurrence of any other
event which terminates the Interest of a Limited Partner in the Partnership,
shall not, in and of itself, cause the Partnership to be dissolved and its
affairs wound up. To the fullest extent permitted by applicable law, upon the
occurrence of any such event, the General Partner may, without any further act,
vote or approval of any Partner, admit any Person to the Partnership as an
additional or substitute limited partner in the Partnership, which admission
shall be effective as of the date of the occurrence of such event, and the
business of the Partnership shall be continued without dissolution.
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(b) The Partnership shall be dissolved and its affairs shall be wound
up upon the earliest to occur of any of the following events:
(i) upon the bankruptcy, insolvency or dissolution of the General
Partner;
(ii) upon the assignment by the General Partner of its entire
interest in the Partnership when the assignee is not admitted to the Partnership
as a general partner of the Partnership in accordance with this Agreement, or
the filing of a certificate of dissolution or its equivalent with respect to the
General Partner, or the revocation of the General Partner's charter and the
expiration of 90 days after the date of notice to the General Partner of
revocation without a reinstatement of its charter, or if any other event occurs
that causes the General Partner to cease to be a general partner of the
Partnership under the Act, unless the business of the Partnership is continued
in accordance with the Act;
(iii) the Partnership has redeemed or otherwise purchased all of
the Partnership Preferred Securities;
(iv) the entry of a decree of judicial dissolution under Section
17-802 of the Act; or
(v) the written consent of all Partners.
(c) Upon dissolution of the Partnership, the Liquidator shall promptly
notify the Partners of such dissolution.
SECTION 13.3 LIQUIDATION.
(a) In the event of the dissolution of the Partnership for any reason,
the General Partner (or, if the Partnership is dissolved pursuant to Section
13.2(b)(i) or (ii), then a liquidating agent appointed by Holders of not less
than 66 2/3% in Liquidation Preference of the Partnership Preferred Securities
(the General Partner or such Person so appointed is hereinafter referred to as
the "LIQUIDATOR"))
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shall commence to wind up the affairs of the Partnership and to liquidate the
Partnership's assets; provided, however, that a reasonable time shall be allowed
for the orderly liquidation of the assets of the Partnership and the
satisfaction of liabilities to creditors so as to enable the Partners to
minimize the normal losses attendant upon liquidation. The Partners shall
continue to share all income, losses and distributions during the period of
liquidation in accordance with Articles IV and V. Subject to the provisions of
this Article XIII, the Liquidator shall have full right and unlimited discretion
to determine the time, manner and terms of any sale or sales of Partnership
property pursuant to such liquidation, giving due regard to the activity and
condition of the relevant market and general financial and economic conditions.
(b) The Liquidator shall have all of the rights and powers with
respect to the assets and liabilities of the Partnership in connection with the
liquidation and termination of the Partnership that the General Partner would
have with respect to the assets and liabilities of the Partnership during the
term of the Partnership, and the Liquidator is hereby expressly authorized and
empowered to execute any and all documents necessary or desirable to effectuate
the liquidation and termination of the Partnership and the transfer of any
assets.
(c) Notwithstanding the foregoing, a Liquidator that is not a General
Partner shall not, by virtue of acting in such capacity, be deemed a Partner in
this Partnership and shall not have any of the economic interests in the
Partnership of a Partner; and such Liquidator may be compensated for its
services to the Partnership at normal customary and competitive rates for its
services to the Partnership as reasonably determined by all the Limited
Partners.
SECTION 13.4 DISTRIBUTION IN LIQUIDATION. The proceeds of
liquidation shall be applied in the following order of priority (and without
regard to the non-mandatory provisions of Section 17-804 of the Act):
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(i) first, to creditors of the Partnership, including Partners who
are creditors, to the extent otherwise permitted by law, in satisfaction of the
liabilities of the Partnership (whether by payment or the making of reasonable
provisions for payment thereof), other than liabilities for distributions
(including Distributions) to Partners;
(ii) second, following any allocations required under Section
4.2(e) of the Agreement, to the Limited Partners, an amount equal to the
aggregate liquidation preference of their Partnership Preferred Securities, plus
the amount of Distributions (including any Compounded Distributions) that are
accumulated and unpaid as of the date of such liquidating distribution; and
(iii) thereafter, to the General Partner.
SECTION 13.5 RIGHTS OF LIMITED PARTNERS. Each Limited Partner shall
look solely to the assets of the Partnership for all distributions with respect
to the Partnership and such Partner's capital contribution (including returns
thereof), and such Partner's share of profits or losses thereof, and shall have
no recourse therefor (upon dissolution or otherwise) against the General
Partner. No Partner shall have any right to demand or receive property other
than cash upon dissolution and termination of the Partnership.
SECTION 13.6 TERMINATION. The Partnership shall terminate when all
of the assets of the Partnership shall have been disposed of and the assets
shall have been distributed as provided in Section 13.4 and the Liquidator has
executed and caused to be filed a certificate of cancellation of the
Partnership.
ARTICLE XIV
AMENDMENTS AND MEETINGS
SECTION 14.1 AMENDMENTS. Except as provided by Section 3.3(b) and
Section 6.2(h)(ii), this Agreement may be amended by, and only by, a written
instrument executed by the
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General Partner without the consent of any Limited Partner; provided, however,
that no amendment shall be made, and any such purported amendment shall be void
and ineffective, to the extent the result thereof would be to (A) cause the
Partnership to be treated for United States federal income tax purposes as an
association or a publicly traded partnership taxable as a corporation, (B)
require the Partnership to register under the 1940 Act or (C) materially
adversely affect the rights, privileges or preferences of the Partnership
Preferred Securities. Notwithstanding any provision to the contrary, in the
event of (i) a liquidation of the Trust for any reason or (ii) any other
distribution which effectively causes Partnership Preferred Securities to be
distributed to Holders of Trust Preferred Securities, the General Partner may
amend this Agreement without the consent of the Limited Partners to provide for
(A) orderly dissemination, purchase, sale, exchange and replacement of such
Partnership Preferred Securities, (B) all other matters to the extent required
by or desirable under then applicable law and (C) such other matters reasonably
incidental or related thereto; provided, however, that no such amendment may
materially adversely affect the rights, privileges, or preferences of the
Partnership Preferred Securities without the consent of a Majority in
Liquidation Preference.
SECTION 14.2 AMENDMENT OF CERTIFICATE. In the event this Agreement
shall be amended pursuant to Section 14.1, the General Partner shall amend the
Certificate to reflect such change if it deems such amendment of the Certificate
to be necessary or appropriate.
SECTION 14.3 MEETINGS OF PARTNERS.
(a) Meetings of the Limited Partners who are Holders may be called at
any time by the General Partner to consider and act on any matter on which
Limited Partners are entitled to act under the terms of this Agreement or the
Act. The General Partner shall call a meeting of Holders if directed to do so
by Holders of no less than 10% in Liquidation Preference of the Partnership
Preferred Securities as permitted by this Agreement. Such direction shall be
given by delivering to the General Partner a request in writing stating that the
signing
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Limited Partners desire to call a meeting and indicating the general or specific
purpose for which the meeting is to be called. Any Limited Partners calling a
meeting shall specify in writing the L.P. Certificates held by the Limited
Partners exercising the right to call a meeting and only those specified
Interests shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
Except to the extent otherwise provided in this Agreement, the following
provisions shall apply to meetings of Partners.
(b) Notice of any such meeting shall be given to all Limited Partners
having a right to vote thereat not less than seven Business Days nor more than
60 days prior to the date of such meeting. Each such notice shall set forth the
date, time and place of the meeting, a description of any matter on which
Holders are entitled to vote and instructions for the delivery of proxies or
written consents.
(c) Any action that may be taken at a meeting of the Limited Partners
may be taken without a meeting if a consent in writing setting forth the action
so taken is signed by Limited Partners owning not less than the minimum
Interests that would be necessary to authorize or take such action at a meeting
in which all Limited Partners having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall be given
to the Limited Partners entitled to vote who have not consented in writing. The
General Partner may provide that any written ballot submitted to the Limited
Partners for the purpose of taking any action without a meeting shall be
returned to the Partnership within a specified time.
(d) Each Partner may authorize any Person to act for it by proxy on
all matters as to which a Partner is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. Every proxy
must be signed by the Partner or its attorney-in-fact. No proxy shall be valid
after the expiration of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of the
Partner executing it. Except as otherwise provided herein, or pursuant to
Section 14.3(f),
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all matters relating to the giving, voting or validity of proxies shall be
governed by the General Corporation Law of the State of Delaware relating to
proxies, and judicial interpretations thereunder, as if the Partnership were a
Delaware corporation and the Limited Partners were stockholders of a Delaware
corporation.
(e) Each meeting of Partners shall be conducted by the General Partner
or by such other Person that the General Partner may designate.
(f) The General Partner may establish all other reasonable procedures
relating to meetings of Limited Partners or the giving of written consents, in
addition to those expressly provided, including notice of time, place or purpose
of any meeting at which any matter is to be voted on by any Partners, waiver of
any such notice, action by consent without a meeting, the establishment of a
record date, quorum requirements, voting in person or by proxy or any other
matter with respect to the exercise of any such right to vote.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 NOTICES. All notices provided for in this Agreement
shall be in writing, and shall be delivered or mailed by first class or
registered or certified mail or, with respect to the Partnership and General
Partner, telecopied, as follows:
(a) if given to the Partnership, in care of the General Partner at the
Partnership's mailing address set forth below:
HEI Preferred Funding, LP
c/o HYCAP MANAGEMENT, INC.
300 Delaware Avenue, Suite 1704
Wilmington, Delaware 19806
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(b) if given to the General Partner, at its mailing address set forth
below:
HYCAP MANAGEMENT, INC.
300 Delaware Avenue, Suite 1704
Wilmington, Delaware 19806
(c) if given to any other Partner at the address set forth on the
books and records of the Partnership.
SECTION 15.2 POWER OF ATTORNEY. Each Holder of a Partnership
Preferred Security does hereby constitute and appoint the General Partner, and
if applicable, any Special Representative appointed pursuant to Section
6.2(h)(i) of this Agreement, as its true and lawful representative and attorney-
in-fact, in its name, place and stead to make, execute, sign, deliver and file
(a) any amendment of the Certificate required because of an amendment of this
Agreement or in order to effect any change in the Partnership, (b) this
Agreement, (c) any amendments to this Agreement adopted in accordance with the
terms of this Agreement and (d) all such other instruments, documents and
certificates which from time to time may be required by the laws of the United
States of America, the State of Delaware or any other jurisdiction, or any
political subdivision or agency thereof, to effectuate, implement and continue
the valid and subsisting existence of the Partnership or to dissolve the
Partnership for any other purpose consistent with this Agreement and the
transactions contemplated hereby.
The power of attorney granted hereby is coupled with an interest and
shall (a) survive and not be affected by the subsequent death, incapacity,
disability, dissolution, termination, or bankruptcy of the Holder granting the
same or the transfer of all or any portion of such Holder's Interest and (b)
extend to such Holder's successors, assigns and legal representatives.
SECTION 15.3 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties. It supersedes any prior agreement or
understandings among them, and it may not be modified or amended in any manner
other than as set forth herein.
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SECTION 15.4 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE
LAW OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY
SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
SECTION 15.5 EFFECT. Except as herein otherwise specifically
provided, this Agreement shall be binding upon and inure to the benefit of the
parties and their legal representatives, successors and assigns.
SECTION 15.6 PRONOUNS AND NUMBER. Wherever from the context it
appears appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in either the
masculine, feminine or neuter shall include the masculine, feminine and neuter.
SECTION 15.7 CAPTIONS. Captions, headings, and subheadings contained
in this Agreement are included for convenience and identification purposes only
and in no way define, limit or extend the scope or intent of this Agreement or
any provision herein.
SECTION 15.8 PARTIAL ENFORCEABILITY. If any provision of this
Agreement, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
SECTION 15.9 COUNTERPARTS. This Agreement may contain more than one
counterpart of the signature page and this Agreement may be executed by the
affixing of the signature of each of the Partners to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
SECTION 15.10 WAIVER OF PARTITION. Each Partner hereby irrevocably
waives any and all rights (if any) that such
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Partner may have to maintain any action for partition of any of the
Partnership's property.
SECTION 15.11 REMEDIES. The failure of any party to seek redress for
violation of, or to insist upon the strict performance of, any provision of this
Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation. The
rights and remedies provided by this Agreement are cumulative and the use of any
one right or remedy by any party shall not preclude or waive its right to use
any or all other remedies. Said rights and remedies are given in addition to
any other rights the parties may have by law, statute, ordinance or otherwise.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above stated.
GENERAL PARTNER: HYCAP MANAGEMENT, INC.,
a Delaware Corporation
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
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INITIAL LIMITED PARTNER: HAWAIIAN ELECTRIC INDUSTRIES
CAPITAL TRUST I, a Delaware
Statutory business trust
By: HAWAIIAN ELECTRIC INDUSTRIES,
INC., a Hawaii corporation
Its: Sponsor
By: __________________________
Name:
Title:
By: __________________________
Name:
Title:
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SCHEDULE 1
LIST OF PARTNERS
Partner Capital Account
- ------- ---------------
HYCAP MANAGEMENT, INC. $______________
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL
TRUST I $______________
ANNEX A
FORM OF L.P. CERTIFICATE
[IF THE PARTNERSHIP PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT: This Partnership Preferred Security Certificate is a Global Certificate
within the meaning of the Agreement of Limited Partnership hereinafter referred
to and is registered in the name of The Depository Trust Company (the
"DEPOSITORY") or a nominee of the Depository. This Partnership Preferred
Security is exchangeable for Partnership Preferred Securities registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Agreement of Limited Partnership and no transfer
of this Partnership Preferred Security (other than a transfer of this
Partnership Preferred Security as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository) may be registered except in limited circumstances.
Unless this Partnership Preferred Security is presented by an
authorized representative of The Depository Trust Company (55 Water Street, New
York, New York), a New York corporation, to the Partnership or its agent for
registration
<PAGE>
of transfer, exchange or payment, and any Partnership Preferred Security issued
is registered in the name of Cede & Co. or such other name as requested by an
authorized representative of the Depository and any payment hereon is made to
Cede & Co. or such other entity as is requested by an authorized representative
of the Depository, 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.]
<PAGE>
[ ]
CERTIFICATE EVIDENCING PARTNERSHIP PREFERRED SECURITIES
OF
HEI PREFERRED FUNDING, LP
____% Partnership Preferred Securities (liquidation amount $25 per
Partnership Preferred Security)
HEI PREFERRED FUNDING, LP, a limited partnership formed under the laws
of the State of Delaware (the "PARTNERSHIP"), hereby certifies that The Bank of
New York, the Property Trustee of Hawaiian Electric Industries Capital Trust I
(the "Trust") pursuant to the Amended and Restated Trust Agreement of the Trust,
dated as of ______________, 1997 (the "HOLDER"), is the registered owner of ____
preferred securities of the Partnership representing limited partner interests
in the Partnership designated the ____% Partnership Preferred Securities
(liquidation amount $25 per Partnership Preferred Security) (the "PARTNERSHIP
PREFERRED SECURITIES"). The Partnership Preferred Securities are freely
transferable on the books and records of the Partnership, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, powers, privileges,
restrictions, preferences and other terms and provisions of the Partnership
Preferred Securities represented hereby are set forth in, issued under and shall
in all respects be subject to the provisions of the Amended and Restated
Agreement of Limited Partnership, dated as of _____________, 1997, as the same
may be amended from time to time (the "AGREEMENT OF LIMITED PARTNERSHIP").
Capitalized terms used herein but not defined shall have the meaning given to
them in the Agreement of Limited Partnership. The Holder is entitled to the
benefits of the Partnership Guarantee to the extent provided therein. The
Partnership will provide a copy of the Agreement of Limited Partnership and the
Partnership Guarantee to a Holder without charge upon written request to
<PAGE>
the Partnership at its principal place of business.
Upon receipt of this certificate, the Holder is admitted to the
Partnership as a Limited Partner, is bound by the Agreement of Limited
Partnership and is entitled to the benefits thereunder. Each Holder of a
Partnership Preferred Security, by acceptance of this Certificate and each
Certificate owner, by acquisition of a beneficial interest in a Certificate,
agrees to treat the Initial Debentures, and any other Affiliate Investment
Instruments that are treated as debt instruments by the relevant Investment
Affiliate and by the Partnership, as indebtedness for United States federal
income tax purposes.
IN WITNESS WHEREOF, the Partnership has executed this certificate this
____ day of _______________, 1997.
HEI PREFERRED FUNDING, LP
BY: HYCAP MANAGEMENT, INC.
AS GENERAL PARTNER
BY: ___________________________
NAME: ____________________
TITLE: ___________________
BY: ___________________________
NAME: ____________________
TITLE: ___________________
(SEE REVERSE FOR ADDITIONAL TERMS)
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Partnership Preferred Security will be
fixed at a rate per annum of ____% of the stated liquidation amount of $25 per
Partnership Preferred Security. Distributions not paid on the scheduled payment
date will accumulate and compound quarterly (to the extent permitted by
applicable law) at the rate of ____ % per annum ("COMPOUNDED DISTRIBUTIONS").
The term "DISTRIBUTIONS" as used herein shall
<PAGE>
mean ordinary cumulative distributions in respect of each quarterly payment
period together with any such Compounded Distributions. Distributions on the
Partnership Preferred Securities will be paid only if, as and when declared in
the sole discretion of the General Partner of the Partnership out of funds
legally available for the payment of such distributions. Amounts available to
the Partnership for distribution to the holders of the Partnership Preferred
Securities will be limited to payments received by the Partnership from Hawaiian
Electric Industries, Inc. and certain of its subsidiaries on Affiliate
Investment Instruments or from Hawaiian Electric Industries, Inc. on the
Partnership Guarantee or on the Eligible Debt Securities. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period on the basis of
the actual number of days elapsed in a 90-day quarter.
Except as otherwise described herein, distributions on the Partnership
Preferred Securities will be cumulative, will accrue from the date of initial
issuance and will be payable quarterly in arrears, on March 31, June 30,
September 30 and December 31 of each year, commencing on March 31, 1997, if, as
and when declared by the General Partner in its sole discretion. If the Trust
Preferred Securities (or, if the Trust is liquidated, the Partnership Preferred
Securities) are in book-entry only form, Distributions will be payable to the
Holders of record of Partnership Preferred Securities as they appear on the
books and records of the Partnership on the relevant record dates, which will be
one Business Day prior to the relevant payment dates. If the Trust or the
Property Trustee is the Holder of the Partnership Preferred Securities, all
distributions of cash shall be made by wire transfer of same day funds to such
Holder by 12:00 Noon, New York City time, on the applicable Distribution Payment
Date. Distributions payable on any Partnership Preferred Securities that are
not punctually paid on any Distribution Payment Date will cease to be payable to
the Person in whose name such Partnership Preferred Securities
<PAGE>
are registered on the relevant record date, and such Distribution will instead
be payable to the Person in whose name such Partnership Preferred Securities are
registered on the record date for payment of such defaulted or accrued
Distribution. If the Trust Preferred Securities (or, if the Trust is liquidated,
the Partnership Preferred Securities) are not in book-entry only form, the
relevant record dates shall be the 15th day of the month of the relevant payment
dates. In the event that any date on which Distributions are payable is not a
Business Day, payment of such Distributions shall be made on the next succeeding
day which is a Business Day (without any interest or other payment in respect of
any such delay) except that, if such Business Day falls in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day (without any reduction in interest or other amounts in respect of any such
early payment), in each case with the same force and effect as if made on the
payment date.
The Partnership Preferred Securities shall be redeemable as provided
in the Agreement of Limited Partnership.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Partnership Preferred Security Certificate to:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(INSERT ASSIGNEE'S SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(INSERT ADDRESS AND ZIP CODE OF ASSIGNEE)
and irrevocably appoints
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
agent to transfer this Partnership Preferred Security Certificate on the books
of the Trust. The agent may substitute another to act for him or her.
Date: ______________________________
Signature: _________________________
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE OTHER SIDE OF THIS PARTNERSHIP
PREFERRED SECURITY CERTIFICATE)
<PAGE>
Exhibit 4(f)
------------
AMENDED AND RESTATED
TRUST AGREEMENT
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST __
DATED AS OF , 1997
--------------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I--INTERPRETATION AND DEFINITIONS
<TABLE>
<CAPTION>
<S> <C> <C>
1.1 Definitions.................................. 1
ARTICLE II--TRUST INDENTURE ACT
2.1 Trust Indenture Act; Application............. 13
2.2 Lists of Holders of Trust Securities......... 13
2.3 Reports by the Property Trustee.............. 14
2.4 Periodic Reports to Property Trustee......... 14
2.5 Evidence of Compliance
with Conditions Precedent.................... 14
2.6 Trust Enforcement Events; Waiver............. 15
2.7 Trust Enforcement Event; Notice.............. 17
ARTICLE III--ORGANIZATION
3.1 Name......................................... 18
3.2 Office....................................... 18
3.3 Purpose...................................... 18
3.4 Authority.................................... 18
3.5 Title to Property of the Trust............... 19
3.6 Powers and Duties of the Regular Trustees.... 19
3.7 Prohibition of Actions by the Trust
and the Trustees............................. 22
3.8 Powers and Duties of the Property Trustee.... 23
3.9 Certain Duties and Responsibilities
of the Property Trustee...................... 26
3.10 Certain Rights of Property Trustee........... 28
3.11 Delaware Trustee............................. 31
3.12 Execution of Documents....................... 31
3.13 Not Responsible for Recitals
or Issuance of Trust Securities.............. 32
3.14 Duration of Trust............................ 32
3.15 Mergers...................................... 32
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ARTICLE IV--SPONSOR
4.1 Responsibilities of the Sponsor.............. 34
4.2 Indemnification and Expenses
of the Property Trustee and the Delaware
Trustee...................................... 36
ARTICLE V--TRUST COMMON SECURITIES HOLDER
5.1 Company's Purchase of Trust
Common Securities............................ 36
5.2 Covenants of the Trust Common
Securities Holder............................ 36
ARTICLE VI--TRUSTEES
6.1 Number of Trustees........................... 36
6.2 Delaware Trustee............................. 37
6.3 Property Trustee; Eligibility................ 37
6.4 Qualifications of Regular Trustees
and Delaware Trustee Generally............... 38
6.5 Regular Trustees............................. 38
6.6 Delaware Trustee............................. 39
6.7 Appointment, Removal and Resignation
of Trustees.................................. 39
6.8 Vacancies among Trustees..................... 41
6.9 Effect of Vacancies.......................... 41
6.10 Meetings..................................... 41
6.11 Delegation of Power.......................... 42
6.12 Merger, Conversion, Consolidation
or Succession to Business.................... 42
ARTICLE VII--DISTRIBUTIONS
7.1 Distributions................................ 43
ARTICLE VIII--ISSUANCE OF TRUST SECURITIES
8.1 Designation and General Provisions
Regarding Trust Securities................... 45
8.2 Redemption of Trust Securities............... 48
8.3 Redemption Procedures........................ 50
8.4 Voting Rights of Trust Preferred
Securities................................... 52
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8.5 Voting Rights of Trust Common Securities..... 56
8.6 Paying Agent................................. 58
8.7 Listing...................................... 59
8.8 Acceptance of Trust Agreement,
Affiliate Investment Instruments,
Guarantees and Agreement of Limited
Partnership.................................. 59
ARTICLE IX--TERMINATION AND LIQUIDATION OF THE TRUST
9.1 Dissolution of Trust......................... 59
9.2 Liquidation Distribution Upon
Termination and Dissolution of the Trust..... 60
ARTICLE X--TRANSFER OF INTERESTS
10.1 Transfer of Trust Securities................. 62
10.2 Transfer of Certificates..................... 63
10.3 Deemed Security Holders...................... 63
10.4 Book-Entry Interests......................... 63
10.5 Notices to Clearing Agency................... 65
10.6 Appointment of Successor Clearing Agency..... 65
10.7 Definitive Trust Preferred
Security Certificates........................ 65
10.8 Mutilated, Destroyed, Lost
or Stolen Certificates....................... 66
ARTICLE XI--LIMITATION OF LIABILITY OF HOLDERS OF TRUST
SECURITIES, TRUSTEES OR OTHERS
11.1 Liability.................................... 67
11.2 Exculpation.................................. 68
11.3 Fiduciary Duty............................... 68
11.4 Indemnification.............................. 70
11.5 Outside Businesses........................... 74
ARTICLE XII--ACCOUNTING
12.1 Fiscal Year.................................. 74
12.2 Certain Accounting Matters................... 75
12.3 Banking...................................... 76
12.4 Withholding.................................. 76
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ARTICLE XIII--AMENDMENTS AND MEETINGS
13.1 Amendments................................... 77
13.2 Meetings of the Holders of Trust
Securities; Action by Written Consent........ 80
ARTICLE XIV--REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
14.1 Representations and Warranties
of Property Trustee.......................... 82
14.2 Representations and Warranties
of Delaware Trustee.......................... 83
ARTICLE XV--MISCELLANEOUS
15.1 Notices...................................... 84
15.2 Governing Law................................ 85
15.3 Intention of the Parties..................... 85
15.4 Headings..................................... 85
15.5 Successors and Assigns....................... 85
15.6 Partial Enforceability....................... 86
15.7 Counterparts................................. 86
EXHIBIT A-1 -- FORM OF PREFERRED SECURITY CERTIFICATE..... A-1.1
EXHIBIT A-2 -- FORM OF COMMON SECURITY CERTIFICATE........ A-2.1
</TABLE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
SECTION OF
SECTION OF ACT TRUST AGREEMENT
-------------- ---------------
<S> <C>
310(a)(1) and (2)........................ 6.3(a)
310(a)(3) and (4)........................ Inapplicable
310(b)................................... 6.3(b)
310(c)................................... Inapplicable
311(a)................................... 2.2(b)
311(b)................................... 2.2(b)
311(c)................................... Inapplicable
312(a)................................... 2.2(a)
312(b)................................... 2.2(b)
312(c)................................... 2.2(b)
313(a),(b)(2),(c) and (d)................ 2.3, 12.2(b)
313(b)(1)................................ Inapplicable
314(a)................................... 2.4
314(b)................................... Inapplicable
314(c)(1) and (2)........................ 2.5
314(c)(3)................................ Inapplicable
314(d)................................... Inapplicable
314(e)................................... 1.1
314(f)................................... Inapplicable
315(a) and (d)........................... 3.9(b)
315(b)................................... 2.7
315(c)................................... 3.9(a)
315(e)................................... 2.1(a)
316(a)(1)................................ 2.6, 8.4, and 8.5
316(a)(2)................................ Not required
316(a) (last sentence)................... 1.1
316(b)................................... 2.1
316(c)................................... 3.6(d)
317(a)................................... 2.1
317(b)................................... 3.8(g)
318(a)................................... 2.1(c)
</TABLE>
- -------------------------
* This Cross-Reference Table does not constitute part of this Trust
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE>
AMENDED AND RESTATED
TRUST AGREEMENT
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST __
AMENDED AND RESTATED TRUST AGREEMENT (this "Trust Agreement") dated
and effective as of _____________, 1997, by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the Holders (as defined herein), from
time to time, of undivided beneficial interests in the Trust to be issued
pursuant to this Trust Agreement;
WHEREAS, certain of the Trustees and the Sponsor established HAWAIIAN
ELECTRIC INDUSTRIES CAPITAL TRUST __ (the "Trust"), a statutory business trust
created under the Business Trust Act (as defined herein) pursuant to a Trust
Agreement dated as of December 19, 1996 (the "Original Declaration"), and a
Certificate of Trust filed with the Secretary of State of the State of Delaware
on December 23, 1996, for the sole purpose of issuing and selling certain
securities representing undivided beneficial interests in the assets of the
Trust and investing the proceeds thereof in the Partnership Preferred Securities
(as defined herein);
WHEREAS, the parties hereto by this Trust Agreement, wish to amend and
restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the Holders, from time to time, of the securities
representing undivided beneficial ownership interests in the assets of the Trust
issued hereunder, subject to the provisions of this Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions.
-----------
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "this Trust Agreement" are to this Trust
Agreement as modified, supplemented or amended from time to time;
(d) all references in this Trust Agreement to Articles and Sections
and Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Trust Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Trust Agreement unless otherwise defined in this Trust
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) a term used in this Trust Agreement and not otherwise defined
herein shall have the meaning ascribed to such term in the Agreement of Limited
Partnership.
"Affiliate" means, with respect to any specified person, any other
person that directly or indirectly controls or is controlled by, or is under
common control with such specified person.
1
<PAGE>
"Affiliate Investment Instruments" has the meaning set forth in
Section 7.1 of the Agreement Limited Partnership.
"Agreement of Limited Partnership" means the Amended and Restated
Agreement of Limited Partnership of HEI Preferred Funding, LP dated as of
1997.
- --------------,
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as set forth in Section 10.4 of this
Trust Agreement.
"Business Day" means any day other than a day on which banking
institutions in The City of New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. Section 3801 et seq., as it may be amended from time to time,
or any successor legislation.
"Certificate" means a Trust Common Security Certificate or a Trust
Preferred Security Certificate.
"Change in 1940 Act Law" means any change on or after the date of the
prospectus supplement relating to the issuance of the Trust Preferred
Securities in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority with the result that there is more than an insubstantial
risk that the Trust is or will be considered an "investment company" which is
required to be registered under the 1940 Act.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Trust Preferred Securities and in whose name or in the name of a nominee
of that organization shall be registered a Global Certificate and which shall
undertake to effect book-entry transfers and pledges of beneficial interests in
the Trust Preferred Securities.
2
<PAGE>
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book-entry transfers and pledges of interest in securities
deposited with the Clearing Agency.
"Closing Date" means _______________, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security Holder of the Trust" means the Company in its
capacity as Holder of the Trust Common Security.
"Company" means Hawaiian Electric Industries, Inc., a Hawaii
corporation.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, director, shareholder, member, partner, employee,
representative or agent of the Trust or its Affiliates.
"Compounded Distributions" has the meaning set forth in Section 7.1(a)
of this Trust Agreement.
"Corporate Trust Office" means the principal corporate trust office of
the Property Trustee at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at
101 Barclay Street, 21st Floor, New York, NY 10286.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Trust Securities.
3
<PAGE>
"Definitive Trust Preferred Security Certificates" has the meaning set
forth in Section 10.4 of this Trust Agreement.
"Delaware Trustee" has the meaning set forth in Section 6.2 of this
Trust Agreement.
"Distribution" has the meaning set forth in Section 7.1(a) of this
Trust Agreement.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
11.4(b) of this Trust Agreement.
"Fiscal Period" has the meaning set forth in Section 1.1 of the
Agreement of Limited Partnership.
"Fiscal Year" has the meaning set forth in Section 12.1 of this Trust
Agreement.
"General Partner" means Hycap Management, Inc., a Delaware
corporation and wholly-owned subsidiary of the Company, in its capacity as the
general partner of the Partnership, its permitted successors, or any successor
general partner in the Partnership admitted as such pursuant to the Agreement of
Limited Partnership.
"Global Certificate" has the meaning set forth in Section 10.4 of this
Trust Agreement.
"Holder" means a Person in whose name a certificate representing a
Trust Security is registered, such Person being a beneficial owner within the
meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
4
<PAGE>
"Initial Debentures" has the meaning set forth in Section 7.1(b) of
the Agreement of Limited Partnership.
"Investment Affiliate" means the Company or any corporation,
partnership, limited liability company or other entity (other than the
Partnership or the Trust) that is controlled by the Company and is not an
Investment Company by reason of Section 3(a) or 3(b) of the 1940 Act.
"Investment Company" means an investment company as defined in the
1940 Act.
"Investment Guarantee" means any guarantee by the Company with respect
to (1) payment of interest, principal and other payment terms of Affiliate
Investment Instruments that are debt securities of an Investment Affiliate and
(2) the payment of dividends, distributions and other payment terms of Affiliate
Investment Instruments that are preferred or preference stock of an Investment
Affiliate when, as and if declared by such Investment Affiliate.
"Legal Action" has the meaning set forth in Section 3.6(h) of this
Trust Agreement.
"List of Holders" has the meaning set forth in Section 2.2(a) of this
Trust Agreement.
"Majority in liquidation amount of the Trust Securities" means, except
as provided in the terms of the Trust Preferred Securities or by the Trust
Indenture Act, Holders of outstanding Trust Securities voting together as a
single class or, as the context may require, Holders of outstanding Trust
Preferred Securities or the Holder of the outstanding Trust Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Trust Securities or all outstanding Trust Securities of the relevant class, as
the case may be.
5
<PAGE>
"Ministerial Action" means, a ministerial action (such as filing a
form or making an election or pursuing some other similar reasonable measure)
which in the sole judgment of the Company has or will cause no adverse effect on
the Trust, the Partnership, the Company, or the Holders of the Trust Securities
and will involve no material cost.
"Nasdaq" means the National Association of Securities Dealers
Automated Quotation System.
"1940 Act" means the Investment Company Act of 1940, as amended from
time to time, or any successor legislation.
"Officers' Certificate" means, with respect to any Person (who is not
an individual), a certificate signed by two authorized officers of such Person,
and, with respect to a natural person, a certificate signed by such person. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Partnership" means HEI Preferred Funding, LP, a Delaware limited
partnership formed pursuant to the Agreement of Limited Partnership and any
successor entity thereto.
6
<PAGE>
"Partnership Enforcement Event" has the meaning set forth in Section
6.2(h)(i) of the Agreement of Limited Partnership.
"Partnership Guarantee" means the Partnership Guarantee Agreement
between the Company and The Bank of New York, as trustee, dated as of
_____________, 1997, by the Company in favor of the Partnership Preferred
Security Holders with respect to the Partnership Preferred Securities, as
amended or supplemented from time to time.
"Partnership Preferred Securities" has the meaning set forth in
Section 1.1 of the Agreement of Limited Partnership.
"Partnership Special Event" has the meaning set forth in Section 1.1
of the Agreement of Limited Partnership.
"Payment Amount" has the meaning set forth in Section 7.1(a) of this
Trust Agreement.
"Paying Agent" has the meaning set forth in Section 3.8(g) of this
Trust Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Security Beneficial Owner" means, with respect to a Book-
Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, and in each case in accordance
with the rules of such Clearing Agency).
"Property Account" has the meaning set forth in Section 3.8(c) of this
Trust Agreement.
7
<PAGE>
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 6.3 of this Trust Agreement.
"Pro Rata" means, in reference to any distributions on or redemptions
of Trust Securities or the distribution of Partnership Preferred Securities or
any other payment with respect to Trust Securities in connection with a Trust
Special Event or liquidation of the Trust, pro rata to each Holder of Trust
Securities according to the aggregate liquidation amount of the Trust Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Trust Securities outstanding.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Redemption Price" has the meaning set forth in Section 8.2(a) of this
Trust Agreement.
"Regular Trustee" has the meaning set forth in Section 6.1 of this
Trust Agreement.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
officer within the Corporate Trust Office of the Property Trustee, including any
vice-president, any assistant vice-president, any secretary, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Property Trustee customarily performing functions
similar to those performed by any of the above designated officers, who has
direct responsibility for the administration of the Trust, and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Rule 3a-5" means Rule 3a-5 under the 1940 Act.
8
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Special Representative" has the meaning set forth in Section
6.2(h)(i) of the Agreement of Limited Partnership.
"Sponsor" means the Company or any successor entity in a merger,
conversion, consolidation or amalgamation, in its capacity as sponsor of the
Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
6.7(b) of this Trust Agreement.
"Successor Entity" has the meaning set forth in Section 3.15 of this
Trust Agreement.
"Successor Property Trustee" has the meaning set forth in Section
6.7(b) of this Trust Agreement.
"Successor Trust Securities" has the meaning set forth in Section 3.15
of this Trust Agreement.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii) of
this Trust Agreement.
"Tax Action" means (a) an amendment to, change in or announced
proposed change in the laws (or any regulations thereunder) of the United States
or any political subdivision or taxing authority thereof or therein, (b) a
judicial decision interpreting, applying or clarifying such laws or regulations,
(c) an administrative pronouncement or action that represents an official
position (including a clarification of an official position) of the governmental
authority or regulatory body making such administrative pronouncement or taking
such action, or (d) a threatened challenge asserted in connection with an audit
of the Company or any of its subsidiaries, the Partnership or the Trust, or a
threatened challenge asserted in writing against any other taxpayer that has
raised capital through the issuance of securities that are substantially similar
to the Initial Debentures, the Partnership Preferred Securities or the Trust
Preferred Securities, which amendment or change is adopted or which decision,
pronouncement or
9
<PAGE>
proposed change is announced or which action, clarification or challenge occurs
on or after the date of the prospectus related to the issuance of the Trust
Preferred Securities.
"10% in liquidation amount of the Trust Securities" means, except as
provided in the terms of the Trust Preferred Securities or by the Trust
Indenture Act, Holders of outstanding Trust Securities voting together as a
single class or, as the context may require, Holders of outstanding Trust
Preferred Securities or the Holder of the outstanding Trust Common Securities
voting separately as a class, who are the record owners of 10% or more of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Trust Securities or all outstanding Trust Securities of the relevant class, as
the case may be.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury Department, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust Common Security" has the meaning set forth in Section 8.1 of
this Trust Agreement.
"Trust Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
"Trust Common Securities Guarantee" means the Trust Common Securities
Guarantee Agreement dated as of ____________, 1997, entered into by the Company,
as Guarantor, for the benefit of the holders of the Trust Common Securities.
"Trust Dissolution Tax Opinion" means an opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that there has been a Trust Tax Event.
10
<PAGE>
"Trust Enforcement Event" means the occurrence, at any time, of (i)
arrearages on distributions on the Trust Preferred Securities that shall exist
for six consecutive quarterly distribution periods, (ii) a default by the
Company in respect of any of its obligations under the Trust Preferred
Securities Guarantee or (iii) a Partnership Enforcement Event.
"Trust Guarantees" means the Trust Common Securities Guarantee and the
Trust Preferred Securities Guarantee, collectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trust Investment Company Event" means that the Company shall have
requested and received and shall have delivered to the Regular Trustees an
opinion of nationally recognized independent legal counsel experienced in such
matters to the effect that, as a result of a Change in 1940 Act Law, there is
more than an insubstantial risk that the Trust is or will be considered an
"investment company" which is required to be registered under the 1940 Act.
"Trust Liquidation" has the meaning set forth in Section 9.2(a) of
this Trust Agreement.
"Trust Liquidation Distribution" has the meaning set forth in Section
9.2(a) of this Trust Agreement.
"Trust Preferred Securities Guarantee" has the meaning set forth in
Section 1.1 of the Agreement of Limited Partnership.
"Trust Preferred Security" has the meaning set forth in Section 8.1(a)
of this Trust Agreement.
"Trust Preferred Security Beneficial Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in
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each case in accordance with the rules of such Clearing Agency).
"Trust Preferred Security Certificate" means a certificate
representing a Trust Preferred Security substantially in the form of
Exhibit A-1.
"Trust Redemption Tax Opinion" means an opinion of nationally
recognized independent tax counsel (which may be counsel for the Company)
experienced in such matters that there has been a Trust Tax Event, and following
such Trust Tax Event there is more than an insubstantial risk that interest
payable by one or more of the Investment Affiliates with respect to the Initial
Debentures issued by such Investment Affiliate is not, or will not be,
deductible by such Investment Affiliate for United States federal income tax
purposes even if the Partnership Preferred Securities were distributed to the
Holders of the Trust Securities in liquidation of such Holders' interests in the
Trust.
"Trust Securities" means the Trust Common Securities and the Trust
Preferred Securities.
"Trust Special Event" means a Trust Tax Event or a Trust Investment
Company Event.
"Trust Tax Event" means that the Company shall have requested and
received and shall have delivered to the Regular Trustees, a Trust Dissolution
Tax Opinion to the effect that there has been a Tax Action that results in there
being more than an insubstantial risk that (i) the Trust is, or will be, subject
to United States federal income tax with respect to income accumulated or
received on the Partnership Preferred Securities, (ii) the Trust is, or will be,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges or (iii) interest payable by an Investment Affiliate with
respect to the Initial Debentures is not, or will not be, deductible by such
Investment Affiliate for United States federal income tax purposes.
"Trustee" or "Trustees" means each Person who has signed this Trust
Agreement as a trustee, so long as such Person shall continue in office in
accordance with the terms
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hereof, and all other Persons who may from time to time be duly appointed,
qualified and serving as Trustees in accordance with the provisions hereof, and
references herein to a Trustee or the Trustees shall refer to such Person or
Persons solely in their capacity as trustees hereunder.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions, including, but not
limited to, Sections 315(e), 316(b) and 317(a) of the Trust Indenture Act.
(b) The Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Trust Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such duties imposed by the Trust
Indenture Act shall control.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
Section 2.2 Lists of Holders of Trust Securities.
------------------------------------
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the Trust
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Property Trustee by the
Sponsor and the Regular Trustees on
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behalf of the Trust, and (ii) at any other time, within 30 days of receipt by
the Trust of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it or which
it receives in the capacity as Paying Agent (if acting in such capacity)
provided that the Property Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act. The Property
Trustee and Sponsor are protected under Section 312(c) of the Trust Indenture
Act.
Section 2.3 Reports by the Property Trustee. Within 60 days after
-------------------------------
May 15 of each year, the Property Trustee shall provide to the Holders of the
Trust Preferred Securities such reports as are required by Section 313(a) of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Property Trustee shall also comply with
Section 313(b) of the Trust Indenture Act, if and as required, in the form and
manner provided by Section 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of Section 313(d) of the Trust Indenture
Act.
Section 2.4 Periodic Reports to Property Trustee. Each of the
------------------------------------
Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee such documents, reports and information as required by Section
314(a) of the Trust Indenture Act, if any, and the compliance certificate
required by Section 314(a) of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314(a) of the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions Precedent. Each
------------------------------------------------
of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to
the Property Trustee such evidence of compliance with any conditions precedent,
if any, provided for in this Trust Agreement that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may be
given in the form of an Officers' Certificate.
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Section 2.6 Trust Enforcement Events; Waiver.
--------------------------------
(a) The Holders of a Majority in liquidation amount of Trust Preferred
Securities may, by vote, on behalf of the Holders of all of the Trust Preferred
Securities, waive any past Trust Enforcement Event in respect of the Trust
Preferred Securities and its consequences, provided that, if the underlying
event of default or Partnership Enforcement Event:
(i) is not waivable under the Trust Preferred Securities
Guarantee or the Agreement of Limited Partnership, the Trust Enforcement Event
under this Trust Agreement shall also not be waivable; or
(ii) requires the consent or vote of the Holders of greater than
a Majority in liquidation amount of the Trust Preferred Securities to be waived
under the Trust Preferred Securities Guarantee or the Partnership Preferred
Securities to be waived under the Agreement of Limited Partnership (a "Super
Majority"), the Trust Enforcement Event under this Trust Agreement may only be
waived by the vote of the Holders of at least the relevant Super Majority in
liquidation amount of the Trust Preferred Securities.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Trust Agreement and
the Trust Securities, as permitted by the Trust Indenture Act. Upon such
waiver, any such default shall cease to exist, and any Trust Enforcement Event
with respect to the Trust Preferred Securities arising therefrom shall be deemed
to have been cured, for every purpose of this Trust Agreement, but no such
waiver shall extend to any subsequent or other default or Trust Enforcement
Event with respect to the Trust Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Trust Preferred Securities
of Trust Enforcement Events with respect to the Trust Preferred Securities shall
also be deemed to constitute a waiver by the Holder of the Trust Common
Securities of any such Trust Enforcement Event with respect to the Trust Common
Securities for all purposes of this Trust Agreement without any further
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act, vote, or consent of the Holder of the Trust Common Securities.
(b) The Holder of the Trust Common Securities may waive any past
Trust Enforcement Event with respect to the Trust Common Securities and its
consequences, provided that, if the underlying event of default or Partnership
Enforcement Event:
(i) is not waivable under the Trust Common Securities
Guarantee or the Agreement of Limited Partnership, except where the Holder of
the Trust Common Securities is deemed to have waived such Trust Enforcement
Event under this Trust Agreement as provided below in this Section 2.6(b), the
Trust Enforcement Event under this Trust Agreement shall also not be waivable;
or
(ii) requires the consent or vote of the Holders of a Super
Majority to be waived, except where the Holder of the Trust Common Securities is
deemed to have waived such Trust Enforcement Event under the Trust Agreement as
provided below in this Section 2.6(b), the Trust Enforcement Event under this
Trust Agreement may only be waived by the vote of the Holder of the Trust Common
Securities; provided further, the Holder of Trust Common Securities will be
deemed to have waived any such Trust Enforcement Event and all Trust Enforcement
Events with respect to the Trust Common Securities and its consequences until
all Trust Enforcement Events with respect to the Trust Preferred Securities have
been cured, waived or otherwise eliminated, and until such Trust Enforcement
Events have been so cured, waived or otherwise eliminated, the Property Trustee
will be deemed to be acting solely on behalf of the Holders of the Trust
Preferred Securities and only the Holders of the Trust Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Trust Securities. The foregoing provisions of this Section 2.6(b) shall be
in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and
such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Trust Agreement and the Trust Securities, as
permitted by the Trust Indenture Act.
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Subject to the foregoing provisions of this Section 2.6(b), upon such waiver,
any such default shall cease to exist and any Trust Enforcement Event with
respect to the Trust Common Securities arising therefrom shall be deemed to have
been cured for every purpose of this Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Trust Enforcement Event with
respect to the Trust Common Securities or impair any right consequent thereon.
(c) A waiver of Partnership Enforcement Events under the Agreement of
Limited Partnership by the Property Trustee at the direction of the Holders of
the Trust Preferred Securities constitutes a waiver of the corresponding Trust
Enforcement Event under this Trust Agreement. The foregoing provisions of this
Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture
Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Trust Agreement and the Trust Securities, as permitted by the
Trust Indenture Act.
Section 2.7 Trust Enforcement Event; Notice. The Property Trustee
-------------------------------
shall, within 90 days after the occurrence of a Trust Enforcement Event,
transmit by mail, first class postage prepaid, to the Holders of the Trust
Securities as the names and addresses of the Holders appear on the books and
records of the Trust, notices of all defaults with respect to the Trust
Securities actually known to a Responsible Officer of the Property Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7 being hereby defined to be
defaults as defined in the Trust Guarantees or the Agreement of Limited
Partnership, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Affiliate Investment Instruments or in the payment of any
sinking fund installment established for the Affiliate Investment Instruments,
the Property Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Property Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Trust Securities.
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ARTICLE III
ORGANIZATION
Section 3.1 Name. The Trust is named "Hawaiian Electric Industries
----
Capital Trust __", as such name may be modified from time to time by the Regular
Trustees following written notice to the Holders of Trust Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.
Section 3.2 Office. The address of the principal office of the Trust
------
is c/o Hycap Management, Inc., 300 Delaware Avenue, Suite 1704, Wilmington,
Delaware 19806. On ten Business Days written notice to the Holders of Trust
Securities, the Regular Trustees may designate another principal office.
Section 3.3 Purpose. The exclusive purposes and functions of the
-------
Trust are (a) to issue and sell Trust Securities and to use the proceeds from
such sale to acquire the Partnership Preferred Securities, and (b) except as
otherwise limited herein, to engage in only those other activities necessary or
incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any activity that would be inconsistent
with the Trust being classified for United States federal income tax purposes as
a grantor trust.
Section 3.4 Authority. Subject to the limitations provided in this
---------
Trust Agreement and to the specific duties of the Property Trustee, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees and the Sponsor in
accordance with their powers shall constitute the act of and serve to bind the
Trust and an action taken by the Property Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees and the Sponsor acting on behalf of the
Trust, no Person shall be required to inquire into the authority of the Trustees
or the Sponsor to bind the Trust. Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees and the Sponsor
as set forth in this Trust Agreement.
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Section 3.5 Title to Property of the Trust. Except as provided in
------------------------------
Section 3.8 with respect to the Partnership Preferred Securities and the
Property Account or as otherwise provided in this Trust Agreement, legal title
to all assets of the Trust shall be vested in the Trust. The Holders shall not
have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial ownership interest in the assets of the Trust.
Section 3.6 Powers and Duties of the Regular Trustees. The Regular
-----------------------------------------
Trustees shall have the exclusive power, duty and authority to cause the Trust
to engage in the following activities:
(a) To issue and sell the Trust Securities in accordance with this
Trust Agreement, and to execute and deliver (after authentication thereof by the
Property Trustee if such execution is by the facsimile signature of a Regular
Trustee) certificates representing the Trust Securities; provided, however, that
the Trust may issue no more than one series of Trust Preferred Securities and no
more than one series of Trust Common Securities, and, provided further, that
there shall be no interests in the Trust other than the Trust Securities, and
the issuance of Trust Securities shall be limited to a one-time, simultaneous
issuance of both Trust Preferred Securities and Trust Common Securities on the
Closing Date;
(b) To acquire the Partnership Preferred Securities with the proceeds
of the sale of the Trust Securities, including the execution and delivery of the
Agreement of Limited Partnership in connection therewith on behalf of the Trust,
as the initial limited partner; provided, however, that the Regular Trustees
shall cause legal title to the Partnership Preferred Securities to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Trust Preferred Securities and the Holder of the Trust Common Securities;
(c) To give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Trust Special Event; provided that the Regular Trustees
shall consult with the Sponsor and the Property Trustee before taking or
refraining from taking any Ministerial Action in relation to a Trust Special
Event;
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(d) To establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Trust Preferred Securities and the Holder of the Trust
Common Securities as to such actions and applicable record dates;
(e) To give prompt written notice to the Holders of the Trust
Securities of any notice received from the Partnership of the General Partner's
election not to make a current, quarterly distribution on the Partnership
Preferred Securities under the Agreement of Limited Partnership;
(f) To take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Trust Securities;
(g) To bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless, pursuant to Section 3.8(f), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) To employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) To cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) To give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
(k) To incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) To act as, or appoint another Person to act as, registrar and
transfer agent for the Trust Securities;
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(m) To execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(n) To take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Trust Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created; and
(o) To take any action, or to take no action, not inconsistent with
this Trust Agreement or with applicable law, that the Regular Trustees determine
in their discretion to be necessary or desirable in carrying out the activities
of the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the 1940 Act; and
(ii) taking no action which would be inconsistent with the Trust
being classified as a grantor trust for United States federal income tax
purposes; provided that such action does not materially adversely affect the
interests of Holders; and
(p) To take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
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Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Partnership pursuant to Section 9.1 of the
Agreement of Limited Partnership.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
The Trust shall not, and the Trustees (including the Property Trustee) shall
cause the Trust not to, engage in any activity other than as required or
authorized by this Trust Agreement. In particular, the Trust shall not and the
Trustees (including the Property Trustee) shall cause the Trust not to:
(a) invest any proceeds received by the Trust from holding the
Partnership Preferred Securities, but shall distribute all such proceeds to
Holders of Trust Securities pursuant to the terms of this Trust Agreement and of
the Trust Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans or incur any indebtedness or acquire any securities
other than the Partnership Preferred Securities;
(e) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Trust Securities in any way whatsoever;
(f) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Trust Securities;
(g) other than as set forth herein, (A) cause the Special
Representative to direct the time, method and place of conducting any proceeding
for any remedy available to the
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Special Representative or exercising any trust or power conferred upon the
Special Representative with respect to the Partnership Preferred Securities, the
Affiliate Investment Instruments, and the Investment Guarantees, (B) cause the
Special Representative to waive any past default that is waivable under the
Agreement of Limited Partnership, the Affiliate Investment Instruments or the
Investment Guarantees, (C) cause the Special Representative to exercise any
right to rescind or annul any declaration that the principal of, or other
amounts in respect of, any Affiliate Investment Instruments is due and payable
or (D) consent to any amendment, modification or termination of the Agreement of
Limited Partnership or the Partnership Preferred Securities where such consent
shall be required; and
(h) other than in connection with the liquidation of the Trust
pursuant to a Trust Special Event or upon redemption of all the Trust
Securities, file a certificate of cancellation of the Trust.
Section 3.8 Powers and Duties of the Property Trustee.
-----------------------------------------
(a) The legal title to the Partnership Preferred Securities shall be
owned by and held of record in the name of the Property Trustee in trust for the
benefit of the Holders of the Trust Securities. The right, title and interest
of the Property Trustee to the Partnership Preferred Securities shall vest
automatically in each Person who may hereafter be appointed as Property Trustee
in accordance with Section 6.7. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Partnership
Preferred Securities have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Partnership Preferred Securities to the Regular Trustees or to
the Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
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(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the Trust Securities
and, upon the receipt of payments of funds made in respect of the Partnership
Preferred Securities held by the Property Trustee, deposit such funds into the
Property Account and make payments to the Holders of the Trust Securities from
the Property Account in accordance with Section 7.1. Funds in the Property
Account shall be held uninvested until disbursed in accordance with this Trust
Agreement. The Property Account shall be an account that is maintained with a
banking institution authorized to exercise corporate trust powers and having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authority;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Trust Securities to the
extent the Partnership Preferred Securities are redeemed; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Trust Securities, engage in
such ministerial activities as shall be necessary or appropriate to effect the
distribution of the Partnership Preferred Securities to Holders of Trust
Securities upon the occurrence of a Trust Special Event.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Trust Securities.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with (i) a Trust Enforcement Event of which a Responsible
Officer of the Property Trustee has actual knowledge or (ii) the Property
Trustee's duties and obligations under this Trust Agreement or the Trust
Indenture Act.
(f) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a
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Holder of Partnership Preferred Securities and, if a Trust Enforcement Event
occurs and is continuing, the Property Trustee shall, for the benefit of Holders
of the Trust Securities, enforce its rights as Holder of the Partnership
Preferred Securities subject to the rights of the Holders pursuant to the terms
of such Trust Securities.
(g) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Trust Securities and any
such Paying Agent shall comply with Section 317(b) of the Trust Indenture Act.
Any Paying Agent may be removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Property Trustee.
(h) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Trust Securities pursuant to
the terms of the Trust Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 6.7.
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
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Section 3.9 Certain Duties and Responsibilities of the Property
---------------------------------------------------
Trustee.
- -------
(a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the curing or waiver of all Trust Enforcement Events
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Trust Agreement and no implied covenants shall be
read into this Trust Agreement against the Property Trustee. In case a Trust
Enforcement Event has occurred (that has not been cured or waived pursuant to
Section 2.6) of which a Responsible Officer of the Property Trustee has actual
knowledge, the Property Trustee shall exercise such of the rights and powers
vested in it by this Trust Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event and
after the curing or waiving of all such Trust Enforcement Events that may have
occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this Trust Agreement and the
Property Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Trust Agreement, and no
implied covenants or obligations shall be read into this Trust Agreement against
the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee and conforming to the
requirements of this Trust Agreement; but in the case of any such certificates
or opinions that by any
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provision hereof are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Trust
Agreement;
(ii) the Property Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
(iii) subject to the requirement of the Property Trustee
receiving a tax opinion as set forth in Section 8.4(d) or 8.5(c), as the case
may be, the Property Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation amount of
the Trust Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this Trust Agreement;
(iv) no provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Trust Agreement or indemnity reasonably
satisfactory to the Property Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safekeeping and physical preservation of the Partnership Preferred
Securities and the Property Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability afforded to the
Property Trustee under this Trust Agreement and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness,
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existence or sufficiency of the Partnership Preferred Securities or the payment
of any taxes or assessments levied thereon or in connection therewith;
(vii) money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Account maintained by
the Property Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Trust Agreement, nor shall the Property Trustee be
liable for any default or misconduct of the Regular Trustees or the Sponsor.
Section 3.10 Certain Rights of Property Trustee.
----------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees acting on behalf of the Trust contemplated by this Trust Agreement
shall be sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Trust Agreement,
the Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees;
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(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may, at the expense of the Sponsor,
consult with counsel or other experts and the advice or opinion of such counsel
and experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion; such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement at the
request or direction of any Holder, unless (a) such Holder shall have provided
to the Property Trustee security and indemnity, reasonably satisfactory to the
Property Trustee, against the fees, charges, costs, expenses (including
attorneys' fees and expenses and the expenses of the Property Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable advances as
may be requested by the Property Trustee and (b) the Property Trustee has
obtained the legal opinions, if any, required by Section 8.4(d) or 8.5(c), as
the case may be, of this Agreement; provided, that, nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the
occurrence of a Trust Enforcement Event, of its obligation to exercise the
rights and powers vested in it by this Trust Agreement;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond,
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debenture, note, other evidence of indebtedness or other paper or document, but
the Property Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Trust Securities, and the
signature of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be required to
inquire as to the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this Trust Agreement, both of
which shall be conclusively evidenced by the Property Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Trust Agreement
the Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action hereunder,
the Property Trustee (a) may request instructions from the Holders of the Trust
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Trust Securities as would be entitled to
direct the Property Trustee under the terms of the Trust Securities in respect
of such remedy, right or action, (b) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(c) shall be protected in conclusively relying on or acting in accordance with
such instructions; provided, however, that the Property Trustee shall not be
required to take any action unless it shall have obtained such legal opinions,
if any, required by Sections 8.4(d) or 8.5(c), as the case may be, of this
Agreement; and
(xi) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under
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any obligation to take any action that is discretionary under the provisions of
this Trust Agreement.
In the event that the Property Trustee is also acting as
authenticating agent, Paying Agent, transfer agent and security registrar, the
rights and protections afforded to the Property Trustee pursuant to this Article
III shall also be afforded to such authenticating agent, Paying Agent, transfer
agent and security registrar.
(b) No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 3.11 Delaware Trustee. Notwithstanding any provision of this
----------------
Trust Agreement other than Section 6.2, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Regular Trustees or the Property Trustee
described in this Trust Agreement. Except as set forth in Section 6.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act. In no
event shall the Property Trustee or the Delaware Trustee be liable for any act
or omission of any of the Regular Trustees hereunder.
Section 3.12 Execution of Documents. Unless otherwise determined by
----------------------
the Regular Trustees, and except as otherwise required by the Business Trust Act
or applicable law, any Regular Trustee is authorized to execute on behalf of the
Trust any documents that the Regular Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6.
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Section 3.13 Not Responsible for Recitals or Issuance of Trust
-------------------------------------------------
Securities. The recitals contained in this Trust Agreement and the Trust
- ----------
Securities shall be taken as the statements of the Sponsor, and the Trustees do
not assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or any
part thereof. The Trustees make no representations as to the validity or
sufficiency of this Trust Agreement or the Trust Securities.
Section 3.14 Duration of Trust. The Trust, unless dissolved pursuant
-----------------
to the provisions of Article IX hereof, shall have perpetual existence.
Section 3.15 Mergers.
-------
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c) or Section 9.2(a).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Trust Securities, the Delaware Trustee or the
Property Trustee, consolidate, amalgamate, merge with or into, or be replaced by
a trust organized as such under the laws of any State of the United States;
provided that:
(i) if the Trust is not the survivor, such successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Trust Securities; or
(B) substitutes for the Trust Preferred Securities other
securities having substantially the same terms as the Trust Preferred Securities
(the "Successor Trust Securities") so long as the Successor Trust Securities
rank the same as the Trust Preferred Securities rank with respect to
Distributions, assets and payments upon liquidation, redemption and otherwise;
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(ii) the Company expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the Property
Trustee as the Holder of the Partnership Preferred Securities;
(iii) the Trust Preferred Securities or any Successor Trust
Securities are listed, or any Successor Trust Securities will be listed upon
notification of issuance, on any national securities exchange or with another
organization on which the Trust Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Trust Preferred Securities (including any Successor Trust
Securities) to be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the Holders
of the Trust Preferred Securities (including any Successor Trust Securities) in
any material respect;
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) the Company guarantees the obligations of such Successor
Entity under the Successor Trust Securities at least to the extent provided by
the Trust Guarantees; and
(viii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally recognized
independent counsel (which may be counsel to the Sponsor) to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement will not adversely affect the rights, preferences and privileges of
the Holders of the Trust Preferred Securities (including any Successor Trust
Securities) in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity);
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(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be required to
register as an Investment Company under the 1940 Act;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will not be classified as an
association or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes; and
(D) following such merger, consolidation, amalgamation or
replacement, the Partnership will not be classified as an association or a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Trust Preferred
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as an
association or a publicly traded partnership taxable as a corporation for
United States federal income tax purposes.
ARTICLE IV
SPONSOR
Section 4.1 Responsibilities of the Sponsor. In connection with the
-------------------------------
issue and sale of the Trust Preferred Securities, the Sponsor shall have the
exclusive right and responsibility to engage in the following activities:
(a) To execute and file with the Commission the registration statement
on Form S-3, including any amendments thereto, pertaining to the Trust Preferred
Securities;
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(b) To execute and file any documents or take any action as determined
necessary by the Sponsor in order to qualify or register all or part of the
Trust Preferred Securities in any jurisdiction;
(c) To execute and file an application to the New York Stock Exchange,
Inc. or any other national stock exchange or the Nasdaq Stock Market's National
Market System for listing upon notice of issuance of the Trust Preferred
Securities;
(d) To execute and file with the Commission a registration statement
on Form 8-A, including any amendments thereto, relating to the registration of
the Trust Preferred Securities under Section 12(b) of the Exchange Act;
(e) To negotiate, execute and enter into an underwriting agreement
providing for the sale of the Trust Preferred Securities; and
(f) To execute and enter into the Agreement of Limited Partnership;
Section 4.2 Indemnification and Expenses of the Property Trustee and
--------------------------------------------------------
the Delaware Trustee. To the extent the Partnership fails to do so, the Sponsor
- --------------------
agrees to indemnify the Property Trustee and the Delaware Trustee and their
respective officers, directors, employees and agents for, and to hold each of
them harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Property Trustee or the Delaware
Trustee, as the case may be, arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including the costs and
expenses of defending either of them against any claim or liability in
connection with the exercise or performance of any of their respective powers or
duties hereunder; the provisions of this Section 4.2 shall survive
the resignation or removal of the Delaware Trustee or the Property Trustee or
the termination of this Trust Agreement.
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ARTICLE V
TRUST COMMON SECURITIES HOLDER
Section 5.1 Company's Purchase of Trust Common Securities. On the
---------------------------------------------
Closing Date the Company will purchase all of the Trust Common Securities issued
by the Trust, for an amount at least equal to 3% of the capital of the Trust, at
the same time as the Trust Preferred Securities are sold.
Section 5.2 Covenants of the Trust Common Securities Holder. For so
-----------------------------------------------
long as the Trust Preferred Securities remain outstanding, the Company will
covenant (i) to maintain directly 100 percent ownership of the Trust Common
Securities, (ii) to cause the Trust to remain a statutory business trust and not
to voluntarily dissolve, wind up, liquidate, or be terminated, except as
permitted by this Trust Agreement, (iii) to use its commercially reasonable
efforts to ensure that the Trust will not be an Investment Company for purposes
of the 1940 Act, and (iv) to take no action which would be reasonably likely to
cause the Trust to be classified as an association or a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes.
ARTICLE VI
TRUSTEES
Section 6.1 Number of Trustees. The number of Trustees initially
------------------
shall be five (5), and:
(a) At any time before the issuance of any Trust Securities, the
Sponsor may, by written instrument, increase or decrease the number of Trustees;
and
(b) After the issuance of any Trust Securities, the number of Trustees
may be increased or decreased by vote of the Holder of Trust Common Securities
voting as a class; provided, however, that the number of Trustees shall in no
event be less than three (3); provided further that (1) if required by the
Business Trust Act, one Trustee is the Delaware Trustee; (2) there shall be at
least one Trustee who is an employee or officer of, or is affiliated
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with the Company (each, a "Regular Trustee"); and (3) one Trustee shall be the
Property Trustee for so long as this Trust Agreement is required to qualify as
an indenture under the Trust Indenture Act, and such Property Trustee may also
serve as Delaware Trustee if it meets the applicable requirements.
Section 6.2 Delaware Trustee. If required by the Business Trust Act,
----------------
one Trustee (the "Delaware Trustee") shall be:
(a) A natural person who is a resident of the State of Delaware; or
(b) If not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law, provided that, if the Property Trustee has its principal place
of business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee may also be the Delaware Trustee (in
which case Section 3.11 shall have no application).
Section 6.3 Property Trustee; Eligibility.
-----------------------------
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial or District of Columbia authority. If
such Person publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 6.3(a)(ii), the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus
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as set forth in its most recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 6.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 6.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Trust Common Securities (as if it were
the obligor referred to in Section 310(b) of the Trust Indenture Act) shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Trust Preferred Securities Guarantee shall be deemed to be
specifically described in this Trust Agreement for purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
Section 6.4 Qualifications of Regular Trustees and Delaware Trustee
-------------------------------------------------------
Generally. Each Regular Trustee and the Delaware Trustee (unless the Property
- ---------
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
Section 6.5 Regular Trustees.
----------------
The initial Regular Trustees shall be:
Robert F. Clarke
Robert F. Mougeot
Constance H. Lau
Except as expressly set forth in this Trust Agreement and except if a meeting of
the Regular Trustees is called with respect to any matter over which the Regular
Trustees have
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<PAGE>
power to act, any power of the Regular Trustees may be exercised by, or with the
consent of, any one such Regular Trustee.
Section 6.6 Delaware Trustee. The initial Delaware Trustee shall be:
----------------
The Bank of New York (Delaware)
Section 6.7 Appointment, Removal and Resignation of Trustees.
------------------------------------------------
(a) Subject to Section 6.7(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Trust Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Trust Securities, by vote of the
Holders of a Majority in liquidation amount of the Trust Common Securities
voting as a class at a meeting of the Holders of the Trust Common Securities.
(b) (i) the Trustee that acts as Property Trustee shall not be
removed in accordance with Section 6.7(a) until a successor Trustee possessing
the qualifications to act as Property Trustee under Section 6.3 (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor;
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 6.7(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 6.2 and 6.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor;
(iii) no such removal of the Property Trustee or the Delaware
Trustee shall be effective until all of the fees, charges, and expenses incurred
by such entity have been paid.
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(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such Successor Property
Trustee and delivered to the Trust, the Sponsor and the resigning Property
Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the Holders of the Trust
Securities;
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been appointed
and has accepted such appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor and the resigning
Delaware Trustee; and
(iii) no such resignation of the Property Trustee or the Delaware
Trustee shall be effective until all of the fees, charges, and expenses incurred
by such entity have been paid.
(d) The Holder of the Trust Common Securities shall use its best
efforts to promptly appoint a Successor Delaware Trustee or Successor Property
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 6.7.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
6.7 within 60 days
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after delivery to the Sponsor and the Trust of an instrument of resignation, the
resigning Property Trustee or Delaware Trustee, as applicable, may petition any
court of competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or successor Delaware
Trustee, as the case may be.
Section 6.8 Vacancies among Trustees. If a Trustee ceases to hold
------------------------
office for any reason and the number of Trustees is not reduced pursuant to
Section 6.1, or if the number of Trustees is increased pursuant to Section 6.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy by
the Regular Trustees or, if there are more than two, a majority of the Regular
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 6.7.
Section 6.9 Effect of Vacancies. The death, resignation, retirement,
-------------------
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to dissolve, terminate or
annul the Trust. Whenever a vacancy in the number of Regular Trustees shall
occur, until such vacancy is filled by the appointment of a Regular Trustee in
accordance with Section 6.7, the Regular Trustees in office, regardless of their
number, shall have all the powers granted to the Regular Trustees and shall
discharge all the duties imposed upon the Regular Trustees by this Trust
Agreement.
Section 6.10 Meetings. If there is more than one Regular Trustee,
--------
meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any in-
person meetings of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meetings of the Regular Trustees or any committee thereof shall be hand
delivered or otherwise delivered in writing (including by
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facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of notice
of such meeting except where a Regular Trustee attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Trust Agreement, any action of the Regular Trustees may be taken at a
meeting by vote of a majority of the Regular Trustees present (whether in person
or by telephone) and eligible to vote with respect to such matter, provided that
a Quorum is present, or without a meeting by the unanimous written consent of
the Regular Trustees. Notwithstanding the foregoing, any and all actions of the
Regular Trustees may be taken by the unanimous written consent of all Regular
Trustees.
Section 6.11 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6.
(b) The Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
Section 6.12 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any Person into which the Property Trustee or the Delaware Trustee,
- --------
as the case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
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<PAGE>
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of the Property Trustee or the Delaware Trustee, as
the case may be, shall be the successor of the Property Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
ARTICLE VII
DISTRIBUTIONS
Section 7.1 Distributions.
-------------
(a) Holders of Trust Securities shall be entitled to receive
cumulative cash distributions at the rate per annum of _____% of the stated
liquidation amount of $25 per Trust Security, calculated on the basis of a 360-
day year consisting of twelve 30-day months. For any period shorter than a full
90-day quarter, distributions will be computed on the basis of the actual number
of days elapsed in such 90-day quarter. Distributions shall be made on the
Trust Preferred Securities and the Trust Common Securities on a Pro Rata basis.
Distributions on the Trust Securities shall, from the date of original issue,
accumulate and be cumulative and shall be payable quarterly only to the extent
that the Trust has funds legally available for the payment of such Distributions
in the Property Account. Distributions not paid on the scheduled payment date
will accumulate and compound quarterly at the rate of __% per annum ("Compounded
Distributions"). "Distributions" shall mean ordinary cumulative distributions
in respect of each Fiscal Period together with any Compounded Distributions. If
and to the extent that the Partnership makes a distribution on the Partnership
Preferred Securities held by the Property Trustee or the Company makes a payment
under the Partnership Guarantee (the amount of any such partnership
distribution, including any compounded partnership distributions, or guarantee
payment being a "Payment Amount"), the Trust shall and the Property Trustee is
directed, to the extent funds are
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available for that purpose pursuant to Section 7.1(c), to make a Pro Rata
Distribution of the Payment Amount to Holders.
(b) Distributions on the Trust Securities will be cumulative, will
accumulate from the date of initial issuance and will be payable quarterly in
arrears on each March 31, June 30, September 30 and December 31, commencing
March 31, 1997, when, as and if legally available for payment, by the Property
Trustee, except as otherwise described below. If Distributions are not paid
when scheduled, the accumulated Distributions shall be paid to the Holders of
record of Trust Securities as they appear on the books and records of the Trust
on the record date as determined under Section 7.1(d) below with respect to the
actual payment date for the Trust Securities, which will correspond to the
actual payment date fixed by the Partnership with respect to the payment of
cumulative distributions on the Partnership Preferred Securities not declared
and paid when regularly scheduled.
(c) Amounts available to the Trust for distribution to the Holders of
the Trust Securities will be limited to payments received by the Trust from the
Partnership on the Partnership Preferred Securities or from the Company on the
Partnership Guarantee or the Trust Guarantee. If the Property Trustee, as the
holder of the Partnership Preferred Securities for the benefit of the Holders of
the Trust Securities, receives written notice of any determination by the
Partnership not to pay distributions on such Partnership Preferred Securities,
the Property Trustee shall give notice of such determination to the Holders.
(d) Distributions on the Trust Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which relevant record dates, as long as the Trust
Preferred Securities remain in book-entry only form, will be one Business Day
prior to the relevant payment dates. Such distributions will be paid through
the Property Trustee who will hold amounts received in respect of the
Partnership Preferred Securities in the Property Account for the benefit of the
Holders of the Trust Securities. In the event that the Trust Securities do not
remain in book-entry only form, the relevant record dates shall be the 15th day
of the month of the relevant payment
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<PAGE>
dates. In the event that any date on which distributions are payable on the
Trust Securities is not a Business Day, payment of the distribution payable on
such date will be made on the next succeeding day which is a Business Day
(without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day (without any reduction
in interest or other payments in respect of such early payment), in each case
with the same force and effect as if made on such date.
ARTICLE VIII
ISSUANCE OF TRUST SECURITIES
Section 8.1 Designation and General Provisions Regarding Trust
--------------------------------------------------
Securities.
- ----------
(a) The Regular Trustees shall on behalf of the Trust issue one class
of preferred securities representing undivided beneficial ownership interests in
the assets of the Trust (the "Trust Preferred Securities") and one class of
common securities representing undivided beneficial ownership interests in the
assets of the Trust (the "Trust Common Securities" and, together with the Trust
Preferred Securities, the "Trust Securities") as follows:
(i) Trust Preferred Securities. 4,000,000 Trust Preferred
--------------------------
Securities of the Trust with an aggregate liquidation amount with respect to the
assets of the Trust of one hundred million dollars ($100,000,000) and a
liquidation amount with respect to the assets of the Trust of $25 per preferred
security, are hereby designated for the purpose of identification only as
______% Trust Originated Preferred Securities. The Trust Preferred Security
Certificates evidencing the Trust Preferred Securities shall be substantially in
the form of Exhibit A-1 to this Trust Agreement, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange on which the Trust
Preferred Securities are listed.
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(ii) Trust Common Securities. 123,732 Trust Common Securities of
-----------------------
the Trust with an aggregate liquidation amount with respect to the assets of the
Trust of three million ninety-three thousand dollars ($3,093,000) and a
liquidation amount with respect to the assets of the Trust of $25 per common
security, are hereby designated for the purposes of identification only as
_____% Trust Common Securities. The Trust Common Security Certificates
evidencing the Trust Common Securities shall be substantially in the form of
Exhibit A-2 to the Trust Agreement, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
(b) Except as provided in Section 9.2(b) of this Trust Agreement, the
Trust Preferred Securities rank pari passu and payment thereon shall be made Pro
Rata with the Trust Common Securities. The Trust shall issue no securities or
other interests in the assets of the Trust other than the Trust Preferred
Securities and the Trust Common Securities.
(c) One or more Regular Trustees shall sign the Trust Securities
Certificates for the Trust by manual or facsimile signature. In case any
Regular Trustee of the Trust who shall have signed any of the Trust Securities
shall cease to be a Regular Trustee before the certificates so signed shall be
delivered by the Trust, such certificates nevertheless may be delivered as
though the person who signed such certificates had not ceased to be such Regular
Trustee; and any certificate may be signed on behalf of the Trust by such
persons who, at the actual date of execution of such Trust Security, shall be
the Regular Trustees of the Trust, although at the date of the execution and
delivery of this Trust Agreement any such person was not such a Regular Trustee.
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements as
the Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation of any stock exchange on which Trust
Securities may be listed, or to conform to usage.
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If executed by the facsimile signature of a Regular Trustee, a Trust
Security shall not be valid until authenticated by the manual signature of an
authorized officer of the Property Trustee. Such signature shall be conclusive
evidence that the Trust Security has been authenticated under this Trust
Agreement.
Upon a written order of the Trust, signed by at least one Regular
Trustee, directing the Property Trustee to authenticate and deliver Trust
Securities (if the Trust Securities Certificates are executed by the facsimile
signature of a Regular Trustee), the Property Trustee shall authenticate and
deliver the Trust Securities for original issue. The aggregate number of Trust
Securities outstanding at any time shall not exceed the number set forth in this
Trust Agreement.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Trust Securities. An authenticating agent may
authenticate Trust Preferred Securities whenever the Property Trustee may do so.
Each reference in this Trust Agreement to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Sponsor or an Affiliate of the
Sponsor.
(d) The consideration received by the Trust for the issuance of the
Trust Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(e) Upon issuance of the Trust Securities as provided in this Trust
Agreement, the Trust Securities so issued shall be deemed to be validly issued,
fully paid and nonassessable, subject to Section 11.1 with respect to the Trust
Common Securities.
(f) Every Person, by virtue of having become a Holder or a Trust
Preferred Security Beneficial Owner in accordance with the terms of this Trust
Agreement, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Trust Agreement.
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Section 8.2 Redemption of Trust Securities.
------------------------------
(a) Upon a purchase of the Partnership Preferred Securities by the
Partnership upon redemption or otherwise, the proceeds from such purchase shall
be simultaneously applied Pro Rata to redeem Trust Securities having an
aggregate liquidation preference equal to the aggregate liquidation preference
of the Partnership Preferred Securities so purchased or redeemed for an amount
equal to $25 per Trust Security plus an amount equal to accumulated and unpaid
Distributions, including any Compounded Distributions thereon through the date
of the redemption or such lesser amount as shall be received by the Trust in
respect of the Partnership Preferred Securities so purchased or redeemed as
calculated by the Regular Trustees (the "Redemption Price"). Holders will be
given not less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Trust Securities are to be so
redeemed, the Trust Common Securities and the Trust Preferred Securities will be
redeemed Pro Rata and the Trust Preferred Securities to be redeemed will be
redeemed as described in Section 8.3 below.
(c) If, at any time, a Trust Special Event shall occur and be
continuing, the Regular Trustees shall, unless the Partnership Preferred
Securities are redeemed in the limited circumstances described below, within 90
days following the occurrence of such Trust Special Event elect to either
(i) dissolve the Trust upon not less than 30 nor more than 60 days' notice with
the result that, after satisfaction of creditors, if any, of the Trust,
Partnership Preferred Securities with an aggregate liquidation preference equal
to the aggregate stated liquidation amount of, with a distribution rate
identical to the distribution rate of, and accumulated and unpaid distributions
equal to accumulated and unpaid distributions on, and having the same record
date for payment as, the Trust Preferred Securities and the Trust Common
Securities outstanding at such time would be distributed on a Pro Rata basis to
the Holders of the Trust Preferred Securities and the Trust Common Securities in
liquidation of such Holders' interests in the Trust; provided, however, that if
at the time there is available to the Trust the opportunity to eliminate,
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within such 90-day period, the Trust Special Event by taking some ministerial
action, such as filing a form or making an election, or pursuing some other
similar reasonable measure which in the sole judgment of the Sponsor has or will
cause no adverse effect on the Trust, the Partnership, the Sponsor or the
Holders of the Trust Securities and will involve no material cost, the Trust
will pursue such measure in lieu of dissolution or (ii) cause the Trust
Preferred Securities to remain outstanding, provided that in the case of this
clause (ii), the Sponsor shall pay any and all expenses incurred by or payable
by the Trust attributable to the Trust Special Event. Furthermore, if in the
case of the occurrence of a Trust Tax Event, the Regular Trustees have received
a Trust Redemption Tax Opinion, then the General Partner shall have the right,
within 90 days following the occurrence of such Trust Tax Event, to elect to
cause the Partnership to redeem the Partnership Preferred Securities in whole
(but not in part) for cash upon not less than 30 nor more than 60 days' notice
and promptly following such redemption, the Trust Securities will be redeemed by
the Trust at the Redemption Price.
(d) If the Partnership Preferred Securities are distributed to the
Holders of the Trust Preferred Securities, the Sponsor will use its best efforts
to cause the Partnership Preferred Securities to be listed on the New York Stock
Exchange or on such other national securities exchange or similar organization
as the Trust Preferred Securities are then listed or quoted.
(e) On the date fixed for any distribution of Partnership Preferred
Securities, upon dissolution of the Trust, (i) the Trust Preferred Securities
and the Trust Common Securities will no longer be deemed to be outstanding and
(ii) certificates representing Trust Securities will be deemed to represent the
Partnership Preferred Securities having an aggregate principal preference equal
to the stated liquidation amount of, and bearing accumulated and unpaid
distributions equal to accumulated and unpaid distributions on, such Trust
Securities until such certificates are presented to the Sponsor or its agent for
transfer or reissuance.
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Section 8.3 Redemption Procedures.
---------------------
(a) Notice of any redemption of, or notice of distribution of
Partnership Preferred Securities in exchange for, the Trust Securities
(a "Redemption/Distribution Notice") will be given by the Trust by mail to each
Holder of Trust Securities to be redeemed or exchanged not fewer than 30 nor
more than 60 days before the date fixed for redemption or exchange thereof
which, in the case of a redemption, will be the date fixed for redemption of the
Partnership Preferred Securities. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given pursuant to this
Section 8.3, a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to Holders
of Trust Securities. Each Redemption/Distribution Notice shall be addressed to
the Holders of Trust Securities at the address of each such Holder appearing in
the books and records of the Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings with respect to
any other Holder.
(b) In the event that fewer than all the outstanding Trust Securities
are to be redeemed, the Trust Securities to be redeemed shall be redeemed
Pro Rata from each Holder of Trust Securities, provided that, in respect of
Trust Preferred Securities registered in the name of and held of record by DTC
or its nominee (or any successor Clearing Agency or its nominee), the
distribution of the proceeds of such redemption will be made to each Clearing
Agency Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by DTC or such Clearing
Agency or nominee. The Trust may not redeem fewer than all of the outstanding
Trust Preferred Securities unless all accumulated and unpaid Distributions
(including Compounded Distributions) have been paid on all Trust Preferred
Securities for all quarterly distribution periods terminating on or prior to the
date of redemption.
(c) If Trust Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may
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only be issued if the Partnership Preferred Securities are redeemed as set out
in this Section 8.3 (which notice will be irrevocable), then (A) while the Trust
Preferred Securities are in book-entry only form, by 12:00 noon, New York City
time, on the redemption date, the Property Trustee will deposit irrevocably with
the DTC or its nominee (or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with respect to the Trust
Preferred Securities and will give the DTC irrevocable instructions and
authority to pay the Redemption Price to the Trust Preferred Securities
Beneficial Owners, and (B) with respect to Trust Preferred Securities issued in
certificated form and Trust Common Securities, the Property Trustee will pay the
relevant Redemption Price to the Holders of such Trust Securities by check
mailed to the address of the relevant Holder appearing on the books and records
of the Trust on the redemption date. If a Redemption/Distribution Notice shall
have been given and funds deposited as required, if applicable, then immediately
prior to the close of business on the date of such deposit, or on the redemption
date, as applicable, distributions will cease to accumulate on the Trust
Securities so called for redemption and all rights of Holders of such Trust
Securities will cease, except the right of the Holders of such Trust Securities
to receive the Redemption Price, but without interest on such Redemption Price
and, from and after the date fixed for redemption, such Trust Securities will
not accumulate Distributions or bear interest. If any date fixed for redemption
of Trust Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay)
except that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day (without any reduction in
interest or other payments in respect of such early payment). If payment of the
Redemption Price in respect of any Trust Securities is improperly withheld or
refused and not paid either by the Property Trustee or by the Sponsor pursuant
to the Trust Preferred Securities Guarantee, Distributions on such Trust
Securities will continue to accumulate at the then applicable rate from the
original redemption date to the actual date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
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calculating the Redemption Price. For these purposes, the applicable Redemption
Price shall not include Distributions which are being paid to Holders who were
Holders on a relevant record date.
Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Trust Securities that
have been called for redemption.
(d) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Company or its
subsidiaries may at any time and from time to time purchase outstanding Trust
Preferred Securities by tender, in the open market or by private agreement.
Section 8.4 Voting Rights of Trust Preferred Securities.
-------------------------------------------
(a) Except as provided under Sections 2.6, 6.1(b) and this Article
VIII and as otherwise required by the Business Trust Act, the Trust Indenture
Act and other applicable law, the Holders of the Trust Preferred Securities will
have no voting rights.
(b) Subject to the requirement of the Property Trustee obtaining a tax
opinion in certain circumstances set forth in Section 8.4(d) below, the Holders
of a Majority in liquidation amount of the Trust Preferred Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or direct the exercise of any trust or
power conferred upon the Property Trustee under this Trust Agreement, including
the right to direct the Property Trustee, as Holder of the Partnership Preferred
Securities, to (i) exercise the remedies available to it under the Agreement of
Limited Partnership as a
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Holder of the Partnership Preferred Securities, including the right to direct
the Special Representative of the Partnership as elected by the Holders of the
Partnership Preferred Securities in accordance with the Agreement of Limited
Partnership to enforce, to the fullest extent permitted by law, (A) the
Partnership's creditors rights and other rights with respect to the Affiliate
Investment Instruments and any Investment Guarantees, (B) the rights of the
holders of the Partnership Preferred Securities under the Partnership Guarantee,
and (C) the rights of the holders of the Partnership Preferred Securities to
receive distributions (if and to the extent such distributions have been
declared out of funds legally available therefor by the General Partner in its
sole discretion) on the Partnership Preferred Securities or (ii) consent to any
amendment, modification, or termination of the Agreement of Limited Partnership
or the Partnership Preferred Securities where such consent shall be required;
provided, however, that where a consent or action under the Agreement of Limited
Partnership would require the consent or act of the Holders of more than a
majority of the aggregate liquidation amount of Partnership Preferred Securities
affected thereby, only the Holders of the percentage of the aggregate stated
liquidation amount of the Trust Preferred Securities which is at least equal to
the percentage required under the Agreement of Limited Partnership may direct
the Property Trustee to give such consent or take such action on behalf of the
Trust.
(c) If the Property Trustee fails to enforce its rights under the
Partnership Preferred Securities after a Holder of record of Trust Preferred
Securities has made a written request, such Holder of record of Trust Preferred
Securities may, to the fullest extent permitted by law, directly institute a
legal proceeding against the General Partner or the Special Representative, to
enforce the Property Trustee's rights under the Partnership Preferred Securities
without first instituting any legal proceeding against the Property Trustee, the
Trust or any other Person. Notwithstanding the foregoing, for so long as the
Property Trustee is the holder of any Partnership Preferred Securities, if a
Trust Enforcement Event has occurred and is continuing and such event is
attributable to the failure of an Investment Affiliate to make any required
payment when due on any
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Affiliate Investment Instrument and the failure of the Company to make any
required payment with respect thereto when due on any Investment Guarantee, then
a Holder of Trust Preferred Securities may, on behalf of the Partnership,
directly institute a proceeding against such Investment Affiliate with respect
to such Affiliate Investment Instrument or against the Company with respect to
any such Investment Guarantee, in each case for enforcement of payment.
(d) The Property Trustee shall notify all Holders of the Trust
Preferred Securities of any notice of any Partnership Enforcement Event received
from the General Partner with respect to the Partnership Preferred Securities
and the Affiliate Investment Instruments. Such notice shall state that such
Partnership Enforcement Event also constitutes a Trust Enforcement Event.
Except with respect to directing the time, method, and place of conducting a
proceeding for a remedy, the Property Trustee shall be under no obligation to
take any of the actions described in clause 8.4(b)(i) and (ii) above unless the
Property Trustee has obtained an opinion of independent tax counsel to the
effect that as a result of such action, the Trust will not be classified as an
association or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes and each Holder will continue to be treated
as owning an undivided beneficial ownership interest in the Partnership
Preferred Securities.
(e) In the event the consent of the Property Trustee, as the Holder of
the Partnership Preferred Securities, is required under the Agreement of Limited
Partnership with respect to any amendment, modification or termination of the
Agreement of Limited Partnership, the Property Trustee shall request the
direction of the Holders of the Trust Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a Majority in liquidation amount of
the Trust Securities voting together as a single class; provided, however, that
where a consent under the Agreement of Limited Partnership would require the
consent of the Holders of more than a majority of the aggregate principal amount
of the Partnership Preferred Securities, the Property Trustee may only give such
consent at the direction of the Holders of at least the same proportion in
aggregate stated liquidation amount of the Trust Securities. The Property
Trustee shall not take any such action in accordance with the directions of the
Holders of
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the Trust Securities unless the Property Trustee has obtained an opinion of tax
counsel to the effect that such action is not inconsistent with the Trust being
classified as a grantor trust for United States federal income tax purposes.
(f) A waiver of a Partnership Enforcement Event with respect to the
Partnership Preferred Securities will constitute a waiver of the corresponding
Trust Enforcement Event.
(g) Any required approval or direction of Holders of Trust Preferred
Securities may be given at a separate meeting of Holders of Trust Preferred
Securities convened for such purpose, at a meeting of all of the Holders of
Trust Securities or pursuant to written consent. The Regular Trustees will
cause a notice of any meeting at which Holders of Trust Preferred Securities are
entitled to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Trust Preferred
Securities. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents.
(h) No vote or consent of the Holders of Trust Preferred Securities
will be required for the Trust to redeem and cancel Trust Preferred Securities
or distribute Partnership Preferred Securities in accordance with the Trust
Agreement.
(i) Notwithstanding that Holders of Trust Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Trust Securities that are beneficially owned at such time by the Company
or any entity directly or indirectly controlled by, or under direct or indirect
common control with, the Company, shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if such Trust
Securities were not outstanding, provided, however that persons otherwise
eligible to vote to whom the Company or any of its subsidiaries have pledged
Trust Preferred Securities may vote or consent
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with respect to such pledged Trust Preferred Securities under any of the
circumstances described herein.
(j) Holders of the Trust Preferred Securities will have no rights to
appoint or remove the Regular Trustees, who may be appointed, removed or
replaced solely by the Company, as the Holder of all of the Trust Common
Securities.
Section 8.5 Voting Rights of Trust Common Securities.
----------------------------------------
(a) Except as provided under this Section 8.5 or as otherwise required
by the Business Trust Act, the Trust Indenture Act or other applicable law or
provided by the Trust Agreement, the Holders of the Trust Common Securities will
have no voting rights.
(b) The Holder of the Trust Common Securities is entitled, subject
to Article VI hereof, to vote to appoint, remove or replace any Trustee or to
increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Trust Agreement and only after all
Trust Enforcement Events with respect to the Trust Preferred Securities have
been cured, waived, or otherwise eliminated and subject to the requirement of
the Property Trustee obtaining a tax opinion in certain circumstances set forth
in this paragraph (c), the Holder of the Trust Common Securities has the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or direct the exercise of any trust or
power conferred upon the Property Trustee under this Trust Agreement, including
the right to direct the Property Trustee, as Holder of the Partnership Preferred
Securities, to (i) exercise the remedies available to it under the Agreement of
Limited Partnership as a Holder of the Partnership Preferred Securities,
including the right to direct the Special Representative of the Partnership as
elected by the Holders of the Partnership Preferred Securities in accordance
with the Agreement of Limited Partnership to enforce, to the fullest extent
permitted by law, (A) the Partnership's creditors rights and other rights with
respect to the Affiliate Investment
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Instruments and any Investment Guarantees, (B) the rights of the Holders of the
Partnership Preferred Securities under the Partnership Guarantee, and (C) the
rights of the Holders of the Partnership Preferred Securities to receive
distributions (if and to the extent such distributions have been declared out of
funds legally available therefor by the General Partner in its sole discretion)
on the Partnership Preferred Securities or (ii) consent to any amendment,
modification, or termination of the Agreement of Limited Partnership or the
Partnership Preferred Securities where such consent shall be required; provided,
however, that where a consent or action under the Agreement of Limited
Partnership would require the consent or act of the Holders of more than a
majority of the aggregate liquidation amount of Partnership Preferred Securities
affected thereby, only the Holders of the percentage of the aggregate stated
liquidation amount of the Trust Common Securities which is at least equal to the
percentage required under the Agreement of Limited Partnership may direct the
Property Trustee to give such consent or take such action on behalf of the
Trust. Except with respect to directing the time, method, and place of
conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clause 8.5(c)(i) and (ii)
above unless the Property Trustee has obtained an opinion of independent tax
counsel to the effect that, as a result of such action, for United States
federal income tax purposes the Trust will not be classified as an association
or a publicly traded partnership taxable as a corporation.
(d) If the Property Trustee fails to enforce its rights under the
Partnership Preferred Securities after a Holder of record of Trust Common
Securities has made a written request, such Holder of record of Trust Common
Securities may, to the fullest extent permitted by law, directly institute a
legal proceeding directly against the General Partner of the Partnership or the
Special Representative, to enforce the Property Trustee's rights under the
Partnership Preferred Securities without first instituting any legal proceeding
against the Property Trustee, the Trust or any other Person. Notwithstanding the
foregoing, if a Trust Enforcement Event has occurred and is continuing and such
event is attributable to the failure of an Investment Affiliate to make any
required payment when due on any Affiliate Investment
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Instrument, then a Holder of Trust Common Securities may directly institute a
proceeding against such Investment Affiliate for enforcement of payment with
respect to such Affiliate Investment Instrument.
(e) A waiver of a Partnership Enforcement Event with respect to the
Partnership Preferred Securities will constitute a waiver of the corresponding
Trust Enforcement Event.
(f) Any required approval or direction of the Holder of the Trust
Common Securities may be given at a separate meeting of the Holder of the Trust
Common Securities convened for such purpose, at a meeting of all of the Holders
of Trust Securities or pursuant to written consent. The Regular Trustees will
cause a notice of any meeting at which the Holder of the Trust Common Securities
is entitled to vote, or of any matter upon which action by written consent of
such Holder is to be taken, to be mailed to the Holder of record of the Trust
Common Securities. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holder is entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents.
(g) No vote or consent of the Holder of the Trust Common Securities
shall be required for the Trust to redeem and cancel Trust Common Securities or
to distribute Partnership Preferred Securities in accordance with the Trust
Agreement and the terms of the Trust Securities.
Section 8.6 Paying Agent. In the event that the Trust Preferred
------------
Securities are not in book-entry only form, the Trust shall maintain in the
Borough of Manhattan, City of New York, State of New York, an office or agency
where the Trust Preferred Securities may be presented for payment ("Paying
Agent"). The Trust may appoint the Paying Agent and may appoint one or more
additional paying agents in such other locations as it shall determine. The
term "Paying Agent" includes any additional paying agent. The Trust may change
any Paying Agent without prior notice to any Holder. The Trust shall notify the
Property Trustee of the name and address of
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any Paying Agent not a party to this Trust Agreement. If the Trust fails to
appoint or maintain another entity as Paying Agent, the Property Trustee shall
act as such. The Trust or any of its Affiliates may act as Paying Agent. The
Bank of New York shall initially act as Paying Agent for the Trust Preferred
Securities and the Trust Common Securities.
Section 8.7 Listing. The Sponsor shall use its best efforts to cause
-------
the Trust Preferred Securities to be listed for quotation on the New York Stock
Exchange.
Section 8.8 Acceptance of Trust Agreement, Affiliate Investment
---------------------------------------------------
Instruments, Guarantees and Agreement of Limited Partnership. Each Holder of
- ------------------------------------------------------------
Trust Preferred Securities and Trust Common Securities, by the acceptance
thereof, agrees to the provisions of this Trust Preferred Securities Agreement,
the Trust Guarantee, the Partnership Guarantee, any Investment Guarantee and the
Agreement of Limited Partnership, respectively, including the subordination
provisions therein.
ARTICLE IX
DISSOLUTION AND LIQUIDATION OF THE TRUST
Section 9.1 Dissolution of Trust.
--------------------
(a) The Trust shall dissolve:
(i) upon the bankruptcy, insolvency or dissolution of the Holder
of Trust Common Securities or the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor, the filing of a certificate of
cancellation with respect to the Trust after having obtained the consent of at
least a Majority in liquidation amount of the Trust Securities, voting together
as a single class, to file such certificate of cancellation, or the revocation
of the Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
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(iii) upon the entry of a decree of judicial dissolution of
the Sponsor or the Trust;
(iv) when all of the Trust Securities shall have been called
for redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders in accordance with the terms of the Trust Securities;
(v) upon the election of the Regular Trustees, following the
occurrence and continuation of a Trust Special Event, pursuant to which the
Trust shall have been dissolved in accordance with the terms of the Trust
Securities and, after satisfaction of the Trust's liabilities, all of the
Partnership Preferred Securities shall have been distributed to the Holders of
Trust Securities in exchange for all of the Trust Securities; or
(vi) before the issuance of any Trust Securities, with the
consent of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 9.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article XI shall survive the
termination of the Trust.
Section 9.2 Liquidation Distribution Upon Termination and Dissolution
---------------------------------------------------------
of the Trust.
- ------------
(a) In the event of any voluntary or involuntary liquidation,
dissolution, winding-up or termination of the Trust (each a "Trust
Liquidation"), the Holders of the Trust Preferred Securities on the date of the
Trust Liquidation will be entitled to receive, out of the assets of the Trust
available for distribution to Holders of Trust Securities after satisfaction of
the Trusts' liabilities to creditors, distributions in cash or other immediately
available funds in an amount equal to the aggregate of the stated liquidation
amount of $25 per Trust Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being
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the "Trust Liquidation Distribution"), unless, in connection with such Trust
Liquidation, Partnership Preferred Securities in an aggregate stated liquidation
preference equal to the aggregate stated liquidation amount of, with a
distribution rate identical to the distribution rate of, and accrued and unpaid
distributions equal to accumulated and unpaid distributions on, such Trust
Securities shall be distributed on a Pro Rata basis to the Holders of the Trust
Securities in exchange for such Trust Securities.
(b) If, upon any such Trust Liquidation, the Trust Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
legally available to pay in full the aggregate Trust Liquidation Distribution,
then, except as provided below, the amounts payable directly by the Trust on the
Trust Securities shall be paid on a Pro Rata basis. The Holders of the Trust
Common Securities will be entitled to receive distributions upon any such Trust
Liquidation Pro Rata with the Holders of the Trust Preferred Securities except
that if the Company is in default on any of its obligations under the Trust
Preferred Securities Guarantee or the Partnership Guarantee, or if any
Investment Event of Default has occurred and is continuing with respect to an
Affiliate Investment Instrument and the Company is in default on any of its
obligations with respect thereto under an applicable Investment Guarantee, the
Trust Preferred Securities shall have a preference over the Trust Common
Securities with regard to such distributions as provided below. Such preference
is effectuated by the Holder of the Trust Common Securities hereby agreeing to
provide limited recourse guarantees (such recourse being limited to the
interests in the Trust represented by the Trust Common Securities) as follows:
(i) to the Holders of the Trust Preferred Securities, of the Company's
obligations under the Trust Preferred Securities Guarantee; (ii) to the Trust
and the Holders of the Trust Preferred Securities, of the Company's obligations
under the Partnership Guarantee; and (iii) to the Partnership and the Holders of
the Trust Preferred Securities, of the Company's obligations under any
Investment Guarantee and/or the obligations of any Investment Affiliate under an
Affiliate Investment Instrument. In the case of the limited recourse guarantee
given by the Holder of the Trust Common Securities to the Partnership and the
Holder of the Trust Preferred Securities in respect of the Company's obligations
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under any Investment Guarantee and/or any Investment Affiliate's obligations
under an Affiliate Investment Instrument, (i) the Trust Common Securities Holder
will be deemed to have pledged the amount due in respect of its Trust Common
Securities upon a liquidation of the Trust to the Partnership and the Holders of
Trust Preferred Securities; (ii) the Trust Common Securities Holder will be
deemed to have paid such amount to the Partnership in respect of such defaulted
Investment Guarantee and/or Affiliate Investment Instrument, as the case may be;
(iii) the Partnership will be deemed to have paid such amount to the Trust; and
(iv) the Property Trustee is hereby authorized to distribute such amount to the
Holders of Trust Preferred Securities (on a Pro Rata basis among such Trust
Preferred Securities Holders) in respect of the Trust Common Securities Holder's
pledge of such amounts to such Trust Preferred Securities Holders. In the case
of a limited recourse guarantee given by the Holder of the Trust Common
Securities to the Trust and the Holders of the Trust Preferred Securities in
respect of the Company's obligations under the Partnership Guarantee, (i) the
Holder of the Trust Common Securities will be deemed to have pledged the amount
due in respect of its Trust Common Securities upon a liquidation of the Trust to
the Trust and the Holders of the Trust Preferred Securities; (ii) the Holder of
the Trust Common Securities will be deemed to have paid such amount to the Trust
in respect of its obligations under the Partnership Guarantee; and (iii) the
Property Trustee is hereby authorized to distribute such amount to the Holders
of the Trust Preferred Securities (on a Pro Rata basis among such Trust
Preferred Securities Holders) in respect of the Trust Common Securities Holder's
pledge of such amount to such Trust Preferred Securities Holders.
ARTICLE X
TRANSFER OF INTERESTS
Section 10.1 Transfer of Trust Securities.
----------------------------
(a) Trust Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Trust Agreement and
in the terms of the Trust Securities. Any transfer or purported transfer of any
Trust
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Security not made in accordance with this Trust Agreement shall be null and
void.
(b) Subject to this Article X, Trust Preferred Securities shall be
freely transferable.
Section 10.2 Transfer of Certificates. The Regular Trustees shall
------------------------
provide for the registration of certificates and of transfers of certificates,
which will be effected without charge but only upon payment (with such indemnity
as the Regular Trustees may require) in respect of any tax or other government
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any certificate, the Regular Trustees shall cause one or more new
certificates to be issued in the name of the designated transferee or
transferees. Every certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer in form satisfactory to the
Regular Trustees duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each certificate surrendered for registration of
transfer shall be canceled by the Regular Trustees. A transferee of a
certificate shall be entitled to the rights and be subject to the obligations of
a Holder hereunder upon the receipt by such transferee of a certificate. By
acceptance of a certificate, each transferee shall be deemed to have agreed to
be bound by this Trust Agreement.
Section 10.3 Deemed Security Holders. The Trustees may treat the
-----------------------
Person in whose name any certificate shall be registered on the books and
records of the Trust as the sole Holder of such certificate and of the Trust
Securities represented by such certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
certificate or in the Trust Securities represented by such certificate on the
part of any Person, whether or not the Trust shall have actual or other notice
thereof.
Section 10.4 Book-Entry Interests. Unless otherwise specified in the
--------------------
terms of the Trust Preferred Securities, the Trust Preferred Securities
Certificates, on original issuance, will be issued in the form of one or more
fully registered,
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global Trust Preferred Security Certificates (each a "Global Certificate"), to
be delivered to DTC, the initial Clearing Agency, or its custodian by, or on
behalf of, the Trust. Such Global Certificates shall initially be registered on
the books and records of the Trust in the name of Cede & Co., the nominee of
DTC, and no Trust Preferred Security Beneficial Owner will receive a Definitive
Trust Preferred Security Certificate representing such Trust Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 10.7. Unless and until definitive, fully registered Trust Preferred
Security Certificates (the "Definitive Trust Preferred Security Certificates")
have been issued to the Trust Preferred Security Beneficial Owners pursuant to
Section 10.7:
(a) the provisions of this Section 10.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Trust Agreement (including the payment
of Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Trust Preferred Securities and the sole
Holder of the Global Certificates and shall have no obligation to the Trust
Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 10.4 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 10.4 shall control; and
(d) the rights of the Trust Preferred Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Trust Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and the Clearing Agency shall receive and transmit payments of
Distributions on the Global Certificates to such Clearing Agency Participants.
The Clearing Agency will make book-entry transfers among the Clearing Agency
Participants; provided, that solely for the purposes of determining whether the
Holders of the requisite amount of Trust Preferred Securities have voted on any
matter provided for in this Trust Agreement, so long as Definitive Trust
Preferred Security
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Certificates have not been issued, the Trustees may conclusively rely on, and
shall be fully protected in relying on, any written instrument (including a
proxy) delivered to the Trustees by the Clearing Agency setting forth the Trust
Preferred Security Beneficial Owners' votes or assigning the right to vote on
any matter to any other Persons either in whole or in part.
Section 10.5 Notices to Clearing Agency. Whenever a notice or other
--------------------------
communication to the Trust Preferred Security Holders is required under this
Trust Agreement, unless and until Definitive Trust Preferred Security
Certificates shall have been issued to the Trust Preferred Security Beneficial
Owners pursuant to Section 10.7, the Regular Trustees shall give all such
notices and communications specified herein to be given to the Trust Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Trust Preferred Security Beneficial Owners.
Section 10.6 Appointment of Successor Clearing Agency. If any
----------------------------------------
Clearing Agency elects to discontinue its services as securities depositary with
respect to the Trust Preferred Securities, the Regular Trustees may, in their
sole discretion, appoint a successor Clearing Agency with respect to such Trust
Preferred Securities.
Section 10.7 Definitive Trust Preferred Security Certificates. If
------------------------------------------------
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Trust Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 10.6; (b) the Regular Trustees elect after consultation with
the Sponsor to terminate the book-entry system through the Clearing Agency with
respect to the Trust Preferred Securities; or (c) there is a Trust Enforcement
Event; then:
(i) Definitive Trust Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect to such
Trust Preferred Securities; and
(ii) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration
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instructions, the Regular Trustees shall cause Definitive Trust Preferred
Security Certificates to be delivered to Trust Preferred Security Beneficial
Owners in accordance with the instructions of the Clearing Agency. Neither the
Trustees nor the Trust shall be liable for any delay in delivery of such
instructions and each of them may conclusively rely on and shall be protected in
relying on, said instructions of the Clearing Agency. The Definitive Trust
Preferred Security Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by one or more of their execution thereof, and may have
such letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which Trust
Preferred Securities may be listed, or to conform to usage.
Section 10.8 Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
(a) any mutilated certificates should be surrendered to the Regular Trustees, or
if the Regular Trustees shall receive evidence to their satisfaction of the
destruction, loss or theft of any certificate; and (b) there shall be delivered
to the Regular Trustees such security or indemnity as may be required by them to
keep each of them harmless, then, in the absence of notice that such certificate
shall have been acquired by a bona fide purchaser, one or more Regular Trustees
on behalf of the Trust shall execute and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen certificate, a new certificate of
like denomination. In connection with the issuance of any new certificate under
this Section 10.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate certificate issued pursuant to this Section
shall constitute conclusive evidence of an ownership interest in the relevant
Trust Securities, as if originally issued, whether or not the lost, stolen or
destroyed certificate shall be found at any time.
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ARTICLE XI
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
Section 11.1 Liability.
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(a) Except as expressly set forth in this Trust Agreement, the Trust
Guarantees and the terms of the Trust Securities, the Sponsor and the Trustees
shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the Trust
Securities which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Trust
Securities any deficit upon dissolution of the Trust or otherwise.
(b) Notwithstanding any other provision herein, the Holder of the
Trust Common Securities, by entering into this Agreement, agrees that it shall
be liable directly to any creditor or claimant of or against the Trust for the
entire amount of all of the debts and obligations of the Trust (other than
obligations to the Holders of Trust Securities in their capacities as Holders)
to the extent not satisfied out of the Trust's assets as if the Holder of the
Trust Common Securities were the general partner of a limited partnership
organized under the Delaware Revised Uniform Limited Partnership Act. This
Section 11.1(b) will automatically terminate upon (i) the adoption of final or
temporary United States federal tax regulations which, if the Trust were not
classified as a grantor trust for United States federal income tax purposes,
would result in the classification of the Trust as a partnership for
United States federal tax purposes without regard to its organic characteristics
and (ii) the taking of such action, if any, by the Trust or the Holders of Trust
Securities as may be necessary to achieve such classification.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders
of the Trust Preferred Securities shall
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be entitled to the same limitation of personal liability extended to
shareholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
Section 11.2 Exculpation.
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(a) No Company Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Company Indemnified Person in good faith on behalf of the Trust
and in a manner such Company Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Company Indemnified Person by this
Trust Agreement or by law, except that a Company Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Company
Indemnified Person's gross negligence or willful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Trust Securities might properly be paid.
Section 11.3 Fiduciary Duty.
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(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Trust Agreement shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust Agreement. The
provisions of this Trust Agreement, to the extent that they restrict the duties
and liabilities of
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an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein or therein provides that an Indemnified Person shall act in
a manner that is, or provides terms that are, fair and reasonable to the Trust
or any Holder of Trust Securities, the Indemnified Person shall resolve such
conflict of interest, take such action or provide such terms, considering in
each case the relative interest of each party (including its own interest) to
such conflict, agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry practices, and
any applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or term
so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Trust Agreement or any other agreement contemplated herein or of
any duty or obligation of the Indemnified Person at law or in equity or
otherwise.
(c) Whenever in this Trust Agreement an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or obligation
to give any consideration to any interest of or factors affecting the Trust or
any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or
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different standard imposed by this Trust Agreement or by applicable law.
Section 11.4 Indemnification.
---------------
(a) (i) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless any Company Indemnified Person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by reason
of the fact that he is or was a Company Indemnified Person against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the fullest extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by reason of the fact that
he is or was a Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust
and except that no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the
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extent that the Court of Chancery of Delaware or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
such Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 11.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the fullest extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 11.4(a) (unless ordered by a court) shall be made by the Sponsor only as
authorized in the specific case upon a determination that indemnification of the
Company Indemnified Person is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority vote of a
quorum consisting of such Regular Trustees who were not parties to such action,
suit or proceeding, (2) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the Holder of the
Trust Common Securities.
(v) To the fullest extent permitted by law, expenses (including
attorneys' fees) incurred by a Company Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 11.4(a) shall be paid by the Sponsor
in advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified Person to
repay such amount if it shall ultimately be
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determined that he is not entitled to be indemnified by the Sponsor as
authorized in this Section 11.4(a). Notwithstanding the foregoing, no advance
shall be made by the Sponsor if a determination is reasonably and promptly made
(i) by the Regular Trustees by a majority vote of a Quorum of disinterested
Regular Trustees, (ii) if such a Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion or (iii) the Holder of the Trust
Common Securities, that, based upon the facts known to the Regular Trustees,
counsel or the Holder of the Trust Common Securities at the time such
determination is made, such Company Indemnified Person acted in bad faith or in
a manner that such Person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances where
the Regular Trustees, independent legal counsel or Holder of the Trust Common
Securities reasonably determine that such Person deliberately breached his duty
to the Trust or the Holder of the Trust Common Securities.
(vi) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 11.4(a) shall not
be deemed exclusive of any other rights to which those seeking indemnification
and advancement of expenses may be entitled under any agreement, vote of
shareholders or disinterested directors of the Sponsor or Holders of the Trust
Preferred Securities or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. All rights to
indemnification under this Section 11.4(a) shall be deemed to be provided by a
contract between the Sponsor and each Company Indemnified Person who serves in
such capacity at any time while this Section 11.4(a) is in effect. Any repeal or
modification of this Section 11.4(a) shall not affect any rights or obligations
then existing.
(vii) The Sponsor or the Trust may purchase and maintain insurance
on behalf of any Person who is or was a Company Indemnified Person against any
liability asserted
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against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Sponsor would have the power to indemnify him
against such liability under the provisions of this Section 11.4(a).
(viii) For purposes of this Section 11.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any Person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 11.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 11.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a Person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Property Trustee, (ii) the
Delaware Trustee, (iii) any Affiliate of the Property Trustee and the Delaware
Trustee, and (iv) any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the Property
Trustee and the Delaware Trustee (each of the Persons in (i) through (iv) being
referred to as a "Fiduciary Indemnified Person") for, and to hold each Fiduciary
Indemnified Person harmless against, any loss, damage, claim, liability or
expense including taxes (other than taxes based on the income of the Trustee)
incurred without negligence or bad faith on the part of the Fiduciary
Indemnified Person arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or
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liability in connection with the exercise or performance of any of its powers or
duties hereunder. The obligation to indemnify as set forth in this
Section 11.4(b) shall survive the satisfaction and discharge of this Trust
Agreement.
Section 11.5 Outside Businesses. Any Covered Person, the Sponsor,
------------------
the Delaware Trustee and the Property Trustee (subject to Section 6.3(c)) may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Trust, and the Trust and the Holders of Trust Securities shall have no
rights by virtue of this Trust Agreement in and to such independent ventures or
the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, nor the
Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of Holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XII
ACCOUNTING
Section 12.1 Fiscal Year. The fiscal year ("Fiscal Year") of the
-----------
Trust shall be the calendar year, or such other year as is required by the Code
or the Treasury Regulations.
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Section 12.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied.
(b) Within 60 days after May 15 of each year, the Property Trustee
shall provide to the Holders of the Trust Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313(a) of the Trust Indenture Act. The Property
Trustee shall also comply with Section 313(b) of the Trust Indenture Act, if and
as required, in the form and manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Trust Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Trust Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return on such form or statement as may be appropriate under United States
federal income tax law, and any other annual income tax returns required to be
filed by the Regular Trustees on behalf of the Trust with any state or local
taxing authority.
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Section 12.3 Banking. The Trust shall maintain one or more bank
-------
accounts in the name and for the sole benefit of the Trust; provided, however,
that all payments of funds in respect of the Partnership Preferred Securities
held by the Property Trustee shall be made directly to the Property Account and
no other funds of the Trust shall be deposited in the Property Account. The
sole signatories for such accounts shall be designated by the Regular Trustees;
provided, however, that the Property Trustee shall designate the signatories for
the Property Account.
Section 12.4 Withholding. The Regular Trustees shall cause the Trust
-----------
to comply with all withholding requirements under United States federal, state
and local law. The Trust shall request, and the Holders shall provide to the
Trust, such forms or certificates as are necessary to establish an exemption
from withholding with respect to each Holder, and any representations and forms
as shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Regular Trustees
shall file required forms with applicable jurisdictions and, unless an exemption
from withholding is properly established by a Holder, shall remit amounts
withheld with respect to the Holder to applicable jurisdictions. To the extent
that the Trust is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a distribution in the amount of the withholding to the
Holder. In the event of any claimed overwithholding, Holders shall be limited
to an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding. Notwithstanding
anything herein to the contrary, the Regular Trustees shall cause the Trust,
absent receipt of an opinion of nationally recognized tax counsel to the
contrary, to withhold thirty percent (30%) (or such other rate as may be imposed
as a result of an amendment to the Code or such lower rate as may be imposed
under an applicable income tax treaty) on the gross amount of any Distributions
on Trust Preferred Securities held by a Holder that is not a "United States
person" within the meaning of Section 7701(a)(30) of the Code.
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ARTICLE XIII
AMENDMENTS AND MEETINGS
Section 13.1 Amendments.
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(a) Except as otherwise provided in this Trust Agreement or by any
applicable terms of the Trust Securities, this Trust Agreement may only be
amended by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee and the Delaware Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this Trust Agreement (including the
terms of the Trust Securities);
(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the Property Trustee or
the Delaware Trustee, the Property Trustee or the Delaware Trustee, as the case
may be, shall have first received an opinion of counsel (who may be counsel to
the Sponsor or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Trust Agreement (including the terms of the Trust Securities);
and
(iii) to the extent the result of such amendment would be to:
77
<PAGE>
(A) cause the Trust to be classified for purposes of
United States federal income taxation as an association or a publicly traded
partnership taxable as a corporation;
(B) cause the Partnership to be classified for
purposes of United States federal income tax as an association or a publicly
traded partnership taxable as a corporation;
(C) reduce or otherwise adversely affect the powers of
the Property Trustee in contravention of the Trust Indenture Act; or
(D) cause the Trust to be deemed to be an Investment
Company required to be registered under the 1940 Act.
(c) In the event the consent of the Property Trustee, as the Holder of
the Partnership Preferred Securities is required under the Agreement of Limited
Partnership with respect to any amendment, modification or termination of the
Agreement of Limited Partnership or the Partnership Preferred Securities the
Property Trustee shall request the direction of the Holders of the Trust
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Trust Securities voting together as a
single class; provided, however, that where a consent under the Agreement of
Limited Partnership would require the consent of a Super Majority of the Holders
of Partnership Preferred Securities the Property Trustee may only give such
consent at the direction of the Holders of at least the proportion in
liquidation amount of the Trust Securities which the relevant Super Majority
represents of the aggregate liquidation amount of the Partnership Preferred
Securities outstanding; provided, further, that the Property Trustee shall not
be obligated to take any action in accordance with the directions of the Holders
of the Trust Securities under this Section 13.1(c) unless the Property Trustee
has obtained an opinion of independent tax counsel to the effect that such
action is not inconsistent with the
78
<PAGE>
being classified as a grantor trust for United States federal income tax
purposes
(d) At such time after the Trust has issued any Trust Securities that
remain outstanding, any amendment that would (i) adversely affect the powers,
preferences or special rights of the Trust Securities or (ii) provide for the
dissolution, winding-up or termination of the Trust other than pursuant to the
terms of this Trust Agreement, may be effected only with the approval of the
Holders of at least a Majority in liquidation amount of the Trust Securities
affected thereby; provided, that if any amendment or proposal referred to in
clause (i) hereof would adversely affect only the Trust Preferred Securities or
the Trust Common Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of a Majority in liquidation amount of such
class of Trust Securities;
(e) Section 11.1(c) and this Section 13.1 shall not be amended without
the consent of all of the Holders of the Trust Securities;
(f) Article V shall not be amended without the consent of the Holder
of the Trust Common Securities;
(g) The rights of the Holder of the Trust Common Securities under
Article VI to increase or decrease the number of, and appoint and remove,
Trustees shall not be amended without the consent of the Holder of the Trust
Common Securities; and
(h) Notwithstanding Section 13.1(c), this Trust Agreement may be
amended without the consent of the Holders of the Trust Securities:
(i) to cure any ambiguity;
(ii) to correct or supplement any provision in this Trust
Agreement that may be defective or inconsistent with any other provision of this
Trust Agreement;
79
<PAGE>
(iii) to add to the covenants, restrictions or obligations of
the Sponsor;
(iv) to conform to any change in the 1940 Act or written change
in interpretation or application of the rules and regulations promulgated
thereunder by any legislative body, court, government agency or regulatory
authority;
(v) to conform to any change in the Trust Indenture Act or
written change in interpretation or application of the rules and regulations
promulgated thereunder by any legislative body, court, government agency or
regulatory authority; and
(vi) to modify, eliminate and add to any provision of this Trust
Agreement to such extent as may be necessary or desirable; provided that such
amendments do not have a material adverse effect on the rights, preferences or
privileges of the Holders of the Trust Securities.
Section 13.2 Meetings of the Holders of Trust Securities; Action by
------------------------------------------------------
Written Consent.
- ---------------
(a) Meetings of the Holders of any class of Trust Securities may be
called at any time by the Regular Trustees (or as provided in the terms of the
Trust Securities) to consider and act on any matter on which Holders of such
class of Trust Securities are entitled to act under the terms of this Trust
Agreement, the terms of the Trust Securities, the Agreement of Limited
Partnership, the rules of any stock exchange on which the Trust Preferred
Securities are listed or admitted for trading, the Business Trust Act or other
applicable law. The Regular Trustees shall call a meeting of the Holders of
such class if directed to do so by the Holders of at least 10% in liquidation
amount of such class of Trust Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in writing stating that the
signing Holders of Trust Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Trust Securities calling a meeting shall specify in writing the certificates
held by the Holders of Trust Securities exercising the right to call a meeting
and only those Trust Securities specified shall
80
<PAGE>
be counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the Trust
Securities, the following provisions shall apply to meetings of Holders of Trust
Securities:
(i) notice of any such meeting shall be given to all the Holders
of Trust Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Any action that may be taken at a
meeting of the Holders of Trust Securities may be taken without a meeting if a
consent in writing setting forth the action so taken is signed by the Holders of
Trust Securities owning not less than the minimum amount of Trust Securities in
liquidation amount that would be necessary to authorize or take such action at a
meeting at which all Holders of Trust Securities having a right to vote thereon
were present and voting. Prompt notice of the taking of action without a meeting
shall be given to the Holders of Trust Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that any written ballot
submitted to the Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Trust Security may authorize any Person to
act for it by proxy on all matters in which a Holder of Trust Securities is
entitled to participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Holder of Trust Securities executing
it. Except as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General Corporation Law
of the State of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders of the
Trust Securities were shareholders of a Delaware corporation;
81
<PAGE>
(iii) each meeting of the Holders of the Trust Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Trust Agreement, the terms
of the Trust Securities, the Trust Indenture Act or the listing rules of any
stock exchange on which the Trust Preferred Securities are then listed for
trading, otherwise provide, the Regular Trustees, in their sole discretion,
shall establish all other provisions relating to meetings of Holders of Trust
Securities, including notice of the time, place or purpose of any meeting at
which any matter is to be voted on by any Holders of Trust Securities, waiver of
any such notice, action by consent without a meeting, the establishment of a
record date, quorum requirements, voting in person or by proxy or any other
matter with respect to the exercise of any such right to vote.
ARTICLE XIV
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 14.1 Representations and Warranties of Property Trustee. The
--------------------------------------------------
Trustee that acts as initial Property Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Trust Agreement, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a New York banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the State of New York, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the Trust
Agreement;
(b) The execution, delivery and performance by the Property Trustee of
the Trust Agreement has been duly authorized by all necessary corporate action
on the part of the Property Trustee. The Trust Agreement has been duly executed
and delivered by the Property Trustee;
82
<PAGE>
(c) The execution, delivery and performance of the Trust Agreement by
the Property Trustee does not conflict with or constitute a breach of the
Articles of Incorporation or Bylaws of the Property Trustee; and
(d) The Property Trustee, pursuant to this Trust Agreement, shall hold
legal title to, and a valid ownership interest on behalf of the Holders of the
Trust Securities, in the Partnership Preferred Securities and agrees that,
except as expressly provided or contemplated by this Agreement, it will not
create, incur or assume, or suffer to exist any mortgage, pledge, hypothecation,
encumbrance, lien or other charge or security interest upon the Partnership
Preferred Securities.
Section 14.2 Representations and Warranties of Delaware Trustee. The
--------------------------------------------------
Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Trust Agreement, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a Delaware corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with power and authority to execute and deliver, and to carry out and perform
its obligations under the terms of, the Trust Agreement;
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Trust Agreement; and
(c) The Delaware Trustee is an entity which has its principal place of
business in the State of Delaware.
83
<PAGE>
ARTICLE XV
MISCELLANEOUS
Section 15.1 Notices. All notices provided for in this Trust
-------
Agreement shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by registered or certified mail, as
follows:
(a) If given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Trust Securities):
Hawaiian Electric Industries Capital Trust I
c/o The Bank of New York
101 Barclay Street, 21st Floor
New York, NY 10286
(b) If given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
other Trustees):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, DE 19711
Attention: Corporate Trust Trustee Department
(c) If given to the Property Trustee, at the mailing address set forth
below (or such other address as the Property Trustee may give notice of to the
Holders of the Trust Securities and the other Trustee):
The Bank of New York
101 Barclay Street, 21st Floor
New York, NY 10286
Attention: Global Trust Services
(d) If given to the Holder of the Trust Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Trust Common Securities may give notice of to the Trust):
84
<PAGE>
Hawaiian Electric Industries, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Attention: Treasury Department
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 15.2 Governing Law. This Trust Agreement and the rights of
-------------
the parties hereunder shall be governed by and construed in accordance with the
internal laws of the State of Delaware and all rights and remedies shall be
governed by such laws without regard to principles of conflict of laws.
Section 15.3 Intention of the Parties. It is the intention of the
------------------------
parties hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Trust Agreement shall be
interpreted to further this intention of the parties.
Section 15.4 Headings. Headings contained in this Trust Agreement
--------
are inserted for convenience of reference only and do not affect the
interpretation of this Trust Agreement or any provision hereof.
Section 15.5 Successors and Assigns. Whenever in this Trust
----------------------
Agreement any of the parties hereto is named or referred to, the successors and
assigns of such party shall be deemed to be included, and all covenants and
agreements in this Trust Agreement by the Sponsor and the Trustees shall bind
and inure to the benefit of their respective successors and assigns, whether so
expressed.
85
<PAGE>
Section 15.6 Partial Enforceability. If any provision of this Trust
----------------------
Agreement, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Trust Agreement, or the application
of such provision to persons or circumstances other than those to which it is
held invalid, shall not be affected thereby.
Section 15.7 Counterparts. This Trust Agreement may contain more
------------
than one counterpart of the signature page and this Trust Agreement may be
executed by the affixing of the signature of each of the Trustees and a duly
authorized officer of the Sponsor to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
IN WITNESS WHEREOF, each of the undersigned has caused these presents
to be executed as of the day and year first above written.
______________________________________
Robert F. Clarke, as Regular Trustee
______________________________________
Robert F. Mougeot, as Regular Trustee
______________________________________
Constance H. Lau, as Regular Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: __________________________________
Name:
Title:
86
<PAGE>
THE BANK OF NEW YORK, as Property
Trustee
By: __________________________________
Name:
Title:
HAWAIIAN ELECTRIC INDUSTRIES, INC.,
as Sponsor
By: __________________________________
Name:
Title:
By: __________________________________
Name:
Title:
87
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
This Trust Preferred Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This Trust Preferred Security is exchangeable for Trust Preferred
Securities registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Trust Preferred Security (other than a transfer of this Trust
Preferred Security 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) may be registered except in limited circumstances.
Unless this Trust Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York), a New York corporation, to the Trust or its agent for registration of
transfer, exchange or payment, and any Trust Preferred Security issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of the Depositary and any payment hereon is made to
Cede & Co. or such other entity as is requested by an authorized representative
of the Depositary, 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.
A-1.1
<PAGE>
TP-1
[ ]
CUSIP NO. _________
CERTIFICATE EVIDENCING TRUST PREFERRED SECURITIES
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST __
____% Trust Preferred Securities (liquidation amount $25 per Trust
Preferred Security)
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST __, a statutory business
trust created under the laws of the State of Delaware (the "Trust"), hereby
certifies that Cede & Co. (the "Holder") is the registered owner of __________
preferred securities of the Trust representing undivided beneficial ownership
interests in the assets of the Trust designated the _____% Trust Preferred
Securities (liquidation amount $25 per Trust Preferred Security) (the "Trust
Preferred Securities"). The Trust Preferred Securities are freely transferable
on the books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer. The designation, rights, powers, privileges, restrictions,
preferences and other terms and provisions of the Trust Preferred Securities
represented hereby are set forth in, issued under and shall in all respects be
subject to the provisions of the Amended and Restated Trust Agreement dated as
of _____________, 1997, as the same may be amended from time to time (the "Trust
Agreement"). Capitalized terms used herein but not defined shall have the
meaning given them in the Trust Agreement. The Holder is entitled to the
benefits of the Trust Preferred Securities Guarantee to the extent provided
therein. Each Holder of a Trust Preferred Security, by acceptance of this
certificate and each Trust Preferred Security Beneficial Owner, by acquisition
of a beneficial interest in a certificate,
A-1.2
<PAGE>
agrees to treat the Initial Debentures, and any other Affiliate Investment
Instruments that are treated as debt instruments by the relevant Investment
Affiliate and by the Partnership, as indebtedness for United States federal
income tax purposes. The Sponsor will provide a copy of the Trust Agreement, the
Trust Preferred Securities Guarantee and the Agreement of Limited Partnership to
a Holder without charge upon written request to the Trust at its principal place
of business.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of _______________, 1997.
HAWAIIAN ELECTRIC INDUSTRIES
CAPITAL TRUST __
---------------------------------
_______________, as Regular
Trustee
---------------------------------
_______________, as Regular
Trustee
---------------------------------
_______________, as Regular
Trustee
A-1.3
<PAGE>
CERTIFICATE OF AUTHENTICATION
This certificate is one of the issue of Trust Preferred Securities
described in the Trust Agreement.
Date of Authentication: _______________.
THE BANK OF NEW YORK,
as Property Trustee
By: ____________________________
Name:
Title:
(See reverse for additional terms)
A-1.4
<PAGE>
[REVERSE OF SECURITY]
Holders of Trust Preferred Securities shall be entitled to receive
cumulative cash distributions at a rate per annum of _____% of the stated
liquidation amount of $25 per Trust Preferred Security. Distributions on the
Trust Preferred Securities shall, from the date of original issue, accumulate
and be cumulative and shall be payable quarterly only to the extent that the
Trust has funds available for the payment of such distributions in the Property
Account. Distributions not paid on the scheduled payment date will accumulate
and compound quarterly (to the extent permitted by applicable law) at the rate
of _____% per annum. The term "Distributions" as used herein shall mean ordinary
cumulative distributions in respect of each Fiscal Period together with any such
Compounded Distributions. Amounts available to the Trust for distribution to the
Holders of the Trust Preferred Securities will be limited to payments received
by the Trust from the Partnership on the Partnership Preferred Securities or
from the Company on the Partnership Guarantee. Distributions on the Partnership
Preferred Securities will be paid only if, as and when declared in the sole
discretion of the General Partner of the Partnership. If and to the extent that
the Partnership makes a distribution on the Partnership Preferred Securities
held by the Property Trustee or the Company makes a payment under the
Partnership Guarantee (the amount of any such partnership distribution,
including any compounded partnership distributions or guarantee payment being a
"Payment Amount"), the Trust shall and the Property Trustee is directed, to the
extent funds are legally available for that purpose, to make a Pro Rata
Distribution of the Payment Amount to Holders.
The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period on the basis of the actual number of days elapsed in a
90-day quarter.
A-1.5
<PAGE>
Except as otherwise described herein, distributions on the Trust
Preferred Securities will be cumulative, will accumulate from the date of
initial issuance and will be payable quarterly in arrears, on March 31, June 30,
September 30 and December 31 of each year, commencing on March 31, 1997 if, as
and when legally available for payment by the Property Trustee. If the Trust
Preferred Securities (or, if the Trust is liquidated, the Partnership Preferred
Securities) are in book-entry-only form, Distributions will be payable to the
Holders of record of Trust Preferred Securities as they appear on the books and
records of the Trust on the relevant record dates, which will be one Business
Day prior to the relevant payment dates. If the Trust Preferred Securities (or,
if the Trust is liquidated, the Partnership Preferred Securities) do not remain
in book-entry-only form, the relevant record dates shall be the 15th day of the
month of the relevant payment dates. In the event that any date on which
distributions are payable is not a Business Day, payment of such Distribution
shall be made on the next succeeding day which is a Business Day (without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day (without any reduction of
interest or other payments in respect of such early payment). Payments of
accumulated Distributions will be payable to Holders of record of Trust
Preferred Securities as they appear on the books and records of the Trust on the
record date with respect to the payment date for the Trust Preferred Securities
which corresponds to the payment date fixed by the Partnership with respect to
the payment of cumulative distributions on the Partnership Preferred Securities.
The Trust Preferred Securities shall be redeemable as provided in the
Trust Agreement.
A-1.6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Preferred Security Certificate to:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
(Insert assignee's social security or tax identification number)
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
agent to transfer this Trust Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: ______________________________
Signature: _________________________
(Sign exactly as your name appears on the other side of this Trust Preferred
Security Certificate)
A-1.7
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
CS-1 [ ]
CERTIFICATE EVIDENCING TRUST COMMON SECURITIES
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST __
____% Trust Common Securities (liquidation amount $25 per Trust
Common Security)
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST __, a statutory business
trust created under the laws of the State of Delaware (the "Trust"), hereby
certifies that Hawaiian Electric Industries, Inc., a Hawaii corporation (the
"Holder") is the registered owner of _____ common securities of the Trust
representing undivided beneficial ownership interests in the assets of the Trust
designated the ____% Trust Common Securities (liquidation amount $25 per Trust
Common Security) (the "Trust Common Securities"). The designation, rights,
powers, privileges, restrictions, preferences and other terms and provisions of
the Trust Common Securities represented hereby are set forth in, issued under
and shall in all respects be subject to the provisions of the Amended and
Restated Trust Agreement dated as of ______________, 1997, as the same may be
amended from time to time (the "Trust Agreement"). Capitalized terms used
herein but not defined shall have the meaning given them in the Trust Agreement.
The Holder is entitled to the benefits of the Trust Common Securities Guarantee
to the extent provided therein. Each Holder of a Trust Common Security, by
acceptance of this certificate, agrees to treat the Initial Debentures, and any
other Affiliate Investment Instruments that
A-2.1
<PAGE>
are treated as debt instruments by the relevant Investment Affiliate and by the
Partnership, as indebtedness for United States federal income tax purposes. The
Sponsor will provide a copy of the Trust Agreement, the Trust Common Securities
Guarantee and the Agreement of Limited Partnership to a Holder without charge
upon written request to the Sponsor at its principal place of business. THE
TRUST COMMON SECURITIES ARE TRANSFERABLE ON THE BOOKS AND RECORDS OF THE TRUST
ONLY IN ACCORDANCE WITH THE TERMS OF THE TRUST AGREEMENT.
A-2.2
<PAGE>
Upon receipt of this certificate, the Sponsor is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of _______________, 1997.
HAWAIIAN ELECTRIC INDUSTRIES
CAPITAL TRUST I
_________________________________
_____________________, as Regular
Trustee
_________________________________
_____________________, as Regular
Trustee
_________________________________
_____________________, as Regular
Trustee
CERTIFICATE OF AUTHENTICATION
This certificate is one of the issue of Trust Common Securities
described in the Trust Agreement.
Date of Authentication: _______________.
THE BANK OF NEW YORK,
as Property Trustee
By: ____________________________
Name:
Title:
(See reverse for additional terms)
A-2.3
<PAGE>
FORM OF REVERSE OF SECURITY
The Holder of Trust Common Securities shall be entitled to receive
cumulative cash distributions at a rate per annum of _____% of the stated
liquidation amount of $25 per Trust Common Security. Distributions on the Trust
Common Securities shall, from the date of original issue, accrue and be
cumulative and shall be payable quarterly only to the extent that the Trust has
funds available for the payment of such distributions in the Property Account.
Distributions not paid on the scheduled payment date will accumulate and
compound quarterly (to the extent permitted by applicable law) at the rate of
____% per annum. The term "Distributions" as used herein shall mean ordinary
cumulative distributions in respect of each Fiscal Period together with any such
Compounded Distributions. Amounts available to the Trust for distribution to the
Holder of the Trust Common Securities will be limited to payments received by
the Trust from the Partnership on the Partnership Preferred Securities or from
the Company on the Partnership Guarantee. Distributions on the Partnership
Preferred Securities will be paid only if, as and when declared in the sole
discretion of the General Partner of the Partnership. If and to the extent that
the Partnership makes a distribution on the Partnership Preferred Securities
held by the Property Trustee or the Company makes a payment under the
Partnership Guarantee (the amount of any such partnership distribution,
including any compounded partnership distributions or guarantee payment being a
"Payment Amount"), the Trust shall and the Property Trustee is directed, to the
extent funds are available for that purpose, to make a Pro Rata Distribution of
the Payment Amount to Holders.
The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period on the basis of the actual number of days elapsed in a 90-
day quarter.
Except as otherwise described herein, distributions on the Trust
Common Securities will be cumulative, will accrue
A-2.4
<PAGE>
from the date of initial issuance and will be payable quarterly in arrears, on
March 31, June 30, September 30 and December 31 of each year, commencing on
March 31, 1997 if, as and when legally available for payment by the Property
Trustee. Distributions will be payable to the Holder of record of the Trust
Common Securities as they appear on the books and records of the Trust on the
relevant record dates, which will be one Business Day prior to the relevant
payment dates. In the event that any date on which distributions are payable is
not a Business Day, payment of the Distribution shall be made on the next
succeeding day which is a Business Day (without any interest or other payment in
respect of any such delay) except that, if such Business Day falls in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day (without any reduction of interest or other payments in
respect of such early payment). Payments of accumulated Distributions will be
payable to the Holder of record of the Trust Common Securities as recorded in
the books and records of the Trust on the record date with respect to the
payment date for the Trust Common Securities which corresponds to the payment
date fixed by the Partnership with respect to the payment of cumulative
distributions on the Partnership Preferred Securities.
The Trust Common Securities shall be redeemable as provided in the
Trust Agreement.
A-2.5
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Common Security Certificate to:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Insert address and zip code of assignee) and irrevocably appoints
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
agent to transfer this Trust Common Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: _____________________________
Signature: ________________________
(Sign exactly as your name appears on the other side of this Trust Common
Security Certificate)
A-2.6
<PAGE>
Exhibit 4(g)
------------
===============================================================================
HAWAIIAN ELECTRIC INDUSTRIES, INC.
AND
___________________________, Trustee
Senior Indenture
Dated as of ______________, _____
_______________
===============================================================================
<PAGE>
CROSS REFERENCE SHEET/1/
_______________
Between
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as
of _____________, _____ between HAWAIIAN ELECTRIC INDUSTRIES, INC. and
__________________, Trustee:
<TABLE>
<CAPTION>
SECTION OF THE ACT SECTION OF INDENTURE
- ------------------ --------------------
<S> <C>
310(a)(1) and (2)........ 6.9
310(a)(3) and (4)........ Inapplicable
310(b)................... 6.8 and 6.10(a), (b) and (d)
310(c)................... Inapplicable
311(a)................... 6.13
311(b)................... 6.13
311(c)................... Inapplicable
312(a)................... 4.1 and 4.2
312(b)................... 4.2
312(c)................... 4.2
313(a)................... 4.4
313(b)(1)................ Inapplicable
313(b)(2)................ 4.4
313(c)................... 4.4, 5.11, 6.10, 6.11, 8.2
and 12.2
313(d)................... 4.4
314(a)................... 3.5 and 4.3
314(b)................... Inapplicable
314(c)(1) and (2)........ 11.5
314(c)(3)................ Inapplicable
314(d)................... Inapplicable
314(e)................... 11.5
314(f)................... Inapplicable
315(a), (c) and (d)...... 6.1
315(b)................... 5.11
315(e)................... 5.12
316(a)(1)................ 5.9 and 5.10
316(a)(2)................ Not required
316(a) (last sentence)... 7.4
316(b)................... 5.7
317(a)................... 5.2
317(b)................... 3.4(a) and (b)
318(a)................... 11.7
</TABLE>
- ----------------------
/1/ This Cross Reference Sheet is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
_______________
PAGE
----
PARTIES.....................................................
RECITALS
Authorization of Indenture.............................
Compliance with Legal Requirements.....................
Purpose of and Consideration for Indenture.............
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined......................
Authenticating Agent.......................
Authorized Newspaper.......................
Board of Directors.........................
Board Resolution...........................
Business Day...............................
Commission.................................
Consolidated Total Assets..................
Corporate Trust Office.....................
Coupon.....................................
covenant defeasance........................
Depositary.................................
Dollar.....................................
ECU........................................
Event of Default...........................
Fair Value.................................
Foreign Currency...........................
Holder, Holder of Securities,
Securityholder...........................
Indebtedness...............................
Indenture..................................
Issuer.....................................
Issuer Order...............................
Judgment Currency..........................
Officer's Certificate......................
i
<PAGE>
Opinion of Counsel.........................
Original Issue Date........................
Original Issue Discount Security...........
Outstanding................................
Periodic Offering..........................
Person.....................................
principal..................................
record date................................
Registered Global Security.................
Registered Security........................
Required Currency..........................
Responsible Officer........................
Restricted Subsidiary......................
Security or Securities.....................
Subsidiary.................................
Trust Indenture Act of 1939................
Trustee....................................
Unregistered Security......................
U. S. Government Obligations...............
Voting Stock...............................
Yield to Maturity..........................
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally............................
SECTION 2.2 Form of Trustee's Certificate
of Authentication........................
SECTION 2.3 Amount Unlimited; Issuable in Series.......
SECTION 2.4 Authentication and Delivery of
Securities...............................
SECTION 2.5 Execution of Securities....................
SECTION 2.6 Certificate of Authentication..............
SECTION 2.7 Denomination and Date of
Securities; Payments of Interest.........
SECTION 2.8 Registration, Transfer and Exchange........
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost
and Stolen Securities....................
SECTION 2.10 Cancellation of Securities;
Destruction Thereof......................
SECTION 2.11 Temporary Securities.......................
SECTION 2.12 Computation of Interest....................
ii
<PAGE>
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest..........
SECTION 3.2 Offices for Payments, etc..................
SECTION 3.3 Appointment to Fill a Vacancy in
Office of Trustee........................
SECTION 3.4 Paying Agents..............................
SECTION 3.5 Written Statement to Trustee...............
SECTION 3.6 Corporate Existence........................
SECTION 3.7 Maintenance of Properties..................
SECTION 3.8 Payment of Taxes and Other Claims..........
SECTION 3.9 Restriction on Liens.......................
SECTION 3.10 SEC Reports................................
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information
as to Names and Addresses of
Securityholders..........................
SECTION 4.2 Preservation and Disclosure of
Securityholders Lists....................
SECTION 4.3 Reports by the Issuer......................
SECTION 4.4 Reports by the Trustee.....................
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration
of Maturity; Waiver of Default...........
SECTION 5.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt...................
SECTION 5.3 Application of Proceeds....................
SECTION 5.4 Suits for Enforcement......................
SECTION 5.5 Restoration of Rights on Abandonment
iii
<PAGE>
of Proceedings...........................
SECTION 5.6 Limitations on Suits by
Securityholders..........................
SECTION 5.7 Unconditional Right of
Securityholders to Institute
Certain Suits............................
SECTION 5.8 Powers and Remedies Cumulative;
Delay or Omission Not Waiver of
Default..................................
SECTION 5.9 Control by Holders of Securities...........
SECTION 5.10 Waiver of Past Defaults....................
SECTION 5.11 Trustee to Give Notice of Default,
But May Withhold in Certain
Circumstances............................
SECTION 5.12 Right of Court to Require Filing
of Undertaking to Pay Costs..............
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the
Trustee; During Default; Prior to
Default..................................
SECTION 6.2 Certain Rights of the Trustee..............
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or
Application of Proceeds Thereof..........
SECTION 6.4 Trustee and Agents May Hold Securities
or Coupons; Collections, etc.............
SECTION 6.5 Moneys Held by Trustee.....................
SECTION 6.6 Compensation and Indemnification
of Trustee and Its Prior Claim...........
SECTION 6.7 Right of Trustee to Rely on
Officer's Certificate, etc...............
SECTION 6.8 Indentures Not Creating Potential
Conflicting Interests for the
Trustee..................................
SECTION 6.9 Persons Eligible for Appointment
as Trustee...............................
SECTION 6.10 Resignation and Removal; Appointment
of Successor Trustee.....................
SECTION 6.11 Acceptance of Appointment by
Successor Trustee........................
iv
<PAGE>
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee........
SECTION 6.13 Preferential Collection of Claims
Against Issuer...........................
SECTION 6.14 Appointment of Authenticating Agent........
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by
Securityholders..........................
SECTION 7.2 Proof of Execution of Instruments and
Holding of Securities....................
SECTION 7.3 Holders to be Treated as Owners............
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding..............................
SECTION 7.5 Right of Revocation of Action Taken........
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without
Consent of Securityholders...............
SECTION 8.2 Supplemental Indentures With Consent
of Securityholders.......................
SECTION 8.3 Effect of Supplemental Indenture...........
SECTION 8.4 Documents to Be Given to Trustee...........
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures..................
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Issuer May Consolidate, Etc., Only
on Certain Terms.........................
SECTION 9.2 Successor Corporation Substituted..........
SECTION 9.3 Restrictions on Dispositions
of HECO Shares...........................
v
<PAGE>
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of
Indenture................................
SECTION 10.2 Application by Trustee of Funds
Deposited for Payment of Securities......
SECTION 10.3 Repayment of Moneys Held by Paying
Agent....................................
SECTION 10.4 Return of Moneys Held by Trustee and
Paying Agent Unclaimed for Two
Years....................................
SECTION 10.5 Indemnity For U.S. Government
Obligations..............................
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Stockholders, Officers
and Directors of Issuer Exempt from
Individual Liability.....................
SECTION 11.2 Provisions of Indenture for the Sole
Benefit of Parties and Holders of
Securities and Coupons...................
SECTION 11.3 Successors and Assigns of Issuer
Bound by Indenture.......................
SECTION 11.4 Notices and Demands on Issuer,
Trustee and Holders of Securities
and Coupons..............................
SECTION 11.5 Officer's Certificates and Opinions
of Counsel; Statements to Be
Contained Therein........................
SECTION 11.6 Payments Due on Saturdays, Sundays
and Holidays.............................
SECTION 11.7 Conflict of Any Provision of
Indenture with Trust Indenture
Act of 1939..............................
SECTION 11.8 New York Law to Govern.....................
SECTION 11.9 Counterparts...............................
SECTION 11.10 Effect of Headings.........................
vi
<PAGE>
SECTION 11.11 Securities in a Foreign Currency
or in ECU................................
SECTION 11.12 Judgment Currency..........................
SECTION 11.13 Separability Clause........................
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article...................
SECTION 12.2 Notice of Redemption; Partial
Redemptions..............................
SECTION 12.3 Payment of Securities Called for
Redemption...............................
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for
Redemption...............................
SECTION 12.5 Mandatory and Optional Sinking
Funds....................................
TESTIMONIUM.................................................
SIGNATURES..................................................
vii
<PAGE>
THIS INDENTURE, dated as of _______________ between HAWAIIAN ELECTRIC
INDUSTRIES, INC., a Hawaii corporation (the "Issuer"), and
________________________, a _____________________, as trustee (the "Trustee"),
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Issuer has duly authorized the issue from time to time of
its unsecured debentures, notes or other evidences of indebtedness to be issued
in one or more series (the "Securities") up to such principal amount or amounts
as may from time to time be authorized in accordance with the terms of this
Indenture;
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication, delivery
and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the holders thereof, the Issuer and the Trustee mutually covenant and agree
for the equal and proportionate benefit of the respective holders from time to
time of the Securities and of the coupons, if any, appertaining thereto as
follows:
ARTICLE ONE
DEFINITIONS
-----------
SECTION 1.1 CERTAIN TERMS DEFINED. The following terms (except
----------------------
as otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have
<PAGE>
the respective meanings specified in this Section. All other terms used in this
Indenture that are defined in the Trust Indenture Act of 1939 or the definitions
of which in the Securities Act of 1933 are referred to in the Trust Indenture
Act of 1939, including terms defined therein by reference to the Securities Act
of 1933 (except as herein otherwise expressly provided or unless the context
otherwise requires), shall have the meanings assigned to such terms in said
Trust Indenture Act and in said Securities Act as in force at the date of this
Indenture. All accounting terms used herein and not expressly defined shall have
the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES"
----------------------------------------
means such accounting principles as are generally accepted at the time of any
computation. The words "HEREIN", "HEREOF" and "HEREUNDER" and other words of
------ ------ ---------
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision. The terms defined in this Article have
the meanings assigned to them in this Article and include the plural as well as
the singular.
"AUTHENTICATING AGENT" shall have the meaning set forth in Section
--------------------
6.14.
"AUTHORIZED NEWSPAPER" means a newspaper (which, in the case of The
--------------------
City of New York, will, if practicable, be The Wall Street Journal (Eastern
Edition) published in an official language of the country of publication
customarily published at least once a day for at least five days in each
calendar week and of general circulation in The City of New York or in any other
applicable city or country. If it shall be impractical in the opinion of the
Trustee to make any publication of any notice required hereby in an Authorized
Newspaper, any publication or other notice in lieu thereof which is made or
given with the approval of the Trustee shall constitute a sufficient publication
of such notice.
"BOARD OF DIRECTORS" means either the Board of Directors of the Issuer
------------------
or any committee of such Board duly authorized to act on its behalf.
"BOARD RESOLUTION" means a copy of one or more resolutions, certified
----------------
by the secretary or an assistant secretary of the Issuer to have been duly
adopted or consented
2
<PAGE>
to by the Board of Directors and to be in full force and effect, and delivered
to the Trustee.
"BUSINESS DAY" means, with respect to any Security, a day that in the
------------
city (or in any of the cities, if more than one) in which amounts are payable,
as specified in the form of such Security, is not a day on which banking
institutions are authorized or required by law or regulation to close.
"COMMISSION" means the Securities and Exchange Commission, as from
----------
time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties on such date.
"CONSOLIDATED TOTAL ASSETS" means, in respect of the Issuer as of any
-------------------------
date of determination, the amount of total assets shown on the consolidated
balance sheet of the Issuer and its consolidated subsidiaries contained in the
most recent annual or quarterly report filed with the Commission, or if the
Issuer is not then subject to the Securities Exchange Act of 1934, the most
recent annual or quarterly report to stockholders and, in respect of any
Subsidiary as of any date of determination, the amount of total assets of such
Subsidiary and its consolidated subsidiaries from which such consolidated
balance sheet of the Issuer and its consolidated Subsidiaries was derived.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which the
----------------------
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located in the County of ______________, the City of
______________.
"COUPON" means any interest coupon appertaining to an Unregistered
------
Security.
"COVENANT DEFEASANCE" shall have the meaning set forth in Section
-------------------
10.1(C).
"DEPOSITARY" means, with respect to the Securities of any series
----------
issuable or issued in the form of one or more
3
<PAGE>
Registered Global Securities, the Person designated as Depositary by the Company
pursuant to Section 2.3 until a successor Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"DEPOSITARY" shall mean or include each Person who is then a Depositary
hereunder, and if at any time there is more than one such Person, "DEPOSITARY"
as used with respect to the Securities of any such series shall mean the
Depositary with respect to the Registered Global Securities of that series.
"DOLLAR" means the coin or currency of the United States of America as
------
at the time of payment is legal tender for the payment of public and private
debts.
"ECU" means the European Currency Unit as defined and revised from
---
time to time by the Council of European Communities.
"EVENT OF DEFAULT" means any event or condition specified as such in
----------------
Section 5.1.
"FAIR VALUE" when used with respect to any Voting Stock means the fair
----------
value as determined in good faith by the Board of Directors of the Issuer.
"FOREIGN CURRENCY" means a currency issued by the government of a
----------------
country other than the United States.
"HOLDER", "HOLDER OF SECURITIES", "SECURITYHOLDER" or other similar
------ -------------------- --------------
terms mean (a) in the case of any Registered Security, the person in whose name
such Security is registered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof, and (b) in the case of any
Unregistered Security, the bearer of such Security, or any Coupon appertaining
thereto, as the case may be.
"INDEBTEDNESS" shall have the meaning set forth in Section 5.1.
------------
"INDENTURE" means this instrument as originally executed and delivered
---------
or, if amended or supplemented as herein provided, as so amended or supplemented
or both, and shall include the forms and terms of particular series of
Securities established as contemplated hereunder.
4
<PAGE>
"ISSUER" means (except as otherwise provided in Article Six) Hawaiian
------
Electric Industries, Inc., a Hawaii corporation and, subject to Article Nine,
its successors and assigns.
"ISSUER ORDER" means a written statement, request or order of the
------------
Issuer signed in its name by the the president, any vice president or the
treasurer or controller of the Issuer.
"JUDGMENT CURRENCY" shall have the meaning set forth in Section 11.12.
-----------------
"OFFICER'S CERTIFICATE" means a certificate signed by the presiden,
---------------------
any vice president, the treasurer or the controller of the Issuer and delivered
to the Trustee. Each such certificate shall comply with Section 314 of the
Trust Indenture Act of 1939 and include the statements provided for in Section
11.5.
"OPINION OF COUNSEL" means an opinion in writing signed by the General
------------------
Counsel of the Issuer or by such other legal counsel who may be an employee of
or counsel to the Issuer and who shall be satisfactory to the Trustee. Each
such opinion shall comply with Section 314 of the Trust Indenture Act of 1939
and include the statements provided for in Section 11.5.
"ORIGINAL ISSUE DATE" of any Security (or portion thereof) means the
-------------------
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security that provides
--------------------------------
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the maturity thereof pursuant to Section 5.1.
"OUTSTANDING" (except as otherwise provided in Section 7.4), when used
-----------
with reference to Securities, shall, subject to the provisions of Section 7.4,
mean, as of any particular time, all Securities authenticated and delivered by
the Trustee under this Indenture, except
5
<PAGE>
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys or U.S. Government Obligations (as provided for in Section
10.1) in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Issuer) or shall have been
set aside, segregated and held in trust by the Issuer for the Holders of
such Securities (if the Issuer shall act as its own paying agent), PROVIDED
that if such Securities, or portions thereof, are to be redeemed prior to
the maturity thereof, notice of such redemption shall have been given as
herein provided, or provision satisfactory to the Trustee shall have been
made for giving such notice; and
(c) Securities which shall have been paid or in substitution for which
other Securities shall have been authenticated and delivered pursuant to
the terms of Section 2.9 (except with respect to any such Security as to
which proof satisfactory to the Trustee is presented that such Security is
held by a person in whose hands such Security is a legal, valid and binding
obligation of the Issuer).
In determining whether the Holders of the requisite principal amount
of Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof pursuant to Section 5.1.
"PERIODIC OFFERING" means an offering of Securities of a series from
-----------------
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated maturity
or maturities thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Company or its agents upon the issuance of
such Securities.
6
<PAGE>
"PERSON" means any individual, corporation, partnership, limited
------
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PLACE OF PAYMENT" when used with respect to the Securities of any
----------------
series, means the place or places where the principal of and interest on the
Securities of that series are payable as specified as contemplated by Section
2.3.
"PRINCIPAL" whenever used with reference to the Securities or any
---------
Security or any portion thereof, shall be deemed to include "and premium, if
any".
"RECORD DATE" shall have the meaning set forth in Section 2.7.
-----------
"REGISTERED GLOBAL SECURITY", means a Security evidencing all or a
--------------------------
part of a series of Registered Securities, issued to the Depositary for such
series in accordance with Section 2.4, and bearing the legend prescribed in
Section 2.4.
"REGISTERED SECURITY" means any Security registered on the Security
-------------------
register of the Issuer.
"REQUIRED CURRENCY" shall have the meaning set forth in Section 11.12.
-----------------
"RESPONSIBLE OFFICER" when used with respect to the Trustee means the
-------------------
chairman of the board of directors, any vice chairman of the board of directors,
the chairman of the trust committee, the chairman of the executive committee,
any vice chairman of the executive committee, the president, any vice president,
(whether or not designated by numbers or words added before or after the title
"VICE PRESIDENT") the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant vice president, any assistant
cashier, any assistant secretary, any assistant treasurer, or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
knowledge of and familiarity with the particular subject.
7
<PAGE>
"SECURITY" or "SECURITIES" (except as otherwise provided in Section
-------- ----------
7.4) has the meaning stated in the first recital of this Indenture, or, as the
case may be, Securities that have been authenticated and delivered under this
Indenture.
"SUBSIDIARY" means any corporation, partnership or other entity of
----------
which at the time of determination the Issuer owns or controls directly or
indirectly more than 50% of the shares of Voting Stock.
"TRUST INDENTURE ACT OF 1939" (except as otherwise provided in
---------------------------
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939 as in force at the
date as of which this Indenture was originally executed.
"TRUSTEE" means the Person identified as "Trustee" in the first
-------
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee. "Trustee" shall also mean or include each Person
who is then a trustee hereunder and if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the trustee with respect to the Securities of such series.
"UNREGISTERED SECURITY" means any Security other than a Registered
---------------------
Security.
"U.S. GOVERNMENT OBLIGATIONS" shall have the meaning set forth in
---------------------------
Section 10.1(A).
"VOTING STOCK" means stock of any class or classes having general
------------
voting power under ordinary circumstances to
8
<PAGE>
elect a majority of the board of directors, managers or trustees of the
corporation in question, PROVIDED that, for the purposes hereof, stock which
carries only the right to vote conditionally on the happening of an event shall
not be considered voting stock whether or not such event shall have happened.
"YIELD TO MATURITY" means the yield to maturity on a series of
-----------------
securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
ARTICLE TWO
SECURITIES
----------
SECTION 2.1 FORMS GENERALLY. The Securities of each series and the
---------------
Coupons, if any, to be attached thereto shall be substantially in such form (not
inconsistent with this Indenture) as shall be established by or pursuant to one
or more Board Resolutions (as set forth in a Board Resolution or, to the extent
established pursuant to rather than set forth in a Board Resolution, an
Officer's Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or
legends or endorsements, not inconsistent with the provisions of this Indenture,
as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such
Securities and Coupons, if any, as evidenced by their execution of such
Securities and Coupons.
The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and Coupons,
if any.
9
<PAGE>
SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
-----------------------------------------------
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
"This is one of the Securities referred to in the within-mentioned
Senior Indenture.
_______________________________,
as Trustee
By_____________________________
Authorized Signatory"
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Trustee's Certificate of
Authentication to be borne by the Securities of each such series shall be
substantially as follows:
"This is one of the Securities referred to in the within-mentioned
Senior Indenture.
______________________________,
as Authenticating Agent
By____________________________
Authorized Signatory"
SECTION 2.3 AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate
------------------------------------
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series and each such
series shall rank equally and pari passu with all other unsecured and
unsubordinated debt of the Issuer. There shall be established in or pursuant to
one or more Board Resolutions (and to the extent established pursuant to rather
than set forth in a Board Resolution, in an Officer's Certificate detailing such
establishment) or established in one or more indentures supplemental hereto,
prior to the initial issuance of Securities of any series,
(1) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all other
series;
10
<PAGE>
(2) any limit upon the aggregate principal amount of the Securities
of the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3);
(3) if other than Dollars, the coin or currency in which the
Securities of that series are denominated (including, but not limited to,
any Foreign Currency or ECU);
(4) the date or dates on which the principal of the Securities of
the series is payable;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which such interest shall
accrue, on which such interest shall be payable and (in the case of
Registered Securities) on which a record shall be taken for the
determination of Holders to whom interest is payable and/or the method by
which such rate or rates or date or dates shall be determined;
(6) the place or places of payment where the principal of and any
interest on Securities of the series shall be payable (if other than as
provided in Section 3.2);
(7) the right, if any, of the Issuer to redeem Securities, in whole
or in part, at its option and the period or periods within which, the price
or prices at which and any terms and conditions upon which Securities of
the series may be so redeemed, pursuant to any sinking fund or otherwise;
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(8) the obligation, if any, of the Issuer to redeem, purchase or
repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder thereof
and the price or prices at which and the period or periods within which and
any terms and conditions upon which Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof in the case of Registered Securities, or $1,000 and $5,000 in the
case of Unregistered Securities, the denominations in which Securities of
the series shall be issuable;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof;
(11) if other than the coin or currency in which the Securities of
that series are denominated, the coin or currency in which payment of the
principal of or interest on the Securities of such series shall be payable;
(12) if the principal of or interest on the Securities of such
series are to be payable, at the election of the Issuer or a Holder
thereof, in a coin or currency other than that in which the Securities are
denominated, the period or periods within which, and the terms and
conditions upon which, such election may be made;
(13) if the amount of payments of principal of and interest on the
Securities of the series may be determined with reference to an index based
on a coin or currency other than that in which the Securities of the series
are denominated, the manner in which such amounts shall be determined;
(14) whether the Securities of the series will be issuable as
Registered Securities (and if so, whether such Securities will be issuable
as Registered Global Securities) or Unregistered Securities (with or
without Coupons), or any combination of the foregoing, any
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restrictions applicable to the offer, sale or delivery of Unregistered
Securities or the payment of interest thereon and, if other than as
provided in Section 2.8, the terms upon which Unregistered Securities of
any series may be exchanged for Registered Securities of such series and
vice versa;
(15) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series held by a person who is
not a U.S. person in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, whether the Issuer will have the option to
redeem such Securities rather than pay such additional amounts;
(16) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, the
form and terms of such certificates, documents or conditions;
(17) any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars or any other agents with respect to the
Securities of such series;
(18) any other events of default or covenants with respect to the
Securities of such series in addition to the Events of Default or covenants
set forth herein; and
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and Coupons, if any, appertaining
thereto, shall be substantially identical, except in the case of Registered
Securities as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officer's Certificate referred to above or
as set forth in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and may be issued from time to
time, consistent with the terms of this Indenture, if so provided by or pursuant
to such Board Resolution, such Officer's Certificate or in any such indenture
supplemental hereto.
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SECTION 2.4 AUTHENTICATION AND DELIVERY OF SECURITIES. The Issuer
-----------------------------------------
may deliver Securities of any series having attached thereto appropriate
Coupons, if any, executed by the Issuer to the Trustee for authentication
together with the applicable documents referred to below in this Section, and
the Trustee shall thereupon authenticate and deliver such Securities to or upon
the order of the Issuer (contained in the Issuer Order referred to below in this
Section) or pursuant to such procedures acceptable to the Trustee and to such
recipients as may be specified from time to time by an Issuer Order. The
maturity date, original issue date, interest rate and any other terms of the
Securities of such series and Coupons, if any, appertaining thereto shall be
determined by or pursuant to such Issuer Order and procedures. If provided for
in such procedures, such Issuer Order may authorize authentication and delivery
pursuant to oral instructions from the Issuer or its duly authorized agent,
which instructions shall be promptly confirmed in writing. In authenticating
such Securities and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive (in the case of subparagraphs 2, 3 and 4 below only at or before the
time of the first request of the Issuer to the Trustee to authenticate
Securities of such series) and (subject to Section 6.1) shall be fully protected
in relying upon, unless and until such documents have been superseded or
revoked:
(1) an Issuer Order requesting such authentication and setting forth
delivery instructions if the Securities and Coupons, if any, are not to be
delivered to the Issuer, provided that, with respect to Securities of a
series subject to a Periodic Offering, (a) such Issuer Order may be
delivered by the Issuer to the Trustee prior to the delivery to the Trustee
of such Securities for authentication and delivery, (b) the Trustee shall
authenticate and deliver Securities of such series for original issue from
time to time, in an aggregate principal amount not exceeding the aggregate
principal amount established for such series, pursuant to an Issuer Order
or pursuant to procedures acceptable to the Trustee as may be specified
from time to time by an Issuer Order, (c) the maturity date or dates,
original issue date or dates, interest rate or rates and any other terms of
Securities of such series shall be determined by an Issuer
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Order or pursuant to such procedures and (d) if provided for in such
procedures, such Issuer Order may authorize authentication and delivery
pursuant to oral or electronic instructions from the Issuer or its duly
authorized agent or agents, which oral instructions shall be promptly
confirmed in writing;
(2) any Board Resolution, Officer's Certificate and/or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant
to which the forms and terms of the Securities and Coupons, if any, were
established;
(3) an Officer's Certificate setting forth the form or forms and terms
of the Securities and Coupons, if any, stating that the form or forms and
terms of the Securities and Coupons, if any, have been established pursuant
to Sections 2.1 and 2.3 and comply with this Indenture, and covering such
other matters as the Trustee may reasonably request; and
(4) At the option of the Issuer, either one or more Opinions of
Counsel, or a letter addressed to the Trustee permitting it to rely on one
or more Opinions of Counsel, substantially to the effect that:
(a) the forms of the Securities and Coupons, if any, have been
duly authorized and established in conformity with the provisions of
this Indenture;
(b) in the case of an underwritten offering, the terms of the
Securities have been duly authorized and established in conformity
with the provisions of this Indenture, and, in the case of an offering
that is not underwritten, certain terms of the Securities have been
established pursuant to a Board Resolution, an Officer's Certificate
or a supplemental indenture in accordance with this Indenture, and
when such other terms as are to be established pursuant to procedures
set forth in an Issuer Order shall have been established, all such
terms will have been duly authorized by the Issuer and will have been
established in conformity with the provisions of this Indenture;
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(c) when the Securities and Coupons, if any, have been executed
by the Issuer and authenticated by the Trustee in accordance with the
provisions of this Indenture and delivered to and duly paid for by the
purchasers thereof, they will have been duly issued under this
Indenture, will be entitled to the benefits of this Indenture, and
will be valid and binding obligations of the Issuer, enforceable in
accordance with their respective terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration, if any, and the availability of equitable remedies may
be limited by equitable principles of general applicability; and
(d) the execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under, the Securities and
Coupons, if any, will not contravene any provision of any material
applicable law or the certificate of incorporation or bylaws of the
Issuer or any agreement or other instrument binding upon the Issuer or
any of its "significant subsidiaries" (as defined in Article 1 of
Regulation S-X under the Securities Act of 1933) that is material to
the Issuer and its subsidiaries, taken as a whole, or, to the best of
such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Issuer
or any "significant subsidiary" (as defined above), and no consent,
approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the
Issuer of its obligations under the Securities and Coupons, if any,
except such as are specified and have been obtained and such as may be
required by the securities or blue sky laws of the various states in
connection with the offer and sale of the Securities and Coupons, if
any.
In rendering such opinions, any counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting the rights and remedies of creditors and is subject
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to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely upon
opinions of other counsel (copies of which shall be delivered to the Trustee),
who shall be counsel reasonably satisfactory to the Trustee, in which case the
opinion shall state that such counsel believes he and the Trustee are entitled
so to rely. Such counsel may also state that, insofar as such opinion involves
factual matters, he has relied, to the extent he deems proper, upon certificates
of officers of the Issuer and its subsidiaries and certificates of public
officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Issuer or
if the Trustee in good faith by its board of directors or board of trustees,
executive committee, or a trust committee of directors or trustees or
Responsible Officers shall determine that such action would expose the Trustee
to personal liability to existing Holders or would affect the Trustee's own
rights, duties or immunities under the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Registered
Global Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section and the Issuer Order with respect to such series,
authenticate and deliver one or more Registered Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate principal
amount of all of the Securities of such series issued and not yet cancelled,
(ii) shall be registered in the name of the Depositary for such Registered
Global Security or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this Security may not be transferred except as a
whole by the Depositary to the 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."
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Each Depositary designated pursuant to Section 2.3 must, at the time
of its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Securities Exchange Act of 1934 and any other
applicable statute or regulation.
SECTION 2.5 EXECUTION OF SECURITIES. The Securities and, if
-----------------------
applicable, each Coupon appertaining thereto shall be signed on behalf of the
Issuer by its president, any vice president or its treasurer or controller,
under its corporate seal (except in the case of Coupons) which may, but need
not, be attested. Such signatures may be the manual or facsimile signatures of
the present or any future such officers. The seal of the Issuer may be in the
form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Securities. Typographical and other minor errors or
defects in any such reproduction of the seal or any such signature shall not
affect the validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities or Coupons, if any, shall cease to be such officer before the
Security or Coupon so signed (or the Security to which the Coupon so signed
appertains) shall be authenticated and delivered by the Trustee or disposed of
by the Issuer, such Security or Coupon nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Security or Coupon
had not ceased to be such officer of the Issuer; and any Security or Coupon may
be signed on behalf of the Issuer by such persons as, at the actual date of the
execution of such Security or Coupon, shall be the proper officers of the
Issuer, although at the date of the execution and delivery of this Indenture any
such person was not such an officer.
SECTION 2.6 CERTIFICATE OF AUTHENTICATION. Only such Securities as
-----------------------------
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized officers, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. No Coupon shall be entitled to the
benefits of this Indenture or shall be valid and obligatory for any purpose
until the certificate of
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authentication on the Security to which such Coupon appertains shall have been
duly executed by the Trustee. The execution of such certificate by the Trustee
upon any Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture.
SECTION 2.7 DENOMINATION AND DATE OF SECURITIES; PAYMENTS OF
------------------------------------------------
INTEREST. The Securities of each series shall be issuable as Registered
- --------
Securities or Unregistered Securities in denominations established as
contemplated by Section 2.3 or, with respect to the Registered Securities of any
series, if not so established, in denominations of $1,000 and any integral
multiple thereof. If denominations of Unregistered Securities of any series are
not so established, such Securities shall be issuable in denominations of $1,000
and $5,000. The Securities of each series shall be numbered, lettered or
otherwise distinguished in such manner or in accordance with such plan as the
officers of the Issuer executing the same may determine with the approval of the
Trustee, as evidenced by the execution and authentication thereof.
Each Registered Security shall be dated the date of its
authentication. Each Unregistered Security shall be dated as provided in the
resolution or resolutions of the Board of Directors of the Issuer referred to in
Section 2.3. The Securities of each series shall bear interest, if any, from
the date, and such interest shall be payable on the dates, established as
contemplated by Section 2.3.
The person in whose name any Registered Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment date,
except if and to the extent the Issuer shall default in the payment of the
interest due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the persons in whose names Outstanding
Registered Securities for such series are registered at the close of business on
a subsequent record date (which shall be not less than five Business Days prior
to the
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date of payment of such defaulted interest) established by notice given by mail
by or on behalf of the Issuer to the Holders of Registered Securities not less
than 15 days preceding such subsequent record date. The term "record date" as
used with respect to any interest payment date (except a date for payment of
defaulted interest) for the Securities of any series shall mean the date
specified as such in the terms of the Registered Securities of such series
established as contemplated by Section 2.3, or, if no such date is so
established, if such interest payment date is the first day of a calendar month,
the fifteenth day of the next preceding calendar month or, if such interest
payment date is the fifteenth day of a calendar month, the first day of such
calendar month, whether or not such record date is a Business Day.
SECTION 2.8 REGISTRATION, TRANSFER AND EXCHANGE. The Issuer will
-----------------------------------
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each series of Securities a register or registers in which,
subject to such reasonable regulations as it may prescribe, it will provide for
the registration of Registered Securities of such series and the registration of
transfer of Registered Securities of such series. Such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.2, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Registered Security or Registered Securities of the same series, maturity
date, interest rate and original issue date in authorized denominations for a
like aggregate principal amount.
Unregistered Securities (except for any temporary global Unregistered
Securities) and Coupons (except for Coupons attached to any temporary global
Unregistered Securities) shall be transferable by delivery.
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At the option of the Holder thereof, Registered Securities of any
series (other than a Registered Global Security, except as set forth below) may
be exchanged for a Registered Security or Registered Securities of such series
having authorized denominations and an equal aggregate principal amount, upon
surrender of such Registered Securities to be exchanged at the agency of the
Issuer that shall be maintained for such purpose in accordance with Section 3.2
and upon payment, if the Issuer shall so require, of the charges hereinafter
provided. If the Securities of any series are issued in both registered and
unregistered form, except as otherwise specified pursuant to Section 2.3, at the
option of the Holder thereof, Unregistered Securities of any series may be
exchanged for Registered Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Unregistered Securities to be exchanged at the agency of the Issuer that shall
be maintained for such purpose in accordance with Section 3.2, with, in the case
of Unregistered Securities that have Coupons attached, all unmatured Coupons and
all matured Coupons in default thereto appertaining, and upon payment, if the
Issuer shall so require, of the charges hereinafter provided. At the option of
the Holder thereof, if Unregistered Securities of any series, maturity date,
interest rate and original issue date are issued in more than one authorized
denomination, except as otherwise specified pursuant to Section 2.3, such
Unregistered Securities may be exchanged for Unregistered Securities of such
series having authorized denominations and an equal aggregate principal amount,
upon surrender of such Unregistered Securities to be exchanged at the agency of
the Issuer that shall be maintained for such purpose in accordance with Section
3.2 or as specified pursuant to Section 2.3, with, in the case of Unregistered
Securities that have Coupons attached, all unmatured Coupons and all matured
Coupons in default thereto appertaining, and upon payment, if the Issuer shall
so require, of the charges hereinafter provided. Registered Securities of any
series may not be exchanged for Unregistered Securities of such series unless
(1) otherwise specified pursuant to Section 2.3 and (2) the Issuer has delivered
to the Trustee an Opinion of Counsel that (x) the Issuer has received from the
Internal Revenue Service a ruling or (y) since the date hereof, there has been a
change in the applicable Federal income tax law, in either case to the effect
that the inclusion of terms permitting Registered Securities to be exchanged for
Unregistered Securities would result in no adverse Federal
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income tax effect to the Issuer or to any Holder. Whenever any Securities are so
surrendered for exchange, the Issuer shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive. All Securities and Coupons surrendered upon any exchange or
transfer provided for in this Indenture shall be promptly cancelled and disposed
of by the Trustee and the Trustee will deliver a certificate of disposition
thereof to the Issuer.
All Registered Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee duly
executed by the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities. No service charge shall be made for any
such transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities of any series for a period of 15 days next preceding the
first mailing of notice of redemption of Securities of such series to be
redeemed or (b) any Securities selected, called or being called for redemption,
in whole or in part, except, in the case of any Security to be redeemed in part,
the portion thereof not so to be redeemed.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Registered Global Security representing all or a portion of
the Securities of a series may not be transferred or exchanged except as a
whole by the Depositary for such series to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
for such series or a nominee of such successor Depositary.
If at any time the Depositary for any Registered Securities of a
series represented by one or more Registered
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Global Securities notifies the Issuer that it is unwilling or unable to continue
as Depositary for such Registered Securities or if at any time the Depositary
for such Registered Securities shall no longer be eligible under Section 2.4,
the Issuer shall appoint a successor Depositary eligible under Section 2.4 with
respect to such Registered Securities. If a successor Depositary eligible under
Section 2.4 for such Registered Securities is not appointed by the Issuer within
90 days after the Issuer receives such notice or becomes aware of such
ineligibility, the Issuer's election pursuant to Section 2.3 that such
Registered Securities be represented by one or more Registered Global Securities
shall no longer be effective and the Issuer will execute, and the Trustee, upon
receipt of an Officer's Certificate for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver, Securities
of such series in definitive registered form without coupons, in any authorized
denominations, in an aggregate principal amount equal to the principal amount of
the Registered Global Security or Securities representing such Registered
Securities in exchange for such Registered Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that
the Registered Securities of any series issued in the form of one or more
Registered Global Securities shall no longer be represented by a Registered
Global Security or Securities. In such event the Issuer will execute, and the
Trustee, upon receipt of an Officer's Certificate for the authentication and
delivery of definitive Securities of such series, will authenticate and deliver,
Securities of such series in definitive registered form without coupons, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Registered Global Security or Securities representing
such Registered Securities, in exchange for such Registered Global Security or
Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Registered Global Security, the Depositary for such
Registered Global Security may surrender such Registered Global Security in
exchange in whole or in part for Securities of the same series in definitive
registered form on such terms as are acceptable to the Issuer and such
Depositary. Thereupon, the Issuer shall execute, and the Trustee shall
authenticate and deliver, without service charge,
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(i) to the Person specified by such Depositary a new Registered
Security or Securities of the same series, of any authorized denominations
as requested by such Person, in an aggregate principal amount equal to and
in exchange for such Person's beneficial interest in the Registered Global
Security; and
(ii) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the principal amount
of the surrendered Registered Global Security and the aggregate principal
amount of Registered Securities authenticated and delivered pursuant to
clause (i) above.
Upon the exchange of a Registered Global Security for Securities in
definitive registered form without coupons, in authorized denominations, such
Registered Global Security shall be cancelled by the Trustee or an agent of the
Issuer or the Trustee. Securities in definitive registered form without coupons
issued in exchange for a Registered Global Security pursuant to this Section 2.8
shall be registered in such names and in such authorized denominations as the
Depositary for such Registered Global Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee or
an agent of the Issuer or the Trustee. The Trustee or such agent shall deliver
such Securities to or as directed by the Persons in whose names such Securities
are so registered.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such transfer or exchange.
Notwithstanding anything herein or in the terms of any series of
Securities to the contrary, none of the Issuer, the Trustee or any agent of the
Issuer or the Trustee (any of which, other than the Issuer, shall rely on an
Officer's Certificate and an Opinion of Counsel) shall be required to exchange
any Unregistered Security for a Registered Security if such exchange would
result in adverse Federal income tax consequences to the Issuer (such as, for
example, the inability of the Issuer to deduct from its income, as computed for
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Federal income tax purposes, the interest payable on the Unregistered
Securities) under then applicable United States Federal income tax laws.
SECTION 2.9 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN
----------------------------------------------
SECURITIES. In case any temporary or definitive Security or any Coupon
- ----------
appertaining to any Security shall become mutilated, defaced or be destroyed,
lost or stolen, the Issuer in its discretion may execute, and upon the written
request of any officer of the Issuer, the Trustee shall authenticate and deliver
a new Security of the same series, maturity date, interest rate and original
issue date, bearing a number or other distinguishing symbol not
contemporaneously outstanding, in exchange and substitution for the mutilated or
defaced Security, or in lieu of and in substitution for the Security so
destroyed, lost or stolen with Coupons corresponding to the Coupons appertaining
to the Securities so mutilated, defaced, destroyed, lost or stolen, or in
exchange or substitution for the Security to which such mutilated, defaced,
destroyed, lost or stolen Coupon appertained, with Coupons appertaining thereto
corresponding to the Coupons so mutilated, defaced, destroyed, lost or stolen.
In every case the applicant for a substitute Security or Coupon shall furnish to
the Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as may be required by them to indemnify and defend and to
save each of them harmless and, in every case of destruction, loss or theft,
evidence to their satisfaction of the destruction, loss or theft of such
Security or Coupon and of the ownership thereof and in the case of mutilation or
defacement shall surrender the Security and related Coupons to the Trustee or
such agent.
Upon the issuance of any substitute Security or Coupon, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) or its agent connected therewith. In case
any Security or Coupon which has matured or is about to mature or has been
called for redemption in full shall become mutilated or defaced or be destroyed,
lost or stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of the same or the relevant Coupon (without surrender
thereof except in the case of a mutilated or defaced Security or Coupon), if the
applicant for such payment shall furnish to the Issuer and to the Trustee
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and any agent of the Issuer or the Trustee such security or indemnity as any of
them may require to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Issuer and
the Trustee and any agent of the Issuer or the Trustee evidence to their
satisfaction of the destruction, loss or theft of such Security or Coupon and of
the ownership thereof.
Every substitute Security or Coupon of any series issued pursuant to
the provisions of this Section by virtue of the fact that any such Security or
Coupon is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen Security
or Coupon shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any and all other
Securities or Coupons of such series duly authenticated and delivered hereunder.
All Securities and Coupons shall be held and owned upon the express condition
that, to the extent permitted by law, the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, defaced or destroyed,
lost or stolen Securities and Coupons and shall preclude any and all other
rights or remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.10 CANCELLATION OF SECURITIES; DESTRUCTION THEREOF. All
-----------------------------------------------
Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if surrendered to the Issuer or any agent of the Issuer or
the Trustee or any agent of the Trustee, shall be delivered to the Trustee or
its agent for cancellation or, if surrendered to the Trustee, shall be cancelled
by it; and no Securities or Coupons shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee or
its agent shall dispose of cancelled Securities and Coupons held by it and
deliver a certificate of disposition to the Issuer. If the Issuer or its agent
shall acquire any of the Securities or Coupons, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Securities
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or Coupons unless and until the same are delivered to the Trustee or its agent
for cancellation.
SECTION 2.11 TEMPORARY SECURITIES. Pending the preparation of
--------------------
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as Registered Securities without coupons, or as Unregistered Securities
with or without coupons attached thereto, of any authorized denomination, and
substantially in the form of the definitive Securities of such series but with
such omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the concurrence of the
Trustee as evidenced by the execution and authentication thereof. Temporary
Securities may contain such references to any provisions of this Indenture as
may be appropriate. Every temporary Security shall be executed by the Issuer
and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities. Without unreasonable delay the Issuer shall execute and shall
furnish definitive Securities of such series and thereupon temporary Registered
Securities of such series may be surrendered in exchange therefor without charge
at each office or agency to be maintained by the Issuer for that purpose
pursuant to Section 3.2 and, in the case of Unregistered Securities, at any
agency maintained by the Issuer for such purpose as specified pursuant to
Section 2.3, and the Trustee shall authenticate and deliver in exchange for such
temporary Securities of such series an equal aggregate principal amount of
definitive Securities of the same series having authorized denominations and, in
the case of Unregistered Securities, having attached thereto any appropriate
Coupons. Until so exchanged, the temporary Securities of any series shall be
entitled to the same benefits under this Indenture as definitive Securities of
such series, unless otherwise established pursuant to Section 2.3. The
provisions of this Section are subject to any restrictions or limitations on the
issue and delivery of temporary Unregistered Securities of any series that may
be established pursuant to Section 2.3 (including any provision that
Unregistered Securities of such series initially be issued in the form of a
single global Unregistered Security to be delivered to a
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depositary or agency located outside the United States and the procedures
pursuant to which definitive or global Unregistered Securities of such series
would be issued in exchange for such temporary global Unregistered Security).
SECTION 2.12 COMPUTATION OF INTEREST. Except as otherwise specified
-----------------------
as contemplated by Section 2.3 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
ARTICLE THREE
COVENANTS OF THE ISSUER
-----------------------
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer covenants
---------------------------------
and agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Securities of such series (together with any additional amounts payable
pursuant to the terms of such Securities) at the place or places, at the
respective times and in the manner provided in such Securities and in the
Coupons, if any, appertaining thereto and in this Indenture. The interest on
Securities with Coupons attached (together with any additional amounts payable
pursuant to the terms of such Securities) shall be payable only upon
presentation and surrender of the several Coupons for such interest installments
as are evidenced thereby as they severally mature. If any temporary
Unregistered Security provides that interest thereon may be paid while such
Security is in temporary form, the interest on any such temporary Unregistered
Security (together with any additional amounts payable pursuant to the terms of
such Security) shall be paid, as to the installments of interest evidenced by
Coupons attached thereto, if any, only upon presentation and surrender thereof,
and, as to the other installments of interest, if any, only upon presentation of
such Securities for notation thereon of the payment of such interest, in each
case subject to any restrictions that may be established pursuant to Section
2.3. The interest on Registered Securities (together with any additional
amounts payable pursuant to the terms of such Securities) shall be payable only
to or upon the written order of the Holders thereof and, at the option of the
Issuer, may be paid by wire transfer or by mailing checks for such interest
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payable to or upon the written order of such Holders at their last addresses as
they appear on the registry books of the Issuer.
SECTION 3.2 OFFICES FOR PAYMENTS, ETC. So long as any Registered
-------------------------
Securities are authorized for issuance pursuant to this Indenture or are
outstanding hereunder, the Issuer will maintain in the Place of Payment an
office or agency where the Registered Securities of each series may be presented
for payment, where the Securities of each series may be presented for exchange
as is provided in this Indenture and, if applicable, pursuant to Section 2.3 and
where the Registered Securities of each series may be presented for registration
of transfer as in this Indenture provided.
If provided for pursuant to Section 2.3, the Issuer will maintain one
or more offices or agencies in a city or cities located outside the United
States (including any city in which such an agency is required to be maintained
under the rules of any stock exchange on which the Securities of such series are
listed) as a Place of Payment where the Unregistered Securities, if any, of each
series and Coupons, if any, appertaining thereto may be presented for payment.
No payment on any Unregistered Security or Coupon will be made upon presentation
of such Unregistered Security or Coupon at an agency of the Issuer within the
United States nor will any payment be made by transfer to an account in, or by
mail to an address in, the United States unless pursuant to applicable United
States laws and regulations then in effect such payment can be made without
adverse tax consequences to the Issuer. Notwithstanding the foregoing, payments
in Dollars of Unregistered Securities of any series and Coupons appertaining
thereto which are payable in Dollars may be made at an agency of the Issuer
maintained in a Place of Payment within the United States if such payment in
Dollars at each agency maintained by the Issuer outside the United States for
payment on such Unregistered Securities is illegal or effectively precluded by
exchange controls or other similar restrictions.
The Issuer will maintain in the Borough of Manhattan, The City of New
York, Places of Payment or at such other place or places as provided pursuant to
Section 2.3, an office or agency where notices and demands to or upon the Issuer
in respect of the Securities of any series, the Coupons appertaining thereto or
this Indenture may be served.
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The Issuer will give to the Trustee prompt written notice of the
location of each such office or agency and of any change of location thereof.
In case the Issuer shall fail to maintain any agency required by this Section to
be located in the Places of Payment, or shall fail to give such notice of the
location or of any change in the location of any of the above agencies,
presentations, surrenders, notices and demands may be made and notices may be
served at the Corporate Trust Office of the Trustee, and the Issuer hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Issuer may from time to time designate one or more additional
offices or agencies where the Securities of a series and any Coupons
appertaining thereto may be presented for payment, where the Securities of that
series may be presented for exchange as provided in this Indenture and pursuant
to Section 2.3 and where the Registered Securities of that series may be
presented for registration of transfer as in this Indenture provided, and the
Issuer may from time to time rescind any such designation, as the Issuer may
deem desirable or expedient; PROVIDED, HOWEVER, that no such designation or
-------- -------
rescission shall in any manner relieve the Issuer of its obligation to maintain
the agencies provided for in this Section. The Issuer will give to the Trustee
prompt written notice of any such designation or rescission thereof.
SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE OF TRUSTEE. The
--------------------------------------------------
Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee with respect to each series of Securities
hereunder.
SECTION 3.4 PAYING AGENTS. Whenever the Issuer shall appoint a
-------------
paying agent other than the Issuer or the Trustee with respect to the Securities
of any series, it will cause such paying agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section,
(a) that it will hold all sums received by it as such agent for the
payment of the principal of or interest on the Securities of such series
(whether such sums have
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<PAGE>
been paid to it by the Issuer or by any other obligor on the Securities of
such series) in trust for the benefit of the Holders of the Securities of
such series, or Coupons appertaining thereto, if any, or of the Trustee,
until such sums shall be paid or otherwise disposed of as provided herein,
(b) that it will give the Trustee notice of any failure by the Issuer
(or by any other obligor on the Securities of such series) to make any
payment of the principal of or interest on the Securities of such series
when the same shall be due and payable, and
(c) that it will pay any such sums so held in trust by it to the
Trustee upon the Trustee's written request at any time during the
continuance of the failure referred to in clause (b) above.
The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with the paying agent, if
any, a sum sufficient to pay such principal or interest so becoming due, and
(unless such paying agent is the Trustee) the Issuer will promptly notify the
Trustee of its action or any failure to take such action.
If the Issuer shall act as its own paying agent with respect to the
Securities of any series, it will, on or before each due date of the principal
of or interest on the Securities of such series, set aside, segregate and hold
in trust for the benefit of the Holders of the Securities of such series or the
Coupons appertaining thereto a sum sufficient to pay such principal or interest
so becoming due. The Issuer will promptly notify the Trustee of its action or
any failure to take such action.
Anything in this Section to the contrary notwithstanding, but subject
to Section 10.1, the Issuer may at any time, for the purpose of obtaining a
satisfaction and discharge with respect to one or more or all series of
Securities hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for any such series by the Issuer or any paying
agent hereunder, as required by this Section, such sums to be held by the
Trustee upon the trusts herein contained.
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Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
SECTION 3.5 WRITTEN STATEMENT TO TRUSTEE. The Issuer will furnish to
----------------------------
the Trustee within 120 days after the end of each year that the Securities are
outstanding a brief certificate (which need not comply with Section 11.5) from
the principal executive, financial or accounting officer of the Issuer stating
whether or not to the best knowledge of the signers thereof the Issuer is in
default in the performance of all conditions and covenants under this Indenture.
SECTION 3.6 CORPORATE EXISTENCE. Subject to Article Nine, the Issuer
-------------------
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the rights (charter and statutory)
and franchises of the Issuer and its Subsidiaries; PROVIDED, HOWEVER, that the
-------- -------
Issuer shall not be required to preserve any such right or franchise, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Issuer and its Subsidiaries
taken as a whole and the loss thereof is not disadvantageous in any material
respect to the Securityholders.
SECTION 3.7 MAINTENANCE OF PROPERTIES. The Issuer will cause all
-------------------------
material properties used in or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair,
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Issuer may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all time except to the extent that the Issuer may be prevented from
so doing by circumstances beyond its control; PROVIDED, HOWEVER, that nothing in
-------- -------
this Section shall prevent the Issuer from discontinuing, or from causing or
permitting a Subsidiary to continue, the operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Issuer, desirable in the conduct of the business of the
Issuer or any Subsidiary and not disadvantageous in any material respect to the
Securityholders.
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SECTION 3.8 PAYMENT OF TAXES AND OTHER CLAIMS. The Issuer will pay
---------------------------------
or discharge or cause to be paid or discharged, before the same shall become
delinquent: (a) all taxes, assessments and governmental charges levied or
imposed upon the Issuer or any Subsidiary or upon the income, profits or
property of the Issuer or any Subsidiary that are material to the Issuer and its
Subsidiaries taken as a whole; and (b) all lawful claims for labor, materials,
and supplies, which, if unpaid, might by law become a lien upon the property of
the Issuer or any Subsidiary and that are material to the Issuer and its
Subsidiaries taken as a whole; PROVIDED, HOWEVER, that the Issuer shall not be
-------- -------
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings; and provided further that
the Issuer shall not be required to cause to be paid or discharged any such tax,
assessment, charge or claim if the Issuer shall determine that such payment is
not advantageous to the conduct of the business of the Issuer and its
Subsidiaries taken as a whole and that the failure so to pay or discharge is not
disadvantageous in any material respect to the Securityholders.
SECTION 3.9 RESTRICTION ON LIENS. So long as any Securities are
--------------------
Outstanding, the Issuer shall not create, incur, issue, or assume any
Indebtedness (as defined below) secured after the date hereof by any security
interest (including, without limitation, any mortgage, pledge, encumbrance, lien
or charge of any kind) on any property of the Issuer (including, without
limitation, property of the Issuer consisting of any share or shares of capital
stock or indebtedness owed to the Issuer by any subsidiary of the Issuer)
whether such property, shares or indebtedness are owned by the Issuer at the
date of this Indenture or thereafter acquired, without effectively providing
concurrently with the creation, incurrence, issuance or assumption of such
Indebtedness or the time when such Indebtedness is permitted or suffered to
exist that the Securities (together with, if the Issuer shall so determine, any
other indebtedness of the Issuer ranking equally with the Securities and then
existing or thereafter created) shall be secured equally and ratably with (or
prior to) the Indebtedness so created, incurred, issued or assumed;
provided, however, that the foregoing shall not apply to:
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(a) security interests on any property acquired, constructed or
improved by the Issuer or on any shares of capital stock or indebtedness of
any subsidiary acquired by the Issuer after the date of this Indenture to
secure the payment of all or any part of the purchase price of such
property, shares of capital stock or indebtedness upon the acquisition
thereof by the Issuer or within 270 days thereafter, or to secure payment
of all or any part of the cost of such construction or improvements as they
are incurred or within 270 days thereafter, and provided that, in the case
of any such acquisition, construction or improvement, such security
interest does not apply to any property or shares of capital stock or
indebtedness theretofore owned by the Issuer, other than, in the case of
any such construction or improvement, any real property on which the
property is so constructed or the improvement is located;
(b) security interests on any property, shares of capital stock, or
indebtedness which security interests exist at the time of acquisition of
such property, shares or indebtedness by the Issuer;
(c) security interests on any property of a corporation or other
Person, which interests exist at the time such corporation is merged with
or into or consolidated with the Issuer or which interests exist at the
time of a sale or transfer of the properties of such corporation or other
Person as an entirety or substantially as an entirety to the Issuer;
(d) security interest in favor of the United States of America or any
State thereof, or of any department, agency or instrumentality or political
subdivision of the United States of America or any State thereof, or in
favor of any other country or political subdivision, (A) to secure partial
progress, advance or other payments pursuant to any contract or statute,
(B) to secure any indebtedness incurred or guaranteed for the purpose of
financing or refinancing all or any part of the purchase price of the
property, shares of capital stock or indebtedness subject to such security
interests, or (C) to secure the cost of constructing or improving the
property subject to such security interests (including, without limitation,
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security interests incurred in connection with pollution control,
industrial revenue or similar financings);
(e) security interests on any property arising in connection with any
defeasance, covenant defeasance or in substance defeasance of any
Indebtedness pursuant to express contractual provision with respect thereto
or generally accepted accounting principles;
(f) security interests on any capital stock of any corporation which
is registered in the name of the Issuer or otherwise owned by or held for
the benefit of the Issuer which may constitute "margin stock" as such term
is defined in Section 207.2(i) of Title 12 of the Code of Federal
Regulations (or any successor provisions); and
(g) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any security interest
referred to in the foregoing clauses (a) through (f), inclusive; provided,
however, that the principal amount of Indebtedness secured thereby shall
not exceed the original principal amount of Indebtedness and that such
extension, renewal or replacement shall be limited to all or a part of the
property (plus improvements and construction on such property), shares of
capital stock or indebtedness which was subject to the security interest so
extended, renewed or replaced.
Notwithstanding the foregoing provisions of this Section, the Issuer may,
without equally and ratably securing the Securities, create, incur, issue or
assume, Indebtedness secured by any security interest not excepted by the
foregoing Clauses (a) through (g), if the aggregate amount of such Indebtedness,
together with all other Indebtedness of the Issuer existing at such time and
secured by security interests not so excepted, does not exceed 10% of the
Issuer's Consolidated Net Assets at such time.
For the purposes of this Section only, "Indebtedness" shall mean (i) any
indebtedness, whether or not represented by bonds, debentures, notes or other
securities, for the repayment of money borrowed, (ii) all deferred indebtedness
(including, without limitation, capitalized leases) for the payment of the
purchase price of property or assets purchased, and (iii) all
35
<PAGE>
guarantees, endorsements, assumptions or other contingent obligations in respect
of, or to purchase or otherwise to acquire, indebtedness of the types described
in clauses (i) and (ii) above. For the purposes of this Section only,
"Consolidated Net Assets" shall mean the total amount of assets appearing on the
consolidated balance sheet of the Issuer and its subsidiaries less, without
duplication: (a) all current liabilities (excluding current liabilities of
"American Savings Bank, F.S.B. and any current liabilities which are by their
terms extendable or renewable at the sole option of the obligor thereon without
requiring the consent of the obligee to a date more than 12 months after the
date of determination); (b) all reserves for depreciation and other asset
valuation reserves but excluding any reserves for deferred Federal income taxes
arising from accelerated amortization or otherwise; and (c) all appropriate
adjustments on account of minority interests of other persons holding common
stock in any subsidiary and trust originated preferred securities. Consolidated
Net Assets are determined in accordance with generally accepted accounting
principles and as of a date not more than 90 days prior to the happening of the
event for which such determination is being made.
SECTION 3.10 SEC REPORTS. The Issuer shall file with the Trustee,
-----------
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the Commission, copies of its annual report and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may by rules and regulations prescribe)
which the Issuer is required to file with the Commission pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
---------------------------------------
SECTION 4.1 ISSUER TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND
-----------------------------------------------------
ADDRESSES OF SECURITYHOLDERS. If and so long as the Trustee shall not be the
- ----------------------------
Security registrar for the Securities of any series, the Issuer and any other
obligor on the Securities will furnish or cause to be furnished to the Trustee a
list in such form as the Trustee may reasonably
36
<PAGE>
require of the names and addresses of the Holders of the Registered Securities
of such series pursuant to Section 312 of the Trust Indenture Act of 1939 (a)
semi-annually not more than 5 days after each record date for the payment of
interest on such Registered Securities, as hereinabove specified, as of such
record date and on dates to be determined pursuant to Section 2.3 for non-
interest bearing Registered Securities in each year, and (b) at such other times
as the Trustee may request in writing, within thirty days after receipt by the
Issuer of any such request as of a date not more than 15 days prior to the time
such information is furnished.
SECTION 4.2 PRESERVATION AND DISCLOSURE OF SECURITYHOLDERS LISTS.
----------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses the Holders contained in the most
recent list furnished to the Trustee as provided in Section 4.1 and the
names and addresses of Holders received by the Trustee in its capacity, if
any, as Security registrar. The Trustee may destroy any list furnished to
it as provided in Section 4.1 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Trustee, and furnish to the Trustee reasonable
proof that each such applicant has owned a Security for a period of at
least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities and is accompanies by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five business days after the receipt of such application, at
its election, either
(i) afford such applicants access to the information preserved at
the time by the Trustee in accordance with Section 4.2(a), or
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section
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<PAGE>
4.2(a), and as to the approximate cost of mailing to such Holders the
form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder whose name and address appear in the information
preserved at the time by the Trustee in accordance with Section 4.2(a) copies of
the form of proxy or other communication which is specified in the request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, of the reasonable expenses of such mailing, unless within five
days after such tender, the Trustee shall mail to such applicants, and file with
the Commission together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the Holders or would be a violation of
applicable law. Such statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections, or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all objections so sustained have been met, and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such Holders
with reasonable promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation or duty to
such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Issuer and the Trustee that neither the Issuer nor the
Trustee nor any agent of either of them shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of
the Holders in accordance with Section 4.2(b), regardless of the source
from which such information was derived, and that the Trustee shall not be
held accountable by reason of mailing any material pursuant to a request
made under Section 4.2(b).
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SECTION 4.3 REPORTS BY THE ISSUER. The Issuer covenants to file with
---------------------
the Trustee, within 15 days after the Issuer is required to file the same with
the Commission, copies of the annual reports and of the information, documents,
and other reports that the Issuer may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
or pursuant to Section 314 of the Trust Indenture Act of 1939.
SECTION 4.4 REPORTS BY THE TRUSTEE. Any Trustee's report required
----------------------
under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on
or before __________ in each year beginning _____________, as provided in
Section 313(c) of the Trust Indenture Act of 1939, so long as any Securities are
Outstanding hereunder, and shall be dated as of a date convenient to the Trustee
no more than 60 days prior thereto. A copy of each such report shall, at the
time of such transmission to Holders, be filed by the Trustee with each stock
exchange upon which the Securities are listed, with the Commission and with the
Issuer. The Issuer will notify the Trustee when any Securities are listed on
any stock exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
-------------------------------------------
SECTION 5.1 EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY;
---------------------------------------------------
WAIVER OF DEFAULT. "Event of Default" with respect to Securities of any series
- -----------------
wherever used herein, means each one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any installment of interest upon any of
the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
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(b) default in the payment of all or any part of the principal on any
of the Securities of such series as and when the same shall become due and
payable either at maturity, upon any redemption, by declaration or
otherwise, and continuance of such default for a period of three business
days; or
(c) default in the payment of any sinking fund installment as and when
the same shall become due and payable by the terms of the Securities of
such series, and continuance of such default for a period of three business
days; or
(d) failure on the part of the Issuer duly to observe or perform any
other of the covenants or agreements on the part of the Issuer in the
Securities of such series (other than a covenant or agreement in respect of
the Securities of such series a default in the performance or breach of
which is elsewhere in this Section specifically dealt with) or contained in
this Indenture (other than a covenant or agreement included in this
Indenture solely for the benefit of a series of Securities other than such
series) for a period of 60 days after the date on which written notice
specifying such failure, stating that such notice is a "Notice of Default"
hereunder and demanding that the Issuer remedy the same, shall have been
given by registered or certified mail, return receipt requested, to the
Issuer by the Trustee, or to the Issuer and the Trustee by the holders of
at least 25% in aggregate principal amount of the Outstanding Securities of
all series affected thereby; or
(e) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Issuer in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Issuer for any
substantial part of its or their property or ordering the winding up or
liquidation of its or their affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
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(f) the Issuer shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under
any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Issuer or any Restricted Subsidiary or for any
substantial part of its or their property, or make any general assignment
for the benefit of creditors; or
(g) an event of default, as defined in any one or more mortgages,
indentures, instruments, bonds, debentures, notes or other similar
instruments under which there may be issued, or by which there may be
secured or evidenced, any indebtedness (other than the Securities of such
series or nonrecourse obligations) ("Indebtedness") in excess in aggregate
principal amount of $10,000,000 for money borrowed by the Issuer shall
occur, if such event of default shall result in the acceleration of such
Indebtedness prior to its expressed maturity under the terms of the
instrument under which the indebtedness is issued or secured unless such
Indebtedness is discharged or such acceleration is cured, waived, rescinded
or annulled within 20 days after written notice thereof shall have been
given by registered or certified mail, return receipt requested, to the
Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Outstanding Securities
(treated as one class) which notice shall state that it is a "Notice of
Default" hereunder; or
(h) any other Event of Default provided in the supplemental indenture
under which such series of Securities is issued or in the form of Security
for such series;
PROVIDED that if any such default or acceleration referred to in clause (g)
- --------
above shall cease or be cured, waived, rescinded or annulled, then the Event of
Default hereunder by reason thereof shall be deemed likewise to have been
thereupon cured.
If an Event of Default described in clause (a), (b), (c), (d) or (h)
(if the Event of Default under clause (d) or (h), as the case may be, is with
respect to such series of securities and to less than all
41
<PAGE>
series of Securities then Outstanding) occurs and is continuing, then, and in
each and every such case, except for any series of Securities the principal of
which shall have already become due and payable, either the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Securities of
each such affected series then Outstanding hereunder (voting as a single class)
by notice in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if the Securities of any
such affected series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all
Securities of all such affected series, and the interest accrued thereon, if
any, to be due and payable immediately, and upon any such declaration, the same
shall become immediately due and payable. If an Event of Default described in
clause (d) or (h) (if the Event of Default under clause (d) or (h), as the case
may be, is with respect to all series of Securities then Outstanding), (e) or
(f) occurs and is continuing, then and in each and every such case, unless the
principal of all the Securities shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of all the Securities then Outstanding hereunder (treated as one class),
by notice in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if any Securities are
Original Issue Discount Securities, such portion of the principal as may be
specified in the terms thereof) of all the Securities then Outstanding, and
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof) of the Securities of any series (or of all the Securities, as the
case may be) shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been obtained or
entered as hereinafter provided, the Issuer shall pay or shall deposit with the
Trustee a sum sufficient to pay all matured installments of interest upon all
the Securities of such series (or of all the Securities, as the case may be) and
the principal of any and all Securities of each such series (or of all the
Securities, as the case may be)
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which shall have become due otherwise than by acceleration (with interest upon
such principal and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest, at the same rate as
the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of each such series (or at the
respective rates of interest or Yields to Maturity of all the Securities, as the
case may be) to the date of such payment or deposit) and such amount as shall be
sufficient to cover reasonable compensation to the Trustee and each predecessor
Trustee, its agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee and each predecessor
Trustee except as a result of negligence or bad faith, and if any and all Events
of Default under the Indenture, other than the nonpayment of the principal of
Securities which shall have become due by acceleration, shall have been cured,
waived or otherwise remedied as provided herein -- then and in every such case
the Holders of a majority in aggregate principal amount of all the Securities of
each such series, or of all the Securities, in each case voting as a single
class, then Outstanding, by written notice to the Issuer and to the Trustee, may
waive all defaults with respect to each such series (or with respect to all the
Securities, as the case may be) and rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the principal
of any Original Issue Discount Securities shall have been accelerated and
declared due and payable pursuant to the provisions hereof, then, from and after
such declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full of such Original Issue
Discount Securities.
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SECTION 5.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE
--------------------------------------------------------
DEBT. The Issuer covenants that (a) in case default shall be made in the
- ----
payment of any installment of interest on any of the Securities of any series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity of
the Securities of such series or upon any redemption or by declaration or
otherwise -- then upon demand of the Trustee, the Issuer will pay to the Trustee
for the benefit of the Holders of the Securities of such series the whole amount
that then shall have become due and payable on all Securities of such series,
and such Coupons, for principal or interest, as the case may be (with interest
to the date of such payment upon the overdue principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series); and in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and any expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities of any series to the registered
holders, whether or not the Securities of such Series be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon the Securities
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon the Securities, wherever situated the moneys adjudged or
decreed to be payable.
44
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In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Securities under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor, or in case
of any other comparable judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or property of the Issuer or
such other obligor, the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Securities of any series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of such series) owing and unpaid in respect of the
Securities of any series, and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a
result of negligence or bad faith) and of the Securityholders allowed in
any judicial proceedings relative to the Issuer or other obligor upon the
Securities, or to the creditors or property of the Issuer or such other
obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Securities of any series in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
45
<PAGE>
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their
behalf; and any trustee, receiver, or liquidator, custodian or other
similar official is hereby authorized by each of the Securityholders to
make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to the Securityholders, to pay
to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor
Trustee except as a result of negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities of any series or Coupons appertaining to such
Securities, may be enforced by the Trustee without the possession of any of the
Securities of such series or Coupons appertaining to such Securities or the
production thereof in any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Securities or Coupons appertaining to such
Securities in respect of which such action was taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the
46
<PAGE>
Trustee shall be held to represent all the Holders of the Securities or Coupons
appertaining to such Securities in respect to which such action was taken, and
it shall not be necessary to make any Holders of such Securities or Coupons
appertaining to such Securities parties to any such proceedings.
SECTION 5.3 APPLICATION OF PROCEEDS. Any moneys collected by the
-----------------------
Trustee pursuant to this Article in respect of any series shall be applied in
the following order at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys on account of principal or interest, upon
presentation of the several Securities and Coupons appertaining to such
Securities in respect of which monies have been collected and stamping (or
otherwise noting) thereon the payment, or issuing Securities of such series in
reduced principal amounts in exchange for the presented Securities of like
series if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such series
in respect of which monies have been collected, including reasonable
compensation to the Trustee and each predecessor Trustee and their
respective agents and attorneys and of all expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor
Trustee except as a result of negligence or bad faith;
SECOND: In case the principal of the Securities of such series in
respect of which moneys have been collected shall not have become and be
then due and payable, to the payment of interest on the Securities of such
series in default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest at the
same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in such Securities, such
payments to be made ratably to the persons entitled thereto, without
discrimination or preference;
THIRD: In case the principal of the Securities of such series in
respect of which moneys have been collected
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<PAGE>
shall have become and shall be then due and payable, to the payment of the
whole amount then owing and unpaid upon all the Securities of such series
for principal and interest, with interest upon the overdue principal, and
(to the extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the same rate as the rate of interest
or Yield to Maturity (in the case of Original Issue Discount Securities)
specified in the Securities of such series; and in case such moneys shall
be insufficient to pay in full the whole amount so due and unpaid upon the
Securities of such series, then to the payment of such principal and
interest or Yield to Maturity, without preference or priority of principal
over interest or Yield to Maturity, or of interest or Yield to Maturity
over principal, or of any installment of interest over any other
installment of interest, or of any Security of such series over any other
Security of such series, ratably to the aggregate of such principal and
accrued and unpaid interest or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any, to the Issuer or any
other person lawfully entitled thereto.
SECTION 5.4 SUITS FOR ENFORCEMENT. In case an Event of Default has
---------------------
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.5 RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS. In
---------------------------------------------------
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Trustee, then and in every such
case the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.
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SECTION 5.6 LIMITATIONS ON SUITS BY SECURITYHOLDERS. No Holder of
---------------------------------------
any Security of any series or of any Coupon appertaining thereto shall have any
right by virtue or by availing of any provision of this Indenture to institute
any action or proceeding at law or in equity or in bankruptcy or otherwise upon
or under or with respect to this Indenture, or for the appointment of a trustee,
receiver, liquidator, custodian or other similar official or for any other
remedy hereunder, against the Issuer unless such Holder previously shall have
given to the Trustee written notice of default and of the continuance thereof,
as hereinbefore provided, and unless also the Holders of not less than 25% in
aggregate principal amount of the Securities of each affected series then
Outstanding (treated as a single class) shall have made written request upon the
Trustee to institute such action or proceedings in its own name as trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby and the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such action or
proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 5.9; it being understood and
intended, and being expressly covenanted by the taker and Holder of every
Security or Coupon with every other taker and Holder and the Trustee, that no
one or more Holders of Securities of any series or Coupons appertaining to such
Securities shall have any right in any manner whatever by virtue or by availing
of any provision of this Indenture to affect, disturb or prejudice the rights of
any other such Holder of Securities or Coupons appertaining to such Securities,
or to obtain or seek to obtain priority over or preference to any other such
Holder or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all Holders of
Securities of the applicable series and Coupons appertaining to such Securities.
For the protection and enforcement of the provisions of this Section, each and
every Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 5.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO INSTITUTE
---------------------------------------------------
CERTAIN SUITS. Notwithstanding any other provision in this Indenture and any
- -------------
provision of any Security, the right of any Holder of any Security or Coupon to
receive
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<PAGE>
payment of the principal of and interest on such Security or Coupon on or after
the respective due dates expressed in such Security or Coupon, or to institute
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 5.8 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
-----------------------------------------------------
WAIVER OF DEFAULT. Except as provided in Section 5.6, no right or remedy herein
- -----------------
conferred upon or reserved to the Trustee or to the Holders of Securities or
Coupons is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of Securities or
Coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 5.6, every power and remedy given
by this Indenture or by law to the Trustee or to the Holders of Securities or
Coupons may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Holders of Securities or Coupons.
SECTION 5.9 CONTROL BY HOLDERS OF SECURITIES. The Holders of a
--------------------------------
majority in aggregate principal amount of the Securities of each series affected
(with all such series voting as a single class) at the time Outstanding shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series by
this Indenture; PROVIDED that such direction shall not be otherwise than in
--------
accordance with law and the provisions of this Indenture and PROVIDED FURTHER
----------------
that (subject to the provisions of Section 6.1) the Trustee shall have the right
to decline to follow any such direction if the Trustee, being advised by
counsel, shall determine that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board
50
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of directors, the executive committee, or a trust committee of directors or
Responsible Officers of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability or if
the Trustee in good faith shall so determine that the actions or forbearances
specified in or pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Securities of all series so affected not joining in
the giving of said direction, it being understood that (subject to Section 6.1)
the Trustee shall have no duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.
SECTION 5.10 WAIVER OF PAST DEFAULTS. Prior to the acceleration of
-----------------------
the maturity of any Securities as provided in Section 5.1, the Holders of a
majority in aggregate principal amount of the Securities of all series at the
time Outstanding with respect to which an event of default shall have occurred
and be continuing (voting as a single class) may on behalf of the Holders of all
such Securities waive any past default or Event of Default described in Section
5.1 and its consequences, except a default in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the Holder of
each Security affected. In the case of any such waiver, the Issuer, the Trustee
and the Holders of all such Securities shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 5.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD IN
------------------------------------------------------
CERTAIN CIRCUMSTANCES. The Trustee shall, within ninety days after the
- ---------------------
occurrence of a default with
51
<PAGE>
respect to the Securities of any series, give notice of all defaults with
respect to that series known to the Trustee (i) if any Unregistered Securities
of that series are then Outstanding, to the Holders thereof, by publication at
least once in an Authorized Newspaper in the Borough of Manhattan, The City of
New York and in an Authorized Newspaper in the Place or Places of Payment (and,
if required, in an Authorized Newspaper any other place or places) and (ii) to
all Holders of Securities of such series in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act of 1939, unless in each
case such defaults shall have been cured before the mailing or publication of
such notice (the term "defaults" for the purpose of this Section being hereby
defined to mean any event or condition which is, or with notice or lapse of time
or both would become, an Event of Default); PROVIDED that, except in the case
--------
of default in the payment of the principal of or interest on any of the
Securities of such series, or in the payment of any sinking or purchase fund
installment on such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors or trustees and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Securityholders of such series.
SECTION 5.12 RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO PAY
------------------------------------------------------
COSTS. All parties to this Indenture agree, and each Holder of any Security or
- -----
Coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, 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, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder or group of
Securityholders of any series holding in the aggregate more than 10% in
aggregate principal amount of the Securities of such series, or, in the case of
any suit relating to or arising under clause (d) or (h) of Section 5.1 (if the
suit relates to Securities of more than one but
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less than all series), 10% in aggregate principal amount of Securities then
Outstanding and affected thereby, or in the case of any suit relating to or
arising under clause (d) or (h) (if the suit under clause (d) or (h) relates to
all the Securities then Outstanding), (e), (f) or (g) of Section 5.1, 10% in
aggregate principal amount of all Securities then Outstanding, or to any suit
instituted by any Securityholder for the enforcement of the payment of the
principal of or interest on any Security on or after the due date expressed in
such Security or any date fixed for redemption.
ARTICLE SIX
CONCERNING THE TRUSTEE
----------------------
SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING
--------------------------------------------------
DEFAULT; PRIOR TO DEFAULT. With respect to the Holders of any series of
- -------------------------
Securities issued hereunder, the Trustee, prior to the occurrence of an Event of
Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect
to such series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise with respect to such series of Securities
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to the
Securities of any series and after the curing or waiving of all such Events
of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect to
the Securities of any series shall be determined solely by the express
provisions of this
53
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Indenture, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders pursuant to Section 5.9 relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
The provisions of this Section 6.1 are in furtherance of and subject
to Section 315 of the Trust Indenture Act of 1939.
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SECTION 6.2 CERTAIN RIGHTS OF THE TRUSTEE. In furtherance of and
-----------------------------
subject to the Trust Indenture Act of 1939, and subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officer's Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the secretary or an assistant secretary of the
Issuer;
(c) the Trustee may consult with counsel and any written advice or
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in reliance thereon in accordance with
such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
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resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing so
to do by the Holders of not less than a majority in aggregate principal
amount of the Securities of all series affected then Outstanding; PROVIDED
--------
that, if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every
such investigation shall be paid by the Issuer or, if paid by the Trustee
or any predecessor Trustee, shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF
----------------------------------------------------
SECURITIES OR APPLICATION OF PROCEEDS THEREOF. The recitals contained herein
- ---------------------------------------------
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities or Coupons. The Trustee shall not be accountable for the use or
application by the Issuer of any of the Securities or of the proceeds thereof.
SECTION 6.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES OR COUPONS;
--------------------------------------------------
COLLECTIONS, ETC. The Trustee or any agent of the Issuer or the Trustee, in its
- ----------------
individual or any other capacity, may become the owner or pledgee of Securities
or Coupons with the same rights it would have if it were not the Trustee or such
agent and may otherwise deal with the Issuer and receive, collect, hold and
retain collections from the Issuer with the
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same rights it would have if it were not the Trustee or such agent.
SECTION 6.5 MONEYS HELD BY TRUSTEE. Subject to the provisions of
----------------------
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR
---------------------------------------------------------
CLAIM. The Issuer covenants and agrees to pay to the Trustee from time to time,
- -----
and the Trustee shall be entitled to, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Issuer also covenants to indemnify the Trustee and each predecessor Trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including the costs and expenses of defending itself
against or investigating any claim of liability in the premises. The
obligations of the Issuer under this Section to compensate and indemnify the
Trustee and each predecessor Trustee and to pay or reimburse the Trustee and
each predecessor Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. Such additional indebtedness shall be a senior
claim to that of the Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the benefit of the Holders
of particular Securities or Coupons, and the Securities are hereby subordinated
to such senior claim.
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SECTION 6.7 RIGHT OF TRUSTEE TO RELY ON OFFICER'S CERTIFICATE, ETC.
------------------------------------------------------
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officer's Certificate delivered to the Trustee, and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.
SECTION 6.8 INDENTURES NOT CREATING POTENTIAL CONFLICTING INTERESTS
-------------------------------------------------------
FOR THE TRUSTEE. The following indentures are hereby specifically described for
- ---------------
the purposes of Section 310(b)(1) of the Trust Indenture Act of 1939; this
Indenture with respect to the Securities of any other series.
SECTION 6.9 PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE. The Trustee
-------------------------------------------
for each series of Securities hereunder shall at all times be a corporation or
banking association organized and doing business under the laws of the United
States of America or of any State or the District of Columbia having a combined
capital and surplus of at least $50,000,000, and which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by Federal, State or District of Columbia authority. Such
corporation or banking association shall have a place of business in
_______________________ and the Place or Places of Payment if there be such a
corporation in such locations willing to act upon reasonable and customary terms
and conditions. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 6.10.
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The provisions of this Section 6.9 are in furtherance of and subject
to Section 310(a) of the Trust Indenture Act of 1939.
SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
-------------------------------------------------
TRUSTEE. (a) The Trustee, or any trustee or trustees hereafter appointed, may
- -------
at any time resign with respect to one or more or all series of Securities by
giving written notice of resignation to the Issuer and (i) if any Unregistered
Securities of a series affected are then Outstanding, by giving notice of such
resignation to the Holders thereof, by publication at least once in an
Authorized Newspaper in _____________________, and in an Authorized Newspaper in
the Place or Places of Payment (and, if required, in an Authorized Newspaper in
any other place or places), (ii) if any Unregistered Securities of a series
affected are then Outstanding, by mailing notice of such resignation to the
Holders thereof who have filed their names and addresses with the Trustee
pursuant to Section 313(c)(2) of the Trust Indenture Act of 1939 at such
addresses as were so furnished to the Trustee and (iii) by mailing notice of
such resignation to the Holders of then Outstanding Registered Securities of
each series affected at their addresses as they shall appear on the registry
books. Upon receiving such notice of resignation, the Issuer shall promptly
appoint a successor trustee or trustees with respect to the applicable series by
written instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Securityholder
who has been a bona fide Holder of a Security or Securities of the applicable
series for at least six months may, subject to the provisions of Section 5.12,
on behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
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(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act of 1939 with respect to any
series of Securities after written request therefor by the Issuer or by any
Securityholder who has been a bona fide Holder of a Security or Securities
of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 6.9 and Section 310(a) of the Trust Indenture Act
of 1939 and shall fail to resign after written request therefor by the
Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with respect
to any series of Securities, or shall be adjudged a bankrupt or insolvent,
or a receiver or liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of Directors
of the Issuer, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 315(e) of the Trust Indenture Act of 1939, any Securityholder who has
been a bona fide Holder of a Security or Securities of such series for at least
six months may on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series at the time outstanding may at any time remove the
Trustee with respect to Securities of such series and appoint a successor
trustee with respect to
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the Securities of such series by delivering to the Trustee so removed, to the
successor trustee so appointed and to the Issuer the evidence provided for in
Section 7.1 of the action in that regard taken by the Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
6.11.
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any
----------------------------------------------
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as if
originally named as trustee for such series hereunder; but, nevertheless, on the
written request of the Issuer or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to Section 10.4,
pay over to the successor trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Issuer shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor Trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the
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predecessor Trustee with respect to the Securities of any series as to which the
predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such trustees
co-trustees of the same trust and that each such trustee shall be trustee of a
trust or trusts under separate indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under Section 310(b) of the
Trust Indenture Act of 1939 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the Issuer shall give notice thereof (a) if any Unregistered
Securities of a series affected are then Outstanding, to the Holders thereof, by
publication of such notice at least once in an Authorized Newspaper in
_________________________ and in an Authorized Newspaper in the Place or Places
of Payment (and, if required, in an Authorized Newspaper in any other place or
places), (b) if any Unregistered Securities of a series affected are then
Outstanding, to the Holders thereof who have filed their names and addresses
with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture Act of
1939, by mailing such notice to such Holders at such addresses as were so
furnished to the Trustee (and the Trustee shall make such information available
to the Issuer for such purpose) and (c) to the Holders of Registered Securities
of each series affected, by mailing such notice to such Holders at their
addresses as they shall appear on the registry books. If the acceptance of
appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10. If the Issuer fails to give such notice within ten
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be given at the expense of the Issuer.
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SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
--------------------------------------------------
BUSINESS OF TRUSTEE. Any corporation into which the Trustee may be merged or
- -------------------
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, PROVIDED that such
--------
corporation shall be qualified under Section 310(b) of the Trust Indenture Act
of 1939 and eligible under the provisions of Section 6.9, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Securities of
such series or in this Indenture provided that the certificate of the Trustee
shall have; PROVIDED, that the right to adopt the certificate of authentication
of any predecessor Trustee or to authenticate Securities of any series in the
name of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
------------------------------------------------
(a) Subject to Section 6.13(b), if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the
Issuer of the Securities within three months prior to a default, as defined
in Section 6.13(c), or subsequent to such a default, then, unless and until
such default shall be cured, the Trustee shall set apart and hold in a
special account for the benefit of the Trustee individually and the Holders
of the Securities and the holders of other indenture securities, as defined
in Section 6.13(c):
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(1) an amount equal to any and all reductions in the amount due
and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such three months' period
and valid as against the Issuer and their other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this Subsection, or from the
exercise of any right of set-off which the Trustee could have
exercised if a petition in bankruptcy had been filed by or against the
Issuer upon the date of such default; and
(2) all property received by the Trustee in respect of any
claims as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the beginning
of such three months' period, or an amount equal to the proceeds of
any such property, if disposed of, subject, however, to the rights, if
------- -------
any, of the Issuer and their other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on account
of any such claim by any Person (other than the Issuer) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third Person, and (iii) distributions made in
cash, securities or other property in respect of claims filed against
the Issuer in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable
State law;
(B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held prior
to the beginning of such three months' period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned,
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<PAGE>
upon any property held by it as security for any such claim, if such
claim was created after the beginning of such three months' period and
such property was received as security therefor simultaneously with
the creation thereof, and if the Trustee shall sustain the burden of
proving that at the time such property was so received the Trustee had
no reasonable cause to believe that a default, as defined in Section
6.13(c), would occur within three months; or
(D) to receive payment on any claim referred to in paragraph (B)
or (C), against the release of any property held as security for such
claim as provided in paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three months' period for property held as
security at the time of such substitution shall, to the extent of the
fair value of the property released, have the same status as the
property released, and, to the extent that any claim referred to in
any of such paragraphs is created in renewal of or in substitution for
or for the purpose of repaying or refunding any pre-existing claim of
the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
among the Trustee, the Holders and the holders of other indenture
securities in such manner that the Trustee, the Holders and the holders of
other indenture securities realize, as a result of payments from such
special account and payments of dividends on claims filed against the
Issuer in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal Bankruptcy Act or applicable State law, the same
percentage of their respective claims, figured before crediting to the
claim of the Trustee anything on account of the receipt by it from the
Issuer of the funds and property in such special account and before
crediting to the respective claims of the Trustee and the Holders and the
holders of other indenture
65
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securities dividends on claims filed against the Issuer in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, but after crediting thereon
receipts on account of the indebtedness represented by their respective
claims from all sources other than from such dividends and from the funds
and property so held in such special account. As used in this paragraph,
with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, whether such distribution is made in cash, securities
or other property, but shall not include any such distribution with respect
to the secured portion, if any, of such claim. The court in which such
bankruptcy, receivership or proceedings for reorganization is pending shall
have jurisdiction (i) to apportion among the Trustee, the Holders and the
holders of other indenture securities, in accordance with the provisions of
this paragraph, the funds and property held in such special account and
proceeds thereof, or (ii) in lieu of such apportionment, in whole or in
part, to give to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the Trustee and
the Holders and the holders of other indenture securities with respect to
their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held
in such special account or as security for any such claim, or to make a
specific allocation of such distributions as between the secured and
unsecured portions of such claims, or otherwise to apply the provisions of
this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of
such three months' period shall be subject to the provisions of this
Subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such three
months' period, it shall be subject to the provisions of this Subsection if
and only if the following conditions exist:
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(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued
as Trustee, occurred after the beginning of such three months' period;
and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
In any case commenced under the Bankruptcy Act of July 1, 1898, or any
amendment thereto enacted prior to November 6, 1978, all references to
periods of three months contained in this Section 6.13(a) shall be deemed
to be references to periods of four months.
(b) There shall be excluded from the operation of Subsection (a) of
this Section 6.13 a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year
or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the Holders
at the time and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness' created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
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securities sold in a cash transaction, as defined in Subsection (c) of
this Section 6.13;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Issuer; and
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper, as defined in
Subsection (c) of this Section 6.13.
(c) For the purposes of this Section 6.13 only:
(1) the term "default" means any failure to make payment in full
of the principal of or interest on any of the Securities or upon the
other indenture securities when and as such principal or interest
becomes due and payable;
(2) the term "other indenture securities" means securities upon
which the Issuer is an obligor outstanding under any other indenture
(i) under which the Trustee is also trustee, (ii) which is qualified
under the Trust Indenture Act of 1939, (iii) which contains provisions
substantially similar to the provisions of this Section 6.13, and (iv)
under which a default exists at the time of the apportionment of the
funds and property held in such special account;
(3) the term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Issuer for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale
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of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares
or merchandise or the receivables or proceeds arising from the sale of
the goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Issuer arising from
the making, drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation;
(5) the term "Issuer" means the Issuer and any other obligor
upon the Securities; and
(6) the term "Federal Bankruptcy Act" means the Bankruptcy Act
or Title 11 of the United States Code.
SECTION 6.14 APPOINTMENT OF AUTHENTICATING AGENT. As long as any
-----------------------------------
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is made
in this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's Certificate of Authentication, such reference
shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent for such series and a Certificate of Authentication
executed on behalf of the Trustee by such Authenticating Agent. Such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $5,000,000 (determined as provided in Section
6.9 with respect to the Trustee) and subject to supervision or examination by
Federal or State authority.
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Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of Securities for which it served as Authenticating Agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such Authenticating Agent. Any Authenticating Agent may at any
time, and if it shall cease to be eligible shall, resign by giving written
notice of resignation to the Trustee and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.14 with respect to
one or more series of Securities, the Trustee shall upon receipt of an Issuer
Order appoint a successor Authenticating Agent and the Issuer shall provide
notice of such appointment to all Holders of Securities of such series in the
manner and to the extent provided in Section 11.4. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
rights, powers, duties and responsibilities of its predecessor hereunder, with
like effect as if originally named as Authenticating Agent. The Issuer agrees
to pay to the Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series shall
have no responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Sections 6.2, 6.3, 6.4, 6.6 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
------------------------------
SECTION 7.1 EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS. Any
-------------------------------------------
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified percentage
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in principal amount of the Securityholders of any or all series may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such specified percentage of Securityholders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee. Proof of execution of any instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Sections 6.1 and 6.2) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article.
SECTION 7.2 PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
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SECURITIES. Subject to Sections 6.1 and 6.2, the execution of any instrument by
- ----------
a Securityholder or his agent or proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of any notary public or other
officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the person executing such instruments acknowledged to
him the execution thereof, or by an affidavit of a witness to such
execution sworn to before any such notary or other such officer. Where
such execution is by or on behalf of any legal entity other than an
individual, such certificate or affidavit shall also constitute sufficient
proof of the authority of the person executing the same. The fact of the
holding by any Holder of an Unregistered Security of any series, and the
identifying number of such Security and the date of his holding the same,
may be proved by the production of such Security or by a certificate
executed by any trust company, bank, banker or recognized securities dealer
wherever situated satisfactory to the Trustee, if such certificate shall be
deemed by the Trustee to be satisfactory. Each such certificate shall be
dated and shall state that on the date thereof a Security of such series
bearing a specified identifying number was deposited with or exhibited to
such trust company, bank, banker or recognized securities dealer by the
person named in such certificate. Any such certificate may be issued in
respect of one or more Unregistered Securities of one or more series
specified therein. The holding by the
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person named in any such certificate of any Unregistered Securities of any
series specified therein shall be presumed to continue for a period of one
year from the date of such certificate unless at the time of any
determination of such holding (1) another certificate bearing a later date
issued in respect of the same Securities shall be produced, or (2) the
Security of such series specified in such certificate shall be produced by
some other person, or (3) the Security of such series specified in such
certificate shall have ceased to be Outstanding. Subject to Sections 6.1
and 6.2, the fact and date of the execution of any such instrument and the
amount and numbers of Securities of any series held by the person so
executing such instrument and the amount and numbers of any Security or
Securities for such series may also be proven in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee for
such series or in any other manner which the Trustee for such series may
deem sufficient.
(b) In the case of Registered Securities, the ownership of such
Securities shall be proved by the Security register or by a certificate of
the Security registrar.
The Issuer may set a record date for purposes of determining the
identity of Holders of Registered Securities of any series entitled to vote or
consent to any action referred to in Section 7.1, which record date may be set
at any time or from time to time by notice to the Trustee, for any date or dates
(in the case of any adjournment or reconsideration) not more than 60 days nor
less than five days prior to the proposed date of such vote or consent, and
thereafter, notwithstanding any other provisions hereof, with respect to
Registered Securities of any series, only Holders of Registered Securities of
such series of record on such record date shall be entitled to so vote or give
such consent or revoke such vote or consent.
SECTION 7.3 HOLDERS TO BE TREATED AS OWNERS. The Issuer, the Trustee
-------------------------------
and any agent of the Issuer or the Trustee may deem and treat the person in
whose name any Security shall be registered upon the Security register for such
series as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment
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of or on account of the principal of and, subject to the provisions of this
Indenture, interest on such Security and for all other purposes; and neither the
Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be
affected by any notice to the contrary. The Issuer, the Trustee and any agent
of the Issuer or the Trustee may treat the Holder of any Unregistered Security
and the Holder of any Coupon as the absolute owner of such Unregistered Security
or Coupon (whether or not such Unregistered Security or Coupon shall be overdue)
for the purpose of receiving payment thereof or on account thereof and for all
other purposes and neither the Issuer, the Trustee, nor any agent of the Issuer
or the Trustee shall be affected by any notice to the contrary. All such
payments so made to any such person, or upon his order, shall be valid, and, to
the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Unregistered Security or Coupon.
SECTION 7.4 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING. In
-------------------------------------------------
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the Issuer
or any other obligor on the Securities with respect to which such determination
is being made or by any person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Issuer or any other
obligor on the Securities with respect to which such determination is being made
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver
only Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Issuer or any other obligor upon the Securities or any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer or any other obligor on the Securities. In case
of a dispute as to such right, the advice of counsel shall be full protection in
respect of any decision made by the Trustee in accordance with such advice.
Upon request of the Trustee, the Issuer shall furnish to the Trustee promptly an
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Officer's Certificate listing and identifying all Securities, if any, known by
the Issuer to be owned or held by or for the account of any of the above-
described persons; and, subject to Sections 6.1 and 6.2, the Trustee shall be
entitled to accept such Officer's Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination.
SECTION 7.5 RIGHT OF REVOCATION OF ACTION TAKEN. At any time prior
-----------------------------------
to (but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate principal amount
of the Securities of any or all series, as the case may be, specified in this
Indenture in connection with such action shall be conclusively binding upon the
Issuer, the Trustee and the Holders of all the Securities affected by such
action.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
-----------------------
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
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SECURITYHOLDERS. The Issuer, when authorized by a resolution of its Board of
- ---------------
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order),
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and the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities of one or more series any property or assets;
(b) to evidence the succession of another corporation to the Issuer,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Issuer pursuant to
Article Nine;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of Securities or Coupons,
and to make the occurrence, or the occurrence and continuance, of a default
in any such additional covenants, restrictions, conditions or provisions an
Event of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture as herein set forth; PROVIDED, that in
--------
respect of any such additional covenant, restriction, condition or
provision such supplemental indenture may provide for a particular period
of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for an immediate
enforcement upon such an Event of Default or may limit the remedies
available to the Trustee upon such an Event of Default or may limit the
right of the Holders of a majority in aggregate principal amount of the
Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make any other provisions as the Issuer may
deem necessary or desirable, PROVIDED that no such action shall adversely
--------
affect the interests of the Holders of the Securities or Coupons;
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(e) to establish the forms or terms of Securities of any series or of
the Coupons appertaining to such Securities as permitted by Sections 2.1
and 2.3; and
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one trustee, pursuant to the requirements
of Section 6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
-------------------------------------------------------
With the consent (evidenced as provided in Article Seven) of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
Outstanding of all series affected by such supplemental indenture (voting as one
class), the Issuer, when authorized by a resolution of its Board of Directors
(which resolution may provide general terms or parameters for such action and
may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from time
to time and at any time, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Securities of each such series or of the Coupons appertaining to such
Securities; PROVIDED, that
--------
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no such supplemental indenture shall (a) extend the final maturity of any
Security, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount payable on
redemption thereof, or make the principal thereof (including any amount in
respect of original issue discount), or interest thereon payable in any coin or
currency other than that provided in the Securities and Coupons or in accordance
with the terms thereof, or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon an acceleration of
the maturity thereof pursuant to Section 5.1 or the amount thereof provable in
bankruptcy pursuant to Section 5.2, or alter the provisions of Section 11.11 or
11.12 or impair or affect the right of any Securityholder to institute suit for
the payment thereof or, if the Securities provide therefor, any right of
repayment at the option of the Securityholder, in each case without the consent
of the Holder of each Security so affected, or (b) reduce the aforesaid
percentage of Securities of any series, the consent of the Holders of which is
required for any such supplemental indenture, without the consent of the Holders
of each Security so affected.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of Holders of Securities of such series, or of Coupons appertaining
to such Securities, with respect to such covenant or provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Securities of
any other series or of the Coupons appertaining to such Securities.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Holders of the Securities as aforesaid
and other documents, if any, required by Section 7.1, the Trustee shall join
with the Issuer in the execution of such supplemental indenture unless such
supplemental indenture
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affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give notice thereof (i) to the Holders of then Outstanding Registered
Securities of each series affected thereby, by mailing a notice thereof by
first-class mail to such Holders at their addresses as they shall appear on the
Security register, (ii) if any Unregistered Securities of a series affected
thereby are then Outstanding, to the Holders thereof who have filed their names
and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust
Indenture Act of 1939, by mailing a notice thereof by first-class mail to such
Holders at such addresses as were so furnished to the Trustee and (iii) if any
Unregistered Securities of a series affected thereby are then Outstanding, to
all Holders thereof, by publication of a notice thereof at least once in an
Authorized Newspaper in ____________________ and in an Authorized Newspaper in
the Place or Places of Payment (and, if required, in an Authorized Newspaper in
any other place or places), and in each case such notice shall set forth in
general terms the substance of such supplemental indenture. Any failure of the
Issuer to give such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 8.3 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
--------------------------------
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental
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indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 8.4 DOCUMENTS TO BE GIVEN TO TRUSTEE. The Trustee, subject
--------------------------------
to the provisions of Sections 6.1 and 6.2, may receive an Officer's Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article 8 complies with the applicable provisions of
this Indenture.
SECTION 8.5 NOTATION ON SECURITIES IN RESPECT OF SUPPLEMENTAL
-------------------------------------------------
INDENTURES. Securities of any series authenticated and delivered after the
- ----------
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or as to any action
taken by Securityholders. If the Issuer or the Trustee shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
-----------------------------------------
SECTION 9.1 ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. So
---------------------------------------------------
long as any securities are Outstanding, the Issuer shall not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and the Issuer shall not
permit any other Person to consolidate with or merge into the Issuer or convey,
transfer or lease its properties and assets substantially as an entirety to the
Issuer, unless:
(a) in case the Issuer shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Issuer is merged or the Person which
acquires by conveyance or transfer, or which
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leases, the properties and assets of the Issuer substantially as an
entirety shall be a corporation organized and existing in corporate form
under the laws of the United States of America, any State thereof or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal
of (and premium, if any) and interest, if any, on all the Securities and
the performance of every covenant of this Indenture on the part of the
Issuer to be performed or observed;
(b) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Issuer or a Subsidiary
as a result of such transaction as having been incurred by the Issuer or
such Subsidiary at the time of such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing;
(c) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Issuer would
become subject to a mortgage, pledge, lien, security interest or other
encumbrance which would not be permitted by this Indenture, the Issuer or
such successor corporation or Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the Securities equally
and ratably with (or prior to) all indebtedness secured thereby; and
(d) the Issuer has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 9.2 SUCCESSOR CORPORATION SUBSTITUTED. The successor
---------------------------------
corporation formed by such consolidation or into which the Issuer is merged or
to which such transfer or lease is made shall succeed to and be substituted for,
and may
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exercise every right and power of, the Issuer under this Indenture with the same
effect as if such successor corporation had been named as the Issuer herein, and
thereafter (except in the case of a lease to another Person) the predecessor
corporation shall be relieved of all obligations and covenants under the
Indenture and the Securities and, in the event of such conveyance or transfer,
any such predecessor corporation may be dissolved and liquidated.
SECTION 9.3 RESTRICTIONS ON DISPOSITIONS OF HECO SHARES. As long as
-------------------------------------------
any Securities are Outstanding, the Issuer will not sell, transfer or otherwise
dispose of, or permit Hawaiian Electric Company, Inc. ("HECO") to issue, sell,
transfer or otherwise dispose of, other than to the Issuer or to a direct or
indirect wholly-owned Subsidiary, Voting Shares of the Issuer; provided,
--------
however, that this covenant shall not restrict (i) sales, transfers or other
- -------
dispositions by HECO of any securities, including capital stock, of its
subsidiaries, (ii) consolidations or mergers of HECO with or into the Issuer or
any of its direct or indirect wholly-owned Subsidiaries, or (iii) consolidations
or mergers of HECO with or into any other corporation if the corporation formed
by such consolidation or merger is a direct or indirect wholly-owned Subsidiary.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
--------------------------------------
SECTION 10.1 SATISFACTION AND DISCHARGE OF INDENTURE. (A) If at any
time (a) the Issuer shall have paid or caused to be paid the principal of and
interest on all the Securities of any series Outstanding hereunder and all
unmatured Coupons appertaining thereto (other than Securities of such series and
Coupons appertaining thereto which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.9) as and when the same
shall have become due and payable, or (b) the Issuer shall have delivered to the
Trustee for cancellation all Securities of any series theretofore authenticated
and all unmatured Coupons appertaining thereto (other than any Securities of
such series and Coupons appertaining thereto which shall have been destroyed,
lost or stolen and which shall have been replaced or
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paid as provided in Section 2.9) or (c) in the case of any series of Securities
where the exact amount (including the currency of payment) of principal of and
interest due on which can be determined at the time of making the deposit
referred to in clause (ii) below, (i) all the Securities of such series and all
unmatured Coupons appertaining thereto not theretofore delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and (ii) the Issuer shall have irrevocably deposited or caused to
be deposited with the Trustee as trust funds the entire amount in cash (other
than moneys repaid by the Trustee or any paying agent to the Issuer in
accordance with Section 10.4) or, in the case of any series of Securities the
payments on which may only be made in Dollars, direct obligations of the United
States of America, backed by its full faith and credit ("U.S. Government
Obligations"), maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash, or a combination thereof,
sufficient in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay (A) the principal of (and premium, if any,) and interest on all
Securities of such series and Coupons appertaining thereto on each date that
such principal, premium or interest is due and payable and (B) any mandatory
sinking fund payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of such series;
and if, in any such case, the Issuer shall also pay or cause to be paid all
other sums payable hereunder by the Issuer, then this Indenture shall cease to
be of further effect (except as to (i) rights of registration of transfer and
exchange of Securities of such Series and of Coupons appertaining thereto and
the Issuer's right of optional redemption, if any, (ii) substitution of
temporary, mutilated, defaced, destroyed, lost or stolen Securities or Coupons,
(iii) rights of holders of Securities and Coupons appertaining thereto to
receive payments of principal thereof and interest thereon, upon the original
stated due dates therefor (but not upon acceleration), and remaining rights of
the Holders to receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v) the rights of
the Holders of Securities of such series and Coupons appertaining thereto as
beneficiaries hereof with respect to the property so
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deposited with the Trustee payable to all or any of them, and (vi) the
obligations of the Issuer under Section 3.2) and the Trustee, on demand of the
Issuer accompanied by an Officer's Certificate and an Opinion of Counsel and at
the cost and expense of the Issuer, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture; PROVIDED,
--------
that the rights of Holders of the Securities and Coupons to receive amounts in
respect of principal of and interest on the Securities and Coupons held by them
shall not be delayed longer than required by then-applicable mandatory rules or
policies of any securities exchange upon which the Securities are listed. The
Issuer agrees to reimburse the Trustee for any costs or expenses thereafter
reasonably and properly incurred and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Securities of such series.
(B) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officer's
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities the exact amounts (including
the currency of payment) of principal of and interest due on which can be
determined at the time of making the deposit referred to in clause (a) below,
the Issuer shall be deemed to have paid and discharged the entire indebtedness
on all the Securities of such a series and the Coupons appertaining thereto on
the date of the deposit referred to in subparagraph (a) below, and the
provisions of this Indenture with respect to the Securities of such series and
Coupons appertaining thereto shall no longer be in effect (except as to (i)
rights of registration of transfer and exchange of Securities of such series and
of Coupons appertaining thereto and the Issuer's right of optional redemption,
if any, (ii) substitution of temporary, mutilated, defaced, destroyed, lost or
stolen Securities or Coupons, (iii) rights of Holders of Securities and Coupons
appertaining thereto to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) the rights, obligations, duties and immunities of
the Trustee hereunder, (v) the rights of the Holders of Securities of such
series and
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Coupons appertaining thereto as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them and (vi)
the obligations of the Issuer under Section 3.2) and the Trustee, at the expense
of the Issuer, shall at the Issuer's request, execute proper instruments
acknowledging the same, if
(a) with reference to this provision the Issuer has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as trust
funds in trust, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of the Securities of such series and Coupons
appertaining thereto (i) cash in an amount, or (ii) in the case of any
series of Securities the payments on which may only be made in Dollars,
U.S. Government Obligations, maturing as to principal and interest at such
times and in such amounts as will insure the availability of cash or (iii)
a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (A) the principal of
(and premium on, if any) and interest on all Securities of such series and
Coupons appertaining thereto on each date that such principal, premium or
interest is due and payable and (B) any mandatory sinking fund payments on
the dates on which such payments are due and payable in accordance with the
terms of the Indenture and the Securities of such series;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the Issuer
is a party or by which it is bound;
(c) the Issuer has delivered to the Trustee an Opinion of Counsel
based on the fact that (x) the Issuer has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the date
hereof, there has been a change in the applicable Federal income tax law,
in either case to the effect that, and such opinion shall confirm that, the
Holders of the Securities of such series and Coupons appertaining thereto
will not recognize income, gain or loss for Federal income tax purposes as
a result of such deposit, defeasance and discharge and will be subject to
Federal income tax on the same amount and in the same manner and at the
same times,
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as would have been the case if such deposit, defeasance and discharge had
not occurred;
(d) the Issuer has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for relating to the defeasance contemplated by this provision have
been complied with; and
(e) not Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to the Securities of
such series shall have occurred and be continuing on the date of such
deposit or, insofar as Sections 5.1(e) and (f) are concerned, at any time
during the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until
the expiration of such period).
(C) The Issuer shall be released from its obligations under Sections
3.6, 3.7, 3.8, 3.9, 3.10, 9.1 and 9.3 with respect to the Securities of any
series, and any Coupons appertaining thereto, Outstanding on and after the date
the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"). For this purpose, such covenant defeasance means that, with
respect to the Outstanding Securities of any series, the Issuer may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in such Section, whether directly or indirectly by reason
of any reference elsewhere herein to such Section or by reason of any reference
in such Section to any other provision herein or in any other document and such
omission to comply shall not constitute an Event of Default under Section 5.1,
but the remainder of this Indenture and such Securities and Coupons shall be
unaffected thereby. The following shall be the conditions to application of
this subsection C of this Section 10.1:
(a) The Issuer has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the holders of the Securities of such series and
coupons appertaining thereto, (i) cash in an amount, or (ii) in the case of
any series of Securities
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the payments on which may only be made in Dollars, U.S. Government
Obligations maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash or (iii) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (A) the principal of (and premium, if any)
and interest on all Securities of such series and Coupons appertaining
thereto on each date that such principal of, premium on or interest is due
and payable and (B) any mandatory sinking fund payments on the day on which
such payments are due and payable in accordance with the terms of the
Indenture and the Securities of such series;
(b) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit or,
insofar as Sections 5.1(e) and (f) are concerned, at any time during the
period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period);
(c) Such covenant defeasance shall not cause the Trustee to have a
conflicting interest as defined in Section 6.8 and for purposes of the
Trust Indenture Act of 1939 with respect to any securities of the Issuer;
(d) Such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Issuer is a party or by which it is
bound;
(e) Such covenant defeasance shall not cause any Securities then
listed on any registered national securities exchange under the Securities
Exchange Act of 1934, as amended, to be delisted;
(f) The Issuer shall have delivered to the Trustee an Officer's
Certificate and Opinion of Counsel to the effect that the Holders of the
Securities of such series and Coupons appertaining thereto 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
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and at the same times as would have been the case if such covenant
defeasance had not occurred; and
(g) The Issuer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the covenant defeasance contemplated by
this provision have been complied with.
SECTION 10.2 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF
--------------------------------------------------------
SECURITIES. Subject to Section 10.4, all moneys deposited with the Trustee (or
- ----------
other trustee) pursuant to Section 10.1 shall be held in trust and applied by it
to the payment, either directly or through any paying agent (including the
Issuer acting as its own paying agent), to the Holders of the particular
Securities of such series and of Coupons appertaining thereto for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent required by law.
SECTION 10.3 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
----------------------------------------
with the satisfaction and discharge of this Indenture with respect to Securities
of any series, all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from all further liability with respect to such moneys.
SECTION 10.4 RETURN OF MONEYS HELD BY TRUSTEE AND PAYING AGENT
-------------------------------------------------
UNCLAIMED FOR TWO YEARS. Any moneys deposited with or paid to the Trustee or
- -----------------------
any paying agent for the payment of the principal of or interest on any Security
of any series or Coupons attached thereto and not applied but remaining
unclaimed for two years after the date upon which such principal or interest
shall have become due and payable, shall, upon the written request of the Issuer
and unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for
such series or such paying agent, and the Holder of the Securities of such
series and of any Coupons appertaining thereto shall, unless otherwise required
by mandatory provisions of applicable escheat or abandoned or
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unclaimed property laws, thereafter look only to the Issuer for any payment
which such Holder may be entitled to collect, and all liability of the Trustee
or any paying agent with respect to such moneys shall thereupon cease; PROVIDED,
--------
HOWEVER, that the Trustee or such paying agent, before being required to make
- -------
any such repayment with respect to moneys deposited with it for any payment (a)
in respect of Registered Securities of any series, shall at the expense of the
Issuer, mail by first-class mail to Holders of such Securities at their
addresses as they shall appear on the Security register, and (b) in respect of
Unregistered Securities of any series, shall at the expense of the Issuer cause
to be published once, in an Authorized Newspaper in _______________________ and
once in an Authorized Newspaper in the Place or Places of Payment (and if
required, once in an Authorized Newspaper in any other place or places), notice,
that such moneys remain and that, after a date specified therein, which shall
not be less than thirty days from the date of such mailing or publication, any
unclaimed balance of such money then remaining will be repaid to the Issuer.
SECTION 10.5 INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The Issuer
-----------------------------------------
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to
Section 10.1 or the principal or interest received in respect of such
obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
------------------------
SECTION 11.1 INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF
------------------------------------------------------
ISSUER EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
- ---------------------------------------
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any successor, either directly
or through the Issuer or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the
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Securities and the Coupons appertaining thereto by the Holders thereof and as
part of the consideration for the issue of the Securities and the Coupons
appertaining thereto.
SECTION 11.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF PARTIES
-------------------------------------------------------
AND HOLDERS OF SECURITIES AND COUPONS. Nothing in this Indenture, in the
- -------------------------------------
Securities or in the Coupons appertaining thereto, expressed or implied, shall
give or be construed to give to any person, firm or corporation, other than the
parties hereto and their successors and the Holders of the Securities or
Coupons, if any, any legal or equitable right, remedy or claim under this
Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the Holders of the Securities or Coupons, if any.
SECTION 11.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY INDENTURE.
---------------------------------------------------
The Issuer shall have the right at all times to assign any of its rights and
obligations under this Indenture to a direct or indirect wholly-owned
Subsidiary, provided that, in the event of any such assignment, the Issuer will
remain liable for all such obligations. All the covenants, stipulations,
promises and agreements in this Indenture contained by or in behalf of the
Issuer shall bind its successors and assigns, whether so expressed or not.
SECTION 11.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND HOLDERS OF
-----------------------------------------------------
SECURITIES AND COUPONS. Any notice or demand which by any provision of this
- ----------------------
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities or Coupons to or on the Issuer may be given or served
by being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the Issuer is
filed by the Issuer with the Trustee) to Hawaiian Electric Industries, Inc. 900
Richards Street, Honolulu, Hawaii 96813, Attention: Treasurer. Any notice,
direction, request or demand by the Issuer or any Holder of Securities or
Coupons to or upon the Trustee shall be deemed to have been sufficiently given
or served by being deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until another address of the
Trustee is filed by the Trustee with the Issuer) to
____________________________, ______________________________, Attention:
________________.
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Where this Indenture provides for notice to Holders of Registered
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder entitled thereto, at his last address as it appears in the Security
register. In any case where notice to such Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when such
notice is required to be given pursuant to any provision of this Indenture, then
any manner of giving such notice as shall be reasonably satisfactory to the
Trustee shall be deemed to be a sufficient giving of such notice.
SECTION 11.5 OFFICER'S CERTIFICATES AND OPINIONS OF COUNSEL;
-----------------------------------------------
STATEMENTS TO BE CONTAINED THEREIN. Upon any application or demand by the
- ----------------------------------
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making
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such certificate or opinion has read such covenant or condition, (b) 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, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters, information with respect to which is in the possession of
the Issuer, upon the certificate, statement or opinion of or representations by
an officer or officers of the Issuer, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
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SECTION 11.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. If the
-----------------------------------------------
date of maturity of interest on or principal of the Securities of any series or
any Coupons appertaining thereto or the date fixed for redemption or repayment
of any such Security or Coupon shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.
SECTION 11.7 CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST
-------------------------------------------------
INDENTURE ACT OF 1939. If and to the extent that any provision of this
- ---------------------
Indenture limits, qualifies or conflicts with the duties imposed by, or with
another provision (an "incorporated provision") included in this Indenture by
operation of, Sections 310 to 318, inclusive, of the Trust Indenture Act of
1939, such imposed duties or incorporated provision shall control.
SECTION 11.8 NEW YORK LAW TO GOVERN. This Indenture and each
----------------------
Security and Coupon shall be deemed to be a contract under the laws of the State
of New York, and for all purposes shall be construed in accordance with the laws
of such State, except as may otherwise be required by mandatory provisions of
law.
SECTION 11.9 COUNTERPARTS. This Indenture may be executed in any
------------
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 EFFECT OF HEADINGS. The Article and Section headings
------------------
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 11.11 SECURITIES IN A FOREIGN CURRENCY OR IN ECU. Unless
------------------------------------------
otherwise specified in an Officer's Certificate delivered pursuant to Section
2.3 of this Indenture with respect to a particular series of Securities,
whenever for purposes of this Indenture any action may be taken by the Holders
of a specified percentage in aggregate principal amount of Securities of all
series or all series affected by a particular action at the time Outstanding
and, at such time, there are Outstanding Securities of any series which are
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denominated in a coin or currency other than Dollars (including ECUs), then the
principal amount of Securities of such series which shall be deemed to be
Outstanding for the purpose of taking such action shall be that amount of
Dollars that could be obtained for such amount at the Market Exchange Rate. For
purposes of this Section 11.11, Market Exchange Rate shall mean the noon Dollar
buying rate in New York City for cable transfers of that currency as published
by the Federal Reserve Bank of New York; PROVIDED, HOWEVER, in the case of ECUs,
-------- -------
Market Exchange Rate shall mean the rate of exchange determined by the
Commission of the European Communities (or any successor thereto) as published
in the Official Journal of the European Communities (such publication or any
successor publication, the "Journal"). If such Market Exchange Rate is not
available for any reason with respect to such currency, the Trustee shall use,
in its sole discretion and without liability on its part, such quotation of the
Federal Reserve Bank of New York or, in the case of ECUs, the rate of exchange
as published in the Journal, as of the most recent available date, or quotations
or, in the case of ECUs, rates of exchange from one or more major banks in The
City of New York or in the country of issue of the currency in question, which
for purposes of the ECU shall be Brussels, Belgium, or such other quotations or,
in the case of ECU, rates of exchange as the Trustee shall deem appropriate.
The provisions of this paragraph shall apply in determining the equivalent
principal amount in respect of Securities of a series denominated in a currency
other than Dollars in connection with any action taken by Holders of Securities
pursuant to the terms of this Indenture including without limitation any
determination contemplated in Section 5.1(g).
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Issuer and all Holders.
SECTION 11.12 JUDGMENT CURRENCY. The Issuer agrees, to the fullest
-----------------
extent that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the principal of or interest on the Securities of
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any series (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Trustee could purchase
in The City of New York the Required Currency with the Judgment Currency on the
day on which final unappealable judgment is entered, unless such day is not a
New York Banking Day, then, to the extent permitted by applicable law, the rate
of exchange used shall be the rate at which in accordance with normal banking
procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the New York Banking Day preceding the
day on which final unappealable judgment is entered and (b) its obligations
under this Indenture to make payments in the Required Currency (i) shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment
(whether or not entered in accordance with subsection (a)), in any currency
other than the Required Currency, except to the extent that such tender or
recovery shall result in the actual receipt, by the payee, of the full amount of
the Required Currency expressed to be payable in respect of such payments, (ii)
shall be enforceable as an alternative or additional cause of action for the
purpose of recovering in the Required Currency the amount, if any, by which such
actual receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or required by law or executive order to
close.
SECTION 11.13 SEPARABILITY CLAUSE. In case any provision in this
-------------------
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not be
in any way affected or impaired thereby.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
------------------------------------------
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SECTION 12.1 APPLICABILITY OF ARTICLE. The provisions of this
------------------------
Article shall be applicable to the Securities of any series which are redeemable
before their maturity or to any sinking fund for the retirement of Securities of
a series except as otherwise specified as contemplated by Section 2.3 for
Securities of such series.
SECTION 12.2 NOTICE OF REDEMPTION; PARTIAL REDEMPTIONS. Notice of
-----------------------------------------
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of such redemption by first class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to such Holders
of Securities of such series at their last addresses as they shall appear upon
the registry books. Notice of redemption to the Holders of Unregistered
Securities to be redeemed as a whole or in part, who have filed their names and
addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture
Act of 1939 shall be given by mailing notice of such redemption, by first class
mail, postage prepaid, at least 30 days and not more than 60 prior to the date
fixed for redemption, to such Holders at such addresses as were so furnished to
the Trustee (and, in the case of any such notice given by the Issuer, the
Trustee shall make such information available to the Issuer for such purpose).
Notice of redemption to all other Holders of Unregistered Securities shall be
published in an Authorized Newspaper in ________________________ and in an
Authorized Newspaper in the Place or Places of Payment (and, if required, in an
Authorized Newspaper in any other place or places), in each case, once in each
of three successive calendar weeks, the first publication to be not less than 30
nor more than 60 days prior to the date fixed for redemption. Any notice which
is mailed in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the Holder receives the notice. Failure to give
notice by mail, or any defect in the notice to the Holder of any Security of a
series designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Security of such
series.
The notice of redemption to each such Holder shall specify, the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price, the place or
places of
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payment, that payment will be made upon presentation and surrender of such
Securities and, in the case of Securities with Coupons attached thereto, of all
Coupons appertaining thereto maturing after the date fixed for redemption, that
such redemption is pursuant to the mandatory or optional sinking fund, or both,
if such be the case, that interest accrued to the date fixed for redemption will
be paid as specified in such notice and that on and after said date interest
thereon or on the portions thereof to be redeemed will cease to accrue. In case
any Security of a series is to be redeemed in part only the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Security, a new Security or Securities of such series in principal amount equal
to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption
given as provided in this Section, the Issuer will deposit with the Trustee or
with one or more paying agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 3.4) an
amount of money sufficient to redeem on the redemption date all the Securities
of such series so called for redemption at the appropriate redemption price,
together with accrued interest to the date fixed for redemption. The Issuer
will deliver to the Trustee at least 70 days prior to the date fixed for
redemption an Officer's Certificate stating the aggregate principal amount of
Securities to be redeemed. In case of a redemption at the election of the
Issuer prior to the expiration of any restriction on such redemption, the Issuer
shall deliver to the Trustee, prior to the giving of any notice of redemption to
Holders pursuant to this Section, an Officer's Certificate stating that such
restriction has been complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such Series to be redeemed in whole or in part. Securities may be
redeemed in
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part in multiples equal to the minimum authorized denomination for Securities of
such series or any multiple thereof. The Trustee shall promptly notify the
Issuer in writing of the Securities of such series selected for redemption and,
in the case of any Securities of such series selected for partial redemption,
the principal amount thereof to be redeemed. For all purposes of this
Indenture, unless the context otherwise requires, all provisions relating to the
redemption of Securities of any series shall relate, in the case of any Security
redeemed or to be redeemed only in part, to the portion of the principal amount
of such Security which has been or is to be redeemed.
SECTION 12.3 PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If notice
-------------------------------------------
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after said
date (unless the Issuer shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and the unmatured Coupons, if any, appertaining thereto shall be void,
and, except as provided in Sections 6.5 and 10.4, such Securities shall cease
from and after the date fixed for redemption to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Securities at a place of payment specified in said notice,
together with all Coupons, if any, appertaining thereto maturing after the date
fixed for redemption, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption; PROVIDED that
--------
payment of interest becoming due on or prior to the date fixed for redemption
shall be payable in the case of Securities with Coupons attached thereto, to the
Holders of the Coupons for such interest upon surrender thereof, and in the case
of Registered Securities, to the Holders of such Registered Securities
registered as such on the relevant record date subject to the terms and
provisions of Sections 2.3 and 2.7 hereof.
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If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.
If any Security with Coupons attached thereto is surrendered for
redemption and is not accompanied by all appurtenant Coupons maturing after the
date fixed for redemption, the surrender of such missing Coupon or Coupons may
be waived by the Issuer and the Trustee, if there be furnished to each of them
such security or indemnity as they may require to save each of them harmless.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, of authorized denominations, in principal amount
equal to the unredeemed portion of the Security so presented.
SECTION 12.4 EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY FOR
----------------------------------------------------
SELECTION FOR REDEMPTION. Securities shall be excluded from eligibility for
- ------------------------
selection for redemption if they are identified by registration and certificate
number in an Officer's Certificate delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by either (a) the
Issuer or (b) an entity specifically identified in such written statement as
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer.
SECTION 12.5 MANDATORY AND OPTIONAL SINKING FUNDS. The minimum
------------------------------------
amount of any sinking fund payment provided for by the terms of the Securities
of any series is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment". The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date".
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In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or (c)
receive credit for Securities of such series (not previously so credited)
redeemed by the Issuer through any optional redemption provision contained in
the terms of such series. Securities so delivered or credited shall be received
or credited by the Trustee at the sinking fund redemption price specified in
such Securities.
On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officer's
Certificate (which need not contain the statements required by Section 11.5) (a)
specifying the portion of the mandatory sinking fund payment to be satisfied by
payment of cash and the portion to be satisfied by credit of Securities of such
series and the basis for such credit, (b) stating that none of the Securities of
such series has theretofore been so credited, (c) stating that no defaults in
the payment of interest or Events of Default with respect to such series have
occurred (which have not been waived or cured) and are continuing and (d)
stating whether or not the Issuer intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if so, specifying
the amount of such optional sinking fund payment which the Issuer intends to pay
on or before the next succeeding sinking fund payment date. Any Securities of
such series to be credited and required to be delivered to the Trustee in order
for the Issuer to be entitled to credit therefor as aforesaid which have not
theretofore been delivered to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such Officer's Certificate (or
reasonably promptly thereafter if acceptable to the Trustee). Such Officer's
Certificate shall be irrevocable and upon its receipt by the Trustee the Issuer
shall become unconditionally obligated to make all the cash payments or payments
therein referred to, if any, on or
99
<PAGE>
before the next succeeding sinking fund payment date. Failure of the Issuer, on
or before any such 60th day, to deliver such Officer's Certificate and
Securities specified in this paragraph, if any, shall not constitute a default
but shall constitute, on and as of such date, the irrevocable election of the
Issuer (i) that the mandatory sinking fund payment for such series due on the
next succeeding sinking fund payment date shall be paid entirely in cash without
the option to deliver or credit Securities of such series in respect thereof and
(ii) that the Issuer will make no optional sinking fund payment with respect to
such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000 (or the equivalent thereof in any Foreign Currency or ECU) or a
lesser sum in Dollars (or the equivalent thereof in any Foreign Currency or ECU)
if the Issuer shall so request with respect to the Securities of any particular
series, such cash shall be applied on the next succeeding sinking fund payment
date to the redemption of Securities of such series at the sinking fund
redemption price together with accrued interest to the date fixed for
redemption. If such amount shall be $50,000 (or the equivalent thereof in any
Foreign Currency or ECU) or less and the Issuer makes no such request then it
shall be carried over until a sum in excess of $50,000 (or the equivalent
thereof in any Foreign Currency or ECU) is available. The Trustee shall select,
in the manner provided in Section 12.2, for redemption on such sinking fund
payment date a sufficient principal amount of Securities of such series to
absorb said cash, as nearly as may be, and shall (if requested in writing by the
Issuer) inform the Issuer of the serial numbers of the Securities of such series
(or portions thereof) so selected. Securities shall be excluded from
eligibility for redemption under this Section if they are identified by
registration and certificate number in an Officer's Certificate delivered to the
Trustee at least 60 days prior to the sinking fund payment date as being owned
of record and beneficially by, and not pledged or hypothecated by either (a) the
Issuer or (b) an entity specifically identified in such Officer's Certificate as
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer. The Trustee, in the name and at the expense of
the Issuer (or the Issuer, if it shall so request the Trustee in writing) shall
100
<PAGE>
cause notice of redemption of the Securities of such series to be given in
substantially the manner provided in Section 12.2 (and with the effect provided
in Section 12.3) for the redemption of Securities of such series in part at the
option of the Issuer. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such series shall be added to the
next cash sinking fund payment for such series and, together with such payment,
shall be applied in accordance with the provisions of this Section. Any and all
sinking fund moneys held on the stated maturity date of the Securities of any
particular series (or earlier, if such maturity is accelerated), which are not
held for the payment or redemption of particular Securities of such series shall
be applied, together with other moneys, if necessary, sufficient for the
purpose, to the payment of the principal of, and interest on, the Securities of
such series at maturity.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all interest
accrued to the date fixed for redemption on Securities to be redeemed on the
next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of
a series with sinking fund moneys or give any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
except that, where the giving of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Issuer a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default shall
occur, and any moneys thereafter paid into the sinking fund, shall, during the
continuance of such default or Event of Default, be deemed to have been
collected under Article Five and held for the payment of all such Securities.
In case such Event of Default shall have been waived as provided in Section 5.10
or the default cured on or before the sixtieth day preceding the sinking fund
payment date in any year, such moneys shall thereafter be applied on the next
succeeding sinking fund payment date in accordance with this Section to the
redemption of such Securities.
101
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of __________________.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
By:
-----------------------------------
Title:
By:
-----------------------------------
Title:
[CORPORATE SEAL]
Attest:
By:
------------------------
Title
----------------------------------------
_______________, as Trustee
By:
-----------------------------------
Title:
[CORPORATE SEAL]
Attest:
By:
------------------------
Title:
102
<PAGE>
STATE OF HAWAII )
) ss.
COUNTY OF HONOLULU )
On this _____ of ________________ before me personally came
___________________________, to me personally known, who, being by me duly
sworn, did depose and say that he resides at ___________________________ that he
is the ____________________ of Hawaiian Electric Industries, Inc., one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
[NOTARIAL SEAL]
______________________________
Notary Public
STATE OF HAWAII )
) ss.
COUNTY OF HONOLULU )
On this _____ of ________________ before me personally came
___________________________, to me personally known, who, being by me duly
sworn, did depose and say that he resides at ___________________________ that he
is the ____________________ of Hawaiian Electric Industries, Inc., one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
[NOTARIAL SEAL]
______________________________
Notary Public
103
<PAGE>
STATE OF ___________ )
) ss.
COUNTY OF __________ )
On this _____ of ________________ before me personally came
___________________________, to me personally known, who, being by me duly
sworn, did depose and say that he resides at ________________________ that he is
a [_____________________] of ___________________________________, one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
[NOTARIAL SEAL]
______________________________
Notary Public
104
<PAGE>
Exhibit 4(h)
------------
============================================================
HAWAIIAN ELECTRIC INDUSTRIES, INC.
AND
____________________________, Trustee
Senior Subordinated Indenture
Dated as of _______________, ____
__________
=============================================================
<PAGE>
CROSS REFERENCE SHEET(*)
Between
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as
of ________ __, 1997 between HAWAIIAN ELECTRIC INDUSTRIES, INC. and
________________________, Trustee:
Section of the Act Section of Indenture
- ------------------ --------------------
310(a)(1) and (2)....................... 6.9
310(a)(3) and (4)....................... Inapplicable
310(b).................................. 6.8 and 6.10(a), (b)
and (d)
310(c).................................. Inapplicable
311(a).................................. 6.13
311(b).................................. 6.13
311(c).................................. Inapplicable
312(a).................................. 4.1 and 4.2
312(b).................................. 4.2
312(c).................................. 4.2
313(a).................................. 4.4
313(b)(1)............................... Inapplicable
313(b)(2)............................... 4.4
313(c).................................. 4.4, 5.11, 6.10,
6.11, 8.2 and 12.2
313(d).................................. 4.4
314(a).................................. 3.5 and 4.3
314(b).................................. Inapplicable
314(c)(1) and (2)....................... 11.5
314(c)(3)............................... Inapplicable
314(d).................................. Inapplicable
314(e).................................. 11.5
314(f).................................. Inapplicable
315(a), (c) and (d)..................... 6.1
315(b).................................. 5.11
315(e).................................. 5.12
316(a)(1)............................... 5.9 and 5.10
316(a)(2)............................... Not required
316(a) (last sentence).................. 7.4
316(b).................................. 5.7
317(a).................................. 5.2
317(b).................................. 3.4(a) and (b)
318(a).................................. 11.7
(*) This Cross Reference Sheet is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
__________
Page
PARTIES.................................................
RECITALS................................................
Authorization of Indenture.........................
Compliance with Legal Requirements.................
Purpose of and Consideration for Indenture.........
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined.................
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally.......................
SECTION 2.2 Form of Trustee's Certificate of
Authentication........................
SECTION 2.3 Amount Unlimited; Issuable in Series..
SECTION 2.4 Authentication and Delivery of
Securities............................
SECTION 2.5 Execution of Securities...............
SECTION 2.6 Certificate of Authentication.........
SECTION 2.7 Denomination and Date of Securities;
Payments of Interest..................
SECTION 2.8 Registration, Transfer and Exchange...
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost
and Stolen Securities.................
SECTION 2.10 Cancellation of Securities;
Destruction Thereof...................
SECTION 2.11 Temporary Securities..................
SECTION 2.12 Computation of Interest...............
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest.....
SECTION 3.2 Offices for Payments, etc.............
<PAGE>
SECTION 3.3 Appointment to Fill a Vacancy in
Office of Trustee.....................
SECTION 3.4 Paying Agents.........................
SECTION 3.5 Written Statement to Trustee..........
SECTION 3.6 Corporate Existence...................
SECTION 3.7 Maintenance of Properties.............
SECTION 3.8 Payment of Taxes and Other Claims.....
SECTION 3.9 This Section left intentionally blank.
SECTION 3.10 SEC Reports...........................
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information
as to Names and Addresses of
Securityholders.......................
SECTION 4.2 Preservation and Disclosure of
Securityholders Lists.................
SECTION 4.3 Reports by the Issuer.................
SECTION 4.4 Reports by the Trustee................
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration
of Maturity; Waiver of Default........
SECTION 5.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt................
SECTION 5.3 Application of Proceeds...............
SECTION 5.4 Suits for Enforcement.................
SECTION 5.5 Restoration of Rights on Abandonment
of Proceedings........................
SECTION 5.6 Limitations on Suits by
Securityholders.......................
SECTION 5.7 Unconditional Right of Securityholders
to Institute Certain Suits............
SECTION 5.8 Powers and Remedies Cumulative; Delay
or Omission Not Waiver of Default.....
SECTION 5.9 Control by Holders of Securities......
SECTION 5.10 Waiver of Past Defaults...............
SECTION 5.11 Trustee to Give Notice of Default,
But May Withhold in Certain
Circumstances.........................
<PAGE>
SECTION 5.12 Right of Court to Require Filing of
Undertaking to Pay Costs..............
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the
Trustee; During Default; Prior to
Default...............................
SECTION 6.2 Certain Rights of the Trustee.........
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or
Application of Proceeds Thereof.......
SECTION 6.4 Trustee and Agents May Hold Securities
or Coupons; Collections, etc..........
SECTION 6.5 Moneys Held by Trustee................
SECTION 6.6 Compensation and Indemnification of
Trustee and Its Prior Claim...........
SECTION 6.7 Right of Trustee to Rely on Officer's
Certificate, etc......................
SECTION 6.8 Indentures Not Creating Potential
Conflicting Interests for the
Trustee...............................
SECTION 6.9 Persons Eligible for Appointment as
Trustee...............................
SECTION 6.10 Resignation and Removal; Appointment
of Successor Trustee..................
SECTION 6.11 Acceptance of Appointment by
Successor Trustee.....................
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee.....
SECTION 6.13 Preferential Collection of Claims
Against Issuer........................
SECTION 6.14 Appointment of Authenticating Agent...
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by
Securityholders.......................
SECTION 7.2 Proof of Execution of Instruments and
of Holding of Securities..............
SECTION 7.3 Holders to be Treated as Owners.......
SECTION 7.4 Securities Owned by Issuer Deemed
Not Outstanding.......................
SECTION 7.5 Right of Revocation of Action Taken...
<PAGE>
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without
Consent of Securityholders............
SECTION 8.2 Supplemental Indentures With Consent
of Securityholders....................
SECTION 8.3 Effect of Supplemental Indenture......
SECTION 8.4 Documents to Be Given to Trustee......
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures...............
SECTION 8.6 Subordination Unimpaired..............
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Issuer May Consolidate, Etc., Only
on Certain Terms......................
SECTION 9.2 Successor Corporation Substituted.....
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of
Indenture.............................
SECTION 10.2 Application by Trustee of Funds
Deposited for Payment of Securities...
SECTION 10.3 Repayment of Moneys Held by Paying
Agent.................................
SECTION 10.4 Return of Moneys Held by Trustee and
Paying Agent Unclaimed for Two Years..
SECTION 10.5 Indemnity for U.S. Government
Obligations...........................
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Stockholders, Officers
and Directors of Issuer Exempt from
Individual Liability..................
SECTION 11.2 Provisions of Indenture for the Sole
Benefit of Parties and Holders of
Securities and Coupons................
<PAGE>
SECTION 11.3 Successors and Assigns of Issuer
Bound by Indenture....................
SECTION 11.4 Notices and Demands on Issuer,
Trustee and Holders of Securities
and Coupons...........................
SECTION 11.5 Officer's Certificates and Opinions
of Counsel; Statements to Be
Contained Therein.....................
SECTION 11.6 Payments Due on Saturdays, Sundays
and Holidays..........................
SECTION 11.7 Conflict of Any Provision of Indenture
with Trust Indenture Act of 1939......
SECTION 11.8 New York Law to Govern................
SECTION 11.9 Counterparts..........................
SECTION 11.10 Effect of Headings....................
SECTION 11.11 Securities in a Foreign Currency
or in ECU.............................
SECTION 11.12 Judgment Currency.....................
SECTION 11.13 Separability Clause...................
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article..............
SECTION 12.2 Notice of Redemption; Partial
Redemptions...........................
SECTION 12.3 Payment of Securities Called for
Redemption............................
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection
for Redemption........................
SECTION 12.5 Mandatory and Optional Sinking Funds..
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1 Agreement to Subordinate..............
SECTION 13.2 Rights of Senior Indebtedness in the
Event of Insolvency, etc., of the
Issuer................................
SECTION 13.3 Payment Over of Proceeds Received on
Securities............................
SECTION 13.4 Payments to Holders...................
SECTION 13.5 Holders of Securities Authorize
Trustee to Effectuate Subordination
of Securities.........................
<PAGE>
SECTION 13.6 Notice to Trustee.....................
SECTION 13.7 Trustee May Hold Senior Indebtedness..
SECTION 13.8 Applicability of Article 13
to Paying Agents......................
ARTICLE FOURTEEN
CONVERSION OF SECURITIES
SECTION 14.1 Applicability of Article..............
SECTION 14.2 Conversion............................
SECTION 14.3 Exercise of Conversion................
SECTION 14.4 Fractional Interests..................
SECTION 14.5 Conversion Price......................
SECTION 14.6 Continuation of Conversion in Case of
Reclassification, Change, Merger,
Consolidation or Sale of Assets.......
SECTION 14.7 Notice of Certain Events..............
SECTION 14.8 Taxes on Conversion...................
SECTION 14.9 Issuer to Provide Stock...............
SECTION 14.10 Disclaimer of Responsibility for
Certain Matters.......................
SECTION 14.11 Return of Funds Deposited for Redemption
of Converted Securities...............
TESTIMONIUM..............................................
SIGNATURES...............................................
<PAGE>
THIS INDENTURE, dated as of _________ __, 1997 between HAWAIIAN
ELECTRIC INDUSTRIES, INC., a Hawaii corporation (the "Issuer"), and
___________________________, a __________________________________, as trustee
(the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue from time to time of
its unsecured debentures, notes or other evidences of indebtedness to be issued
in one or more series (the "Securities") up to such principal amount or amounts
as may from time to time be authorized in accordance with the terms of this
Indenture;
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication, delivery
and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the holders thereof, the Issuer and the Trustee mutually covenant and agree
for the equal and proportionate benefit of the respective holders from time to
time of the Securities and of the coupons, if any, appertaining thereto as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 CERTAIN TERMS DEFINED. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939 or
the definitions of which in the Securities Act of 1933 are referred to in the
Trust Indenture Act of 1939, including terms defined therein by reference to the
Securities Act of 1933 (except as herein otherwise expressly provided or unless
the context otherwise requires),
<PAGE>
shall have the meanings assigned to such terms in said Trust Indenture Act and
in said Securities Act as in force at the date of this Indenture. All accounting
terms used herein and not expressly defined shall have the meanings assigned to
such terms in accordance with generally accepted accounting principles, and the
term "generally accepted accounting principles" means such accounting principles
as are generally accepted at the time of any computation. The words "herein",
"hereof" and "hereunder" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision. The terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular.
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
"Authorized Newspaper" means a newspaper (which, in the case of the
City of ________________, will, if practicable, be The Wall Street Journal
(Eastern Edition)) published in an official language of the country of
publication customarily published at least once a day for at least five days in
each calendar week and of general circulation in the City of ______________ or
in any other city or country as applicable. If it shall be impractical in the
opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof which
is made or given with the approval of the Trustee shall constitute a sufficient
publication of such notice.
"Board of Directors" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means a copy of one or more resolutions, certified
by the secretary or an assistant secretary of the Issuer to have been duly
adopted or consented to by the Board of Directors and to be in full force and
effect, and delivered to the Trustee.
"Business Day" means, with respect to any Security, a day that in the
city (or in any of the cities, if more than one) in which amounts are payable,
as specified in the form of such Security, is not a day on which banking
institutions are authorized or required by law or regulation to close.
2
<PAGE>
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties on such date.
"Consolidated Total Assets" means, in respect of the Issuer as of any
date of determination, the amount of total assets shown on the consolidated
balance sheet of the Issuer and its consolidated subsidiaries contained in the
most recent annual or quarterly report filed with the Commission, or if the
Issuer is not then subject to the Securities Exchange Act of 1934, the most
recent annual or quarterly report to stockholders and, in respect of any
Subsidiary as of any date of determination, the amount of total assets of such
Subsidiary and its consolidated subsidiaries from which such consolidated
balance sheet of the Issuer and its consolidated Subsidiaries was derived.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located in the County of ______________, the City of
_________________.
"Coupon" means any interest coupon appertaining to an Unregistered
Security.
"Covenant defeasance" shall have the meaning set forth in Section
10.1(C).
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Registered Global Securities, the
Person designated as Depositary by the Company pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one such Person, "Depositary" as used with respect to the
3
<PAGE>
Securities of any such series shall mean the Depositary with respect to the
Registered Global Securities of that series.
"Dollar" means the coin or currency of the United States of America as
at the time of payment is legal tender for the payment of public and private
debts.
"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of European Communities.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Foreign Currency" means a currency issued by the government of a
country other than the United States.
"Holder", "Holder of Securities", "Securityholder" or other similar
terms mean (a) in the case of any Registered Security, the person in whose name
such Security is registered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof, and (b) in the case of any
Unregistered Security, the bearer of such Security, or any Coupon appertaining
thereto, as the case may be.
"Indebtedness" shall have the meaning set forth in Section 5.1.
"Indenture" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or supplemented
or both, and shall include the forms and terms of particular series of
Securities established as contemplated hereunder.
"Issuer" means (except as otherwise provided in Article Six) Hawaiian
Electric Industries, Inc., a Hawaii corporation and, subject to Article Nine,
its successors and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer signed in its name by the president, any vice president or the treasurer
or controller of the Issuer.
"Judgment Currency" shall have the meaning set forth in Section 11.12.
4
<PAGE>
"Officer's Certificate" means a certificate signed by the president,
any vice president or the treasurer or controller of the Issuer and delivered to
the Trustee. Each such certificate shall comply with Section 314 of the Trust
Indenture Act of 1939 and include the statements provided for in Section 11.5.
"Opinion of Counsel" means an opinion in writing signed by the General
Counsel of the Issuer or by such other legal counsel who may be an employee of
or counsel to the Issuer and who shall be satisfactory to the Trustee. Each
such opinion shall comply with Section 314 of the Trust Indenture Act of 1939
and include the statements provided for in Section 11.5.
"Original issue date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the maturity thereof pursuant to Section 5.1.
"Outstanding" when used with reference to Securities, shall, subject
to the provisions of Section 7.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except
(a) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys or U.S. Government Obligations (as provided
for in Section 10.1(A) and (B)) in the necessary amount shall have
been deposited in trust with the Trustee or with any paying agent
(other than the Issuer) or shall have been set aside, segregated and
held in trust by the Issuer for the Holders of such Securities (if the
Issuer shall act as its own paying agent), provided that if such
Securities, or portions thereof, are to
5
<PAGE>
be redeemed prior to the maturity thereof, notice of such redemption
shall have been given as herein provided, or provision satisfactory to
the Trustee shall have been made for giving such notice; and
(c) Securities which shall have been paid or in substitution for
which other Securities shall have been authenticated and delivered
pursuant to the terms of Section 2.9 (except with respect to any such
Security as to which proof satisfactory to the Trustee is presented
that such Security is held by a person in whose hands such Security is
a legal, valid and binding obligation of the Issuer) or Securities
converted pursuant hereto or Securities not deemed outstanding
pursuant to Section 12.2.
In determining whether the Holders of the requisite principal amount
of Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof pursuant to Section 5.1.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated maturity
or maturities thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Company or its agents upon the issuance of
such Securities.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of and interest on the
Securities of that series are payable as specified as contemplated by Section
2.3.
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"principal" whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any".
"Record date" shall have the meaning set forth in Section 2.7.
"Registered Global Security", means a Security evidencing all or a
part of a series of Registered Securities, issued to the Depositary for such
series in accordance with Section 2.4, and bearing the legend prescribed in
Section 2.4.
"Registered Security" means any Security registered on the Security
register of the Issuer.
"Required Currency" shall have the meaning set forth in Section 11.12.
"Responsible Officer" when used with respect to the Trustee means the
chairman of the board of directors, any vice chairman of the board of directors,
the chairman of the trust committee, the chairman of the executive committee,
any vice chairman of the executive committee, the president, any vice president,
(whether or not designated by numbers or words added before or after the title
"vice president") the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant vice president, any assistant
cashier, any assistant secretary, any assistant treasurer, or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
knowledge of and familiarity with the particular subject.
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"Security" or "Securities" (except as otherwise provided in Section
7.4) has the meaning stated in the first recital of this Indenture, or, as the
case may be, Securities that have been authenticated and delivered under this
Indenture.
"Senior Indebtedness" means the principal of and premium, if any, and
interest on (a) all indebtedness of the Issuer, whether outstanding on the date
of this Indenture or thereafter created, (i) for money borrowed by the Issuer,
(ii) for money borrowed by, or obligations of, others and either assumed or
guaranteed, directly or indirectly, by the Issuer, (iii) in respect of letters
of credit and acceptances issued or made by banks, or (iv) constituting purchase
money indebtedness, or indebtedness secured by property included in the
property, plant and equipment accounts of the Issuer at the time of the
acquisition of such property by the Issuer, for the payment of which the Issuer
is directly liable, and (b) all deferrals, renewals, extensions and refundings
of, and amendments, modifications and supplements to, any such indebtedness. As
used in the preceding sentence the term "purchase money indebtedness" means
indebtedness evidenced by a note, debenture, bond or other instrument (whether
or not secured by any lien or other security interest) issued or assumed as all
or a part of the consideration for the acquisition of property, whether by
purchase, merger, consolidation or otherwise, unless by its terms such
indebtedness is subordinate to other indebtedness of the Issuer.
Notwithstanding anything to the contrary in this Indenture or the Securities,
Senior Indebtedness shall not include (i) any indebtedness of the Issuer which,
by its terms or the terms of the instrument creating or evidencing it, is
subordinate in right of payment to or pari passu with the Securities or (ii) any
indebtedness of the Issuer to a Subsidiary.
"Subsidiary" means any corporation, partnership or other entity of
which at the time of determination the Issuer owns or controls directly or
indirectly more than 50% of the shares of voting stock.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act
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of 1939 as in force at the date as of which this Indenture was originally
executed.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee. "Trustee" shall also mean or include each Person
who is then a trustee hereunder and if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the trustee with respect to the Securities of such series.
"Unregistered Security" means any Security other than a Registered
Security.
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.1(A).
"Yield to Maturity" means the yield to maturity on a series of
securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
ARTICLE TWO
SECURITIES
SECTION 2.1 FORMS GENERALLY. The Securities of each series and the
Coupons, if any, to be attached thereto shall be substantially in such form (not
inconsistent with this Indenture) as shall be established by or pursuant to one
or more Board Resolutions (as set forth in a Board Resolution or, to the extent
established pursuant to rather than set forth in a Board Resolution, an
Officer's Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or
legends or endorsements, not inconsistent with the provisions of this Indenture,
as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such
Securities and
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Coupons, if any, as evidenced by their execution of such Securities and Coupons.
The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and Coupons,
if any.
SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
"This is one of the Securities referred to in the within-mentioned
Subordinated Indenture.
______________________,
as Trustee
By_____________________
Authorized Signatory"
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Trustee's Certificate of
Authentication to be borne by the Securities of each such series shall be
substantially as follows:
"This is one of the Securities referred to in the within-mentioned
Subordinated Indenture.
______________________,
as Authenticating Agent
By_____________________
Authorized Signatory"
SECTION 2.3 AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
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The Securities may be issued in one or more series and each such
series shall rank equally and pari passu with the Securities of each other
series, but all Securities issued hereunder and any Coupons and the payment of
principal of and interest on any Securities and of any Coupons shall be
subordinate and junior in right of payment, to the extent and in the manner set
forth in Article Thirteen, to all Senior Indebtedness. There shall be
established in or pursuant to one or more Board Resolutions (and to the extent
established pursuant to rather than set forth in a Board Resolution, in an
Officer's Certificate detailing such establishment) or established in one or
more indentures supplemental hereto, prior to the initial issuance of Securities
of any series,
(1) the designation of the Securities of the series, which shall
distinguish the Securities of the Series from the Securities of all other
series;
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.8, 2.9, 2.11, 8.5, 12.3 or
14.3);
(3) if other than Dollars, the coin or currency in which the
Securities of that series are denominated (including, but not limited to,
any Foreign Currency or ECU);
(4) the date or dates on which the principal of the Securities
of the series is payable;
(5) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which such interest
shall accrue, on which such interest shall be payable and (in the case of
Registered Securities) on which a record shall be taken for the
determination of Holders to whom interest is payable and/or the method by
which such rate or rates or date or dates shall be determined;
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(6) the place or places where the principal of and any interest
on Securities of the series shall be payable (if other than as provided in
Section 3.2);
(7) the right, if any, of the Issuer to redeem Securities, in
whole or in part, at its option and the period or periods within which, the
price or prices at which and any terms and conditions upon which Securities
of the series may be so redeemed, pursuant to any sinking fund or
otherwise;
(8) the obligation, if any, of the Issuer to redeem, purchase or
repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder there of
and the price or prices at which and the period or periods within which and
any terms and conditions upon which Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof in the case of Registered Securities, or $1,000 and $5,000
in the case of Unregistered Securities, the denominations in which
Securities of the series shall be issuable;
(10) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof;
(11) if other than the coin or currency in which the Securities
of that series are denominated, the coin or currency in which payment of
the principal of or interest on the Securities of such series shall be
payable;
(12) if the principal of or interest on the Securities of such
series are to be payable, at the election of the Issuer or a Holder
thereof, in a coin or currency other than that in which the Securities are
denominated, the period or periods within which, and the terms and
conditions upon which, such election may be made;
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(13) if the amount of payments of principal of and interest on
the Securities of the series may be determined with reference to an index
based on a coin or currency other than that in which the Securities of the
series are denominated, the manner in which such amounts shall be
determined;
(14) whether the Securities of the series will be issuable as
Registered Securities (and if so, whether such Securities will be issuable
as Registered Global Securities) or Unregistered Securities (with or
without Coupons), or any combination of the foregoing, any restrictions
applicable to the offer, sale or delivery of Unregistered Securities or the
payment of interest thereon and, if other than as provided in Section 2.8,
the terms upon which Unregistered Securities of any series may be exchanged
for Registered Securities of such series and vice versa;
(15) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series held by a person who is
not a U.S. person in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, whether the Issuer will have the option to
redeem such Securities rather than pay such additional amounts;
(16) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, the
form and terms of such certificates, documents or conditions;
(17) any trustees, depositaries, authenticating or paying
agents, transfer agents or registrars or any other agents with respect to
the Securities of such series;
(18) any other events of default or covenants with respect to
the Securities of such series in addition to the Events of Default or
covenants set forth herein;
(19) if the Securities of such series are to be convertible into
any cash, securities or property, at the
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option of the Holder or the Issuer or upon the happening of some event or
otherwise, all terms relating to such convertibility, including without
limitation any term inconsistent with the provisions of this Indenture
relating to conversion; and
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and Coupons, if any, appertaining
thereto, shall be substantially identical, except in the case of Registered
Securities as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officer's Certificate referred to above or
as set forth in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and may be issued from time to
time, consistent with the terms of this Indenture, if so provided by or pursuant
to such Board Resolution, such Officer's Certificate or in any such indenture
supplemental hereto.
SECTION 2.4 AUTHENTICATION AND DELIVERY OF SECURITIES. The Issuer
may deliver Securities of any series having attached thereto appropriate
Coupons, if any, executed by the Issuer to the Trustee for authentication
together with the applicable documents referred to below in this Section, and
the Trustee shall thereupon authenticate and deliver such Securities to or upon
the order of the Issuer (contained in the Issuer Order referred to below in this
Section) or pursuant to such procedures acceptable to the Trustee and to such
recipients as may be specified from time to time by an Issuer Order. The
maturity date, original issue date, interest rate and any other terms of the
Securities of such series and Coupons, if any, appertaining thereto shall be
determined by or pursuant to such Issuer Order and procedures. If provided for
in such procedures, such Issuer Order may authorize authentication and delivery
pursuant to oral instructions from the Issuer or its duly authorized agent,
which instructions shall be promptly confirmed in writing. In authenticating
such Securities and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive (in the case of subparagraphs 2, 3 and 4 below only at or before the
time of the first request of the Issuer to the Trustee to authenticate
Securities of such
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series) and (subject to Section 6.1) shall be fully protected in relying upon,
unless and until such documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication and setting
forth delivery instructions if the Securities and Coupons, if any, are not
to be delivered to the Issuer, provided that, with respect to Securities of
a series subject to a Periodic Offering, (a) such Issuer Order may be
delivered by the Issuer to the Trustee prior to the delivery to the Trustee
of such Securities for authentication and delivery, (b) the Trustee shall
authenticate and deliver Securities of such series for original issue from
time to time, in an aggregate principal amount not exceeding the aggregate
principal amount established for such series, pursuant to an Issuer Order
or pursuant to procedures acceptable to the Trustee as may be specified
from time to time by an Issuer Order, (c) the maturity date or dates,
original issue date or dates, interest rate or rates and any other terms of
Securities of such series shall be determined by an Issuer Order or
pursuant to such procedures and (d) if provided for in such procedures,
such Issuer Order may authorize authentication and delivery pursuant to
oral or electronic instructions from the Issuer or its duly authorized
agent or agents, which oral instructions shall be promptly confirmed in
writing;
(2) any Board Resolution, Officer's Certificate and/or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant
to which the forms and terms of the Securities and Coupons, if any, were
established;
(3) an Officer's Certificate setting forth the form or forms and
terms of the Securities and Coupons, if any, stating that the form or forms
and terms of the Securities and Coupons, if any, have been established
pursuant to Sections 2.1 and 2.3 and comply with this Indenture, and
covering such other matters as the Trustee may reasonably request; and
(4) at the option of the Issuer, either one or more Opinions of
Counsel, or a letter addressed to the
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Trustee permitting it to rely on one or more Opinions of Counsel,
substantially to the effect that:
(a) the forms of the Securities and Coupons, if any, have
been duly authorized and established in conformity with the
provisions of this Indenture;
(b) in the case of an underwritten offering, the terms of
the Securities have been duly authorized and established in
conformity with the provisions of this Indenture, and, in the
case of an offering that is not underwritten, certain terms of
the Securities have been established pursuant to a Board
Resolution, an Officer's Certificate or a supplemental indenture
in accordance with this Indenture, and when such other terms as
are to be established pursuant to procedures set forth in an
Issuer Order shall have been established, all such terms will
have been duly authorized by the Issuer and will have been
established in conformity with the provisions of this Indenture;
(c) when the Securities and Coupons, if any, have been
executed by the Issuer and authenticated by the Trustee in
accordance with the provisions of this Indenture and delivered to
and duly paid for by the purchasers thereof, they will have been
duly issued under this Indenture, will be entitled to the
benefits of this Indenture, and will be valid and binding
obligations of the Issuer, enforceable in accordance with their
respective terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration, if
any, and the availability of equitable remedies may be limited by
equitable principles of general applicability; and
(d) the execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under, the
Securities and
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Coupons, if any, will not contravene any provision of any
material applicable law or the certificate of incorporation or
bylaws of the Issuer or any agreement or other instrument binding
upon the Issuer or any of its "significant subsidiaries" (as
defined in Article 1 of Regulation S-X under the Securities Act
of 1933) that is material to the Issuer and its subsidiaries,
taken as a whole, or, to the best of such counsel's knowledge,
any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Issuer or any "significant
subsidiary" (as defined above), and no consent, approval,
authorization or order of or qualification with any governmental
body or agency is required for the performance by the Issuer of
its obligations under the Securities and Coupons, if any, except
such as are specified and have been obtained and such as may be
required by the securities or blue sky laws of the various states
in connection with the offer and sale of the Securities and
Coupons, if any.
In rendering such opinions, any counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting the rights and remedies of creditors and is subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). Such counsel may rely upon opinions of other
counsel (copies of which shall be delivered to the Trustee), who shall be
counsel reasonably satisfactory to the Trustee, in which case the opinion shall
state that such counsel believes he and the Trustee are entitled so to rely.
Such counsel may also state that, insofar as such opinion involves factual
matters, he has relied, to the extent he deems proper, upon certificates of
officers of the Issuer and its subsidiaries and certificates of public
officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Issuer or
if the
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Trustee in good faith by its board of directors or board of trustees, executive
committee, or a trust committee of directors or trustees or Responsible Officers
shall determine that such action would expose the Trustee to personal liability
to existing Holders or would affect the Trustee's own rights, duties or
immunities under the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Registered
Global Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section and the Issuer Order with respect to such series,
authenticate and deliver one or more Registered Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate principal
amount of all of the Securities of such series issued and not yet cancelled,
(ii) shall be registered in the name of the Depositary for such Registered
Global Security or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this Security may not be transferred except as a
whole by the Depositary to the 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."
Each Depositary designated pursuant to Section 2.3 must, at the time
of its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Securities Exchange Act of 1934 and any other
applicable statute or regulation.
SECTION 2.5 EXECUTION OF SECURITIES. The Securities and, if
applicable, each Coupon appertaining thereto shall be signed on behalf of the
Issuer by its President or any Vice President and by its Treasurer, its
Controller, its Secretary or an Assistant Treasurer or Assistant Secretary,
under its corporate seal (except in the case of Coupons) which may, but need
not, be attested. Such signatures may be the manual or facsimile signatures of
the present or any future such officers. The seal of the Issuer may be in the
form of a
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facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects in
any such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security that has been duly authenticated and
delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities or Coupons, if any, shall cease to be such officer before the
Security or Coupon so signed (or the Security to which the Coupon so signed
appertains) shall be authenticated and delivered by the Trustee or disposed of
by the Issuer, such Security or Coupon nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Security or Coupon
had not ceased to be such officer of the Issuer; and any Security or Coupon may
be signed on behalf of the Issuer by such persons as, at the actual date of the
execution of such Security or Coupon, shall be the proper officers of the
Issuer, although at the date of the execution and delivery of this Indenture any
such person was not such an officer.
SECTION 2.6 CERTIFICATE OF AUTHENTICATION. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized officers, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. No Coupon shall be entitled to the
benefits of this Indenture or shall be valid and obligatory for any purpose
until the certificate of authentication on the Security to which such Coupon
appertains shall have been duly executed by the Trustee. The execution of such
certificate by the Trustee upon any Security executed by the Issuer shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this Indenture.
SECTION 2.7 DENOMINATION AND DATE OF SECURITIES; PAYMENTS OF
INTEREST. The Securities of each series shall be issuable as Registered
Securities or Unregistered Securities in denominations established as
contemplated by Section 2.3 or, with respect to the Registered Securities of any
series, if not so established, in denominations of $1,000 and any integral
multiple thereof. If denominations of Unregistered Securities
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of any series are not so established, such Securities shall be issuable in
denominations of $1,000 and $5,000. The Securities of each series shall be
numbered, lettered or otherwise distinguished in such manner or in accordance
with such plan as the officers of the Issuer executing the same may determine
with the approval of the Trustee, as evidenced by the execution and
authentication thereof.
Each Registered Security shall be dated the date of its
authentication. Each Unregistered Security shall be dated as provided in the
resolution or resolutions of the Board of Directors of the Issuer referred to in
Section 2.3. The Securities of each series shall bear interest, if any, from
the date, and such interest shall be payable on the dates, established as
contemplated by Section 2.3.
The person in whose name any Registered Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment date
(but subject to Section 14.3 in the case of any conversion during such period),
except if and to the extent the Issuer shall default in the payment of the
interest due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the persons in whose names Outstanding
Registered Securities for such series are registered at the close of business on
a subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice given
by mail by or on behalf of the Issuer to the Holders of Registered Securities
not less than 15 days preceding such subsequent record date. The term "record
date" as used with respect to any interest payment date (except a date for
payment of defaulted interest) for the Securities of any series shall mean the
date specified as such in the terms of the Registered Securities of such series
established as contemplated by Section 2.3, or, if no such date is so
established, if such interest payment date is the first day of a calendar month,
the fifteenth day of the next preceding calendar month or, if such interest
payment date is the fifteenth day of a calendar month, the first day of such
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calendar month, whether or not such record date is a Business Day.
SECTION 2.8 REGISTRATION, TRANSFER AND EXCHANGE. The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each series of Securities a register or registers in which,
subject to such reasonable regulations as it may prescribe, it will provide for
the registration of Registered Securities of such series and the registration of
transfer of Registered Securities of such series. Such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.2, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Registered Security or Registered Securities of the same series, maturity
date, interest rate and original issue date in authorized denominations for a
like aggregate principal amount.
Unregistered Securities (except for any temporary global Unregistered
Securities) and Coupons (except for Coupons attached to any temporary global
Unregistered Securities) shall be transferable by delivery.
At the option of the Holder thereof, Registered Securities of any
series (other than a Registered Global Security, except as set forth below) may
be exchanged for a Registered Security or Registered Securities of such series
having authorized denominations and an equal aggregate principal amount, upon
surrender of such Registered Securities to be exchanged at the agency of the
Issuer that shall be maintained for such purpose in accordance with Section 3.2
and upon payment, if the Issuer shall so require, of the charges hereinafter
provided. If the Securities of any series are issued in both registered and
unregistered form, except as otherwise specified pursuant to Section 2.3, at the
option of the Holder thereof, Unregistered Securities of any series may be
exchanged for Registered Securities of such series having
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authorized denominations and an equal aggregate principal amount, upon surrender
of such Unregistered Securities to be exchanged at the agency of the Issuer that
shall be maintained for such purpose in accordance with Section 3.2, with, in
the case of Unregistered Securities that have Coupons attached, all unmatured
Coupons and all matured Coupons in default thereto appertaining, and upon
payment, if the Issuer shall so require, of the charges hereinafter provided. At
the option of the Holder thereof, if Unregistered Securities of any series,
maturity date, interest rate and original issue date are issued in more than one
authorized denomination, except as otherwise specified pursuant to Section 2.3,
such Unregistered Securities may be exchanged for Unregistered Securities of
such series having authorized denominations and an equal aggregate principal
amount, upon surrender of such Unregistered Securities to be exchanged at the
agency of the Issuer that shall be maintained for such purpose in accordance
with Section 3.2 or as specified pursuant to Section 2.3, with, in the case of
Unregistered Securities that have Coupons attached, all unmatured Coupons and
all matured Coupons in default thereto appertaining, and upon payment, if the
Issuer shall so require, of the charges hereinafter provided. Registered
Securities of any series may not be exchanged for Unregistered Securities of
such series unless (1) otherwise specified pursuant to Section 2.3 and (2) the
Issuer has delivered to the Trustee an Opinion of Counsel that (x) the Issuer
has received from the Internal Revenue Service a ruling or (y) since the date
hereof, there has been a change in the applicable Federal income tax law, in
either case to the effect that the inclusion of terms permitting Registered
Securities to be exchanged for Unregistered Securities would result in no
adverse Federal income tax effect to the Issuer or to any Holder. Whenever any
Securities are so surrendered for exchange, the Issuer shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive. All Securities and Coupons surrendered upon
any exchange or transfer provided for in this Indenture shall be promptly
cancelled and disposed of by the Trustee and the Trustee will deliver a
certificate of disposition thereof to the Issuer.
All Registered Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of
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transfer in form satisfactory to the Issuer and the Trustee duly executed by the
Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities. No service charge shall be made for any
such transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities of any series for a period of 15 days next preceding the
first mailing of notice of redemption of Securities of such series to be
redeemed or (b) any Securities selected, called or being called for redemption,
in whole or in part, except, in the case of any Security to be redeemed in part,
the portion thereof not so to be redeemed.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Registered Global Security representing all or a portion of
the Securities of a series may not be transferred or exchanged except as a whole
by the Depositary for such series to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
for such series or a nominee of such successor Depositary.
If at any time the Depositary for any Registered Securities of a
series represented by one or more Registered Global Securities notifies the
Issuer that it is unwilling or unable to continue as Depositary for such
Registered Securities or if at any time the Depositary for such Registered
Securities shall no longer be eligible under Section 2.4, the Issuer shall
appoint a successor Depositary eligible under Section 2.4 with respect to such
Registered Securities. If a successor Depositary eligible under Section 2.4 for
such Registered Securities is not appointed by the Issuer within 90 days after
the Issuer receives such notice or becomes aware of such ineligibility, the
Issuer's election pursuant to Section 2.3 that such Registered Securities be
represented by one or more Registered Global Securities shall no longer be
effective and the Issuer will execute, and the Trustee, upon receipt of an
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Officer's Certificate for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver, Securities of such
series in definitive registered form without coupons, in any authorized
denominations, in an aggregate principal amount equal to the principal amount of
the Registered Global Security or Securities representing such Registered
Securities in exchange for such Registered Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that
the Registered Securities of any series issued in the form of one or more
Registered Global Securities shall no longer be represented by a Registered
Global Security or Securities. In such event the Issuer will execute, and the
Trustee, upon receipt of an Officer's Certificate for the authentication and
delivery of definitive Securities of such series, will authenticate and deliver,
Securities of such series in definitive registered form without coupons, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Registered Global Security or Securities representing
such Registered Securities, in exchange for such Registered Global Security or
Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Registered Global Security, the Depositary for such
Registered Global Security may surrender such Registered Global Security in
exchange in whole or in part for Securities of the same series in definitive
registered form on such terms as are acceptable to the Issuer and such
Depositary. Thereupon, the Issuer shall execute, and the Trustee shall
authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary a new Registered
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Registered Global Security; and
(ii) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Registered Global Security and the aggregate
principal amount of Registered Securities
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authenticated and delivered pursuant to clause (i) above.
Upon the exchange of a Registered Global Security for Securities in
definitive registered form without coupons, in authorized denominations, such
Registered Global Security shall be cancelled by the Trustee or an agent of the
Issuer or the Trustee. Securities in definitive registered form without coupons
issued in exchange for a Registered Global Security pursuant to this Section 2.8
shall be registered in such names and in such authorized denominations as the
Depositary for such Registered Global Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee or
an agent of the Issuer or the Trustee. The Trustee or such agent shall deliver
such Securities to or as directed by the Persons in whose names such Securities
are so registered.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such transfer or exchange.
Notwithstanding anything herein or in the terms of any series of
Securities to the contrary, none of the Issuer, the Trustee or any agent of the
Issuer or the Trustee (any of which, other than the Issuer, shall rely on an
Officer's Certificate and an Opinion of Counsel) shall be required to exchange
any Unregistered Security for a Registered Security if such exchange would
result in adverse Federal income tax consequences to the Issuer (such as, for
example, the inability of the Issuer to deduct from its income, as computed for
Federal income tax purposes, the interest payable on the Unregistered
Securities) under then applicable United States Federal income tax laws.
SECTION 2.9 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN
SECURITIES. In case any temporary or definitive Security or any Coupon
appertaining to any Security shall become mutilated, defaced or be destroyed,
lost or stolen, the Issuer in its discretion may execute, and upon the written
request of any officer of the Issuer, the Trustee shall authenticate and deliver
a new Security of the same series, maturity date, interest rate and original
issue date, bearing a
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number or other distinguishing symbol not contemporaneously outstanding, in
exchange and substitution for the mutilated or defaced Security, or in lieu of
and in substitution for the Security so destroyed, lost or stolen with Coupons
corresponding to the Coupons appertaining to the Securities so mutilated,
defaced, destroyed, lost or stolen, or in exchange or substitution for the
Security to which such mutilated, defaced, destroyed, lost or stolen Coupon
appertained, with Coupons appertaining thereto corresponding to the Coupons so
mutilated, defaced, destroyed, lost or stolen. In every case the applicant for a
substitute Security or Coupon shall furnish to the Issuer and to the Trustee and
any agent of the Issuer or the Trustee such security or indemnity as may be
required by them to indemnify and defend and to save each of them harmless and,
in every case of destruction, loss or theft, evidence to their satisfaction of
the destruction, loss or theft of such Security or Coupon and of the ownership
thereof and in the case of mutilation or defacement shall surrender the Security
and related Coupons to the Trustee or such agent.
Upon the issuance of any substitute Security or Coupon, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) or its agent connected therewith. In case
any Security or Coupon which has matured or is about to mature, has been called
for redemption in full or is being converted in full shall become mutilated or
defaced or be destroyed, lost or stolen, the Issuer may instead of issuing a
substitute Security, pay or authorize the payment or conversion of the same or
the payment of the relevant Coupon (without surrender thereof except in the case
of a mutilated or defaced Security or Coupon), if the applicant for such payment
shall furnish to the Issuer and to the Trustee and any agent of the Issuer or
the Trustee such security or indemnity as any of them may require to save each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Issuer and the Trustee and any agent of the
Issuer or the Trustee evidence to their satisfaction of the destruction, loss or
theft of such Security or Coupon and of the ownership thereof.
Every substitute Security or Coupon of any series issued pursuant to
the provisions of this Section by virtue of the fact that any such Security or
Coupon is destroyed, lost or
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stolen shall constitute an additional contractual obligation of the Issuer,
whether or not the destroyed, lost or stolen Security or Coupon shall be at any
time enforceable by anyone and shall be entitled to all the benefits of (but
shall be subject to all the limitations of rights set forth in) this Indenture
equally and proportionately with any and all other Securities or Coupons of such
series duly authenticated and delivered hereunder. All Securities and Coupons
shall be held and owned upon the express condition that, to the extent permitted
by law, the foregoing provisions are exclusive with respect to the replacement
or payment of mutilated, defaced or destroyed, lost or stolen Securities and
Coupons and shall preclude any and all other rights or remedies notwithstanding
any law or statute existing or hereafter enacted to the contrary with respect to
the replacement or payment of negotiable instruments or other securities without
their surrender.
SECTION 2.10 CANCELLATION OF SECURITIES; DESTRUCTION THEREOF. All
Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, conversion or for credit against any payment in respect of
a sinking or analogous fund, if surrendered to the Issuer or any agent of the
Issuer or the Trustee or any agent of the Trustee, shall be delivered to the
Trustee or its agent for cancellation or, if surrendered to the Trustee, shall
be cancelled by it; and no Securities or Coupons shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee or its agent shall dispose of cancelled Securities and Coupons held by
it and deliver a certificate of disposition to the Issuer. If the Issuer or its
agent shall acquire any of the Securities or Coupons, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Securities or Coupons unless and until the same are delivered to the Trustee or
its agent for cancellation.
SECTION 2.11 TEMPORARY SECURITIES. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as Registered Securities without coupons, or as Unregistered Securities
with or without coupons attached thereto, of any authorized denomination, and
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substantially in the form of the definitive Securities of such series but with
such omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the concurrence of the
Trustee as evidenced by the execution and authentication thereof. Temporary
Securities may contain such references to any provisions of this Indenture as
may be appropriate. Every temporary Security shall be executed by the Issuer
and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities. Without unreasonable delay the Issuer shall execute and shall
furnish definitive Securities of such series and thereupon temporary Registered
Securities of such series may be surrendered in exchange therefor without charge
at each office or agency to be maintained by the Issuer for that purpose
pursuant to Section 3.2 and, in the case of Unregistered Securities, at any
agency maintained by the Issuer for such purpose as specified pursuant to
Section 2.3, and the Trustee shall authenticate and deliver in exchange for such
temporary Securities of such series an equal aggregate principal amount of
definitive Securities of the same series having authorized denominations and, in
the case of Unregistered Securities, having attached thereto any appropriate
Coupons. Until so exchanged, the temporary Securities of any series shall be
entitled to the same benefits under this Indenture as definitive Securities of
such series, unless otherwise established pursuant to Section 2.3. The
provisions of this Section are subject to any restrictions or limitations on the
issue and delivery of temporary Unregistered Securities of any series that may
be established pursuant to Section 2.3 (including any provision that
Unregistered Securities of such series initially be issued in the form of a
single global Unregistered Security to be delivered to a depositary or agency
located outside the United States and the procedures pursuant to which
definitive or global Unregistered Securities of such series would be issued in
exchange for such temporary global Unregistered Security).
SECTION 2.12 COMPUTATION OF INTEREST. Except as otherwise specified
as contemplated by Section 2.3 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
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ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer covenants
and agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Securities of such series (together with any additional amounts payable
pursuant to the terms of such Securities) at the place or places, at the
respective times and in the manner provided in such Securities and in the
Coupons, if any, appertaining thereto and in this Indenture. The interest on
Securities with Coupons attached (together with any additional amounts payable
pursuant to the terms of such Securities) shall be payable only upon
presentation and surrender of the several Coupons for such interest installments
as are evidenced thereby as they severally mature. If any temporary
Unregistered Security provides that interest thereon may be paid while such
Security is in temporary form, the interest on any such temporary Unregistered
Security (together with any additional amounts payable pursuant to the terms of
such Security) shall be paid, as to the installments of interest evidenced by
Coupons attached thereto, if any, only upon presentation and surrender thereof,
and, as to the other installments of interest, if any, only upon presentation of
such Securities for notation thereon of the payment of such interest, in each
case subject to any restrictions that may be established pursuant to Section
2.3. The interest on Registered Securities (together with any additional
amounts payable pursuant to the terms of such Securities) shall be payable only
to or upon the written order of the Holders thereof and, at the option of the
Issuer, may be paid by wire transfer or by mailing checks for such interest
payable to or upon the written order of such Holders at their last addresses as
they appear on the registry books of the Issuer.
SECTION 3.2 OFFICES FOR PAYMENTS, ETC. So long as any Registered
Securities are authorized for issuance pursuant to this Indenture or are
outstanding hereunder, the Issuer will maintain in the Place or Places of
Payment for a particular series pursuant to Section 2.3, an office or agency
where the Registered Securities of each series may be presented for payment,
where the Securities of each series may be presented for exchange or conversion
as is provided in this Indenture
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and, if applicable, pursuant to Section 2.3 where the Registered Securities of
each series may be presented for registration of transfer as in this Indenture
provided.
If provided for pursuant to Section 2.3, the Issuer will maintain one
or more offices or agencies in a city or cities located outside the United
States (including any city in which such an agency is required to be maintained
under the rules of any stock exchange on which the Securities of such series are
listed) as a Place of Payment where the Unregistered Securities, if any, of each
series and Coupons, if any, appertaining thereto may be presented for payment.
No payment on any Unregistered Security or Coupon will be made upon presentation
of such Unregistered Security or Coupon at an agency of the Issuer within the
United States nor will any payment be made by transfer to an account in, or by
mail to an address in, the United States unless pursuant to applicable United
States laws and regulations then in effect such payment can be made without
adverse tax consequences to the Issuer. Notwithstanding the foregoing, payments
in Dollars of Unregistered Securities of any series and Coupons appertaining
thereto which are payable in Dollars may be made at an agency of the Issuer
maintained in a Place of Payment within the United States if such payment in
Dollars at each agency maintained by the Issuer outside the United States for
payment on such Unregistered Securities is illegal or effectively precluded by
exchange controls or other similar restrictions.
The Issuer will maintain in _______________________, Places of Payment
or at such other place or places as provided pursuant to Section 2.3, an office
or agency where notices and demands to or upon the Issuer in respect of the
Securities of any series, the Coupons appertaining thereto or this Indenture may
be served.
The Issuer will give to the Trustee prompt written notice of the
location of each such office or agency and of any change of location thereof.
In case the Issuer shall fail to maintain any agency required by this Section to
be located in the Places of Payment, or shall fail to give such notice of the
location or of any change in the location of any of the above agencies,
presentations, surrenders, notices and demands may be made and notices may be
served at the Corporate Trust Office of the Trustee, and the Issuer hereby
appoints the Trustee as its
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agent to receive all such presentations, surrenders, notices and demands.
The Issuer may from time to time designate one or more additional
offices or agencies where the Securities of a series and any Coupons
appertaining thereto may be presented for payment, where the Securities of that
series may be presented for exchange or conversion as provided in this Indenture
and pursuant to Section 2.3 and where the Registered Securities of that series
may be presented for registration of transfer as in this Indenture provided, and
the Issuer may from time to time rescind any such designation, as the Issuer may
deem desirable or expedient; provided, however, that no such designation or
rescission shall in any manner relieve the Issuer of its obligation to maintain
the agencies provided for in this Section. The Issuer will give to the Trustee
prompt written notice of any such designation or rescission thereof.
SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE OF TRUSTEE. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee with respect to each series of Securities
hereunder.
SECTION 3.4 PAYING AGENTS. Whenever the Issuer shall appoint a
paying agent other than the Issuer or the Trustee with respect to the Securities
of any series, it will cause such paying agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section,
(a) that it will hold all sums received by it as such agent for
the payment of the principal of or interest on the Securities of such
series (whether such sums have been paid to it by the Issuer or by any
other obligor on the Securities of such series) in trust for the
benefit of the Holders of the Securities of such series or of the
Trustee until such sums shall be paid or otherwise disposed of as
provided herein,
(b) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities of such series) to
make any payment of the
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principal of or interest on the Securities of such series when the
same shall be due and payable, and
(c) that it will pay any such sums so held in trust by it to the
Trustee upon the Trustee's written request at any time during the
continuance of the failure referred to in clause (b) above.
The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with any and all paying
agents a sum sufficient to pay such principal or interest so becoming due, and
(unless such paying agent is the Trustee) the Issuer will promptly notify the
Trustee of its action or any failure to take such action.
If the Issuer shall act as its own paying agent with respect to the
Securities of any series, it will, on or before each due date of the principal
of or interest on the Securities of such series, set aside, segregate and hold
in trust for the benefit of the Holders of the Securities of such series or the
Coupons appertaining thereto a sum sufficient to pay such principal or interest
so becoming due. The Issuer will promptly notify the Trustee of its action or
any failure to take such action.
Anything in this Section to the contrary notwithstanding, but subject
to Section 10.1, the Issuer may at any time, for the purpose of obtaining a
satisfaction and discharge with respect to one or more or all series of
Securities hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for any such series by the Issuer or any paying
agent hereunder, as required by this Section, such sums to be held by the
Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
SECTION 3.5 WRITTEN STATEMENT TO TRUSTEE. The Issuer will furnish to
the Trustee, within 120 days after the end of each fiscal year of the Issuer
ending after the date hereof, a brief certificate (which need not comply with
Section 11.5) from the principal executive, financial or
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accounting officer of the Issuer stating whether or not to the best knowledge of
the signers thereof the Company is in default in the performance of all
conditions and covenants under the Indenture.
SECTION 3.6 CORPORATE EXISTENCE. Subject to Article Nine, the Issuer
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the rights (charter and statutory)
and franchises of the Issuer and its Subsidiaries; provided, however, that the
Issuer shall not be required to preserve any such right or franchise, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Issuer and its Subsidiaries
taken as a whole and the loss thereof is not disadvantageous in any material
respect to the Securityholders.
SECTION 3.7 MAINTENANCE OF PROPERTIES. The Issuer will cause all
material properties used in or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair,
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Issuer may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all time except to the extent that the Issuer may be prevented from
so doing by circumstances beyond its control; provided, however, that nothing in
this Section shall prevent the Issuer from discontinuing or from causing or
permitting a Subsidiary to continue the operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Issuer, desirable in the conduct of the business of the
Issuer or any Subsidiary and not disadvantageous in any material respect to the
Securityholders.
SECTION 3.8 PAYMENT OF TAXES AND OTHER CLAIMS. The Issuer will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent: (a) all taxes, assessments and governmental charges levied or
imposed upon the Issuer or any Subsidiary or upon the income, profits or
property of the Issuer or any Subsidiary that are material to the Issuer and its
Subsidiaries taken as a whole; and (b) all lawful claims for labor, materials,
and supplies, which, if
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unpaid, might by law become a lien upon the property of the Issuer or any
Subsidiary and that are material to the Issuer and its Subsidiaries taken as a
whole; provided, however, that the Issuer shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings; and provided further that the Issuer shall not be
required to cause to be paid or discharged any such tax, assessment, charge or
claim if the Issuer shall determine that such payment is not advantageous to the
conduct of the business of the Issuer and its Subsidiaries taken as a whole and
that the failure so to pay or discharge is not disadvantageous in any material
respect to the Securityholders.
SECTION 3.9 This Section left intentionally blank.
SECTION 3.10 SEC REPORTS. The Issuer shall file with the Trustee,
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the Commission, copies of its annual report and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may by rules and regulations prescribe)
which the Issuer is required to file with the Commission pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS
BY THE ISSUER AND THE TRUSTEE
SECTION 4.1 ISSUER TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND
ADDRESSES OF SECURITYHOLDERS. If and so long as the Trustee shall not be the
Security registrar for the Securities of any series, the Issuer and any other
obligor on the Securities will furnish or cause to be furnished to the Trustee a
list in such form as the Trustee may reasonably require of the names and
addresses of the Holders of the Registered Securities of such series pursuant to
Section 312 of the Trust Indenture Act of 1939 (a) semiannually not more than 5
days after each record date for the payment of interest on such Registered
Securities, as hereinabove specified, as of such record date and on dates to be
determined pursuant to Section 2.3 for non-interest bearing Registered
Securities in
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each year, and (b) at such other times as the Trustee may request in writing,
within thirty days after receipt by the Issuer of any such request as of a date
not more than 15 days prior to the time such information is furnished.
SECTION 4.2 PRESERVATION AND DISCLOSURE OF SECURITYHOLDERS LISTS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses the Holders contained in
the most recent list furnished to the Trustee as provided in Section 4.1
and the names and addresses of Holders received by the Trustee in its
capacity, if any, as Security registrar. The Trustee may destroy any list
furnished to it as provided in Section 4.1 upon receipt of a new list so
furnished.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Trustee, and furnish to the Trustee reasonable
proof that each such applicant has owned a Security for a period of at
least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities and is accompanies by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five business days after the receipt of such application, at
its election, either
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with Section
4.2(a), or
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section
4.2(a), and as to the approximate cost of mailing to such Holders
the form of proxy or other communication, if any, specified in
such application.
If the Trustee shall elect not to afford such applicants access
to such information, the Trustee shall,
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upon the written request of such applicants, mail to each Holder whose name
and address appear in the information preserved at the time by the Trustee
in accordance with Section 4.2(a) copies of the form of proxy or other
communication which is specified in the request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment,
of the reasonable expenses of such mailing, unless within five days after
such tender, the Trustee shall mail to such applicants, and file with the
Commission together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing
would be contrary to the best interests of the Holders or would be a
violation of applicable law. Such statement shall specify the basis of such
opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections, or if, after the entry of
an order sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all objections so
sustained have been met, and shall enter an order so declaring, the Trustee
shall mail copies of such material to all such Holders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Issuer and the Trustee that neither the Issuer nor
the Trustee nor any agent of either of them shall be held accountable by
reason of the disclosure of any such information as to the names and
addresses of the Holders in accordance with Section 4.2(b), regardless of
the source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material pursuant to
a request made under Section 4.2(b).
SECTION 4.3 REPORTS BY THE ISSUER. The Issuer covenants to file with
the Trustee, within 15 days after the Issuer is required to file the same with
the Commission, copies of the annual reports and of the information, documents,
and other reports that the Issuer may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the
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Securities Exchange Act of 1934 or pursuant to Section 314 of the Trust
Indenture Act of 1939.
SECTION 4.4 REPORTS BY THE TRUSTEE. Any Trustee's report required
under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on
or before ________ in each year beginning _____________, as provided in Section
313(c) of the Trust Indenture Act of 1939, so long as any Securities are
Outstanding hereunder, and shall be dated as of a date convenient to the Trustee
no more than 60 days prior thereto. A copy of each such report shall, at the
time of such transmission to Holders, be filed by the Trustee with each stock
exchange upon which the Securities are listed, with the Commission and with the
Issuer. The Issuer will notify the Trustee when any Securities are listed on
any stock exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY;
WAIVER OF DEFAULT. "Event of Default" with respect to Securities of any series
wherever used herein, means each one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any installment of interest upon
any of the Securities of such series as and when the same shall become
due and payable, and continuance of such default for a period of
30 days; or
(b) default in the payment of all or any part of the principal
on any of the Securities of such series as and when the same shall
become due and payable either at maturity, upon any redemption, by
declaration or otherwise, and continuance of such default for a period
of three business days; or
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(c) default in the payment of any sinking fund installment as
and when the same shall become due and payable by the terms of the
Securities of such series, and continuance of such default for a
period of three business days; or
(d) failure on the part of the Issuer duly to observe or perform
any other of the covenants or agreements on the part of the Issuer in
the Securities of such series (other than a covenant or agreement in
respect of the Securities of such series a default in the performance
or breach of which is elsewhere in this Section specifically dealt
with) or contained in this Indenture (other than a covenant or
agreement included in this Indenture solely for the benefit of a
series of Securities other than such series) for a period of 60 days
after the date on which written notice specifying such failure,
stating that such notice is a "Notice of Default" hereunder and
demanding that the Issuer remedy the same, shall have been given by
registered or certified mail, return receipt requested, to the Issuer
by the Trustee, or to the Issuer and the Trustee by the holders of at
least 25% in aggregate principal amount of the Outstanding Securities
of all series affected thereby; or
(e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer in an involuntary
case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of
the Issuer or of any Restricted Subsidiary for any substantial part of
its or their property or ordering the winding up or liquidation of its
or their affairs, and such decree or order shall remain unstayed and
in effect for a period of 60 consecutive days; or
(f) the Issuer shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an
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order for relief in an involuntary case under any such law, or consent
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of
the Issuer or for any substantial part of its or their property, or
make any general assignment for the benefit of creditors; or
(g) an event of default, as defined in any one or more mortgages,
indentures, instruments, bonds, debentures, notes or other similar
instruments under which there may be issued, or by which there may be
secured or evidenced, any indebtedness (other than the Securities of
such series or nonrecourse obligations) ("Indebtedness") in excess in
aggregate principal amount of $10,000,000 for money borrowed by the
Issuer shall occur, if such event of default shall result in the
acceleration of such Indebtedness prior to its expressed maturity
under the terms of the instrument under which such indebtedness is
issued or secured unless such Indebtedness is discharged or such
acceleration is cured, waived, rescinded or annulled within 10 days
after written notice thereof shall have been given by registered or
certified mail, return receipt requested, to the Issuer by the Trustee
or to the Issuer and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities (treated as
one class) which notice shall state that it is a "Notice of Default"
hereunder; or
(h) any other Event of Default provided in the supplemental
indenture under which such series of Securities is issued or in the
form of Security for such series;
provided that if any such default or acceleration referred to in clause (g)
above shall cease or be cured, waived, rescinded or annulled, then the Event of
Default hereunder by reason thereof shall be deemed likewise to have been
thereupon cured.
If an Event of Default described in clause (a), (b), (d) or (h) (if
the Event of Default under clause (d) or (h), as the case may be, is with
respect to less than all series of Securities then Outstanding) occurs and is
continuing, then, and in each and every such case, except for any series of
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Securities the principal of which shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of each such affected series then Outstanding hereunder
(voting as a single class) by notice in writing to the Issuer (and to the
Trustee if given by Securityholders), may declare the entire principal (or, if
the Securities of any such affected series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all Securities of all such affected series, and the
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration, the same shall become immediately due and payable. If an
Event of Default described in clause (d) or (h) (if the Event of Default under
clause (d) or (h), as the case may be, is with respect to all series of
Securities then Outstanding), (e) or (f) occurs and is continuing, then and in
each and every such case, unless the principal of all the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of all the Securities then Outstanding
hereunder (treated as one class), by notice in writing to the Issuer (and to the
Trustee if given by Securityholders), may declare the entire principal (or, if
any Securities are Original Issue Discount Securities, such portion of the
principal as may be specified in the terms thereof) of all the Securities then
Outstanding, and interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof) of the Securities of any series (or of all the Securities, as the
case may be) shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been obtained or
entered as hereinafter provided, the Issuer shall pay or shall deposit with the
Trustee a sum sufficient to pay all matured installments of interest upon all
the Securities of such series (or of all the Securities, as the case may be) and
the principal of any and all Securities of each such series (or of all the
Securities, as the case may be) which shall have become due otherwise than by
acceleration (with interest upon such principal and, to the extent that
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payment of such interest is enforceable under applicable law, on overdue
installments of interest, at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of each such series (or at the respective rates of interest or Yields
to Maturity of all the Securities, as the case may be) to the date of such
payment or deposit) and such amount as shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, its agents, attorneys
and counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee except as a result of
negligence or bad faith, and if any and all Events of Default under the
Indenture, other than the non-payment of the principal of Securities which shall
have become due by acceleration, shall have been cured, waived or otherwise
remedied as provided herein -- then and in every such case the Holders of a
majority in aggregate principal amount of all the Securities of each such
series, or of all the Securities, in each case voting as a single class, then
Outstanding, by written notice to the Issuer and to the Trustee, may waive all
defaults with respect to each such series (or with respect to all the
Securities, as the case may be) and rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the principal
of any Original Issue Discount Securities shall have been accelerated and
declared due and payable pursuant to the provisions hereof, then, from and after
such declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full of such Original Issue
Discount Securities.
SECTION 5.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE
DEBT. The Issuer covenants that (a) in case default shall be made in the
payment of any installment of
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interest on any of the Securities of any series when such interest shall have
become due and payable, and such default shall have continued for a period of 30
days or (b) in case default shall be made in the payment of all or any part of
the principal of any of the Securities of any series when the same shall have
become due and payable, whether upon maturity of the Securities of such series
or upon any redemption or by declaration or otherwise -- then upon demand of the
Trustee, the Issuer will pay to the Trustee for the benefit of the Holders of
the Securities of such series the whole amount that then shall have become due
and payable on all Securities of such series, and such Coupons, for principal or
interest, as the case may be (with interest to the date of such payment upon the
overdue principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest at the
same rate as the rate of interest or Yield to Maturity (in the case of Original
Issue Discount Securities) specified in the Securities of such series); and in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including reasonable compensation to the Trustee and
each predecessor Trustee, their respective agents, attorneys and counsel, and
any expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities of any series to the registered
holders, whether or not the Securities of such Series be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon the Securities
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon the Securities, wherever situated the moneys adjudged or
decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Securities under
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Title 11 of the United States Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or taken possession of the Issuer or its
property or such other obligor, or in case of any other comparable judicial
proceedings relative to the Issuer or other obligor upon the Securities, or to
the creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Securities of any series are
Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) owing and
unpaid in respect of the Securities of any series, and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee, except as a result of negligence
or bad faith) and of the Securityholders allowed in any judicial
proceedings relative to the Issuer or other obligor upon the
Securities, or to the creditors or property of the Issuer or such
other obligor,
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the holders of the Securities of any series in any
election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable
proceedings, and
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(c) to collect and receive any moneys or other property payable
or deliverable on any such claims, and to distribute all amounts
received with respect to the claims of the Securityholders and of the
Trustee on their behalf; and any trustee, receiver, or liquidator,
custodian or other similar official is hereby authorized by each of
the Securityholders to make payments to the Trustee, and, in the event
that the Trustee shall consent to the making of payments directly to
the Securityholders, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities of any series or Coupons appertaining to such
Securities, may be enforced by the Trustee without the possession of any of the
Securities of such series or Coupons appertaining to such Securities or the
production thereof in any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Securities or Coupons appertaining to such
Securities in respect of which such action was taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision
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of this Indenture to which the Trustee shall be a party) the Trustee shall be
held to represent all the Holders of the Securities or Coupons appertaining to
such Securities in respect to which such action was taken, and it shall not be
necessary to make any Holders of such Securities or Coupons appertaining to such
Securities parties to any such proceedings.
SECTION 5.3 APPLICATION OF PROCEEDS. Any moneys collected by the
Trustee pursuant to this Article in respect of any series shall, subject to the
subordination provisions hereof, be applied in the following order at the date
or dates fixed by the Trustee and, in case of the distribution of such moneys on
account of principal or interest, upon presentation of the several Securities
and Coupons appertaining to such Securities in respect of which monies have been
collected and stamping (or otherwise noting) thereon the payment, or issuing
Securities of such series in reduced principal amounts in exchange for the
presented Securities of like series if only partially paid, or upon surrender
thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such
series in respect of which monies have been collected, including
reasonable compensation to the Trustee and each predecessor Trustee
and their respective agents and attorneys and of all expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith;
SECOND: In case the principal of the Securities of such series
in respect of which moneys have been collected shall not have become
and be then due and payable, to the payment of interest on the
Securities of such series in default in the order of the maturity of
the installments of such interest, with interest (to the extent that
such interest has been collected by the Trustee) upon the overdue
installments of interest at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities)
specified in such Securities, such payments to be made ratably to the
persons entitled thereto, without discrimination or preference;
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THIRD: In case the principal of the Securities of such series in
respect of which moneys have been collected shall have become and
shall be then due and payable, to the payment of the whole amount then
owing and unpaid upon all the Securities of such series for principal
and interest, with interest upon the overdue principal, and (to the
extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the same rate as the rate of
interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Securities of such series; and in case
such moneys shall be insufficient to pay in full the whole amount so
due and unpaid upon the Securities of such series, then to the payment
of such principal and interest or Yield to Maturity, without
preference or priority of principal over interest or Yield to
Maturity, or of interest or Yield to Maturity over principal, or of
any installment of interest over any other installment of interest, or
of any Security of such series over any other Security of such series,
ratably to the aggregate of such principal and accrued and unpaid
interest or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any, to the Issuer
or any other person lawfully entitled thereto.
SECTION 5.4 SUITS FOR ENFORCEMENT. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.5 RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or
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shall have been determined adversely to the Trustee, then and in every such
case the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.
SECTION 5.6 LIMITATIONS ON SUITS BY SECURITYHOLDERS. No Holder of any
Security of any series or of any Coupon appertaining thereto shall have any
right by virtue or by availing of any provision of this Indenture to institute
any action or proceeding at law or in equity or in bankruptcy or otherwise upon
or under or with respect to this Indenture, or for the appointment of a trustee,
receiver, liquidator, custodian or other similar official or for any other
remedy hereunder, against the Issuer unless such Holder previously shall have
given to the Trustee written notice of default and of the continuance thereof,
as hereinbefore provided, and unless also the Holders of not less than 25% in
aggregate principal amount of the Securities of each affected series then
Outstanding (treated as a single class) shall have made written request upon the
Trustee to institute such action or proceedings in its own name as trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby and the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such action or
proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 5.9; it being understood and
intended, and being expressly covenanted by the taker and Holder of every
Security or Coupon with every other taker and Holder and the Trustee, that no
one or more Holders of Securities of any series or Coupons appertaining to such
Securities shall have any right in any manner whatever by virtue or by availing
of any provision of this Indenture to affect, disturb or prejudice the rights of
any other such Holder of Securities or Coupons appertaining to such Securities,
or to obtain or seek to obtain priority over or preference to any other such
Holder or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all Holders of
Securities of the applicable series and Coupons appertaining to such Securities.
For the protection and enforcement of the provisions of this Section, each and
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every Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 5.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO INSTITUTE
CERTAIN SUITS. Notwithstanding any other provision in this Indenture and any
provision of any Security, the right of any Holder of any Security or Coupon to
receive payment of the principal of and interest on such Security or Coupon on
or after the respective due dates expressed in such Security or Coupon, or to
institute suit for the enforcement of any such payment on or after such
respective dates, or the right to convert such Security, if any, or to institute
suit therefor shall not be impaired or affected without the consent of such
Holder.
SECTION 5.8 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER OF DEFAULT. Except as provided in Section 5.6, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders of Securities or
Coupons is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of Securities or
Coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 5.6, every power and remedy given
by this Indenture or by law to the Trustee or to the Holders of Securities or
Coupons may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Holders of Securities or Coupons.
SECTION 5.9 CONTROL BY HOLDERS OF SECURITIES. The Holders of a
majority in aggregate principal amount of the Securities of each series affected
(with all such series voting as a single class) at the time Outstanding shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or
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exercising any trust or power conferred on the Trustee with respect to the
Securities of such series by this Indenture; provided that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture and provided further that (subject to the provisions of Section 6.1)
the Trustee shall have the right to decline to follow any such direction if the
Trustee, being advised by counsel, shall determine that the action or proceeding
so directed may not lawfully be taken or if the Trustee in good faith by its
board of directors, the executive committee, or a trust committee of directors
or Responsible Officers of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability or if
the Trustee in good faith shall so determine that the actions or forbearances
specified in or pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Securities of all series so affected not joining in
the giving of said direction, it being understood that (subject to Section 6.1)
the Trustee shall have no duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.
SECTION 5.10 WAIVER OF PAST DEFAULTS. Prior to the acceleration of
the maturity of any Securities as provided in Section 5.1, the Holders of a
majority in aggregate principal amount of the Securities of all series at the
time Outstanding with respect to which an event of default shall have occurred
and be continuing (voting as a single class) may on behalf of the Holders of all
such Securities waive any past default or Event of Default described in Section
5.1 and its consequences, except a default in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the Holder of
each Security affected. In the case of any such waiver, the Issuer, the Trustee
and the Holders of all such Securities shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon.
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Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 5.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD IN
CERTAIN CIRCUMSTANCES. The Trustee shall, within ninety days after the
occurrence of a default with respect to the Securities of any series, give
notice of all defaults with respect to that series known to the Trustee (i) if
any Unregistered Securities of that series are then Outstanding, to the Holders
thereof, by publication at least once in an Authorized Newspaper in
_________________________ and in an Authorized Newspaper in each of the Places
of Payment (and, if required, at least once in an Authorized Newspaper in any
other place or places) and (ii) to all Holders of Securities of such series in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act of 1939, unless in each case such defaults shall have been cured before the
mailing or publication of such notice (the term "defaults" for the purpose of
this Section being hereby defined to mean any event or condition which is, or
with notice or lapse of time or both would become, an Event of Default);
provided that, except in the case of default in the payment of the principal of
or interest on any of the Securities of such series, or in the payment of any
sinking or purchase fund installment on such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors or trustees and/or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Securityholders of such
series.
SECTION 5.12 RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO PAY
COSTS. All parties to this Indenture agree, and each Holder of any Security or
Coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, 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 Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its
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discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder or group of
Securityholders of any series holding in the aggregate more than 10% in
aggregate principal amount of the Securities of such series, or, in the case of
any suit relating to or arising under clause (d) or (h) of Section 5.1 (if the
suit relates to Securities of more than one but less than all series), 10% in
aggregate principal amount of Securities then Outstanding and affected thereby,
or in the case of any suit relating to or arising under clause (d) or (h) (if
the suit under clause (d) or (h) relates to all the Securities then
Outstanding), (e), (f) or (g) of Section 5.1, 10% in aggregate principal amount
of all Securities then Outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of or
interest on any Security on or after the due date expressed in such Security or
any date fixed for redemption.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING
DEFAULT; PRIOR TO DEFAULT. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event of
Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect
to such series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise with respect to such series of Securities
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent
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action, its own negligent failure to act or its own wilful misconduct, except
that
(a) prior to the occurrence of an Event of Default with respect
to the Securities of any series and after the curing or waiving of all such
Events of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect
to the Securities of any series shall be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee;
and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 5.9 relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
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None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
The provisions of this Section 6.1 are in furtherance of and subject
to Section 315 of the Trust Indenture Act of 1939.
SECTION 6.2 CERTAIN RIGHTS OF THE TRUSTEE. In furtherance of and
subject to the Trust Indenture Act of 1939, and subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon, security or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors
may be evidenced to the Trustee by a copy thereof certified by the
secretary or an assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any written advice
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in reliance thereon in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by
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this Indenture at the request, order or direction of any of the
Securityholders pursuant to the provisions of this Indenture, unless
such Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless
requested in writing so to do by the Holders of not less than a
majority in aggregate principal amount of the Securities of all series
affected then Outstanding; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of
every such investigation shall be paid by the Issuer or, if paid by
the Trustee or any predecessor Trustee, shall be repaid by the Issuer
upon demand; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys not regularly in its employ and the
Trustee shall not be responsible for any misconduct or negligence on
the part of any such agent or attorney appointed with due care by it
hereunder.
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SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF
SECURITIES OR APPLICATION OF PROCEEDS THEREOF. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities or Coupons. The Trustee shall not be accountable for the use or
application by the Issuer of any of the Securities or of the proceeds thereof.
SECTION 6.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES OR COUPONS;
COLLECTIONS, ETC. The Trustee or any agent of the Issuer or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
or Coupons with the same rights it would have if it were not the Trustee or such
agent and may otherwise deal with the Issuer and receive, collect, hold and
retain collections from the Issuer with the same rights it would have if it were
not the Trustee or such agent.
SECTION 6.5 MONEYS HELD BY TRUSTEE. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR
CLAIM. The Issuer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense,
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disbursement or advance as may arise from its negligence or bad faith.
The Issuer also covenants to indemnify the Trustee and each predecessor Trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including the costs and expenses of defending itself
against or investigating any claim of liability in the premises. The
obligations of the Issuer under this Section to compensate and indemnify the
Trustee and each predecessor Trustee and to pay or reimburse the Trustee and
each predecessor Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. Such additional indebtedness shall be a senior
claim to that of the Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the benefit of the Holders
of particular Securities or Coupons, and the Securities are hereby subordinated
to such senior claim.
SECTION 6.7 RIGHT OF TRUSTEE TO RELY ON OFFICER'S CERTIFICATE, ETC.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officer's Certificate delivered to the Trustee, and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.
SECTION 6.8 INDENTURES NOT CREATING POTENTIAL CONFLICTING INTERESTS
FOR THE TRUSTEE. The following indentures are hereby specifically described for
the purposes of Section 310(b)(1) of the Trust Indenture Act of 1939; this
Indenture with respect to the Securities of any other series.
SECTION 6.9 PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE. The Trustee
for each series of Securities hereunder shall at all times be a corporation or
banking association organized and doing business under the laws of the United
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States of America or of any State or the District of Columbia having a combined
capital and surplus of at least $50,000,000, and which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by Federal, State or District of Columbia authority. Such
corporation or banking association shall have a place of business in
__________________________ and each of the Places of Payment if there be such a
corporation in such location willing to act upon reasonable and customary terms
and conditions. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 6.10.
The provisions of this Section 6.9 are in furtherance of and subject
to Section 310(a) of the Trust Indenture Act of 1939.
SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
TRUSTEE.
(a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign with respect to one or more or all series of
Securities by giving written notice of resignation to the Issuer and (i) if
any Unregistered Securities of a series affected are then Outstanding, by
giving notice of such resignation to the Holders thereof, by publication at
least once in an Authorized Newspaper in ________________________________
and in an Authorized Newspaper in each of the Places of Payment (and, if
required, at least once in an Authorized Newspaper in any other place or
places), (ii) if any Unregistered Securities of a series affected are then
Outstanding, by mailing notice of such resignation to the Holders thereof
who have filed their names and addresses with the Trustee pursuant to
Section 313(c)(2) of the Trust Indenture Act of 1939 at such addresses as
were so furnished to the Trustee and (iii) by mailing notice of such
resignation to the Holders of then Outstanding
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Registered Securities of each series affected at their addresses as they
shall appear on the registry books. Upon receiving such notice of
resignation, the Issuer shall promptly appoint a successor trustee or
trustees with respect to the applicable series by written instrument in
duplicate, executed by authority of the Board of Directors, one copy of
which instrument shall be delivered to the resigning Trustee and one copy
to the successor trustee or trustees. If no successor trustee shall have
been so appointed with respect to any series and have accepted appointment
within 30 days after the mailing of such notice of resignation, the
resigning trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Securityholder who has been a
bona fide Holder of a Security or Securities of the applicable series for
at least six months may, subject to the provisions of Section 5.12, on
behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act of 1939 with respect to any
series of Securities after written request therefor by the Issuer or
by any Securityholder who has been a bona fide Holder of a Security or
Securities of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.9 and Section 310(a) of the Trust
Indenture Act of 1939 and shall fail to resign after written request
therefor by the Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a bankrupt
or insolvent, or a receiver or liquidator of the Trustee or of its
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property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect
to the applicable series of Securities and appoint a successor trustee for
such series by written instrument, in duplicate, executed by order of the
Board of Directors of the Issuer, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee,
or, subject to the provisions of Section 315(e) of the Trust Indenture Act
of 1939, any Securityholder who has been a bona fide Holder of a Security
or Securities of such series for at least six months may on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee with respect to such series. Such court may thereupon,
after such notice, if any, as it may deem proper, remove the Trustee and
appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount
of the Securities of each series at the time outstanding may at any
time remove the Trustee with respect to Securities of such series and
appoint a successor trustee with respect to the Securities of such
series by delivering to the Trustee so removed, to the successor
trustee so appointed and to the Issuer the evidence provided for in
Section 7.1 of the action in that regard taken by the Securityholders.
(d) Any resignation or removal of the Trustee with respect
to any series and any appointment of a successor trustee with respect
to such series pursuant to any of the provisions of this Section 6.10
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 6.11.
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its
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predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee with respect to
all or any applicable series shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all
rights, powers, duties and obligations with respect to such series of its
predecessor hereunder, with like effect as if originally named as trustee for
such series hereunder; but, nevertheless, on the written request of the Issuer
or of the successor trustee, upon payment of its charges then unpaid, the
trustee ceasing to act shall, subject to Section 10.4, pay over to the successor
trustee all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all such rights,
powers, duties and obligations. Upon request of any such successor trustee, the
Issuer shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor Trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor Trustee with respect to the
Securities of any series as to which the predecessor Trustee is not retiring
shall continue to be vested in the predecessor Trustee, and shall add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such trustees co-trustees of the same trust and that
each such trustee shall be trustee of a trust or trusts under separate
indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under Section 310(b) of
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the Trust Indenture Act of 1939 and eligible under the provisions of Section
6.9.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the Issuer shall give notice thereof (a) if any Unregistered
Securities of a series affected are then Outstanding, to the Holders thereof, by
publication of such notice at least once in an Authorized Newspaper in
________________________________ and in an Authorized Newspaper in each of the
Places of Payment (and, if required, at least once in an Authorized Newspaper in
any other place or places), (b) if any Unregistered Securities of a series
affected are then Outstanding, to the Holders thereof who have filed their names
and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust
Indenture Act of 1939, by mailing such notice to such Holders at such addresses
as were so furnished to the Trustee (and the Trustee shall make such information
available to the Issuer for such purpose) and (c) to the Holders of Registered
Securities of each series affected, by mailing such notice to such Holders at
their addresses as they shall appear on the registry books. If the acceptance
of appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10. If the Issuer fails to give such notice within ten
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be given at the expense of the Issuer.
SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF TRUSTEE. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under Section 310(b) of the Trust Indenture Act
of 1939 and eligible under the provisions of Section 6.9, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of
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the Securities of any series shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor Trustee and deliver such Securities so authenticated; and, in
case at that time any of the Securities of any series shall not have been
authenticated, any successor to the Trustee may authenticate such Securities
either in the name of any predecessor hereunder or in the name of the successor
Trustee; and in all such cases such certificate shall have the full force which
it is anywhere in the Securities of such series or in this Indenture provided
that the certificate of the Trustee shall have; provided, that the right to
adopt the certificate of authentication of any predecessor Trustee or to
authenticate Securities of any series in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
(a) Subject to Section 6.13(b), if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the
Issuer of the Securities within three months prior to a default, as defined
in Section 6.13(c), or subsequent to such a default, then, unless and until
such default shall be cured, the Trustee shall set apart and hold in a
special account for the benefit of the Trustee individually and the Holders
of the Securities and the holders of other indenture securities, as defined
in Section 6.13(c):
(1) an amount equal to any and all reductions in the amount due
and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such three months' period and
valid as against the Issuer and their other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (2) of this Subsection, or from the exercise of any
right of set-off which the Trustee could have exercised if a petition in
bankruptcy had been filed by or against the Issuer upon the date of such
default; and
(2) all property received by the Trustee in respect of any claims
as such creditor, either as security therefor, or in satisfaction or
composition
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thereof, or otherwise, after the beginning of such three months' period, or
an amount equal to the proceeds of any such property, if disposed of,
subject, however, to the rights, if any, of the Issuer and their other
creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on account of
any such claim by any Person (other than the Issuer) who is liable thereon,
and (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third Person, and (iii) distributions made in cash, securities
or other property in respect of claims filed against the Issuer in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Act or applicable State law;
(B) to realize, for its own account, upon any property held by it
as security for any such claim, if such property was so held prior to the
beginning of such three months' period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as security
for any such claim, if such claim was created after the beginning of such
three months' period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default, as defined in
Section 6.13(c), would occur within three months; or
(D) to receive payment on any claim referred to in paragraph (B)
or (C), against the release of any property held as security for such claim
as provided in paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three months' period for
property held as security at the time of such substitution shall,
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to the extent of the fair value of the property released, have
the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying
or refunding any pre-existing claim of the Trustee as such
creditor, such claim shall have the same status as such pre-
existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof
shall be apportioned among the Trustee, the Holders and the
holders of other indenture securities in such manner that the
Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the
Issuer in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Issuer of the
funds and property in such special account and before crediting
to the respective claims of the Trustee and the Holders and the
holders of other indenture securities dividends on claims filed
against the Issuer in bankruptcy or receivership or in
proceedings for reorganization pursuant to the Federal Bankruptcy
Act or applicable State law, but after crediting thereon receipts
on account of the indebtedness represented by their respective
claims from all sources other than from such dividends and from
the funds and property so held in such special account. As used
in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such
claim, in bankruptcy or receivership or proceedings for
reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, whether such distribution is made in cash,
securities or other property,
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but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such
bankruptcy, receivership or proceedings for reorganization is
pending shall have jurisdiction (i) to apportion among the
Trustee, the Holders and the holders of other indenture
securities, in accordance with the provisions of this paragraph,
the funds and property held in such special account and proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in
part, to give to the provisions of this paragraph due
consideration in determining the fairness of the distributions to
be made to the Trustee and the Holders and the holders of other
indenture securities with respect to their respective claims, in
which event it shall not be necessary to liquidate or to appraise
the value of any securities or other property held in such
special account or as security for any such claim, or to make a
specific allocation of such distributions as between the secured
and unsecured portions of such claims, or otherwise to apply the
provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the
beginning of such three months' period shall be subject to the
provisions of this Subsection as though such resignation or
removal had not occurred. If any Trustee has resigned or been
removed prior to the beginning of such three months' period, it
shall be subject to the provisions of this Subsection if and only
if the following conditions exist:
(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee had
continued as Trustee, occurred after the beginning of such three
months' period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
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In any case commenced under the Bankruptcy Act of July 1, 1898, or any
amendment thereto enacted prior to November 6, 1978, all references to
periods of three months contained in this Section 6.13(a) shall be deemed
to be references to periods of four months.
(b) There shall be excluded from the operation of Subsection (a)
of this Section 6.13 a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of
one year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction or by this Indenture, for the
purpose of preserving any property which shall at any time be
subject to the lien of this Indenture or of discharging tax liens
or other prior liens or encumbrances thereon, if notice of such
advances and of the circumstances surrounding the making thereof
is given to the Holders at the time and in the manner provided in
this Indenture;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent,
registrar, custodian, paying agent, fiscal agent or depositary,
or other similar capacity;
(4) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a
result of goods or securities sold in a cash transaction, as
defined in Subsection (c) of this Section 6.13;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of
the Federal Reserve Act, as amended, which is directly or
indirectly a creditor of the Issuer; and
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(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which
fall within the classification of self-liquidating paper, as
defined in Subsection (c) of this Section 6.13.
(c) For the purposes of this Section 6.13 only:
(1) the term "default" means any failure to make payment in
full of the principal of or interest on any of the Securities or
upon the other indenture securities when and as such principal or
interest becomes due and payable;
(2) the term "other indenture securities" means securities
upon which the Issuer is an obligor outstanding under any other
indenture (i) under which the Trustee is also trustee, (ii) which
is qualified under the Trust Indenture Act of 1939, (iii) which
contains provisions substantially similar to the provisions of
this Section 6.13, and (iv) under which a default exists at the
time of the apportionment of the funds and property held in such
special account;
(3) the term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within
seven days after delivery of the goods or securities in currency
or in checks or other orders drawn upon banks or bankers and
payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill
of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Issuer for the purpose of financing
the purchase, processing, manufacturing, shipment, storage or
sale of goods, wares or merchandise and which is secured by
documents evidencing title to, possession of, or a lien upon, the
goods, wares or merchandise or the receivables or proceeds
arising from the sale of the goods, wares or merchandise
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previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the
creditor relationship with the Issuer arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation;
(5) the term "Issuer" means the Issuer and any other obligor
upon the Securities; and
(6) the term "Federal Bankruptcy Act" means the Bankruptcy
Act or Title 11 of the United States Code.
SECTION 6.14 APPOINTMENT OF AUTHENTICATING AGENT. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is made
in this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's Certificate of Authentication, such reference
shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent for such series and a Certificate of Authentication
executed on behalf of the Trustee by such Authenticating Agent. Such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $5,000,000 (determined as provided in Section
6.9 with respect to the Trustee) and subject to supervision or examination by
Federal or State authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
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shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of Securities for which it served as Authenticating Agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such Authenticating Agent. Any Authenticating Agent may at any
time, and if it shall cease to be eligible shall, resign by giving written
notice of resignation to the Trustee and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.14 with respect to
one or more series of Securities, the Trustee shall upon receipt of an Issuer
Order appoint a successor Authenticating Agent and the Issuer shall provide
notice of such appointment to all Holders of Securities of such series in the
manner and to the extent provided in Section 11.4. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
rights, powers, duties and responsibilities of its predecessor hereunder, with
like effect as if originally named as Authenticating Agent. The Issuer agrees
to pay to the Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series shall
have no responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Sections 6.2, 6.3, 6.4, 6.6 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified percentage
in principal amount of the Securityholders of any or all series may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such specified percentage of Securityholders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided,
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such action shall become effective when such instrument or instruments are
delivered to the Trustee. Proof of execution of any instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Sections 6.1 and 6.2) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article.
SECTION 7.2 PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
SECURITIES. Subject to Sections 6.1 and 6.2, the execution of any instrument by
a Securityholder or his agent or proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments
of deeds or administer oaths that the person executing such
instruments acknowledged to him the execution thereof, or by an
affidavit of a witness to such execution sworn to before any such
notary or other such officer. Where such execution is by or on behalf
of any legal entity other than an individual, such certificate or
affidavit shall also constitute sufficient proof of the authority of
the person executing the same. The fact of the holding by any Holder
of an Unregistered Security of any series, and the identifying number
of such Security and the date of his holding the same, may be proved
by the production of such Security or by a certificate executed by any
trust company, bank, banker or recognized securities dealer wherever
situated satisfactory to the Trustee, if such certificate shall be
deemed by the Trustee to be satisfactory. Each such certificate shall
be dated and shall state that on the date thereof a Security of such
series bearing a specified identifying number was deposited with or
exhibited to such trust company, bank, banker or recognized securities
dealer by the person named in such certificate. Any such certificate
may be issued in respect of one or more Unregistered Securities of one
or more series specified therein. The holding by the person named in
any such certificate of any Unregistered Securities of any series
specified therein shall be presumed to
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continue for a period of one year from the date of such certificate
unless at the time of any determination of such holding (1) another
certificate bearing a later date issued in respect of the same
Securities shall be produced, or (2) the Security of such series
specified in such certificate shall be produced by some other person,
or (3) the Security of such series specified in such certificate shall
have ceased to be Outstanding. Subject to Sections 6.1 and 6.2, the
fact and date of the execution of any such instrument and the amount
and numbers of Securities of any series held by the person so
executing such instrument and the amount and numbers of any Security
or Securities for such series may also be proven in accordance with
such reasonable rules and regulations as may be prescribed by the
Trustee for such series or in any other manner which the Trustee for
such series may deem sufficient.
(b) In the case of Registered Securities, the ownership of such
Securities shall be proved by the Security register or by a
certificate of the Security registrar.
The Issuer may set a record date for purposes of determining the
identity of Holders of Registered Securities of any series entitled to vote or
consent to any action referred to in Section 7.1, which record date may be set
at any time or from time to time by notice to the Trustee, for any date or dates
(in the case of any adjournment or reconsideration) not more than 60 days nor
less than five days prior to the proposed date of such vote or consent, and
thereafter, notwithstanding any other provisions hereof, with respect to
Registered Securities of any series, only Holders of Registered Securities of
such series of record on such record date shall be entitled to so vote or give
such consent or revoke such vote or consent.
SECTION 7.3 HOLDERS TO BE TREATED AS OWNERS. The Issuer, the Trustee
and any agent of the Issuer or the Trustee may deem and treat the person in
whose name any Security shall be registered upon the Security register for such
series as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and, subject to the
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provisions of this Indenture, interest on such Security and for all other
purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer or
the Trustee shall be affected by any notice to the contrary. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may treat the Holder of any
Unregistered Security and the Holder of any Coupon as the absolute owner of such
Unregistered Security or Coupon (whether or not such Unregistered Security or
Coupon shall be overdue) for the purpose of receiving payment thereof or on
account thereof and for all other purposes and neither the Issuer, the Trustee,
nor any agent of the Issuer or the Trustee shall be affected by any notice to
the contrary. All such payments so made to any such person, or upon his order,
shall be valid, and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for moneys payable upon any such
Unregistered Security or Coupon.
SECTION 7.4 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the Issuer
or any other obligor on the Securities with respect to which such determination
is being made or by any person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Issuer or any other
obligor on the Securities with respect to which such determination is being made
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver
only Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Issuer or any other obligor upon the Securities or any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer or any other obligor on the Securities. In case
of a dispute as to such right, the advice of counsel shall be full protection in
respect of any decision made by the Trustee in accordance with such advice.
Upon request of the Trustee, the Issuer shall furnish to the Trustee promptly an
Officer's Certificate listing and identifying all Securities,
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if any, known by the Issuer to be owned or held by or for the account of any of
the above-described persons; and, subject to Sections 6.1 and 6.2, the Trustee
shall be entitled to accept such Officer's Certificate as conclusive evidence of
the facts therein set forth and of the fact that all Securities not listed
therein are Outstanding for the purpose of any such determination.
SECTION 7.5 RIGHT OF REVOCATION OF ACTION TAKEN. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate principal amount
of the Securities of any or all series, as the case may be, specified in this
Indenture in connection with such action shall be conclusively binding upon the
Issuer, the Trustee and the Holders of all the Securities affected by such
action.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITYHOLDERS. The Issuer, when authorized by a resolution of its Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto, which
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comply with the Trust Indenture Act of 1939, as then in effect, for one or more
of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any
property or assets;
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer
pursuant to Article Nine and to provide for the adjustment of
conversion rights pursuant to Section 14.6;
(c) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as the Issuer and
the Trustee shall consider to be for the protection of the Holders of
Securities or Coupons, and to make the occurrence, or the occurrence
and continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an Event of Default permitting
the enforcement of all or any of the several remedies provided in this
Indenture as herein set forth; provided, that in respect of any such
additional covenant, restriction, condition or provision such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such an Event of Default or may limit the remedies
available to the Trustee upon such an Event of Default or may limit
the right of the Holders of a majority in aggregate principal amount
of the Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make any other provisions as
the Issuer may deem necessary or desirable, provided that no such
action shall
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adversely affect the interests of the Holders of the Securities or
Coupons;
(e) to establish the forms or terms of Securities of any series
or of the Coupons appertaining to such Securities as permitted by
Sections 2.1 and 2.3;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee,
pursuant to the requirements of Section 6.11; and
(g) to add any provision hereto or remove or change any
provision hereof relating to the conversion of any Securities, whether
at the option of the Holders or the Issuer or upon the happening of
some event or otherwise, provided that no such action shall adversely
affect the interest of the Holders of outstanding Securities.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
With the consent (evidenced as provided in Article Seven) of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
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Outstanding of all series affected by such supplemental indenture (voting as one
class), the Issuer, when authorized by a resolution of its Board of Directors
(which resolution may provide general terms or parameters for such action and
may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from time
to time and at any time, enter into an indenture or indentures supplemental
hereto, which comply with the Trust Indenture Act of 1939, as then in effect,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Securities of each such series or of the Coupons appertaining to such
Securities; provided, that no such supplemental indenture shall (a) extend the
final maturity of any Security, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
amount payable on redemption thereof, or make the principal thereof (including
any amount in respect of original issue discount), or interest thereon payable
in any coin or currency other than that provided in the Securities and Coupons
or in accordance with the terms thereof, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof pursuant to Section 5.1 or the amount
thereof provable in bankruptcy pursuant to Section 5.2, or alter the provisions
of Section 11.11 or 11.12 or impair or affect the right of any Securityholder to
institute suit for the payment or conversion (if applicable) thereof or, if the
Securities provide therefor, any right of repayment at the option of the
Securityholder and any right to convert, in each case without the consent of the
Holder of each Security so affected, or (b) reduce the aforesaid percentage of
Securities of any series, the consent of the Holders of which is required for
any such supplemental indenture, without the consent of the Holders of each
Security so affected.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of Holders of Securities of such series, or of Coupons appertaining
to such Securities, with respect to such covenant or provision, shall be deemed
not to affect the rights under
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this Indenture of the Holders of Securities of any other series or of the
Coupons appertaining to such Securities.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Holders of the Securities as aforesaid
and other documents, if any, required by Section 7.1, the Trustee shall join
with the Issuer in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give notice thereof (i) to the Holders of then Outstanding Registered
Securities of each series affected thereby, by mailing a notice thereof by
first-class mail to such Holders at their addresses as they shall appear on the
Security register, (ii) if any Unregistered Securities of a series affected
thereby are then Outstanding, to the Holders thereof who have filed their names
and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust
Indenture Act of 1939, by mailing a notice thereof by first-class mail to such
Holders at such addresses as were so furnished to the Trustee and (iii) if any
Unregistered Securities of a series affected thereby are then Outstanding, to
all Holders thereof, by publication of a notice thereof at least once in an
Authorized Newspaper in _________________________________ and in an Authorized
Newspaper in each of the Places of Payment (and, if required, at least once in
an Authorized Newspaper in any other place or places), and in each case such
notice shall set forth in
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general terms the substance of such supplemental indenture. Any failure of the
Issuer to give such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 8.3 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 8.4 DOCUMENTS TO BE GIVEN TO TRUSTEE. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, may receive an Officer's Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article 8 complies with the applicable provisions of
this Indenture.
SECTION 8.5 NOTATION ON SECURITIES IN RESPECT OF SUPPLEMENTAL
INDENTURES. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or as to any action
taken by Securityholders. If the Issuer or the Trustee shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.
SECTION 8.6 SUBORDINATION UNIMPAIRED. This Indenture may not be
amended to alter the subordination of any of the Outstanding Securities without
the written consent of each holder of Senior Indebtedness then outstanding that
would be adversely affected thereby.
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ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. So
long as any securities are outstanding, Issuer shall not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and the Issuer shall not
permit any other Person to consolidate with or merge into the Issuer or convey,
transfer or lease its properties and assets substantially as an entirety to the
Issuer, unless:
(a) in case the Issuer shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Issuer is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Issuer substantially as an entirety shall be a corporation
organized and existing in corporate form under the laws of the United
States of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of (and premium, if any) and interest on
all the Securities and the performance of every covenant of this Indenture
on the part of the Issuer to be performed or observed;
(b) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Issuer or a Subsidiary
as a result of such transaction as having been incurred by the Issuer or
such Subsidiary at the time of such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing;
(c) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Issuer would
become subject to a mortgage, pledge, lien, security interest or other
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encumbrance which would not be permitted by this Indenture, the Issuer or
such successor corporation or Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the Securities equally
and ratably with (or prior to) all indebtedness secured thereby; and
(d) the Issuer has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 9.2 SUCCESSOR CORPORATION SUBSTITUTED. The successor
corporation formed by a consolidation or into which the Issuer is merged or to
which such transfer or lease is made shall succeed to and be substituted for,
and may exercise every right and power of, the Issuer under this Indenture with
the same effect as if such successor corporation had been named as the Issuer
herein, subject to Section 14.6, and thereafter (except in the case of a lease
to another Person) the predecessor corporation shall be relieved of all
obligations and covenants under the Indenture and the Securities and, in the
event of such conveyance or transfer, any such predecessor corporation may be
dissolved and liquidated.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1 SATISFACTION AND DISCHARGE OF INDENTURE. (A) If at any
time (a) the Issuer shall have paid or caused to be paid the principal of and
interest on all the Securities of any series Outstanding hereunder and all
unmatured Coupons appertaining thereto (other than Securities of such series and
Coupons appertaining thereto which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.9) as and when the same
shall have become due and payable, or (b) the Issuer shall have delivered to the
Trustee for cancellation all Securities of any series theretofore authenticated
and all unmatured Coupons
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appertaining thereto (other than any Securities of such series and Coupons
appertaining thereto which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.9) or (c) in the case
of any series of Securities where the exact amount (including the currency of
payment) of principal of and interest due on which can be determined at the time
of making the deposit referred to in clause (ii) below, (i) all the Securities
of such series and all unmatured Coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and (ii) the Issuer shall have
irrevocably deposited or caused to be deposited with the Trustee as trust funds
the entire amount in cash (other than moneys repaid by the Trustee or any paying
agent to the Issuer in accordance with Section 10.4) or, in the case of any
series of Securities the payments on which may only be made in Dollars, direct
obligations of the United States of America, backed by its full faith and credit
("U.S. Government Obligations"), maturing as to principal and interest at such
times and in such amounts as will insure the availability of cash, or a
combination thereof, sufficient in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (A) the principal of (and premium on, if any,)
and interest on all Securities of such series and Coupons appertaining thereto
on each date that such principal, premium or interest is due and payable and (B)
any mandatory sinking fund payments on the dates on which such payments are due
and payable in accordance with the terms of the Indenture and the Securities of
such series; and if, in any such case, the Issuer shall also pay or cause to be
paid all other sums payable hereunder by the Issuer, then this Indenture shall
cease to be of further effect (except as to (i) rights of registration of
transfer and exchange of Securities of such Series and of Coupons appertaining
thereto and the Issuer's right of optional redemption, if any, (ii) substitution
of temporary, mutilated, defaced, destroyed, lost or stolen Securities or
Coupons, (iii) rights of holders of Securities and Coupons appertaining thereto
to receive payments of principal thereof and interest thereon, upon the original
stated due dates therefor (but not upon acceleration), and remaining rights of
the Holders to receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and
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immunities of the Trustee hereunder, (v) the rights of the Holders of Securities
of such series and Coupons appertaining thereto as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them, and (vi) the obligations of the Issuer under Section 3.2) and the Trustee,
on demand of the Issuer accompanied by an Officer's Certificate and an Opinion
of Counsel and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging such satisfaction of and discharging this Indenture;
provided, that the rights of Holders of the Securities and Coupons to receive
amounts in respect of principal of and interest on the Securities and Coupons
held by them shall not be delayed longer than required by then-applicable
mandatory rules or policies of any securities exchange upon which the Securities
are listed. The Issuer agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred and to compensate the Trustee for
any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Securities of such series.
(B) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officer's
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities the exact amounts (including
the currency of payment) of principal of and interest due on which can be
determined at the time of making the deposit referred to in clause (a) below,
the Issuer shall be deemed to have paid and discharged the entire indebtedness
on all the Securities of such a series and the Coupons appertaining thereto on
the date of the deposit referred to in subparagraph (a) below, and the
provisions of this Indenture with respect to the Securities of such series and
Coupons appertaining thereto shall no longer be in effect (except as to (i)
rights of registration of transfer and exchange of Securities of such series and
of Coupons appertaining thereto and the Issuer's right of optional redemption,
if any, (ii) substitution of temporary, mutilated, defaced, destroyed, lost or
stolen Securities or Coupons, (iii) rights of Holders of Securities and Coupons
appertaining thereto to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive
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mandatory sinking fund payments, if any, (iv) the rights, obligations, duties
and immunities of the Trustee hereunder, (v) the rights of the Holders of
Securities of such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the Trustee payable to all
or any of them and (vi) the obligations of the Issuer under Section 3.2) and the
Trustee, at the expense of the Issuer, shall at the Issuer's request, execute
proper instruments acknowledging the same, if
(a) with reference to this provision the Issuer has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as
trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities of
such series and Coupons appertaining thereto (i) cash in an amount, or
(ii) in the case of any series of Securities the payments on which may
only be made in Dollars, U.S. Government Obligations, maturing as to
principal and interest at such times and in such amounts as will
insure the availability of cash or (iii) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal of (and
premium, if any) and interest on all Securities of such series and
Coupons appertaining thereto on each date that such principal, premium
or interest is due and payable and (B) any mandatory sinking fund
payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of such
series;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the
Issuer is a party or by which it is bound;
(c) the Issuer has delivered to the Trustee an Opinion of
Counsel based on the fact that (x) the Issuer has received from, or
there has been published by, the Internal Revenue Service a ruling
(and such ruling shall accompany such Opinion of Counsel) or (y) since
the date hereof, there has been a change in the applicable Federal
income tax law, in either case
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to the effect that, and such opinion shall confirm that, the Holders
of the Securities of such series and Coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as
a result of such deposit, defeasance and discharge and will be subject
to Federal income tax on the same amount and in the same manner and at
the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred;
(d) the Issuer has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the defeasance
contemplated by this provision have been complied with;
(e) no event or condition shall exist that, pursuant to the
provisions of Section 13.2, would prevent the Issuer from making
payments of the principal of or interest on the Securities of such
series and Coupons appertaining thereto on the date of such deposit or
at any time during the period ending on the 91st day after the date of
such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period); and
(f) no Default or Event of Default or event which with the
notice or lapse of time or both would become an Event of Default with
respect to the Securites of such series shal have occurred and be
continuing on the date of such deposit or, insofar as Section 5.1(e)
and (f) are concerned, at any time during the period ending on the
91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period).
(C) The Issuer shall be released from its obligations under Sections
3.6, 3.7, 3.8 and 9.1 with respect to the Securities of any series, and any
Coupons appertaining thereto, Outstanding on and after the date the conditions
set forth below are satisfied (hereinafter, "covenant defeasance"). For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Securities of any series, the Issuer
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may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in such Section, whether directly or
indirectly by reason of any reference elsewhere herein to such Section or by
reason of any reference in such Section to any other provision herein or in any
other document and such omission to comply shall not constitute an Event of
Default under Section 5.1, but the remainder of this Indenture and such
Securities and Coupons shall be unaffected thereby. The following shall be the
conditions to application of this subsection (C) of this Section 10.1:
(a) The Issuer has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the holders of the Securities
of such series and coupons appertaining thereto, (i) cash in an
amount, or (ii) in the case of any series of Securities the payments
on which may only be made in Dollars, U.S. Government Obligations
maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash or (iii) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal of (and
premium, if any) and interest on all Securities of such series and
Coupons appertaining thereto on each date that such principal, premium
or interest is due and payable and (B) any mandatory sinking fund
payments on the day on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of such
series;
(b) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period);
(c) Such covenant defeasance shall not cause the Trustee to have
a conflicting interest as defined in Section 6.8 and for purposes of
the Trust
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Indenture Act of 1939 with respect to any securities of the Issuer;
(d) Such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any
other agreement or instrument to which the Issuer is a party or by
which it is bound;
(e) Such covenant defeasance shall not cause any Securities then
listed on any registered national securities exchange under the
Securities Exchange Act of 1934, as amended, to be delisted;
(f) No event or condition shall exist that, pursuant to the
provisions of Section 13.2, would prevent the Issuer from making
payments of the principal of (and premium, if any) or interest on the
Securities of such series and Coupons appertaining thereto on the date
of such deposit or at any time during the period ending on the 91st
day after the date of such deposit or, insofar as Sections 5.1(e) and
(f) are concerned, at any time during the period ending on the 91st
day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period);
(g) The Issuer shall have delivered to the Trustee an Officer's
Certificate and Opinion of Counsel to the effect that the Holders of
the Securities of such series and Coupons appertaining thereto 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; and
(h) The Issuer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the covenant defeasance
contemplated by this provision have been complied with.
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SECTION 10.2 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF
SECURITIES. Subject to Section 10.4, all moneys deposited with the Trustee (or
other trustee) pursuant to Section 10.1 shall be held in trust and applied by it
to the payment, either directly or through any paying agent (including the
Issuer acting as its own paying agent), to the Holders of the particular
Securities of such series and of Coupons appertaining thereto for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent required by law.
SECTION 10.3 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to Securities
of any series, all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from all further liability with respect to such moneys.
SECTION 10.4 RETURN OF MONEYS HELD BY TRUSTEE AND PAYING AGENT
UNCLAIMED FOR TWO YEARS. Any moneys deposited with or paid to the Trustee or
any paying agent for the payment of the principal of or interest on any Security
of any series or Coupons attached thereto and not applied but remaining
unclaimed for two years after the date upon which such principal or interest
shall have become due and payable, shall, upon the written request of the Issuer
and unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for
such series or such paying agent, and the Holder of the Securities of such
series and of any Coupons appertaining thereto shall, unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed property
laws, thereafter look only to the Issuer for any payment which such Holder may
be entitled to collect, and all liability of the Trustee or any paying agent
with respect to such moneys shall thereupon cease; provided, however, that the
Trustee or such paying agent, before being required to make any such repayment
with respect to moneys deposited with it for any payment (a) in respect of
Registered Securities of any series, shall at the expense of the Issuer, mail by
first-class mail to Holders of such Securities at their addresses as they
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shall appear on the Security register, and (b) in respect of Unregistered
Securities of any series, shall at the expense of the Issuer cause to be
published once, in an Authorized Newspaper in _____________________________ and
in an Authorized Newspaper in each of the Places of Payment (and, if required,
once in an Authorized Newspaper in any other place or places), notice, that such
moneys remain and that, after a date specified therein, which shall not be less
than thirty days from the date of such mailing or publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer.
SECTION 10.5 INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to
Section 10.1 or the principal or interest received in respect of such
obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF
ISSUER EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any successor, either directly
or through the Issuer or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities and the Coupons appertaining
thereto by the Holders thereof and as part of the consideration for the issue of
the Securities and the Coupons appertaining thereto.
SECTION 11.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF PARTIES
AND HOLDERS OF SECURITIES AND COUPONS. Nothing in this Indenture, in the
Securities or in the Coupons appertaining thereto, expressed or implied, shall
give or be construed to give to any person, firm or corporation, other than the
parties hereto and their successors and the holders of
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Senior Indebtedness and the Holders of the Securities or Coupons, if any, any
legal or equitable right, remedy or claim under this Indenture or under any
covenant or provision herein contained, all such covenants and provisions being
for the sole benefit of the parties hereto and their successors, the holders of
the Senior Indebtedness and the Holders of the Securities or Coupons, if any.
SECTION 11.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY INDENTURE.
The Issuer shall have the right at all times to assign any of its rights and
obligations under this Indenture to a direct or indirect wholly-owned
Subsidiary, provided that, in the event of any such assignment, the Issuer will
remain liable for all such obligations. All the covenants, stipulations,
promises and agreements in this Indenture contained by or in behalf of the
Issuer shall bind its successors and assigns, whether so expressed or not.
SECTION 11.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND HOLDERS OF
SECURITIES AND COUPONS. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities or Coupons to or on the Issuer may be given or served
by being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the Issuer is
filed by the Issuer with the Trustee) to Hawaiian Electric Industries, Inc., 900
Richards Street, Honolulu, Hawaii 96813, Attention: Secretary. Any notice,
direction, request or demand by the Issuer or any Holder of Securities or
Coupons to or upon the Trustee shall be deemed to have been sufficiently given
or served by being deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until another address of the
Trustee is filed by the Trustee with the Issuer) to
____________________________________, Attention: ______________________.
Where this Indenture provides for notice to Holders of Registered
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder entitled thereto, at his last address as it appears in the Security
register. In any case where notice to such Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall
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affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when such
notice is required to be given pursuant to any provision of this Indenture, then
any manner of giving such notice as shall be reasonably satisfactory to the
Trustee shall be deemed to be a sufficient giving of such notice.
SECTION 11.5 OFFICER'S CERTIFICATES AND OPINIONS OF COUNSEL;
STATEMENTS TO BE CONTAINED THEREIN. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) 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, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a
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statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters, upon information with respect to which is in the possession
of the Issuer, upon the certificate, statement or opinion of or representations
by an officer or officers of the Issuer, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. If the
date of maturity of interest on or principal of the Securities of any series or
any Coupons appertaining thereto or the date fixed for redemption or repayment
of any such Security or Coupon shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the
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date fixed for redemption, and no interest shall accrue for the period after
such date.
SECTION 11.7 CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST
INDENTURE ACT OF 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by, or with
another provision (an "incorporated provision") included in this Indenture by
operation of, Sections 310 to 318, inclusive, of the Trust Indenture Act of
1939, such imposed duties or incorporated provision shall control.
SECTION 11.8 NEW YORK LAW TO GOVERN. This Indenture and each
Security and Coupon shall be deemed to be a contract under the laws of the State
of New York, and for all purposes shall be construed in accordance with the laws
of such State, except as may otherwise be required by mandatory provisions of
law.
SECTION 11.9 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 EFFECT OF HEADINGS. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 11.11 SECURITIES IN A FOREIGN CURRENCY OR IN ECU. Unless
otherwise specified in an Officer's Certificate delivered pursuant to Section
2.3 of this Indenture with respect to a particular series of Securities,
whenever for purposes of this Indenture any action may be taken by the Holders
of a specified percentage in aggregate principal amount of Securities of all
series or all series affected by a particular action at the time Outstanding
and, at such time, there are Outstanding Securities of any series which are
denominated in a coin or currency other than Dollars (including ECUs), then the
principal amount of Securities of such series which shall be deemed to be
Outstanding for the purpose of taking such action shall be that amount of
Dollars that could be obtained for such amount at the Market Exchange Rate. For
purposes of this Section 11.11, Market Exchange Rate shall mean the noon Dollar
buying rate in New York City for cable transfers of that currency as published
by the Federal Reserve
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Bank of New York; provided, however, in the case of ECUs, Market Exchange Rate
shall mean the rate of exchange determined by the Commission of the European
Communities (or any successor thereto) as published in the Official Journal of
the European Communities (such publication or any successor publication, the
"Journal"). If such Market Exchange Rate is not available for any reason with
respect to such currency, the Trustee shall use, in its sole discretion and
without liability on its part, such quotation of the Federal Reserve Bank of New
York or, in the case of ECUs, the rate of exchange as published in the Journal,
as of the most recent available date, or quotations or, in the case of ECUs,
rates of exchange from one or more major banks in The City of New York or in the
country of issue of the currency in question, which for purposes of the ECU
shall be Brussels, Belgium, or such other quotations or, in the case of ECU,
rates of exchange as the Trustee shall deem appropriate. The provisions of this
paragraph shall apply in determining the equivalent principal amount in respect
of Securities of a series denominated in a currency other than Dollars in
connection with any action taken by Holders of Securities pursuant to the terms
of this Indenture including without limitation any determination contemplated in
Section 5.1(g).
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Issuer and all Holders.
SECTION 11.12 JUDGMENT CURRENCY. The Issuer agrees, to the fullest
extent that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the principal of or interest on the Securities of any series
(the "Required Currency") into a currency in which a judgment will be rendered
(the "Judgment Currency"), the rate of exchange used shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the day on
which final unappealable judgment is entered, unless such day is not a New York
Banking Day, then, to the extent permitted by applicable law, the rate of
exchange
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used shall be the rate at which in accordance with normal banking
procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the New York Banking Day preceding the
day on which final unappealable judgment is entered and (b) its obligations
under this Indenture to make payments in the Required Currency (i) shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment
(whether or not entered in accordance with subsection (a)), in any currency
other than the Required Currency, except to the extent that such tender or
recovery shall result in the actual receipt, by the payee, of the full amount of
the Required Currency expressed to be payable in respect of such payments, (ii)
shall be enforceable as an alternative or additional cause of action for the
purpose of recovering in the Required Currency the amount, if any, by which such
actual receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or required by law or executive order to
close.
SECTION 11.13 SEPARABILITY CLAUSE. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not be
in any way affected or impaired thereby.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 APPLICABILITY OF ARTICLE. The provisions of this
Article shall be applicable to the Securities of any series which are redeemable
before their maturity or to any sinking fund for the retirement of Securities of
a series except as otherwise specified as contemplated by Section 2.3 for
Securities of such series.
SECTION 12.2 NOTICE OF REDEMPTION; PARTIAL REDEMPTIONS. Notice of
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of
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such redemption by first class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to such Holders
of Securities of such series at their last addresses as they shall appear upon
the registry books. Notice of redemption to the Holders of Unregistered
Securities to be redeemed as a whole or in part, who have filed their names and
addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture
Act of 1939 shall be given by mailing notice of such redemption, by first class
mail, postage prepaid, at least 30 days and not more than 60 prior to the date
fixed for redemption, to such Holders at such addresses as were so furnished to
the Trustee (and, in the case of any such notice given by the Issuer, the
Trustee shall make such information available to the Issuer for such purpose).
Notice of redemption to all other Holders of Unregistered Securities shall be
published in an Authorized Newspaper in the Borough of Manhattan, The City of
New York and in an Authorized Newspaper in each of the Places of Payment (and,
if required, in an Authorized Newspaper), in each case, once in each of three
successive calendar weeks, the first publication to be not less than 30 nor more
than 60 days prior to the date fixed for redemption. Any notice which is mailed
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice. Failure to give notice by
mail, or any defect in the notice to the Holder of any Security of a series
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Security of such series.
Any notice of redemption mailed to each such Holder as provided
hereinabove shall specify, the principal amount of each Security of such series
held by such Holder to be redeemed, the date fixed for redemption, the
redemption price, the place or places of payment, that payment will be made upon
presentation and surrender of such Securities and, in the case of Securities
with Coupons attached thereto, of all Coupons appertaining thereto maturing
after the date fixed for redemption, that such redemption is pursuant to the
mandatory or optional sinking fund, or both, if such be the case, that interest
accrued to the date fixed for redemption will be paid as specified in such
notice and that on and after said date interest thereon or on the portions
thereof to be redeemed will cease to accrue and will specify any conversion
price then in effect and when any right to convert such Security on part
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thereof to be redeemed will expire. In case any Security of a series is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or
Securities of such series in principal amount equal to the unredeemed portion
thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption
given as provided in this Section, the Issuer will deposit with the Trustee or
with one or more paying agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 3.4) an
amount of money sufficient to redeem on the redemption date all the Securities
of such series so called for redemption (other than those, if any, theretofore
surrendered for conversion) at the appropriate redemption price, together with
accrued interest to the date fixed for redemption. If any Security called for
redemption is converted pursuant hereto, any money deposited with the Trustee or
any paying agent or so segregated and held in trust for the redemption of such
Security shall be paid to the Issuer upon the Issuer's request, or, if then held
by the Issuer, shall be discharged from such trust. The Issuer will deliver to
the Trustee at least 70 days prior to the date fixed for redemption an Officer's
Certificate stating the aggregate principal amount of Securities to be redeemed.
In case of a redemption at the election of the Issuer prior to the expiration of
any restriction on such redemption, the Issuer shall deliver to the Trustee,
prior to the giving of any notice of redemption to Holders pursuant to this
Section, an Officer's Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such Series to be redeemed in whole or in part. Securities may be
redeemed in part in multiples equal to the minimum authorized denomination for
Securities of such series or any multiple thereof. The Trustee shall promptly
notify the Issuer in writing of the
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Securities of such series selected for redemption and, in the case of any
Securities of such series selected for partial redemption, the principal amount
thereof to be redeemed. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities of
any series shall relate, in the case of any Security redeemed or to be redeemed
only in part, to the portion of the principal amount of such Security which has
been or is to be redeemed. If any Security selected for partial redemption is
surrendered for conversion after such selection, the converted portion of such
Security shall be deemed (so far as may be) to be the portion selected for
redemption. Upon any redemption of less than all the Securities of any series,
the Issuer and the Trustee may treat as outstanding any Securities of such
series surrendered for conversion during the period of 15 days next preceding
the mailing of a notice of redemption, and need not treat as outstanding any
Security authenticated and delivered during such period in exchange for the
unconverted portion of any Security of such series converted in part during such
period.
SECTION 12.3 PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If notice
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after said
date (unless the Issuer shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and the unmatured Coupons, if any, appertaining thereto shall be void,
and, except as provided in Sections 6.5 and 10.4, such Securities shall cease
from and after the date fixed for redemption to be convertible or entitled to
any other benefit or security under this Indenture, and the Holders thereof
shall have no right in respect of such Securities except the right to receive
the redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities at a place of
payment specified in said notice, together with all Coupons, if any,
appertaining thereto maturing after the date fixed for redemption, said
Securities or the specified portions thereof shall be paid and redeemed by the
Issuer at the applicable redemption price, together with
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interest accrued thereon to the date fixed for redemption; provided that payment
of interest becoming due on or prior to the date fixed for redemption shall be
payable in the case of Securities with Coupons attached thereto, to the Holders
of the Coupons for such interest upon surrender thereof, and in the case of
Registered Securities, to the Holders of such Registered Securities registered
as such on the relevant record date subject to the terms and provisions of
Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security and such Security shall remain convertible in
accordance with its terms until paid or duly provided for.
If any Security with Coupons attached thereto is surrendered for
redemption and is not accompanied by all appurtenant Coupons maturing after the
date fixed for redemption, the surrender of such missing Coupon or Coupons may
be waived by the Issuer and the Trustee, if there be furnished to each of them
such security or indemnity as they may require to save each of them harmless.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, of authorized denominations, in principal amount
equal to the unredeemed portion of the Security so presented.
SECTION 12.4 EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY FOR
SELECTION FOR REDEMPTION. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officer's Certificate delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by either (a) the
Issuer or (b) an entity specifically identified in such written statement as
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directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer.
SECTION 12.5 MANDATORY AND OPTIONAL SINKING FUNDS. The minimum
amount of any sinking fund payment provided for by the terms of the Securities
of any series is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment". The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Issuer or converted and delivered to the Trustee
for cancellation pursuant to Section 2.10, (b) receive credit for optional
sinking fund payments (not previously so credited) made pursuant to this
Section, or (c) receive credit for Securities of such series (not previously so
credited) redeemed by the Issuer through any optional redemption provision
contained in the terms of such series. Securities so delivered or credited
shall be received or credited by the Trustee at the sinking fund redemption
price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officer's
Certificate (which need not contain the statements required by Section 11.5) (a)
specifying the portion of the mandatory sinking fund payment to be satisfied by
payment of cash and the portion to be satisfied by credit of Securities of such
series and the basis for such credit, (b) stating that none of the Securities of
such series has theretofore been so credited, (c) stating that no defaults in
the payment of interest or Events of Default with respect to such series have
occurred (which have not been waived or cured) and are continuing and (d)
stating whether or not the Issuer intends to exercise its right to make an
optional sinking fund
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payment with respect to such series and, if so, specifying the amount of such
optional sinking fund payment which the Issuer intends to pay on or before the
next succeeding sinking fund payment date. Any Securities of such series to be
credited and required to be delivered to the Trustee in order for the Issuer to
be entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to Section
2.10 to the Trustee with such Officer's Certificate (or reasonably promptly
thereafter if acceptable to the Trustee). Such Officer's Certificate shall be
irrevocable and upon its receipt by the Trustee the Issuer shall become
unconditionally obligated to make all the cash payments or payments therein
referred to, if any, on or before the next succeeding sinking fund payment date.
Failure of the Issuer, on or before any such 60th day, to deliver such Officer's
Certificate and Securities specified in this paragraph, if any, shall not
constitute a default but shall constitute, on and as of such date, the
irrevocable election of the Issuer (i) that the mandatory sinking fund payment
for such series due on the next succeeding sinking fund payment date shall be
paid entirely in cash without the option to deliver or credit Securities of such
series in respect thereof and (ii) that the Issuer will make no optional sinking
fund payment with respect to such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000 (or the equivalent thereof in any Foreign Currency or ECU) or a
lesser sum in Dollars (or the equivalent thereof in any Foreign Currency or ECU)
if the Issuer shall so request with respect to the Securities of any particular
series, such cash shall be applied on the next succeeding sinking fund payment
date to the redemption of Securities of such series at the sinking fund
redemption price together with accrued interest to the date fixed for
redemption. If such amount shall be $50,000 (or the equivalent thereof in any
Foreign Currency or ECU) or less and the Issuer makes no such request then it
shall be carried over until a sum in excess of $50,000 (or the equivalent
thereof in any Foreign Currency or ECU) is available. The Trustee shall select,
in the manner provided in Section 12.2, for redemption on such sinking fund
payment date a sufficient principal amount of Securities of such series to
absorb said cash, as nearly as may be, and shall (if requested
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in writing by the Issuer) inform the Issuer of the serial numbers of the
Securities of such series (or portions thereof) so selected. Securities shall be
excluded from eligibility for redemption under this Section if they are
identified by registration and certificate number in an Officer's Certificate
delivered to the Trustee at least 60 days prior to the sinking fund payment date
as being owned of record and beneficially by, and not pledged or hypothecated by
either (a) the Issuer or (b) an entity specifically identified in such Officer's
Certificate as directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer. The Trustee, in the name and
at the expense of the Issuer (or the Issuer, if it shall so request the Trustee
in writing) shall cause notice of redemption of the Securities of such series to
be given in substantially the manner provided in Section 12.2 (and with the
effect provided in Section 12.3) for the redemption of Securities of such series
in part at the option of the Issuer. The amount of any sinking fund payments not
so applied or allocated to the redemption of Securities of such series shall be
added to the next cash sinking fund payment for such series and, together with
such payment, shall be applied in accordance with the provisions of this
Section. Any and all sinking fund moneys held on the stated maturity date of the
Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of, and
interest on, the Securities of such series at maturity. The Issuer's obligation
to make a mandatory or optional sinking fund payment shall automatically be
reduced by an amount equal to the sinking fund redemption price allocable to any
Securities or portions thereof called for redemption pursuant to the preceding
paragraph on any sinking fund payment date and converted; provided, that if the
Trustee is not the conversion agent for the Securities, the Issuer or such
conversion agent shall give the Trustee written notice prior to the date fixed
for redemption of the principal amount of Securities or portions thereof so
converted.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all interest
accrued to the date fixed for redemption on Securities to be redeemed on the
next following sinking fund payment date.
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The Trustee shall not redeem or cause to be redeemed any Securities of
a series with sinking fund moneys or give any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
except that, where the giving of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Issuer a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default shall
occur, and any moneys thereafter paid into the sinking fund, shall, during the
continuance of such default or Event of Default, be deemed to have been
collected under Article Five and held for the payment of all such Securities.
In case such Event of Default shall have been waived as provided in Section 5.10
or the default cured on or before the sixtieth day preceding the sinking fund
payment date in any year, such moneys shall thereafter be applied on the next
succeeding sinking fund payment date in accordance with this Section to the
redemption of such Securities.
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1 AGREEMENT TO SUBORDINATE. The Issuer, for itself, its
successors and assigns, covenants and agrees, and each Holder of a Security or
Coupon, by its acceptance thereof, likewise covenants and agrees, that the
payment of the principal of and interest on, each and all of the Securities and
any Coupons is hereby expressly subordinated, to the extent and in the manner
hereinafter in this Article 13 set forth, in right of payment to the prior
payment in full of all Senior Indebtedness.
SECTION 13.2 RIGHTS OF SENIOR INDEBTEDNESS IN THE EVENT OF
INSOLVENCY, ETC., OF THE ISSUER.
(a) In the event of any insolvency or bankruptcy proceedings, or
any receivership, liquidation, reorganization or other similar
proceedings in connection therewith, relative to the Issuer or to its
creditors, as such, or to its property, and in
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the event of any proceedings for voluntary liquidation, dissolution or
other winding up of the Issuer, whether or not involving insolvency or
bankruptcy, and in the event of any execution sale, then the holders
of Senior Indebtedness shall be entitled to receive payment in full of
principal thereof and premium thereon, if any, and interest due
thereon (including without limitation, except to the extent, if any,
prohibited by mandatory provisions of law, post-petition interest in
any such proceedings) in money or money's worth of all Senior
Indebtedness before the Holders are entitled to receive any payment on
account of the principal of or premium on, if any, or interest on the
indebtedness evidenced by the Securities or of the Coupons, and to
that end the holders of Senior Indebtedness shall be entitled to
receive for application in payment thereof any payment or distribution
of any kind or character, whether in cash or property or securities,
which may be payable or deliverable in connection with any such
proceedings or sale in respect of the principal of or interest on the
Securities or Coupons other than securities of the Issuer as
reorganized or readjusted or securities of the Issuer or any other
corporation provided for by a plan of reorganization or readjustment
the payment of which is subordinate, at least to the extent provided
in this Article 13 with respect to the Securities or Coupons, to the
payment of all indebtedness of the nature of Senior Indebtedness,
provided that the rights of the holders of the Senior Indebtedness are
not altered by such reorganization or readjustment;
(b) In the event and during the continuation of any default in
payment of any Senior Indebtedness or if any event of default, as
therein defined, shall exist under any Senior Indebtedness or any
agreement pursuant to which any Senior Indebtedness is issued, no
payment of the principal of or interest on the Securities or Coupons
shall be made and the Issuer covenants that it will, upon ascertaining
any such default or event of default, provide written notice to the
Trustee of such default or event of default;
(c) In the event that the Securities of any series are declared
due and payable before their
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expressed maturity because of the occurrence of an Event of Default
(under circumstances when the provisions of subsection (a) of this
Section 13.2 shall not be applicable), the holders of all Senior
Indebtedness shall be entitled to receive payment in full in money or
money's worth of such Senior Indebtedness before such Holders are
entitled to receive any payment on account of the principal of or
interest on the Securities or Coupons; and
(d) No holder of Senior Indebtedness shall be prejudiced in his
right to enforce subordination of the Securities or Coupons by any act
or failure to act on the part of the Issuer.
SECTION 13.3 PAYMENT OVER OF PROCEEDS RECEIVED ON SECURITIES. In the
event that, notwithstanding the provisions of Section 13.2, any payment or
distribution of assets of the Issuer of any kind or character, whether in cash,
property or securities (other than securities of the Issuer as reorganized or
readjusted or securities of the Issuer or any other corporation provided for by
a plan of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in this Article 13 with respect to the Securities
or Coupons, to the payment of all indebtedness of the nature of Senior
Indebtedness, provided that the rights of the holders of the Senior Indebtedness
are not altered by such reorganization or readjustment) shall be received by the
Holders or by the Trustee for their benefit in connection with any proceedings
or sale referred to in subsection (a) of Section 13.2 before all Senior
Indebtedness is paid in full in money or money's worth, such payment or
distribution shall be paid over to the holders of such Senior Indebtedness or
their representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness held or represented by each, for
application to the payment of all Senior Indebtedness remaining unpaid until all
such Senior Indebtedness shall have been paid in full in money or money's worth,
after giving effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness.
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From and after the payment in full in money or money's worth of all
Senior Indebtedness, the Holders (together with the holders of any other
indebtedness of the Issuer which is subordinate in right of payment to the
payment in full of all Senior Indebtedness, which is not subordinate in right of
payment to the Securities or Coupons and which by its terms grants such right of
subrogation to the holder thereof) shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of assets or
securities of the Issuer applicable to the Senior Indebtedness until the
Securities and any Coupons shall be paid in full, and, for the purposes of such
subrogation, no such payments or distributions to the holders of Senior
Indebtedness of assets or securities, which otherwise would have been payable or
distributable to Holders, shall, as between the Issuer, its creditors other than
the holders of Senior Indebtedness, and the Holders, be deemed to be a payment
by the Issuer to or on account of the Senior Indebtedness, it being understood
that the provisions of this Article 13 are and are intended solely for the
purpose of defining the relative rights of the Holders, on the one hand, and the
holders of the Senior Indebtedness, on the other hand, and nothing contained in
this Article 13 or elsewhere in this Indenture or in the Securities or Coupons
is intended to or shall impair as between the Issuer, its creditors other than
the holders of Senior Indebtedness, and the Holders, the obligation of the
Issuer, which is unconditional and absolute, to pay to the Holders the principal
of and interest on the Securities or Coupons as and when the same shall become
due and payable in accordance with their terms, or to affect the relative rights
of the Holders and creditors of the Issuer other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
holder of any Security or Coupon from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture subject to the
rights of the holders of Senior Indebtedness, under Section 13.2, to receive
cash, property or securities of the Issuer otherwise payable or deliverable to
the holders of the Securities or Coupons.
Upon any distribution or payment in connection with any proceedings or
sale referred to in subsection (a) of Section 13.2, the Trustee, subject as
between the Trustee and the Holders to the provisions of Sections 6.1 and 6.2
hereof, shall be entitled to rely upon a certificate of the liquidating trustee
or agent or other person making any distribution or
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payment to the Trustee for the purpose of ascertaining the holders of Senior
Indebtedness entitled to participate in such payment or distribution, the amount
of such Senior Indebtedness or the amount payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 13. In the event that the Trustee determines, in good faith, that
further evidence is required with respect to the right of any person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Section 13.3, the Trustee may request such person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such person, as to the extent to which such person is
entitled to participate in such payment or distribution, and as to other facts
pertinent to the rights of such person under this Section 13.3, and if such
evidence is not furnished, the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.
The Trustee, however, shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness, and shall not be liable to any such holders
if it shall in good faith pay over or distribute to Holders or the Issuer or any
other person moneys or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of Article 13 of this Indenture or otherwise.
SECTION 13.4 PAYMENTS TO HOLDERS. Nothing contained in this Article
13 or elsewhere in this Indenture, or in any of the Securities or in any Coupon,
shall prevent at any time, (a) the Issuer from making payments at any time of
principal of or interest on the Securities or Coupons, except under the
conditions described in Section 13.2 or during the pendency of any proceedings
or sale therein referred to, provided, however, that payments of principal of or
interest on the Securities or Coupons shall only be made by the Issuer within
three business days of the due dates for such payments or (b) the application by
the Trustee of any moneys deposited with it hereunder to the payment of or on
account of the principal of or interest on the Securities or Coupons, if at the
time of such deposit the Trustee did not have written notice in accordance with
Section 13.6 of any event prohibiting the making of such deposit by the Issuer
or if in the event of redemption, the Trustee did not have such written notice
prior to the time that the notice of redemption pursuant to Section 12.2 was
given (which notice of
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redemption shall in no event be given more than 60 days prior to the date fixed
for redemption).
SECTION 13.5 HOLDERS OF SECURITIES AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES. Each Holder by his acceptance of a Security or
Coupon authorizes and directs the Trustee on his behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
as provided in this Article 13 and appoints the Trustee as attorney-in-fact for
any and all such purposes, including, in the event of any dissolution, winding
up, liquidation or reorganization of the Issuer (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Issuer, the immediate filing of a claim for the unpaid balance of such
Holder's Securities or Coupons in the form required in said proceedings and
cause said claim to be approved.
SECTION 13.6 NOTICE TO TRUSTEE. Notwithstanding the provisions of
this Article 13 or any other provisions of this Indenture, the Trustee shall not
be charged with the knowledge of the existence of any facts which would prohibit
the making of any payment of moneys to the Trustee, unless and until the Trustee
shall have received written notice thereof from the Issuer or from the holder or
the representative of any class of Senior Indebtedness; provided, however, that
if at least two Business Days prior to the date upon which by the terms hereof
any such monies may become payable for any purpose (including, without
limitation, the payment of either the cash amount payable at maturity or
interest on any Security or Coupon) the Trustee shall not have received with
respect to such monies the notice provided for in this Section 13.6, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such monies and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary, which may be received by it on or after such two
Business Days prior to such date.
SECTION 13.7 TRUSTEE MAY HOLD SENIOR INDEBTEDNESS. Subject to the
provisions of Section 6.13, the Trustee shall be entitled to all the rights set
forth in this Article 13 with respect to any Senior Indebtedness which may at
any time be
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held by it, to the same extent as any other holder of Senior Indebtedness.
SECTION 13.8 APPLICABILITY OF ARTICLE 13 TO PAYING AGENTS. In case
at any time any paying agent other than the Trustee shall be appointed by the
Issuer and be then acting hereunder, the term "Trustee" as used in this Article
13 shall in such case (unless the context shall otherwise require) be construed
as extending to and including such paying agent within its meaning as fully for
all intents and purposes as if such paying agent were named in this Article 13
in place of the Trustee.
ARTICLE FOURTEEN
CONVERSION OF SECURITIES
SECTION 14.1. APPLICABILITY OF ARTICLE. The provisions of this
Article shall be applicable to the Securities of any series which are
convertible before their maturity except as otherwise specified as contemplated
by Section 2.3 for Securities of such series.
SECTION 14.2. CONVERSION. Subject to and upon compliance with the
provisions of this Article, any Security which by its terms specified as
contemplated by Section 2.3 is convertible into any cash, securities or property
("Conversion Proceeds") may, at any time until and including but not after the
close of business on the date of maturity of such Security, or in case such
Security or some portion thereof shall be called for redemption prior to such
date, then, with respect to such Security or such portion thereof as is so
called, until and including but (if no default is made in making due provision
for the payment of the redemption price) not after the close of business on the
date fixed for redemption, be converted, in whole, or in part in multiples of
$1,000 principal amount, at 100% of the principal amount of such Security (or
portion thereof), into the Conversion Proceeds issuable upon conversion of such
Security, at the conversion price in effect at the Date of Conversion (as
hereinafter defined).
SECTION 14.3 EXERCISE OF CONVERSION. In order to convert, the Holder
of any Security to be converted shall surrender such Security to the Issuer at
any time during usual
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business hours at its office or agency maintained for the purpose as provided in
this Indenture, accompanied by a fully executed written notice, in substantially
the form set forth on the reverse of the Security, that the Holder elects to
convert such Security or a stated portion thereof constituting a multiple of
$1,000 principal amount, and, if such Security is surrendered for conversion
during the period between the close of business on any record date and the
opening of business on the following interest payment date and has not been
called for redemption on a redemption date within such period (or on such
interest payment date), accompanied also by payment of an amount equal to the
interest payable on such interest payment date on the principal amount of the
Security being surrendered for conversion. Such notice shall also state the name
or names (with address) in which any certificate or certificates for Conversion
Proceeds constituting securities shall be issued. Securities surrendered for
conversion shall (if so required by the Issuer or the Trustee) be duly endorsed
by, or be accompanied by a written instrument or instruments of transfer in form
satisfactory to the Issuer duly executed by, the Holder or his attorney duly
authorized in writing. As promptly as practicable after the receipt of such
notice and the surrender of such Security as aforesaid, the Issuer shall,
subject to the provisions of this Article Fourteen, deliver the Conversion
Proceeds thereof at such office or agency to such Holder, or on his written
order. Such conversion shall be deemed to have been effected immediately prior
to the close of business on the date (herein called the "Date of Conversion") on
which such notice shall have been received by the Issuer and such Security shall
have been surrendered as aforesaid, and the person or persons in whose name or
names any certificate or certificates for Conversion Proceeds constituting
securities shall be issuable upon such conversion shall be deemed to have become
on the Date of Conversion the holder or holders of record of the securities
represented thereby; provided, however, that any such surrender on any date when
the stock transfer books for such securities shall be closed shall constitute
the person or persons in whose name or names the certificate or certificates are
to be issued as the recordholder or holders thereof for all purposes at the
opening of business on the next succeeding day on which such stock transfer
books are open but such conversion shall nevertheless be at the conversion price
in effect at the close of business on the date when such Security shall have
been so surrendered with the conversion notice. In the case of conversion of a
portion, but less than all, of a Security, the
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Issuer shall execute, and the Trustee shall authenticate and deliver to the
holder thereof, at the expense of the Issuer, a Security or Securities in the
aggregate principal amount of the unconverted portion of the Security
surrendered. Except as otherwise expressly provided in this Indenture, no
payment or adjustment shall be made for interest accrued on any Security (or
portion thereof) converted or for dividends or distributions on any security
issued upon conversion of any Security.
SECTION 14.4 FRACTIONAL INTERESTS. No fractions of any security or
scrip representing fractions thereof shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at
one time by the same Holder, the number of full securities which shall be
issuable upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Securities so surrendered. If any fraction of any
security would, except for the provisions of this Section, be issuable on the
conversion of any Security or Securities, the Issuer shall make payment in lieu
thereof in an amount of United States dollars equal to the value of such
fraction computed on the basis of the current market price of such security on
the last business day prior to the Date of Conversion.
SECTION 14.5 CONVERSION PRICE. The conversion price ("Conversion
Price") per unit of Conversion Proceeds issuable upon conversion of the
Securities, if any, shall initially be the amount specified as contemplated in
Section 2.3 for the Securities of any series and shall be subject to adjustment
from time to time as specified as contemplated in Section 2.3 for the Securities
of such series. Whenever the Conversion Price is adjusted as herein provided,
the Issuer shall promptly (i) file with the Trustee and each conversion agent an
Officers' Certificate setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment,
which certificate shall be conclusive evidence of the correctness of such
adjustment, and (ii) mail or cause to be mailed a notice of such adjustment to
each Holder of Securities at his address as the same appears on the registry
books of the Issuer. The Issuer shall be entitled to make such reductions in
the Conversion Price, in addition to those required by this Section, as it in
its discretion shall determine to be advisable in order that any stock dividend,
subdivision of shares, distribution of rights or warrants to
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purchase stock or securities, or distribution of other assets (other than cash
dividends) hereafter made by the Issuer to its stockholders shall not be
taxable.
SECTION 14.6 CONTINUATION OF CONVERSION IN CASE OF RECLASSIFICATION,
CHANGE, MERGER, CONSOLIDATION OR SALE OF ASSETS. If any of the following shall
occur, namely: (a) any reclassification or change of outstanding securities
issuable upon conversion of the Securities (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (b) any consolidation or merger to
which the Issuer is a party as a result of which the holders of such securities
shall be entitled to receive stock, other securities or other assets with
respect to or in exchange for such securities or (c) sale or conveyance of all
or substantially all of the property or business of the Issuer as an entirety
(if the Issuer is the issuer of such securities), then the Issuer, or such
successor or purchasing corporation, as the case may be, shall, as a condition
precedent to such reclassification, change, consolidation, merger, sale or
conveyance, execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then outstanding shall have the right
to convert such Security into the kind and amount of securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance by a holder of the amount of such securities issuable upon conversion
of such Security immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. Such supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments specified as contemplated by Section 2.3 for
Securities of the series. If, in the case of any such consolidation, merger,
sale or conveyance, the securities and property receivable thereupon by a holder
of outstanding securities issuable upon conversion includes shares of stock or
other securities and property of a corporation other than the successor or
purchasing corporation, as the case may be, in such consolidation, merger, sale
or conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the holders of the Securities as the Board of Directors shall
reasonably consider necessary by reason of the foregoing. The provisions of
this Section shall
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<PAGE>
similarly apply to successive consolidations, mergers, sales or conveyances.
Notice of the execution of each such supplemental indenture shall be
mailed to each Holder of Securities at his address as the same appears on the
registry books of the Issuer.
Neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or securities or property receivable by Holders of Securities upon the
conversion of their Securities after any such reclassification, change,
consolidation, merger, sale or conveyance or to any adjustment to be made with
respect thereto, but, subject to the provisions of Sections 6.1 and 6.2, may
accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, the Officers' Certificate (which the Issuer
shall be obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
SECTION 14.7 NOTICE OF CERTAIN EVENTS. So long as any convertible
Securities are outstanding, in case:
(a) the Issuer shall declare a dividend (or any other
distribution) payable to the holders of any securities constituting
Conversion Proceeds otherwise than in cash; or
(b) the Issuer shall authorize the granting to the holders of
such securities of rights to subscribe for or purchase any shares of
stock of any class or of any other rights; or
(c) the Issuer shall authorize any reclassification or change of
such securities (other than a subdivision or combination of such
securities), or any consolidation or merger to which the Issuer is a
party and for which approval of any stockholders of the Issuer is
required, or the sale or conveyance of all or substantially all the
property or business of the Issuer; or
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(d) there shall be proposed any voluntary or involuntary
dissolution, liquidation or winding-up of the Issuer; then, the
Issuer shall cause to be filed at the office or agency maintained for
the purpose of conversion of the Securities as provided in
Section 3.2, and shall cause to be mailed to each Holder of
Securities, at his address as it shall appear on the registry books of
the Issuer, at least 20 days before the date hereinafter specified (or
the earlier of the dates hereinafter specified, in the event that more
than one date is specified), a notice stating the date on which (1) a
record is expected to be taken for the purpose of such dividend,
distribution or rights, or if a record is not to be taken, the date as
of which the holders of such securities of record to be entitled to
such dividend, distribution or rights are to be determined, or
(2) such reclassification, change, consolidation, merger, sale,
conveyance, dissolution, liquidation or winding-up is expected to
become effective and the date, if any is to be fixed, as of which it
is expected that holders of such securities of record shall be
entitled to exchange their such securities for securities or other
property deliverable upon such reclassification, change,
consolidation, merger, sale, conveyance, dissolution, liquidation or
winding-up.
SECTION 14.8 TAXES ON CONVERSION. The Issuer will pay any and all
documentary, stamp or similar taxes payable to the United States of America or
any political subdivision or taxing authority thereof or therein in respect of
the issue or delivery of Conversion Proceeds on conversion of Securities
pursuant thereto; provided, however, that the Issuer shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issue or delivery of Conversion Proceeds in a name other than that of the holder
of the Securities to be converted and no such issue or delivery shall be made
unless and until the person requesting such issue or delivery has paid to the
Issuer the amount of any such tax or has established, to the satisfaction of the
Issuer, that such tax has been paid. The Issuer extends no protection with
respect to any other taxes imposed in connection with conversion of Securities.
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SECTION 14.9 ISSUER TO PROVIDE STOCK. To the extent that any
Securities are convertible into securities of the Issuer, the Issuer shall
reserve, free from pre-emptive rights, out of its authorized but unissued
securities, sufficient securities to provide for the conversion of the
Securities from time to time as such Securities are presented for conversion,
provided, that nothing contained herein shall be construed to preclude the
Issuer from satisfying its obligations in respect of the conversion of
Securities by delivery of repurchased Securities which are held in the treasury
of the Issuer.
If any securities to be reserved for the purpose of conversion of
securities hereunder require registration with or approval of any governmental
authority under any Federal or State law before such securities may be validly
issued or delivered upon conversion, then the Issuer covenants that it will in
good faith and as expeditiously as possible endeavor to secure such registration
or approval, as the case may be, provided, however, that nothing in this Section
shall be deemed to affect in any way any obligation of the Issuer to convert
Securities.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of such securities, the
Issuer will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Issuer may validly and legally issue fully paid and
non-assessable such securities at such adjusted Conversion Price.
The Issuer covenants that all securities of the Issuer which may be
issued upon conversion of Securities will upon issue be fully paid and non-
assessable by the Issuer and free of pre-emptive rights.
SECTION 14.10 DISCLAIMER OF RESPONSIBILITY FOR CERTAIN MATTERS.
Neither the Trustee nor any agent of the Trustee shall at any time be under any
duty or responsibility to any holder of Securities to determine whether any
facts exist which may require any adjustment of the Conversion Price, or with
respect to the Officers' Certificate referred to in Section 14.5, or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture as
specified as contemplated in Section 2.3 provided to be
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employed, in making the same. Neither the Trustee nor any agent of the Trustee
shall be accountable with respect to the validity or value (or the kind or
amount) of any securities or property, which may at any time be issued or
delivered upon the conversion of any Security; and neither the Trustee nor any
conversion agent makes any representation with respect thereto. Neither the
Trustee nor any agent of the Trustee shall be responsible for any failure of the
Issuer to issue, register the transfer of or deliver any securities or property
upon the surrender of any Security for the purpose of conversion or, subject to
Sections 6.1 and 6.2, to comply with any of the covenants of the Issuer
contained in this Article or specified as contemplated in Section 2.3.
SECTION 14.11 RETURN OF FUNDS DEPOSITED FOR REDEMPTION OF CONVERTED
SECURITIES. Any funds which at any time shall have been deposited by the Issuer
or on its behalf with the Trustee or any paying agent for the purpose of paying
the principal of and interest on any of the Securities and which shall not be
required for such purposes because of the conversion of such Securities, shall
after such conversion be repaid to the Issuer by the Trustee or such other
paying agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of ____________________.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
By _______________________________
Name:
Title:
[CORPORATE SEAL]
Attest:
By _________________________
Name:
Title:
________________________________
__________, as Trustee
By _____________________________
Name:
Title:
[CORPORATE SEAL]
Attest:
By _________________________
Name:
Title:
116
<PAGE>
STATE OF HAWAII )
) ss.
COUNTY OF HONOLULU )
On this _____ of ________________ before me personally came
___________________________, to me personally known, who, being by me duly
sworn, did depose and say that he resides at ___________________________ that he
is the ____________________ of Hawaiian Electric Industries, Inc., one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
[NOTARIAL SEAL]
______________________________
Notary Public
<PAGE>
STATE OF ___________ )
) ss.
COUNTY OF __________ )
On this _____ of ________________ before me personally came
___________________________, to me personally known, who, being by me duly
sworn, did depose and say that he resides at ________________________ that he is
a [_____________________] of ___________________________________, one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
[NOTARIAL SEAL]
______________________________
Notary Public
<PAGE>
Exhibit 4(i)
------------
HAWAIIAN ELECTRIC INDUSTRIES, INC.
AND
THE BANK OF NEW YORK,
AS TRUSTEE
__________________
INDENTURE
Dated as of , 1997
-----------
___________________
Junior Subordinated Debentures
<PAGE>
CROSS REFERENCE SHEET(*)
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as
of , 1997 between HAWAIIAN ELECTRIC INDUSTRIES, INC. and THE BANK OF
----------
NEW YORK, Trustee:
Section of the Act Section of Indenture
- ------------------ --------------------
310(a)(1) and (2)....................... 7.09
310(a)(3) and (4)....................... Inapplicable
310(b).................................. 7.08, 7.10 and 7.11
310(c).................................. Inapplicable
311(a).................................. 7.13(a)
311(b).................................. 7.13(b)
311(c).................................. Inapplicable
312(a).................................. 5.01 and 5.02
312(b).................................. 5.02
312(c).................................. 5.02
313(a).................................. 5.04
313(b)(1)............................... Inapplicable
313(b)(2)............................... 5.04
313(c).................................. 5.04
313(d).................................. 5.04
314(a).................................. 5.03
314(b).................................. Inapplicable
314(c)(1) and (2)....................... 13.06
314(c)(3)............................... Inapplicable
314(d).................................. Inapplicable
314(e).................................. 13.06
314(f).................................. Inapplicable
315(a), (c) and (d)..................... 7.01
315(b).................................. 6.07
315(e).................................. 6.08
316(a)(1)............................... 6.06
316(a)(2)............................... Inapplicable
316(a) (last sentence).................. 8.04
316(b).................................. 6.04
317(a).................................. 6.02
317(b).................................. 4.03
318(a).................................. 13.08
(*) This Cross Reference Sheet is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS(*)
PARTIES..................................................... 1
RECITALS:
Purpose of Indenture........................................ 1
Compliance with legal requirements.......................... 1
Purpose of and consideration for Indenture.................. 1
ARTICLE ONE
Definitions
SECTION 1.01. Definitions.................................. 2
Additional Interest.......................... 2
Affiliate.................................... 2
Authenticating Agent......................... 3
Board of Directors........................... 3
Board Resolution............................. 3
Business Day................................. 3
Certificate.................................. 3
Company...................................... 3
Corporate Trust Office....................... 3
Debenture or Debentures...................... 4
Debenture Register........................... 4
Debentureholder.............................. 4
Default...................................... 4
Defeasance Agent............................. 4
Depository................................... 4
Event of Default............................. 4
General Partner.............................. 5
Global Debenture............................. 5
Governmental Obligations..................... 5
Hawaiian Electric Industries Capital Trust... 5
Indenture.................................... 6
Interest Payment Date........................ 6
Limited Partnership Agreement................ 6
Officer's Certificate........................ 5
Opinion of Counsel........................... 6
Outstanding.................................. 6
Partnership.................................. 7
<PAGE>
Partnership Guarantee........................ 7
Partnership Preferred Securities............. 7
Person....................................... 7
Place of Payment............................. 7
Predecessor Debenture........................ 7
Property Trustee............................. 8
Responsible Officer.......................... 8
Security..................................... 8
Security Exchange............................ 8
Senior Indebtedness.......................... 9
Subsidiary................................... 9
Trust Agreement.............................. 9
Trust Common Securities...................... 10
Trust Guarantee.............................. 10
Trust Indenture Act.......................... 10
Trust Preferred Securities................... 10
Trustee...................................... 10
ARTICLE TWO
The Debentures
SECTION 2.01. Designation, Terms, Amount, Authentication
and Delivery of Debentures................... 10
SECTION 2.02. Form of Debentures and Trustee's Certificate. 13
SECTION 2.03. Date and Denominations of Debentures; Payment
of Principal, Premium and Interest........... 13
SECTION 2.04. Execution of Debentures...................... 16
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen
Debentures................................... 17
SECTION 2.06. Temporary Debentures........................ 18
SECTION 2.07. Exchange of Debentures...................... 19
SECTION 2.08. Cancellation................................ 21
SECTION 2.09. Beneficiaries............................... 21
SECTION 2.10. Appointment of Authenticating Agent......... 21
SECTION 2.11. Global Debenture............................ 22
SECTION 2.12. CUSIP Numbers............................... 24
<PAGE>
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions
SECTION 3.01. Redemption of Debentures..................... 24
SECTION 3.02. Notice of Redemption; Selection by
Trustee of Debentures to be Redeemed......... 24
SECTION 3.03. Debentures Payable on Redemption Date;
Debentures Redeemed in Part.................. 26
SECTION 3.04. Sinking Fund for Debentures.................. 27
SECTION 3.05. Satisfaction of Sinking Fund Payments With
Debentures................................... 27
SECTION 3.06. Redemption of Debentures for Sinking Fund.... 28
ARTICLE FOUR
Particular Covenants of the Company
SECTION 4.01. Payment of Principal, Premium and Interest... 28
SECTION 4.02. Maintenance of Office or Agency.............. 28
SECTION 4.03. Paying Agent; Money for Debenture Payments
to be Held in Trust.......................... 29
SECTION 4.04. Appointment to Fill Vacancy.................. 31
SECTION 4.05. Payment of Additional Interest............... 31
SECTION 4.06. Maintenance of the Hawaiian Electric
Industries Capital Trust and the
Partnership.................................. 31
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee
SECTION 5.01. Company to Furnish Trustee Names and
Addresses of Debentureholders................ 32
SECTION 5.02. Preservation of Information; Communications
to Holders................................... 33
SECTION 5.03. Reports by Company........................... 35
SECTION 5.04. Reports by Trustee........................... 36
<PAGE>
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default
SECTION 6.01. Event of Default............................. 38
SECTION 6.02. Acceleration of Maturity..................... 42
SECTION 6.03. Application of Moneys Collected.............. 44
SECTION 6.04. Limitation on Suits; Unconditional Right of
Debentureholders to Insitute Certain Suits... 44
SECTION 6.05. Rights and Remedies Cumulative; Delay or
Omission Not A Waiver........................ 46
SECTION 6.06. Control by Debentureholders; Waiver of
Past Defaults................................ 46
SECTION 6.07. Notice of Defaults........................... 48
SECTION 6.08. Undertaking for Costs........................ 48
SECTION 6.09. Certain Additional Covenants................. 49
ARTICLE SEVEN
Concerning the Trustee
SECTION 7.01. Certain Duties and Responsibilities.......... 50
SECTION 7.02. Certain Rights of Trustee.................... 52
SECTION 7.03. Limitations of Liability..................... 53
SECTION 7.04. Ownership of Debentures...................... 54
SECTION 7.05. Moneys Held Without Interest................. 54
SECTION 7.06. Compensation and Reimbursement............... 54
SECTION 7.07. Reliance on Certificate of Officers
of Company................................... 55
SECTION 7.08. Conflicts of Interest........................ 56
SECTION 7.09. Requirements for Eligibility................. 64
SECTION 7.10. Resignation and Removal...................... 64
SECTION 7.11. Successor Trustee............................ 67
SECTION 7.12. Successor to Trustee by Merger,
Consolidation or Succession to Business...... 69
SECTION 7.13. Preferential Collection of Claims Against
Issuer; Trustee as Creditor.................. 69
<PAGE>
ARTICLE EIGHT
Concerning the Debentureholders
SECTION 8.01. Evidence of Action by Debentureholders....... 75
SECTION 8.02. Proof of Execution of Instruments and of
Holding of Debentures........................ 76
SECTION 8.03. Persons Deemed Owners of Debentures.......... 76
SECTION 8.04. Debentures Owned by Company or Controlled
or Controlling Companies Disregarded for
Certain Purposes............................. 76
SECTION 8.05. Instruments Executed by Debentureholders
Bind Future Holders.......................... 77
ARTICLE NINE
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of
Debentureholders............................. 78
SECTION 9.02. Modification of Indenture With Consent of
Debentureholders............................. 79
SECTION 9.03. Effect of Supplemental Indentures............ 81
SECTION 9.04. Debentures May Bear Notation of Changes by
Supplemental Indentures...................... 81
SECTION 9.05. Opinion of Counsel........................... 82
ARTICLE TEN
Consolidation, Merger, Sale or Conveyance
SECTION 10.01. Company May Consolidate, Etc., Only on
Certain Terms................................ 82
SECTION 10.02. Successor Corporation........................ 83
SECTION 10.03. Opinion of Counsel........................... 83
<PAGE>
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Defeasance; Unclaimed Moneys
SECTION 11.01. Satisfaction and Discharge of Indenture...... 83
SECTION 11.02. Application by Trustee of Funds Deposited
for Payment of Debentures.................... 89
SECTION 11.03. Application by Trustee of Funds Deposited
for Payment of Debentures.................... 89
SECTION 11.04. Repayment of Moneys Held by Paying Agent..... 90
SECTION 11.05. Repayment of Moneys Held by Trustee.......... 90
ARTICLE TWELVE
Immunity of Incorporators, Stockholders,
Officers and Directors
SECTION 12.01. Immunity From Individual Liability........... 91
ARTICLE THIRTEEN
Miscellaneous Provisions
SECTION 13.01. Successors and Assigns....................... 92
SECTION 13.02. Acts of Board, Committee or Officer of
Successor Company............................ 92
SECTION 13.03. Surrender of Powers of Company............... 92
SECTION 13.04. Required Notices or Demands Served by Mail... 92
SECTION 13.05. Governing Law................................ 93
SECTION 13.06. Officer's Certificates and Opinions of
Counsel...................................... 93
SECTION 13.07. Payments Due on Saturdays, Sundays
or Holidays.................................. 93
SECTION 13.08. Provisions Required by Trust Indenture Act... 94
SECTION 13.09. Indenture May be Executed in Counterparts.... 94
SECTION 13.10. Severability of Indenture Provisions......... 94
SECTION 13.11. Assignment by Company to Subsidiary.......... 94
SECTION 13.12. Holders of Trust Preferred Securities as
Third Party Beneficiaries of this Indenture.. 95
<PAGE>
ARTICLE FOURTEEN
Subordination of Debentures
SECTION 14.01. Agreement to Subordinate.................... 95
SECTION 14.02. Rights of Senior Indebtedness in the Event
of Insolvency, Etc., of the Company......... 96
SECTION 14.03. Payment Over of Proceeds Received on
Debentures.................................. 97
SECTION 14.04. Payment to Debentureholders................. 99
SECTION 14.05. Holders of Debentures Authorize
Trustee to Effectuate Subordination
of Debentures............................... 100
SECTION 14.06. Notice to Trustee........................... 100
SECTION 14.07. Trustees May Hold Senior Indebtedness....... 101
SECTION 14.08. Applicability of Article Fourteen
to Paying Agents............................ 101
ACCEPTANCE OF TRUST BY TRUSTEE.............................
TESTIMONIUM................................................
SIGNATURES AND SEALS.......................................
ACKNOWLEDGMENTS............................................
<PAGE>
THIS INDENTURE, is dated as of the _____ day of ______________, 1997,
between HAWAIIAN ELECTRIC INDUSTRIES, INC., a corporation duly organized and
existing under the laws of the State of Hawaii (hereinafter sometimes referred
to as the "Company"), and THE BANK OF NEW YORK, a New York banking corporation,
as Trustee (hereinafter sometimes referred to as the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has fully
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured debentures (hereinafter referred to as the "Debentures"),
in an unlimited aggregate principal amount to be issued from time to time in one
or more series as in this Indenture provided, as registered Debentures without
coupons, to be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication to be
borne by the Debentures (the "Certificate of Authentication") are to be
substantially in such forms as may be approved by the Board of Directors (as
defined below) or set forth in any indenture supplemental to this Indenture;
AND WHEREAS, all acts and things necessary to make the Debentures
issued pursuant hereto, when executed by the Company and authenticated and
delivered by the Trustee as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
indenture and agreement according to its terms, have been done and performed or
will be done and performed prior to the issuance of such Debentures, and the
execution of this Indenture has been and the issuance hereunder of the
Debentures has been or will be prior to issuance in all respects duly
authorized, and the Company, in the exercise of the legal right and power in it
vested, executes this Indenture and proposes to make, execute, issue and deliver
the Debentures:
1
<PAGE>
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are and are to be authenticated, issued and delivered, and in
consideration of the premises and of the acquisition and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee, for the equal and proportionate benefit (subject to the provisions of
this Indenture) of the respective holders from time to time of the Debentures,
without any discrimination, preference or priority of any one Debenture over any
other by reason of priority in the time of issue, sale or negotiation thereof,
or otherwise, except as provided herein, as follows:
ARTICLE ONE
Definitions
SECTION 1.01. Definitions.
------------
The terms defined in this Section (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture, any resolution of the Board of Directors of the
Company and of any indenture supplemental hereof shall have the respective
meanings specified in this Section. All other terms used in this Indenture
which are defined in the Trust Indenture Act of 1939, as amended, or which are
by reference in such Act defined in the Securities Act of 1933, as amended
(except as herein otherwise expressly provided or unless the context otherwise
requires), shall have the meanings assigned to such terms in said Trust
Indenture Act and in said Securities Act as in force at the date of this
instrument.
Additional Interest: The term "Additional Interest" shall mean the
additional interest as provided in Section 4.05.
Affiliate: The term "Affiliate" of the Company shall mean any company
at least a majority of whose outstanding voting stock shall at the time be owned
by the Company, or by one or more direct or indirect subsidiaries of the Company
or by the Company and one or more direct or indirect subsidiaries of the
Company. For the purposes only of this definition of
2
<PAGE>
the term "Affiliate", the term "voting stock", as applied to the stock of any
company, shall mean stock of any class or classes having ordinary voting power
for the election of a majority of the directors of such company, other than
stock having such power only by reason of the occurrence of a contingency.
Authenticating Agent: The term "Authenticating Agent" means an
authenticating agent with respect to all or any of the series of Debentures, as
the case may be, appointed with respect to all or any series of the Debentures,
as the case may be, by the Trustee pursuant to Section 2.10.
Board of Directors: The term "Board of Directors" shall mean the
Board of Directors of the Company, or any committee of such Board duly
authorized to act hereunder.
Board Resolution: The term "Board Resolution" shall mean a copy of
one or more resolutions, certified by the secretary or an assistant secretary of
the Company to have been adopted or consented to by the Board of Directors and
to be in full force and effect, and delivered to the Trustee.
Business Day: The term "business day", with respect to any Place of
Payment for a series of Debentures, shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in such
Place of Payment are authorized or obligated by law or executive order to close.
Certificate: The term "Certificate" shall mean a certificate signed
by the principal executive officer, the principal financial officer or the
principal accounting officer of the Company. The Certificate need not comply
with the provisions of Section 13.06.
Company: The term "Company" shall mean Hawaiian Electric Industries,
Inc., a corporation duly organized and existing under the laws of the State of
Hawaii, and, subject to the provisions of Article Ten, shall also include its
successors and assigns.
Corporate Trust Office: The term "Corporate Trust Office" shall mean
the office of the Trustee at which at any particular time its corporate trust
business shall be
3
<PAGE>
principally administered, which office at the date of the execution of this
Indenture is located at 101 Barclay Street, 21st Floor, New York, New York
10286, Attention: Corporate Trust Trustee Administration.
Debenture or Debentures: The term "Debenture" or "Debentures" shall
mean any Debenture or Debentures, as the case may be, authenticated and
delivered under this Indenture. The term "Debenture" or "Debentures" also
include unsecured notes and other evidences of indebtedness which may be issued
pursuant to this Indenture.
Debenture Register: The term "Debenture Register" shall mean the book
in which the Company will keep and register, or cause to be kept and registered,
a record of the name and addresses of the holder of record of each Debenture as
provided in Section 2.07 and in accordance with the terms of this Indenture.
Debentureholder: The term "Debentureholder", "holder of Debentures",
"registered holder", or other similar term, shall mean the person or persons in
whose name or names a particular Debenture shall be registered in the Debenture
Register.
Default: The term "Default" shall mean any event, act or condition
which with notice or lapse of time, or both, would constitute an Event of
Default.
Defeasance Agent: The term "Defeasance Agent" shall mean the Person,
if any, selected by the Company and approved by the Trustee to receive the
payments of money and any Governmental Obligations as provided in Section 11.01.
Depository: The term "Depository" shall mean, with respect to
Debentures of any series, for which the Company shall determine that such
Debentures will be issued as a Global Debenture, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a
clearing agency under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to either Section 2.01 or 2.11.
Event of Default: The term "Event of Default" with respect to
Debentures of a particular series shall mean any event specified in Section
6.01(a), continued for the period of time, if any, therein designated.
4
<PAGE>
General Partner: The term "General Partner" means Hycap Management,
Inc., a Delaware corporation and subsidiary of the Company, in its capacity as
general partner of the Partnership, and its successors and assigns.
Global Debenture: The term "Global Debenture" shall mean, with
respect to any series of Debentures, a Debenture executed by the Company and
delivered by the Trustee to the Depository or pursuant to the Depository's
instruction, all in accordance with the Indenture, which shall be registered in
the name of the Depository or its nominee.
Governmental Obligations: The term, "Governmental Obligations" shall
mean securities that are (i)direct obligations of the United States of America
for the payment of which its full faith and credit is pledged or (ii)obligations
of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as
amended) as custodian with respect to any such Governmental Obligation or a
specific payment of principal of or interest on any such Governmental Obligation
held by such custodian for the account of the holder of such depository receipt;
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the Governmental
Obligation or the specific payment of principal of or interest on the
Governmental Obligation evidenced by such depository receipt.
Hawaiian Electric Industries Capital Trust: The term "Hawaiian
Electric Industries Capital Trust" shall mean such statutory business trust
created under the laws of the State of Delaware specified in the applicable
Board Resolution or supplemental indenture establishing a particular series of
Debentures pursuant to Section 2.01 hereof.
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Indenture: The term "Indenture" shall mean this instrument as
originally executed, or, if amended or supplemented as herein provided, as so
amended or supplemented.
Interest Payment Date: The term "Interest Payment Date" when used
with respect to any installment of interest on a Debenture of a particular
series shall mean the date specified in such Debenture or in a Board Resolution
or in an indenture supplemental hereto with respect to such series as the fixed
date on which an installment of interest with respect to Debentures of that
series is due and payable.
Limited Partnership Agreement: The term "Limited Partnership
Agreement" means the Amended and Restated Agreement of Limited Partnership,
dated as of _________________, 1997, of the Partnership, as amended, modified or
otherwise supplemented from time to time.
Officer's Certificate: The term "Officer's Certificate" shall mean a
certificate signed by the President, any Vice President, the Treasurer or the
Controller of the Company. Each such certificate shall include the statements
provided for in Section 13.06, if and to the extent required by the provisions
thereof.
Opinion of Counsel: The term "Opinion of Counsel" shall mean an
opinion in writing signed by legal counsel, who may be an employee of or counsel
for the Company or a Subsidiary and who shall be satisfactory to the Trustee.
Each such opinion shall include the statements provided for in Section 13.06, if
and to the extent required by the provisions thereof.
Outstanding: The term "Outstanding", when used with reference to
Debentures of any series, shall, subject to the provisions of Section 8.01,
mean, as of any particular time, all Debentures of that series theretofore
authenticated and delivered by the Trustee under this Indenture, except
(a)Debentures theretofore canceled by the Trustee or any paying agent, or
delivered to the Trustee or any paying agent for cancellation or which have
previously been canceled; (b)Debentures or portions thereof for the payment or
redemption of which moneys or Governmental Obligations in the necessary amount
shall have been deposited in trust with the Trustee or with any paying agent
(other than the Company) or shall have
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been set aside and segregated in trust for the holders of such Debentures by the
Company (if the Company shall act as its own paying agent); provided, however,
that if such Debentures or portions of such Debentures are to be redeemed prior
to the maturity thereof, notice of such redemption shall have been given as in
Article Three provided, or provision satisfactory to the Trustee shall have been
made for giving such notice; (c) Debentures in lieu of or in substitution for
which other Debentures shall have been authenticated and delivered pursuant to
the terms of Section 2.07; and (d) Debentures paid pursuant to Section 2.05.
Partnership: The term "Partnership" means HEI Preferred Funding, LP,
a Delaware limited partnership, and any successor thereto.
Partnership Guarantee: The term "Partnership Guarantee" shall mean
the guarantee, if any, that the Company may enter into that operates directly or
indirectly for the benefit of holders of Partnership Preferred Securities, if
any, issued by the Partnership.
Partnership Preferred Securities: The term "Partnership Preferred
Securities" means the limited partnership interests, if any, issued pursuant to
the Limited Partnership Agreement.
Person: The term "Person" means any individual, corporation, joint
venture, association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Place of Payment: The term "Place of Payment", when used with respect
to the Debentures of any series, means the place or places where the principal
of (and premium, if any) and interest on the Debentures of that series are
payable as specified as contemplated by Section 2.01.
Predecessor Debenture: The term "Predecessor Debenture" of any
particular Debenture shall mean every previous Debenture evidencing all or a
portion of the same debt as that evidenced by such particular Debenture; and,
for the purposes of this definition, any Debenture authenticated and delivered
under Section 2.05 in lieu of a lost, destroyed or
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stolen Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.
Property Trustee: The term "Property Trustee" means the entity
performing the function of the Property Trustee under the applicable Trust
Agreement of a Hawaiian Electric Industries Capital Trust.
Responsible Officer: The term "Responsible Officer" when used with
respect to the Trustee shall mean any vice president, the treasurer, any trust
officer, any corporate trust officer or any other officer or assistant officer
of the Corporate Trust Office of the Trustee customarily performing functions
similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
Security: Except as provided in Section 7.08, the word "security" or
securities" as used in this Indenture shall mean any note, stock, treasury
stock, bond, debenture, evidence of indebtedness, certificate of interest or
participation in any profit-sharing agreement, collateral trust certificate,
pre-organization certificate or subscription, transferable share, investment
contract, voting trust certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other mineral rights, or, in
general, any interest or instrument commonly known as a "security", or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to or purchase,
any of the foregoing.
Security Exchange: "Security Exchange" when used with respect to the
Debentures of any series that are held as trust assets of a Hawaiian Electric
Industries Capital Trust pursuant to the Trust Agreement of such Hawaiian
Electric Industries Capital Trust, means the distribution of the Debentures of
such series by such Hawaiian Electric Industries Capital Trust in exchange for
the Trust Preferred Securities and Trust Common Securities of such Hawaiian
Electric Industries Capital Trust in dissolution of such Hawaiian Electric
Industries Capital Trust pursuant to such Trust Agreement.
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Senior Indebtedness: The term "Senior Indebtedness" means the
principal of and premium, if any, and interest on (a)all indebtedness of the
Company, whether outstanding on the date of this Indenture or thereafter
created, (i)for money borrowed by the Company, (ii)for money borrowed by, or
obligations of, others and either assumed or guaranteed, directly or indirectly,
by the Company, (iii)in respect of letters of credit and acceptances issued or
made by banks, or (iv)constituting purchase money indebtedness, or indebtedness
secured by property included in the property, plant and equipment accounts of
the Company at the time of the acquisition of such property by the Company, for
the payment of which the Company is directly liable, and (b)all deferrals,
renewals, extensions and refundings of, and amendments, modifications and
supplements to, any such indebtedness. As used in the preceding sentence the
term "purchase money indebtedness" means indebtedness evidenced by a note,
debenture, bond or other instrument (whether or not secured by any lien or other
security interest) issued or assumed as all or a part of the consideration for
the acquisition of property, whether by purchase, merger, consolidation or
otherwise, unless by its terms such indebtedness is subordinate to other
indebtedness of the Company. Notwithstanding anything to the contrary in this
Indenture or the Debentures, Senior Indebtedness shall not include (i)any
indebtedness of the Company which, by its terms or the terms of the instrument
creating or evidencing it, is subordinate in right of payment to or pari passu
with the Debentures, as the case may be, or (ii)any indebtedness of the Company
to a Subsidiary.
Subsidiary: The term "Subsidiary" shall mean any corporation at least
a majority of whose outstanding voting stock shall at the time be owned by the
Company or by one or more subsidiaries or by the Company and one or more
Subsidiaries. For the purposes only of this definition of the term
"Subsidiary", the term "voting stock", as applied to the stock of any
corporation, shall mean stock of any class or classes having ordinary voting
power for the election of a majority of the directors of such corporation, other
than stock having such power only by reason of the occurrence of a contingency.
Trust Agreement: The term "Trust Agreement" shall mean the respective
Trust Agreement of the Hawaiian Electric Industries Capital Trusts, if any,
specified in the applicable
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Board Resolution or supplemental indenture establishing a particular series of
Debentures pursuant to Section 2.01 hereof.
Trust Common Securities: The term "Trust Common Securities" shall
mean the common undivided beneficial interests, if any, in the assets of the
applicable Hawaiian Electric Industries Capital Trust or Trusts.
Trust Guarantee: The term "Trust Guarantee" shall mean the guarantee,
if any, that the Company may enter into that operates directly or indirectly for
the benefit of holders of Trust Preferred Securities, if any, issued by a
Hawaiian Electric Industries Capital Trust.
Trust Indenture Act: The term "Trust Indenture Act", subject to the
provisions of Sections 9.01 and 9.02, shall mean the Trust Indenture Act of
1939, as amended and in effect at the date of execution of this Indenture.
Trust Preferred Securities: The term "Trust Preferred Securities"
shall mean the preferred undivided beneficial interests, if any, in the assets
of the applicable Hawaiian Electric Industries Capital Trust.
Trustee: The term "Trustee" shall mean The Bank of New York and,
subject to the provisions of Article Seven, shall also include its successors
and assigns, and, if at any time there is more than one person acting in such
capacity hereunder, "Trustee" shall mean each such person. The term "Trustee"
as used with respect to a particular series of the Debentures shall mean the
trustee with respect to that series.
ARTICLE TWO
The Debentures
SECTION 2.01. Designation, Terms, Amount, Authentication and
Delivery of Debentures.
The aggregate principal amount of Debentures which may be
authenticated and delivered under this Indenture is unlimited.
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The Debentures may be issued in one or more series up to the aggregate
principal amount of Debentures of that series from time to time authorized by or
pursuant to a Board Resolution or pursuant to one or more indentures
supplemental hereto, prior to the initial issuance of Debentures of a particular
series and shall rank pari passu with the Debentures of each other series. The
Debentures of each series shall be junior and subordinate in right of payment to
any securities issued pursuant to the Senior Subordinated Indenture of the
Company. Prior to the initial issuance of Debentures of any series, there shall
be established in or pursuant to a Board Resolution, and set forth in an
Officer's Certificate, or established in one or more indentures supplemental
hereto:
(1) the title of the Debentures of the series (which shall
distinguish the Debentures of the series from all other Debentures);
(2) any limit upon the aggregate principal amount of the Debentures
of that series which may be authenticated and delivered under this
Indenture (except for Debentures authenticated and delivered upon
registration or transfer of, or in exchange for, or in lieu of, other
Debentures of that series);
(3) the date or dates on which the principal of the Debentures of
the series is payable;
(4) the rate or rates at which the Debentures of the series shall
bear interest or the manner of calculation of such rate or rates, if any;
(5) the place or places where the principal of (and premium, if any)
and interest on Debentures of the series shall be payable or surrendered
for registration of transfer or exchange;
(6) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the manner
of determination of such Interest Payment Dates and the record dates for
the determination of holders to whom interest is payable on any such
Interest Payment Dates;
(7) the right, if any, to extend the interest payment periods and
the duration of such extension;
(8) the period or periods, if any, within which, the price or prices
at which, and the terms and conditions
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upon which, Debentures of the series may be redeemed, in whole or in part,
at the option of the Company;
(9) the provisions, if any, for a sinking, purchase or other
analogous fund and the obligation, if any, of the Company to redeem or
purchase Debentures of the series pursuant to any sinking fund or analogous
provisions (including payments made in cash in anticipation of future
sinking fund obligations) or at the option of a holder thereof and the
period or periods within which, the price or prices at which, and the terms
and conditions upon which, Debentures of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(10) the form of the Debentures of the series including the form of
the Certificate of Authentication for such series;
(11) if other than denominations of $25 or any integral multiple
thereof, the denominations in which the Debentures of the series shall be
issuable;
(12) whether the Debentures are issuable as a Global Debenture and,
in such case, the identity of the Depository for such series;
(13) if the Debentures of such series are to be deposited as trust
assets in a Hawaiian Electric Industries Capital Trust, the name of the
applicable Hawaiian Electric Industries Capital Trust (which shall
distinguish such statutory business trust from all other Hawaiian Electric
Industries Capital Trusts) into which the Debentures of such series are to
be deposited as trust assets and the date of its Trust Agreement;
(14) if the Debentures of such series are to be deposited as
partnership assets in a limited partnership, such as the Partnership, the
name of the applicable limited partnership (which shall distinguish such
limited partnership from any other limited partnership of the Company) into
which the Debentures of such series are to be deposited as partnership
assets and the date of its limited partnership agreement;
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(15) whether or not the Debentures are to be sold to Persons who are
not directly or indirectly owned or controlled by the Company and who are
not Affiliates of the Company; and
(16) any and all other terms with respect to such series (which
terms shall not be inconsistent with the terms of this Indenture).
All Debentures of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to any such Board Resolution or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officer's
Certificate setting forth the terms of the series.
SECTION 2.02. Form of Debentures and Trustee's Certificate.
--------------------------------------------
The Debentures of any series and the Trustee's certificate of
authentication to be borne by such Debentures shall be substantially of the
tenor and purport as set forth in one or more indentures supplemental hereto or
as provided in a Board Resolution and as set forth in an Officer's Certificate,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Debentures of that series may be listed, or to
conform to usage.
SECTION 2.03. Date and Denominations of Debentures; Payment of
Principal, Premium and Interest.
-------------------------------
The Debentures shall be issuable as registered Debentures and in the
denominations of $25 or any integral multiple thereof, subject to Section
2.01(10). The Debentures of a particular series shall bear interest payable on
the dates
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and at the rate specified with respect to that series. The principal of and the
interest on the Debentures of any series, as well as any premium thereon in case
of redemption thereof prior to maturity, shall be payable in the coin or
currency of the United States of America which at the time is legal tender for
public and private debt, at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, the City and State of New York. Each
Debenture shall be dated the date of its authentication. Interest on the
Debentures shall be computed on the basis of a 360-day year composed of twelve
30-day months. For any period shorter than a full 90-day quarter, interest will
be completed on the basis of the actual number of days elapsed in such 90-day
quarter.
The interest installment on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name said
Debenture (or one or more Predecessor Debentures) is registered on the Debenture
Register at the close of business on the regular record date for such interest
installment. In the event that any Debenture of a particular series or portion
thereof is called for redemption and the redemption date is subsequent to a
regular record date with respect to any Interest Payment Date and prior to such
Interest Payment Date, interest on such Debenture will be paid upon presentation
and surrender of such Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Debentures of the
same series (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered holder on the relevant regular record date by virtue
of having been such holder; and such Defaulted Interest shall be paid by the
Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or their
respective Predecessor Debentures) are registered at the close of business
on a special record date for the payment of such Defaulted Interest, which
shall be fixed in the following manner: the Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each such Debenture and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an
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amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a special record date for the payment of
such Defaulted Interest which shall not be more than 15 nor less than 10
days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such special record date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the special record date
therefor to be mailed, first class postage prepaid, to each Debentureholder
at his or her address as it appears in the Debenture Register, not less
than 10 days prior to such special record date. Notice of the proposed
payment of such Defaulted Interest and the special record date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to
the persons in whose names such Debentures (or their Predecessor
Debentures) are registered on such special record date and shall be no
longer payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Unless otherwise set forth in a or pursuant to Board Resolution or one
or more indentures supplemental hereto establishing the terms of any series of
Debentures pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Debentures with respect to any
Interest Payment Date for such series shall mean either the fifteenth day of the
month immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall occur, if such
Interest
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Payment Date is the first day of a month, or the last day of the month
immediately preceding the month in which an Interest Payment Date established
for such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the fifteenth day of a month, whether or not such date is a
business day.
Subject to the foregoing provisions of this Section, each Debenture of
a series delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debenture of such series shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Debenture.
SECTION 2.04. Execution of Debentures.
--------------------------
The Debentures shall, subject to the provisions of Section 2.06, be
printed on steel engraved borders or fully or partially engraved, or legibly
typed, as the proper officers of the Company may determine, and shall be signed
on behalf of the Company by its President or any Vice President and by its
Treasurer, Controller or Secretary or an Assistant Treasurer or Assistant
Secretary, under its corporate seal or a facsimile thereof reproduced thereon.
The signature of any of these officers on the Debentures may be manual or
facsimile. The seal of the Company may be in the form of a facsimile of the
seal of the Company and may be impressed, affixed, imprinted or otherwise
reproduced on the Debentures.
Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures and did not
hold such offices at the date of such Debentures.
Only such Debentures as shall bear thereon a Certificate of
Authentication substantially in the form established for such Debentures,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Debentures, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate executed by the Trustee, or by any Authenticating Agent appointed by
the Trustee with respect to such Debentures, upon any Debenture executed by the
Company
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shall be conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures of any series executed by the
Company to the Trustee for authentication, together with a written order of the
Company for the authentication and delivery of such Debentures, signed by its
President or any Vice President and by its Treasurer, Controller or Secretary or
any Assistant Treasurer or Assistant Secretary, and the Trustee in accordance
with such written order shall authenticate and make available such Debentures.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and
terms thereof have been established in conformity with the provisions of this
Indenture.
The Trustee shall not be required to authenticate such Debentures if
the issue of such Debentures pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Debentures and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Debentures.
--------------------------------------------------
In case any temporary or definitive Debenture shall become mutilated
or be destroyed, lost or stolen, the Company (subject to the next succeeding
sentence) shall execute, and upon its request the Trustee (subject as aforesaid)
shall authenticate and deliver, a new Debenture of the same series bearing a
number not contemporaneously Outstanding, in exchange and substitution for the
mutilated Debenture, or in lieu of and in substitution for the Debenture so
destroyed, lost or stolen. In every case the applicant for a substituted
Debenture shall furnish to the Company and to the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and to the Trustee evidence to their satisfaction of the
destruction, loss or
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theft of the applicant's Debenture and of the ownership thereof. The Trustee may
authenticate any such substituted Debenture and deliver the same upon the
written request or authorization of any officer of the Company. Upon the
issuance of any substituted Debenture, the Company may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. In case any Debenture which has matured or is
about to mature shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Debenture, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
Debenture) if the applicant for such payment shall furnish to the Company and to
the Trustee such security or indemnity as they may require to save them
harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Debenture and of the ownership thereof.
Every Debenture issued pursuant to the provisions of this Section in
substitution for any Debenture which is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Debenture shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debentures of
the same series duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.06. Temporary Debentures.
-----------------------
Pending the preparation of definitive Debentures of any series, the
Company may execute, and the Trustee shall authenticate and deliver, temporary
Debentures (printed, lithographed or typewritten) of any authorized
denomination, and substantially in the form of the definitive Debentures in
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lieu of which they are issued, but with such omissions, insertions and
variations as may be appropriate for temporary Debentures, all as may be
determined by the Company. Every temporary Debenture of any series shall be
executed by the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the
definitive Debentures of such series. Without unnecessary delay the Company will
execute and will furnish definitive Debentures of such series and thereupon any
or all temporary Debentures of such series may be surrendered in exchange
therefor (without charge to the holders), at the office or agency of the Company
designated for the purpose in a Place of Payment for that series, and the
Trustee shall authenticate and such office or agency shall deliver in exchange
for such temporary Debentures an equal aggregate principal amount of definitive
Debentures of such series, unless the Company advises the Trustee to the effect
that definitive Debentures need not be executed and furnished until further
notice from the Company. Until so exchanged, the temporary Debentures of such
series shall be entitled to the same benefits under this Indenture as definitive
Debentures of such series authenticated and delivered hereunder.
SECTION 2.07. Exchange of Debentures.
----------------------
(a) Debentures of any series may be exchanged upon presentation
thereof at the office or agency of the Company in a Place of Payment for that
series, for other Debentures of such series of authorized denominations, and for
a like aggregate principal amount, upon payment of a sum sufficient to cover any
tax or other governmental charge in relation thereto, all as provided in this
Section. In respect of any Debentures so surrendered for exchange, the Company
shall execute, the Trustee shall authenticate and such office or agency shall
deliver in exchange therefor the Debenture or Debentures of the same series
which the Debentureholder making the exchange shall be entitled to receive,
bearing numbers not contemporaneously Outstanding.
(b) The Company shall keep, or cause to be kept, at the Corporate
Trust Office of the Trustee, or such other location designated by the Company in
the Place of Payment, a register or registers (the "Debenture Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall register the Debentures and the transfers of
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Debentures as in this Article provided and which at all reasonable times shall
be open for inspection by the Trustee. Unless otherwise provided by Board
Resolution for a series of Debentures, the Trustee is hereby appointed as the
registrar for the purpose of registering Debentures and transferring Debentures
as herein provided (the "Debenture Registrar").
Upon surrender for transfer of any Debenture at the Corporate Trust
Office of the Trustee or such other location designated by the Company, the
Company shall execute, the Trustee shall authenticate and such office or agency
shall make available for delivery in the name of the transferee or transferees a
new Debenture or Debentures of the same series as the Debenture presented for a
like aggregate principal amount.
All Debentures presented or surrendered for exchange or registration
of transfer, as provided in this Section, shall be accompanied (if so required
by the Company or the Debenture Registrar) by a written instrument or
instruments of transfer, in form satisfactory to the Company or the Debenture
Registrar, duly executed by the registered holder or by his duly authorized
attorney in writing.
(c) No service charge shall be made for any exchange or registration
of transfer of Debentures, or issue of new Debentures in case of partial
redemption of any series, but the Company or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge in relation
thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and
Section 9.04 not involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Debentures during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
less than all the Outstanding Debentures of the same series and ending at the
close of business on the day of such mailing, nor (ii)to register the transfer
of or exchange any Debentures of any series or portions thereof called for
redemption. The provisions of this Section 2.07 are, with respect to any Global
Debenture, subject to Section 2.11 hereof.
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SECTION 2.08. Cancellation.
---------------
All Debentures surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any
paying agent, be delivered to the Trustee for cancellation, or, if surrendered
to the Trustee, shall be canceled by it, and no Debentures shall be issued in
lieu thereof except as expressly required or permitted by any of the provisions
of this Indenture. On request of the Company, the Trustee shall deliver to the
Company canceled Debentures held by the Trustee. In the absence of such request
the Trustee may dispose of canceled Debentures in accordance with its standard
procedures and deliver a certificate of disposition to the Company. If the
Company shall otherwise acquire any of the Debentures, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Debentures unless and until the same are delivered to the
Trustee for cancellation.
SECTION 2.09. Beneficiaries.
---------------
Nothing in this Indenture or in the Debentures, express or implied,
shall give or be construed to give to any person, firm or corporation, other
than the parties hereto and the holders of the Debentures, any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under
any covenant, condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties hereto and
of the holders of the Debentures.
SECTION 2.10. Appointment of Authenticating Agent.
--------------------------------------
So long as any of the Debentures of any series remain Outstanding
there may be an Authenticating Agent for any or all such series of Debentures
which the Trustee shall have the right to appoint. Said Authenticating Agent
shall be authorized to act on behalf of the Trustee to authenticate Debentures
of such series issued upon exchange, transfer or partial redemption thereof, and
Debentures so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. All references in this Indenture to the authentication of
Debentures by the Trustee shall be deemed to include authentication by an
Authenticating Agent for such series except for authentication upon original
issuance or
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pursuant to Section 2.05 hereof. Each Authenticating Agent shall be acceptable
to the Company and shall be a corporation which has a combined capital and
surplus, as most recently reported or determined by it, sufficient under the
laws of any jurisdiction under which it is organized or in which it is doing
business to conduct a trust business, and which is otherwise authorized under
such laws to conduct such business and is subject to supervision or examination
by Federal or State authorities. If at any time any Authenticating Agent shall
cease to be eligible in accordance with these provisions, it shall resign
immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. Global Debenture.
----------------
(a) If the Company shall establish pursuant to Section 2.01 that the
Debentures of a particular series are to be issued in whole as one or more
Global Debentures, then the Company shall execute and the Trustee shall, in
accordance with Section 2.04, authenticate and deliver, one or more Global
Debentures which (i)shall represent, and shall be denominated in an aggregate
amount equal to the aggregate principal amount of, all of the Outstanding
Debentures of such series, (ii)shall be registered in the name of the Depository
or its nominee, (iii)shall be delivered by the Trustee to the Depository or
pursuant to the Depository's instruction and (iv)shall bear a legend
substantially to the following effect: "Except as otherwise provided in Section
2.11 of the Indenture, this Debenture may be transferred, in whole but not in
part, only to another nominee of the Depository or to a successor Depository or
to a nominee of such successor Depository."
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(b) Notwithstanding the provisions of Section 2.07, unless and until
it is exchanged in whole or in part for Debentures in definitive registered
form the Global Debenture or Debentures of a series may be transferred, in whole
but not in part and in the manner provided in Section 2.07, only to another
nominee of the Depository for such series, or to a successor Depository for such
series selected or approved by the Company or to a nominee of such successor
Depository.
(c) If at any time the Depository for a series of Debentures notifies
the Company that it is unwilling or unable to continue as Depository for such
series or if at any time the Depository for such series shall no longer be
registered or in good standing under the Exchange Act, or other applicable
statute or regulation and a successor Depository for such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, this Section 2.11 shall
no longer be applicable to the Debentures of such series and the Company will
execute, and subject to Section 2.07, the Trustee will authenticate and deliver
Debentures of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debentures of such series in exchange for such
Global Debenture. In addition, the Company may at any time determine that the
Debentures of any series shall no longer be represented by one or more Global
Debentures and that the provisions of this Section 2.11 shall no longer apply to
the Debentures of such series. In such event the Company will execute and
subject to Section 2.07, the Trustee, upon receipt of an Officer's Certificate
evidencing such determination by the Company, will authenticate and make
available for delivery Debentures of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debentures of such series in
exchange for such Global Debentures. Upon the exchange of the Global Debentures
for such Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debentures shall be canceled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Debentures pursuant to this Section 2.11(c) shall be registered in such names
and in such authorized denominations as the Depository, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Debentures to the Depository for
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delivery to the persons in whose names such Debentures are so registered.
SECTION 2.12. CUSIP Numbers.
--------------
The Company in issuing the Debentures may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Debentureholders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE THREE
Redemption of Debentures and
Sinking Fund Provisions
SECTION 3.01. Redemption of Debentures.
---------------------------
The Company may redeem the Debentures of any series issued hereunder
on and after the dates and in accordance with the terms established for such
series pursuant to Section 2.01 hereof.
SECTION 3.02. Notice of Redemption; Selection by Trustee of
Debentures to be Redeemed.
--------------------------
(a) In case the Company shall desire to exercise such right to redeem
all or, as the case may be, a portion of the Debentures of any series in
accordance with the right reserved so to do, it shall give notice of such
redemption to holders of the Debentures of such series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less than
30 days and not more than 60 days before the date fixed for redemption of that
series to such holders at their last addresses as they shall appear upon the
Debenture Register. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
registered holder receives the
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notice. In any case, failure duly to give such notice to the holder of any
Debenture of any series designated for redemption in whole or in part, or any
defect in the notice, shall not affect the validity of the proceedings for the
redemption of any other Debentures of such series or any other series. In the
case of any redemption of Debentures prior to the expiration of any restriction
on such redemption provided in the terms of such Debentures or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officer's Certificate
evidencing compliance with any such restriction.
Each such notice of redemption shall identify the Debentures to be
redeemed (including "CUSIP" numbers) and shall specify the date fixed for
redemption and the redemption price at which Debentures of that series are to be
redeemed, and shall state the place or places where such Debentures are to be
presented and surrendered for payment of the redemption price of such Debentures
to be redeemed, that interest accrued to the date fixed for redemption will be
paid as specified in said notice, that from and after said date interest will
cease to accrue and that the redemption is for a sinking fund, if such is the
case. If less than all the Debentures of a series are to be redeemed, the
notice to the holders of Debentures of that series to be redeemed in whole or in
part shall specify the particular Debentures to be so redeemed. In case any
Debenture is to be redeemed in part only, the notice which relates to such
Debenture shall state the portion of the principal amount thereof to be
redeemed, and shall state that on and after the redemption date, upon surrender
of such Debenture, a new Debenture or Debentures of such series in principal
amount equal to the unredeemed portion thereof will be issued.
(b) If the Debentures of a series are to be redeemed, the Company
shall give the Trustee at least 45 days' notice in advance of the date fixed for
redemption as to the aggregate principal amount of Debentures of the series to
be redeemed, and thereupon the Trustee shall select, by lot or in such other
manner as it shall deem appropriate and fair in its discretion and which may
provide for the selection of a portion or portions (equal to $25 or any
integral multiple thereof) of the principal amount of such Debentures of a
denomination larger than $25, the Debentures to be redeemed and shall
thereafter promptly notify the Company in writing of the numbers of the
Debentures to be redeemed, in whole or in part.
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The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President, any Vice President or its
Treasurer, Controller or Secretary, instruct the Trustee or any paying agent to
call all or any part of the Debentures of a particular series for redemption and
to give notice of redemption in the manner set forth in this Section, such
notice to be in the name of the Company or its own name as the Trustee or such
paying agent may deem advisable. In any case in which notice of redemption is
to be given by the Trustee or any such paying agent, the Company shall deliver
or cause to be delivered to, or permit to remain with, the Trustee or such
paying agent, as the case may be, such Debenture Register, transfer books or
other records, or suitable copies or extracts therefrom, sufficient to enable
the Trustee or such paying agent to give any notice by mail that may be required
under the provisions of this Section.
SECTION 3.03. Debentures Payable on Redemption Date;
Debentures Redeemed in Part.
---------------------------------------
(a) If the giving of notice of redemption shall have been completed as
above provided, the Debentures or portions of Debentures of the series to be
redeemed specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption and interest on such
Debentures or portions of Debentures shall cease to accrue on and after the date
fixed for redemption, unless the Company shall default in the payment of such
redemption price and accrued interest with respect to any such Debenture or
portion thereof. On presentation and surrender of such Debentures on or after
the date fixed for redemption at the place of payment specified in the notice,
said Debentures shall be paid and redeemed at the applicable redemption price
for such series, together with interest accrued thereon to the date fixed for
redemption (but if the date fixed for redemption is an interest payment date,
the interest installment payable on such date shall be payable to the registered
holder at the close of business on the applicable record date pursuant to
Section 2.03).
(b) Upon presentation of any Debenture of such series which is to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Debenture is presented shall
make available
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for delivery to the holder thereof, at the expense of the Company, a new
Debenture or Debentures of the same series, of authorized denominations in
principal amount equal to the unredeemed portion of the Debenture so presented.
SECTION 3.04. Sinking Fund for Debentures.
-----------------------------
The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to
any sinking fund for the retirement of Debentures of a series, except as
otherwise specified as contemplated by Section 2.01 for Debentures of such
series.
The minimum amount of any sinking fund payment provided for by the
terms of Debentures of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Debentures of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Debentures for any
series, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 3.05. Each sinking fund payment shall be applied to the
redemption of Debentures of any series as provided for by the terms of
Debentures of such series.
SECTION 3.05. Satisfaction of Sinking Fund Payments With
Debentures.
-------------------------------------------
The Company (i)may deliver Outstanding Debentures of a series (other
than any previously called for redemption) and (ii)may apply as a credit
Debentures of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Debentures or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Debentures, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Debentures of such series required to be made
pursuant to the terms of such Debentures as provided for by the terms of such
series; provided that such Debentures have not been previously so credited.
Such Debentures shall be received and credited for such purpose by the Trustee
at the redemption price specified in such Debentures for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
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SECTION 3.06. Redemption of Debentures for Sinking Fund.
--------------------------------------------
Not less than 45 days prior to each sinking fund payment date for any
series of Debentures, the Company will deliver to the Trustee an Officer's
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms for that series, the portion thereof, if any,
which is to be satisfied by delivering and crediting Debentures of that series
pursuant to Section 3.05 and the basis for such credit and will, together with
such Officer's Certificate, deliver to the Trustee any Debentures to be so
delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Debentures to be redeemed upon such sinking fund
payment date in the manner specified in Section 3.02 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 3.02. Such notice having been duly given, the
redemption of such Debentures shall be made upon the terms and in the manner
stated in Section 3.03.
ARTICLE FOUR
Particular Covenants of the Company
The Company covenants and agrees for each series of the Debentures as
follows:
SECTION 4.01. Payment of Principal, Premium and Interest.
---------------------------------------------
The Company will duly and punctually pay or cause to be paid the
principal of (and premium, if any) and interest on the Debentures of that series
at the time and place and in the manner provided herein and established with
respect to such Debentures.
SECTION 4.02. Maintenance of Office or Agency.
----------------------------------
So long as any series of the Debentures remain Outstanding, the
Company agrees to maintain an office or agency in the Borough of Manhattan, the
City and State of New York, with respect to each such series and at such other
location or locations as may be designated as provided in this Section 4.02,
where (i)Debentures of that series may be presented for
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payment, (ii)Debentures of that series may be presented as hereinabove
authorized for registration of transfer and exchange, and (iii)notices and
demands to or upon the Company in respect of the Debentures of that series and
this Indenture may be given or served, such designation to continue with respect
to such office or agency until the Company shall, by written notice signed by
its President, any Vice President or its Treasurer, Controller or Secretary and
delivered to the Trustee, designate some other office or agency for such
purposes or any of them. So long as any series of the Debentures remain
Outstanding, such presentations, notices and demands may also be made or served
at the Corporate Trust Office of the Trustee, and the Company hereby appoints
the Trustee as its agent to receive all such presentations, notices and demands.
Notwithstanding anything else contained in this Indenture, payment of interest,
if any, on Debentures that are not registered to a Hawaiian Electric Industries
Capital Trust or the Partnership may be made at the option of the Company by
check mailed to the address of the Person entitled thereto as it appears on the
Debenture Register or by wire transfer to an account appropriately designated by
the Person entitled thereto as it appears on the Debenture Register.
SECTION 4.03. Paying Agent; Money for Debenture Payment to be
Held in Trust.
------------------------------------------------
(a) If the Company shall appoint one or more paying agents for all or
any series of the Debentures, other than the Trustee, the Company will cause
each such paying agency to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the provisions of this
Section:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of (and premium, if any) or interest on the
Debentures of that series (whether such sums have been paid to it by the
Company or by any other obligor of such Debentures) in trust for the
benefit of the persons entitled thereto;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor of such Debentures) to make any payment of
the principal of (and premium, if any) or interest on the Debentures of
that series when the same shall be due and payable;
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(3) that it will, at any time during the continuance of any failure
referred to in the preceding paragraph (a)(2) above, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to
any series of the Debentures, it will on or before each due date of the
principal of (and premium, if any) or interest on Debentures of that series, set
aside, segregate and hold in trust for the benefit of the persons entitled
thereto a sum sufficient to pay such principal (and premium, if any) or interest
so becoming due on Debentures of that series until such sums shall be paid to
such persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of such action, or any failure (by it or any other obligor on
such Debentures) to take such action. Whenever the Company shall have one or
more paying agents for any series of Debentures, it will, prior to each due date
of the principal of (and premium, if any) or interest on any Debentures of that
series, deposit with the paying agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the persons entitled to such principal, premium or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
(c) Anything in this Section to the contrary notwithstanding, (i)the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.05, and (ii)the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for any
other purpose, pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions as those upon which such sums were
held by the Company or such paying agent; and, upon such payment by any paying
agent to the Trustee, such paying agent shall be released from all further
liability with respect to such money.
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SECTION 4.04. Appointment to Fill Vacancy.
---------------------------
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 7.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 4.05. Payment of Additional Interest.
------------------------------
If, at any time while the Property Trustee is a Debentureholder of any
Debentures issued to a Hawaiian Electric Industries Capital Trust or the
Property Trustee is a holder of Partnership Preferred Securities in the
Partnership which in turn is a Debentureholder of any Debentures, such Trust,
the Property Trustee or the Partnership shall be required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes or taxes or charges imposed by reason of the transfer of the
Trust Preferred Securities or beneficial interests therein) imposed by the
United States, or any other taxing authority, then, in any such case, the
Company shall promptly pay as additional interest (the "Additional Interest") on
the Debentures held by the Property Trustee or the Partnership, such additional
amounts as shall be required so that the net amounts received and retained by
such Trust and by the Property Trustee, or by the Partnership, whichever the
case may be, after paying any such taxes, duties, assessments or other
governmental charges will be equal to the amounts such Trust and the Property
Trustee, or the Partnership, as the case may be, would have received had no such
taxes, duties, assessments or other governmental charges been imposed.
SECTION 4.06. Maintenance of the Hawaiian Electric Industries
Capital Trust and the Partnership.
---------------------------------
In the event any Debentures are issued to a Hawaiian Electric
Industries Capital Trust, or a Trustee of such a Trust, or to the Partnership in
connection with the issuance of Trust Preferred Securities of a Hawaiian
Electric Industries Capital Trust or Partnership Preferred Securities of the
Partnership, for so long as such Trust Preferred Securities or such Partnership
Preferred Securities remain Outstanding, the Company will covenant (i) to
directly or indirectly maintain 100 percent ownership of the Trust Common
Securities of such Trust; provided, however, that any permitted successor of the
Company under this Indenture may succeed to the Company's ownership of such
Trust Common
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Securities, (ii) to use its reasonable efforts to cause such Trust (a) to remain
a statutory business trust, except in connection with the distribution of the
Debentures to the holders of Trust Preferred Securities and Trust Common
Securities in liquidation of such Trust, the redemption of all of the Trust
Preferred Securities and Trust Common Securities of such Trust, or the mergers,
consolidations or amalgamations, each as permitted by the Trust Agreement of
such Trust, and (b) to otherwise continue not to be treated as an association
taxable as a corporation or a partnership for United States federal income tax
purposes, and (iii) to use its reasonable efforts to cause each holder of Trust
Common Securities and Trust Preferred Securities to be treated as owning an
undivided beneficial interest in the Debentures.
ARTICLE FIVE
Debentureholders' Lists and
Reports by the Company and the Trustee
SECTION 5.01. Company to Furnish Trustee Names and Addresses
of Debentureholders.
-----------------------------------------------
The Company shall furnish or cause to be furnished to the Trustee (a)
semiannually, not later than June 1 and December 1 in each year, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
holders of each series of Debentures as of such regular record date and such a
list shall not be furnished to the Trustee at intervals of more than six months,
provided, that the Company shall not be obligated to furnish or cause to furnish
such list at any time that the list shall not differ in any respect from the
most recent list furnished to the Trustee by the Company and (b)at such other
times as the Trustee may request in writing within 30 days after the receipt by
the Company of any such request, a list of similar form and content as of a date
not more than 15 days prior to the time such list is furnished; provided,
however, no such list need be furnished for any series for which the Trustee
shall be the Debenture Registrar.
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SECTION 5.02. Preservation of Information; Communications to
Holders.
-----------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debentures contained in the most recent list furnished to it as provided in
Section 5.01 and as to the names and addresses of holders of Debentures received
by the Trustee in its capacity as Debenture Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Debentures of a series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Debenture for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Debentures of such series or holders of all
Debentures with respect to their rights under this Indenture or under such
Debentures, and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall
within five business days after the receipt of such application, at its
election, either:
(1) afford to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a)
of this Section 5.02; or
(2) inform such applicants as to the approximate number of holders
of Debentures of such series or of all Debentures, as the case may be,
whose names and addresses appear in the information preserved at the time
by the Trustee, in accordance with the provisions of subsection (a) of this
Section 5.02, and as to the approximate cost of mailing to such
Debentureholders the form of proxy or other communication, if any,
specified in such application.
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(d) If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of such series or of all Debentures, as the case
may be, whose name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of subsection (a) of this
Section 5.02, a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission (the "Commission"), together with a copy of
the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interests of
the holders of Debentures of such series or of all Debentures, as the case may
be, or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all such Debentureholders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise, the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(e) Each and every holder of the Debentures, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any paying agent nor any Debenture Registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Debentures in accordance with the provisions of
subsection (b) of this Section, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said subsection
(b).
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SECTION 5.03. Reports by Company.
--------------------
(a) The Company covenants and agrees to file with the Trustee, within
15 days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act, in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations. Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable overnight delivery service which provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to subsections (a) and (b) of this Section
as may be required by rules and regulations prescribed from time to time by the
Commission.
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(d) The Company covenants and agrees to furnish to the Trustee, within
120 days after the end of each fiscal year of the Company for each fiscal year
in which any of the Debentures are Outstanding, or on or before such other day
in each calendar year as the Company and the Trustee may from time to time agree
upon, a Certificate as to the signing officer's best knowledge of the Company's
compliance with the conditions and covenants under this Indenture requiring
compliance by the Company. For purposes of this subsection (d), such compliance
shall be determined without regard to any period of grace or requirement of
notice provided under this Indenture.
SECTION 5.04. Reports by Trustee.
---------------------
(a) Within 60 days after August 15 of each year in which any of the
Debentures are Outstanding, the Trustee shall transmit by mail, first class
postage prepaid, to the Debentureholders, as their names and addresses appear
upon the Debenture Register, a brief report with respect to any of the following
events which may have occurred within the previous twelve months (but if no such
event has occurred within such period no report need be transmitted):
(1) any change to its eligibility under Section 7.09, and its
qualifications under Section 7.08;
(2) the creation of or any material change to a relationship
specified in paragraphs (1) through (10) of subsection (c) of Section 7.08;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Debentures, on any property or funds held or collected
by it as Trustee if such advances so remaining unpaid aggregate more than
1/2 of 1% of the principal amount of the Debentures Outstanding on the date
of such report;
(4) the amount, interest rate, and maturity date of all other
indebtedness owing by the Company, or by any other obligor on the
Debentures, to the Trustee in its
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individual capacity, on the date of such report, with a brief description
of any property held as collateral security therefor, except any
indebtedness based upon a creditor relationship arising in any manner
described in paragraph (2), (3), (4), or (6) of subsection (b) of Section
7.13;
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any change to any release, or release and substitution, of
property, if any, subject to the lien of this Indenture (and the
consideration thereof, if any) which it has not previously reported;
(7) any additional issue of Debentures which the Trustee has not
previously reported; and
(8) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in its
opinion materially affects the Debentures or the Debentures of any series,
except any action in respect of a default, notice of which has been or is
to be withheld by it in accordance with the provisions of Section 6.07.
(b) The Trustee shall transmit by mail, first class postage prepaid,
to the Debentureholders, as their names and addresses appear upon the Debenture
Register, a brief report with respect to the character and amount of any
advances (and if the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee as such since the date of the last
report transmitted pursuant to the provisions of subsection (a) of this Section
(or if no such report has yet been so transmitted, since the date of execution
of this Indenture), for the reimbursement of which it claims or may claim a lien
or charge prior to that of the Debentures of any series on property or funds
held or collected by it as Trustee, and which it has not previously reported
pursuant to this subsection if such advances remaining unpaid at any time
aggregate more than 10% of the principal amount of Debentures of such series
Outstanding at such time, such report to be transmitted within 90 days after
such time.
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(c) A copy of each such report shall, at the time of such transmission
to Debentureholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Debentures are listed (if so listed) and also with the
Commission. The Company agrees to promptly notify the Trustee when any
Debentures become listed on any stock exchange.
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default
SECTION 6.01. Events of Default.
------------------
(a) Whenever used herein with respect to Debentures of a particular
series, "Event of Default" means any one or more of the following events which
has occurred and is continuing:
(1) default in the payment of any installment of interest, including
any Additional Interest in respect thereon, upon any of the Debentures of
that series, as and when the same shall become due and payable, and
continuance of such default for a period of 30 days; provided, however,
that a valid extension of an interest payment period by the Company shall
not constitute a default in the payment of interest for this purpose;
(2) default in the payment of the principal of (or premium, if any,
on) any of the Debentures of that series as and when the same shall become
due and payable whether at maturity, upon redemption, by declaration or
otherwise, provided, however, that a valid extension of the maturity of
such Debentures shall not constitute a default for that purpose;
(3) default in the performance by the Company of any other of the
covenants or agreements on the part of the Company with respect to that
series contained in such Debentures or otherwise established with respect
to that series of Debentures pursuant to Section 2.01 hereof or contained
in this Indenture (other than a covenant or agreement which has been
expressly included in this Indenture solely for the benefit of one or more
series of
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Debentures other than such series), and the continuance of such
default for a period of 90 days after the date on which written notice of
such default, requiring the same to be remedied and stating that such
notice is a "Notice of Default" hereunder, shall have been given to the
Company by the Trustee, by registered or certified mail, or to the Company
and the Trustee by the holders of at least 25% in aggregate principal
amount of the Debentures of that series at the time Outstanding;
(4) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company as bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation or
reorganization of the Company under the Federal Bankruptcy Code or any
other similar applicable Federal or State law, and such decree or order
shall have continued unvacated and unstayed for a period of 90 days; or an
involuntary case shall be commenced under such Code in respect of the
Company and shall continue undismissed for a period of 90 days or an order
for relief in such case shall have been entered; or a decree or order of a
court having jurisdiction in the premises shall have been entered for the
appointment on the ground of insolvency or bankruptcy of a receiver or
custodian or liquidator or trustee or assignee in bankruptcy or insolvency
of the Company or of its property, or for the winding up or liquidation of
its affairs, and such decree or order shall have remained in force
unvacated and unstayed for a period of 90 days;
(5) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent
seeking liquidation or reorganization under the Federal Bankruptcy Code or
any other similar applicable Federal or State law, or shall consent to the
filing of any such petition, or shall consent to the appointment on the
ground of insolvency or bankruptcy of a receiver or custodian or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of its
property, or shall make an assignment for the benefit of creditors; or
(6) in the event the Debentures are issued to a Hawaiian Electric
Industries Capital Trust, a Property Trustee or to the
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Partnership, in connection with the issuance of Trust Preferred Securities
by such Trust, the voluntary or involuntary dissolution, winding-up or
termination of such Trust, except in connection with the distribution of
the Debentures to the holders of the Trust Preferred Securities and the
Trust Common Securities in liquidation of such Trust, the redemption of all
of the Trust Preferred Securities of such Trust, or the mergers,
consolidations or amalgamations, each as permitted by the Trust Agreement
of such Trust.
(b) If an Event of Default with respect to the Debentures of any
series at the time Outstanding occurs and is continuing, then, unless the
principal of all the Debentures of that series shall have already become due and
payable, either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Debentures of that series then Outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by such
Debentureholders), may declare the principal of all the Debentures of that
series to be due and payable immediately, and upon any such declaration the same
shall become and shall be immediately due and payable, anything contained in
this Indenture or in the Debentures of that series or established with respect
to that series pursuant to Section 2.01 hereof to the contrary notwithstanding
except for subsection (c) of this Section.
(c) Section 6.01(b), however, is subject to the condition that if, at
any time after the principal of the Debentures of that series shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Debentures of that series and the
principal of (and premium, if any, on) any and all Debentures of that series
which shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at the
rate per annum expressed in the Debentures of that series to the date of such
payment or deposit) and the amount payable to the Trustee under Section 7.06,
and any and all defaults under the Indenture, other than the nonpayment of
principal on Debentures of that series which shall not have
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become due by their terms, shall have been remedied or waived as provided in
Section 6.06 then and in every such case the holders of a majority in aggregate
principal amount of the Debentures of that series then Outstanding (subject to,
in the case of any series of Debentures held as trust assets of a Hawaiian
Electric Industries Capital Trust or as partnership assets of the Partnership
and with respect to which a Security Exchange has not theretofore occurred, such
consent of the holders of the Trust Preferred Securities and the Trust Common
Securities of such Hawaiian Electric Industries Capital Trust as may be required
under the Trust Agreement of such Hawaiian Electric Industries Capital Trust),
by written notice to the Company and to the Trustee, may rescind and annul such
declaration and its consequences with respect to that series of Debentures; but
no such rescission and annulment shall extend to or shall affect any subsequent
default, or shall impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of that series under this Indenture and such proceedings
shall have been discontinued or abandoned because of such rescission or
annulment or for any other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
(e) If, prior to a Security Exchange with respect to the Debentures of
any series, an Event of Default with respect to the Debentures of such series
shall have occurred, the Company expressly acknowledges that under the
circumstances set forth in the applicable Trust Agreement, any holder of Trust
Preferred Securities of the applicable Hawaiian Electric Industries Capital
Trust may enforce directly against the Company the applicable Property Trustee's
rights hereunder. In furtherance of the foregoing and for the avoidance of any
doubt, the Company acknowledges that, under the circumstances described in the
applicable Trust Agreement, any such holder of Trust Preferred Securities, in
its own name, in the name of the applicable Hawaiian Electric Industries Capital
Trust or in the name of the holders of the Trust Preferred Securities issued by
such Hawaiian Electric Industries Capital Trust, may institute or cause to be
instituted a proceeding, including, without
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limitation, any suit in equity, an action at law or other judicial or
administrative proceeding, to enforce the applicable Property Trustee's rights
hereunder directly against the Company as issuer of the applicable series of
Debentures, and may prosecute such proceeding to judgment or final decree, and
enforce the same against the Company.
SECTION 6.02. Acceleration of Maturity.
---------------------------
(a) The Company covenants that (1) in case default shall be made in
the payment of any installment of interest on any of the Debentures of a series,
or any payment required by any sinking or analogous fund established with
respect to that series as and when the same shall have become due and payable,
and such default shall have continued for a period of 30 days, or (2) in case
default shall be made in the payment of the principal of (or premium, if any,
on) any of the Debentures of a series when the same shall have become due and
payable, whether upon maturity of the Debentures of a series or upon redemption
or upon declaration or otherwise, then, upon demand of the Trustee, the Company
will pay to the Trustee, for the benefit of the holders of the Debentures of
that series, the whole amount that then shall have become due and payable on all
such Debentures for principal (and premium, if any) or interest, or both, as the
case may be, with interest upon the overdue principal (and premium, if any) and
(to the extent that payment of such interest is enforceable under applicable law
and without duplication of any other amounts paid by the Company or the
applicable Hawaiian Electric Industries Capital Trust in respect thereof) upon
overdue installments of interest at the rate per annum expressed in the
Debentures of that series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and the
amount payable to the Trustee under Section 7.06.
(b) In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law or
in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company or other obligor upon the
Debentures of that series and collect in the manner provided by law out of the
property of
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the Company or other obligor upon the Debentures of that series wherever
situated the moneys adjudged or decreed to be payable.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or other judicial
proceedings affecting the Company, any other obligor on such Debentures, or the
creditors or property of either, the Trustee shall have the power to intervene
in such proceedings and take any action therein that may be permitted by the
court and shall (except as may be otherwise provided by law) be entitled to file
such proofs of claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of the holders of
Debentures of such series allowed for the entire amount due and payable by the
Company or such other obligor under the Indenture at the date of institution of
such proceedings and for any additional amount which may become due and payable
by the Company or such other obligor after such date, and to collect and receive
any moneys or other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to the Trustee
under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Debentures of such
series to make such payments to the Trustee, and, in the event that the Trustee
shall consent to the making of such payments directly to such Debentureholders,
to pay to the Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this Indenture,
or under any of the terms established with respect to Debentures of that series,
may be enforced by the Trustee without the possession of any of such Debentures,
or the production thereof at any trial or other proceeding relative thereto, and
any such suit or proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall,
after provision for payment to the Trustee of any amounts due under Section
7.06, be for the ratable benefit of the holders of the Debentures of such
series.
In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect
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and enforce any of such rights, either at law or in equity or in bankruptcy or
otherwise, whether for the specific enforcement of any covenant or agreement
contained in the Indenture or in aid of the exercise of any power granted in
this Indenture, or to enforce any other legal or equitable right vested in the
Trustee by this Indenture or by law.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Debentureholder in any such
proceeding.
SECTION 6.03. Application of Moneys Collected.
----------------------------------
Any moneys collected by the Trustee pursuant to Section 6.02 with
respect to a particular series of Debentures shall be applied in the order
following, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal (or premium, if any) or
interest, upon presentation of the several Debentures of that series, and
stamping thereon the payment, if only partially paid, and upon surrender thereof
if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.06; and
SECOND: To the payment of the amounts then due and unpaid upon
Debentures of such series for principal (and premium, if any) and interest, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Debentures for principal (and premium, if any) and
interest, respectively.
SECTION 6.04. Limitation on Suits; Unconditional Right of
Debentureholders to Institute Certain Suits.
----------------------------------------------
No holder of any Debenture of any series shall have any right by
virtue or by availing of any provision of this Indenture to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Indenture or
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for the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(a) such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof with respect to
Debentures of such series specifying such Event of Default, as hereinbefore
provided;
(b) the holders of not less than 25% in aggregate principal amount of
the Debentures of such series then Outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
trustee hereunder;
(c) such holder or holders have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity, shall have failed to institute any such action, suit or
proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the holders of a majority in
principal amount of the Outstanding Debentures of that series;
it being understood and intended, and being expressly covenanted by the taker
and holder of every Debenture of such series with every other such taker and
holder and Trustee, that no one or more holders of Debentures of such series
shall have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the
holders of any other of such Debentures, or to obtain or seek to obtain priority
over or preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Debentures of such series. For the protection
and enforcement of the provisions of this Section, each and every
Debentureholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
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Notwithstanding any other provisions of this Indenture, however, the
right of any holder of any Debenture to receive payment of the principal of (and
premium, if any) and interest on such Debenture, as therein provided, on or
after the respective due dates expressed in such Debenture (or in the case of
redemption, on the redemption date) as the same may be extended, or to institute
suit for the enforcement of any such payment on or after such respective dates
or redemption date, shall not be impaired or affected without the consent of
such holder.
SECTION 6.05. Rights and Remedies Cumulative; Delay or
Omission Not A Waiver.
-------------------------------------------
(a) All powers and remedies given by this Article to the Trustee or to
the Debentureholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any others thereof or of any other powers and remedies
available to the Trustee or the holders of the debentures, by judicial
proceedings or otherwise, to enforce performance or observance of the covenants
and agreements contained in this Indenture or otherwise established with respect
to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of the
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or to the Debentureholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Debentureholders.
SECTION 6.06. Control by Debentureholders;
Waiver of Past Defaults.
------------------------------
The holders of a majority in aggregate principal amount of the
Debentures of any series at the time Outstanding, determined in accordance with
Section 8.04 (with, in the case of any series of Debentures held as trust assets
of a Hawaiian Electric Industries Capital Trust as to which a Security Exchange
has not theretofore occurred or as partnership assets of the Partnership, such
consent of holders of the Trust Preferred Securities and the Trust Common
Securities of such
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Hawaiian Electric Industries Capital Trust as may be required under the Trust
Agreement of such Hawaiian Electric Industries Capital Trust), shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee with respect to such series; provided that (1)such direction shall
not be in conflict with any rule of law or with this Indenture or unduly
prejudicial to the rights of holders of Debentures of any other series at the
time Outstanding determined in accordance with Section 8.04, and (2)the Trustee
may take any other action deemed proper by the Trustee which is not inconsistent
with such direction. Subject to the provisions of Section 7.01, the Trustee
shall have the right to decline to follow any such direction if the Trustee in
good faith shall, by a Responsible Officer or Officers of the Trustee, determine
that the proceeding so directed would involve the Trustee in personal liability.
The holders of a majority in aggregate principal amount of the Debentures of any
series at the time Outstanding affected thereby, determined in accordance with
Section 8.04 (with, in the case of any series of Debentures held as trust assets
of a Hawaiian Electric Industries Capital Trust or as partnership assets of the
Partnership and with respect to which a Security Exchange has not theretofore
occurred, such consent of holders of the Trust Preferred Securities and the
Trust Common Securities of such Hawaiian Electric Industries Capital Trust as
may be required under the Trust Agreement of such Hawaiian Electric Industries
Capital Trust), may on behalf of the holders of all of the Debentures of such
series waive any past default in the performance of any of the covenants
contained herein or established pursuant to Section 2.01 with respect to such
series and its consequences, except a default in the payment of the principal
of, or premium, if any, or interest on, any of the Debentures of that series as
and when the same shall become due by the terms of such Debentures otherwise
than by acceleration (unless such default has been cured and a sum sufficient to
pay all matured installments of interest and principal and any premium has been
deposited with the Trustee (in accordance with Section 6.01(c)) or a call for
redemption of Debentures of that series. Upon any such waiver, the default
covered thereby shall be deemed to be cured for all purposes of this Indenture
and the Company, the Trustee and the holders of the Debentures of such series
shall be restored to their former positions and rights hereunder, respectively;
but
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no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 6.07. Notice of Defaults.
---------------------
The Trustee shall, within 90 days after the occurrence of an Event of
Default with respect to a particular series, transmit by mail, first class
postage prepaid, to the holders of Debentures of that series, as their names and
addresses appear upon the Debenture Register, notice of all defaults with
respect to that series known to the Trustee, unless such defaults shall have
been cured before the giving of such notice (defaults in this context shall not
include any periods of grace provided for therein and shall be irrespective of
the giving of notice provided for by subsection (3) of Section 6.01(a));
provided, that, except in the case of default in the payment of the principal of
(or premium, if any) or interest on any of the Debentures of that series or in
the payment of any sinking fund installment established with respect to that
series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers, of the Trustee in good faith determine
that the withholding of such notice is in the interests of the holders of
Debentures of that series; provided further, that in the case of any default of
the character specified in Section 6.01(a)(3) with respect to Debentures of such
series no such notice to the holders of the Debentures of that series shall be
given until at least 30 days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any default,
except (i) a default under subsection (a)(1) or (a)(2) of Section 6.01 as long
as the Trustee is acting as paying agent for such series of Debentures or
(ii)any default as to which the Trustee shall have received written notice or a
Responsible Officer charged with the administration of this Indenture shall have
obtained written notice.
SECTION 6.08. Undertaking for Costs.
------------------------
All parties to this Indenture agree, and each holder of any Debentures
by his or her acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy
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under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders, holding more than 10% in aggregate principal amount of the
Outstanding Debentures of any series, or to any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture of such series, on or after the
respective due dates expressed in such Debenture or established pursuant to this
Indenture.
SECTION 6.09. Certain Additional Covenants.
-------------------------------
If (i) there shall have occurred any Event of Default relating to any
series of Debentures, (ii) the Company shall be in default with respect to its
payments of any obligations under a related Trust Guarantee or Partnership
Guarantee, or (iii) the Company shall have given notice of its election to defer
payments of interest on any series of Debentures by extending the interest
payment period as provided in and permitted by a supplemental indenture to this
Indenture, and such period, or any extension thereof, shall be continuing, then
(a) the Company shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (except for dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, its common stock and other than (x)purchases or acquisitions of shares of
the Company's common stock in connection with the satisfaction by the Company of
its obligations under any employee benefit dividend reinvestment, stock purchase
or other stock plans or any other contractual obligation of the Company (other
than a contractual obligation ranking pari passu with or junior to the
Debentures), (y)as a result of a reclassification of the Company's capital stock
or the exchange or conversion of one class or series of the Company's capital
stock for another class or series of the Company's capital stock, or (z)the
purchase of fractional
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interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock of the Company or the security being
converted or exchanged), (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company which rank pari passu with or junior to such
Debentures, provided that, if only the event referred to in clause (iii) above
(and not the events referred to in clause (i) or (ii) has occurred), this
restriction shall apply only to other series of Debentures or debt securities
with equivalent deferral options, and (c) the Company shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Trust Guarantee, Partnership Guarantee or any other guarantee by the Company
with respect to comparable securities).
ARTICLE SEVEN
Concerning the Trustee
SECTION 7.01. Certain Duties and Responsibilities.
--------------------------------------
(a) Except during the continuance of an Event of Default, the Trustee
undertakes to perform with respect to Debentures of such series such duties and
only such duties as are specifically set forth in this Indenture, and no implied
covenants shall be read into this Indenture against the Trustee. In case an
Event of Default with respect to Debentures of a series has occurred (which has
not been cured or waived), the Trustee shall exercise with respect to Debentures
of that series such rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with respect to
Debentures of a series and after the curing or waiving of all such Events
of Default with respect to that series which may have occurred:
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(i) the duties and obligations of the Trustee shall with respect
to Debentures of such series be determined solely by the express provisions
of this Indenture, and the Trustee shall not be liable with respect to
Debentures of such series except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may with respect to Debentures of such series conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the holders of not less than a majority in principal amount of the
Debentures of any series at the time Outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee
under this Indenture with respect to the Debentures of that series; and
(4) none of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability
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in the performance of any of its duties or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
SECTION 7.02. Certain Rights of Trustee.
----------------------------
Except as otherwise provided in Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security or
other paper or document believed by it to be the genuine and to have been signed
or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by its President, any Vice President or its
Treasurer, Controller or Secretary (unless other evidence in respect thereof is
specifically prescribed herein);
(c) The Trustee may consult with counsel of its choice and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
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(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security, or
other papers or documents, unless requested in writing so to do by the holders
of not less than a majority in principal amount of the Outstanding Debentures of
the particular series affected thereby (determined as provided in Section 8.04);
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such costs, expenses or
liabilities as a condition to so proceeding. The reasonable expense of every
such examination shall be paid by the Company or, if paid by the Trustee, shall
be repaid by the Company upon demand;
(g) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder and,
(h) The trustee shall not be deemed to have notice of any event of
default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Debentures and this Indenture.
SECTION 7.03. Limitations of Liability.
-------------------------
(a) The recitals contained herein and in the Debentures (other than
the Certificate of Authentication on the Debentures) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures.
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(c) The Trustee shall not be accountable for the use or application by
the Company of any of the Debentures or of the proceeds of such Debentures, or
for the use or application of any moneys paid over by the Trustee in accordance
with any provision of this Indenture or established pursuant to Section 2.01, or
for the use or application of any moneys received by any paying agent other than
the Trustee.
SECTION 7.04. Ownership of Debentures.
--------------------------
The Trustee or any paying agent or Debenture Registrar, in its
individual or any other capacity, may become the owner or pledgee of Debentures
with the same rights it would have if it were not Trustee, paying agent or
Debenture Registrar.
SECTION 7.05. Moneys Held Without Interest.
------------------------------
Subject to the provisions of Section 11.05, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder except such as it
may agree in writing with the Company to pay thereon.
SECTION 7.06. Compensation and Reimbursement.
---------------------------------
(a) The Company covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as the Company
and the Trustee shall from time to time agree (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trusts hereby created
and in the exercise and performance of any of the powers and duties hereunder of
the Trustee, and the Company will pay or reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Indenture (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify the Trustee
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(and its officers, agents, directors and employees) for, and to hold it harmless
against, any loss, liability, damage, claim or expense including taxes (other
than taxes based on the income of the Trustee) incurred without negligence or
bad faith on the part of the Trustee and arising out of or in connection with
the acceptance or administration of this trust, including the costs and expenses
of defending itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Debentures upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular
Debentures.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.01(4) or Section 6.01(5), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 7.07. Reliance on Certificate of Officers of Company.
------------------------------------------------
Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting to take any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officer's Certificate delivered to the
Trustee and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.
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SECTION 7.08. Conflicts of Interest.
------------------------
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, with respect to the Debentures of any series and if the
Default to which such conflicting interest relates has not been cured, duly
waived or otherwise eliminated, within 90 days after ascertaining that it has
such conflicting interest, it shall either eliminate such conflicting interest
or, except as otherwise provided herein, resign with respect to the Debentures
of that series in the manner and with the effect specified in Section 7.10 and
the Company shall promptly appoint a successor Trustee in the manner provided
herein.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section, with respect to the Debentures of
any series the Trustee shall, within ten days after the expiration of such 90-
day period, transmit notice of such failure by mail, first class postage
prepaid, to the Debentureholders of that series as their names and addresses
appear upon the registration books. Unless the Trustee's duty to resign is
stayed as provided herein, any Debentureholder who has been a bona fide holder
of Debentures for at least six months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee, and the appointment of a successor Trustee, if such Trustee
fails, after written request thereof by such holder to comply with the
provisions of subsection (a) of this Section.
(c) For the purposes of this Section the Trustee shall be deemed to
have a conflicting interest with respect to the Debentures of any series if a
Default has occurred and is continuing and:
(1) the Trustee is trustee under this Indenture with respect to
the Outstanding Debentures of any series other than that series, or is
trustee under another indenture under which any other securities, or
certificates of interest or participation in any other securities, of the
Company are outstanding, unless such other indenture is a collateral trust
indenture under which the only collateral consists of Debentures issued
under this Indenture; provided that there shall be excluded from the
operation of this paragraph the
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Debentures of any series other than that series and any other indenture or
indentures under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding if (i)
this Indenture and such other indenture or indentures and all series of
securities issuable thereunder are wholly unsecured and rank equally and
such other indenture or indentures (and such series) are hereafter
qualified under the Trust Indenture Act, unless the Commission shall have
found and declared by order pursuant to subsection (b) of Section 305 or
subsection (c) of Section 307 of the Trust Indenture Act, that differences
exist between (A)the provisions of this Indenture with respect to
Debentures of that series and with respect to one or more other series or
(B)the provisions of this Indenture and the provisions of such other
indenture or indentures (or such series), which are so likely to involve a
material conflict of interest as to make it necessary in the public
interest or for the protection of investors to disqualify the Trustee from
acting as such under this Indenture with respect to the Debentures of that
series and such other series or such other indenture or indentures, or (ii)
the Company shall have sustained the burden of proving, on application to
the Commission and after opportunity for hearing thereon, that the
trusteeship under this Indenture with respect to Debentures of that series
and such other series or such other indenture or indentures is not so
likely to involve a material conflict of interest as to make it necessary
in the public interest or for the protection of investors to disqualify the
Trustee from acting as such under this Indenture with respect to Debentures
of that series and such other series or under such other indentures;
(2) the Trustee or any of its directors or executive officers is
an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with
an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is
a director, officer, partner, employee, appointee or representative of the
Company, or
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of an underwriter (other than the Trustee itself) for the Company who is
currently engaged in the business of underwriting, except that (A)one
individual may be a director and/or an executive officer of the Trustee and
a director and/or an executive officer of the Company, but may not be at
the same time an executive officer of both the Trustee and the Company;
(B)if and so long as the number of directors of the Trustee in office is
more than nine, one additional individual may be a director and/or an
executive officer of the Trustee and a director of the Company; and (C)the
Trustee may be designated by the Company or by an underwriter for the
Company to act in the capacity of transfer agent, registrar, custodian,
paying agent, fiscal agent, escrow agent, or depository, or in any other
similar capacity, or, subject to the provisions of paragraph (1) of this
subsection (c), to act as trustee, whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner, or
executive officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such persons; or
10% or more of the voting securities of the Trustee is beneficially owned
either by an underwriter for the Company or by any director, partner, or
executive officer thereof, or is beneficially owned, collectively, by any
two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter
in this subsection (c) defined), (A) 5% or more of the voting securities,
or 10% or more of any other class of security, of the Company, not
including the Debentures issued under this Indenture and securities issued
under any other indenture under which the Trustee is also trustee, or (B)
10% or more of any class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter
in this subsection (c) defined), 5% or more of the voting securities of any
person who, to the knowledge of the Trustee, owns 10% or more of the voting
securities of, or controls directly or indirectly
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or is under direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter
in this subsection (c) defined), 10% or more of any class of security of
any person who, to the knowledge of the Trustee, owns 50% or more of the
voting securities of the Company;
(9) the Trustee owns, on the date of Default upon the Debentures
of any series or any anniversary of such Default while such Default upon
the Debentures issued under this Indenture remains Outstanding, in the
capacity of executor, administrator, testamentary or inter vivos trustee,
guardian, committee or conservator, or in any other similar capacity, an
aggregate of 25% or more of the voting securities, or of any class of
security, of any person, the beneficial ownership of a specified percentage
of which would have constituted a conflict interest under paragraph (6),
(7), or (8) of this subsection (c). As to any such securities of which the
Trustee acquired ownership through becoming executor, administrator or
testamentary trustee of an estate which includes them, the provisions of
the preceding sentence shall not apply for a period of not more than two
years from the date of such acquisition, to the extent that such securities
in such estate do not exceed 25% of such voting securities or 25% of any
such class of security. Promptly after the dates of any such Default upon
the Debentures issued under this Indenture and annually in each succeeding
year that the Debentures issued under this Indenture remain in Default, the
Trustee shall make a check of its holding of such securities in any of the
above-mentioned capacities as of such dates. If the Company fails to make
payment in full of principal of or interest on any of the Debentures when
and as the same becomes due and payable, and such failure continues for 30
days thereafter, the Trustee shall make a prompt check of its holding of
such securities in any of the above-mentioned capacities as of the date of
the expiration of such 30-day period, and after such date, notwithstanding
the foregoing provisions of this paragraph (9), all such securities so held
by the Trustee, with sole or joint control over such securities vested in
it, shall, but only so long as such failure shall continue, be
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considered as though beneficially owned by the Trustee for the purposes of
paragraphs (6), (7) and (8) of this subsection (c); or
(10) except under the circumstances described in paragraph (1),
(3), (4), (5) or (6) of subsection (b) of Section 7.13 the Trustee shall be
or shall become a creditor of the Company.
For purposes of paragraph (1) of this subsection (c), and of Section
6.06, the term "series of securities" or "securities" means a series, class or
group of securities issuable under an indenture pursuant to whose terms holders
of one such series may vote to direct the indenture trustee, or otherwise take
action pursuant to a vote of such holders, separately from holders of another
such series; provided, that, "series of securities" or "series" shall not
include any series of securities issuable under an indenture if all such series
rank equally and are wholly secured.
The specification of percentages in paragraphs (5) to (9), inclusive,
of this subsection (c) shall not be construed as indicating that the ownership
of such percentages of securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection (c).
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection (c) only, (A)the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (B)an obligation shall be deemed to
be in "default", when a default in payment of principal shall have continued for
30 days or more and shall not have been cured; and (C)the Trustee shall not be
deemed to be the owner or holder of (i)any security which it holds as collateral
security (as trustee or otherwise) for any obligation which is not in default as
defined in clause (B) above, or (ii)any security which it holds as collateral
security under this Indenture, irrespective of any Default hereunder, or
(iii)any security
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which it holds as agent for collection, or as custodian, escrow agent or
depositary, or in any similar representative capacity.
(d) For the purposes of this Section 7.08:
(1) The term "underwriter" when used with reference to the
Company shall mean every person, who, within one year prior to the time as
of which the determination is made, has purchased from the Company with a
view to, or has offered or sold for the Company in connection with, the
distribution of any security of the Company, or has participated or has had
a direct or indirect participation in any such undertaking, or has
participated or has had a participation in the direct or indirect
underwriting of any such undertaking, but such term shall not include a
person whose interest was limited to a commission from an underwriter or
dealer not in excess of the usual and customary distributors' or sellers'
commission.
(2) The term "director" shall mean any member of the board of
directors of a corporation or any individual performing similar functions
with respect to any organization whether incorporated or unincorporated.
(3) The term "person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" shall mean any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of the affairs of
a person.
(5) The term "Company" shall mean any obligor upon the
Debentures.
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(6) The term "executive officer" shall mean the chairman of the
board of directors, president, every vice president, every assistant vice
president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this Section (each
of whom is referred to as a "person" in this paragraph) means such amount
of the outstanding voting securities of such person as entitles the holder
or holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
person.
(2) A specified percentage of a class of securities of a person
means such percentage of the aggregate amount of securities of the class
outstanding.
(3) The term "amount", when used in regard to securities, means
the principal amount if relating to evidences of indebtedness, the number
of shares if relating to capital shares and the number of units if relating
to any other kind of security.
(4) The term "outstanding" means issued and not held by or for
the account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating
to securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating
to another class of securities of the issuer, if the obligation
evidenced by such
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other class of securities is not in default as to principal or
interest or otherwise;
(iii) securities pledged by the issuer thereof as security
for an obligation of the issuer not in default as to principal or
interest or otherwise; and
(iv) securities held in escrow if placed in escrow by the
issuer thereof, provided, however, that any voting securities of an
issuer shall be deemed outstanding if any person other than the issuer
is entitled to exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, however, that, in
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes; and provided, further, that, in
the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not they are
issued under a single indenture.
(f) Except in the case of a default in the payment of the principal of
(or premium, if any) or interest on any Debentures issued under this Indenture,
or in the payment of any sinking or analogous fund installment, the Trustee
shall not be required to resign as provided by this Section 7.08 if such Trustee
shall have sustained the burden of proving, on application to the Commission and
after opportunity for hearing thereon, that (i)the default under the Indenture
may be cured or waived during a reasonable period and under the procedures
described in such application and (ii) a stay of the Trustee's duty to resign
will not be inconsistent with the interests of Debentureholders. The filing of
such an application shall automatically stay the performance of the duty to
resign until the Commission orders otherwise.
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Any resignation of the Trustee shall become effective only upon the
appointment of a successor trustee and such successor's acceptance of such an
appointment.
SECTION 7.09. Requirements for Eligibility.
-----------------------------
There shall at all times be a Trustee with respect to the Debentures
issued hereunder which shall at all times be a corporation organized and doing
business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or other
person permitted to act as trustee by the Commission, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial, or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. The
Company may not, nor may any person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 7.10.
SECTION 7.10. Resignation and Removal.
------------------------
(a) The Trustee or any successor hereafter appointed, may at any time
resign with respect to the Debentures of one or more series by giving written
notice thereof to the Company and by transmitting notice of resignation by mail,
first class postage prepaid, to the Debentureholders of such series, as their
names and addresses appear upon the Debenture Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
with respect to Debentures of such series by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted appointment
within 30 days after the mailing of such
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notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee with respect to
Debentures of such series, or any Debentureholder of that series who has been a
bona fide holder of a Debenture or Debentures for at least six months may,
subject to the provisions of Section 6.08, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, appointment a successor trustee.
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(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.08 after written request therefor by the
Company or by any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder; or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, the
Company may remove the Trustee with respect to all Debentures and appoint a
successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee, or, subject
to the provisions of Section 6.08, unless the Trustee's duty to resign is
stated as provided herein, any Debentureholder who has been a bona fide
holder of a Debenture or Debentures for at least six months may, on behalf
of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment
of a successor trustee. Such court may thereupon after such notice, if
any, as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures of any series at the time Outstanding may at any time remove the
Trustee with respect to such series and appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures of a series pursuant to any of
the provisions of
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this Section shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Debentures of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Debentures of any particular series.
SECTION 7.11. Successor Trustee.
--------------------
(a) In case of the appointment hereunder of a successor trustee with
respect to all Debentures, every such successor trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers, and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor trustee with
respect to the Debentures of one or more (but not all) series, the Company, the
retiring Trustee and each successor trustee with respect to the Debentures of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor trustee shall accept such appointment and which (1)shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Debentures of that
or those series to which the appointment of such successor trustee relates,
(2)shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Debentures of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3)shall add to or
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change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust, that
each such Trustee shall be trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any other such Trustee
and that no Trustee shall be responsible for any act or failure to act on the
part of any other Trustee hereunder; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein, such retiring Trustee shall
with respect to the Debentures of that or those series to which the appointment
of such successor trustee relates have no further responsibility for the
exercise of rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture, and each such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Debentures of that or those series to which the appointment of such
successor trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor trustee, to the extent contemplated by such supplemental indenture,
the property and money held by such retiring Trustee hereunder with respect to
the Debentures of that or those series to which the appointment of such
successor trustee relates.
(c) Upon request of any such successor trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor trustee all such rights, power and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor trustee shall accept its appointment unless at the
time of such acceptance such successor trustee shall be qualified and eligible
under this Article.
(e) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first class postage prepaid, to the Debentureholders,
as their
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names and addresses appear upon the Debenture Register. If the Company fails to
transmit such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
SECTION 7.12. Successor to Trustee by Merger, Consolidation or
Succession to Business.
-------------------------------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be qualified under the provisions of Section 7.08 and eligible
under the provisions of Section 7.09, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. In case any Debentures shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debentures so authenticated with the same
effect as if such successor Trustee had itself authenticated such Debentures.
SECTION 7.13. Preferential Collection of Claims
Against Issuer.
----------------------------------
(a) Subject to the provisions of subsection (b) of this Section, if
the Trustee shall be or shall become a creditor, directly or indirectly, secured
or unsecured, of the Company within three months prior to a default, as defined
in subsection (b) of this Section, or subsequent to such a default, then, unless
and until such default shall be cured, the Trustee shall set apart and hold in a
special account for the benefit of the Trustee individually, the holders of the
Debentures and the holders of other indenture securities (as defined in
subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount due
and owing upon any claim as such creditor in respect of principal or
interest, effected
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after the beginning of such three months' period and valid as against the
Company and its other creditors, except any such reduction resulting from
the receipt or disposition of any property described in paragraph (2) of
this subsection, or from the exercise of any right of set-off which the
Trustee could have exercised if a petition in bankruptcy had been filed by
or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim
as such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three
months' period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i)payments made on account of any
such claim by any person (other than the Company) who is liable thereon, and
(ii)the proceeds of the bona fide sale of any such claim by the Trustee to a
third person, and (iii)distributions made in cash, securities, or other property
in respect of claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to the Federal Bankruptcy Code or
applicable State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the beginning
of such three months' period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for any
such claim, if such claim was created after the beginning of such three months'
period and such property was received as security therefor simultaneously with
the creation thereof, and if the Trustee shall sustain the burden of proving
that at the time such property was so received the Trustee had no reasonable
cause to believe that a
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default, as defined in subsection (c) of this Section, would occur within three
months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such claim as
provided in such paragraph (B) or (C), as the case may be, to the extent of the
fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three months' period for property held as security
at the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Debentureholders and the holders of other indenture
securities in such manner that the Trustee, the Debentureholders and the holders
of other indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Company in
bankruptcy or receivership or proceedings for reorganization pursuant to the
Federal Bankruptcy Code or applicable State law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee anything
on account of the receipt by it from the Company of the funds and property in
such special account and before crediting to the respective claims of the
Trustee, the Debentureholders and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other than
from such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or proceedings for reorganization
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pursuant to the Federal Bankruptcy Code or applicable State law, whether such
distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceedings for
reorganization is pending shall have jurisdiction (i)to apportion between the
Trustee, the Debentureholders and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held in
such special account and the proceeds thereof, or (ii)in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee, the Debentureholders and the holders of other indenture securities
with respect to their respective claims, in which event it shall not be
necessary to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured and
unsecured portions of such claims, or otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such three months' period shall be subject to the provisions of this subsection
(a) as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three months' period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim which would have
given rise to the obligation to account, if such Trustee had continued as
trustee, occurred after the beginning of such three months' period; and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
In any case commenced under the Bankruptcy Act of July 1, 1898, or any
amendment thereto enacted prior to November 6, 1978, all references to periods
of three months in subsection (a) of this Section shall be deemed to be
references to periods of four months.
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(b) There shall be excluded from the operation of subsection (a) of this
Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien, if any, of
this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and of the circumstances
surrounding the making thereof is given to the Debentureholders at the time
and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, subscription agent, fiscal agent or depositary, or
other similar capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in subsection (c) of
this Section.
(c) As used in this Section:
(1) The term "default" shall mean any failure to make payment in
full of the principal of (or premium, if
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any) or interest upon any of the Debenture or upon the other indenture
securities when and as such principal (or premium, if any) or interest
becomes due and payable.
(2) The term "other indenture securities" shall mean securities upon
which the Company is an obligor (as defined in the Trust Indenture Act)
outstanding under any other indenture (A)under which the Trustee is also
trustee, (B)which contains provisions substantially similar to the
provisions of subsection (a) of this Section, and (C)under which a default
exists at the time of the apportionment of the funds and property held in
said special account.
(3) The term "cash transaction" shall mean any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" shall mean any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
(5) The term "Company" shall mean any obligor upon any of the
Debentures.
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ARTICLE EIGHT
Concerning the Debentureholders
SECTION 8.01. Evidence of Action by Debentureholders.
-----------------------------------------
Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the Debentures
of a particular series may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action) the fact that at the time of taking any such action the holders of
such majority or specified percentage of that series have joined therein may be
evidenced by any instrument or any number of instruments of similar tenor
executed by such holders of Debentures of that series in person or by agent or
proxy appointed in writing.
If the Company shall solicit from the Debentureholders of any series
any request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officer's
Certificate, fix in advance a record date for such series for the determination
of Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of Outstanding Debentures of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Outstanding Debentures of that series
shall be computed as of the record date; provided that no such authorization,
agreement or consent by such Debentureholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
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SECTION 8.02. Proof of Execution of Instruments and of Holding
of Debentures.
-------------------------------------------------
Subject to the provisions of Section 7.01, proof of the execution of
any instrument by a Debentureholder or his agent or proxy and proof of the
holding by any person of any of the Debentures shall be sufficient if made in
the following manner:
(a) The fact and date of the execution by any such person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Debentures shall be proved by the Debenture
Register of such Debentures or by a certificate of the Debenture Registrar
thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.03. Persons Deemed Owners of Debentures.
--------------------------------------
Prior to the due presentment for registration of transfer of any
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the person in whose name such Debenture shall be
registered upon the books of the Company as the absolute owner of such Debenture
(whether or not such Debenture shall be overdue and notwithstanding any notice
of ownership or writing thereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal of, premium, if any, and (subject to Section 2.03) interest on such
Debenture and for all other purposes; and neither the Company nor the Trustee
nor any paying agent nor any Debenture Registrar shall be affected by any notice
to the contrary.
SECTION 8.04. Debentures Owned by Company or Controlled or
Controlling Companies Disregarded for Certain
Purposes.
----------------------------------------------
In determining whether the holders of the requisite aggregate
principal amount of Debentures of a particular series have concurred in any
direction, consent or waiver under this Indenture, Debentures of that series
which are owned by the
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Company or any other obligor on the Debentures of that series or by any
Subsidiary of the Company or of such other obligor on the Debentures of that
series shall be disregarded and deemed not to be Outstanding for the purpose of
any such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver,
only Debentures of such series which the Trustee actually knows are so owned
shall be so disregarded. Debentures so owned which have been pledged in good
faith may be regarded as Outstanding for the purposes of this Section, if the
pledgee shall establish to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Debentures and that the pledgee is not a Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with or an Affiliate of the Company or any such other obligor. In
case of a dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee.
SECTION 8.05. Instruments Executed by Debentureholders Bind
Future Holders.
----------------------------------------------
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Debentures of a
particular series specified in this Indenture in connection with such action,
any holder of a Debenture of that series which is shown by the evidence to be
included in the Debentures the holders of which have consented to such action
may, by filing written notice with the Trustee, and upon proof of holding as
provided in Section 8.02, revoke such action so far as concerns such Debenture.
Except as aforesaid any such action taken by the holder of any Debenture shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Debenture, and of any Debenture issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Debenture. Any action
taken by the holders of the majority or percentage in aggregate principal amount
of the Debentures of a particular series specified in this Indenture in
connection with such action shall be conclusively binding upon the Company, the
Trustee and the holders of all the Debentures of that series.
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ARTICLE NINE
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of_
Debentureholders.
------------------------------------------
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as then in effect), without the consent of the Debentureholders,
for one or more of the following purposes:
(a) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the Company
contained herein or otherwise established with respect to the Debentures; or
(b) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the holders of the
Debentures of all or any series as the Board of Directors and the Trustee shall
consider to be for the protection of the holders of Debentures of all or any
series, and to make the occurrence, or the occurrence and continuance, of a
default in any of such additional covenants, restrictions, conditions or
provisions a default or an Event of Default with respect to such series
permitting the enforcement of all or any of the several remedies provided in
this Indenture as herein set forth; provided, however, that in respect of any
such additional covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such default or may limit the
remedies available to the Trustee upon such default or may limit the right of
the holders of a majority in aggregate principal amount of the Debentures of
such series to waive such default; or
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
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supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture as shall not be inconsistent with the
provisions of this Indenture and shall not adversely affect the interests of the
holders of the Debentures of any series; or
(d) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Debenture Outstanding of any series created prior to the execution
of such supplemental indenture which is entitled to the benefit of such
provision.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the holders of any of the Debentures at the time Outstanding, notwithstanding
any of the provisions of Section 9.02.
SECTION 9.02. Modification of Indenture With Consent of
Debentureholders.
-----------------
With the consent (evidenced as provided in Section 8.01) of the
holders of not less than a majority in aggregate principal amount of the
Debentures of each series affected at the time Outstanding (and, in the case of
any series of Debentures held as trust assets of a Hawaiian Electric Industries
Capital Trust as to which a Security Exchange has not theretofore occurred or as
partnership assets of the Partnership, such consent of holders of the Trust
Preferred Securities and the Trust Common Securities of such Hawaiian Electric
Industries Capital Trust as may be required under the Trust Agreement of such
Hawaiian Electric Industries Capital Trust), the Company, when authorized by a
Board Resolution, and the Trustee may from time to time and at any time enter
into an indenture or indentures supplemental hereto (which shall conform to the
provisions of
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the Trust Indenture Act as then in effect) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the holders of the Debentures of such series under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the holders of each Debenture (and, in the case of any series of
Debentures held as trust assets of a Hawaiian Electric Industries Capital Trust
as to which a Security Exchange has not theretofore occurred or as partnership
assets of the Partnership, such consent of the holders of the Trust Preferred
Securities and the Trust Common Securities of such Hawaiian Electric Industries
Capital Trust as may be required under the Trust Agreement of such Hawaiian
Electric Industries Capital Trust) then Outstanding and affected thereby,
(i)extend the fixed maturity of any Debentures of any series, or reduce the
principal amount thereof (including in the case of a discounted Debenture the
amount payable thereon in the event of acceleration or the amount provable in
bankruptcy) or any premium thereon, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable upon the redemption
thereof, or make the principal of or interest or premium, if any, on the
Debentures payable in any coin or currency other than that provided in the
Debentures, or impair or affect the right of any Debentureholder to institute
suit for the payment thereof or the right of prepayment, if any, at the option
of the Debentureholder, (ii)reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such modification, or (iii)
otherwise adversely affect the interest of the holders of any series of
Debentures.
Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Debentureholders (and, in
the case of any series of Debentures held as trust assets of a Hawaiian Electric
Industries Capital Trust as to which a Security Exchange has not theretofore
occurred or as partnership assets of the Partnership, such consent of holders of
the Trust Preferred Securities and the Trust Common Securities of such Hawaiian
Electric Industries Capital Trust as may be required under the Trust Agreement
of such Hawaiian Electric Industries Capital Trust) required to consent thereto
as aforesaid, the Trustee shall join with the Company in the execution of such
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supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion but shall not be obligated to enter into
such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders of
any series affected thereby under this Section to approve the particular form of
any proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Debentureholders of all series affected thereby as their names and addresses
appear upon the Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. Effect of Supplemental Indentures.
------------------------------------
Upon the execution of any supplemental indenture pursuant to the
provisions of this Article or of Section 10.01, this Indenture shall, with
respect to such series, be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Debentures of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.04. Debentures May Bear Notation of Changes by
Supplemental Indentures.
-------------------------------------------
Debentures of any series, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this
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Article or of Section 10.01, may bear a notation in form approved by the
Company, provided such form meets the requirements of any exchange upon which
such series may be listed, as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Debentures of that series so
modified as to conform, in the opinion of the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared by the Company, authenticated by the Trustee and delivered in
exchange for the Debentures of that series then Outstanding.
SECTION 9.05. Opinion of Counsel.
-------------------
The Trustee, subject to the provisions of Section 7.01, may receive an
Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article is authorized or permitted by, and conforms
to, the terms of this Article and that it is proper for the Trustee under the
provisions of this Article to join in the execution thereof.
ARTICLE TEN
Consolidation, Merger, Sale or Conveyance
SECTION 10.01. Company May Consolidate, Etc., Only on Certain Terms.
-----------------------------------------------------
The Company shall not consolidate with or merge into any other Person
or convey or transfer its properties and assets substantially as an entirety to
any Person unless:
(a) either the Company shall be the continuing corporation, or the
corporation (if other than the Company) formed by such consolidation or into
which the Company is merged or to which the properties and assets of the Company
substantially as an entity are transferred shall be a corporation organized and
existing under the laws of the United States of America or any State thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, all the obligations of the Company under the Debentures and this
Indenture; and
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(b) immediately after giving effect to such transaction no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing.
SECTION 10.02. Successor Corporation.
------------------------
The successor corporation formed by such consolidation or into which
the Company is merged or to which such transfer is made shall succeed to and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein, and thereafter the predecessor corporation shall be
relieved of all obligations and covenants under the Indenture and the Debentures
and, in the event of such conveyance or transfer, any such predecessor
corporation may be dissolved and liquidated.
SECTION 10.03. Opinion of Counsel.
---------------------
The Trustee, subject to the provisions of Section 7.01, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or other disposition, and any such assumption, comply
with the provisions of this Article.
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Defeasance; Unclaimed Moneys
SECTION 11.01. Satisfaction and Discharge of Indenture.
-----------------------------------------
(a) If at any time (1)the Company shall have paid or caused to be paid
the principal of and interest on all the Debentures of any series Outstanding
hereunder (other than Debentures of such series which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 2.05) as
and when the same shall have become due and payable, or (2)the Company shall
have delivered to the Trustee for cancellation all Debentures of any series
theretofore authenticated (other than any Debentures of such series which shall
have been destroyed, lost or stolen and which shall have
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been replaced or paid as provided in Section 2.05) or (3) (i)all the Debentures
of series not theretofore delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and (ii)the
Company shall have irrevocably deposited or caused to be deposited with the
Trustee or any Defeasance Agent as trust funds the entire amount in cash (other
than moneys repaid by the Trustee or any paying agent to the Company in
accordance with Section 11.04) or Governmental Obligations, maturing as to
principal and interest at such times and in such amounts as will insure the
availability of cash, or a combination thereof, sufficient in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (A)the principal
of, premium on, if any and interest on all Debentures of such series on each
date that such principal or interest is due and payable and (B)any mandatory
sinking fund payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture and the Debentures of such series;
and if, in any such case, the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture shall cease to
be of further effect (except as to (i)rights of registration of transfer and
exchange of Debentures of such series and the Company's right of optional
redemption, if any, (ii)substitution of mutilated, defaced, destroyed, lost or
stolen Debentures, (iii)rights of holders of Debentures to receive payments of
principal thereof and interest thereon, upon the original stated due dates
therefor (but not upon acceleration), and remaining rights of the
Debentureholders to receive mandatory sinking fund payments, if any, (iv)the
rights, obligations, duties and immunities of the Trustee hereunder, (v)the
rights of the holders of Debentures of such series as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them, and (vi)the obligations of the Company under Section 4.02) and the
Trustee, on demand of the Company accompanied by an Officer's Certificate and an
Opinion of Counsel and at the cost and expense of the Company, shall execute
proper instruments acknowledging such satisfaction of and discharging this
Indenture; provided, that the rights of Holders of the Debentures to receive
amounts in respect of principal of and interest on the Debentures held by them
shall not be delayed
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longer than required by then-applicable mandatory rules or policies of any
securities exchange upon which the Debentures are listed. The Company agrees to
reimburse the Trustee or any Defeasance Agent for any costs or expenses
thereafter reasonably and properly incurred and to compensate the Trustee or any
Defeasance Agent for any services thereafter reasonably and properly rendered by
the Trustee or any Defeasance Agent, respectively, in connection with this
Indenture or the Debentures of such series.
(b) The following provisions shall apply to the Debentures of each
series unless specifically otherwise provided in a Board Resolution or indenture
supplemental hereto provided pursuant to Section 2.01. In addition to discharge
of the Indenture pursuant to the next preceding paragraph, the Company shall be
deemed to have paid and discharged the entire indebtedness on all the Debentures
of a series on the date of the deposit referred to in subparagraph (a) below,
and the provisions of this Indenture with respect to the Debentures of such
series shall no longer be in effect (except as to (i)rights of registration of
transfer and exchange of Debentures of such series and the Company's right of
optional redemption, if any, (ii)substitution of mutilated, defaced, destroyed,
lost or stolen Debentures, (iii)rights of holders of Debentures to receive
payments of principal thereof and interest thereon, upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the holders
of Debentures to receive mandatory sinking fund payments, if any, (iv)the
rights, obligations, duties and immunities of the Trustee hereunder, (v)the
rights of the Holders of Debentures as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them and (vi)the
obligations of the Company under Section 4.02) and the Trustee, at the expense
of the Company, shall at the Company's request, execute proper instruments
acknowledging the same, if
(1) with reference to this provision the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee or any
Defeasance Agent as trust funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the holders of the Debentures
of such series (i)cash in an amount, or (ii)Governmental Obligations
maturing as to principal and interest at such times and in such amounts as
will insure
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the availability of cash or (iii) a combination thereof, sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay (A)the principal of and premium on, if any, and interest on all
Debentures of such series on each date that such principal or interest is
due and payable and (B)any mandatory sinking fund payments on the dates on
which such payments are due and payable in accordance with the terms of the
Indenture and the Debentures of such series;
(2) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the
Company is a party or by which it is bound;
(3) the Company has delivered to the Trustee and any Defeasance
Agent an Opinion of Counsel to the effect that (x)the Company has received
from, or there has been published by, the Internal Revenue Service a ruling
pertaining to a comparable form of transaction (and such ruling shall
accompany such Opinion of Counsel) or (y)since the date hereof, there has
been a change in the applicable Federal income tax law, in either case to
the effect that, and such opinion shall confirm that, the holders of the
Debentures of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to Federal income tax on the same amount and
in the same manner and at the same times, as would have been the case if
such deposit, defeasance and discharge had not occurred;
(4) the Company has delivered to the Trustee and any Defeasance
Agent an Officer's Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for relating to the defeasance
contemplated by this provision have been complied with;
(5) no event or condition shall exist that, pursuant to the
provisions of Section 14.02 or 14.03, would prevent the Company from making
payments of the principal of or interest on the Debentures of such series
on the date of such deposit or at any time during the period ending on the
91st day after the date of such deposit (it being
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understood that this condition shall not be deemed satisfied until the
expiration of such period);
(6) if the Debentures of such series are listed on any registered
national securities exchange under the Securities Exchange Act of 1934, as
amended, the Company has delivered to the Trustee and any Defeasance Agent
an Opinion of Counsel to the effect that said Debentures will not be
delisted from such national securities exchange as a result of such
deposit, defeasance and discharge; and
(7) no Default or Event of Default with respect to the Debentures of
such series shall have occurred and be continuing on the date of such
deposit and no Event of Default under Section 6.01(a)(4) or Section
6.01(a)(5) shall have occurred and be continuing on the 91st day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
(c) The Company shall be released from its obligations under Sections
4.06, 6.09 and 10.01 with respect to the Debentures of any series, Outstanding
on and after the date the conditions set forth below are satisfied (hereinafter,
"covenant defeasance"). For this purpose, such covenant defeasance means that,
with respect to the Outstanding Debentures of any series, the Company may omit
to comply with and shall have no liability in respect of any term, condition or
limitation set forth in such Section, whether directly or indirectly by reason
of any reference elsewhere herein to such Section or by reason of any reference
in such Section to any other provision herein or in any other document and such
omission to comply shall not constitute an Event of Default under Section 6.01,
but the remainder of this Indenture and such Debentures shall be unaffected
thereby. The following shall be the conditions to application of this
subsection (C) of this Section 11.01:
(1) the Company has irrevocably deposited or caused to be deposited
with the Trustee or any Defeasance Agent as trust funds in trust for the
purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the holders of the Debentures
of such series and coupons appertaining thereto, (i) cash in an amount,
(ii) Governmental
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Obligations maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash, or (iii) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (A) the principal and premium on, if any,
and interest on all Debentures of such series and (B) any mandatory sinking
fund payments on the day on which such payments are due and payable in
accordance with the terms of the Indenture and the Debentures of such
series;
(2) no Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to the Debentures
shall have occurred and be continuing on the date of such deposit and no
Event of Default under Section 6.01(a)(4) or Section 6.01(a)(5) shall have
occurred and be continuing on the 91st day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until the expiration of such period);
(3) such covenant defeasance shall not cause the Trustee to have a
conflicting interest as defined in Section 7.08 and for purposes of the
Trust Indenture Act of 1939 with respect to any securities of the Company;
(4) such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it is
bound;
(5) if the Debentures of such series are listed on any registered
national securities exchange under the Securities Exchange Act of 1934, as
amended, the Company shall have delivered to the Trustee and any Defeasance
Agent an Opinion of Counsel to the effect that said Debentures will not be
delisted from such national securities exchange as a result of such
covenant defeasance;
(6) no event or condition shall exist that, pursuant to the
provisions of Section 14.02 or 14.03, would prevent the Company from making
payments of the principal of or interest on the Debentures of such series
on the date of such deposit or at any time during the period ending on
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the 91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period);
(7) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of the Debentures of such series
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; and
(8) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the covenant defeasance contemplated by
this provision have been complied with.
SECTION 11.02. Application by Trustee of Funds Deposited for
Payment of Debentures.
----------------------------------------------
Subject to Section 11.04, all moneys deposited with the Trustee (or
other trustee) pursuant to Section 11.01 shall be held in trust and applied by
it to the payment, either directly or through any paying agent (including the
Company acting as its own paying agent), to the Holders of the particular
Debentures of such series for the payment or redemption of which such moneys
have been deposited with the Trustee, of all sums due and to become due thereon
for principal and interest; but such money need not be segregated from other
funds except to the extent required by law.
SECTION 11.03. Application by Trustee of Funds Deposited for
Payment of Debentures.
----------------------------------------------
In connection with the satisfaction and discharge of this Indenture
with respect to Debentures of any series, all moneys then held by any paying
agent under the provisions of this Indenture with respect to such series of
Debentures shall, upon demand of the Company, be repaid to it or paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys.
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SECTION 11.04. Repayment of Moneys Held by Paying Agent.
-------------------------------------------
Any moneys deposited with or paid to the Trustee or any paying agent
for the payment of the principal of or interest on any Security of any series
and not applied but remaining unclaimed for two years after the date upon which
such principal or interest shall have become due and payable, shall, upon the
written request of the Company and unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be
repaid to the Company by the Trustee for such series or such paying agent, and
the Holder of the Debentures of such series shall, unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
laws, thereafter look only to the Company for any payment which such holder may
be entitled to collect, and all liability of the Trustee or any paying agent
with respect to such moneys shall thereupon cease; provided, however, that the
Trustee or such paying agent, before being required to make any such repayment
with respect to moneys deposited with it for any payment series, shall at the
expense of the Company, mail by first-class mail to holders of such Debentures
at their addresses as they shall appear on the Debenture Register, notice, that
such moneys remain and that, after a date specified therein, which shall not be
less than thirty days from the date of such mailing or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 11.05. Repayment of Moneys Held by Trustee.
--------------------------------------
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Governmental Obligations
deposited pursuant to Section 11.01 or the principal or interest received in
respect of such obligations.
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ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors
SECTION 12.01. Immunity From Individual Liability.
------------------------------------
No recourse under or upon any obligations, covenant or agreement of
this Indenture, or of any Debenture, or for any claim based thereon or otherwise
in respect thereof, shall be had against any incorporator, stockholder, officer
or director, past, present or future as such, of the Company or of any
predecessor or successor corporation, either directly or through the Company or
any such predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of
any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Debentures.
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ARTICLE THIRTEEN
Miscellaneous Provisions
SECTION 13.01. Successors and Assigns.
-------------------------
All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 13.02. Acts of Board, Committee or Officer of Successor
Company.
-------------------------------------------------
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.
SECTION 13.03. Surrender of Powers of Company.
---------------------------------
The Company by instrument in writing executed by authority of two-
thirds of its Board of Directors and delivered to the Trustee may surrender any
of the powers reserved to the Company and thereupon such power so surrendered
shall terminate both as to the Company and as to any successor corporation.
SECTION 13.04. Required Notices or Demands Served by Mail.
---------------------------------------------
Except as otherwise expressly provided herein any notice or demand
which by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Debentures to or on the Company may
be given or served by being deposited first class postage prepaid in a post-
office letter box addressed (until another address is filed in writing by the
Company with the Trustee), as follows: Hawaiian Electric Industries, Inc., 900
Richards Street, Honolulu, Hawaii 96813, Attention: Treasurer. Any notice,
election, request or demand by the Company or any Debentureholder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made in writing at the Corporate Trust Office of the
Trustee.
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SECTION 13.05. Governing Law.
-------------
This Indenture and each Debenture shall be deemed to be a contract
made under the laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the internal laws of said State.
SECTION 13.06. Officer's Certificates and Opinions of Counsel.
----------------------------------------------
(a) Upon any application or demand by the Company to the Trustee to
take any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officer's Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture (other than the certificate provided pursuant to Section
5.03(d) of this Indenture) shall 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 has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 13.07. Payments Due on Saturdays, Sundays or Holidays.
----------------------------------------------
Except as provided pursuant to Section 2.01 pursuant to a Board
Resolution, and as set forth in an Officer's Certificate, or established in one
or more indentures supplemental to the Indenture, in any case where the date of
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maturity of interest or principal of any Debenture or the date of redemption of
any Debenture shall not be a business day then payment of interest or principal
(and premium, if any) may be made on the next succeeding business day with the
same force and effect as if made on the nominal date of maturity or redemption,
and no interest shall accrue for the period after such nominal date.
SECTION 13.08. Provisions Required by Trust Indenture Act.
---------------------------------------------
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.09. Indenture May be Executed in Counterparts.
--------------------------------------------
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
SECTION 13.10. Severability of Indenture Provisions.
--------------------------------------
In case any one or more of the provisions contained in this Indenture
or in the Debentures of any series shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Debentures, but this Indenture and such Debentures shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 13.11. Assignment by Company to Subsidiary.
--------------------------------------
The Company will have the right at all times to assign any of its
rights or obligations under this Indenture to a direct or indirect wholly owned
Subsidiary of the Company; provided that, in the event of any such assignment,
the Company will remain jointly and severally liable for all such obligations.
Subject to the foregoing, this Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns.
This Indenture may not otherwise be assigned by the parties hereto.
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SECTION 13.12. Holders of Trust Preferred Securities as Third
Party Beneficiaries of This Indenture.
-----------------------------------------------
The Company hereby acknowledges that, to the extent specifically set
forth herein, prior to a Security Exchange with respect to the Debentures of any
series held as trust assets of a Hawaiian Electric Industries Capital Trust or
as partnership assets of the Partnership, the holders of the Trust Preferred
Securities of such Hawaiian Electric Industries Capital Trust shall expressly be
third party beneficiaries of this Indenture. The Company further acknowledges
that, prior to a Security Exchange with respect to Debentures of any series held
as trust assets of a Hawaiian Electric Industries Capital Trust, if the Property
Trustee of such Hawaiian Electric Industries Capital Trust fails to enforce its
rights under this Indenture as the holder of the Debentures of a series held as
trust assets of such Hawaiian Electric Industries Capital Trust or as the holder
of the Partnership Preferred Securities with respect to such securities' rights,
if any, regarding any Debentures of a series held as partnership assets of the
Partnership, any holder of the Trust Preferred Securities of such Hawaiian
Electric Industries Capital Trust may, after a period of 30 days has elapsed
from such holder's written request to such Property Trustee to enforce such
rights, institute legal proceedings directly against the Company to enforce such
Property Trustee's rights under this Indenture without first instituting any
legal proceedings against such Property Trustee or any other person or entity.
ARTICLE FOURTEEN
Subordination of Debentures
SECTION 14.01. Agreement to Subordinate.
---------------------------
The Company, for itself, its successors and assigns, covenants and
agrees, and each holder of a Debenture, by its acceptance thereof, likewise
covenants and agrees, that the payment of the principal of, premium, if any, and
interest on, each and all of the Debentures is hereby expressly subordinated, to
the extent and in the manner hereinafter in this Article Fourteen set forth, in
right of payment to the prior payment in full of all Senior Indebtedness.
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SECTION 14.02. Rights of Senior Indebtedness in the Event of
Insolvency, Etc., of the Company.
----------------------------------------------
(a) In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to the Company or to its creditors, as such, or
to its property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of the Company, whether or not involving
insolvency or bankruptcy, and in the event of any execution sale, then the
holders of Senior Indebtedness shall be entitled to receive payment in full of
principal thereof and interest due thereon (including without limitation, except
to the extent, if any, prohibited by mandatory provisions of law, post-petition
interest in any such proceedings) in money of all Senior Indebtedness before the
holders of Debentures are entitled to receive any payment on account of the
principal of or interest on the indebtedness evidenced by the Debentures, and to
that end the holders of Senior Indebtedness shall be entitled to receive for
application in payment thereof any payment or distribution of any kind or
character, whether in cash or property or securities, which may be payable or
deliverable in connection with any such proceedings or sale in respect of the
principal of or interest on the Debentures other than securities of the Company
as reorganized or readjusted or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in this Article
Fourteen with respect to the Debentures, to the payment of all indebtedness of
the nature of Senior Indebtedness, provided that the rights of the holders of
the Senior Indebtedness are not altered by such reorganization or readjustment;
(b) In the event and during the continuation of any default in payment
of any Senior Indebtedness or if any event of default, as therein defined, shall
exist under any Senior Indebtedness or any agreement pursuant to which any
Senior Indebtedness is issued, no payment of the principal of, premium if any,
or interest on the Debentures shall be made and the Company covenants that it
will, upon ascertaining any such default or event of default, provide written
notice to the Trustee of such default or event of default;
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(c) In the event that the Debentures of any series are declared due
and payable before their expressed maturity because of the occurrence of an
Event of Default (under circumstances when the provisions of subsection (a) of
this Section 14.02 shall not be applicable), the holders of all Senior
Indebtedness shall be entitled to receive payment in full in money of such
Senior Indebtedness before such holders of Debentures are entitled to receive
any payment on account of the principal of or interest on the Debentures; and
(d) No holder of Senior Indebtedness shall be prejudiced in his right
to enforce subordination of the Debentures by any act or failure to act on the
part of the Company.
SECTION 14.03. Payment Over of Proceeds Received on Debentures.
--------------------------------------------------
In the event that, notwithstanding the provisions of Section 14.02,
any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than securities of the Company as
reorganized or readjusted or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Article Fourteen with
respect to the Debentures, to the payment of all indebtedness of the nature of
Senior Indebtedness, provided that the rights of the holders of the Senior
Indebtedness are not altered by such reorganization or readjustment) shall be
received by the holders or by the Trustee for their benefit in connection with
any proceedings or sale referred to in subsection (a) of Section 14.02 before
all Senior Indebtedness is paid in full in money, such payment or distribution
shall be paid over to the holders of such Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness held or represented by each, for
application to the payment of all Senior Indebtedness remaining unpaid until all
such Senior Indebtedness shall have been paid in full in money, after giving
effect to any concurrent payment or distribution to the holders of such Senior
Indebtedness.
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From and after the payment in full in money of all Senior
Indebtedness, the holders of Debentures (together with the holders of any other
indebtedness of the Company which is subordinate in right of payment to the
payment in full of all Senior Indebtedness, which is not subordinate in right of
payment to the Debentures and which by its terms grants such right of
subrogation to the holder thereof) shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of assets or
securities of the Company applicable to the Senior Indebtedness until the
Debentures shall be paid in full, and, for the purposes of such subrogation, no
such payments or distributions to the holders of Senior Indebtedness of assets
or securities, which otherwise would have been payable or distributable to
holders of Debentures, shall, as between the Company, its creditors other than
the holders of Senior Indebtedness, and the holders, be deemed to be a payment
by the Company to or on account of the Senior Indebtedness, it being understood
that the provisions of this Article Fourteen are and are intended solely for the
purpose of defining the relative rights of the holders, on the one hand, and the
holders of the Senior Indebtedness, on the other hand, and nothing contained in
this Article Fourteen or elsewhere in this Indenture or in the Debentures is
intended to or shall impair as between the Company, its creditors other than the
holders of Senior Indebtedness, and the holders, the obligation of the Company,
which is unconditional and absolute, to pay to the holders the principal of and
interest on the Debentures as and when the same shall become due and payable in
accordance with their terms, or to affect the relative rights of the holders and
creditors of the Company other than the holders of the Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or the holder of any
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture subject to the rights of the holders of Senior
Indebtedness, under Section 14.02, to receive cash, property or securities of
the Company otherwise payable or deliverable to the holders of the Debentures.
Upon any distribution or payment in connection with any proceedings or
sale referred to in subsection (a) of Section 14.02, the Trustee, subject as
between the Trustee and the holders to the provisions of Sections 7.01 and 7.02
hereof, shall be entitled to rely upon a certificate of the liquidating trustee
or agent or other person making any distribution or payment to the Trustee for
the purpose of ascertaining the
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holders of Senior Indebtedness entitled to participate in such payment or
distribution, the amount of such Senior Indebtedness or the amount payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article Fourteen. In the event that the Trustee
determines, in good faith, that further evidence is required with respect to the
right of any person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Section 14.03, the Trustee may request
such person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness held by such person, as to the extent to
which such person is entitled to participate in such payment or distribution,
and as to other facts pertinent to the rights of such person under this Section
14.03, and if such evidence is not furnished, the Trustee may defer any payment
to such person pending judicial determination as to the right of such person to
receive such payment.
The Trustee, however, shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness, and shall not be liable to any such holders
if it shall in good faith pay over or distribute to holders of Debentures or the
Company or any other person moneys or assets to which any holders of Senior
Indebtedness shall be entitled by virtue of Article Fourteen of this Indenture
or otherwise.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants or obligations as
are specifically set forth in this Article and no implied covenants or
obligations with respect to holders of Senior Indebtedness shall be read into
this Indenture against the Trustee.
SECTION 14.04. Payment to Debentureholders.
------------------------------
Nothing contained in this Article Fourteen or elsewhere in this
Indenture, or in any of the Debentures, shall prevent at any time, (a)the
Company from making payments at any time of principal of or interest on the
Debentures, except under the conditions described in Section 14.02 or during the
pendency of any proceedings or sale therein referred to, provided, however, that
payments of principal of or interest on the Debentures shall only be made by the
Company within three business days of the due dates for such payments or (b)the
application by the Trustee of any moneys deposited with it
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hereunder to the payment of or on account of the principal of or interest on the
Debentures, if at the time of such deposit the Trustee did not have written
notice in accordance with Section 14.06 of any event prohibiting the making of
such deposit by the Company or if in the event of redemption, the Trustee did
not have such written notice prior to the time that the notice of redemption
pursuant to Section 3.02 was given (which notice of redemption shall in no event
be given more than 60 days prior to the date fixed for redemption).
SECTION 14.05. Holders of Debentures Authorize Trustee to
Effectuate Subordination of Debentures.
-------------------------------------------
Each Debentureholder by his acceptance of a Debenture authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination as provided in this
Article Fourteen and appoints the Trustee as attorney-in-fact for any and all
such purposes, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise) tending towards liquidation of the business and assets of the
Company, the immediate filing of a claim for the unpaid balance of such
Debentureholder's Debentures in the form required in said proceedings and cause
said claim to be approved.
SECTION 14.06. Notice to Trustee.
--------------------
Notwithstanding the provisions of this Article Fourteen or any other
provisions of this Indenture, the Trustee shall not be charged with the
knowledge of the existence of any facts which would prohibit the making of any
payment of moneys to the Trustee, unless and until the Trustee shall have
received written notice thereof from the Company or from the holder or the
representative of any class of Senior Indebtedness; provided, however, that if
at least two business days prior to the date upon which by the terms hereof any
such monies may become payable for any purpose (including, without limitation,
the payment of either the cash amount payable at maturity or interest on any
Debenture) the Trustee shall not have received with respect to such monies the
notice provided for in this Section 14.06, then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power
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and authority to receive such monies and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary, which may be received by it on or after such two business days prior
to such date.
SECTION 14.07. Trustees May Hold Senior Indebtedness.
---------------------------------------
The Trustee shall be entitled to all the rights set forth in this
Article Fourteen with respect to any Senior Indebtedness which may at any time
be held by it, to the same extent as any other holder of Senior Indebtedness.
Nothing in this Article Fourteen shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.06.
SECTION 14.08. Applicability of Article Fourteen to Paying
Agents.
--------------------------------------------
In case at any time any paying agent other than the Trustee shall be
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article Fourteen shall in such case (unless the context shall
otherwise require) be construed as extending to and including such paying agent
within its meaning as fully for all intents and purposes as if such paying agent
were named in this Article Fourteen in place of the Trustee.
The Bank of New York, as Trustee, hereby accepts the trust in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
By ________________________________
Name:
Title:
By ________________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By ________________________________
Name:
Title:
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Exhibit 4(j)
------------
HAWAIIAN ELECTRIC INDUSTRIES, INC.
----------------------------------
Officer's Certificate Pursuant to
Sections 2.3 and 11.5 of the Indenture
--------------------------------------
The undersigned hereby certifies, pursuant to the Senior Indenture,
dated as of ____________, _____ (the "Indenture"), between Hawaiian Electric
Industries, Inc., a Hawaii corporation (the "Company"), and ___________________,
a ____________________, as Trustee (the "Trustee"), that:
A. There has been established pursuant to resolutions duly adopted
by the Board of Directors of the Company at its meeting held on
____________________ a series of Securities (as that term is defined in the
Indenture) to be issued under the Indenture, which Securities shall be in the
form and shall include the Certificate of Authentication attached hereto and
shall have the following terms (capitalized terms defined in the Indenture but
not herein shall have the meanings given to such terms in the Indenture):
1. [state the designation of the Securities of the series, which
shall distinguish the Securities of the series from the Securities of all
other series];
2. [state any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3 of
the Indenture)];
3. [if other than Dollars, state the coin or currency in which the
Securities of that series are denominated (including, but not limited to,
any Foreign Currency or ECU)];
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<PAGE>
4. [state the date or dates on which the principal of the Securities
of the series is payable];
5. [state the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which such interest
shall accrue, on which such interest shall be payable and (in the case of
Registered Securities) on which a record shall be taken for the
determination of Holders to whom interest is payable and/or the method by
which such rate or rates or date or dates shall be determined];
6. [state the place or places of payment where the principal of and
any interest on Securities of the series shall be payable (if other than as
provided in Section 3.2 of the Indenture)];
7. [state the right, if any, of the Issuer to redeem Securities, in
whole or in part, at its option and the period or periods within which, the
price or prices at which and any terms and conditions upon which Securities
of the series may be so redeemed, pursuant to any sinking fund or
otherwise];
8. [state the obligation, if any, of the Issuer to redeem, purchase
or repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder thereof
and the price or prices at which and the period or periods within which and
any terms and conditions upon which Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation];
9. [if other than denominations of $1,000 and any integral multiple
thereof in the case of Registered Securities, or $1,000 and $5,000 in the
case of Unregistered Securities, state the denominations in which
Securities of the series shall be issuable];
10. [if other than the principal amount thereof, state the portion of
the principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof];
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<PAGE>
11. [if other than the coin or currency in which the Securities of
that series are denominated, state the coin or currency in which payment of
the principal of or interest on the Securities of such series shall be
payable];
12. [if the principal of or interest on the Securities of such series
are to be payable, at the election of the Issuer or a Holder thereof, in a
coin or currency other than that in which the Securities are denominated,
state the period or periods within which, and the terms and conditions upon
which, such election may be made];
13. [if the amount of payments of principal of and interest on the
Securities of the series may be determined with reference to an index based
on a coin or currency other than that in which the Securities of the series
are denominated, state the manner in which such amounts shall be
determined];
14. [state whether the Securities of the series will be issuable as
Registered Securities (and if so, state whether such Securities will be
issuable as Registered Global Securities) or Unregistered Securities (with
or without Coupons), or any combination of the foregoing, state any
restrictions applicable to the offer, sale or delivery of Unregistered
Securities or the payment of interest thereon and, if other than as
provided in Section 2.8 of the Indenture, state the terms upon which
Unregistered Securities of any series may be exchanged for Registered
Securities of such series and vice versa];
15. [state whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series held by a person who is
not a U.S. person in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, state whether the Issuer will have the
option to redeem such Securities rather than pay such additional amounts];
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<PAGE>
16. [if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
include the form and terms of such certificates, documents or conditions];
17. [identify any trustees, depositaries, authenticating or paying
agents, transfer agents or registrars or any other agents with respect to
the Securities of such series];
18. [describe any other events of default or covenants with respect
to the Securities of such series in addition to the Events of Default or
covenants set forth herein]; and
19. [state any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture)].
B. The undersigned has read the Indenture, including the provisions
of Sections 2.3 and 11.5 and the definitions relating thereto, and the
resolutions adopted by the Board of Directors of the Company referred to above.
In the opinion of the undersigned, [he][she] has made such examination or
investigation as is necessary to enable [him][her] to express an informed
opinion as to whether or not all conditions precedent provided in the Indenture
relating to the establishment of the title and terms of a series of Securities
under the Indenture, designated as the _____________ in this Officer's
Certificate, and to the authentication and delivery by the Trustee of such
Securities, have been complied with. In the opinion of the undersigned, all
such conditions precedent have been complied with.
IN WITNESS WHEREOF, the undersigned has hereunto executed this
Officer's Certificate as of the ____ day of __________, _____.
________________________________
Name:
Title:
4
<PAGE>
Exhibit 4(k)
------------
HAWAIIAN ELECTRIC INDUSTRIES, INC.
----------------------------------
Officer's Certificate Pursuant to
Sections 2.3 and 11.5 of the Indenture
--------------------------------------
The undersigned hereby certifies, pursuant to the Senior Subordinated
Indenture, dated as of ____________, _____ (the "Indenture"), between Hawaiian
Electric Industries, Inc., a Hawaii corporation (the "Company"), and
_____________________, a ______________________, as Trustee (the "Trustee"),
that:
A. There has been established pursuant to resolutions duly adopted
by the Board of Directors of the Company at its meeting held on
____________________ a series of Securities (as that term is defined in the
Indenture) to be issued under the Indenture, which Securities shall be in the
form and shall include the Certificate of Authentication attached hereto and
shall have the following terms (capitalized terms defined in the Indenture but
not herein shall have the meanings given to such terms in the Indenture):
1. [state the designation of the Securities of the series, which
shall distinguish the Securities of the Series from the Securities of all
other series];
2. [state any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.8, 2.9, 2.11, 8.5, 12.3 or
14.3 of the Indenture)];
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<PAGE>
3. [if other than Dollars, state the coin or currency in which the
Securities of that series are denominated (including, but not limited to,
any Foreign Currency or ECU)];
4. [state the date or dates on which the principal of the Securities
of the series is payable];
5. [state the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which such interest
shall accrue, on which such interest shall be payable and (in the case of
Registered Securities) on which a record shall be taken for the
determination of Holders to whom interest is payable and/or the method by
which such rate or rates or date or dates shall be determined];
6. [state the place or places where the principal of and any interest
on Securities of the series shall be payable (if other than as provided in
Section 3.2 of the Indenture)];
7. [state the right, if any, of the Issuer to redeem Securities, in
whole or in part, at its option and the period or periods within which, the
price or prices at which and any terms and conditions upon which Securities
of the series may be so redeemed, pursuant to any sinking fund or
otherwise];
8. [state the obligation, if any, of the Issuer to redeem, purchase
or repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder thereof
and the price or prices at which and the period or periods within which and
any terms and conditions upon which Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation];
9. [if other than denominations of $1,000 and any integral multiple
thereof in the case of Registered Securities, or $1,000 and $5,000 in the
case of Unregistered Securities, state the denominations in which
Securities of the series shall be issuable];
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<PAGE>
10. [if other than the principal amount thereof, state the portion of
the principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof];
11. [if other than the coin or currency in which the Securities of
that series are denominated, state the coin or currency in which payment of
the principal of or interest on the Securities of such series shall be
payable];
12. [if the principal of or interest on the Securities of such series
are to be payable, at the election of the Issuer or a Holder thereof, in a
coin or currency other than that in which the Securities are denominated,
state the period or periods within which, and the terms and conditions upon
which, such election may be made];
13. [if the amount of payments of principal of and interest on the
Securities of the series may be determined with reference to an index based
on a coin or currency other than that in which the Securities of the series
are denominated, state the manner in which such amounts shall be
determined];
14. [state whether the Securities of the series will be issuable as
Registered Securities (and if so, state whether such Securities will be
issuable as Registered Global Securities) or Unregistered Securities (with
or without Coupons), or any combination of the foregoing, any restrictions
applicable to the offer, sale or delivery of Unregistered Securities or the
payment of interest thereon and, if other than as provided in Section 2.8
of the Indenture, state the terms upon which Unregistered Securities of any
series may be exchanged for Registered Securities of such series and vice
versa];
15. [state whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series held by a person who is
not a U.S. person in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, state whether the Issuer will have the
option to redeem such Securities rather than pay such additional amounts];
3
<PAGE>
16. [if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
include the form and terms of such certificates, documents or conditions];
17. [identify any trustees, depositaries, authenticating or paying
agents, transfer agents or registrars or any other agents with respect to
the Securities of such series];
18. [state any other events of default or covenants with respect to
the Securities of such series in addition to the Events of Default or
covenants set forth herein];
19. [if the Securities of such series are to be convertible into any
cash, securities or property, at the option of the Holder or the Issuer or
upon the happening of some event or otherwise, state all terms relating to
such convertibility, including without limitation any term inconsistent
with the provisions of this Indenture relating to conversion]; and
20. [state any other terms of the series (which terms shall not be
inconsistent with the provisions of the Indenture)].
B. The undersigned has read the Indenture, including the provisions
of Sections 2.3 and 11.5 and the definitions relating thereto, and the
resolutions adopted by the Board of Directors of the Company referred to above.
In the opinion of the undersigned, [he][she] has made such examination or
investigation as is necessary to enable [him][her] to express an informed
opinion as to whether or not all conditions precedent provided in the Indenture
relating to the establishment of the title and terms of a series of Securities
under the Indenture, designated as the _____________ in this Officer's
Certificate, and to the authentication and delivery by the Trustee of such
Securities, have been complied with. In the opinion of the undersigned, all
such conditions precedent have been complied with.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has hereunto executed this
Officer's Certificate as of the ____ day of __________, _____.
________________________________
Name:
Title:
5
<PAGE>
Exhibit 4(l)
------------
HAWAIIAN ELECTRIC INDUSTRIES, INC.
----------------------------------
Officers' Certificate Pursuant to
Sections 2.01 and 13.06 of the Indenture
----------------------------------------
The undersigned hereby certify, pursuant to the Indenture for Junior
Subordinated Debentures, dated as of ____________, 1997 (the "Indenture"),
between Hawaiian Electric Industries, Inc., a Hawaii corporation (the
"Company"), and The Bank of New York, a New York banking corporation, as Trustee
(the "Trustee"), that:
A. There has been established pursuant to resolutions duly adopted by
the Board of Directors of the Company at its meeting held on December 19, 1996,
as supplemented by resolutions adopted by the Board of Directors at its meeting
held on January 21, 1997, a series of Debentures (as that term is defined in the
Indenture) to be issued under the Indenture, which Debentures shall be in the
form and shall include the Certificate of Authentication attached hereto and
shall have the following terms (capitalized terms defined in the Indenture but
not herein shall have the meanings given to such terms in the Indenture):
1. The title of the Debentures of the series is "Junior
Subordinated Debentures, Series A" (the "Series A Debentures");
2. The limit upon the aggregate principal amount of the Series A
Debentures which may be authenticated and delivered under this Indenture
(except for Debentures authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Debentures of that
series) is $103,000,000;
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<PAGE>
3. The date on which the principal of each of the Series A
Debentures is payable shall be ______________, 2017 (the "Stated
Maturity");
4. Each Debenture will bear interest at the rate of _____% per
annum ("Interest Rate");
5. The principal of (and premium, if any) and interest on the
Series A Debentures shall be payable and the Series A Debentures shall be
surrendered for registration of transfer or exchange at the offices and
agencies of the Company maintained for that purpose in the Borough of
Manhattan, the City and State of New York, or at such other location or
locations selected by the Company, agreed to by the Trustee and consistent
with the Indenture. Payment of the principal (and premium, if any) and
interest due with respect to any Debenture at maturity will be made in
immediately available funds upon surrender of the Debenture at the place or
places provided hereinabove; provided that the Debenture is presented to
the Paying Agent in time for the Paying Agent to make such payments in such
funds in accordance with its normal procedures. Payments of interest other
than at maturity will be made at the place or places provided hereinabove;
provided that payment of interest on Debentures that are not registered to
a Hawaiian Electric Industries Capital Trust or the Partnership may be made
at the option of the Company by check mailed to the address of the Person
entitled thereto as it appears on the Debenture Register or by wire
transfer to an account appropriately designated by the Person entitled
thereto as it appears on the Debenture Register;
6. Interest shall accrue from the original date of issuance
until the principal thereof becomes due and payable, and on any overdue
principal and, to the extent that payment of such interest is enforceable
under applicable law, on any overdue installment of interest at the
Interest Rate, payable quarterly in arrears on March 31, June 30, September
30 and December 31 of each year (each, an "Interest Payment Date"),
commencing on March 31, 1997;
7. The Company shall have the right at any time during the term
of the Series A Debentures, from time to time, to extend the interest
payment period of
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<PAGE>
such Debenture for up to six consecutive quarters (an "Extension Period"),
during which periods interest will compound quarterly and the Company shall
have the right to make partial payments of interest on any Interest Payment
Date, and at the end of which Extension Period the Company shall pay all
interest then accrued and unpaid (together with Additional Interest thereon
to the extent that payment of such interest is permitted by applicable
law). Prior to the termination of any such Extension Period, the Company
may further extend the interest payment period, provided that such
Extension Period together with all such previous and further extensions
thereof shall not exceed six consecutive quarters or extend beyond the
Stated Maturity of this Debenture. Upon the termination of any such
Extension Period and upon the payment of all accrued and unpaid interest
and any Additional Interest then due, the Company may select a new
Extension Period, subject to the foregoing requirements. No interest shall
be due and payable during an Extension Period except at the end thereof.
The Company shall give the holder of this Debenture and the Trustee written
notice of its selection of an Extension Period at least one Business Day
prior to the earlier of (i) the Interest Payment Date or (ii) the date
Hawaiian Electric Industries Capital Trust I is required to give notice to
the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Trust Preferred Securities of the record
date or the date such distributions are payable, but in any event not less
than one Business Day prior to such record date;
8. At any time on or after February ___, 2002, the Company shall
have the right to redeem the Series A Debentures, in whole or in part, from
time to time, at a redemption price equal to 100% of the principal amount
of Debentures to be redeemed plus accrued but unpaid interest, including
any Additional Interest, if any, to the redemption date. If, at any time, a
Partnership Tax Event or a Partnership Investment Company Event, each a
Partnership Special Event, shall occur and be continuing, the Company may,
within 90 days following the occurrence of such Partnership Special Event,
elect to redeem the Series A Debentures in whole (but not in part), upon
not less than 30 or more than 60 days' notice at the redemption price,
provided that, if at the time there is available
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<PAGE>
to the Company or the Partnership the opportunity to eliminate, within such
90-day period, the Partnership Special Event by taking some ministerial
action, such as filing a form or making an election, or pursuing some other
similar reasonable such measure that in the sole judgment of the Company
has or will cause no adverse effect on the Partnership, the Trust or the
Company, the Company will pursue such measure in lieu of redemption;
For the purposes of this Certificate:
"Partnership Special Event" shall mean either a Partnership
Investment Company Event or a Partnership Tax Event;
"Partnership Investment Company Event", when used with respect to
the Series A Debentures that are held as trust assets of a Hawaiian
Electric Industries Capital Trust as to which a Security Exchange has not
theretofore occurred or as partnership assets of the Partnership, shall
mean that the General Partner shall have requested and received an opinion
of nationally recognized independent legal counsel experienced in such
matters to the effect that as a result of the occurrence, on or after the
date of the prospectus supplement relating to the Trust Preferred
Securities of such Hawaiian Electric Industries Capital Trust, of a change
in law or regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or
regulatory authority, there is more than an insubstantial risk that the
Partnership is or will be considered an "investment company" which is
required to be registered under the Investment Company Act of 1940;
"Partnership Tax Event" shall mean that the General Partner shall
have requested and received an opinion of nationally recognized independent
tax counsel experienced in such matters to the effect that there has been a
Tax Action resulting in there being more than an insubstantial risk that
(a) the Partnership is, or will be, subject to United States federal income
tax with respect to income accrued or received on the Affiliate Investment
Instruments or the Eligible Debt Securities (each as defined in the Limited
Partnership Agreement), (b) the Partnership is, or will be, subject to more
than a de minimus amount of other taxes, duties or other
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<PAGE>
governmental charges, or (c) interest payable by one or more of the
obligors with respect to the Affiliate Investment Instruments to the
Partnership is not, or will not be, deductible by the Company for United
States federal income tax purposes;
"Tax Action", when used with respect to the Series A Debentures
that are held as trust assets of a Hawaiian Electric Industries Capital
Trust as to which a Security Exchange has not theretofore occurred or as
partnership assets of the Partnership, shall mean that there has been (a)
an amendment to, change in or announced proposed change in the laws (or any
regulations thereunder) of the United States or any political subdivision
or taxing authority thereof or therein, (b) a judicial decision
interpreting, applying or clarifying such laws or regulations, (c) an
administrative pronouncement or action that represents an official position
(including a clarification of any official position) of the governmental
authority or regulatory body making such administrative pronouncement or
taking such action, or (d) a threatened challenge asserted in connection
with an audit of the Company or any of its Subsidiaries, the Partnership,
or the Trust, or a threatened challenge asserted in writing in connection
with any other taxpayer that has raised capital through the issuance of
securities that are substantially similar to the Series A Debentures, the
Partnership Preferred Securities, or the Trust Preferred Securities, which
amendment or change is adopted or which decision or pronouncement is
announced or which action, clarification or challenge occurs on or after
the date of the prospectus supplement relating to the Trust Preferred
Securities of such Hawaiian Electric Industries Capital Trust;
9. There is no obligation of the Company to redeem or purchase
the Series A Debentures pursuant to any sinking fund or analogous
provision, or at the option of the holder thereof;
10. The form of Series A Debenture, including the form of
Certificate of Authentication, is attached hereto;
11. The Series A Debentures shall be issued in denominations of
$25 or any integral multiple thereof;
5
<PAGE>
12. The Series A Debentures will not be issued as a Global
Debenture and there shall not be a Depository for any Global Debenture for
the Series A Debentures;
13. The Series A Debentures will not be deposited as trust assets
in a Hawaiian Electric Industries Capital Trust;
14. The Series A Debentures will be deposited as partnership
assets in HEI Preferred Funding, LP, a limited partnership created by the
Agreement of Limited Partnership dated as of December 23, 1996, as amended,
modified or otherwise supplemented from time to time;
15. The Series A Debentures will not be sold to Persons who are
not directly or indirectly owned or controlled by the Company and who are
not Affiliates of the Company; and
16. In case of any conflict between this certificate and the
Series A Debentures in the form attached hereto, or between the above-
mentioned Board resolutions and the Series A Debentures in such forms, the
Series A Debentures shall control.
B. Each of the undersigned has read the Indenture, including the
provisions of Sections 2.01 and 13.06 and the definitions relating thereto, and
the resolutions adopted by the Board of Directors of the Company referred to
above. In the opinion of each of the undersigned, 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 all conditions precedent provided in the
Indenture relating to the establishment of the title and terms of a series of
Debentures under the Indenture, designated as the Series A Debentures in this
Officers' Certificate, and to the authentication and delivery by the Trustee of
such Debentures, have been complied with. In the opinion of the undersigned, all
such conditions precedent have been complied with.
6
<PAGE>
IN WITNESS WHEREOF, the undersigned has hereunto executed this Officers'
Certificate as of the ____ day of __________, 1997.
________________________________
Name:
Title:
________________________________
Name:
Title:
7
<PAGE>
(FORM OF FACE OF DEBENTURE)
No. __________
HAWAIIAN ELECTRIC INDUSTRIES, INC.
______% JUNIOR SUBORDINATED DEBENTURE, SERIES A
DUE 2017
$_____________ PRINCIPAL AMOUNT
HAWAIIAN ELECTRIC INDUSTRIES, INC., a Hawaii corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _________________ or
registered assigns, the principal sum of ___________________ Dollars
($___________) on _________, _____ (the "Stated Maturity"), and to pay interest
on said principal sum from the original date of issuance or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on March 31, June 30, September 30 and December 31
of each year commencing March 31, 1997, at the rate of ______% per annum, plus
Additional Interest, if any, until the principal hereof shall have become due
and payable, and on any overdue principal and premium, if any. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months. For any period shorter than a full 90-
day quarter, interest will be computed on the basis of the actual number of days
elapsed in such 90-day quarter. In the event that any date on which interest
is payable on this Debenture is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the person
in whose name this Debenture (or one or more Predecessor Debentures, as defined
in said Indenture) is registered at the close of
<PAGE>
business on the regular record date for such interest installment.
Any interest on this Debenture which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date for Debentures of the same
series (herein called "Defaulted Interest") shall forthwith cease to be payable
to the registered holder on the relevant regular record date by virtue of having
been such holder; and such Defaulted Interest shall be paid by the Company, at
its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on this
Debenture to the person or persons in whose names this Debenture (or one or
more Predecessor Debentures) are registered at the close of business on a
special record date for the payment of such Defaulted Interest, which shall
be fixed in the following manner: the Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on this
Debenture and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest which shall
not be more than 15 nor less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such special record date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be mailed, first class
postage prepaid, to each Debentureholder at his or her address as it
appears in the Debenture Register, not less than 10 days prior to such
special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the person or persons
in whose names this Debenture (or one or more Predecessor Debentures) is
2
<PAGE>
registered on such special record date and shall be no longer payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on this
Debenture in any other lawful manner not inconsistent with the requirements
of any Securities Exchange on which this Debenture may be listed, and upon
such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
The Company shall have the right at any time during the term of this
Debenture, from time to time, to extend the interest payment period of this
Debenture for up to six consecutive quarters (an "Extension Period"), during
which periods interest will compound quarterly and the Company shall have the
right to make partial payments of interest on any Interest Payment Date, and at
the end of which Extension Period the Company shall pay all interest then
accrued and unpaid (together with Additional Interest thereon to the extent that
payment of such interest is permitted by applicable law). Prior to the
termination of any such Extension Period, the Company may further extend the
interest payment period, provided that such Extension Period together with all
such previous and further extensions thereof shall not exceed six consecutive
quarters or extend beyond the Stated Maturity of this Debenture. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company may select a
new Extension Period, subject to the foregoing requirements. No interest shall
be due and payable during an Extension Period except at the end thereof. The
Company shall give the holder of this Debenture and the Trustee written notice
of its selection of an Extension Period at least one Business Day prior to the
earlier of (i) the Interest Payment Date or (ii) the date Hawaiian Electric
Industries Capital Trust I is required to give notice to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of the
Trust Preferred Securities of the record date or the date such distributions are
payable, but in any event not less than one Business Day prior to such record
date.
The principal of (and premium, if any) and interest on this Debenture shall
be payable and this Debenture shall be surrendered for registration of transfer
or exchange at
3
<PAGE>
the offices and agencies of the Company maintained for that purpose in the
Borough of Manhattan, the City and State of New York, or at such other location
or locations selected by the Company, agreed to by the Trustee and consistent
with the Indenture. Payment of the principal (and premium, if any) and interest
due with respect to any Debenture at maturity will be made in immediately
available funds upon surrender of the Debenture at the place or places provided
hereinabove; provided that this Debenture is presented to the Paying Agent in
time for the Paying Agent to make such payments in such funds in accordance with
its normal procedures. Payments of interest other than at maturity will be made
at the place or places provided hereinabove; provided that payment of interest
on this Debenture if not registered to a Hawaiian Electric Industries Capital
Trust or the Partnership may be made at the option of the Company by check
mailed to the address of the Person entitled thereto as it appears on the
Debenture Register or by wire transfer to an account appropriately designated by
the Person entitled thereto as it appears on the Debenture Register.
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each holder hereof, by his or her acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee by manual signature.
The provisions of this Debenture are continued on the reverse side hereof
and such continued provisions shall
4
<PAGE>
for all purposes have the same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
Dated: HAWAIIAN ELECTRIC INDUSTRIES, INC.
By:
__________________________
Name:
Title:
By:
__________________________
Name:
Title:
Attest:
By:
__________________________
Name:
Title:
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debenture of the
Company (herein sometimes referred to as the "Debenture"), limited in aggregate
principal amount to $103,000,000, all issued or to be issued in one or more
series under and pursuant to an Indenture dated as of _______________ (the
"Indenture") duly executed and delivered between the Company and The Bank of New
York, as Trustee (the "Trustee", which term includes any successor trustee under
the Indenture), and pursuant to an Officers' Certificate dated as of
________________, (the "Officers' Certificate") duly executed by ______________,
________________, and ________________, ____________________, of the Company, to
which Indenture and said Officers' Certificate thereto reference is hereby made
for a description of the rights, limitations of rights,
5
<PAGE>
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Debentures and of the terms upon which the Debentures are,
and are to be, authenticated and delivered. By the terms of the Indenture, the
Debentures are issuable in series that may vary as to amount, date of maturity,
rate of interest and in other respects as provided in the Indenture.
At any time on or after February ___, 2002, the Company shall have the
right to redeem the Debentures, in whole or in part, from time to time, at a
redemption price equal to 100% of the principal amount of Debentures to be
redeemed plus accrued but unpaid interest, including any Additional Interest, if
any, to the redemption date.
If, at any time, a Partnership Tax Event or a Partnership Investment
Company Event, each a Partnership Special Event, shall occur and be continuing,
the Company may, within 90 days following the occurrence of such Partnership
Special Event, elect to redeem the Debentures in whole (but not in part), upon
not less than 30 or more than 60 days' notice at the redemption price, provided
that, if at the time there is available to the Company or the Partnership the
opportunity to eliminate, within such 90-day period, the Partnership Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable such measure that in the
sole judgment of the Company has or will cause no adverse effect on the
Partnership, the Trust or the Company, the Company will pursue such measure in
lieu of redemption.
For the purposes of this Debenture:
"Partnership Special Event" shall mean either a Partnership Investment
Company Event or a Partnership Tax Event;
"Partnership Investment Company Event", if this Debenture is held as trust
assets of a Hawaiian Electric Industries Capital Trust as to which a Security
Exchange has not theretofore occurred or as partnership assets of the
Partnership, shall mean that the General Partner shall have requested and
received an opinion of nationally recognized independent legal counsel
experienced in such matters to the effect that as a result of the occurrence, on
or after the date of the prospectus supplement relating to the Trust Preferred
Securities of such Hawaiian Electric Industries
6
<PAGE>
Capital Trust, of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Partnership is or will be considered an "investment company" which is
required to be registered under the Investment Company Act of 1940;
"Partnership Tax Event" shall mean that the General Partner shall have
requested and received an opinion of nationally recognized independent tax
counsel experienced in such matters to the effect that there has been a Tax
Action resulting in there being more than an insubstantial risk that (a) the
Partnership is, or will be, subject to United States federal income tax with
respect to income accrued or received on the Affiliate Investment Instruments or
the Eligible Debt Securities (each as defined in the Limited Partnership
Agreement), (b) the Partnership is, or will be, subject to more than a de
minimus amount of other taxes, duties or other governmental charges, or (c)
interest payable by one or more of the obligors with respect to the Affiliate
Investment Instruments to the Partnership is not, or will not be, deductible by
the Company for United States federal income tax purposes; and
"Tax Action", if this Debenture is held as trust assets of a Hawaiian
Electric Industries Capital Trust as to which a Security Exchange has not
theretofore occurred or as partnership assets of the Partnership, shall mean
that there has been (a) an amendment to, change in or announced proposed change
in the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) a judicial
decision interpreting, applying or clarifying such laws or regulations, (c) an
administrative pronouncement or action that represents an official position
(including a clarification of any official position) of the governmental
authority or regulatory body making such administrative pronouncement or taking
such action, or (d) a threatened challenge asserted in connection with an audit
of the Company or any of its Subsidiaries, the Partnership, or the Trust, or a
threatened challenge asserted in writing in connection with any other taxpayer
that has raised capital through the issuance of securities that are
substantially similar to the Debentures, the Partnership Preferred Securities,
or the Trust Preferred Securities, which amendment or change is adopted or which
decision or pronouncement is announced or
7
<PAGE>
which action, clarification or challenge occurs on or after the date of the
prospectus supplement relating to the Trust Preferred Securities of such
Hawaiian Electric Industries Capital Trust.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures for the unredeemed portion hereof will be issued in the name of
the holder hereof upon the cancellation hereof.
In case an Event of Default with respect to this series of Debentures, as
defined in the Indenture, shall have occurred and be continuing, the principal
of all of the Debentures may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for satisfaction and discharge at any
time of the entire indebtedness of this Debenture upon compliance by the Company
with certain conditions set forth in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to modify the Indenture in a manner
affecting the rights of the holders of the Debentures; provided, however, that
no such modification may, without the consent of the holder of each outstanding
Debenture (and, in the case of any series of Debentures held as trust assets of
a Hawaiian Electric Industries Capital Trust as to which a Security Exchange has
not theretofore occurred or as partnership assets of the Partnership, such
consent of the holders of the Trust Preferred Securities and the Trust Common
Securities of such Hawaiian Electric Industries Capital Trust as may be required
under the Trust Agreement of such Hawaiian Electric Industries Capital Trust),
(i) extend the fixed maturity of any Debentures of any series, or reduce the
principal amount thereof (including in the case of a discounted Debenture the
amount payable thereon in the event of acceleration or the amount provable in
bankruptcy) or any premium thereon, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable upon the redemption
thereof, or make the principal of or interest or premium, if any, on the
Debentures payable in any coin or currency other than that provided in the
Debentures,
8
<PAGE>
or impair or affect the right of any Debentureholder to institute suit for the
payment thereof or the right of prepayment, if any, at the option of the
Debentureholder, (ii) reduce the aforesaid percentage of Debentures, the holders
of which are required to consent to any such modification, or (iii) otherwise
adversely affect the interest of the holders of any series of Debentures.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the time and place and at the rate and in the
currency herein prescribed, in accordance with the terms of the Indenture, this
Debenture and the Officers' Certificate.
As provided in the Indenture and subject to certain limitations therein set
forth, this Debenture is transferable by the registered holder hereof on the
Debenture Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency provided by the Company for
that purpose accompanied by a written instrument or instruments of transfer in
form satisfactory to the Company or the Trustee duly executed by the registered
holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto, subject to certain limitations
set forth in the Indenture.
Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any Paying Agent and the Debenture Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Debenture Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any paying agent nor any Debenture Registrar
shall be affected by any notice to the contrary.
9
<PAGE>
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Debentures of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations herein and therein set
forth, Debentures of this series so issued are exchangeable for a like aggregate
principal amount of Debentures of this series of a different authorized
denomination, as requested by the holder surrendering the same.
All terms used in this Debenture that are defined in the Indenture and the
Officers' Certificate shall have the meanings assigned to them in the Indenture
and the Officers' Certificate.
THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.
10
<PAGE>
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series designated herein referred to
in the within-mentioned Indenture.
THE BANK OF NEW YORK
as Trustee
By:
__________________________
Authorized Officer
<PAGE>
Exhibit 4(o)
================================================================================
TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
DATED AS OF JANUARY [ ], 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation......................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application....................... 7
SECTION 2.2 Lists of Holders of Securities......................... 7
SECTION 2.3 Reports by the Trust Guarantee Trustee................. 8
SECTION 2.4 Periodic Reports to the Trust Guarantee Trustee........ 8
SECTION 2.5 Evidence of Compliance with Conditions Precedent....... 8
SECTION 2.6 Events of Default; Waiver.............................. 8
SECTION 2.7 Event of Default; Notice............................... 9
SECTION 2.8 Conflicting Interests.................................. 9
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
THE TRUST GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Guarantee Trustee....... 9
SECTION 3.2 Certain Rights of the Trust Guarantee Trustee.......... 12
SECTION 3.3 Not Responsible for Recitals or Issuance of the Trust
Preferred Securities Guarantee......................... 15
ARTICLE IV
THE TRUST GUARANTEE TRUSTEE
SECTION 4.1 The Trust Guarantee Trustee; Eligibility............... 15
SECTION 4.2 Appointment, Removal and Resignation of the Trust
Guarantee Trustee...................................... 16
SECTION 4.3 Successor to the Trust Guarantee Trustee by Merger,
Consolidation or Succession to Business................ 17
ARTICLE V
THE TRUST PREFERRED SECURITIES GUARANTEE
SECTION 5.1 Guarantee.............................................. 17
SECTION 5.2 Waiver of Notice and Demand............................ 17
SECTION 5.3 Obligations Not Affected............................... 17
SECTION 5.4 Rights of Holders...................................... 19
SECTION 5.5 Guarantee of Payment................................... 19
SECTION 5.6 Subrogation............................................ 19
SECTION 5.7 Independent Obligations................................ 20
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions............................. 20
SECTION 6.2 Ranking................................................ 11
ARTICLE VII
TERMINATION
SECTION 7.1 Termination............................................ 22
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
SECTION 8.1 Exculpation............................................ 22
SECTION 8.2 Indemnification........................................ 23
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns................................. 23
SECTION 9.2 Amendments............................................. 23
SECTION 9.3 Merger of the Guarantor................................ 24
SECTION 9.4 Notices................................................ 24
SECTION 9.5 Benefit................................................ 25
SECTION 9.6 Governing Law.......................................... 25
CROSS-REFERENCE TABLE*
SECTION OF SECTION OF
TRUST INDENTURE ACT GUARANTEE
OF 1939, AS AMENDED AGREEMENT
- ------------------- ----------
310(a)...................................................... 4.1(a)
310(b)...................................................... 4.1(c), 2.8
310(c)...................................................... Inapplicable
311(a)...................................................... 2.2(b)
311(b)...................................................... 2.2(b)
311(c)...................................................... Inapplicable
312(a)...................................................... 2.2(a)
312(b)...................................................... 2.2(b)
313......................................................... 2.3
314(a)...................................................... 2.4
314(b)...................................................... Inapplicable
314(c)...................................................... 2.5
314(d)...................................................... Inapplicable
314(e)...................................................... 1.1, 2.5, 3.2
314(f)...................................................... 2.1, 3.2
315(a)...................................................... 3.1(d)
315(b)...................................................... 2.7
315(c)...................................................... 3.1
315(d)...................................................... 3.1(d)
316(a)...................................................... 1.1, 2.6, 5.4
316(b)...................................................... 5.3
316(c)...................................................... 9.2
317(a)...................................................... Inapplicable
318(a)...................................................... Inapplicable
318(a)...................................................... 2.1(b)
318(b)...................................................... 2.1
318(c)...................................................... 2.1(a)
- --------
* This Cross-Reference Table does not constitute part of this Trust Preference
Securities Guarantee Agreement and shall not affect the interpretation of any
of its terms or provisions.
</TABLE>
<PAGE>
Trust Preferred Securities Guarantee Agreement
This TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Trust
Preferred Securities Guarantee"), dated as of February __, 1997, is executed and
delivered by Hawaiian Electric Industries, Inc., a Hawaii corporation (the
"Guarantor" or the "Company"), and The Bank of New York, a New York banking
corporation, as trustee (the "Trust Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Trust Preferred Securities
(as defined herein) of Hawaiian Electric Industries Capital Trust I, a Delaware
statutory business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of February __, 1997, among the trustees of the
Trust named therein, Hawaiian Electric Industries, Inc., as sponsor, and the
holders from time to time of undivided beneficial interests in the assets of the
Trust, the Trust is issuing on the date hereof 4,000,000 Trust Originated
Preferred Securities, having an aggregate liquidation amount of $100,000,000,
designated the % Trust Originated Preferred Securities (the "Trust
Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Trust Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Trust Preferred Securities Guarantee, to pay to the
Holders of the Trust Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set forth
herein and;
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Trust Common Securities Guarantee") in substantially identical
terms to this Trust Preferred Securities Guarantee for the benefit of the
holders of the Trust Common Securities (as defined herein), except that if the
Company is in default on any of its obligations under this Trust Preferred
Securities Guarantee or the Partnership Guarantee or an Investment Event of
Default (as defined herein) has occurred and is continuing and the Company is in
default on any of its obligations with respect thereto under an applicable
Investment Guarantee, the rights of holders of the Trust Common Securities to
receive Guarantee Payments under the
1
<PAGE>
Trust Common Securities Guarantee are subordinated to the rights of Holders of
Trust Preferred Securities to receive Guarantee Payments under this Trust
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Trust Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Trust Preferred
Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Trust Preferred Securities Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Trust Preferred Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) capitalized terms used in this Trust Preferred Securities
Guarantee but not otherwise defined herein shall have the meanings assigned to
them in the Trust Agreement or the Agreement of Limited Partnership, as the case
may be;
(c) a term defined anywhere in this Trust Preferred Securities
Guarantee has the same meaning throughout;
(d) all references to "this Trust Preferred Securities Guarantee" are
to this Trust Preferred Securities Guarantee as modified, supplemented or
amended from time to time;
(e) all references in this Trust Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Trust Preferred
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Trust Preferred Securities Guarantee, unless otherwise defined
in this Trust Preferred
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Securities Guarantee or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" means, with respect to any specified Person, any other
Person that directly or indirectly controls or is controlled by, or is under
common control with, such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Affiliate Investment Instruments" has the meaning set forth in the
Agreement of Limited Partnership.
"Agreement of Limited Partnership" means the Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of February ____,
1997, among Hycap Management, Inc., a Delaware corporation, as general partner,
Hawaiian Electric Industries Capital Trust I, a Delaware statutory business
trust, as initial limited partner, and such other Persons who become limited
partners as provided therein.
"Business Day" means any day other than a day on which banking
institutions in the City of New York, State of New York are authorized or
required by any applicable law to close.
"Comparable Equity Interest" shall mean any preferred security
hereafter issued by any finance subsidiary of which the Company is the parent
company and the principal purpose of which is to lend the proceeds of the sale
thereof to the Company or to eligible affiliates of the Company.
"Corporate Trust Office" means the principal trust office of the Trust
Guarantee Trustee at which, at any particular time, its corporate trust business
shall be administered, which office at the date hereof is located at 101 Barclay
Street, 21st Floor, New York, New York 10286, Attention: Corporate Trust
Trustee Administration.
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"Covered Person" means any Holder or beneficial owner of Trust
Preferred Securities.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Trust Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Trust Preferred Securities, to the
extent not paid or made by the Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) that are required to be paid
on such Trust Preferred Securities to the extent the Trust shall have funds
available therefor, (ii) the redemption price, including all accumulated and
unpaid Distributions to the date of redemption (the "Redemption Price") to the
extent the Trust has funds available therefor, with respect to any Trust
Preferred Securities called for redemption by the Trust, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Trust
(other than in connection with the distribution of Partnership Preferred
Securities to the Holders as provided in the Trust Agreement or the redemption
of all of the Trust Preferred Securities), the lesser of (a) the aggregate of
the liquidation amount and all accumulated and unpaid Distributions on the Trust
Preferred Securities to the date of payment and (b) the amount of assets of the
Trust, after satisfaction of all liabilities, remaining available for
distribution to Holders in liquidation of the Trust (in either case, the
"Liquidation Distribution").
"Holder" shall mean any and each holder, as registered on the books
and records of the Trust of any Trust Preferred Securities; provided, however,
that, in determining whether the holders of the requisite percentage of Trust
Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.
"Indemnified Person" means the Trust Guarantee Trustee, any Affiliate
of the Trust Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Trust Guarantee Trustee.
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"Investment Affiliate" means the Company or any corporation,
partnership, limited liability company or other entity (other than the
Partnership, the general partner of the Partnership or the Trust) that is
controlled by the Company and is not an investment company by reason of
Section 3(a) or 3(b) of the 1940 Act.
"Investment Event of Default" means an event of default under any
Affiliate Investment Instrument that is a debt instrument or the breach by an
Investment Affiliate of its obligations under any Affiliate Investment
Instrument that is an equity instrument.
"Majority in liquidation amount of the Trust Preferred Securities"
means, except as provided by the Trust Indenture Act, a vote by Holders of Trust
Preferred Securities, voting separately as a class, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all Trust
Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
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"Partnership" means HEI Preferred Funding, LP.
"Partnership Preferred Securities" means those securities representing
limited partner interests in the Partnership.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the Trust Guarantee
Trustee, any officer within the Corporate Trust Office of the Trust Guarantee
Trustee, including any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer or other officer of the Trust
Guarantee Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Trust Guarantee Trustee" means a successor Trust Guarantee
Trustee possessing the qualifications to act as Trust Guarantee Trustee under
Section 4.1.
"Trust Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Trust.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Guarantee Trustee" means The Bank of New York, a New York
banking corporation, until a Successor Trust Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this Trust
Preferred Securities Guarantee and thereafter means each such Successor Trust
Guarantee Trustee.
"Trust Securities" means the Trust Common Securities together with the
Trust Preferred Securities.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Trust Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this Trust
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions.
(b) If and to the extent that any provision of this Trust Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, the duties imposed by
the Trust Indenture Act shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Trust Guarantee Trustee shall preserve in as current a form as
is reasonably practicable the most recent list available to it of the names and
addresses of Holders of Trust Preferred Securities. If the Trust Guarantee
Trustee is not the Registrar, the Guarantor shall furnish (or cause to be
furnished) to the Trust Guarantee Trustee semi-annually on or before the last
day of June and December in each year, and at such other times as the Trust
Guarantee Trustee may request in writing, a list, in such form and as of such
date as the Trust Guarantee Trustee may reasonably require, containing all the
information in the possession or control of the Registrar, the Guarantor or any
of its Paying Agents other than the Trust Guarantee Trustee as to the names and
addresses of Holders of Trust Preferred Securities. If there are unregistered
securities outstanding, even if the Trust Guarantee Trustee is the Registrar,
the Company shall furnish to the Trust Guarantee Trustee such a list containing
such information with respect to Holders of such unregistered securities only.
(b) The Trust Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
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SECTION 2.3 Reports by the Trust Guarantee Trustee
Within 60 days after May 15 of each year, the Trust Guarantee Trustee
shall provide to the Holders of the Trust Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Trust
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to the Trust Guarantee Trustee
The Guarantor shall provide to the Trust Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act. Delivery of such reports, information and documents to the Trust
Guarantee Trustee is for informational purposes only and the Trust Guarantee
Trustee's receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Trust Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Trust Preferred Securities Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Trust Preferred
Securities may, by vote, on behalf of the Holders of all of the Trust Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Trust Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
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SECTION 2.7 Event of Default; Notice
(a) The Trust Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Trust Preferred Securities, notices of all Events
of Default actually known to a Responsible Officer of the Trust Guarantee
Trustee, unless such defaults have been cured before the giving of such notice;
provided, however, that the Trust Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Trust
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Trust Preferred Securities.
(b) The Trust Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Trust Guarantee Trustee shall have received
written notice, or of which a Responsible Officer of the Trust Guarantee Trustee
charged with the administration of the Trust Agreement shall have obtained
actual knowledge.
SECTION 2.8 Conflicting Interests
The Trust Agreement shall be deemed to be specifically described in
this Trust Preferred Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
THE TRUST GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Guarantee Trustee
(a) This Trust Preferred Securities Guarantee shall be held by the
Trust Guarantee Trustee for the benefit of the Holders of the Trust Preferred
Securities, and the Trust Guarantee Trustee shall not transfer this Trust
Preferred Securities Guarantee to any Person except a Holder of Trust Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Trust Guarantee Trustee on acceptance by such Successor Trust
Guarantee Trustee of its appointment to act as Successor Trust Guarantee
Trustee. The right, title and interest of the Trust Guarantee Trustee shall
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automatically vest in any Successor Trust Guarantee Trustee, and such vesting
and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor
Trust Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Trust Guarantee Trustee has occurred and is continuing, the Trust Guarantee
Trustee shall enforce this Trust Preferred Securities Guarantee for the benefit
of the Holders of the Trust Preferred Securities.
(c) The Trust Guarantee Trustee, during the period before the
occurrence of any Event of Default and during the period after the curing or
waiver of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Trust Preferred
Securities Guarantee, and no implied covenants shall be read into this Trust
Preferred Securities Guarantee against the Trust Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6) and is actually known to a Responsible Officer of the Trust
Guarantee Trustee, the Trust Guarantee Trustee shall exercise such of the rights
and powers vested in it by this Trust Preferred Securities Guarantee, and use
the same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Trust Preferred Securities Guarantee shall be
construed to relieve the Trust Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) During the period prior to the occurrence of any Event of
Default and during the period after the curing or waiving of any Events of
Default that may occur:
(A) the duties and obligations of the Trust Guarantee Trustee
shall be determined solely by the express provisions of this Trust
Preferred Securities Guarantee, and the Trust Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this
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Trust Securities Guarantee, and no implied covenants or obligations
shall be read into this Trust Securities Guarantee against the Trust
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Trust
Guarantee Trustee, the Trust Guarantee Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Trust Guarantee Trustee and conforming to the requirements of this
Trust Preferred Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Trust Guarantee Trustee, the Trust
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Trust Preferred Securities Guarantee;
(ii) The Trust Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Trust
Guarantee Trustee, unless it shall be proved that the Trust Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) The Trust Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Trust Preferred Securities
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trust Guarantee Trustee, or exercising any trust or
power conferred upon the Trust Guarantee Trustee under this Trust Preferred
Securities Guarantee; and
(iv) No provision of this Trust Preferred Securities Guarantee shall
require the Trust Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the Trust
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or
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liability is not reasonably assured to it under the terms of this Trust
Preferred Securities Guarantee or indemnity, reasonably satisfactory to the
Trust Guarantee Trustee, against such risk or liability is not reasonably
assured to it.
SECTION 3.2 Certain Rights of the Trust Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Trust Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Trust Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Trust Preferred
Securities Guarantee, the Trust Guarantee Trustee shall deem it desirable
that a matter be proved or established before taking, suffering or omitting
any action hereunder, the Trust Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Trust Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof).
(v) The Trust Guarantee Trustee may, at the expense of the Sponsor,
consult with counsel of its selection, and the advice or opinion of such
counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered or
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omitted by it hereunder in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Trust Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Trust Preferred Securities Guarantee from any
court of competent jurisdiction.
(vi) The Trust Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Trust Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Trust Guarantee Trustee, against
the costs, expenses (including attorneys' fees and expenses and the
expenses of the Trust Guarantee Trustee's agents, nominees or custodians)
and liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by the
Trust Guarantee Trustee; provided that, nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Trust Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Trust Preferred Securities Guarantee.
(vii) The Trust Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trust Guarantee Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(viii) The Trust Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, nominees, custodians or attorneys, and the Trust Guarantee
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
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(ix) Any action taken by the Trust Guarantee Trustee or its agents
hereunder shall bind the Holders of the Trust Preferred Securities, and the
signature of the Trust Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Trust Guarantee Trustee
to so act or as to its compliance with any of the terms and provisions of
this Trust Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Trust Guarantee Trustee or its agent taking
such action.
(x) Whenever in the administration of this Trust Preferred
Securities Guarantee the Trust Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Trust Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Trust Preferred Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively relying on or acting
in accordance with such instructions.
(xi) The Trust Guarantee Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Trust Preferred Securities Guarantee.
(b) No provision of this Trust Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Trust Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Trust Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Trust Guarantee Trustee shall be construed to be a duty.
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SECTION 3.3 Not Responsible for Recitals or Issuance of the Trust Preferred
Securities Guarantee
The recitals contained in this Trust Preferred Securities Guarantee shall
be taken as the statements of the Guarantor, and the Trust Guarantee Trustee
does not assume any responsibility for their correctness. The Trust Guarantee
Trustee makes no representation as to the validity or sufficiency of this Trust
Preferred Securities Guarantee.
ARTICLE IV
THE TRUST GUARANTEE TRUSTEE
SECTION 4.1 The Trust Guarantee Trustee; Eligibility
(a) There shall at all times be a Trust Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Trust Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Trust Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2(c).
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(c) If the Trust Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Trust Guarantee Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of the Trust Guarantee Trustee
(a) Subject to Section 4.2(b), the Trust Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor except during an Event of
Default.
(b) The Trust Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Trust Guarantee Trustee has been appointed and
has accepted such appointment by written instrument executed by such Successor
Trust Guarantee Trustee and delivered to the Guarantor.
(c) The Trust Guarantee Trustee appointed to office shall hold office until
a Successor Trust Guarantee Trustee shall have been appointed or until its
removal or resignation. The Trust Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Trust Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Trust Guarantee Trustee has
been appointed and has accepted such appointment by instrument in writing
executed by such Successor Trust Guarantee Trustee and delivered to the
Guarantor and the resigning Trust Guarantee Trustee.
(d) If no Successor Trust Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of removal or resignation, the Trust Guarantee Trustee
resigning or being removed may petition any court of competent jurisdiction for
appointment of a Successor Trust Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a
Successor Trust Guarantee Trustee.
(e) No Trust Guarantee Trustee shall be liable for the acts or omissions to
act of any Successor Trust Guarantee Trustee.
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(f) Upon termination of this Trust Preferred Securities Guarantee or
removal or resignation of the Trust Guarantee Trustee pursuant to this Section
4.2, and before the appointment of any Successor Trust Guarantee Trustee the
Guarantor shall pay to the Trust Guarantee Trustee all amounts to which it is
entitled to the date of such termination, removal or resignation.
SECTION 4.3 Successor to the Trust Guarantee Trustee by Merger, Consolidation
or Succession to Business.
Any corporation into which the Trust Guarantee Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trust Guarantee Trustee, shall be the successor of the Trust Guarantee Trustee
hereunder, provided such corporation shall be qualified and eligible under the
provisions of Section 4.1(a), without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
ARTICLE V
THE TRUST PREFERRED SECURITIES GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Trust), if, as and when due, regardless of any defense, right of setoff
or counterclaim that the Trust may have or assert. The Guarantor's obligation
to make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Trust to pay such
amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Trust Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Trust or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under
this Trust Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition
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relating to the Trust Preferred Securities to be performed or observed by the
Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Trust Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Trust Preferred Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Partnership Preferred Securities or any extension
of the maturity date of the Partnership Preferred Securities permitted by the
Agreement of Limited Partnership);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Trust Preferred
Securities, or any action on the part of the Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Trust Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
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SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Trust Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Trust Guarantee Trustee in
respect of this Trust Preferred Securities Guarantee or exercising any trust or
power conferred upon the Trust Guarantee Trustee under this Trust Preferred
Securities Guarantee.
(b) If the Trust Guarantee Trustee fails to enforce its rights under the
Trust Preferred Securities Guarantee after a Holder of Trust Preferred
Securities has made a written request, such Holder of Trust Preferred Securities
may institute a legal proceeding directly against the Guarantor to enforce the
Trust Guarantee Trustee's rights under this Trust Preferred Securities
Guarantee, without first instituting a legal proceeding against the Trust, the
Trust Guarantee Trustee or any other Person or entity. Notwithstanding the
foregoing, if the Guarantor has failed to make a guarantee payment, a Holder of
Trust Preferred Securities may directly institute a proceeding in such Holder's
own name against the Guarantor for enforcement of the Trust Preferred Securities
Guarantee for such payment. The Guarantor waives any right or remedy to require
that any action be brought first against the Trust or any other Person or entity
before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Trust Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Trust Preferred Securities against the Trust in respect of any amounts paid to
such Holders by the Guarantor under this Trust Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Trust Preferred
19
<PAGE>
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Trust Preferred Securities Guarantee. If any amount shall
be paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Trust with respect to the Trust Preferred Securities,
and that the Guarantor shall be liable as principal and as debtor hereunder to
make Guarantee Payments pursuant to the terms of this Trust Preferred Securities
Guarantee notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Trust Preferred Securities remain outstanding, if (a) for
any distribution period, full distributions on a cumulative basis on any Trust
Preferred Securities have not been paid or declared and set apart for payment,
(b) an Investment Event of Default by any Investment Affiliate in respect of any
Affiliate Investment Instrument has occurred and is continuing and the Company
has not performed its obligations with respect thereto under an applicable
Investment Guarantee, or (c) the Company is in default of its obligations under
this Trust Preferred Securities Guarantee, the Trust Common Securities Guarantee
or the Partnership Guarantee, then, during such period (i) the Company shall not
declare or pay any dividends on, make any distributions with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect to any
of its capital stock (except for dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of, its common
stock and exchanges or conversions of common stock of one class for common stock
of another class and other than (x) purchases or acquisitions of shares of its
Common Stock in connection with the satisfaction by the Company of its
20
<PAGE>
obligations under any employee benefit plans or any other contractual obligation
of the Company (other than a contractual obligation ranking pari passu with or
junior to an Affiliate Investment Instrument), (y) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock or (z) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged),
(ii) the Company shall not make any payment or cause any payment to be made that
would result in, and shall take such action as shall be necessary to prevent,
the payment of dividends on, any distribution with respect to, any redemption,
purchase or other acquisition of, or any liquidation payment with respect to,
any Comparable Equity Interest, and (iii) the Company shall not make any
guarantee payments with respect to the foregoing (other than pursuant to this
Trust Preferred Securities Guarantee or any other guarantee by the Company with
respect to any Comparable Equity Interest).
SECTION 6.2 Ranking
This Trust Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, including, without
limitation, the fees, charges, expenses and indemnities due to the Property
Trustee or the Delaware Trustee in respect of the Trust Agreement, to the
Partnership Guarantee Trustee in respect of the Partnership Guarantee, to the
Investment Guarantee Trustee in respect of the Investment Guarantee and to the
Trust Guarantee Trustee in respect of this Trust Guarantee, (ii) pari passu with
(A) the most senior preferred or preference stock now or hereafter issued by the
Guarantor, (B) each Investment Guarantee related to an Affiliate Investment
Instrument, (C) the Partnership Guarantee, (D) any guarantee hereafter entered
into by the Guarantor in respect of any preferred security (similar to the Trust
Preferred Securities or the Partnership Preferred Securities) of the Guarantor
or any Affiliate of the Guarantor, and (E) any other obligation of the Guarantor
expressly stated to rank pari passu with this Trust Guarantee or any of the
foregoing, and (iii) senior to the Guarantor's common stock. Any similar
guarantee given
21
<PAGE>
hereafter by the Company with respect to Trust Preferred Securities that is
silent as to seniority will rank pari passu with this Trust Preferred Securities
Agreement.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Trust Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Trust Preferred Securities, (ii) upon the
distribution of the Partnership Preferred Securities to the Holders of all of
the Trust Preferred Securities or (iii) upon full payment of the amounts payable
in accordance with the Trust Agreement upon liquidation of the Trust.
Notwithstanding the foregoing, this Trust Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Trust Preferred Securities must restore payment of any sums
paid under the Trust Preferred Securities or under this Trust Preferred
Securities Guarantee.
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Trust Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Trust Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's gross negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions, reports
or statements
22
<PAGE>
presented to the Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Guarantor, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Trust Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense, including taxes (other than taxes based on the income of such
Indemnified Person) incurred without gross negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Trust Preferred Securities Guarantee or the earlier resignation or removal of
the Trust Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Trust Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Trust Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not materially adversely affect
the rights of Holders (in which case no consent of Holders will be required),
this Trust Preferred Securities
23
<PAGE>
Guarantee may only be amended with the prior approval of the Holders of at least
a Majority in liquidation amount of the Trust Preferred Securities. The
provisions of Section 13.2 of the Trust Agreement with respect to meetings of
Holders of the Trust Preferred Securities apply to the giving of such approval.
SECTION 9.3 Merger of the Guarantor
The Guarantor covenants that it will not merge or consolidate with any
other corporation or other entity or sell or convey all or substantially all of
its assets to any Person (other than such a sale or conveyance to a Subsidiary
or any successor thereto (such a sale or conveyance being called an "Asset Drop-
Down")), unless (i) either the Guarantor shall be the continuing corporation or
the successor corporation or other entity or the Person which acquires by sale
or conveyance substantially all the assets of the Guarantor shall expressly
assume the obligations of the Guarantor hereunder, according to their tenor, and
the due and punctual performance and observance of all of the covenants hereof
to be performed or observed by the Guarantor, by instrument in form satisfactory
to the Trust Guarantee Trustee, executed and delivered to the Trust Guarantee
Trustee by such corporation or other entity, and (ii) the Guarantor or such
successor corporation or other entity, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance, be
in default in the performance of any such covenant or condition. In the event
of any Asset Drop-Down after the date hereof, any subsequent sale or conveyance
of assets by a Subsidiary to which assets were transferred in such Asset Drop-
Down will be deemed to be a sale or conveyance of assets by the Company for
purposes of this provision.
SECTION 9.4 Notices
All notices provided for in this Trust Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Trust Guarantee Trustee, at the Trust Guarantee
Trustee's mailing address set forth below:
The Bank of New York
101 Barclay Street, 21st Floor
24
<PAGE>
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Telecopy: (212)815-5915
(b) If given to the Guarantor, at the Guarantor's mailing address set forth
below (or such other address as the Guarantor may give notice of to the Holders
of the Trust Preferred Securities):
Hawaiian Electric Industries, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Attention: Treasurer
Telecopy: (808) 543-7966
(c) If given to any Holder of Trust Preferred Securities, at the address
set forth on the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.5 Benefit
This Trust Preferred Securities Guarantee is solely for the benefit of the
Holders of the Trust Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Trust Preferred Securities.
SECTION 9.6 Governing Law
THIS TRUST PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
25
<PAGE>
THIS TRUST PREFERRED SECURITIES GUARANTEE is executed as
of the day and year first above written.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
as Guarantor
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trust Guarantee Trustee
By:___________________________________
Name:
Title:
26
<PAGE>
Exhibit 4(p)
------------
=============================================================================
PARTNERSHIP GUARANTEE AGREEMENT
HEI PREFERRED FUNDING, LP
DATED AS OF JANUARY [ ], 1997
=============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.......................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application...................... 6
SECTION 2.2 Lists of Holders of Securities........................ 6
SECTION 2.3 Reports by the Partnership Guarantee Trustee.......... 7
SECTION 2.4 Periodic Reports to the Partnership Guarantee
Trustee............................................... 7
SECTION 2.5 Evidence of Compliance with Conditions Precedent...... 7
SECTION 2.6 Events of Default; Waiver............................. 7
SECTION 2.7 Event of Default; Notice.............................. 8
SECTION 2.8 Conflicting Interests................................. 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE
PARTNERSHIP GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Partnership Guarantee Trustee 8
SECTION 3.2 Certain Rights of the Partnership Guarantee Trustee... 11
SECTION 3.3 Not Responsible for Recitals or Issuance of the
Partnership Guarantee................................. 14
ARTICLE IV
THE PARTNERSHIP GUARANTEE TRUSTEE
SECTION 4.1 The Partnership Guarantee Trustee; Eligibility.......... 14
SECTION 4.2 Appointment, Removal and Resignation of Partnership
Guarantee Trustee....................................... 15
SECTION 4.3 Successor to the Partnership Guarantee Trustee by
Merger, Consolidation or Succession to Business......... 16
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE V
THE PARTNERSHIP GUARANTEE
SECTION 5.1 Guarantee............................................. 16
SECTION 5.2 Waiver of Notice and Demand........................... 17
SECTION 5.3 Obligations Not Affected.............................. 17
SECTION 5.4 Rights of Holders..................................... 18
SECTION 5.5 Guarantee of Payment.................................. 19
SECTION 5.6 Subrogation........................................... 19
SECTION 5.7 Independent Obligations............................... 19
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions............................ 19
SECTION 6.2 Ranking............................................... 20
ARTICLE VII
TERMINATION
SECTION 7.1 Termination........................................... 21
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
SECTION 8.1 Exculpation........................................... 22
SECTION 8.2 Indemnification....................................... 22
ARTICLE IX
COVENANTS OF THE GUARANTOR
SECTION 9.1 General Partner of the Partnership.................... 23
SECTION 9.2 Amendments............................................ 23
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Successors and Assigns................................ 23
SECTION 10.2 Merger of the Guarantor............................... 23
SECTION 10.3 Notices............................................... 24
SECTION 10.4 Gender................................................ 25
SECTION 10.5 Benefit............................................... 25
SECTION 10.6 Governing Law......................................... 26
</TABLE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
- ------------------- ----------
<S> <C>
310(a) ........................................................ 4.1(a)
310(b) ........................................................ 4.1(c), 2.8
310(c) ........................................................ Inapplicable
311(a) ........................................................ 2.2(b)
311(b) ........................................................ 2.2(b)
311(c) ........................................................ Inapplicable
312(a) ........................................................ 2.2(a)
312(b) ........................................................ 2.2(b)
313 ........................................................ 2.3
314(a) ........................................................ 2.4
314(b) ........................................................ Inapplicable
314(c) ........................................................ 2.5
314(d) ........................................................ Inapplicable
314(e) ........................................................ 1.1, 2.5, 3.2
314(f) ........................................................ 2.1, 3.2
315(a) ........................................................ 3.1(d)
315(b) ........................................................ 2.7
315(c) ........................................................ 3.1
315(d) ........................................................ 3.1(d)
316(a) ........................................................ 1.1, 2.6, 5.4
316(b) ........................................................ 5.3
316(c) ........................................................ 9.2
317(a) ........................................................ Inapplicable
317(b) ........................................................ Inapplicable
318(a) ........................................................ 2.1(b)
318(b) ........................................................ 2.1
318(c) ........................................................ 2.1(a)
</TABLE>
- -----------------
* This Cross-Reference Table does not constitute part of this Partnership
Guarantee Agreement and shall not affect the interpretation of any of its
terms or provisions.
<PAGE>
PARTNERSHIP GUARANTEE AGREEMENT
This PARTNERSHIP GUARANTEE AGREEMENT (this "Partnership Guarantee"),
dated as of February __, 1997, is executed and delivered by Hawaiian Electric
Industries, Inc., a Hawaii corporation (the "Company" or the "Guarantor"), and
The Bank of New York, a New York banking corporation, as trustee (the
"Partnership Guarantee Trustee"), for the benefit of the holders from time to
time of the Partnership Preferred Securities (as defined below).
WHEREAS, pursuant to an Amended and Restated Agreement of Limited
Partnership (the "Agreement of Limited Partnership"), dated as of the date
hereof, of HEI Preferred Funding, LP, a Delaware limited partnership (the
"Partnership"), the Partnership may issue a single series of limited partner
interests in the Partnership (the "Partnership Preferred Securities");
WHEREAS, pursuant to the Agreement of Limited Partnership, the
proceeds received by the Partnership from the issuance and sale of the
Partnership Preferred Securities will be invested by the Partnership in the
Affiliate Investment Instruments and Eligible Debt Securities (each as defined
in the Agreement of Limited Partnership); and
WHEREAS, the Guarantor, as incentive for the Holders (as defined
herein) to purchase Partnership Preferred Securities, desires hereby irrevocably
and unconditionally to agree, to the extent set forth herein, to pay to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Partnership Preferred Securities, which purchase the Guarantor hereby agrees
shall directly or indirectly provide material benefits to the Guarantor, the
Guarantor executes and delivers this Partnership Guarantee for the benefit of
the Holders.
1
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Partnership Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Partnership Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) capitalized terms used in this Partnership Guarantee but not
otherwise defined herein shall have the meanings assigned to them in the
Agreement of Limited Partnership or the Trust Agreement, as the case may be;
(c) a term defined anywhere in this Partnership Guarantee has the same
meaning throughout;
(d) all references to "this Partnership Guarantee" are to this
Partnership Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Partnership Guarantee to Articles and
Sections are to Articles and Sections of this Partnership Guarantee, unless
otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Partnership Guarantee, unless otherwise defined in this
Partnership Guarantee or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" means, with respect to any specified Person, any other
Person that directly or indirectly controls or is controlled by, or is under
common control with, such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
2
<PAGE>
by contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Affiliate Investment Instrument" shall have the meaning set forth in
the Agreement of Limited Partnership.
"Comparable Equity Interest" shall mean any preferred security
hereafter issued by any finance subsidiary of which the Company is the parent
company and the principal purpose of which is to lend the proceeds of the sale
thereof to the Company or to eligible affiliates of the Company.
"Corporate Trust Office" means the principal trust office of the
Partnership Guarantee Trustee at which, at any particular time, its corporate
trust business shall be administered, which office at the date hereof is located
at 101 Barclay Street, 21st Floor, New York, New York 10286, Attention:
Corporate Trust Trustee Administration.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Partnership Guarantee.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Partnership Preferred
Securities, to the extent not paid or made by the Partnership: (i) any
accumulated and unpaid distributions that have theretofore been declared on the
Partnership Preferred Securities out of funds legally available therefor, (ii)
the redemption price, including all accumulated and unpaid Distributions to the
date of redemption (the "Redemption Price"), payable out of funds legally
available therefor, with respect to any Partnership Preferred Securities called
for redemption by the Partnership, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Partnership, the lesser of (a) the
aggregate of the liquidation preference and all accumulated and unpaid
distributions on the Partnership Preferred Securities to the date of payment and
(b) the amount of assets of the Partnership after satisfaction of all
liabilities remaining available for distribution to Holders in liquidation of
the Partnership (in either case, the "Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and records
of the Partnership, of any Partnership Preferred
3
<PAGE>
Securities; provided, however, that in determining whether the holders of the
requisite percentage of Partnership Preferred Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or
any entity owned more than 50% by the Guarantor, either directly or indirectly.
"Indemnified Person" means the Partnership Guarantee Trustee, any
Affiliate of the Partnership Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Partnership Guarantee Trustee.
"Investment Affiliate" means the Company or any corporation,
partnership, limited liability company or other entity (other than the
Partnership, the general partner of the Partnership or the Trust) that is
controlled by the Company and is not an investment company by reason of Section
3(a) or 3(b) of the 1940 Act.
"Investment Event of Default" means an event of default under any
Affiliate Investment Instrument that is a debt instrument or the breach by an
Investment Affiliate of its obligations under any Affiliate Investment
Instrument that is an equity instrument.
"Majority in liquidation preference of the Partnership Preferred
Securities" means, except as provided by the Trust Indenture Act, a vote by the
Holders of Partnership Preferred Securities, voting separately as a class, of
more than 50% of the aggregate liquidation preference (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all Partnership Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Partnership Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
4
<PAGE>
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Partnership" means HEI Preferred Funding, L.P.
"Partnership Guarantee Trustee" means The Bank of New York, a New York
banking corporation, until a Successor Partnership Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Partnership Guarantee and thereafter means each such Successor Partnership
Guarantee Trustee.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the Partnership Guarantee
Trustee, any officer within the Corporate Trust Office of the Partnership
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, any assistant treasurer or other officer of the Trust
Guarantee Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Partnership Guarantee Trustee" means a successor
Partnership Guarantee Trustee possessing the qualifications to act as
Partnership Guarantee Trustee under Section 4.1.
5
<PAGE>
"Trust" means Hawaiian Electric Industries Capital Trust I, a Delaware
statutory business trust.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Partnership Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Partnership Guarantee
and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Partnership
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, the duties imposed by the Trust
Indenture Act shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Partnership Guarantee Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders of Partnership Preferred Securities. If the
Partnership Trustee is not the Registrar, the Guarantor shall furnish to the
Partnership Guarantee Trustee semi-annually on or before the last day of June
and December in each year, and at such other times as the Partnership Guarantee
Trustee may request in writing, a list, in such form and as of such date as the
Partnership Guarantee Trustee may reasonably require, containing all the
information in the possession or control of the Registrar, the Guarantor or any
of its Paying Agents other than the Partnership Guarantee Trustee as to the
names and addresses of Holders of Partnership Preferred Securities. If there
are unregistered securities outstanding, even if the Partnership Guarantee
Trustee is the Registrar, the Company shall furnish to the Partnership Guarantee
Trustee such a list containing such information with respect to Holders of such
unregistered securities only.
6
<PAGE>
(b) The Partnership Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Partnership Guarantee Trustee
Within 60 days after May 15 of each year, the Partnership Guarantee
Trustee shall provide to the Holders of the Partnership Preferred Securities
such reports as are required by Section 313 of the Trust Indenture Act, if any,
in the form and in the manner provided by Section 313 of the Trust Indenture
Act. The Partnership Guarantee Trustee shall also comply with the requirements
of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to the Partnership Guarantee Trustee
The Guarantor shall provide to the Partnership Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act. Delivery of such reports, information and documents to the
Partnership Guarantee Trustee is for informational purposes only and the
Partnership Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Partnership Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Partnership Guarantee that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion required
to be given by an officer pursuant to Section 314(c)(1) may be given in the form
of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Partnership
Preferred Securities may, by vote, on behalf of the Holders of all of the
Partnership Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Partnership Guarantee, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.
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SECTION 2.7 Event of Default; Notice
(a) The Partnership Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Partnership Preferred Securities, notices of all
Events of Default actually known to a Responsible Officer of the Partnership
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice; provided, however, that the Partnership Guarantee Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Partnership Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Partnership Preferred
Securities.
(b) The Partnership Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Partnership Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the
Partnership Guarantee Trustee charged with the administration of the Trust
Agreement shall have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Trust Agreement shall be deemed to be specifically described in
this Partnership Guarantee for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
THE PARTNERSHIP GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Partnership Guarantee Trustee
(a) This Partnership Guarantee shall be held by the Partnership
Guarantee Trustee for the benefit of the Holders of the Partnership Preferred
Securities, and the Partnership Guarantee Trustee shall not transfer this
Partnership Preferred Guarantee to any Person except a Holder of Partnership
Preferred Securities exercising his or her rights pursuant to Section 5.4(b) or
to a Successor Partnership Guarantee Trustee
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on acceptance by such Successor Partnership Guarantee Trustee of its appointment
to act as Successor Partnership Guarantee Trustee. The right, title and interest
of the Partnership Guarantee Trustee shall automatically vest in any Successor
Partnership Guarantee Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Partnership Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Partnership Guarantee Trustee has occurred and is continuing, the
Partnership Guarantee Trustee shall enforce this Partnership Guarantee for the
benefit of the Holders of the Partnership Preferred Securities.
(c) The Partnership Guarantee Trustee, during the period before the
occurrence of any Event of Default and during the period after the curing or
waiver of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Partnership
Guarantee, and no implied covenants shall be read into this Partnership
Guarantee against the Partnership Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
and is actually known to a Responsible Officer of the Partnership Guarantee
Trustee, the Partnership Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Partnership Guarantee, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Partnership Guarantee shall be construed to
relieve the Partnership Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) During the period prior to the occurrence of any Event of
Default and during the period after the curing or waiving of any Events of
Default that may occur:
(A) the duties and obligations of the Partnership Guarantee
Trustee shall be determined solely by the express provisions of this
Partnership Guarantee, and the Partnership Guarantee Trustee shall not
be liable except for the performance of
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such duties and obligations as are specifically set forth in this
Partnership Guarantee, and no implied covenants or obligations shall
be read into this Partnership Guarantee against the Partnership
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Partnership
Guarantee Trustee, the Partnership Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Partnership
Guarantee Trustee and conforming to the requirements of this
Partnership Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Partnership
Guarantee Trustee, the Partnership Guarantee Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Partnership
Guarantee;
(ii) The Partnership Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Partnership Guarantee Trustee, unless it shall be proved that the
Partnership Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) The Partnership Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Partnership Preferred
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Partnership
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Guarantee Trustee, or exercising any trust or power conferred upon the
Partnership Guarantee Trustee under this Partnership Guarantee; and
(iv) No provision of this Partnership Guarantee shall require the
Partnership Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the Partnership
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this Partnership Guarantee or indemnity, reasonably
satisfactory to the Partnership Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of the Partnership Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Partnership Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Partnership Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this Partnership
Guarantee, the Partnership Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Partnership Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor.
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(iv) The Partnership Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Partnership Guarantee Trustee may, at the expense of the
Sponsor, consult with counsel of its selection, and the advice or opinion
of such counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Partnership Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Partnership Guarantee from any court of
competent jurisdiction.
(vi) The Partnership Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Partnership
Guarantee at the request or direction of any Holder, unless such Holder
shall have provided to the Partnership Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Partnership Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Partnership Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Partnership Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Partnership Guarantee Trustee, upon the occurrence of an Event of Default,
of its obligation to exercise the rights and powers vested in it by this
Partnership Guarantee.
(vii) The Partnership Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture,
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note, other evidence of indebtedness or other paper or document, but the
Partnership Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(viii) The Partnership Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the
Partnership Guarantee Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care
by it hereunder.
(ix) Any action taken by the Partnership Guarantee Trustee or its
agents hereunder shall bind the Holders of the Partnership Preferred
Securities, and the signature of the Partnership Guarantee Trustee or its
agents alone shall be sufficient and effective to perform any such action.
No third party shall be required to inquire as to the authority of the
Partnership Guarantee Trustee to so act or as to its compliance with any of
the terms and provisions of this Partnership Guarantee, both of which shall
be conclusively evidenced by the Partnership Guarantee Trustee or its agent
taking such action.
(x) Whenever in the administration of this Partnership Guarantee the
Partnership Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Partnership Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the
Partnership Preferred Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively relying on or acting
in accordance with such instructions.
(xi) The Partnership Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Partnership Guarantee.
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(b) No provision of this Partnership Guarantee shall be deemed to impose
any duty or obligation on the Partnership Guarantee Trustee to perform any act
or acts or exercise any right, power, duty or obligation conferred or imposed on
it in any jurisdiction in which it shall be illegal, or in which the Partnership
Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
Partnership Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of the Partnership
Guarantee
The recitals contained in this Partnership Guarantee shall be taken as the
statements of the Guarantor, and the Partnership Guarantee Trustee does not
assume any responsibility for their correctness. The Partnership Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Partnership Guarantee.
ARTICLE IV
THE PARTNERSHIP GUARANTEE TRUSTEE
SECTION 4.1 The Partnership Guarantee Trustee; Eligibility
(a) There shall at all times be a Partnership Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the
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requirements of the supervising or examining authority referred to above,
then, for the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Partnership Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Partnership Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Partnership Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Partnership Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of the Partnership Guarantee
Trustee
(a) Subject to Section 4.2(b), the Partnership Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an
Event of Default.
(b) The Partnership Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Partnership Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Partnership Guarantee Trustee and delivered to the Guarantor.
(c) The Partnership Guarantee Trustee appointed to office shall hold office
until a Successor Partnership Guarantee Trustee shall have been appointed or
until its removal or resignation. The Partnership Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Partnership Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Partnership
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Partnership Guarantee Trustee
and delivered to the Guarantor and the resigning Partnership Guarantee Trustee.
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(d) If no Successor Partnership Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of removal or resignation, the Partnership Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Partnership Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Partnership Guarantee Trustee.
(e) No Partnership Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Partnership Guarantee Trustee.
(f) Upon termination of this Partnership Guarantee or removal or
resignation of the Partnership Guarantee Trustee pursuant to this Section 4.2,
and before the appointment of any Successor Partnership Guarantee Trustee the
Guarantor shall pay to the Partnership Guarantee Trustee all amounts to which it
is entitled to the date of such termination, removal or resignation.
SECTION 4.3 Successor to the Partnership Guarantee Trustee by Merger,
Consolidation or Succession to Business.
Any corporation into which the Partnership Guarantee Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Partnership Guarantee Trustee, shall be the successor of the Partnership
Guarantee Trustee hereunder, provided such corporation shall be qualified and
eligible under the provisions of Section 4.1(a), without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
ARTICLE V
THE PARTNERSHIP GUARANTEE
SECTION 5.1 Guarantee.
(a) The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments, as and when due (without duplication of
amounts theretofore paid by the Partnership), regardless of any defense, right
of setoff or counterclaim which the Partnership may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Partnership to pay such amounts to the Holders.
(b) To the extent the same has not been paid by the General Partner, the
Guarantor irrevocably and unconditionally agrees to pay in full, as and when
due, without duplication of any amounts actually paid by the General Partner,
all debts, obligations, liabilities or expenses which the General Partner is
responsible for pursuant to the Agreement of Limited Partnership, including,
without limitation, those debts, obligations, liabilities or expenses set forth
in Sections 9.1, 9.2 and 11.3 thereof.
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SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Partnership
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Partnership, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor under
this Partnership Guarantee shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Partnership of any express or implied
agreement, covenant, term or condition relating to the Partnership Preferred
Securities to be performed or observed by the Partnership;
(b) the extension of time for the payment by the Partnership of all or any
portion of the distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Partnership Preferred Securities or
the extension of time for the performance of any other obligation under, arising
out of, or in connection with, the Partnership Preferred Securities; provided
that nothing in this Partnership Guarantee shall affect or impair any valid
extension of time for payment of such sums;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Partnership Preferred
Securities, or any action on the part of the Partnership granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of
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debt of, or other similar proceedings affecting, the Partnership or any of the
assets of the Partnership;
(e) any invalidity of, or defect or deficiency in, the Partnership
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
The Guarantor expressly acknowledges that (i) this Partnership Guarantee
will be deposited with the General Partner to be held for the benefit of the
Holders; (ii) in the event of the appointment of a Special Representative to,
among other things, enforce this Partnership Guarantee, the Special
Representative may take possession of this Partnership Guarantee for such
purpose; (iii) if no Special Representative has been appointed, the General
Partner has the right to enforce this Partnership Guarantee on behalf of the
Holders; (iv) the Holders of not less than a Majority in liquidation preference
of the Partnership Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available in
respect of this Partnership Guarantee including the giving of directions to the
General Partner or the Special Representative, as the case may be; and (v) if
the General Partner or Special Representative fails to enforce this Partnership
Guarantee as above provided, any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Partnership
Guarantee, without first instituting a legal proceeding against the Partnership
or any other person or entity. Notwithstanding the foregoing, if the Guarantor
has failed to make a Guarantee Payment, a Holder may directly institute a
proceeding against the Guarantor to
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enforce such Guarantee Payment under this Partnership Guarantee.
SECTION 5.5 Guarantee of Payment
This Partnership Guarantee will constitute a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Partnership in respect of any amounts paid to the Holders by the
Guarantor under this Partnership Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Partnership Guarantee, if, at the time of any
such payment, any amounts are due and unpaid under this Partnership Guarantee.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Partnership with respect to the Partnership Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Partnership
Guarantee notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Partnership Preferred Securities remain outstanding, if (a)
for any distribution period, full distributions on a cumulative basis on any
Partnership
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Preferred Securities have not been paid or declared and set apart for payment
(b) an Investment Event of Default by any Investment Affiliate in respect of any
Affiliate Investment Instrument has occurred and is continuing and the Guarantor
has not performed its obligations with respect thereto under an applicable
Investment Guarantee or (c) the Guarantor shall be in default with respect to
its payment obligations under this Partnership Guarantee, the Trust Preferred
Securities Guarantee or the Trust Common Securities Guarantee then, during such
period (i) the Company shall not declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a liquidation payment
with respect to any of its capital stock (except for dividends or distributions
in shares of its common stock and exchanges or conversions of common stock of
one class for common stock of another class and other than (x) purchases or
acquisitions of shares of its Common Stock in connection with the satisfaction
by the Company of its obligations under any employee benefit plans or any other
contractual obligation of the Company (other than a contractual obligation
ranking pari passu with or junior to any Affiliate Investment Instrument), (y)
as a result of a reclassification of the Company's capital stock or the exchange
or conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or (z) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged), (ii) the Company shall not make any payment or cause any payment to
be made that would result in and shall take such action as shall be necessary to
prevent, the payment of dividends on, any distribution with respect to, any
redemption, purchase or other acquisition of, or any liquidation payment with
respect to, any Comparable Equity Interest, and (iii) the Company shall not make
any guarantee payments with respect to the foregoing (other than pursuant to
this Partnership Guarantee or any other guarantee by the Company with respect to
any Comparable Equity Interest).
SECTION 6.2 Ranking
This Partnership Guarantee will constitute an unsecured obligation of the
Guarantor and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Guarantor, including, without limitation, the fees,
charges, expenses and indemnities due to the Property Trustee or the
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Delaware Trustee in respect of the Trust Agreement, to the Trust Guarantee
Trustee in respect of the Trust Preferred Securities Guarantee, to the
Investment Guarantee Trustee in respect of the Investment Guarantee and to the
Partnership Guarantee Trustee in respect of this Partnership Guarantee, (ii)
pari passu with (A) the most senior preferred or preference stock now or
hereafter issued by the Guarantor, (B) each Investment Guarantee related to an
Affiliate Investment Instrument, (C) the Trust Preferred Securities Guarantee,
(D) any guarantee hereafter entered into by the Guarantor in respect of any
preferred security (similar to the Trust Preferred Securities or the Partnership
Preferred Securities) of the Guarantor or any Affiliate of the Guarantor, and
(E) any other obligation of the Guarantor expressly stated to rank pari passu
with this Partnership Guarantee or any of the foregoing, (iii) senior to the
Guarantor's common stock. Any similar guarantee given hereafter by the Company
with respect to Partnership Preferred Securities that is silent as to seniority
will rank pari passu with this Partnership Guarantee.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Partnership Guarantee shall terminate and be of no further force and
effect, as to the Partnership Preferred Securities, upon full payment of the
Redemption Price of all Partnership Preferred Securities, and will terminate
completely upon full payment of the amounts payable in accordance with the
Agreement of Limited Partnership upon liquidation of the Partnership. This
Partnership Guarantee will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must, in accordance with Delaware
Revised Uniform Limited Partnership Act, restore payment of any sums paid under
any Partnership Preferred Securities or this Partnership Guarantee.
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ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Partnership Guarantee
and in a manner that such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Partnership Guarantee or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions, reports
or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Partnership Preferred Securities might
properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense, including taxes (other than taxes based on the income of such
Indemnified Person), incurred without gross negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The
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obligation to indemnify as set forth in this Section 8.2 shall survive the
termination of this Partnership Guarantee or the earlier resignation or removal
of the Trust Guarantee Trustee.
ARTICLE IX
COVENANTS OF THE GUARANTOR
SECTION 9.1 Owner of Interest in the Partnership
For so long as the Partnership Preferred Securities remain outstanding, the
Guarantor hereby covenants and agrees that it will, directly or indirectly,
maintain 100% ownership of the General Partner's interest in the Partnership.
SECTION 9.2 Merger of the Guarantor
The Guarantor covenants that it will not merge or consolidate with any
other corporation or other entity or sell or convey all or substantially all of
its assets to any Person (other than such a sale or conveyance to a Subsidiary
or any successor thereto (such a sale or conveyance being called an "Asset Drop-
Down")), unless (i) either the Guarantor shall be the continuing corporation or
the successor corporation or other entity or the Person which acquires by sale
or conveyance substantially all the assets of the Guarantor shall expressly
assume the obligations of the Guarantor hereunder, according to their tenor, and
the due and punctual performance and observance of all of the covenants hereof
to be performed or observed by the Guarantor, by instrument in form satisfactory
to the General Partner, executed and delivered to the General Partner by such
corporation or other entity, and (ii) the Guarantor or such successor
corporation or other entity, as the case may be, shall not, immediately after
such merger or consolidation, or such sale or conveyance, be in default in the
performance of any such covenant or condition. In the event of any Asset Drop-
Down after the date hereof, any subsequent sale or conveyance of assets by a
Subsidiary to which assets were transferred in such Asset Drop-Down will be
deemed to be a sale or conveyance of assets by the Company for purposes of this
provision.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Successors and Assigns
All guarantees and agreements contained in this Partnership Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Partnership
Preferred Securities then outstanding.
SECTION 10.2 Amendments
Except with respect to any changes which do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Partnership Guarantee may only be amended with the prior
approval of the Holders of not less than a Majority in liquidation preference of
the Partnership Preferred Securities. The provisions of Section 14.3 of the
Agreement of Limited Partnership with respect to meetings of Holders of the
Partnership Preferred Securities apply to the giving of such approval.
23
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SECTION 10.3 Notices
All notices provided for in this Partnership Guarantee shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by first class mail, as follows:
(a) If given to the Partnership Guarantee Trustee, at the Partnership
Guarantee Trustee's mailing address set forth below:
The Bank of New York
101 Barclay Street, 21st Floor
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Telecopy: (212)815-5915
(b) If given to the Guarantor, at the Guarantor's mailing address set forth
below (or such other address as the Guarantor may give notice of to the Holders
of the Partnership Preferred Securities):
Hawaiian Electric Industries, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Attention: Treasurer
Telecopy: (808) 543-7966
(c) If given to any Holder of Partnership Preferred Securities, at the
address set forth on the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was
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given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 10.4 Gender
The masculine, feminine and neuter genders used herein shall include the
masculine, feminine and neuter genders.
SECTION 10.5 Benefit
This Partnership Guarantee is solely for the benefit of the Holders and is
not separately transferable from the Partnership Preferred Securities.
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SECTION 10.6 Governing Law
THIS PARTNERSHIP GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
THIS PARTNERSHIP GUARANTEE AGREEMENT is executed as of the day and year
first above written.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
THE BANK OF NEW YORK,
as Partnership Guarantee Trustee
By: _____________________________
Name:
Title:
26
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Exhibit 4(q)
===============================================================
AFFILIATE INVESTMENT INSTRUMENTS GUARANTEE AGREEMENT
HAWAIIAN ELECTRIC INDUSTRIES, INC.
DATED AS OF JANUARY __, 1997
===============================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation......................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application....................... 5
SECTION 2.2 Lists of Holders of Securities......................... 6
SECTION 2.3 Reports by the Trust Preferred Guarantee Trustee....... 6
SECTION 2.4 Periodic Reports to the Trust Preferred Guarantee
Trustee................................................ 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent....... 7
SECTION 2.6 Events of Default; Waiver.............................. 7
SECTION 2.7 Event of Default; Notice............................... 7
SECTION 2.8 Conflicting Interests.................................. 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE INVESTMENT GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Investment Guarantee Trustee.. 8
SECTION 3.2 Certain Rights of the Investment Guarantee Trustee..... 10
SECTION 3.3 Not Responsible for Recitals or Issuance of the
Investment Guarantee................................... 13
ARTICLE IV
THE INVESTMENT GUARANTEE TRUSTEE
SECTION 4.1 The Investment Guarantee Trustee; Eligibility.......... 13
SECTION 4.2 Appointment, Removal and Resignation of the Investment
Guarantee Trustee...................................... 14
SECTION 4.3 Successor to the Investment Guarantee Trustee by Merger,
Consolidation or Successor to Business................. 15
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE V
THE INVESTMENT GUARANTEE
SECTION 5.1 Guarantee............................................. 15
SECTION 5.2 Waiver of Notice and Demand........................... 16
SECTION 5.3 Obligations Not Affected.............................. 16
SECTION 5.4 Rights of Holders..................................... 17
SECTION 5.5 Guarantee of Payment.................................. 18
SECTION 5.6 Subrogation........................................... 18
SECTION 5.7 Independent Obligations............................... 18
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking............................................... 18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination........................................... 19
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
SECTION 8.1 Exculpation........................................... 19
SECTION 8.2 Indemnification....................................... 20
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns................................ 20
SECTION 9.2 Amendments............................................ 21
SECTION 9.3 Merger of the Guarantor............................... 21
SECTION 9.4 Notices............................................... 21
SECTION 9.5 Benefit............................................... 22
SECTION 9.6 Governing Law......................................... 23
CROSS-REFERENCE TABLE*
SECTION OF SECTION OF
TRUST INDENTURE ACT GUARANTEE
OF 1939, AS AMENDED AGREEMENT
------------------- ----------
310(a) 4.1(a)
310(b) 4.1(c), 2.8
310(c) Inapplicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(e) 1.1, 2.5, 3.2
314(f) 2.1, 3.2
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1
315(d) 3.1(d)
316(a) 1.1, 2.6, 5.4
316(b) 5.3
316(c) 9.2
317(a) Inapplicable
317(b) Inapplicable
318(a) 2.1(b)
318(b) 2.1
318(c) 2.1(a)
- ----
* This Cross-Reference Table does not constitute part of this Affiliate
Investment Instrument Guarantee Agreement and shall not affect the
interpretation of any of its terms or provisions.
</TABLE>
<PAGE>
AFFILIATE INVESTMENT INSTRUMENTS GUARANTEE AGREEMENT
This AFFILIATE INVESTMENT INSTRUMENTS GUARANTEE AGREEMENT (this
"Investment Guarantee"), dated as of February __, 1997, is executed and
delivered by Hawaiian Electric Industries, Inc., a Hawaii corporation (the
"Guarantor"), and The Bank of New York, a New York banking corporation, as
trustee (the "Investment Guarantee Trustee"), for the benefit of the Holders (as
defined herein) of the Affiliate Debentures (as defined herein) of [NAME OF
ISSUER], a _______________ corporation (the "Issuer").
WHEREAS, pursuant to a Junior Subordinated Indenture (the "Affiliate
Indenture"), dated as of February __, 1997, between the Issuer and The Bank of
New York, as indenture trustee (in such capacity, the "Indenture Trustee"), the
Issuer is issuing to the Holders on the date hereof its __% Junior Subordinated
Debentures Due February __, 2017 (the "Affiliate Debentures");
WHEREAS, as incentive for the Holders to purchase the Affiliate
Debentures, the Guarantor desires irrevocably and unconditionally to agree to
make Guarantee Payments (as defined herein) to the Holders of the Affiliate
Debentures on the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the purchase by the Holders of the
Affiliate Debentures, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Investment Guarantee for
the benefit of the Holders.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Investment Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Investment Guarantee but not
defined in the Preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) capitalized terms used in this Investment Guarantee but not
otherwise defined herein shall have the meanings assigned to them in the
Affiliate Indenture;
(c) a term defined anywhere in this Investment Guarantee has the same
meaning throughout;
(d) all references to "this Investment Guarantee" are to this
Investment Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Investment Guarantee to Articles and
Sections are to Articles and Sections of this Investment Guarantee, unless
otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Investment Guarantee, unless otherwise defined in this
Investment Guarantee or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
2
<PAGE>
"Agreement of Limited Partnership" means the Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of February __,
1997, among Hycap Management, Inc., a Delaware corporation, as general partner,
Hawaiian Electric Industries Capital Trust I, a Delaware statutory business
trust, as initial limited partner, and such other persons who become limited
partners as provided therein.
"Business Day" means a day other than a day on which banking
institutions in the City of New York, State of New York are authorized or
required by law to close.
"Corporate Trust Office" means the office of the Investment Guarantee
Trustee at which the corporate trust business of the Investment Guarantee
Trustee shall, at any particular time, be principally administered, which office
at the date of execution of this Agreement is located at 101 Barclay Street,
21st Floor, New York, New York 10286.
"Covered Person" means the Holder or any beneficial owner of the
Affiliate Debentures.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Investment Guarantee.
"Guarantee Payments" means, with respect to the Affiliate Debentures,
to the extent not paid or made by the Issuer, the due and punctual payment of
the principal of and premium, if any, and interest on the Affiliate Debentures,
when and as the same shall become due and payable, whether at maturity or upon
declaration of acceleration or otherwise, according to the terms of the
Affiliate Debentures and of the Affiliate Indenture.
"Holder" shall mean any and each holder, as registered on the books
and records of the Issuer, of the Affiliate Debentures. The initial Holder of
the Affiliate Debentures is the Partnership.
"Indemnified Person" means the Investment Guarantee Trustee, any
Affiliate of the Investment Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Investment Guarantee Trustee.
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<PAGE>
"Investment Guarantee Trustee" means The Bank of New York, a New York
banking corporation, until a Successor Investment Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Investment Guarantee and thereafter means each such Successor Investment
Guarantee Trustee.
"Majority in principal amount of the Affiliate Debentures" means,
except as provided by the Trust Indenture Act, a vote by Holders of the
Affiliate Debentures, voting separately as a class, of more than 50% of the
outstanding principal amount of the Affiliate Debentures plus accrued and unpaid
interest to the date upon which the voting percentages are determined.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two authorized officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Investment Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition of covenant has been complied with.
"Partnership" means HEI Preferred Funding, LP, a Delaware limited
partnership.
"Partnership Preferred Securities" means those securities representing
limited partner interests in the Partnership.
4
<PAGE>
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Investment Guarantee
Trustee, any officer within the Corporate Trust Office of the Investment
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, any assistant treasurer or other officer of the
Corporate Trust Office of the Investment Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Investment Guarantee Trustee" means a successor Investment
Guarantee Trustee possessing the qualifications to act as Investment Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Investment Guarantee Trustee" means The Bank of New York, a New York
banking corporation, until a Successor Investment Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Investment Guarantee and thereafter means each such Successor Investment
Guarantee Trustee.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Investment Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Investment Guarantee
and shall, to the extent applicable, be governed by such provisions.
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<PAGE>
(b) If and to the extent that any provision of this Investment
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, the duties imposed by the Trust
Indenture Act shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Investment Guarantee Trustee with
a list, in such form as the Investment Guarantee Trustee may reasonably require,
of the names and addresses of the Holders of the Affiliate Debentures ("List of
Holders") as of such date, (i) within one (1) Business Day after January 1 and
June 30 of each year, and (ii) at any other time within 30 days of receipt by
the Guarantor of a written request for a List of Holders as of a date no more
than 14 days before such List of Holders is given to the Investment Guarantee
Trustee; provided, however, that the Guarantor shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Investment Guarantee Trustee by the
Guarantor. The Investment Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Investment Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Trust Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Investment Guarantee
Trustee shall provide to the Holders of the Affiliate Debentures such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The
Investment Guarantee Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to the Trust Preferred Guarantee Trustee
The Guarantor shall provide to the Investment Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the
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manner and at the times required by Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Investment Guarantee
Trustee is for informational purposes only and the Investment Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Investment Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Investment Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of the Affiliate
Debentures may, by vote, on behalf of the Holders of the Affiliate Debentures,
waive any past Event of Default and its consequences. Upon such waiver, any
such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Investment Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Investment Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Affiliate Debentures, notices of all Events of
Default actually known to a Responsible Officer of the Investment Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Investment Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Investment Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Affiliate Debentures.
(b) The Investment Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Investment Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the
Investment Guarantee Trustee
7
<PAGE>
charged with the administration of the Affiliate Debentures shall have obtained
actual knowledge.
SECTION 2.8 Conflicting Interests
The Affiliate Debentures shall be deemed to be specifically described
in this Investment Guarantee for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE INVESTMENT
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Investment Guarantee Trustee
(a) This Investment Guarantee shall be held by the Investment
Guarantee Trustee for the benefit of the Holders of the Affiliate Debentures,
and the Investment Guarantee Trustee shall not transfer this Investment
Guarantee to any Person except a Holder of the Affiliate Debentures exercising
his or her rights pursuant to Section 5.4(b) or to a Successor Investment
Guarantee Trustee on acceptance by such Successor Investment Guarantee Trustee
of its appointment to act as Successor Investment Guarantee Trustee. The right,
title and interest of the Investment Guarantee Trustee shall automatically vest
in any Successor Investment Guarantee Trustee, and such vesting and cessation of
title shall be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such Successor Investment
Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Investment Guarantee Trustee has occurred and is continuing, the Investment
Guarantee Trustee shall enforce this Investment Guarantee for the benefit of the
Holders of the Affiliate Debentures.
(c) The Investment Guarantee Trustee, during the period before the
occurrence of any Event of Default and during the period after the curing or
waiver of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Investment
Guarantee, and no implied covenants shall be read into this Investment
8
<PAGE>
Guarantee against the Investment Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Investment Guarantee Trustee, the
Investment Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Investment Guarantee, and use the same degree of care and skill in
its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Investment Guarantee shall be construed to
relieve the Investment Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) During the period prior to the occurrence of any Event of Default,
and during the period after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Investment Guarantee
Trustee shall be determined solely by the express provisions of this
Investment Guarantee, and the Investment Guarantee Trustee shall not
be liable except for the performance of such duties and obligations as
are specifically set forth in this Investment Guarantee, and no
implied covenants or obligations shall be read into this Investment
Guarantee against the Investment Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Investment
Guarantee Trustee, the Investment Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Investment Guarantee Trustee and conforming to the
requirements of this Investment Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Investment Guarantee Trustee, the
Investment Guarantee Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Investment Guarantee;
9
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(ii) the Investment Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Investment Guarantee Trustee, unless it shall be proved that the Investment
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Investment Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of the Affiliate Debentures
relating to the time, method and place of conducting any proceeding for any
remedy available to the Investment Guarantee Trustee, or exercising any
trust or power conferred upon the Investment Guarantee Trustee under this
Investment Guarantee; and
(iv) no provision of this Investment Guarantee shall require the
Investment Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the Investment
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this Investment Guarantee or indemnity, reasonably
satisfactory to the Investment Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of the Investment Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Investment Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
10
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(ii) Any direction or act of the Guarantor contemplated by this
Investment Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this Investment Guarantee,
the Investment Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any action
hereunder, the Investment Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Investment Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or reregistration thereof).
(v) The Investment Guarantee Trustee may, at the expense of the
Guarantor, consult with counsel of its selection, and the advice or opinion
of such counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Investment Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Investment Guarantee from any court of competent
jurisdiction.
(vi) The Investment Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Investment
Guarantee at the request or direction of any Holder, unless such Holder
shall have provided to the Investment Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Investment Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Investment Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including
11
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such reasonable advances as may be requested by the Investment Guarantee
Trustee; provided that, nothing contained in this Section 3.2(a)(vi) shall
be taken to relieve the Investment Guarantee Trustee, upon the occurrence
of an Event of Default, of its obligation to exercise the rights and powers
vested in it by this Investment Guarantee.
(vii) The Investment Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Investment Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Investment Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Investment
Guarantee Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it
hereunder.
(ix) Any action taken by the Investment Guarantee Trustee or its
agents hereunder shall bind the Holders of the Affiliate Debentures, and
the signature of the Investment Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Investment
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Investment Guarantee, both of which shall be
conclusively evidenced by the Investment Guarantee Trustee or its agent
taking such action.
(x) Whenever in the administration of this Investment Guarantee the
Investment Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Investment Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the
Affiliate
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Debentures, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall be
protected in conclusively relying on or acting in accordance with such
instructions.
(xi) The Investment Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Investment Guarantee.
(b) No provision of this Investment Guarantee shall be deemed to impose any
duty or obligation on the Investment Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Investment
Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
Investment Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of the Investment
Guarantee
The recitals contained in this Investment Guarantee shall be taken as the
statements of the Guarantor, and the Investment Guarantee Trustee does not
assume any responsibility for their correctness. The Investment Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Investment Guarantee.
ARTICLE IV
THE INVESTMENT GUARANTEE TRUSTEE
SECTION 4.1 The Investment Guarantee Trustee; Eligibility
(a) There shall at all times be an Investment Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia,
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or a corporation or Person permitted by the Securities and Exchange
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then, for the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Investment Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Investment Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Investment Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Investment Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of the Investment Guarantee
Trustee
(a) Subject to Section 4.2(b), the Investment Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an
Event of Default.
(b) The Investment Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Investment Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Investment Guarantee Trustee and delivered to the Guarantor.
(c) The Investment Guarantee Trustee appointed to office shall hold office
until a Successor Investment Guarantee Trustee shall have been appointed or
until its removal or resignation. The Investment Guarantee Trustee may resign
from
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office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Investment Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Investment
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Investment Guarantee Trustee
and delivered to the Guarantor and the resigning Investment Guarantee Trustee.
(d) If no Successor Investment Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of removal or resignation, the Investment Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Investment Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Investment Guarantee Trustee.
(e) No Investment Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Investment Guarantee Trustee.
(f) Upon termination of this Investment Guarantee or removal or resignation
of the Investment Guarantee Trustee pursuant to this Section 4.2 and before the
appointment of any Successor Investment Guarantee Trustee, the Guarantor shall
pay to the Investment Guarantee Trustee all amounts to which it is entitled to
the date of such termination, removal or resignation.
SECTION 4.3 Successor to the Investment Guarantee Trustee by Merger,
Consolidation or Succession to Business
Any corporation into which the Investment Guarantee Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Investment Guarantee Trustee, shall be the successor of the Investment Guarantee
Trustee hereunder, provided such corporation shall be qualified and eligible
under the provisions of Section 4.1(a), without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
ARTICLE V
THE INVESTMENT GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), if, as and when due (after taking a valid extension of an
interest payment period by the Guarantor pursuant to the terms of the Affiliate
Debentures), regardless of any defense, right of setoff or counterclaim that the
Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of
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the required amounts by the Guarantor to the Holders or by causing the Issuer to
pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Investment
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under
this Investment Guarantee shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Affiliate Debentures to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the interest, principal or premiums, if any, or any other sums
payable under the terms of the Affiliate Debentures or the extension of time for
the performance of any other obligation under, arising out of, or in connection
with, the Affiliate Debentures (other than as provided in Section 5.1 with
respect to an extension of time for payment of interest during an Extension
Period);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Affiliate Debentures, or
any action on the part of the Holders granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors,
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reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Affiliate
Debentures;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in principal amount of the Affiliate
Debentures have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Investment Guarantee Trustee in
respect of this Investment Guarantee or exercising any trust or power conferred
upon the Investment Guarantee Trustee under this Investment Guarantee.
(b) If the Investment Guarantee Trustee fails to enforce its rights under
the Investment Guarantee after a Holder of the Affiliate Debentures has made a
written request, such Holder of the Affiliate Debentures may institute a legal
proceeding directly against the Guarantor to enforce the Investment Guarantee
Trustee's rights under this Investment Guarantee, without first instituting a
legal proceeding against the Issuer, the Investment Guarantee Trustee or any
other Person. Notwithstanding the foregoing, if the Guarantor has failed to
make a Guarantee Payment, a Holder of the Affiliate Debentures may directly
institute a proceeding in such Holder's own name against the Guarantor for
enforcement of the Investment Guarantee for such payment. The Guarantor waives
any right or remedy to require that any action be brought first against the
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Issuer or any other person or entity before proceeding directly against the
Guarantor.
SECTION 5.5 Guarantee of Payment
This Investment Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Affiliate Debentures against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Investment Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Investment Guarantee,
if, at the time of any such payment, any amounts are due and unpaid under this
Investment Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Affiliate Debentures, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Investment Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking
This Investment Guarantee will constitute an unsecured obligation of the
Guarantor and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Guarantor, including, without limitation, the fees,
charges, expenses and indemnities due to the Property Trustee or the
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Delaware Trustee in respect of the Trust Agreement, to the Trust Guarantee
Trustee in respect of the Trust Preferred Securities Guarantee, to the
Partnership Guarantee Trustee in resect of the Partnership Guarantee and to the
Investment Guarantee Trustee in respect of this Investment Guarantee, (ii) pari
passu with (A) the most senior preferred or preference stock now or hereafter
issued by the Guarantor (B) the guarantee of any other Affiliate Investment
Instrument, (C) the Trust Guarantee, (D) the Partnership Guarantee, (E) any
guarantee hereafter entered into by the Guarantor in respect of any preferred
security (similar to the Trust Preferred Securities or the Partnership Preferred
Securities) of the Guarantor or any Affiliate of the Guarantor, and (F) any
other obligation of the Guarantor expressly stated to rank pari passu with this
Investment Guarantee or any of the foregoing, and (iii) senior to the
Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Investment Guarantee shall terminate upon the repayment in full
(whether at maturity, upon redemption or otherwise) of all of the principal of,
interest on (including all accrued and unpaid interest thereon) and any other
amounts payable in respect of the Affiliate Debentures. Notwithstanding the
foregoing, this Investment Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of the Affiliate
Debentures must restore payment of any sums paid under the Affiliate Debentures
or under this Investment Guarantee.
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Investment Guarantee
and in a manner that such Indemnified Person reasonably believed to be within
the scope of the authority
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conferred on such Indemnified Person by this Investment Guarantee or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions, reports
or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which principal, interest or other payments to Holders of the Affiliate
Debentures might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense, including taxes other than taxes based on the income of such
Indemnified Person) incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Investment Guarantee or the earlier resignation or removal of the Investment
Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Investment Guarantee shall
bind the successors, assigns, receivers,
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trustees and representatives of the Guarantor and shall inure to the benefit of
the Holders of the Affiliate Debentures then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not materially adversely affect
the rights of Holders (in which case no consent of Holders will be required),
this Investment Guarantee may only be amended with the prior approval of the
holders of at least a majority in liquidation preference of the Partnership
Preferred Securities. The provisions of Section 14.3 of the Agreement of Limited
Partnership with respect to meetings of Holders of the Partnership Preferred
Securities apply to the giving of such approval.
SECTION 9.3 Merger of the Guarantor
The Guarantor covenants that it will not merge or consolidate with any
other corporation or other entity or sell or convey all or substantially all of
its assets to any person (other than such a sale or conveyance to a Subsidiary
or any successor thereto (such a sale or conveyance being called an "Asset Drop-
Down")), unless (i) either the Guarantor shall be the continuing corporation or
the successor corporation or other entity or the person which acquires by sale
or conveyance substantially all the assets of the Guarantor shall expressly
assume the obligations of the Guarantor hereunder, according to their tenor, and
the due and punctual performance and observance of all of the covenants hereof
to be performed or observed by the Guarantor, by instrument in form satisfactory
to the Investment Guarantee Trustee, executed and delivered to the Investment
Guarantee Trustee by such corporation or other entity, and (ii) the Guarantor or
such successor corporation or other entity, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance, be
in default in the performance of any such covenant or condition. In the event
of any Asset Drop-Down after the date hereof, any subsequent sale or conveyance
of assets by a Subsidiary to which assets were transferred in such Asset Drop-
Down will be deemed to be a sale or conveyance of assets by the Company for
purposes of this provision.
SECTION 9.4 Notices
All notices provided for in this Investment Guarantee shall be in writing,
duly signed by the party giving such
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notice, and shall be delivered, telecopied or mailed by first class mail, as
follows:
(a) If given to the Investment Guarantee Trustee, at the Investment
Guarantee Trustee's mailing address set forth below (or such other address as
the Investment Guarantee Trustee may give notice of to the Holders of the
Affiliate Debentures):
The Bank of New York
101 Barclay Street, 21st Floor
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Telecopy: (212) 815-5915
(b) If given to the Guarantor, at the Guarantor's mailing address set forth
below (or such other address as the Guarantor may give notice of to the Holders
of the Affiliate Debentures):
Hawaiian Electric Industries, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Attention: Treasurer
Telecopy: (808) 543-7966
(c) If given to any Holder of Affiliate Debentures, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.5 Benefit
This Investment Guarantee is solely for the benefit of the Holders of the
Affiliate Debentures and, subject to SectionE3.1(a), is not separately
transferable from the Affiliate Debentures.
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SECTION 9.6 Governing Law
THIS INVESTMENT GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
This Investment Guarantee is executed as of the day and year first above
written.
HAWAIIAN ELECTRIC INDUSTRIES, INC., as Guarantor
By: _____________________________
Name:
Title:
By: _____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Investment Guarantee Trustee
By: _____________________________
Name:
Title:
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Exhibit 5(a)
------------
[GOODSILL ANDERSON QUINN & STIFEL LETTERHEAD]
January 23, 1997
HAWAIIAN ELECTRIC INDUSTRIES, INC.
900 Richards Street
Honolulu, Hawaii 96813
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST II
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST III
c/o The Bank of New York
101 Barclay Street, 21st Floor
New York, New York 10286
HEI PREFERRED FUNDING, LP
c/o Hycap Management, Inc.
300 Delaware Avenue, Suite 1704
Wilmington, Delaware 19806
Ladies and Gentlemen:
Hawaiian Electric Industries, Inc., a Hawaii corporation (the
"Company"), Hawaiian Electric Industries Capital Trust I, a statutory business
trust created under the laws of the State of Delaware ("Trust-I"), Hawaiian
Electric Industries Capital Trust II, a statutory business trust created under
the laws of the State of Delaware ("Trust-II"), Hawaiian Electric Industries
Capital Trust III, a statutory business trust created under the laws of the
State of Delaware ("Trust-III" and, together with Trust-I and Trust-II, the
"Trusts"),
<PAGE>
Hawaiian Electric Industries, Inc.
Hawaiian Electric Industries Capital Trust I
Hawaiian Electric Industries Capital Trust II
Hawaiian Electric Industries Capital Trust III
HEI Preferred Funding, LP
Page 2
and HEI Preferred Funding, LP, a Delaware limited partnership (the
"Partnership"), have filed a registration statement on Form S-3 under the
Securities Act of 1933 (the "Act"), as amended by Amendment No. 1 thereto (as
amended, the "Registration Statement"), covering: (i) 4,000,000 ___% Trust
Originated Preferred Securities, stated liquidation preference amount $25 per
trust preferred security, of Trust-I, (ii) an indeterminate number of Trust
Originated Preferred Securities of Trust-II, (iii) an indeterminate number of
Trust Originated Preferred Securities of Trust-III, (iv) an indeterminate amount
of Senior Debt Securities, Senior Subordinated Debt Securities and Junior
Subordinated Debt Securities of the Company, consisting of debentures, notes or
other evidences of indebtedness, each in one or more series (collectively, the
"Debentures"), (v) an indeterminate number of shares of Preferred Stock of the
Company, without par value, in one or more series (the "Preferred Stock"), (vi)
an indeterminate number of shares of Common Stock of the Company, without par
value, in one or more series (the "Common Stock"), (vii) an indeterminate amount
of Partnership Preferred Securities of the Partnership, and (viii) guarantees of
the Company with respect to: (a) the Trust Originated Preferred Securities of
the Trusts (collectively, the "Trust Guarantees"), (b) the Partnership Preferred
Securities of the Partnership (the "Partnership Guarantee") and (c) certain
debentures of wholly-owned subsidiaries of the Company (the "Subsidiary
Guarantees" and, together with the Trust Guarantees and the Partnership
Guarantee, the "Guarantees").
We have examined the Registration Statement and, for purposes of this
opinion, we have assumed that it has become effective. We have also examined the
Restated Articles of Incorporation of the Company, as amended (the "Articles"),
and such appropriate records of the Company, certificates of public officials
and other documents as we deem pertinent as a basis for the opinions hereinafter
expressed.
<PAGE>
Hawaiian Electric Industries, Inc.
Hawaiian Electric Industries Capital Trust I
Hawaiian Electric Industries Capital Trust II
Hawaiian Electric Industries Capital Trust III
HEI Preferred Funding, LP
Page 3
Based on such examination, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Hawaii
2. When the Debentures have been issued and sold in return for the
consideration specified therefor and as contemplated in the Registration
Statement and each prospectus supplement and amendment relating thereto, the
Debentures will be duly authorized and issued and will be valid and binding
obligations of the Company, except insofar as the binding effect thereof may be
(a) limited by bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or similar laws now or hereinafter in effect relating to or affecting
the enforcement of creditors' rights generally and (b) affected by limitations
on the availability of equitable remedies by reason of equitable principles of
general applicability (regardless of whether considered in a proceeding at law
or in equity).
3. When the relative rights and preferences, designations and
limitations of a series of the Preferred Stock shall have been duly fixed by a
resolution of the Board of Directors of the Company (the "Board") or by an
amendment to the Articles, and when the issuance of the shares of such series
shall have been duly authorized in a resolution in which the Board fixes the
consideration to be received therefor (or the manner in which it shall be
determined) and determines that such consideration is adequate, and when the
shares of the series of the Preferred Stock thus established shall have been
duly issued and sold in return for the consideration specified in such
resolution and as contemplated in the Registration Statement and each prospectus
supplement and amendment relating thereto, such shares of the Preferred Stock
will be validly issued, fully paid and nonassessable.
4. When the shares of the Common Stock have been duly authorized for
issuance by a resolution of the Board which
<PAGE>
Hawaiian Electric Industries, Inc.
Hawaiian Electric Industries Capital Trust I
Hawaiian Electric Industries Capital Trust II
Hawaiian Electric Industries Capital Trust III
HEI Preferred Funding, LP
Page 4
fixes the consideration to be received therefor (or the manner in which it shall
be determined) and determines that such consideration is adequate, and when the
shares of the Common Stock are issued and sold in return for the consideration
specified in such resolution and as contemplated in the Registration Statement
and each prospectus supplement and amendment relating thereto, the Common Stock
will be validly issued, fully paid and nonassessable.
5. When the Guarantees have been duly executed and delivered so as
not to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or governmental or regulatory
body having jurisdiction over the Company, and when the respective conditions
precedent for the obligations of the Company under the Guarantees to arise have
been satisfied as contemplated in the Registration Statement and each prospectus
supplement and amendment relating thereto, the Guarantees will constitute valid
and binding obligations of the Company, except insofar as the binding effect
thereof may be (a) limited by bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or similar laws now or hereinafter in effect relating to or
affecting the enforcement of creditors' rights generally and (b) affected by
limitations on the availability of equitable remedies by reason of equitable
principles of general applicability (regardless of whether considered in a
proceeding at law or in equity).
We are members of the Bar of the State of Hawaii, and we do not hold
ourselves out as experts on the laws of any other jurisdiction. This opinion is
limited in all respects to
<PAGE>
Hawaiian Electric Industries, Inc.
Hawaiian Electric Industries Capital Trust I
Hawaiian Electric Industries Capital Trust II
Hawaiian Electric Industries Capital Trust III
HEI Preferred Funding, LP
Page 5
matters governed by the laws of the State of Hawaii. We express no opinion
concerning compliance with the laws or regulations of any other jurisdiction or
jurisdictions, or as to the validity, meaning or effect of any act or document
under the laws of any other jurisdiction or jurisdictions. As to matters
governed by Delaware law, we are relying on the opinion of Richards, Layton &
Finger submitted concurrently herewith as Exhibit 5(b) to the Registration
Statement. As to the validity and binding effect of any document that is
governed by the laws of a jurisdiction other than the State of Hawaii, to the
extent that the validity and binding effect of such document is covered by or
relates to this opinion, we have assumed that the laws of such other
jurisdiction are identical in all material respects to the laws of the State of
Hawaii.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) the legal capacity
of natural persons who are signatories to the documents examined by us, (ii)
that each of the parties to the documents examined by us has the power and
authority to execute
<PAGE>
Hawaiian Electric Industries, Inc.
Hawaiian Electric Industries Capital Trust I
Hawaiian Electric Industries Capital Trust II
Hawaiian Electric Industries Capital Trust III
HEI Preferred Funding, LP
Page 6
and deliver, and to perform its obligations under, such documents, (iii) that
all documents examined by us have been duly authorized, executed and delivered
by all parties thereto (other than the Company).
The opinions expressed herein are based on laws and regulations as in
effect on the date hereof and facts as we understand them as of the date hereof.
We are not assuming any obligation, and do not undertake, to revise, update or
supplement this opinion after the date hereof notwithstanding any change in
applicable law or regulation or interpretation thereof, any amendment,
supplement, modification or rescission of any document examined or relied on in
connection herewith, or any change in the facts, after the execution and
delivery of this opinion on the date hereof.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the references to our firm under the caption
"Legal Matters." This opinion may not be furnished or quoted to, or relied
upon, by any person for any purpose, without our prior written consent.
Very truly yours,
/s/ GOODSILL ANDERSON QUINN & STIFEL
<PAGE>
EXHIBIT 5(b)
[Letterhead of Richards, Layton & Finger]
January 23, 1997
HEI Preferred Funding, LP
Hawaiian Electric Industries Capital Trust I
c/o Hawaiian Electric Industries, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Re: HEI Preferred Funding, LP
and Hawaiian Electric Industries Capital Trust I
------------------------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Hawaiian Electric
Industries, Inc., a Hawaii corporation (the "Company"), HEI Preferred Funding,
LP, a Delaware limited partnership (the "Partnership"), and Hawaiian Electric
Industries Capital Trust I, a Delaware business trust (the "Trust"), in
connection with the matters set forth herein. At your request, this opinion is
being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Limited Partnership of the Partnership, dated
as of December 23, 1996, as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on December 23, 1996;
<PAGE>
HEI Preferred Funding, LP
Hawaiian Electric Industries Capital Trust I
January 23, 1997
Page 2
(b) The Agreement of Limited Partnership of the Partnership, dated as
of December 23, 1996;
(c) The Amended and Restated Certificate of Limited Partnership of the
Partnership, dated as of January 23, 1997 (the "Partnership Certificate"), as
filed in the office of the Secretary of State on January 23, 1997;
(d) The Assignment of General Partner Interest and Amendment to
Agreement of Limited Partnership of the Partnership, dated as of January 23,
1997;
(e) A form of Amended and Restated Agreement of Limited Partnership of
the Partnership (including Annex A thereto) (the "Partnership Agreement"), to be
entered into among Hycap Management, Inc., a Delaware corporation, as general
partner, the Trust, as initial limited partner, and such other Persons who
become limited partners of the Partnership, attached as an exhibit to the
Registration Statement (as defined below);
(f) The Certificate of Trust of the Trust, dated as of December 19,
1996 (the "Trust Certificate"), as filed in the office of the Secretary of State
on December 23, 1996;
(g) The Trust Agreement of the Trust, dated as of December 19, 1996,
among the Company, and the trustees of the Trust named therein;
(h) A form of Amended and Restated Trust Agreement of the Trust
(including Exhibits A-1 and A-2 thereto) (the "Trust Agreement"), to be
entered into among the Company, as sponsor, the trustees of the Trust named
therein, and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust, attached as an exhibit to the Registration
Statement;
(i) Amendment No. 1 to the Registration Statement (the "Registration
Statement") on Form S-3, including a related preliminary prospectus (the
"Prospectus"), and a preliminary prospectus supplement, relating to the ___%
Trust Originated Preferred Securities of the Trust representing preferred
undivided beneficial interests in the assets of the Trust (each, a "Trust
Preferred Security" and collectively, the "Trust Preferred Securities"), and the
Partnership Preferred Securities of the Partnership representing limited partner
interests in the Partnership (each, a "Partnership Preferred Security" and
collectively, the "Partnership Preferred Securities"), as proposed to be filed
by the Company, the Partnership, the Trust and others with the Securities and
Exchange Commission on or about January 23, 1997;
(j) A Certificate of Good Standing for the Partnership, dated January
23, 1997, obtained from the Secretary of State; and
(k) A Certificate of Good Standing for the Trust, dated January 23,
1997, obtained from the Secretary of State.
<PAGE>
HEI Preferred Funding, LP
Hawaiian Electric Industries Capital Trust I
January 23, 1997
Page 3
Capitalized terms used herein and not otherwise defined are used as
defined in the Partnership Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (k) above. In particular,
we have not reviewed any document (other than the documents listed in paragraphs
(a) through (k) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own, but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Partnership
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the admission
of partners to, and the creation, operation and termination of, the Partnership,
and that the Partnership Agreement and the Partnership Certificate are in full
force and effect and have not been amended, (ii) that the Trust Agreement
constitutes the entire agreement among the parties thereto with respect to the
subject matter thereof, including with respect to the creation, operation and
termination of the Trust, and that the Trust Agreement and the Trust
Certificate are in full force and effect and have not been amended, (iii) except
to the extent provided in paragraphs 1 and 5 below, the due creation or the due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation or organization or formation, (iv) the legal
capacity of natural persons who are signatories to the documents examined by us,
(v) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (vi) that all documents examined by us have been duly authorized,
executed and delivered by all parties thereto, (vii) the receipt by each Person
to whom a Partnership Preferred Security is to be issued by the Partnership
(collectively, the "Partnership Preferred Security Holders") of an L.P.
Certificate and the payment for the Partnership Preferred Security acquired by
it, in accordance with the Partnership Agreement and the
<PAGE>
HEI Preferred Funding, LP
Hawaiian Electric Industries Capital Trust I
January 23, 1997
Page 4
Registration Statement, (viii) the receipt by each Person to whom a Trust
Preferred Security is to be issued by the Trust (collectively, the "Trust
Preferred Security Holders") of a Trust Preferred Security Certificate (as
defined in the Trust Agreement) and the payment for the Trust Preferred
Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, (ix) that the books and records of the Partnership set
forth all information required by the Partnership Agreement and the Delaware
Revised Uniform Limited Partnership Act (6 Del. C. (S) 17-101, et seq.) (the
------- -- ---
"Partnership Act"), including all information with respect to all Persons to be
admitted as Partners and their contributions to the Partnership, (x) that the
Partnership Preferred Securities are issued and sold to the Partnership
Preferred Security Holders in accordance with the Registration Statement and the
Partnership Agreement, and (xi) that the Trust Preferred Securities are issued
and sold to the Trust Preferred Security Holders in accordance with the
Registration Statement and the Trust Agreement. We have not participated in
the preparation of the Registration Statement and assume no responsibility for
its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Partnership has been duly formed and is validly existing in
good standing as a limited partnership under the Partnership Act.
2. The Partnership Preferred Securities will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable limited partner interests in the Partnership.
3. Assuming that the Partnership Preferred Security Holders, as
limited partners of the Partnership, do not participate in the control of the
business of the Partnership, the Partnership Preferred Security Holders, as
limited partners of the Partnership, will have no liability in excess of their
obligations to make payments provided for in the Partnership Agreement and their
share of the Partnership's assets and
<PAGE>
HEI Preferred Funding, LP
Hawaiian Electric Industries Capital Trust I
January 23, 1997
Page 5
undistributed profits (subject to the obligation of a Partnership Preferred
Security Holder to repay any funds wrongfully distributed to it).
4. There are no provisions in the Partnership Agreement the
inclusion of which, subject to the terms and conditions therein, or, assuming
that the Partnership Preferred Security Holders, as limited partners of the
Partnership, take no action other than actions permitted by the Partnership
Agreement, the exercise of which, in accordance with the terms and conditions
therein, would cause the Partnership Preferred Security Holders, as limited
partners of the Partnership, to be deemed to be participating in the control of
the business of the Partnership.
5. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act (12 Del. C.
-------
(S) 3801, et seq.).
-- ---
6. The Trust Preferred Securities will represent valid and, subject
to the qualifications set forth in paragraph 7 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
7. The Trust Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Trust Preferred
Security Holders may be obligated to make payments as set forth in the
Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We also
consent to Goodsill Anderson Quinn & Stifel's relying as to matters of Delaware
law upon this opinion in connection with an opinion to be rendered by it in
connection with the Registration Statement. In addition, we hereby consent to
the use of our name under the heading "Legal Matters" in the Prospectus. In
giving the foregoing consents, we do not thereby admit that we come within the
category of Persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder. Except as stated above, without our prior
written consent, this opinion may not be furnished or quoted to, or relied upon
by, any other Person for any purpose.
Very truly yours,
BJK/jj
<PAGE>
Exhibit 8
---------
[Letterhead of Goodsill Anderson Quinn & Stifel]
_______________, 1997
Hawaiian Electric Industries, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Hawaiian Electric Industries Capital Trust I
c/o The Bank of New York
101 Barclay Street, 21st Floor
New York, New York 10286
HEI Preferred Funding, LP
300 Delaware Avenue, Suite 1704
Wilmington, Delaware 19801
Re: Hawaiian Electric Industries
Capital Trust I's issuance and sale of
Trust Originated Preferred Securities
--------------------------------------
Ladies and Gentlemen:
We have acted as counsel with respect to federal income tax matters to
Hawaiian Electric Industries, Inc., a Hawaii corporation (the "Company"), the
Hawaiian Electric Industries Capital Trust I, a statutory business trust
organized under the Business Trust Act of the State of Delaware (the "Trust"),
and HEI Preferred Funding, LP, a limited partnership formed under the Delaware
Revised Uniform Limited Partnership Act (the "Partnership"), in connection with
the preparation and filing by the Company, the Partnership and the Trust with
the Securities and Exchange Commission of a Registration Statement on Form S-3
(Registration Nos. 333- 18809,
<PAGE>
Hawaiian Electric Industries, Inc.
Hawaiian Electric Industries Capital Trust I
HEI Preferred Funding, LP
Page 2
333-18809-01, 333-18809-02, 333-18809-03, 333-18809-04) (as amended, the
"Registration Statement")/1/ under the Securities Act of 1933 with respect to
(i) the issuance and sale of the Trust Preferred Securities, (ii) the issuance
and sale of the Partnership Preferred Securities, (iii) the issuance and sale of
the Debentures and (iv) the issuance and sale of the Trust Guarantees, the
Partnership Guarantee and the Investment Guarantees.
In rendering our opinions, we have reviewed and relied upon (i) the
facts set forth in the Registration Statement, (ii) the forms of the Trust
Agreement, the Limited Partnership Agreement, the Trust Securities, the
Partnership Preferred Securities, the Debentures, the Partnership Guarantee, the
Trust Guarantees and the Investment Guarantees, each filed as an exhibit to the
Registration Statement, and (iii) certain representations made by officers of
the Company and certain of its subsidiaries.
On the basis of the foregoing, and assuming that the Partnership and
the Trust are formed and will be maintained in compliance with the terms of the
Limited Partnership Agreement and the Trust Agreement, respectively, we hereby
confirm (i) our opinions set forth in the Registration Statement under the
caption "Certain Federal Income Tax Considerations" and (ii) that, subject to
the qualifications set forth therein, the discussion set forth in the
Registration Statement under such caption is an accurate summary of the United
States federal income tax matters described therein.
We express no opinion with respect to the transactions described in
the Registration Statement other than as expressly set forth herein. Moreover,
we note that there is no authority directly on point dealing with securities
such as the Trust Preferred Securities or transactions of the type described
therein, and that our opinions are not binding on the Internal Revenue Service
or the courts, either of which could
- ------------------
/1/ Capitalized terms used but not defined herein have the meanings ascribed to
them in the Registration Statement.
<PAGE>
Hawaiian Electric Industries, Inc.
Hawaiian Electric Industries Capital Trust I
HEI Preferred Funding, LP
Page 3
take a contrary position. Nevertheless, we believe that if challenged, the
opinions set forth in the Registration Statement would be sustained by a court
with jurisdiction in a properly presented case.
Our opinions are based upon the Internal Revenue Code of 1986, as
amended, the Treasury regulations promulgated thereunder, and other relevant
authorities, all as in effect on the date hereof. Consequently, future changes
in the law may cause the tax treatment of the transactions referred to herein to
be materially different from that described in the Registration Statement.
We hereby consent to the use of our name in the Registration Statement
and to the filing of this letter as an exhibit to the Registration Statement.
In giving this consent, however, we do not hereby admit that we are within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933 and the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ GOODSILL ANDERSON QUINN & STIFEL
<PAGE>
[KPMG PEAT MARWICK LLP LETTERHEAD APPEARS HERE]
Exhibit 23(a)
The Board of Directors:
Hawaiian Electric Industries, Inc.:
We consent to incorporation by reference in the Registration Statement on Form
S-3 of Hawaiian Electric Industries, Inc. of our report dated January 25, 1996,
relating to the consolidated balance sheets of Hawaiian Electric Industries,
Inc. and subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of income, retained earnings and cash flows for each of
the years in the three-year period ended December 31, 1995, which report is
incorporated by reference in the December 31, 1995 annual report on Form 10-K/A
of Hawaiian Electric Industries, Inc.
We also consent to incorporation by reference of our report dated January 25,
1996 relating to the financial statement schedules of Hawaiian Electric
Industries, Inc. in the aforementioned December 31, 1995 annual report on Form
10-K/A, which report appears in said Form 10-K/A.
/s/ KPMG Peat Marwick LLP
Honolulu, Hawaii
January 23, 1997
<PAGE>
EXHIBIT 25(a)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
HAWAIIAN ELECTRIC INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Hawaii 99-0208097
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
900 Richards Street
Honolulu, Hawaii 96813
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Trust Originated Preferred Securities of
Hawaiian Electric Industries Capital Trust I
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-
29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with
Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published pursuant
to law or to the requirements of its supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee
of all facts on which to base a responsive answer to Item 2, the answer to said
Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment
to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of January, 1997.
THE BANK OF NEW YORK
By: /S/VIVIAN GEORGES
----------------------
Name: VIVIAN GEORGES
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 4,404,522
Interest-bearing balances.............. 732,833
Securities:
Held-to-maturity securities............ 789,964
Available-for-sale securities.......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold..................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income.....................28,728,602
LESS: Allowance for loan and
lease losses..................584,525
LESS: Allocated transfer risk
reserve...........................429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts.......... 1,004,242
Premises and fixed assets (including
capitalized leases).................... 605,668
Other real estate owned.................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies.............................. 205,031
Customers' liability to this bank on
acceptances outstanding................ 949,154
Intangible assets........................ 490,524
Other assets............................. 1,305,839
-----------
Total assets............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices.................... $20,441,318
Noninterest-bearing...........8,158,472
Interest-bearing.............12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs....... 11,710,903
Noninterest-bearing..............46,182
Interest-bearing.............11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased................ 1,565,288
Demand notes issued to the U.S.
Treasury............................... 293,186
Trading liabilities...................... 826,856
Other borrowed money:
With original maturity of one year
or less.............................. 2,103,443
With original maturity of more than
one year............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................. 951,116
Subordinated notes and debentures........ 1,020,400
Other liabilities........................ 1,522,884
-----------
Total liabilities........................ 40,456,160
-----------
EQUITY CAPITAL
Common stock............................. 942,284
Surplus.................................. 525,666
Undivided profits and capital reserves... 2,129,376
Net unrealized holding gains (losses) on
available-for-sale securities.......... ( 2,073)
Cumulative foreign currency translation
adjustments............................ ( 8,403)
-----------
Total equity capital..................... 3,586,850
-----------
Total liabilities and equity
capital................................ $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 25(b)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
HAWAIIAN ELECTRIC INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Hawaii 99-0208097
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
900 Richards Street
Honolulu, Hawaii 96813
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Trust Originated Preferred Securities of
Hawaiian Electric Industries Capital Trust II
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-
29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with
Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published pursuant
to law or to the requirements of its supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee
of all facts on which to base a responsive answer to Item 2, the answer to said
Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment
to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of January, 1997.
THE BANK OF NEW YORK
By: /S/VIVIAN GEORGES
----------------------
Name: VIVIAN GEORGES
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 4,404,522
Interest-bearing balances.............. 732,833
Securities:
Held-to-maturity securities............ 789,964
Available-for-sale securities.......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold..................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income.....................28,728,602
LESS: Allowance for loan and
lease losses..................584,525
LESS: Allocated transfer risk
reserve...........................429
Loans and leases, net of unearned
income, allowance, and reserve....... 28,143,648
Assets held in trading accounts.......... 1,004,242
Premises and fixed assets (including
capitalized leases).................... 605,668
Other real estate owned.................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies.............................. 205,031
Customers' liability to this bank on
acceptances outstanding................ 949,154
Intangible assets........................ 490,524
Other assets............................. 1,305,839
-----------
Total assets............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices.................... $20,441,318
Noninterest-bearing...........8,158,472
Interest-bearing.............12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs....... 11,710,903
Noninterest-bearing..............46,182
Interest-bearing.............11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased................ 1,565,288
Demand notes issued to the U.S.
Treasury............................... 293,186
Trading liabilities...................... 826,856
Other borrowed money:
With original maturity of one year
or less.............................. 2,103,443
With original maturity of more than
one year............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................. 951,116
Subordinated notes and debentures........ 1,020,400
Other liabilities........................ 1,522,884
-----------
Total liabilities........................ 40,456,160
-----------
EQUITY CAPITAL
Common stock............................. 942,284
Surplus.................................. 525,666
Undivided profits and capital reserves... 2,129,376
Net unrealized holding gains (losses) on
available-for-sale securities.......... ( 2,073)
Cumulative foreign currency translation
adjustments............................ ( 8,403)
-----------
Total equity capital..................... 3,586,850
-----------
Total liabilities and equity
capital................................ $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 25(c)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
HAWAIIAN ELECTRIC INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Hawaii 99-0208097
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
900 Richards Street
Honolulu, Hawaii 96813
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Trust Originated Preferred Securities of
Hawaiian Electric Industries Capital Trust III
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-
29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with
Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published pursuant
to law or to the requirements of its supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee
of all facts on which to base a responsive answer to Item 2, the answer to said
Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment
to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of January, 1997.
THE BANK OF NEW YORK
By: /S/VIVIAN GEORGES
----------------------
Name: VIVIAN GEORGES
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 4,404,522
Interest-bearing balances.............. 732,833
Securities:
Held-to-maturity securities............ 789,964
Available-for-sale securities.......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold..................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income.....................28,728,602
LESS: Allowance for loan and
lease losses..................584,525
LESS: Allocated transfer risk
reserve...........................429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts.......... 1,004,242
Premises and fixed assets (including
capitalized leases).................... 605,668
Other real estate owned.................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies.............................. 205,031
Customers' liability to this bank on
acceptances outstanding................ 949,154
Intangible assets........................ 490,524
Other assets............................. 1,305,839
-----------
Total assets............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices.................... $20,441,318
Noninterest-bearing...........8,158,472
Interest-bearing.............12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs....... 11,710,903
Noninterest-bearing..............46,182
Interest-bearing.............11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased................ 1,565,288
Demand notes issued to the U.S.
Treasury............................... 293,186
Trading liabilities...................... 826,856
Other borrowed money:
With original maturity of one year
or less.............................. 2,103,443
With original maturity of more than
one year............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................. 951,116
Subordinated notes and debentures........ 1,020,400
Other liabilities........................ 1,522,884
-----------
Total liabilities........................ 40,456,160
-----------
EQUITY CAPITAL
Common stock............................. 942,284
Surplus.................................. 525,666
Undivided profits and capital reserves... 2,129,376
Net unrealized holding gains (losses) on
available-for-sale securities.......... ( 2,073)
Cumulative foreign currency translation
adjustments............................ ( 8,403)
-----------
Total equity capital..................... 3,586,850
-----------
Total liabilities and equity
capital................................ $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 25(d)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Delaware 52-6829385
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
c/o The Bank of New York
101 Barclay Street, 21st Floor
New York, New York 10286
(Address of principal executive offices) (Zip code)
______________________
Trust Originated Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-
29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with
Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published pursuant
to law or to the requirements of its supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee
of all facts on which to base a responsive answer to Item 2, the answer to said
Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment
to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of January, 1997.
THE BANK OF NEW YORK
By: /S/VIVIAN GEORGES
----------------------
Name: VIVIAN GEORGES
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 4,404,522
Interest-bearing balances.............. 732,833
Securities:
Held-to-maturity securities............ 789,964
Available-for-sale securities.......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold..................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income.....................28,728,602
LESS: Allowance for loan and
lease losses..................584,525
LESS: Allocated transfer risk
reserve...........................429
Loans and leases, net of unearned
income, allowance, and reserve....... 28,143,648
Assets held in trading accounts.......... 1,004,242
Premises and fixed assets (including
capitalized leases).................... 605,668
Other real estate owned.................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies.............................. 205,031
Customers' liability to this bank on
acceptances outstanding................ 949,154
Intangible assets........................ 490,524
Other assets............................. 1,305,839
-----------
Total assets............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices.................... $20,441,318
Noninterest-bearing...........8,158,472
Interest-bearing.............12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs....... 11,710,903
Noninterest-bearing..............46,182
Interest-bearing.............11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased................ 1,565,288
Demand notes issued to the U.S.
Treasury............................... 293,186
Trading liabilities...................... 826,856
Other borrowed money:
With original maturity of one year
or less.............................. 2,103,443
With original maturity of more than
one year............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................. 951,116
Subordinated notes and debentures........ 1,020,400
Other liabilities........................ 1,522,884
-----------
Total liabilities........................ 40,456,160
-----------
EQUITY CAPITAL
Common stock............................. 942,284
Surplus.................................. 525,666
Undivided profits and capital reserves... 2,129,376
Net unrealized holding gains (losses) on
available-for-sale securities.......... ( 2,073)
Cumulative foreign currency translation
adjustments............................ ( 8,403)
-----------
Total equity capital..................... 3,586,850
-----------
Total liabilities and equity
capital................................ $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 25(e)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST II
(Exact name of obligor as specified in its charter)
Delaware 52-6829386
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
c/o The Bank of New York
101 Barclay Street, 21st Floor
New York, New York 10286
(Address of principal executive offices) (Zip code)
______________________
Trust Originated Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-
29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with
Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published pursuant
to law or to the requirements of its supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee
of all facts on which to base a responsive answer to Item 2, the answer to said
Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment
to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of January, 1997.
THE BANK OF NEW YORK
By: /S/VIVIAN GEORGES
----------------------
Name: VIVIAN GEORGES
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 4,404,522
Interest-bearing balances.............. 732,833
Securities:
Held-to-maturity securities............ 789,964
Available-for-sale securities.......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold..................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income.....................28,728,602
LESS: Allowance for loan and
lease losses..................584,525
LESS: Allocated transfer risk
reserve...........................429
Loans and leases, net of unearned
income, allowance, and reserve...... 28,143,648
Assets held in trading accounts.......... 1,004,242
Premises and fixed assets (including
capitalized leases).................... 605,668
Other real estate owned.................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies.............................. 205,031
Customers' liability to this bank on
acceptances outstanding................ 949,154
Intangible assets........................ 490,524
Other assets............................. 1,305,839
-----------
Total assets............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices.................... $20,441,318
Noninterest-bearing...........8,158,472
Interest-bearing.............12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs....... 11,710,903
Noninterest-bearing..............46,182
Interest-bearing.............11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased................ 1,565,288
Demand notes issued to the U.S.
Treasury............................... 293,186
Trading liabilities...................... 826,856
Other borrowed money:
With original maturity of one year
or less.............................. 2,103,443
With original maturity of more than
one year............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................. 951,116
Subordinated notes and debentures........ 1,020,400
Other liabilities........................ 1,522,884
-----------
Total liabilities........................ 40,456,160
-----------
EQUITY CAPITAL
Common stock............................. 942,284
Surplus.................................. 525,666
Undivided profits and capital reserves... 2,129,376
Net unrealized holding gains (losses) on
available-for-sale securities.......... ( 2,073)
Cumulative foreign currency translation
adjustments............................ ( 8,403)
-----------
Total equity capital..................... 3,586,850
-----------
Total liabilities and equity
capital................................ $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 25(f)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST III
(Exact name of obligor as specified in its charter)
Delaware 52-6829387
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
c/o The Bank of New York
101 Barclay Street, 21st Floor
New York, New York 10286
(Address of principal executive offices) (Zip code)
______________________
Trust Originated Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-
29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with
Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published pursuant
to law or to the requirements of its supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee
of all facts on which to base a responsive answer to Item 2, the answer to said
Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment
to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of January, 1997.
THE BANK OF NEW YORK
By: /S/VIVIAN GEORGES
----------------------
Name: VIVIAN GEORGES
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 4,404,522
Interest-bearing balances.............. 732,833
Securities:
Held-to-maturity securities............ 789,964
Available-for-sale securities.......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold..................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income.....................28,728,602
LESS: Allowance for loan and
lease losses..................584,525
LESS: Allocated transfer risk
reserve...........................429
Loans and leases, net of unearned
income, allowance, and reserve....... 28,143,648
Assets held in trading accounts.......... 1,004,242
Premises and fixed assets (including
capitalized leases).................... 605,668
Other real estate owned.................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies.............................. 205,031
Customers' liability to this bank on
acceptances outstanding................ 949,154
Intangible assets........................ 490,524
Other assets............................. 1,305,839
-----------
Total assets............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices.................... $20,441,318
Noninterest-bearing...........8,158,472
Interest-bearing.............12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs....... 11,710,903
Noninterest-bearing..............46,182
Interest-bearing.............11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased................ 1,565,288
Demand notes issued to the U.S.
Treasury............................... 293,186
Trading liabilities...................... 826,856
Other borrowed money:
With original maturity of one year
or less.............................. 2,103,443
With original maturity of more than
one year............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................. 951,116
Subordinated notes and debentures........ 1,020,400
Other liabilities........................ 1,522,884
-----------
Total liabilities........................ 40,456,160
-----------
EQUITY CAPITAL
Common stock............................. 942,284
Surplus.................................. 525,666
Undivided profits and capital reserves... 2,129,376
Net unrealized holding gains (losses) on
available-for-sale securities.......... ( 2,073)
Cumulative foreign currency translation
adjustments............................ ( 8,403)
-----------
Total equity capital..................... 3,586,850
-----------
Total liabilities and equity
capital................................ $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 25(g)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
HAWAIIAN ELECTRIC INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Hawaii 99-0208097
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
900 Richards Street
Honolulu, Hawaii 96813
(Address of principal executive offices) (Zip code)
----------------------
Junior Subordinated Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-
29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with
Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee
of all facts on which to base a responsive answer to Item 2, the answer to said
Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment
to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of January, 1997.
THE BANK OF NEW YORK
By: /s/VIVIAN GEORGES
----------------------------------
Name: VIVIAN GEORGES
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 4,404,522
Interest-bearing balances.............. 732,833
Securities:
Held-to-maturity securities............ 789,964
Available-for-sale securities.......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold..................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income.....................28,728,602
LESS: Allowance for loan and
lease losses..................584,525
LESS: Allocated transfer risk
reserve...........................429
Loans and leases, net of unearned
income, allowance, and reserve....... 28,143,648
Assets held in trading accounts.......... 1,004,242
Premises and fixed assets (including
capitalized leases).................... 605,668
Other real estate owned.................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies.............................. 205,031
Customers' liability to this bank on
acceptances outstanding................ 949,154
Intangible assets........................ 490,524
Other assets............................. 1,305,839
-----------
Total assets............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices.................... $20,441,318
Noninterest-bearing...........8,158,472
Interest-bearing.............12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs....... 11,710,903
Noninterest-bearing..............46,182
Interest-bearing.............11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased................ 1,565,288
Demand notes issued to the U.S.
Treasury............................... 293,186
Trading liabilities...................... 826,856
Other borrowed money:
With original maturity of one year
or less.............................. 2,103,443
With original maturity of more than
one year............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................. 951,116
Subordinated notes and debentures........ 1,020,400
Other liabilities........................ 1,522,884
-----------
Total liabilities........................ 40,456,160
-----------
EQUITY CAPITAL
Common stock............................. 942,284
Surplus.................................. 525,666
Undivided profits and capital reserves... 2,129,376
Net unrealized holding gains (losses) on
available-for-sale securities.......... ( 2,073)
Cumulative foreign currency translation
adjustments............................ ( 8,403)
-----------
Total equity capital..................... 3,586,850
-----------
Total liabilities and equity
capital................................ $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 25(h)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
HAWAIIAN ELECTRIC INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Hawaii 99-0208097
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
900 Richards Street
Honolulu, Hawaii 96813
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Partnership Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-
29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with
Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published pursuant
to law or to the requirements of its supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee
of all facts on which to base a responsive answer to Item 2, the answer to said
Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment
to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of January, 1997.
THE BANK OF NEW YORK
By: /S/MARY JANE MORRISSEY
--------------------------
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin.................... $ 4,404,522
Interest-bearing balances.............. 732,833
Securities:
Held-to-maturity securities............ 789,964
Available-for-sale securities.......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold..................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income.....................28,728,602
LESS: Allowance for loan and
lease losses..................584,525
LESS: Allocated transfer risk
reserve...........................429
Loans and leases, net of unearned
income, allowance, and reserve....... 28,143,648
Assets held in trading accounts.......... 1,004,242
Premises and fixed assets (including
capitalized leases).................... 605,668
Other real estate owned.................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies.............................. 205,031
Customers' liability to this bank on
acceptances outstanding................ 949,154
Intangible assets........................ 490,524
Other assets............................. 1,305,839
-----------
Total assets............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices.................... $20,441,318
Noninterest-bearing...........8,158,472
Interest-bearing.............12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs....... 11,710,903
Noninterest-bearing..............46,182
Interest-bearing.............11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased................ 1,565,288
Demand notes issued to the U.S.
Treasury............................... 293,186
Trading liabilities...................... 826,856
Other borrowed money:
With original maturity of one year
or less.............................. 2,103,443
With original maturity of more than
one year............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................. 951,116
Subordinated notes and debentures........ 1,020,400
Other liabilities........................ 1,522,884
-----------
Total liabilities........................ 40,456,160
-----------
EQUITY CAPITAL
Common stock............................. 942,284
Surplus.................................. 525,666
Undivided profits and capital reserves... 2,129,376
Net unrealized holding gains (losses) on
available-for-sale securities.......... ( 2,073)
Cumulative foreign currency translation
adjustments............................ ( 8,403)
-----------
Total equity capital..................... 3,586,850
-----------
Total liabilities and equity
capital................................ $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 25(i)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
HEI PREFERRED FUNDING, LP
(Exact name of obligor as specified in its charter)
Delaware 52-2007237
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
300 Delaware Avenue, Suite 1704
Wilmington, Delaware 19801
(Address of principal executive offices) (Zip code)
----------------------
Partnership Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-
29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with
Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published pursuant
to law or to the requirements of its supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee
of all facts on which to base a responsive answer to Item 2, the answer to said
Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment
to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of January, 1997.
THE BANK OF NEW YORK
By: /S/MARY JANE MORRISSEY
--------------------------
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin.................... $ 4,404,522
Interest-bearing balances.............. 732,833
Securities:
Held-to-maturity securities............ 789,964
Available-for-sale securities.......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold..................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income.....................28,728,602
LESS: Allowance for loan and
lease losses..................584,525
LESS: Allocated transfer risk
reserve...........................429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts.......... 1,004,242
Premises and fixed assets (including
capitalized leases).................... 605,668
Other real estate owned.................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies.............................. 205,031
Customers' liability to this bank on
acceptances outstanding................ 949,154
Intangible assets........................ 490,524
Other assets............................. 1,305,839
-----------
Total assets............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices.................... $20,441,318
Noninterest-bearing...........8,158,472
Interest-bearing.............12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs....... 11,710,903
Noninterest-bearing..............46,182
Interest-bearing.............11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased................ 1,565,288
Demand notes issued to the U.S.
Treasury............................... 293,186
Trading liabilities...................... 826,856
Other borrowed money:
With original maturity of one year
or less.............................. 2,103,443
With original maturity of more than
one year............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................. 951,116
Subordinated notes and debentures........ 1,020,400
Other liabilities........................ 1,522,884
-----------
Total liabilities........................ 40,456,160
-----------
EQUITY CAPITAL
Common stock............................. 942,284
Surplus.................................. 525,666
Undivided profits and capital reserves... 2,129,376
Net unrealized holding gains (losses) on
available-for-sale securities.......... ( 2,073)
Cumulative foreign currency translation
adjustments............................ ( 8,403)
-----------
Total equity capital..................... 3,586,850
-----------
Total liabilities and equity
capital................................ $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
