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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: February 4, 1997
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Exact Name of Registrant Commission I.R.S. Employer
as Specified in Its Charter File Number Identification No.
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Hawaiian Electric Industries, Inc. 1-8503 99-0208097
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State of Hawaii
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(State or other jurisdiction of incorporation)
900 Richards Street, Honolulu, Hawaii 96813
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(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (808) 543-5662
None
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
On February 4, 1997, Hawaiian Electric Industries Capital Trust I (the
"Trust") issued and sold 4,000,000 of its 8.36% Trust Originated Preferred
Securities (Liquidation Amount $25 Per Trust Preferred Security) ($100,000,000
aggregate liquidation amount) (the "Securities") pursuant to a Purchase
Agreement dated January 29, 1997 among Hawaiian Electric Industries, Inc. (the
"Company"), the Trust, HEI Preferred Funding, LP (the "Partnership") and the
several Underwriters named therein. The Registration Statement on Form S-3
(File Nos. 333-18809, 333-18809-01, 333-18809-02, 333-18809-03 and 333-18809-04)
filed by the Company, the Trust and the Partnership with the Securities and
Exchange Commission with respect to the Securities (the "Registration
Statement") was declared effective under the Securities Act of 1933 on January
24, 1997.
Item 7. Exhibits
The following documents are hereby being filed as part of this Current
Report on Form 8-K in the final form delivered in connection with the offer and
sale of the Securities (the exhibit number designations denote the exhibit
number assigned to the form or previous version of such documents included as
exhibits to the Registration Statement):
Exhibit 1 Purchase Agreement dated January 29, 1997, among the Company,
the Trust, the Partnership and the several Underwriters named
therein
Exhibit 4(e) Amended and Restated Agreement of Limited Partnership of the
Partnership dated as of February 1, 1997
Exhibit 4(f) Amended and Restated Trust Agreement of the Trust dated as of
February 1, 1997
Exhibit 4(i) Junior Indenture between the Company and The Bank of New York,
as Trustee, dated as of February 1, 1997
Exhibit 4(l) Officers' Certificate in connection with issuance of 8.36%
Junior Subordinated Debenture, Series A, Due 2017 under Junior
Indenture of the Company
Exhibit 4(m) 8.36% Trust Originated Preferred Security (Liquidation Amount
$25 Per Trust Preferred Security) of the Trust
Exhibit 4(n) 8.36% Junior Subordinated Debenture Series A, Due 2017 of the
Company
Exhibit 4(o) Trust Preferred Securities Guarantee Agreement with respect to
the Trust dated as of February 1, 1997
Exhibit 4(p) Partnership Guarantee Agreement with respect to the
Partnership dated as of February 1, 1997
Exhibit 4(q) Affiliate Investment Instruments Guarantee Agreement with
respect to 8.36% Junior Subordinated Debenture of HEI
Diversified, Inc. dated as of February 1, 1997
Exhibit 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 Affiliate Investment Instruments Guarantee
Agreement
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
(Registrant)
/s/ Robert F. Mougeot
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Robert F. Mougeot
Financial Vice President and
Chief Financial Officer
(Principal Financial Officer of HEI)
Date: February 13, 1997
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EXHIBIT 1
4,000,000 Trust Preferred Securities
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
8.36% 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
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January 29, 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 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
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* "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
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"Offerors"), a Hawaii corporation, confirm their agreement (this "Agreement")
with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("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 (collectively, the "Underwriters," which term shall also include
any underwriter substituted as hereinafter provided in Section 10 hereof), 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 8.36% 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
Schedule A hereto. 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 February 1, 1997 among the Company, as
Sponsor and Depositor, Robert F. Clarke, Robert F. Mougeot and Constance H. Lau,
as regular trustees (the "Regular Trustees"), The Bank of New York, a New York
banking corporation, as initial institutional trustee (the "Property Trustee"),
and The Bank of New York (Delaware), a Delaware banking 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 February 1, 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 February 1, 1997 among the General Partner, the
Trust, as initial limited partner, and such other persons who become limited
partners thereto (the "Agreement of Limited Partnership"), 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 February 1, 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 Trust Guarantee, together with the Partnership Preferred Securities and the
Partnership Guarantee, are referred to herein as the "Offered Securities."
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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 one or more subsidiaries of the Company
(each such subsidiary, an "Investment Subsidiary" and, together with the
Company, the "Investment Affiliates"; such debt instruments of the Investment
Subsidiaries, the "Subsidiary Debentures" and, together with the Company
Debentures, the "Affiliate Debentures") and (iii) certain U.S. government
obligations, commercial paper and certain other securities 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, an Affiliate Investment Instruments Guarantee
Agreement dated as of February 1, 1997 between The Bank of New York, as trustee
(the "Investment Guarantee Trustee"), and the Company (each, an "Investment
Guarantee"). Each of the Affiliate Debentures shall be issued pursuant to an
Indenture dated as of February 1, 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 Underwriters 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, the Offered Securities. 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 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
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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 Guarantees, the Indenture relating
to the Company Debentures and each 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.
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(a) Representations and Warranties by Company. The Company represents
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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
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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 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 (A) made in reliance upon and in
conformity with
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information furnished to the Company in writing by any Underwriter through
Merrill Lynch expressly for use in the Registration Statement or the
Prospectus which, for purposes of this Agreement, shall be deemed to
consist of the matters described in the last paragraph on page S-4 of the
Prospectus Supplement and in the first paragraph under the table set forth
under "Underwriting" in the Prospectus Supplement (collectively, the
"Underwriter Information") and (B) with respect to the statements of
eligibility on Form T-1 filed as exhibits to the Registration Statement.
The Prospectus delivered to the Underwriters for use in making
confirmations of sales of Trust Preferred Securities will be identical in
substance 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 (x) the date the Registration Statement, or any post-effective
amendment thereto, was declared effective by the Commission under the 1933
Act and (y) 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
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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 audited
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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
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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, 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
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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
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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 Significant Subsidiary (as defined herein) of the
Company, other than American Savings Bank, F.S.B. ("ASB") and the General
Partner, 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
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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
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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 and
issued and are fully paid and nonassessable; all of the issued shares of
capital stock of each Significant Subsidiary has been duly and validly
authorized and issued and is fully paid and nonassessable; and all of such
shares, 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
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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
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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 to the Partnership 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 contemplated by 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
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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
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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 Guarantees. Each Investment Guarantee has been
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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 Company in accordance
with its terms, except as may be limited by the Exceptions. Each
Investment Guarantee has been duly qualified under the 1939 Act.
(xii) Prospectus Descriptions. The Offered Securities, the
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Trust Agreement, the Agreement of Limited Partnership, the Indentures and
the Investment Guarantees will conform in all material respects to the
respective statements relating thereto contained in the Prospectus.
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(xiii) Absence of Defaults and Conflicts. The execution,
---------------------------------
delivery and performance of the Trust Agreement, the Guarantees and each
Investment Guarantee by the Company, the Affiliate Debentures and the
Indentures by the applicable Investment Affiliate, the Agreement of Limited
Partnership by the General Partner and any other agreement or instrument
entered into or issued or to be entered into or issued by the Company, each
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, each 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, each 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
Subsidiaries taken as a whole.
(xv) Licenses, Franchises, Trademarks, Easements, etc. The
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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
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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 and such filings as are
required by Section 33 of such Act with respect to interests of the Company
or Subsidiaries in any foreign utility company, 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.
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("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").
(b) Officers' Certificates. Any certificate signed by any officer of
----------------------
any of the Offerors or each 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 such 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:
-9-
<PAGE>
(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 material agreements 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.
(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
-10-
<PAGE>
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
Agreement of Limited Partnership; 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 material agreements 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) Agreement of Limited Partnership. The Agreement of
--------------------------------
Limited Partnership 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 Agreement of Limited
Partnership and, when issued and delivered pursuant to the Agreement of
Limited Partnership 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
Agreement of Limited Partnership 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 Agreement of
Limited Partnership (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.
-11-
<PAGE>
(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 Agreement of Limited Partnership or its amended
and restated certificate of limited partnership, dated as of January 23,
1997 (the "Certificate of Limited 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 Agreement of Limited Partnership or the Certificate of
Limited 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, the
Guarantees and each Investment Guarantee under the 1939 Act and the 1939
Act Regulations.
(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.
-12-
<PAGE>
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"), pursuant to such arrangements and instructions
as shall be agreed upon by the Underwriters and the Company, at 10:00 A.M.
(Eastern time) 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 Underwriters 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 by or on behalf of the Underwriters to the Trust
by wire transfer of immediately available funds to a bank account maintained by
the Property Trustee for that purpose, against delivery to such persons
designated by the Underwriters 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
Merrill Lynch, for its account, to accept delivery of and receipt for, and make
payment of the purchase price for, the Trust Preferred Securities that such
Underwriter 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 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 Underwriters 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 the Closing Time to
Merrill Lynch, 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.
-13-
<PAGE>
(c) Registration. The global certificate for the Trust Preferred
------------
Securities shall be registered in the name of "Cede & Co.," as nominee of DTC,
and delivered to DTC, or its custodian, at least one full business day prior to
the Closing Time. For the purpose of expediting the checking of the global
certificate for the Trust Preferred Securities by the Underwriters, the Trust
agrees to make such global certificate available to the Underwriters 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 Underwriters.
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
Underwriters 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 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 Underwriters
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 Underwriters 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 Underwriters or
counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Offerors have furnished
-----------------------------------
or will deliver to the Underwriters 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 Underwriters, without charge, a conformed
-14-
<PAGE>
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 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 Underwriters 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
-15-
<PAGE>
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 are 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) 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.
-16-
<PAGE>
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay, or cause to be paid, 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 Agreement of Limited
Partnership, 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 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) up to a maximum of $15,000, (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 Guarantees and each 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, 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
------------------------
Underwriters in accordance with the provisions of Section 5 or 9(a)(i) 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 or officers of the Offerors or each 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
-17-
<PAGE>
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
-------------------------------
Underwriters 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 equity 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 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;
(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 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
and such filings as are required by Section 33 of such Act with respect to
interests of the Company or Subsidiaries in any foreign utility company,
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
-18-
<PAGE>
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, 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 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 at 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 Agreement of Limited Partnership, and each Investment Guarantee, and
the statements under "Description of Hawaiian Electric Industries, Inc.--
General" 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;
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(xii) 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;
(xiii) 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;
(xiv) 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;
(xv) each 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;
(xvi) 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, and the Affiliate
Debentures will be entitled to the benefits of the applicable Indenture;
(xvii) the execution, delivery and performance of the Trust
Agreement, the Agreement of Limited Partnership, the Guarantees and each
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
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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;
(xviii) 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;
(xix) 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
(xx) to such counsel's knowledge, 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 or encumbrance; 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, 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, 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 (ix) 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 (x) and (xix) above), (I) such
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counsel may limit the matters set forth in paragraphs (xiii) through (xvi) above
by the effect of the Exceptions and, if applicable, 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 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 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 (vi) 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 Underwriters 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 Underwriters shall have received an opinion of Richards, Layton & Finger,
P.A., special Delaware counsel for the Offerors and the General Partner, 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
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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 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 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;
(ix) 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;
(x) under the Agreement of Limited Partnership 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 Agreement of Limited Partnership, and as described in
the Prospectus, and to perform its other obligations under the Agreement of
Limited Partnership, 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) the Agreement of Limited Partnership has been duly authorized
by all necessary corporate action of, and duly executed and delivered by,
the General Partner and 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 Agreement of Limited Partnership and represent valid and,
subject to the qualifications set forth in paragraph (xiii) below, fully
paid and nonassessable limited partner interests in the Partnership;
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(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 Agreement of
Limited Partnership 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 Agreement of Limited Partnership 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;
(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 Agreement of Limited Partnership or (B) any
applicable Delaware law, rule or regulation; and
(xviii) under the Agreement of Limited Partnership 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
Agreement of Limited Partnership 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
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Underwriters), (B) such counsel may rely, as to matters of fact, 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 (xi) 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 Underwriters 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
-----------------------------------
Underwriters 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, upon the opinions of counsel
satisfactory to the Underwriters. Such counsel may 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 Underwriters shall have received the favorable opinion, dated as of the
Closing Time, of Emmet, Marvin & Martin, LLP, counsel for the Property Trustee
in form and substance satisfactory to counsel for the Underwriters, together
with signed or reproduced copies of such opinion 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 material 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 Underwriters 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.
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(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
Underwriters 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 of the Partnership, whether or not arising in the ordinary course of
business, and the Underwriters 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 Underwriters shall have received from KPMG Peat Marwick LLP, a letter dated
such date, in form and substance satisfactory to the Underwriters, 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 Underwriters.
(j) Bring-Down Comfort Letter. At the Closing Time, the Underwriters
-------------------------
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
Underwriters a letter dated on or prior to the Closing Time, from each such
rating agency, or other evidence satisfactory to the Underwriters, 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
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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
----------------------------------
Underwriters shall have received a letter from each 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.
(n) No Special Events. At the Closing Time, neither a Partnership
-----------------
Special Event (as defined in the Agreement of Limited Partnership) 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 Underwriters 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 Underwriters 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),
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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, 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 the Underwriter Information; 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; provided further,
however, that the indemnification contained in this Section 6(a) with respect to
the Basic Prospectus shall not inure to the benefit of any Underwriter (or to
the benefit of any person controlling such Underwriter) on account of any such
loss, claim, damage, liability or expense arising from the sale of the Offered
Securities by such Underwriter to any person if the Offerors have established
that a copy of the Prospectus shall not have been delivered or sent to such
person within the time required by the 1933 Act and the 1933 Act Regulations,
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Basic Prospectus was corrected in
the Prospectus, provided that the Offerors have delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending.
(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
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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 the
Underwriter Information; 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 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.
-29-
<PAGE>
(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 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
-30-
<PAGE>
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.
------------------------
(a) Termination; General. The Underwriters 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 Underwriters, 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.
-31-
<PAGE>
(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 non-defaulting Underwriters 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 non-defaulting
Underwriters 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.
In the event of any such default that does not result in a termination
of this Agreement, either the non-defaulting Underwriters 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.
-32-
<PAGE>
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: /s/ Robert F. Mougeot
--------------------------------------------
Name: Robert F. Mougeot
Title: Financial Vice President and CFO
By: /s/ Constance H. Lau
--------------------------------------------
Name: Constance H. Lau
Title: Treasurer
HEI Preferred Funding, LP
By: 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
By: Hawaiian Electric Industries, Inc.,
as Sponsor and Depositor
By: /s/ Robert F. Mougeot
--------------------------------------------
Name: Robert F. Mougeot
Title: Financial Vice President and CFO
By: /s/ Constance H. Lau
---------------------------------------------
Name: Constance H. Lau
Title: Treasurer
<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: /s/ Maria Marta Falkinhoff
-----------------------------------------------
Authorized Signatory
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Trust Preferred
Name of Underwriter Securities
- ------------------- ---------------
<S> <C>
Merrill Lynch, Pierce, Fenner
& Smith Incorporated.................................... 675,000
Goldman, Sachs & Co....................................... 665,000
Dean Witter Reynolds Inc.................................. 665,000
A.G. Edwards & Sons, Inc.................................. 665,000
Legg Mason Wood Walker, Incorporated...................... 665,000
Robert W. Baird & Co., Incorporated....................... 665,000
---------
Total..................................................... 4,000,000
=========
</TABLE>
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 $.7875; 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 $.5000.
SCHEDULE B-1
<PAGE>
EXHIBIT 4(e)
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
HEI PREFERRED FUNDING, LP
DATED AS OF FEBRUARY 1, 1997
<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............ 11
2.2 NAME....................................... 11
2.3 PURPOSES OF THE PARTNERSHIP................ 11
2.4 TERM....................................... 12
2.5 REGISTERED AGENT AND OFFICE................ 12
2.6 PRINCIPAL PLACE OF ACTIVITY................ 12
2.7 NAME AND ADDRESS OF GENERAL PARTNER........ 12
2.8 QUALIFICATION TO CONDUCT ACTIVITIES........ 13
2.9 ADMISSION OF HOLDERS OF PARTNERSHIP
PREFERRED SECURITIES....................... 13
ARTICLE III--CAPITAL CONTRIBUTIONS; REPRESENTATION OF
PARTNERSHIP PREFERRED SECURITY HOLDER'S
INTEREST; CAPITAL ACCOUNTS
3.1 CAPITAL CONTRIBUTIONS...................... 13
3.2 PARTNERSHIP PREFERRED SECURITY
HOLDER'S INTEREST REPRESENTED BY
PARTNERSHIP PREFERRED SECURITIES........... 14
3.3 CAPITAL ACCOUNTS........................... 14
3.4 INTEREST ON CAPITAL CONTRIBUTIONS.......... 15
3.5 WITHDRAWAL AND RETURN OF CAPITAL
CONTRIBUTIONS.............................. 15
ARTICLE IV--ALLOCATIONS
4.1 PROFITS AND LOSSES......................... 15
4.2 SPECIAL ALLOCATION......................... 16
4.3 WITHHOLDING................................ 18
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE V--DISTRIBUTIONS
5.1 DISTRIBUTIONS.............................. 18
5.2 LIMITATIONS ON DISTRIBUTIONS............... 19
ARTICLE VI--ISSUANCE OF PARTNERSHIP PREFERRED SECURITIES
6.1 GENERAL PROVISIONS REGARDING
PARTNERSHIP PREFERRED SECURITIES........... 19
6.2 PARTNERSHIP PREFERRED SECURITIES........... 20
ARTICLE VII--PARTNERSHIP INVESTMENTS
7.1 AFFILIATE INVESTMENT INSTRUMENTS;
ELIGIBLE DEBT SECURITIES................... 31
7.2 REINVESTMENT OF PAYMENTS RECEIVED
BY THE PARTNERSHIP......................... 32
7.3 ASSUMPTION OF OBLIGATIONS AND
RELEASE OF INVESTMENT AFFILIATE............ 33
ARTICLE VIII--BOOKS OF ACCOUNT, RECORDS AND REPORTS
8.1 BOOKS AND RECORDS.......................... 33
8.2 ACCOUNTING METHOD.......................... 34
ARTICLE IX--PAYMENT OF EXPENSES
9.1 PAYMENT OF TRUST EXPENSES AND
PARTNERSHIP TAXES.......................... 34
9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES...... 35
ARTICLE X--POWERS, RIGHTS AND DUTIES OF THE
LIMITED PARTNERS
10.1 LIMITATIONS................................ 35
10.2 LIABILITY.................................. 36
10.3 PRIORITY................................... 36
ARTICLE XI--POWERS, RIGHTS, DUTIES AND COVENANTS OF THE
GENERAL PARTNER
11.1 AUTHORITY.................................. 36
11.2 POWERS AND DUTIES OF GENERAL PARTNER....... 36
11.3 OBLIGATIONS AND EXPENSES PAYABLE BY AND
COVENANTS OF THE GENERAL PARTNER........... 38
11.4 LIABILITY.................................. 39
11.5 OUTSIDE ACTIVITIES......................... 39
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C> <C>
11.6 LIMITS ON GENERAL PARTNER'S POWERS........ 39
11.7 EXCULPATION............................... 40
11.8 FIDUCIARY DUTY............................ 41
11.9 INDEMNIFICATION........................... 42
11.10 TAX MATTERS............................... 43
11.11 CONSOLIDATION, AMALGAMATION, MERGER
OR SALE OF ASSETS......................... 43
ARTICLE XII--TRANSFERS OF INTERESTS BY PARTNERS
12.1 TRANSFER OF INTERESTS..................... 45
12.2 TRANSFER OF L.P. CERTIFICATES............. 46
12.3 DEFINITIVE L.P. CERTIFICATES;
PERSONS DEEMED PARTNERSHIP
PREFERRED SECURITY HOLDERS................ 46
12.4 BOOK-ENTRY PROVISIONS..................... 47
12.5 REGISTRAR AND PAYING AGENT................ 49
ARTICLE XIII--WITHDRAWAL, DISSOLUTION; LIQUIDATION
AND DISTRIBUTION OF ASSETS
13.1 WITHDRAWAL OF PARTNERS.................... 50
13.2 DISSOLUTION OF THE PARTNERSHIP............ 50
13.3 LIQUIDATION............................... 51
13.4 DISTRIBUTION IN LIQUIDATION............... 52
13.5 RIGHTS OF LIMITED PARTNERS................ 53
13.6 TERMINATION............................... 53
ARTICLE XIV--AMENDMENTS AND MEETINGS
14.1 AMENDMENTS................................ 53
14.2 AMENDMENT OF CERTIFICATE.................. 54
14.3 MEETINGS OF PARTNERS...................... 54
ARTICLE XV--MISCELLANEOUS
15.1 NOTICES................................... 55
15.2 POWER OF ATTORNEY......................... 56
15.3 ENTIRE AGREEMENT.......................... 56
15.4 GOVERNING LAW............................. 57
15.5 EFFECT.................................... 57
15.6 PRONOUNS AND NUMBER....................... 57
15.7 CAPTIONS.................................. 57
15.8 PARTIAL ENFORCEABILITY.................... 57
15.9 COUNTERPARTS.............................. 57
15.10 WAIVER OF PARTITION....................... 57
15.11 REMEDIES.................................. 57
</TABLE>
(iii)
<PAGE>
Schedule 1 LIST OF PARTNERS
Annex A FORM OF L.P. CERTIFICATE
(iv)
<PAGE>
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
February 1, 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 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 Amendment, in
its entirety as follows:
<PAGE>
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.
"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.
2
<PAGE>
"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 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 accumulate on the $25 stated liquidation preference of each Partnership
Preferred Security from the Closing Date and are payable quarterly in arrears in
accordance with Sections 5.1 and 6.2(b) of this Agreement. Unless the context
otherwise requires, "Distributions" includes "Compounded Distributions."
"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
3
<PAGE>
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 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.
4
<PAGE>
"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 Junior 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 February 1, 1997.
"INDEPENDENT FINANCIAL ADVISER" shall mean (i) Merrill Lynch, Pierce,
Fenner & Smith Incorporated or (ii) such other nationally recognized investment
banking firm which shall be designated by the General Partner and which firm
does not (and whose directors, officers, employees and affiliates do not) have a
direct or indirect material equity interest in the General Partner or any of its
Affiliates or (iii) another entity which is an investment banking, accounting or
financial services firm selected by the General Partner 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.
5
<PAGE>
"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 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.
6
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"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.
"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 February 1, 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 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
7
<PAGE>
Trust Preferred Securities 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.
"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 recognized 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 by such
Investment Affiliate for United States federal income tax purposes.
"PAYING AGENT" shall have the meaning set forth in Section 12.5 of
this Agreement.
8
<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.
"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.
"PURCHASE AGREEMENT" means the Purchase Agreement dated January 29,
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.
"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.
"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.
9
<PAGE>
"RELEASED INVESTMENT AFFILIATE" has the meaning set forth in Section
7.3 of this Agreement.
"S&P" means Standard & Poor's Ratings Services 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 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 and Depositor, 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 February 1, 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.
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"TRUST COMMON SECURITIES GUARANTEE" means the Trust Common Securities
Guarantee Agreement dated as of February 1, 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 February 1, 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.
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
11
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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 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 c/o the General Partner, 300 Delaware
Avenue, Suite 1704, Wilmington, Delaware 19801. 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 19801
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.
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SECTION 2.8 QUALIFICATION TO CONDUCT ACTIVITIES. The General Partner
-----------------------------------
shall cause the Partnership to become 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.
(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
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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 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.
14
<PAGE>
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, 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 accumulated 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.
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<PAGE>
(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
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.
16
<PAGE>
(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 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
17
<PAGE>
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 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
18
<PAGE>
Compounded Distributions, paid on the Partnership Preferred 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) The Partnership is hereby authorized to issue and sell Partnership
Preferred Securities having an aggregate liquidation preference of $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 Bank of New York (or its successor), as trustee
under the Partnership Guarantee, to hold the Partnership 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 and The Bank of New York, as trustee, each 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
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
19
<PAGE>
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 "8.36% 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 8.36% 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 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
8.36% per annum ("COMPOUNDED DISTRIBUTIONS"). In the event that any date on
which Distributions are payable on the Partnership Preferred
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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 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 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
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 February 4, 2002, upon not less than 30 nor more than 60
days' notice, at an amount per Partnership Preferred Security equal to $25 plus
accumulated and unpaid Distributions thereon, including any Compounded
Distributions, to 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
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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 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, to the extent practicable, 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
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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 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 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 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
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<PAGE>
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 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 long as the Partnership Preferred Securities are held by
the
24
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Property Trustee, the Property Trustee as the holder of the Partnership
Preferred Securities), shall have the right, to the exclusion of the General
Partner, to the fullest extent permitted by law, (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 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
25
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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 or any
applicable Investment Guarantee 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 and against HEI under any applicable Investment
Guarantees 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 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
26
<PAGE>
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
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
27
<PAGE>
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 materially 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 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 General Partner.
(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:
28
<PAGE>
(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.
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
29
<PAGE>
any notice of an Investment Event of Default received with respect to any
Affiliate Investment Instrument.
(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 $103,000,000 and
(2) junior subordinated debentures of one or more United States subsidiaries of
hei in an aggregate principal amount of $17,073,100 (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, if supported in the case of Investment
Affiliates other than HEI by a full and unconditional guarantee from HEI
comparable to an Investment Guarantee, of issuing and selling debt instruments
with terms and conditions comparable to the applicable Initial Debentures to
unrelated third party investors, (iii) the financial terms and conditions of the
Initial Debentures taken as a whole are 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
securities comparable to such Initial Debentures and supported by a full and
unconditional guarantee by HEI. 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.
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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 the requested investment in such Affiliate Investment Instrument.
(d) Each Affiliate Investment Instrument shall satisfy the following
criteria (the "REINVESTMENT CRITERIA"): (i) the applicable financial terms and
conditions of the proposed Affiliate Investment Instrument taken as a whole
shall have been determined by the Independent Financial Advisor to be at least
as favorable as the terms and conditions which could be obtained by the
Partnership in a contemporaneous public offering or private placement under Rule
144A of the Securities Act of a comparable security that is supported by a full
and unconditional guarantee issued by an entity comparable to HEI; (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 preferred stock or other 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.
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(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 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
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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.
(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
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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.
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 and the
Trust 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, and of paying agents, registrar, transfer
agents, 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
restricted in any respect), by virtue of acquiring or owning an Interest in the
Partnership.
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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:
(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;
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(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 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;
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(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.
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 the General Partner or HEI to Holders of the
Partnership Preferred Securities in such Holders' capacities as Holders of such
Partnership Preferred Securities, such obligations being separately guaranteed
by HEI 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 and Section 4.2 of the Trust Agreement. The General Partner also
agrees to pay, solely out of its own funds, such portion of the commissions,
fees and expenses of the offering and sale of the Trust Preferred Securities and
the Partnership Preferred Securities as the General Partner and HEI shall agree.
(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,
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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 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.
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
40
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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 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
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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 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).
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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 General Partner and
the Partnership Preferred Security Holders shall be treated as "partners" of the
Partnership.
(d) The General Partner may retain, at the expense of the Partnership
and at its sole discretion, a nationally recognized firm of certified public
accountants to 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
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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 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 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 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.
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ARTICLE XII
TRANSFERS OF INTERESTS BY PARTNERS
SECTION 12.1 TRANSFER OF INTERESTS.
---------------------
(a) Partnership Preferred Securities shall be freely transferable by a
Holder.
(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 Guarantee) 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 recognized
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 executed on behalf of
the Partnership by the manual signature of the General Partner by any two of its
officers.
(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 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.
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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 any two officers of the
General Partner, or by facsimile signature of any two officers of the General
Partner with authentication by the manual signature of a duly authorized
representative of the Registrar 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):
(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
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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 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 with respect
to such notices and communications 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
48
<PAGE>
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 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).
SECTION 12.5 REGISTRAR AND PAYING AGENT.
---------------------------
(a) The General Partner will act as Registrar and Paying Agent for the
Partnership Preferred Securities for so long as the Partnership Preferred
Securities are held by the Property Trustee for 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
49
<PAGE>
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 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
50
<PAGE>
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.
(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
51
<PAGE>
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")) 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):
(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;
52
<PAGE>
(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 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
53
<PAGE>
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 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
54
<PAGE>
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), 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:
55
<PAGE>
(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 19801
(b) if given to the General Partner, at its mailing address set forth
below:
HYCAP MANAGEMENT, INC.
300 Delaware Avenue, Suite 1704
Wilmington, Delaware 19801
(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,
56
<PAGE>
and it may not be modified or amended in any manner other than as set forth
herein.
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 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
57
<PAGE>
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: /s/ Robert F. Clarke
-----------------------------
Name: Robert F. Clarke
Title: President
By: /s/ Betty Ann M. Splinter
-----------------------------
Name: Betty Ann M. Splinter
Title: Secretary
INITIAL LIMITED PARTNER: HAWAIIAN ELECTRIC INDUSTRIES
CAPITAL TRUST I, A DELAWARE
statutory business trust
By: HAWAIIAN ELECTRIC INDUSTRIES,
INC., a Hawaii corporation
Its: Sponsor and Depositor
By: /s/ Robert F. Mougeot
-------------------------
Name: Robert F. Mougeot
Title: Financial Vice
President
By: /s/ Constance H. Lau
-------------------------
Name: Constance H. Lau
Title: Treasurer
58
<PAGE>
SCHEDULE 1
LIST OF PARTNERS
<TABLE>
<CAPTION>
Partner Capital Account
- ------- ---------------
<S> <C>
HYCAP MANAGEMENT, INC. $18,193,000
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL
TRUST I $103,093,000
</TABLE>
<PAGE>
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 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 NO. NO. OF PREFERRED SECURITIES
- --------------- ---------------------------
[PP- ] [ ]
CERTIFICATE EVIDENCING PARTNERSHIP PREFERRED SECURITIES
OF
HEI PREFERRED FUNDING, LP
8.36% Partnership Preferred Securities (Liquidation Preference $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, a New York bank corporation, as 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 February 1, 1997 (the
"HOLDER"), is the registered owner of [_______] preferred securities of the
Partnership representing limited partner interests in the Partnership designated
the 8.36% Partnership Preferred Securities (Liquidation Preference $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 February 1, 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 the Partnership at its principal
place of activity.
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. The Holder, by
acceptance of this
<PAGE>
certificate, and each Partnership Preferred Securities Beneficial Owner, by
acquisition of a beneficial interest in this 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
4th day of February, 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 8.36% of the stated liquidation preference 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 8.36% per annum ("COMPOUNDED DISTRIBUTIONS").
The term "DISTRIBUTIONS" as used herein shall mean ordinary cumulative
distributions in respect of each Fiscal 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 one or
more of certain of its subsidiaries
2
<PAGE>
on Affiliate Investment Instruments or from Hawaiian Electric Industries, Inc.
on the Partnership Guarantee or any Investment Guarantee or from 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, except that for any period shorter than a full
quarterly Distribution period on the basis of the actual number of days elapsed
in such 90-day quarter.
Except as otherwise described herein, Distributions on the Partnership
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 (each a
"Distribution Payment Date"), if, as and when declared by the General Partner in
its sole discretion. If 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 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. 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 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 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 accumulated Distribution. 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.
3
<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 Partnership. 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 I
DATED AS OF FEBRUARY 1, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I--INTERPRETATION AND DEFINITIONS
1.1 Definitions............................................. 1
ARTICLE II--TRUST INDENTURE ACT
2.1 Trust Indenture Act; Application........................ 12
2.2 Lists of Holders of Trust Securities.................... 13
2.3 Reports by the Property Trustee......................... 13
2.4 Periodic Reports to Property Trustee.................... 14
2.5 Evidence of Compliance
with Conditions Precedent............................... 14
2.6 Trust Enforcement Events; Waiver........................ 14
2.7 Trust Enforcement Event; Notice......................... 16
ARTICLE III--ORGANIZATION
3.1 Name.................................................... 17
3.2 Office.................................................. 17
3.3 Purpose................................................. 17
3.4 Authority............................................... 17
3.5 Title to Property of the Trust.......................... 18
3.6 Powers and Duties of the Regular Trustees............... 18
3.7 Prohibition of Actions by the Trust
and the Trustees........................................ 21
3.8 Powers and Duties of the Property Trustee............... 22
3.9 Certain Duties and Responsibilities
of the Property Trustee................................. 24
3.10 Certain Rights of Property Trustee...................... 26
3.11 Delaware Trustee........................................ 29
3.12 Execution of Documents.................................. 29
3.13 Not Responsible for Recitals
or Issuance of Trust Securities......................... 29
3.14 Duration of Trust....................................... 29
3.15 Mergers................................................. 29
ARTICLE IV--SPONSOR
4.1 Responsibilities of the Sponsor......................... 32
4.2 Indemnification and Expenses
of the Property Trustee and the
Delaware Trustee........................................ 32
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C>
ARTICLE V--TRUST COMMON SECURITIES HOLDER
5.1 Company's Purchase of Trust
Common Securities....................................... 33
5.2 Covenants of the Trust Common
Securities Holder....................................... 33
ARTICLE VI--TRUSTEES
6.1 Number of Trustees...................................... 33
6.2 Delaware Trustee........................................ 34
6.3 Property Trustee; Eligibility........................... 34
6.4 Qualifications of Regular Trustees
and Delaware Trustee Generally.......................... 35
6.5 Regular Trustees........................................ 35
6.6 Delaware Trustee........................................ 36
6.7 Appointment, Removal and Resignation
of Trustees............................................. 36
6.8 Vacancies among Trustees................................ 37
6.9 Effect of Vacancies..................................... 38
6.10 Meetings................................................ 38
6.11 Delegation of Power..................................... 39
6.12 Merger, Conversion, Consolidation
or Succession to Business............................... 39
ARTICLE VII--DISTRIBUTIONS
7.1 Distributions........................................... 39
ARTICLE VIII--ISSUANCE OF TRUST SECURITIES
8.1 Designation and General Provisions
Regarding Trust Securities.............................. 41
8.2 Redemption of Trust Securities.......................... 43
8.3 Redemption Procedures................................... 45
8.4 Voting Rights of Trust Preferred
Securities.............................................. 47
8.5 Voting Rights of Trust Common Securities................ 51
8.6 Paying Agent............................................ 53
8.7 Listing................................................. 53
8.8 Acceptance of Trust Agreement,
Affiliate Investment Instruments,
Guarantees and Agreement of Limited
Partnership............................................. 53
ARTICLE IX--DISSOLUTION AND LIQUIDATION OF THE TRUST
9.1 Dissolution of Trust.................................... 54
9.2 Liquidation Distribution Upon
Termination and Dissolution of the Trust................ 55
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C>
ARTICLE X--TRANSFER OF INTERESTS
10.1 Transfer of Trust Securities............................ 57
10.2 Transfer of Certificates................................ 57
10.3 Deemed Security Holders................................. 57
10.4 Book-Entry Interests.................................... 58
10.5 Notices to Depository................................... 59
10.6 Appointment of Successor Depository..................... 59
10.7 Definitive Trust Preferred
Security Certificates................................... 59
10.8 Mutilated, Destroyed, Lost
or Stolen Certificates.................................. 60
ARTICLE XI--LIMITATION OF LIABILITY OF HOLDERS OF TRUST
SECURITIES, TRUSTEES AND OTHERS
11.1 Liability............................................... 61
11.2 Exculpation............................................. 62
11.3 Fiduciary Duty.......................................... 62
11.4 Indemnification......................................... 63
11.5 Outside Businesses...................................... 67
ARTICLE XII--ACCOUNTING
12.1 Fiscal Year............................................. 67
12.2 Certain Accounting Matters.............................. 68
12.3 Banking................................................. 68
12.4 Withholding............................................. 69
ARTICLE XIII--AMENDMENTS, CERTAIN ACTIONS OF PROPERTY
TRUSTEE REQUIRING APPROVAL AND MEETINGS
13.1 Amendments and Actions of
Property Trustee Requiring Approval..................... 69
13.2 Meetings of the Holders of Trust
Securities; Action by Written Consent................... 73
ARTICLE XIV--REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
14.1 Representations and Warranties
of Property Trustee..................................... 74
14.2 Representations and Warranties
of Delaware Trustee..................................... 75
ARTICLE XV--MISCELLANEOUS
15.1 Notices................................................. 76
15.2 Governing Law........................................... 77
</TABLE>
(iii)
<PAGE>
<TABLE>
<S> <C>
15.3 Intention of the Parties................................ 77
15.4 Headings................................................ 77
15.5 Successors and Assigns.................................. 77
15.6 Partial Enforceability.................................. 78
15.7 Counterparts............................................ 78
EXHIBIT A-1 -- FORM OF TRUST PREFERRED SECURITY CERTIFICATE............ A-1.1
EXHIBIT A-2 -- FORM OF TRUST COMMON SECURITY CERTIFICATE............... A-2.1
</TABLE>
(iv)
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED 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 (b) ......................... 3.9(b)
315(b) ................................. 2.7
315(c) ................................. 3.9(a)
315(e) ................................. 2.1(a)
316(a)(1) ..............................2.6, 8.4, 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.
(v)
<PAGE>
AMENDED AND RESTATED
TRUST AGREEMENT
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
AMENDED AND RESTATED TRUST AGREEMENT (this "Trust Agreement") dated
and effective as of February 1, 1997, by the Trustees (as defined herein), the
Sponsor and Depositor (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 I (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 Trust Agreement"), 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 Trust Agreement.
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 Trust Agreement 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 Trust Agreement.
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions.
-----------
Unless the context otherwise requires:
<PAGE>
(a) capitalized terms used in this Trust Agreement 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 Trust Agreement 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.
"Affiliate Investment Instruments" has the meaning set forth in
Section 7.1 of the Agreement of Limited Partnership.
"Agreement of Limited Partnership" means the Amended and Restated
Agreement of Limited Partnership of HEI Preferred Funding, LP dated as of
February 1, 1997, as it may be amended and restated from time to time.
"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 Depository as set forth in Section 10.4 of this Trust
Agreement, or on the books
2
<PAGE>
of a Person maintaining an account with the Depository (directly as a Depository
Participant or as an indirect participant or otherwise, in each case in
accordance with the rules of the Depository).
"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.
"Closing Date" means February 4, 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.
3
<PAGE>
"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, New York 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.
"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.
"Depository" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depository 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.
"Depository Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of interest in securities deposited with the
Depository.
"Distribution(s)" has the meaning set forth in Section 7.1(a) of this
Trust Agreement.
"DTC" means The Depository Trust Company, the initial Depository.
"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.
4
<PAGE>
"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.
"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 Event of Default" has the meaning set forth in Section 1.1
of the Agreement of Limited Partnership.
"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.
5
<PAGE>
"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" means, with respect to the Trust
Securities, or either class thereof, as the context may require, 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 Holders of outstanding Trust Preferred 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 Preferred Securities, as the case may
be.
"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 judgement of the Company or the General Partner, as the case
may be, 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.
"Officer's Certificate" means, with respect to any Person (who is not
an individual), a certificate signed by an Authorized Officer of such Person,
and, with respect to a natural person, a certificate signed by such person. Any
Officer's Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that the officer signing the Officer's 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 such officer in rendering the Officer's Certificate;
6
<PAGE>
(c) a statement that 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 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.
"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 February
1, 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 Depository, or on the books of a
Person
7
<PAGE>
maintaining an account with such Depository (directly as a Depository
Participant or as an indirect participant or otherwise, in each case in
accordance with the rules of the Depository).
"Property Account" has the meaning set forth in Section 3.8(c) of this
Trust Agreement.
"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, 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.
8
<PAGE>
"Rule 3a-5" means Rule 3a-5 under the 1940 Act.
"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 and
depositor 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 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 Initial Debentures, the Partnership Preferred Securities or the Trust
Preferred Securities, which amendment or change is adopted or which decision,
pronouncement or proposed change is announced or which action, clarification or
challenge occurs on or after the date of the prospectus supplement related to
the issuance of the Trust Preferred Securities.
9
<PAGE>
"10% in liquidation amount" means, with respect to the Trust
Securities, or either class thereof, 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 Holders of outstanding
Trust Preferred 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 Preferred Securities, 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 February 1, 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 recognized
independent tax counsel (which may be counsel to the Company) experienced in
such matters to the effect that there has been a Trust Tax Event.
"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 Guarantee, collectively.
10
<PAGE>
"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 recognized independent legal counsel (which may be counsel to the
Company) 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" or "Trust Guarantee" means the
Trust Preferred Securities Guarantee Agreement between the Company and The Bank
of New York, as Trustee, dated as of February 1, 1997, for the benefit of the
Holders of the Trust Preferred Securities, as amended or supplemented from time
to time.
"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 Depository, or on the books of a
Person maintaining an account with such Depository (directly as a Depository
Participant or as an indirect participant, in each case in accordance with the
rules of such Depository).
"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 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
11
<PAGE>
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 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.
"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 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.
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(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 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 that 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
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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 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. 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. 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 Officer's Certificate.
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 of holders of greater
than a Majority in Liquidation Preference of the Partnership Preferred.
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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 act,
vote, or consent of the Holders 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 or written consent of the Holder
of the Trust Common Securities; provided further, the Holder of Trust Common
Securities will be deemed.
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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. 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
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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. The Property Trustee shall
not be deemed to have notice of any Trust Enforcement Event unless a Responsible
Officer of the Property Trustee has actual knowledge thereof or unless written
notice of such Trust Enforcement Event is received by the Trustee and such
notice references the Trust Preferred Securities and this Trust Agreement.
ARTICLE III
ORGANIZATION
Section 3.1 Name. The Trust is named "Hawaiian Electric Industries
----
Capital Trust I", 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 The Bank of New York, 101 Barclay Street, 21st Floor, New York, New York
10286. 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.
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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.
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 of the Trust
Preferred Securities 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; 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;
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(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;
(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 priviledges 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.
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.
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Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the General Partner 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 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
Affiliated 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
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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).
(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 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;
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(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 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
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(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.
Section 3.9 Certain Duties and Responsibilities of the Property
---------------------------------------------------
Trustee.
- -------
(a) The Property Trustee, during the period before the occurrence of
any Trust Enforcement Event and during any period 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) during the period prior to the occurrence of a Trust
Enforcement Event and during any period 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
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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 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
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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, 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 Officer's 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
Officer's 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 of its selection 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, 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;
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(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 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.
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(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.
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
29
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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;
(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;
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(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 recognized independent
counsel (which may be counsel to the Sponsor) 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);
(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.
31
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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;
(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 or
purchase agreement providing for the sale of the Trust Preferred Securities;
(f) To execute and enter into the Agreement of Limited Partnership;
(g) To execute and enter into a letter of representation with DTC and
to take such other action as may be necessary to cause the Trust Preferred
Securities to be entered into DTC's book-entry-only system; and
(h) To execute all documents or instruments, or perform all duties
and powers, and do all things for or on behalf of the Trust in all matters
necessary or incidental to the foregoing.
Section 4.2 Indemnification and Expenses of the Property Trustee and
--------------------------------------------------------
the Delaware Trustee. To the extent the General Partner or 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
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agents for, and to hold each of them harmless against, any and all loss,
liability, damages or expense (including taxes other than taxes based on income
of the Property Trustee) 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.
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 covenants
(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
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<PAGE>
(b) After the issuance of any Trust Securities, the number of
Trustees may be increased or decreased by vote or written consent of the Holder
of the 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 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
34
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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 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 an
Authorized Officer.
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 power to act, any power of the Regular Trustees may be exercised
by, or with the consent of, any one such Regular Trustee.
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<PAGE>
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 written
consent or by vote of the Holder of the Trust Common Securities voting as a
class.
(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.
(c) A Trustee appointed to office shall hold office until his or her
successor shall have been appointed or until his or her 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:
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(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 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
37
<PAGE>
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 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.
38
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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 Property Trustee 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 for any merger, conversion or
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 8.36% 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
39
<PAGE>
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 8.36% 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
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 Secrities or from the Company on the
Partnership Guarantee or the Trust Guarantees. 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
40
<PAGE>
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
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 8.36%
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
41
<PAGE>
practice or to conform to the rules of any stock exchange on which the Trust
Preferred Securities are listed.
(ii) Trust Common Securities. 123,720 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
8.36% 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.
If executed by the facsimile signature of a Regular Trustee, a Trust
Preferred Security shall not be valid until authenticated by the manual
signature of an authorized officer
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of the Property Trustee. Such signature shall be conclusive evidence that the
Trust Preferred 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
Preferred Securities (if the Trust Preferred Securities Certificates are
executed by the facsimile signature of a Regular Trustee), the Property Trustee
shall authenticate and deliver the Trust Preferred Securities for original
issue. The aggregate number of Trust Preferred 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 Preferred 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.
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 amount equal to the aggregate liquidation preference of
the Partnership Preferred Securities so purchased or redeemed for
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an amount equal to $25 per Trust Security plus an amount equal to accumulated
and unpaid Distributions 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 indentical 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, 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
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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 liquidation preference
equal to the aggregate 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.
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.
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(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 to the
extent practicable 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 Depository or its nominee), the
distribution of the proceeds of such redemption will be made to each Depository
Participant (or Person on whose behalf such nominee holds such securities) in
accordance with the procedures applied by DTC or such Depository 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 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 DTC or
its nominee (or successor Depository or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Trust Preferred Securities and
will give 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
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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), in
each case with the same force and effect as if made on such date. 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 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 expressly provided in this Trust Agreement, including
without limitation as provided under Section 2.6 and this Article VIII, and
except 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, and to 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
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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 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 preference of Partnership Preferred Securities affected
thereby, only the Holders of the percentage of the aggregate 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 right 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 Affiliate Investment Instrument and the failure of the
Company to make any required payment with respect thereto when due on an
applicable Investment Guarantee, then a Holder of Trust Preferred Securities
may, on behalf of the Partnership, to the fullest extent permitted by
law, directly institute a
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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 to the Partnership.
(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 recognized 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 (i) under the Agreement of
Limited Partnership with respect to any amendment, modification or termination
of the Agreement of Limited Partnership, (ii) under the Agreement of Limited
Partnership with respect to the waiver of a Partnership Enforcement Event or any
other waiver or forbearance or (iii) under the Partnership Guarantee or any
Investment Guarantee with respect to any amendment, modification, termination,
waiver or forbearance thereunder, the Property Trustee shall request the
direction of the Holders of the Trust Securities with respect to such amendment,
modification, termination, waiver or forbearance and shall vote or otherwise act
with respect to such amendment, modification, termination, waiver or forbearance
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 Liquidation Preference 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 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
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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 Preferred 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 Preferred 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 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.
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Section 8.5 Voting Rights of Trust Common Securities.
----------------------------------------
(a) Except as expressly provided in this Trust Agreement, including
without limitation under Section 2.6(b) and this Section 8.5, or except 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, by vote or written consent, 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 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
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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
recognized independent tax counsel (which may be counsel to the Company)
experienced in such matters 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 Instrument, then a Holder
of Trust Common Securities, on behalf of the Trust, to the fullest extent
permitted by law, may directly institute a proceeding against such Investment
Affiliate for enforcement of payment to the Partnership 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 by a vote of the Holder of the Trust Common
Securities, 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 Holders of the Trust Common Securities are entitled to vote, or of any
matter upon which action by written consent
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of such Holder is to be taken, to be mailed to the Holders 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 Holders 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 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 Agreement, the Trust Guarantees,
the Partnership Guarantee, any Investment Guarantee and the Agreement of Limited
Partnership, respectively, including the subordination provisions therein.
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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;
(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 or set aside for payment 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 Regular Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
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(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 Trust's 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 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 accumulated 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 Holder 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
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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 Holders of the Trust
Preferred Securities in respect of the Company's obligations 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 Holders of Trust Preferred Securities and
the Partnership; (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.
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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
the terms and conditions set forth in the certificates evidencing Trust
Securities. Any transfer or purported transfer of any Trust Security not made in
accordance with this Trust Agreement and the Trust Securities shall be null and
void.
(b) Subject to this Article X, Trust Preferred Securities shall be
freely transferable. To the fullest extent permitted by law, other than a
transfer in connection with a consolidation or merger of the Company into
another Person or an Asset Drop-Down permitted under Section 9.3 of the Trust
Preferred Securities Guarantee in which the successor Person assumes all of the
obligations of the Company under this Trust Agreement by instrument of
assumption satisfactory to the Property Trustee, any attempted transfer of the
Common Securities shall be void. The Regular Trustees shall cause each Common
Security Certificate issued to the Company to contain a legend stating "THIS
CERTIFICATE IS NOT 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
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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 fully
registered, global Trust Preferred Security Certificate (a "Global
Certificate"), to be delivered to DTC, the initial Depository, or its custodian
by, or on behalf of, the Trust. Such Global Certificate 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 Certificate,
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
Depository for all purposes of this Trust Agreement (including the payment of
Distributions on the Global Certificate and receiving approvals, votes or
consents hereunder) as the Holder of the Trust Preferred Securities and the sole
Holder of the Global Certificate 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 Depository and shall be limited to those
established by law and agreements between such Trust Preferred Security
Beneficial Owners and the Depository and/or the Depository Participants
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and the Depository shall receive and transmit payments of Distributions on the
Global Certificates to such Depository Participants. The Depository will make
book-entry transfers among the Depository 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 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 Depository 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 Depository. Whenever a notice or other
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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 Depository, and shall have no notice obligations to the
Trust Preferred Security Beneficial Owners.
Section 10.6 Appointment of Successor Depository. If any Depository
-----------------------------------
elects to discontinue its services as securities depository with respect to the
Trust Preferred Securities, the Regular Trustees may, in their sole discretion,
appoint a successor Depository with respect to such Trust Preferred Securities.
Section 10.7 Definitive Trust Preferred Security Certificates. If
------------------------------------------------
(a) a Depository elects to discontinue its services as securities depositary
with respect to the Trust Preferred Securities and a successor Depository 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 Depository 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
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(ii) upon surrender of the Global Certificate (or
Certificates) representing the Trust Preferred Securities by the Depository,
accompanied by registration 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
Depository. 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 Depository. 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 AND 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 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.
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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.
--------------
(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 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
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(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 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
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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 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
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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 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
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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 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 and all loss, damage,
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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 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.
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 sold
signatories for such accounts shall be designated by the Regular Trustees;
provided, however, that
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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 recognized independent tax counsel (which may be
counsel to the Company) experienced in such matters 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.
ARTICLE XIII
AMENDMENTS, CERTAIN ACTIONS OF PROPERTY
TRUSTEE REQUIRING APPROVAL AND MEETINGS
Section 13.1 Amendments and Actions of Property Trustee Requiring
----------------------------------------------------
Approval.
- --------
(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:
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(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;
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities or 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 Officer's
Certificate from 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:
(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 the
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
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(D) cause the Trust or the Partnership to be deemed to
be an Investment Company required to be registered under the 1940 Act.
(c) In the event the consent, approval, waiver or other action of the
Property Trustee as the Holder of the Partnership Preferred Securities is
required (i) 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 with respect to any action proposed to
be taken by the Partnership or the General Partner, or (ii) under the
Partnership Guarantee, any Affiliate Investment Instrument or any Investment
Guarantee with respect to any amendment, modification or termination thereof,
any waiver of a default thereunder or any other matter, the Property Trustee
shall request the direction of the Holders of the Trust Securities with respect
to such amendment, modification, termination, waiver or other action 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, approval, waiver or other
action under the Agreement of Limited Partnership, or under the Partnership
Guarantee or any Investment Guarantee, 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 preference 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 recognized independent
tax counsel (which may be counsel to the Sponsor) experienced in such matters 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.
(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) provided 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;
71
<PAGE>
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.
(h) Notwithstanding Section 13.1(d), and provided that any such
amendment does not have a material adverse effect on the rights, preferences or
privileges of the Holders of the Trust Securities, 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;
(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
72
<PAGE>
(vi) to modify, eliminate and add to any provision of this
Trust Agreement to such extent as may be necessary or desirable.
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 Trust Guarantees, the Partnership Guarantee, any Investment
Guarantee, 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 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
73
<PAGE>
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;
(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
74
<PAGE>
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;
(c) The execution, delivery and performance of the Trust Agreement by
the Property Trustee does not conflict with or constitute a breach of the
Charter or By-laws 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 banking 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
75
<PAGE>
(c) The Delaware Trustee is an entity which has its principal place
of business in the State of Delaware.
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 first class postage prepaid, as follows:
(a) If given to the Trust, in care of the Property Trustee 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
Attention: Corporate Trust Trustee
Administration
with a copy to:
Hawaiian Electric Industries, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Attention: Treasury Department
(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 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: Corporate Trust Trustee
Administration
76
<PAGE>
(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):
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 principals 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.
77
<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.
/s/ Robert F. Clarke
----------------------------------------
Robert F. Clarke, as Regular Trustee
/s/ Robert F. Mougeot
----------------------------------------
Robert F. Mougeot, as Regular Trustee
/s/ Constance H. Lau
----------------------------------------
Constance H. Lau, as Regular Trustee
HAWAIIAN ELECTRIC INDUSTRIES, INC.,
as Sponsor and Depositor
By: /s/ Robert F. Mougeot
------------------------------------
Name: Robert F. Mougeot
Title: Financial Vice President
By: /s/ Constance H. Lau
------------------------------------
Name: Constance H. Lau
Title: Treasurer
78
<PAGE>
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Mary Jane Morrisey
-----------------------------------------
Name: Mary Jane Morrisey
Title: Vice President
THE BANK OF NEW YORK, as Property
Trustee
By: /s/ Vivian Georges
-----------------------------------------
Name: Vivian Georges
Title: Assistant Vice President
79
<PAGE>
EXHIBIT A-1
FORM OF TRUST PREFERRED SECURITY CERTIFICATE
This Trust Preferred Security is a Global Certificate within the
meaning of the Trust Agreement hereinafter referred to and is registered in the
name of The Depository Trust Company (the "Depository") or a nominee of the
Depository. This Trust Preferred Security is exchangeable for Trust Preferred
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Trust Agreement and
no transfer of this Trust Preferred Security (other than a transfer of this
Trust 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 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 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.
A-1.1
<PAGE>
CERTIFICATE NO. NO. OF PREFERRED SECURITIES
- -------------- ---------------------------
TP- 4,000,000
CUSIP NO. 41987M201
CERTIFICATE EVIDENCING TRUST ORIGINATED PREFERRED SECURITIES
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
8.36% Trust Originated Preferred Securities
(Liquidation Amount $25 Per Trust Preferred Security)
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I, 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 4,000,000
preferred securities of the Trust representing undivided beneficial ownership
interests in the assets of the Trust designated the 8.36% Trust Originated
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 February 1, 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. The Holder, by acceptance of this certificate, and each Trust
Preferred Security Beneficial Owner, by acquisition of a beneficial interest in
this 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. The Property Trustee will provide a copy of
the Trust Agreement, the Trust Preferred Securities Guarantee and the Agreement
of Limited Partnership to the Holder without charge upon written request to the
Trust at its principal place of business.
A-1.2
<PAGE>
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 4th
day of February, 1997.
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL
TRUST I
________________________________________
Robert F. Clarke, as Regular Trustee
________________________________________
Robert F. Mougeot, as Regular Trustee
________________________________________
Constance H. Lau, as Regular Trustee
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-1.3
<PAGE>
[FORM OF REVERSE OF TRUST PREFERRED SECURITY]
Holders of Trust Preferred Securities shall be entitled to receive
cumulative cash distributions at a rate per annum of 8.36% 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 8.36% per annum ("Compounded Distributions"). 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
pursuant to the Trust Agreement, to make a Pro Rata Distribution of the Payment
Amount to the Holders of the Trust Preferred 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, except that for any period shorter than a full 90-day
quarter on the basis of the actual number of days elapsed in such 90-day
quarter.
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 are in book-entry-only form, Distributions will be payable
to the
A-1.4
<PAGE>
holders of record of the 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 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), in each case with the same force and effect as if made on the payment
date. Payments of accumulated Distributions will be payable to holders of record
of the Trust Preferred Securities as they appear on the books and records of the
Trust on the relevant 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. If Distributions are not paid when scheduled,
the accumulated Distributions shall be paid to the holders of record of the
Trust Preferred Securities as they appear on the books and records of the Trust
on the relevant record date as determined under the Trust Agreement 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 Trust Preferred Securities shall be redeemable as provided in the
Trust Agreement.
A-1.5
<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-1.6
<PAGE>
EXHIBIT A-2
FORM OF TRUST COMMON SECURITY CERTIFICATE
CERTIFICATE NO. NO. OF COMMON SECURITIES
- -------------- ------------------------
TC- [ ]
CERTIFICATE EVIDENCING TRUST COMMON SECURITIES
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
8.36% Trust Common Securities
(Liquidation Amount $25 Per Trust Common Security)
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I, a statutory business
trust created under the laws of the State of Delaware (the "Trust"), hereby
certifies that [ ] (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 8.36% 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 February 1, 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 are treated as debt instruments by the relevant
Investment Affiliate and by the Partnership, as indebtedness for United States
federal income tax purposes. The Property Trustee 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 Trust
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-2.1
<PAGE>
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 4th
day of February, 1997.
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL
TRUST I
________________________________________
Robert F. Clarke, as Regular Trustee
________________________________________
Robert F. Mougeot, as Regular Trustee
________________________________________
Constance H. Lau, as Regular Trustee
A-2.2
<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 8.36% of the stated
liquidation amount of $25 per Trust Common Security. Distributions on the Trust
Common 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
8.36% per annum ("Compounded Distributions"). 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 pursuant
to the Trust Agreement, to make a Pro Rata Distribution of the Payment Amount to
the Holder.
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, except that for any period shorter than a full 90-day
quarter on the basis of the actual number of days elapsed in such 90-day
quarter.
Except as otherwise described herein, Distributions on the Trust
Common 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. Distributions
will be payable to the holders of record of the Trust Common Securities as they
appear on the
A-2.3
<PAGE>
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 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), in
each case with the same force and effect as if made on the payment date.
Payments of accumulated Distributions will be payable to the holders of record
of the Trust Common Securities as recorded in the books and records of the Trust
on the relevant 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. If Distributions are not paid when scheduled, the
accumulated Distributions shall be paid to the holders of record of the Trust
Common Securities as they appear on the books and records of the Trust on the
relevant record date as determined under the Trust Agreement with respect to the
actual payment date for the Trust Common 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 Trust Common Securities shall be redeemable as provided in the
Trust Agreement.
A-2.4
<PAGE>
Exhiibit 4(i)
HAWAIIAN ELECTRIC INDUSTRIES, INC.
AND
THE BANK OF NEW YORK,
AS TRUSTEE
____________________________
JUNIOR INDENTURE
Dated as of February 1, 1997
____________________________
<PAGE>
TABLE OF CONTENTS
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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
Agreement of Limited Partnership....................... 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................................ 3
Debenture Register..................................... 4
Debentureholder........................................ 4
Default................................................ 4
Defeasance Agent....................................... 4
Depository............................................. 4
Event of Default....................................... 4
General Partner........................................ 4
Global Debenture....................................... 4
Governmental Obligations............................... 5
Hawaiian Electric Industries Capital Trust............. 5
Indenture ............................................. 5
Interest Payment Date.................................. 5
Officer's Certificate.................................. 5
Opinion of Counsel..................................... 6
Outstanding............................................ 6
Partnership............................................ 6
Partnership Guarantee.................................. 6
Partnership Preferred Securities....................... 6
Person................................................. 6
Place of Payment....................................... 7
Predecessor Debenture.................................. 7
Property Trustee....................................... 7
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Responsible Officer.................................... 7
Security............................................... 7
Security Exchange...................................... 7
Senior Indebtedness.................................... 8
Subsidiary............................................. 8
Trust Agreement........................................ 9
Trust Common Securities................................ 9
Trust Guarantee........................................ 9
Trust Indenture Act.................................... 9
Trust Preferred Securities............................. 9
Trustee................................................ 9
ARTICLE TWO
The Debentures
SECTION 2.01. Designation, Terms, Amount, Authentication
and Delivery of Debentures............................. 9
SECTION 2.02. Form of Debentures and Trustee's
Certificate............................................ 12
SECTION 2.03. Date and Denominations of Debentures;
Payment of Principal, Premium
and Interest........................................... 13
SECTION 2.04. Execution of Debentures................................ 15
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen
Debentures............................................. 16
SECTION 2.06. Temporary Debentures................................... 17
SECTION 2.07. Exchange of Debentures................................. 18
SECTION 2.08. Cancellation........................................... 19
SECTION 2.09. Beneficiaries.......................................... 20
SECTION 2.10. Appointment of Authenticating Agent.................... 20
SECTION 2.11. Global Debenture....................................... 21
SECTION 2.12. CUSIP Numbers.......................................... 22
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions
SECTION 3.01. Redemption of Debentures............................... 22
SECTION 3.02. Notice of Redemption; Selection by
Trustee of Debentures to be Redeemed................... 23
SECTION 3.03. Debentures Payable on Redemption Date;
Debentures Redeemed in Part............................ 24
SECTION 3.04. Sinking Fund for Debentures............................ 25
SECTION 3.05. Satisfaction of Sinking Fund Payments With
Debentures ............................................ 25
SECTION 3.06. Redemption of Debentures for Sinking Fund.............. 26
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ARTICLE FOUR
Particular Covenants of the Company
SECTION 4.01. Payment of Principal, Premium and
Interest .............................................. 26
SECTION 4.02. Maintenance of Office or Agency........................ 26
SECTION 4.03. Paying Agent; Money for Debenture Payments
to be Held in Trust.................................... 27
SECTION 4.04. Appointment to Fill Vacancy............................ 28
SECTION 4.05. Payment of Additional Interest......................... 28
SECTION 4.06. Maintenance of the Hawaiian Electric
Industries Capital Trust............................... 29
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee
SECTION 5.01. Company to Furnish Trustee Names and
Addresses of Debentureholders.......................... 30
SECTION 5.02. Preservation of Information;
Communications to Holders.............................. 30
SECTION 5.03. Reports by Company..................................... 32
SECTION 5.04. Reports by Trustee..................................... 33
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default
SECTION 6.01. Events of Default...................................... 35
SECTION 6.02. Collection of Indebtedness and
Suits for Enforcement by Trustee....................... 38
SECTION 6.03. Application of Moneys Collected........................ 40
SECTION 6.04. Limitation on Suits; Unconditional
Right of Debentureholders to Institute
Certain Suits.......................................... 41
SECTION 6.05. Rights and Remedies Cumulative; Delay or
Omission Not A Waiver.................................. 42
SECTION 6.06. Control by Debentureholders;
Waiver of Past Defaults................................ 42
SECTION 6.07. Notice of Defaults..................................... 43
SECTION 6.08. Undertaking for Costs.................................. 44
SECTION 6.09. Certain Additional Covenants........................... 44
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ARTICLE SEVEN
Concerning the Trustee
SECTION 7.01. Certain Duties and Responsibilities.................... 45
SECTION 7.02. Certain Rights of Trustee.............................. 47
SECTION 7.03. Limitations of Liability............................... 48
SECTION 7.04. Ownership of Debentures................................ 49
SECTION 7.05. Moneys Held Without Interest........................... 49
SECTION 7.06. Compensation and Reimbursement......................... 49
SECTION 7.07. Reliance on Certificate of Officers
of Company............................................. 50
SECTION 7.08. Conflicts of Interest.................................. 50
SECTION 7.09. Requirements for Eligibility........................... 57
SECTION 7.10. Resignation and Removal................................ 58
SECTION 7.11. Acceptance of Appointment by Successor................. 59
SECTION 7.12. Successor to Trustee by Merger,
Consolidation or Succession to Business................ 61
SECTION 7.13. Preferential Collection of Claims
Against Issuer......................................... 62
ARTICLE EIGHT
Concerning the Debentureholders
SECTION 8.01. Evidence of Action by Debentureholders................. 66
SECTION 8.02. Proof of Execution of Instruments and of
Holding of Debentures.................................. 67
SECTION 8.03. Persons Deemed Owners of Debentures.................... 68
SECTION 8.04. Debentures Owned by Company or Controlled
or Controlling Companies Disregarded for
Certain Purposes....................................... 68
SECTION 8.05. Instruments Executed by Debentureholders
Bind Future Holders.................................... 69
ARTICLE NINE
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without
Consent of Debentureholders............................ 69
SECTION 9.02. Modification of Indenture With Consent of
Debentureholders....................................... 71
SECTION 9.03. Effect of Supplemental Indentures...................... 72
SECTION 9.04. Debentures May Bear Notation of Changes by
Supplemental Indentures................................ 72
SECTION 9.05. Opinion of Counsel..................................... 73
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ARTICLE TEN
Consolidation, Merger, Sale or Conveyance
SECTION 10.01. Company May Consolidate, Etc., Only on
Certain Terms.......................................... 73
SECTION 10.02. Successor Corporation Substituted...................... 73
SECTION 10.03. Opinion of Counsel..................................... 74
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Defeasance; Unclaimed Moneys
SECTION 11.01. Satisfaction and Discharge of Indenture................ 74
SECTION 11.02. Application by Trustee of Funds Deposited
for Payment of Debentures.............................. 79
SECTION 11.03. Application by Trustee of Funds Deposited
for Payment of Debentures.............................. 79
SECTION 11.04. Repayment of Moneys Held by Paying Agent............... 79
SECTION 11.05. Repayment of Moneys Held by Trustee.................... 80
ARTICLE TWELVE
Immunity of Incorporators, Stockholders,
Officers and Directors
SECTION 12.01. Immunity From Individual Liability..................... 80
ARTICLE THIRTEEN
Miscellaneous Provisions
SECTION 13.01. Successors and Assigns................................. 81
SECTION 13.02. Acts of Board, Committee or Officer of
Successor Company...................................... 81
SECTION 13.03. Surrender of Powers of Company......................... 81
SECTION 13.04. Required Notices or Demands Served
by Mail................................................ 81
SECTION 13.05. Governing Law.......................................... 82
SECTION 13.06. Officer's Certificates and
Opinions of Counsel.................................... 82
SECTION 13.07. Payments Due on Saturdays, Sundays
or Holidays............................................ 82
SECTION 13.08. Provisions Required by
Trust Indenture Act.................................... 83
SECTION 13.09. Indenture May be Executed in Counterparts.............. 83
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SECTION 13.10. Severability of Indenture Provisions................... 83
SECTION 13.11. Assignment by Company to Subsidiary.................... 83
SECTION 13.12. Holders of Trust Preferred Securities
as Third Party Beneficiaries
of This Indenture...................................... 83
ARTICLE FOURTEEN
Subordination of Debentures
SECTION 14.01. Agreement to Subordinate............................... 84
SECTION 14.02. Rights of Senior Indebtedness in the Event
of Insolvency, Etc., of the Company.................... 84
SECTION 14.03. Payment Over of Proceeds Received on
Debentures............................................. 86
SECTION 14.04. Payments to Debentureholders........................... 88
SECTION 14.05. Holders of Debentures Authorize Trustee to
Effectuate Subordination of Debentures................. 88
SECTION 14.06. Notice to Trustee...................................... 89
SECTION 14.07. Trustees May Hold Senior Indebtedness.................. 89
SECTION 14.08. Not Applicable to Trustee's Compensation and
Reimbursement.......................................... 89
SECTION 14.09. Applicability of Article Fourteen to Paying
Agents................................................. 89
ACCEPTANCE OF TRUST BY TRUSTEE........................................ 90
SIGNATURES............................................................ 90
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CROSS REFERENCE SHEET(*)
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as
of February 1, 1997 between HAWAIIAN ELECTRIC INDUSTRIES, INC. and THE BANK OF
NEW YORK, Trustee:
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Section of the Act Section of Indenture
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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
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(*) This Cross Reference Sheet is not part of the Indenture.
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THIS INDENTURE, is dated as of the 1st day of February, 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) in or pursuant to a Board Resolution (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:
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
<PAGE>
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 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.
Agreement of Limited Partnership: The term "Agreement of Limited
--------------------------------
Partnership" means the Amended and Restated Agreement of Limited Partnership,
dated as of February 1, 1997, of the Partnership, as amended, modified or
otherwise supplemented from time to time.
2
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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 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.
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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.
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.
4
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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 or pursuant to the
applicable Board Resolution or supplemental indenture establishing a particular
series of Debentures pursuant to Section 2.01 hereof.
Indenture: The term "Indenture" shall mean this instrument as
---------
originally executed, or, if amended or supplemented as herein provided, as so
amended or supplemented from time to time.
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 or pursuant to 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.
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.
5
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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 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 its successors and assigns.
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 Agreement of Limited Partnership.
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.
6
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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 in or pursuant to a Board Resolution or supplemental
indenture 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 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, 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
7
<PAGE>
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.
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.
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Trust Agreement: The term "Trust Agreement" shall mean the respective
---------------
Trust Agreement, as it may be amended from time to time, of the Hawaiian
Electric Industries Capital Trusts, if any, specified in or pursuant to the
applicable 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 (i) junior and subordinate in right of
payment to any and all notes, debentures and other evidences of indebtedness of
the Company that shall contain or have applicable thereto subordination
provisions substantially identical in effect to the subordination provisions set
forth in Section 13.02 of the form of the Senior Subordinated Indenture filed by
the Company as Exhibit 4(h) to its Registration Statement on Form S-3 (File No.
333-18809) providing for such indebtedness being junior and subordinate in right
of payment to all Senior Indebtedness (as defined in such form) and (ii) pari
passu with any and all other notes, debentures and other evidences of
indebtedness of the Company that shall contain or have applicable thereto
subordination provisions substantially identical in effect to the subordination
provisions set forth in Section 14.02 providing for such indebtedness being
junior and subordinate in right of payment to all Senior Indebtedness (as
defined herein). Prior to the initial issuance of Debentures of any series,
there shall be established in a Board Resolution, 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 of
transfer of, or in exchange for, or in lieu of, other Debentures of that
series);
(3) the percentage of the principal amount of which the Debentures
will be issued, and 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;
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(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 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;
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(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;
(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;
(16) if the Debentures are to be denominated in a currency or currency
unit other than United States dollars, the denomination in which such
Debentures will be issued and the coin or currency in which the principal,
premium, if any, and interest, if any, on such Debentures 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; and
(17) 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, or pursuant to a Board Resolution and 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
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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 without
coupons and in the denominations of $25 or any integral multiple thereof,
subject to Sections 2.01(10) and 2.01(16). The Debentures of a particular
series shall bear interest payable on the dates and at the rate specified with
respect to that series. Unless otherwise provided in a Supplemental Indenture
or Officer's Certificate for a series of Debentures, 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 Place of Payment for that series of Debentures. 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, except that 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.
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
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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 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 its 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.
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Unless otherwise set forth in or pursuant to a 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 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
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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 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 for delivery 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 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
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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 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
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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 its 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 the 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.
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.
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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 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.
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The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
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."
(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 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 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
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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
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.
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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 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
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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.
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).
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(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
deliver 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 in or pursuant to a Board Resolution or supplemental
indenture 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 Place of Payment 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 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
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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 Payments 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;
(3) that it will, at any time during the continuance of any failure
referred to in subsection (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.
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(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.
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, the Partnership or the General Partner shall
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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 the Property Trustee, or by the
Partnership and the General Partner, 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 and the
General Partner, 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.
-------------------------------------------------------------
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, for so long as such Trust 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
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.
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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)
on each regular record date (as defined in Section 2.03), 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, 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.
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
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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.
(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.
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(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).
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.
(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) Delivery of reports, information and documents to the Trustee as
provided in subsection (a) above 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).
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(d) 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.
(e) 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 (e), 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 May 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 subsections (c)(1) through (c)(10) 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;
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(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 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 subsections (b)(2), (b)(3),
(b)(4), or (b)(6) 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 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
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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, unless the
Trustee or the holders of not less than the aggregate principal amount of
such series, the holders of which gave such notice, as the case may be,
agree in writing to an extension of such period prior to its expiration;
(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; or
(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.
(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
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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 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, 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) In the case of any series of Debentures held as trust assets of a
Hawaiian Electric Industries Capital Trust prior to a Security Exchange with
respect to the Debentures of that series, or held as partnership assets of the
Partnership,
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if 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 or the Agreement of Limited Partnership,
any holder of Trust Preferred Securities of the applicable Hawaiian Electric
Industries Capital Trust or of Partnership Preferred Securities may enforce
directly against the Company the applicable Property Trustee's or Partnership's
rights hereunder, as the case may be. 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 or in the Agreement of
Limited Partnership, 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, and any holder of Partnership
Preferred Securities, in its own name, in the name of the Partnership or in the
name of the holders Partnership Preferred Securities, may 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 the
applicable Property Trustee's or Partnership'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. Collection of Indebtedness and
Suits for Enforcement by Trustee.
--------------------------------
(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
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Trust or the Partnership 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 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
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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 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.
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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 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
Article Eight, 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 Article Eight, 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
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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 Article Eight, 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 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
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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 its 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
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 or in or pursuant to a Board Resolution, and such period, or any
extension thereof, shall be continuing, then (a) the Company shall not declare
or pay any dividend on, make any
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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 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 its own affairs.
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(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:
(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
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(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 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 selection 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;
(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,
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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 Article Eight); 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.
(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.
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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 (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
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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(a)(4) or Section 6.01(a)(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.
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, it shall,
within 90 days after ascertaining that it has such conflicting interest, either
eliminate such conflicting interest or, except as otherwise provided in this
Section 7.08, 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
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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
subsection (c)(1) the 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
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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 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 subsection
(c)(1) of this Section, 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
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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 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 subsection (c)(6), (c)(7) or
(c)(8) of this Section. 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
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subsection (c)(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 considered as though beneficially owned by
the Trustee for the purposes of subsections (c)(6), (c)(7) and (c)(8) of
this Section; or
(10) except under the circumstances described in subsections (b)(1),
(b)(3), (b)(4), (b)(5) or (b)(6) of Section 7.13 the Trustee shall be or
shall become a creditor of the Company.
For purposes of subsection (c)(1) of this Section, and 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 subsections (c)(5) to (c)(9),
inclusive, of this Section 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
subsections (c)(3) or (c)(7) of this Section.
For the purposes of subsections (c)(6), (c)(7), (c)(8) and (c)(9) of
this Section 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 which it holds as agent for collection, or as custodian,
escrow agent or depositary, or in any similar representative capacity.
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(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.
(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.
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(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 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.
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(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.
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 $50,000,000.00, 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,
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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 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.
(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
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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 with respect
to the Debentures of such series by delivering to the Trustee so removed, to the
successor so appointed and to the Company the evidence provided for in Section
8.01 of the action in that regard to be taken by the Debentureholders.
(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 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. Acceptance of Appointment by Successor.
--------------------------------------
(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
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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 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
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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 subsections (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 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.
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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 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
subsection (a)(2) of this Section, 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;
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(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 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) above, 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) above, 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"
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shall include any distribution with respect to such claim, in bankruptcy or
receivership or proceedings for reorganization 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 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.
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(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.
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.
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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.
In the event a Debenture is held by a Hawaiian Electric Industries
Capital Trust or the Partnership, and the approval or consent of said Trust or
Partnership as a holder of the Debenture is required under any provision of this
Indenture, or any action is to be taken by said Trust or Partnership as a holder
of a Debenture under any provision of this Indenture, the approval or consent
of, or action by, said Trust or the Partnership will be subject to any approval
and other requirements of the applicable Trust Agreement or the Agreement of
Limited Partnership, as the case may be.
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 the Debentureholder's 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.
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(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 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.
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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.
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
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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 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.
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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, 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) 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 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 required
to consent thereto as aforesaid, the Trustee shall join with the Company 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 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.
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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 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 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.
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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
corporation 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
(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 Substituted.
---------------------------------
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.
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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 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
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
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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 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 or pursuant to a Board
Resolution or indenture supplemental hereto provided pursuant to Section 2.01.
In addition to discharge of the Indenture pursuant to subsection (a) of this
Section, 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 subsection (b)(1) 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
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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 the availability of cash or (iii) a combination thereof,
sufficient, in the opinion of a 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
a ruling to that effect from the Internal Revenue Service 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;
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(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 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 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
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
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) with reference to this provision 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
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amount, or (ii) Governmental 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
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
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) such deposit will not result in a breach or violation of, or
constitute a default under, any other agreement or instrument to which the
Company is a party or by which it is bound;
(3) 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;
(4) the Company shall have 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 covenant
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 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 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;
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(7) no Default or 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); and
(8) 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.
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.
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
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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.
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
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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.
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
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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.
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(e) 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 in or pursuant to a Board
Resolution, or established in one or more indentures supplemental to the
Indenture, in any case where the date of maturity of interest or principal of
any Debenture or the date of redemption of any Debenture shall not be a business
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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.
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
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assets of a Hawaiian Electric Industries Capital Trust, or during such time as
the Debentures of any series are held by the Partnership, the holders of the
Trust Preferred Securities of such Hawaiian Electric Industries Capital Trust
and the holders of the Partnership Preferred Securities, if any, 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,
and with respect to any Debentures of any series held by the Partnership, if the
Property Trustee of such Hawaiian Electric Industries Capital Trust or the
Partnership, if any, fails to enforce its rights under this Indenture as the
holder of the Debentures, any holder of the Trust Preferred Securities of such
Hawaiian Electric Industries Capital Trust or of Partnership Preferred
Securities may, after a period of 30 days has elapsed from such holder's written
request to such Property Trustee or the Partnership, as the case may be, to
enforce such rights, institute legal proceedings directly against the Company to
enforce such Property Trustee's or the Partnership's rights under this Indenture
without first instituting any legal proceedings against such Property Trustee or
the Partnership 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, and 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.
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,
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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.
(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.
(d) No holder of Senior Indebtedness shall be prejudiced in its right
to enforce subordination of the Debentures by any act or failure to act on the
part of the Company.
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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 held in trust for the benefit of and 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.
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
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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 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
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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. Payments 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 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 its acceptance of a Debenture authorizes and
directs the Trustee on its 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.
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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 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.
SECTION 14.08. Not Applicable to Trustee's Compensation and
Reimbursement.
--------------------------------------------
Nothing in this Article Fourteen shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.06.
SECTION 14.09. 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.
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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.
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 /s/ Robert F. Mougeot
--------------------------------
Robert F. Mougeot
Financial Vice President and
Chief Financial Officer
By /s/ Constance H. Lau
--------------------------------
Constance H. Lau
Treasurer
THE BANK OF NEW YORK,
as Trustee
By /s/ Vivian Georges
--------------------------------
Name: Vivian Georges
Title: Assistant Vice President
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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 Junior Indenture,
dated as of February 1, 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 Board 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 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 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 such series is "Junior
Subordinated Debentures, Series A, Due 2017" (the "Series A Debentures");
2. The limit upon the aggregate principal amount of the Series A
Debentures which may be authenticated and delivered under the Indenture
(except for Series A Debentures authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Series A Debentures) is $103,000,000;
3. The Series A Debentures will be issued at 100% of their
principal amount. The date on which the principal of the Series A
Debentures is payable shall be February 4, 2017 (the "Stated Maturity");
4. The Series A Debentures will bear interest at the rate of
8.36% per annum (the "Stated 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
<PAGE>
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 the Series A Debentures on any date on which
the principal thereof becomes due and payable by its terms (whether at the
Stated Maturity, upon earlier redemption or acceleration or otherwise)
("Maturity") will be made in immediately available funds upon surrender of
the Series A Debentures at the place or places provided hereinabove,
provided that the Series A Debentures are 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 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 of
the Series A Debentures 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 Stated 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 to holders of record
as they appear on the Debenture Register on the fifteenth day of the month
in which an Interest Payment Date shall occur;
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 the Series A Debentures for a period (including any
extensions thereof) not exceeding six consecutive quarters (each, an
"Extension Period"), during which Extension Period interest will accumulate
and compound quarterly (to the extent permitted by applicable law) at the
Stated Rate 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. Upon the termination of any such
Extension Period and upon the
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<PAGE>
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
holders of Series A Debentures and the Trustee written notice of its
selection of an Extension Period at least one business day prior to the
earlier of (i) the next Interest Payment Date and (ii) the date Hawaiian
Electric Industries Capital Trust I, a Delaware statutory business trust
(the "Trust"), is required to give notice to the New York Stock Exchange or
other applicable self-regulatory organization or to holders of its Trust
Preferred Securities of the record date or the date distributions thereon
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 4, 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 the Series A Debentures to be redeemed plus accrued but unpaid interest,
including any Additional Interest, if any, to the redemption date (the
"Redemption Price") upon not less than 30 nor more than 60 days' notice.
In addition, 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 shall, unless, within 90 days following the
occurrence of such Partnership Special Event, the General Partner elects to
cause the Partnership Preferred Securities to remain outstanding, elect to
redeem the Series A Debentures in whole (but not in part), upon not less
than 30 nor 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, such 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 Company or the General Partner has or will cause no adverse
effect on the Partnership, the General Partner, the Trust or the Company,
the Company or the General Partner will pursue such measure in lieu of
redemption;
For the purposes of this Certificate:
"Change in 1940 Act Law" shall mean any change on or after the
date of the prospectus supplement relating to the issuance of the Trust
Preferred Securities of the Trust in law or regulation or a change in
interpretation or application of law or regulation by
3
<PAGE>
any legislative body, court, governmental agency or regulatory authority;
"Partnership Investment Company Event" shall mean that the
General Partner shall have requested and received 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 the prospectus supplement relating to the Trust Preferred
Securities of the Trust, 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
Investment Company Act of 1940, as amended;
"Partnership Tax Event" shall mean 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 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 Agreement of Limited Partnership), (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 an Investment Affiliate (as defined in the Agreement of Limited
Partnership) 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 by such Investment Affiliate for United
States federal income tax purposes;
"Tax Action" shall mean (a) an amendment to, change in or
announced proposed change in the laws (or any regulations thereunder) of
the 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 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
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<PAGE>
substantially similar to the Series A Debentures, the Partnership Preferred
Securities, or the Trust Preferred Securities of the Trust, which amendment
or change is adopted or which decision, pronouncement or proposed change is
announced or which action, clarification or challenge occurs on or after
the date of the prospectus supplement relating to such Trust Preferred
Securities;
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 Debentures, including the form of
Certificate of Authentication, is attached hereto;
11. 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;
12. The Series A Debentures will be deposited as partnership
assets in the Partnership;
13. 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
14. 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 thereof and the definitions relating
thereto, and the Board Resolutions 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 the Series A
Debentures, have been complied with. In the opinion of the undersigned, all
such conditions precedent have been complied with.
5
<PAGE>
IN WITNESS WHEREOF, the undersigned has hereunto executed this
Officers' Certificate as of the 4th day of February, 1997.
/s/ Robert F. Mougeot
--------------------------------
Robert F. Mougeot
Financial Vice President and
Chief Financial Officer
/s/ Constance H. Lau
--------------------------------
Constance H. Lau
Treasurer
6
<PAGE>
(FORM OF FACE OF DEBENTURE)
No. __________
HAWAIIAN ELECTRIC INDUSTRIES, INC.
8.36% JUNIOR SUBORDINATED DEBENTURE, SERIES A,
DUE 2017
$103,000,000 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 One Hundred
Three Million Dollars ($103,000,000) on February 4, 2017 (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 8.36% per annum (the "Stated Rate"), 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, except that, 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 (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. The interest installment so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture referred to below, be paid to the person in whose name
this Debenture (or one or more Predecessor Debentures, as defined in the
Indenture) is registered at the close of 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
<PAGE>
(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
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.
2
<PAGE>
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 a period (including any extensions thereof) not exceeding six
consecutive quarters (each, an "Extension Period"), during which Extension
Period interest will accumulate and compound quarterly (to the extent permitted
by applicable law) at the Stated Rate 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. 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 next
Interest Payment Date and (ii) the date Hawaiian Electric Industries Capital
Trust I, a Delaware statutory business trust (the "Trust"), is required to give
notice to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of its 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 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 this Debenture on any date on
which the principal hereof becomes due and payable by its terms (whether at the
Stated Maturity, upon earlier redemption or acceleration or otherwise)
("Maturity") will be made in immediately available funds upon surrender of this
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 by wire transfer
3
<PAGE>
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, her or its 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, her or its
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 of Senior Indebtedness 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 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:
4
<PAGE>
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), limited in aggregate
principal amount to $103,000,000, all issued or to be issued in one or more
series under and pursuant to a Junior Indenture dated as of February 1, 1997 (as
it may be amended or supplemented from time to time, 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 February 4, 1997 (the "Officers'
Certificate") duly executed by Robert F. Mougeot, Financial Vice President and
Chief Financial Officer, and Constance H. Lau, Treasurer, of the Company, to
which Indenture and said Officers' Certificate thereto reference is hereby made
for a description of the rights, limitations of rights, 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 4, 2002, the Company shall have the
right to redeem the Debentures of this series, 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 (the "Redemption Price") upon not less
than 30 nor more than 60 days' notice.
In addition, 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 shall, unless, within 90 days following the
occurrence of such Partnership Special Event, the General Partner elects to
cause the Partnership Preferred Securities to remain outstanding, elect to
redeem the Debentures of this series in whole (but not in part), upon not less
than 30 nor 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, such 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 Company or
the General Partner has or will cause no adverse effect on the Partnership, the
General Partner, the Trust or the Company, the Company or the General Partner
will pursue such measure in lieu of redemption.
5
<PAGE>
For purposes of this Debenture:
"Change in 1940 Act Law" shall mean any change on or after the date of
the prospectus supplement relating to the issuance of the Trust Preferred
Securities of the Trust 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;
"Partnership Investment Company Event" shall mean that the General
Partner shall have requested and received 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 the
prospectus supplement relating to the Trust Preferred Securities of the Trust,
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 Investment Company Act of 1940, as amended;
"Partnership Tax Event" shall mean 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 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
Agreement of Limited Partnership), (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 an Investment Affiliate (as defined in the
Agreement of Limited Partnership) 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 by such Investment Affiliate for
United States federal income tax purposes; and
"Tax Action" shall mean (a) an amendment to, change in or announced
proposed change in the laws (or any regulations thereunder) of the 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 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
6
<PAGE>
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 of this series, the Partnership
Preferred Securities, or the Trust Preferred Securities of the Trust, which
amendment or change is adopted or which decision, pronouncement or proposed
change is announced or which action, clarification or challenge occurs on or
after the date of the prospectus supplement relating to such Trust Preferred
Securities.
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 the Debentures of this
series shall have occurred and be continuing, the principal of all of the
Debentures of this series 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 (and such consent of the holders of the Trust Preferred Securities
and the Trust Common Securities of the Trust as may be required under the Trust
Agreement of the Trust) to modify the Indenture in a manner affecting the rights
of the holders of the Debentures of such series; provided, however, that no such
modification may, without the consent of the holder of each Debenture (and such
consent of the holders of the Trust Preferred Securities and the Trust Common
Securities of the Trust as may be required under the Trust Agreement of the
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 of such series payable in any coin or
currency other than that provided in the Debentures of such series, or impair or
affect the right of any Debentureholder to institute suit for the payment
thereof or the right of
7
<PAGE>
prepayment, if any, at the option of the Debentureholder, (ii) reduce the
aforesaid percentage of Debentures of such series, the holders of which are
required to consent to any such modification, or (iii) otherwise adversely
affect the interest of the holders of the Debentures of such series.
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 such holder's 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.
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
8
<PAGE>
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, the 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.
9
<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 and Officers' Certificate.
THE BANK OF NEW YORK
as Trustee
By: __________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Debenture to:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(INSERT ASSIGNEE'S SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(INSERT ADDRESS AND ZIP CODE OF ASSIGNEE)
and irrevocably appoints
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
agent to transfer this Debenture on the books of the Company. The agent may
substitute another to act for him or her.
Date: ______________________________
Signature: _________________________
(SIGN EXACTLY AS YOUR NAME APPEARS IN THIS DEBENTURE)
<PAGE>
Exhibit 4(m)
This Trust Preferred Security is a Global Certificate within the
meaning of the Trust Agreement hereinafter referred to and is registered in the
name of The Depository Trust Company (the "DEPOSITORY") or a nominee of the
Depository. This Trust Preferred Security is exchangeable for Trust Preferred
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Trust Agreement and
no transfer of this Trust Preferred Security (other than a transfer of this
Trust 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 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 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 NO. NO. OF PREFERRED SECURITIES
--------------- ---------------------------
TP-1 4,000,000
CUSIP NO.
---------
41987M201
CERTIFICATE EVIDENCING TRUST ORIGINATED PREFERRED SECURITIES
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
8.36% Trust Originated Preferred Securities
(Liquidation Amount $25 Per Trust Preferred Security)
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I, 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 4,000,000
preferred securities of the Trust representing undivided beneficial ownership
interests in the assets of the Trust designated the 8.36% Trust Originated
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 February 1, 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. The Holder, by acceptance of this certificate, and each Trust
Preferred Security Beneficial Owner, by acquisition of a beneficial interest in
this 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. The Property Trustee will provide a copy of
the Trust Agreement, the Trust Preferred Securities Guarantee and the Agreement
of Limited Partnership to the Holder without charge upon written request to the
Trust at its principal place of business.
<PAGE>
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
Holders of Trust Preferred Securities shall be entitled to receive
cumulative cash distributions at a rate per annum of 8.36% 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 8.36% per annum ("Compounded Distributions"). 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 pursuant to the Trust Agreement, to make a
Pro Rata Distribution of the Payment Amount to the holders of the Trust
Preferred 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, except that for any period shorter than a full 90-day
quarter on the basis of the actual number of days elapsed in such 90-day
quarter.
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 are in book-entry-only form, Distributions will be payable
to the holders of record of the Trust Preferred Securities as they
2
<PAGE>
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 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), in each case with the same force and effect as if made on the payment
date. Payments of accumulated Distributions will be payable to holders of
record of the Trust Preferred Securities as they appear on the books and records
of the Trust on the relevant 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. If Distributions are not paid when scheduled,
the accumulated Distributions shall be paid to the holders of record of the
Trust Preferred Securities as they appear on the books and records of the Trust
on the relevant record date as determined under the Trust Agreement 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 Trust Preferred Securities shall be redeemable as provided in the
Trust Agreement.
_______________________________________________________________
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
____________________________________________________________
3
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this
4th day of February, 1997.
HAWAIIAN ELECTRIC INDUSTRIES
CAPITAL TRUST I
/s/ ROBERT F. CLARKE
-----------------------------
ROBERT F. CLARKE, AS REGULAR
TRUSTEE
/s/ ROBERT F. MOUGEOT
------------------------------
ROBERT F. MOUGEOT, AS REGULAR
TRUSTEE
/s/ CONSTANCE H. LAU
-----------------------------
CONSTANCE H. LAU, AS REGULAR
TRUSTEE
CERTIFICATE OF AUTHENTICATION
This certificate is one of the issue of Trust Preferred Securities
described in the Trust Agreement.
Date of Authentication: February 4, 1997.
THE BANK OF NEW YORK,
AS PROPERTY TRUSTEE
BY: /s/ Vivian Georges
-----------------------------------
NAME: Vivian Georges
TITLE: Assistant Vice President
4
<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 IN THIS TRUST PREFERRED SECURITY CERTIFICATE)
5
<PAGE>
EXHIBIT 4(n)
No. CD-1
HAWAIIAN ELECTRIC INDUSTRIES, INC.
8.36% JUNIOR SUBORDINATED DEBENTURE, SERIES A,
DUE 2017
$103,000,000 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 HEI
PREFERRED FUNDING, LP, a Delaware limited partnership or registered assigns, the
principal sum of One Hundred Three Million Dollars ($103,000,000) on February 4,
2017 (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 8.36% per annum (the "Stated Rate"), 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, except that, 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 (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. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture referred to below, be
paid to the person in whose name this Debenture (or one or more Predecessor
Debentures, as defined in the Indenture) is registered at the close of 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
<PAGE>
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
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.
2
<PAGE>
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 a period (including any extensions thereof) not exceeding six
consecutive quarters (each, an "Extension Period"), during which Extension
Period interest will accumulate and compound quarterly (to the extent permitted
by applicable law) at the Stated Rate 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. 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 next
Interest Payment Date and (ii) the date Hawaiian Electric Industries Capital
Trust I, a Delaware statutory business trust (the "Trust"), is required to give
notice to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of its 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 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 this Debenture on any date on
which the principal hereof becomes due and payable by its terms (whether at the
Stated Maturity, upon earlier redemption or acceleration or otherwise)
("Maturity") will be made in immediately available funds upon surrender of this
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 by wire transfer to an account
appropriately designated
3
<PAGE>
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, her or its 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, her or its
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 of Senior Indebtedness 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.
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), limited in aggregate
principal amount to $103,000,000, all issued or to be issued in one or more
series under and pursuant to a Junior Indenture dated as of February 1, 1997 (as
it may be amended or supplemented from time to time, 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 February 4, 1997 (the "Officers'
Certificate") duly executed by Robert F. Mougeot, Financial Vice President and
Chief Financial Officer, and Constance H. Lau, Treasurer, of the Company, to
which Indenture and said Officers' Certificate thereto reference is hereby made
for a description of the rights, limitations of rights, 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 4, 2002, the Company shall have the
right to redeem the Debentures of this series,
4
<PAGE>
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 (the
"Redemption Price") upon not less than 30 nor more than 60 days' notice.
In addition, 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 shall, unless, within 90 days following the
occurrence of such Partnership Special Event, the General Partner elects to
cause the Partnership Preferred Securities to remain outstanding, elect to
redeem the Debentures of this series in whole (but not in part), upon not less
than 30 nor 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, such 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 Company or
the General Partner has or will cause no adverse effect on the Partnership, the
General Partner, the Trust or the Company, the Company or the General Partner
will pursue such measure in lieu of redemption.
For purposes of this Debenture:
"Change in 1940 Act Law" shall mean any change on or after the date of
the prospectus supplement relating to the issuance of the Trust Preferred
Securities of the Trust 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;
"Partnership Investment Company Event" shall mean that the General
Partner shall have requested and received 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 the
prospectus supplement relating to the Trust Preferred Securities of the Trust,
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 Investment Company Act of 1940, as amended;
"Partnership Tax Event" shall mean 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 resulting in there being more than an insubstantial
risk that (a) the Partnership is, or will be,
5
<PAGE>
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 Agreement of Limited Partnership), (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 an Investment
Affiliate (as defined in the Agreement of Limited Partnership) 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 by
such Investment Affiliate for United States federal income tax purposes; and
"Tax Action" shall mean (a) an amendment to, change in or announced
proposed change in the laws (or any regulations thereunder) of the 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 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 of this series, the Partnership
Preferred Securities, or the Trust Preferred Securities of the Trust, which
amendment or change is adopted or which decision, pronouncement or proposed
change is announced or which action, clarification or challenge occurs on or
after the date of the prospectus supplement relating to such Trust Preferred
Securities.
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 the Debentures of this
series shall have occurred and be continuing, the principal of all of the
Debentures of this series 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.
6
<PAGE>
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 (and such consent of the holders of the Trust Preferred Securities
and the Trust Common Securities of the Trust as may be required under the Trust
Agreement of the Trust) to modify the Indenture in a manner affecting the rights
of the holders of the Debentures of such series; provided, however, that no such
modification may, without the consent of the holder of each Debenture (and such
consent of the holders of the Trust Preferred Securities and the Trust Common
Securities of the Trust as may be required under the Trust Agreement of the
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 of such series payable in any coin or
currency other than that provided in the Debentures of such series, 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 of such
series, the holders of which are required to consent to any such modification,
or (iii) otherwise adversely affect the interest of the holders of the
Debentures of such series.
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 such holder's 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
7
<PAGE>
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.
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, the 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.
8
<PAGE>
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.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated: February 4, 1997 HAWAIIAN ELECTRIC INDUSTRIES, INC.
By: /s/ Robert F. Mougeot
------------------------------
Robert F. Mougeot
Financial Vice President and
Chief Financial Officer
By: /s/ Constance H. Lau
------------------------------
Constance H. Lau
Treasurer
9
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series designated herein referred to
in the within-mentioned Indenture and Officers' Certificate.
THE BANK OF NEW YORK
as Trustee
By: /s/ Vivian Georges
---------------------------
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Debenture to:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
(Insert assignee's social security or tax identification number)
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
agent to transfer this Debenture on the books of the Company. The agent may
substitute another to act for him or her.
Date: ______________________________
Signature: _________________________
(Sign exactly as your name appears in this Debenture)
<PAGE>
Exhibit 4(o)
================================================================================
TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
DATED AS OF FEBRUARY 1, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <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 Trust Guarantee Trustee..................... 7
SECTION 2.4 Periodic Reports to the Trust 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 TRUST GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Guarantee Trustee........... 8
SECTION 3.2 Certain Rights of the Trust Guarantee Trustee.............. 10
SECTION 3.3 Not Responsible for Recitals or Issuance of the
Trust Guarantee............................................ 13
ARTICLE IV
THE TRUST GUARANTEE TRUSTEE
SECTION 4.1 The Trust Guarantee Trustee; Eligibility................... 13
SECTION 4.2 Appointment, Removal and Resignation of
the Trust Guarantee Trustee................................ 14
SECTION 4.3 Successor to the Trust Guarantee Trustee
by Merger, Consolidation or Succession
to Business................................................ 15
ARTICLE V
THE TRUST GUARANTEE
SECTION 5.1 Guarantee.................................................. 15
SECTION 5.2 Waiver of Notice and Demand................................ 15
SECTION 5.3 Obligations Not Affected................................... 16
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C>
SECTION 5.4 Rights of Holders.......................................... 17
SECTION 5.5 Guarantee of Payment....................................... 17
SECTION 5.6 Subrogation................................................ 17
SECTION 5.7 Independent Obligations.................................... 18
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions................................. 18
SECTION 6.2 Ranking.................................................... 19
ARTICLE VII
TERMINATION
SECTION 7.1 Termination................................................ 19
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
SECTION 8.1 Exculpation................................................ 20
SECTION 8.2 Indemnification............................................ 20
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns..................................... 21
SECTION 9.2 Amendments and Assignment.................................. 21
SECTION 9.3 Merger of the Guarantor.................................... 21
SECTION 9.4 Notices.................................................... 22
SECTION 9.5 Benefit.................................................... 23
SECTION 9.6 Governing Law.............................................. 23
</TABLE>
(ii)
<PAGE>
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 Trust Preferred
Securities Guarantee Agreement and shall not affect the interpretation of
any of its terms or provisions.
(iii)
<PAGE>
TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
This TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Trust
Guarantee"), dated as of February 1, 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 1, 1997, among the trustees of the Trust named
therein, Hawaiian Electric Industries, Inc., as Sponsor and Depositor, 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 8.36% 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 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 Guarantee for the benefit of the holder of the Trust Common
Securities (as defined herein), except that if the Company is in default on any
of its obligations under this Trust 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 the holder of the Trust
Common Securities to receive Guarantee Payments under the Trust Common
Securities Guarantee are subordinated to the rights of Holders of Trust
Preferred Securities to receive Guarantee Payments under this Trust Guarantee.
<PAGE>
NOW, THEREFORE, in consideration of the purchase by each Holder of Trust
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor both directly and indirectly, the Guarantor executes and delivers
this Trust Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Trust Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Trust 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 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 Guarantee has the same meaning
throughout;
(d) all references to "this Trust Guarantee" are to this Trust Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Trust Guarantee to Articles and Sections are to
Articles and Sections of this Trust Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Trust Guarantee, unless otherwise defined in this Trust 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 Instruments" has the meaning set forth in Section 1.1
of 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 1, 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.
"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 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
3
<PAGE>
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 remaining available, after
satisfaction of all obligations of the Trust, 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.
"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 on which the voting percentages are determined) of all Trust
Preferred Securities then outstanding.
"Officer's Certificate" means, with respect to any Person, a certificate
signed by an Authorized Officer of such Person. Any Officer's Certificate
delivered with respect to compliance
4
<PAGE>
with a condition or covenant provided for in this Trust Guarantee shall include:
(a) a statement that the officer signing the Officer's 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 the officer in rendering the Officer's Certificate;
(c) a statement that 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 such officer, such
condition or 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.
"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.
5
<PAGE>
"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 Guarantee and
thereafter means each such Successor Trust Guarantee Trustee.
"Trust Securities" means the Trust Common Securities together with the
Trust Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Trust Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Guarantee and shall, to
the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Trust 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
6
<PAGE>
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.
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
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 Officer's
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 Guarantee, but no such waiver shall
7
<PAGE>
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 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 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 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 Guarantee to any Person except a
Holder of Trust Preferred Securities exercising its 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
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
8
<PAGE>
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 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 Guarantee, and no implied
covenants shall be read into this Trust 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 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 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
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 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
9
<PAGE>
conforming to the requirements of this Trust 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 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
Guarantee; and
(iv) No provision of this Trust 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 liability is not reasonably assured to it under the terms of this
Trust 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.
10
<PAGE>
(ii) Any direction or act of the Guarantor contemplated by this
Trust Guarantee shall be sufficiently evidenced by an Officer's
Certificate.
(iii) Whenever, in the administration of this Trust 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 Officer's 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
Guarantor, consult with counsel of its selection with respect to this Trust
Guarantee, 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 Trust Guarantee Trustee shall have the right at any time to
seek instructions concerning the administration of this Trust 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 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 Guarantee.
11
<PAGE>
(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.
(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 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 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 Guarantee.
(b) No provision of this Trust Guarantee shall be deemed to impose any duty
or obligation on the Trust Guarantee Trustee
12
<PAGE>
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.
SECTION 3.3 Not Responsible for Recitals or Issuance of the Trust Guarantee
The recitals contained in this Trust 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 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.
13
<PAGE>
(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).
(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 any period
in which an Event of Default has occurred and is continuing.
(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.
14
<PAGE>
(f) Upon termination of this Trust 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 all or substantially all of 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 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 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.
15
<PAGE>
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under
this Trust 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 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;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders or the Trust Guarantee Trustee to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders or the Trust Guarantee
Trustee pursuant to the terms of the Trust Preferred Securities or this Trust
Guarantee, 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.
16
<PAGE>
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 Guarantee or exercising any trust or power conferred upon
the Trust Guarantee Trustee under this Trust Guarantee.
(b) If the Trust Guarantee Trustee fails to enforce its rights under the
Trust 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 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 Guarantee for such payment. The Guarantor waives any right or remedy
to require that any action be brought first against the Trust, the Trust
Guarantee Trustee or any other Person or entity before proceeding directly
against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Trust Guarantee constitutes 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 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 Guarantee, if,
at the time of any such payment, any amounts are due and unpaid under this Trust
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.
17
<PAGE>
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 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
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
this Trust 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 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 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,
18
<PAGE>
the payment of any 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 Guarantee or any other guarantee by the Company with respect to any
Comparable Equity Interest).
SECTION 6.2 Ranking
This Trust Guarantee will constitute an unsecured obligation of the
Guarantor and will rank (i) subordinate and junior in right of payment to all
other existing 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 any 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) the Trust Common Securities 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 any Affiliate of the Guarantor, and (F) 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;
provided, however, that under the circumstances set forth in Section 2.3 of the
Trust Common Securities Guarantee, the rights of the holder of the Trust Common
Securities shall be subordinated to the rights of the Holders. Any similar
guarantee given hereafter by the Guarantor with respect to securities similar 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 Guarantee shall terminate upon (i) full payment of the
Redemption Price of all Trust Preferred Securities, (ii) the distribution of the
Partnership Preferred Securities to the Holders of all the outstanding Trust
Preferred Securities or (iii) full payment of the amounts payable in accordance
with the Trust Agreement upon liquidation of the Trust.
19
<PAGE>
Notwithstanding the foregoing, this 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 sums paid under the
Trust Preferred Securities or under this Trust 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 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 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 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
20
<PAGE>
survive the termination of this Trust 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 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 and Assignment
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 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.
The Guarantor may not assign its rights or delegate its obligations under
this Trust Guarantee without the prior approval of the Holders of at least a
Majority in liquidation amount of the Trust Preferred Securities.
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
21
<PAGE>
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 Guarantor for purposes of
this provision.
SECTION 9.4 Notices
All notices provided for in this Trust 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
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 with
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.
22
<PAGE>
SECTION 9.5 Benefit
This Trust 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 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 TRUST GUARANTEE is executed as of the day and year first above
written.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
Guarantor
By: /s/ Robert F. Mougeot
----------------------------------
Name: Robert F. Mougeot
Title: Financial Vice President
By: /s/ Constance H. Lau
----------------------------------
Name: Constance H. Lau
Title: Treasurer
THE BANK OF NEW YORK,
as Trust Guarantee Trustee
By: /s/ Vivian Georges
----------------------------------
Name: Vivian Georges
Title: Assistant Vice President
23
<PAGE>
EXHIBIT 4(p)
================================================================================
PARTNERSHIP GUARANTEE AGREEMENT
HEI PREFERRED FUNDING, LP
DATED AS OF FEBRUARY 1, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
---------
DEFINITIONS AND INTERPRETATION
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1.1 Definitions and Interpretation................. 1
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 Partnership
Guarantee Trustee.............................. 6
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....................... 7
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.............................. 10
SECTION 3.3 Not Responsible for Recitals or
Issuance of the Partnership Guarantee.......... 13
ARTICLE IV
THE PARTNERSHIP GUARANTEE TRUSTEE
SECTION 4.1 The Partnership Guarantee Trustee;
Eligibility.................................... 13
SECTION 4.2 Appointment, Removal and Resignation of
Partnership Guarantee Trustee.................. 14
SECTION 4.3 Successor to the Partnership Guarantee
Trustee by Merger, Consolidation or
Succession to Business......................... 15
ARTICLE V
THE PARTNERSHIP GUARANTEE
SECTION 5.1 Guarantee...................................... 15
SECTION 5.2 Waiver of Notice and Demand.................... 16
SECTION 5.3 Obligations Not Affected....................... 16
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C> <C>
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
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions...................... 18
SECTION 6.2 Ranking......................................... 19
ARTICLE VII
TERMINATION
SECTION 7.1 Termination..................................... 20
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
SECTION 8.1 Exculpation..................................... 20
SECTION 8.2 Indemnification................................. 21
ARTICLE IX
COVENANTS OF THE GUARANTOR
SECTION 9.1 Owner of Interest in the Partnership............ 21
SECTION 9.2 Merger of the Guarantor......................... 21
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Successors and Assigns.......................... 22
SECTION 10.2 Amendments and Assignment; Approvals............ 22
SECTION 10.3 Notices......................................... 23
SECTION 10.4 Gender.......................................... 23
SECTION 10.5 Benefit......................................... 24
SECTION 10.6 Governing Law................................... 24
</TABLE>
(ii)
<PAGE>
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.
(iii)
<PAGE>
PARTNERSHIP GUARANTEE AGREEMENT
This PARTNERSHIP GUARANTEE AGREEMENT (this "Partnership Guarantee"), dated
as of February 1, 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 dated as of the date hereof (the "Agreement of Limited
Partnership"), 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.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Partnership Guarantee, unless the context otherwise requires:
<PAGE>
(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, 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
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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.
"Distributions" shall have the meaning set forth in Section 1.1 of the
Agreement of Limited Partnership and, for purposes of this Partnership
Guarantee, shall include Compounded Distributions (as defined in Section 6.2(b)
of the Agreement of Limited Partnership).
"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 by the General Partner on the
Partnership Preferred Securities out of funds legally available to the
Partnership therefor, (ii) the redemption price of the Partnership Preferred
Securities, including all accumulated and unpaid Distributions to the date of
redemption (the "Redemption Price"), payable out of funds legally available to
the Partnership 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 remaining available for
distribution to Holders in liquidation of the Partnership after satisfaction of
all liabilities of the Partnership (in either case, the "Liquidation
Distribution").
"Holders" shall mean the holders, as registered on the books and records of
the Partnership, of the Partnership Preferred 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, "Holders" 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.
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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" has the
meaning set forth in Section 1.1 of the Trust Agreement.
"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 on which the voting percentages
are determined) of all Partnership Preferred Securities then outstanding.
"Officer's Certificate" means, with respect to any Person, a certificate
signed by an Authorized Officer of such Person. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Partnership Guarantee shall include:
(a) a statement that the officer signing the Officer's 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 such officer in rendering the Officer's Certificate;
(c) a statement that 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 such officer, such
condition or covenant has been complied with.
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"Partnership" means HEI Preferred Funding, LP.
"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.
"Special Representative" shall have the meaning set forth in Section 6.2(h)
of the Agreement of Limited Partnership.
"Successor Partnership Guarantee Trustee" means a successor Partnership
Guarantee Trustee possessing the qualifications to act as Partnership Guarantee
Trustee under Section 4.1.
"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
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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 Guarantee 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.
(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.
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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 Officer's Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of the Partnership
Preferred Securities may, by vote at a meeting or by written consent, 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.
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
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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 to the Special Representative, a Holder
of Partnership Preferred Securities exercising its rights pursuant to Section
5.4(b) or to a Successor Partnership Guarantee Trustee 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, and unless
enforcement action under the Partnership Guarantee has been undertaken and is
being pursued by the Special Representative, the Partnership Guarantee Trustee
shall enforce this Partnership Guarantee for the benefit of the Holders of the
Partnership Preferred Securities.
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(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 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;
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(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 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 Officer's
Certificate.
(iii) Whenever, in the administration of this Partnership
Guarantee, the Partnership Guarantee Trustee
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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 Officer's
Certificate which, upon receipt of such request, shall be promptly delivered by
the Guarantor.
(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
Guarantor, consult with counsel of its selection with respect to this
Partnership Guarantee, 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,
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instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, 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 preference of
the Partnership Preferred Securities or, if any Partnership Preferred
Securities are at the time held by the Property Trustee of the Trust, 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 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.
(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
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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 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
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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
any period in which an Event of Default has occurred and is continuing.
(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.
(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.
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(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 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 all or substantially all of 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 for which the General Partner is
responsible pursuant to the Agreement of Limited Partnership, including, without
limitation, those debts,
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obligations, liabilities or expenses set forth in Sections 9.1, 9.2 and 11.3
thereof.
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 of the Partnership Preferred Securities, the Partnership Guarantee
Trustee or the Special Representative 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 debt of,
or other similar proceedings affecting, the Partnership or any of the assets of
the Partnership;
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(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 Partnership Guarantee Trustee 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
Partnership Guarantee Trustee 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 to the Special Representative or the Partnership Guarantee Trustee in
respect of this Partnership Guarantee including the giving of directions to the
Special Representative or Partnership Guarantee Trustee, as the case may be, and
to direct the exercise of any trust or power under this Partnership Guarantee;
and (v) if the Special Representative and Partnership Guarantee Trustee fail 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
Special Representative, the Partnership Guarantee Trustee, the Partnership or
any other Person. Notwithstanding the foregoing, if the Guarantor has failed to
make a Guarantee Payment, a Holder may directly institute a proceeding against
the Guarantor to enforce such Guarantee Payment under this Partnership
Guarantee.
17
<PAGE>
SECTION 5.5 Guarantee of Payment
This Partnership Guarantee constitutes 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 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 is in default of 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
18
<PAGE>
or the Trust Common Securities 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 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 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 any 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 existing 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 Trust Guarantee
Trustee in respect of the Trust Preferred Securities Guarantee, to the
Investment Guarantee Trustee in respect of any 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 Guarantees, (D) any guarantee
hereafter entered into by the Guarantor in respect of any preferred security
(similar to the Trust Preferred Securities
19
<PAGE>
or the Partnership Preferred Securities) of 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, and (iii) senior to the
Guarantor's common stock. Any similar guarantee issued hereafter by the
Guarantor with respect to securities similar to the 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.
Notwithstanding the foregoing, 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.
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
20
<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 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 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 Partnership
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 ownership of 100% 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
21
<PAGE>
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 Partnership Guarantee Trustee, executed and delivered
to the Partnership 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 Guarantor 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 and Assignment; Approvals
Except with respect to any changes which do not materially adversely affect
the rights of Holders of the Partnership Preferred Securities (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; provided,
however, that 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 approval of the holders of a Majority in liquidation amount of the
Trust Preferred Securities. The provisions of Section 14.3 of the Agreement of
Limited Partnership with respect to meetings and written consents of Holders of
the Partnership Preferred Securities, and the provisions of Section 13.2 of the
Trust Agreement with respect to meetings and written consents of holders of the
Trust Preferred Securities, respectively, apply to the giving of such approval.
The Guarantor may not assign its rights or delegate its obligations under
this Partnership Guarantee without the prior
22
<PAGE>
approval of the Holders of at least a Majority in liquidation preference of the
Partnership Preferred Securities.
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 with
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 10.4 Gender
The masculine, feminine and neuter genders used herein shall include the
masculine, feminine and neuter genders.
23
<PAGE>
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.
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.
Guarantor
By: /s/ Robert F. Mougeot
------------------------------
Name: Robert F. Mougeot
Title: Financial Vice President
By: /s/ Constance H. Lau
------------------------------
Name: Constance H. Lau
Title: Treasurer
THE BANK OF NEW YORK,
as Partnership Guarantee Trustee
By: /s/ Vivian Georges
------------------------------
Name: Vivian Georges
Title: Assistant Vice President
24
<PAGE>
EXHIBIT 4(q)
================================================================================
AFFILIATE INVESTMENT INSTRUMENTS GUARANTEE AGREEMENT
HAWAIIAN ELECTRIC INDUSTRIES, INC.
DATED AS OF FEBRUARY 1, 1997
==============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION> Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation............... 1
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 Investment Guarantee
Trustee...................................... 6
SECTION 2.4 Periodic Reports to the Investment
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
Succession to Business....................... 15
ARTICLE V
THE INVESTMENT GUARANTEE
SECTION 5.1 Guarantee.................................... 15
SECTION 5.2 Waiver of Notice and Demand.................. 15
SECTION 5.3 Obligations Not Affected..................... 15
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 5.4 Rights of Holders............................ 17
SECTION 5.5 Guarantee of Payment......................... 17
SECTION 5.6 Subrogation.................................. 17
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 and Assignments; Approvals........ 20
SECTION 9.3 Merger of the Guarantor...................... 21
SECTION 9.4 Notices...................................... 22
SECTION 9.5 Benefit...................................... 23
SECTION 9.6 Governing Law................................ 23
</TABLE>
(ii)
<PAGE>
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 Affiliate
Investment Instrument Guarantee and shall not affect the interpretation of
any of its terms or provisions.
(iii)
<PAGE>
AFFILIATE INVESTMENT INSTRUMENTS GUARANTEE AGREEMENT
This AFFILIATE INVESTMENT INSTRUMENTS GUARANTEE AGREEMENT (this "Investment
Guarantee"), dated as of February 1, 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 "Investment Guarantee Trustee"), for the benefit of the Holders (as defined
herein) of the Affiliate Debentures (as defined herein) of HEI Diversified,
Inc., a Hawaii corporation (the "Issuer").
WHEREAS, pursuant to a Junior Indenture (the "Affiliate Indenture"), dated
as of February 1, 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 8.36% Junior Subordinated
Debentures Due February 4, 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 directly
or indirectly provide material benefits to the Guarantor, the Guarantor executes
and delivers this Investment Guarantee for the benefit of the Holders.
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;
<PAGE>
(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.
"Agreement of Limited Partnership" means the Amended and Restated Agreement
of Limited Partnership of the Partnership, dated as of February 1, 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 principal trust office of the Investment
Guarantee Trustee at which, at any particular time, its corporate trust business
shall 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, attention: Corporate Trust Trustee Administration.
2
<PAGE>
"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.
"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 liquidation amount of the Trust Preferred Securities" has the
meaning set forth in Section 1.1 of the Trust Agreement.
"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 on which the voting percentages
are determined) of all Partnership Preferred Securities then outstanding.
"Majority in principal amount of the Affiliate Debentures" means, except as
provided by the Trust Indenture Act, a vote by
3
<PAGE>
Holders of the Affiliate Debentures, voting separately as a class, of more than
50% of the outstanding principal amount of the Affiliate Debentures then
outstanding plus accrued and unpaid interest to the date on which the voting
percentages are determined.
"Officer's Certificate" means, with respect to any Person, a certificate
signed by an authorized officer of such Person. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Investment Guarantee shall include:
(a) a statement that the officer signing the Officer's 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 such officer in rendering the Officer's Certificate;
(c) a statement that 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 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.
"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
4
<PAGE>
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.
"Special Representative" shall have the meaning set forth in Section 6.2(h)
of the Agreement of Limited Partnership.
"Trust Agreement" means the Amended and Restated Trust Agreement by and
among the Company, as Sponsor and Depositor, the Delaware Trustee, the Property
Trustee, the Regular Trustees and the holders, from time to time, of undivided
beneficial interests in the assets of Hawaiian Electric Industries Capital Trust
I dated as of February 1, 1997 as it may be amended or supplemented from time to
time.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trust Preferred Securities" has the meaning set forth in Section 8.1 of
the Trust Agreement.
"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.
(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.
5
<PAGE>
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 Investment 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 Investment 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 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.
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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
Officer's Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in principal amount of the Affiliate Debentures
may, by vote or written consent, on behalf of the Holders of the Affiliate
Debentures, waive any past Event of Default and its consequences; provided,
however, that so long as the Partnership is the Holder of the Affiliate
Debentures, no such waiver shall be effective unless the holders of a Majority
in liquidation preference of the Partnership Preferred Securities approve such
waiver. 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 charged with the administration of the Affiliate Debentures
shall have obtained actual knowledge.
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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, the holders
of the Partnership Preferred Securities and the Trust Preferred Securities. The
Investment Guarantee Trustee shall not transfer this Investment Guarantee to any
Person except to a holder of the Partnership Preferred Securities, to a Special
Representative, to a holder of Trust Preferred Securities exercising its 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, and unless
enforcement action has been undertaken and is being pursued by the Special
Representative, the Investment Guarantee Trustee shall enforce this Investment
Guarantee for the benefit of the holders of the Partnership Preferred
Securities.
(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 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
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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;
(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;
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(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.
(ii) Any direction or act of the Guarantor contemplated by this
Investment Guarantee shall be sufficiently evidenced by an Officer's
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 Officer's Certificate which,
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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 with respect to this
Investment Guarantee, 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 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.
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(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 preference of
the Partnership Preferred Securities, or, so long as the Property Trustee
of the Trust is the holder of the Partnership Preferred Securities, from 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 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
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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, 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
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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
any period in which an Event of Default has occurred and is continuing.
(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 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
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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 all or substantially all of 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 into account a valid extension
of an interest payment period by the Issuer 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 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
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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 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 of the Affiliate Debentures, or of the Investment Guarantee Trustee, the
Special Representative (if any) or the holders of the Partnership Preferred
Securities or the Trust Preferred Securities, to enforce, assert or exercise any
right, privilege, power or remedy provided for pursuant to the terms of the
Affiliate Debentures or the Investment Guarantee, or any action on the part of
any Person 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 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.
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SECTION 5.4 Rights of Holders
(a) 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 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
including, without limitation, the right to appoint a Special Representative to
enforce the obligations of Guarantor under this Investment Guarantee.
(b) If the Investment Guarantee Trustee and the Special Representative fail
to enforce the Investment Guarantee after a holder of Trust Preferred Securities
has made a written request for either or both of them to do so, such holder of
Trust Preferred Securities may, to the fullest extent permitted by law,
institute a legal proceeding directly against the Guarantor to enforce the
rights of the Holders of the Affiliate Debentures, the rights of the Special
Representative, the rights of the Partnership and the rights of the Investment
Guarantee Trustee under this Investment Guarantee, without first instituting a
legal proceeding against the Issuer, the Investment Guarantee Trustee, the
Special Representative or any other Person. Notwithstanding the foregoing, if
the Guarantor has failed to make a Guarantee Payment when due, a holder of the
Trust Securities (as defined in the Trust Agreement) may, to the fullest extent
permitted by law on behalf of the Partnership, directly institute a proceeding
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 Issuer, the Partnership, the General Partner of the
Partnership, the Investment Guarantee Trustee, the Special Representative or any
other person or entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Investment Guarantee constitutes a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Partnership, the Holders of Affiliate Debentures, the holders of the Partnership
Preferred Securities, the Special Representative and the holders of the Trust
Securities 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
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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 existing 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 Trust Guarantee
Trustee in respect of the Trust Guarantee, to the Partnership Guarantee Trustee
in respect 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) any other guarantee by the Guarantor of any other Affiliate Investment
Instrument, (C) the Trust Guarantees, (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 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. Any
similar guarantee given hereafter by the Guarantor with respect to debentures or
other securities issued under the Affiliate Indenture or under similar junior
subordinated indentures that is silent as to seniority will rank pari passu with
this Investment Guarantee.
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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 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.
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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, 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 and Assignments; Approvals
(a) Except with respect to any changes that do not materially adversely
affect the rights of Holders of the Affiliate Debentures (in which case no
consent of such Holders will be required), this Investment Guarantee may only be
amended with the prior approval of the Holders of a Majority in principal amount
of the Affiliate Debentures; provided, however, that so long as the Partnership
is the Holder of the Affiliate Debentures, such amendment will not be effective
without the prior approval of the holders of at least a majority in liquidation
preference of the Partnership Preferred Securities; and provided, further, that
so long as the Partnership is the Holder of the Affiliate Debentures and the
Property Trustee of the Trust is the holder of the Partnership Preferred
Securities, such amendment will not be effective without the prior approval of
the holders of a Majority in liquidation amount of the Trust Preferred
Securities.
(b) The provisions of Article VIII of the Affiliate Indenture with respect
to actions of Holders of Affiliate
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Debentures, the provisions of Section 14.3 of the Agreement of Limited
Partnership with respect to meetings of holders of the Partnership Preferred
Securities and the provisions of Section 13.2 of the Trust Agreement with
respect to meetings and written consents of holders of Trust Preferred
Securities, as the case may be, apply to any approvals required under this
Investment Guarantee by Holders of the Affiliate Debentures, holders of the
Partnership Preferred Securities and holders of the Trust Preferred Securities,
respectively.
(c) The Guarantor may not assign its rights or delegate its obligations
under this Investment Guarantee without the prior approval of the Holders of a
Majority in principal amount of the Affiliate Debentures; provided, however,
that so long as the Partnership is the Holder of the Affiliate Debentures, such
assignment or obligation will not be effective without the prior approval of a
Majority in liquidation preference of the Partnership Preferred Securities; and
provided, further, that so long as the Partnership is the holder of the
Partnership Preferred Securities, such assignment or obligation will not be
effective without the prior approval of the holders of a Majority in liquidation
amount of the Trust Preferred Securities. The provisions identified in the
preceding paragraph shall apply to such approvals.
(d) In the event of a transfer or assignment or other arrangement whereby
the obligations of Issuer under the Affiliate Debentures are transferred to and
assumed by another subsidiary of Guarantor, this Investment Guarantee shall
continue to apply in all respects to the Affiliate Debentures and to the
obligations of such other subsidiary thereunder in the same manner as if such
subsidiary were the original issuer thereof.
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
21
<PAGE>
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
Guarantor 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 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
22
<PAGE>
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 Section 3.1(a), is not separately
transferable from the Affiliate Debentures.
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.
Guarantor
By: /s/ Robert F. Mougeot
------------------------------
Name: Robert F. Mougeot
Title: Financial Vice President
By: /s/ Constance H. Lau
------------------------------
Name: Constance H. Lau
Title: Treasurer
THE BANK OF NEW YORK,
as Investment Guarantee Trustee
By: /s/ Vivian Georges
------------------------------
Name: Vivian Georges
Title: Assistant Vice President
23
<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)
----------------------
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 Affiliate Investment Instruments
(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
- --------------------------------------------------------------------------------
