EXHIBIT 4(q)
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AFFILIATE INVESTMENT INSTRUMENTS GUARANTEE AGREEMENT
HAWAIIAN ELECTRIC INDUSTRIES, INC.
DATED AS OF FEBRUARY 1, 1997
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TABLE OF CONTENTS
Page
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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
(i)
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
(ii)
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------- ----------
310(a).......................................... 4.1(a)
310(b).......................................... 4.1(c), 2.8
310(c).......................................... Inapplicable
311(a).......................................... 2.2(b)
311(b).......................................... 2.2(b)
311(c).......................................... Inapplicable
312(a).......................................... 2.2(a)
312(b).......................................... 2.2(b)
313............................................. 2.3
314(a).......................................... 2.4
314(b).......................................... Inapplicable
314(c).......................................... 2.5
314(d).......................................... Inapplicable
314(e).......................................... 1.1, 2.5, 3.2
314(f).......................................... 2.1, 3.2
315(a).......................................... 3.1(d)
315(b).......................................... 2.7
315(c).......................................... 3.1
315(d).......................................... 3.1(d)
316(a).......................................... 1.1, 2.6, 5.4
316(b).......................................... 5.3
316(c).......................................... 9.2
317(a).......................................... Inapplicable
317(b).......................................... Inapplicable
318(a).......................................... 2.1(b)
318(b).......................................... 2.1
318(c).......................................... 2.1(a)
______________________________
* This Cross-Reference Table does not constitute part of this Affiliate
Investment Instrument Guarantee and shall not affect the interpretation of
any of its terms or provisions.
(iii)
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;
(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 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention: Corporate Trust Trustee Administration.
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"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
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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
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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.
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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
20
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
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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
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee
Administration
Telecopy: (000) 000-0000
(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.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Treasurer
Telecopy: (000) 000-0000
(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
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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/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Financial Vice President
By: /s/ Xxxxxxxxx X. Xxx
------------------------------
Name: Xxxxxxxxx X. Xxx
Title: Treasurer
THE BANK OF NEW YORK,
as Investment Guarantee Trustee
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: Assistant Vice President
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