EXHIBIT 4(h)
MAUI ELECTRIC COMPANY, LIMITED
and
HAWAIIAN ELECTRIC COMPANY, INC., as Guarantor
and
THE BANK OF NEW YORK, as Trustee
JUNIOR INDENTURE
Dated as of December 1, 1998
Providing for the Issuance of
Junior Subordinated Deferrable Interest Debentures in Series
including
7.30% Junior Subordinated Deferrable Interest Debentures,
Series 1998
JUNIOR INDENTURE (this "Indenture" or "Junior Indenture"), dated as of
December 1, 1998, by and among Maui Electric Company, Limited, a corporation
duly organized and existing under the laws of the State of Hawaii (the
"Company"), Hawaiian Electric Company, Inc., a corporation duly organized and
existing under the laws of the State of Hawaii ("HECO"), and The Bank of New
York, a New York banking corporation, as trustee (the "Trustee").
WHEREAS, the Company may from time to time issue, authenticate and deliver
securities under this Indenture, in one or more series (the "Debentures").
WHEREAS, the Company is a wholly owned subsidiary of HECO.
WHEREAS, HECO may from time to time create or establish one or more
statutory business trusts for the purpose of issuing undivided beneficial
interests in the assets thereof (the "Trust Securities") and using the proceeds
thereof to acquire the Junior Subordinated Deferrable Interest Debentures of
HECO and HECO's subsidiaries, including any of the Company's Debentures.
WHEREAS, HECO, as depositor, The Bank of New York, as Property Trustee (the
"Property Trustee II"), The Bank of New York, as Delaware Trustee (the "Delaware
Trustee II"), and the Administrative Trustees named therein have heretofore duly
declared and established HECO Capital Trust II, a Delaware business trust
("Trust II"), by entering into a Trust Agreement dated as of October 7, 1998
(the "Original Trust Agreement") and by executing and filing with the Secretary
of State of the State of Delaware a Certificate of Trust on October 15, 1998.
WHEREAS, the Original Trust Agreement has been amended and restated
pursuant to an Amended and Restated Trust Agreement dated as of December 1, 1998
among HECO, as depositor, the Property Trustee II, the Delaware Trustee II, the
Administrative Trustees named therein and the holders, from time to time, of
undivided beneficial interests in the assets of Trust II (the "Trust II
Agreement").
WHEREAS, HECO has authorized the issuance of its 7.30% Junior Subordinated
Deferrable Interest Debentures, Series 1998 (the "HECO Series 1998 Debentures")
to be purchased by Trust II with the proceeds from the issuance and sale of the
Trust Securities of Trust II and HECO has duly authorized the execution and
delivery of a related Junior Indenture dated as of December 1, 1998 by and
between HECO and The Bank of New York, a New York banking corporation, as
trustee (the "HECO Junior Indenture").
WHEREAS, the Company has authorized the issuance of its 7.30% Junior
Subordinated Deferrable Interest Debentures, Series 1998 (the "Series 1998
Debentures") to be purchased by Trust II with a portion of the proceeds from the
issuance and sale of the Trust Securities of Trust II, and the Company has duly
authorized the execution and delivery of this Junior Indenture.
WHEREAS, HECO has authorized the execution and delivery of this Junior
Indenture to provide for the Guarantee (as hereinafter defined) with respect to
any series of Debentures, and has performed all acts necessary to make its
guarantee the valid obligation of HECO.
WHEREAS, all things necessary to make the securities issued hereunder, when
duly issued and executed by the Company and authenticated and delivered
hereunder, the valid obligations of the Company, and to make this Junior
Indenture a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, have been done.
NOW THEREFORE, each of the Company, the Trustee and HECO, intending to be
legally bound hereby, agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders (as hereinafter defined) of the
securities issued hereunder, including the Series 1998 Debentures:
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Additional Sums" means the additional amounts, as provided in Section 4.06
hereof, as may be necessary in order that the amount of distributions then due
and payable by any Trust on its outstanding Trust Securities shall not be
reduced as a result of any additional taxes, duties or other governmental
charges to which such Trust has become subject.
"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. When used with respect to any Person,
"control" means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
2
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means (i) a copy of a resolution certified by the
Secretary or the Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee or (ii) a certificate signed by an
authorized officer or officers to whom the Board of Directors has delegated its
authority, and in each case, delivered to the Trustee.
"Business Day" means any day that is not a Saturday, a Sunday or a day on
which banking institutions in the City of New York are authorized or required by
law or executive order to close.
"Capital Lease Obligations" of a Person means any obligation which is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with GAAP.
"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participation or other equivalents of or interests in
(however designated) corporate stock.
"Company" means Maui Electric Company, Limited, a Hawaii corporation, or
any successor thereto.
"Company Order" means a written request or order signed in the name of the
Company by an Officer of the Company and delivered to the Trustee.
"Covered Person" means any Holder or beneficial owner of the Debentures.
"Debenture Exchange" means the issuance of HECO Series 1998 Debentures in
exchange for Debentures of the Company held by Trust II pursuant to Section
2.05(b) of the Trust II Agreement.
"Debentureholder" or "Holder" means a Person in whose name a Debenture is
registered on the Registrar's books.
"Debentures" shall mean any of the securities of any series issued,
authenticated and delivered under this Junior Indenture.
3
"Default" means any event which is, or after notice or passage of time, or
both, would be, an Event of Default pursuant to Section 6.01 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extension Period", with respect to any series of Debentures, means the
period during which the Company may elect to extend the interest payment period
on such series of the Debentures pursuant to Section 4.01(b) hereof; provided
that no Extension Period shall extend beyond the Stated Maturity Date or the
Redemption Date of any Debenture of such series.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board.
"Guarantee" means the guaranty by HECO of the obligations of the Company as
provided for in Article 11 hereof.
"Guarantee Event of Default" means a default by the Guarantor on any of its
payment or other obligations under the Guarantee; provided, that except with
respect to a default resulting from a failure to pay any Guarantee Payment, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means, with respect to any series of Debentures, to
the extent not paid or made by the Company, the due and punctual payment of the
principal of and premium, if any, and interest on such series of Debentures,
when and as the same shall become due and payable, whether at maturity by reason
of acceleration or otherwise, according to the terms of such series of
Debentures and of this Junior Indenture.
"Guarantor" means HECO.
"Guaranteed Obligations" means, with respect to any series of Debentures,
all indebtedness, liabilities, obligations, covenants and duties of, and all
terms and conditions to be observed by, the Company (including in its capacity
as a "debtor in possession" under any Bankruptcy Law) due or owing to, or in
favor or for the benefit of, the Trustee (or any other Person that becomes the
Trustee by reason of any succession or assignment at any time) or the Holders
under this Indenture, including the Company's obligations to make Guarantee
Payments with respect to such series of Debentures,
4
in each case whether or not an allowable claim against the Company under any
Bankruptcy Law, or otherwise enforceable against the Company, and including, in
any event, interest accruing after the filing of any petition in bankruptcy or
for reorganization relating to the Company whether or not such claim for post-
petition interest is allowed in such proceeding.
"HECO" means Hawaiian Electric Company, Inc., a corporation organized under
the laws of the Kingdom of Hawaii, or any successor thereto.
"HECO Junior Indenture" means the Junior Indenture, dated as of December 1,
1998, by and between HECO and The Bank of New York, a New York banking
corporation, as trustee thereunder, as amended or supplemented from time to time
in accordance with the terms thereof, including the provisions of the TIA that
are deemed to be a part thereof.
"HECO Series 1998 Debentures" means HECO's 7.30% Junior Subordinated
Deferrable Interest Debentures, Series 1998 issued under the HECO Junior
Indenture.
"Holder" or "Debentureholder" means a Person in whose name a Debenture is
registered on the Registrar's books.
"Indebtedness" means, without duplication, with respect to the Company,
whether recourse is to all or a portion of the assets of the Company and whether
or not contingent, (i) every obligation of the Company for money borrowed; (ii)
every obligation of the Company evidenced by bonds, debentures, notes or other
similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses; (iii) every reimbursement
obligation of the Company with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of the Company; (iv)
every obligation of the Company issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business); (v) Capital Lease
Obligations of the Company; and (vi) every obligation of the type referred to in
clauses (i) through (v) above of another Person and all dividends of another
Person the payment of which, in either case, the Company has guaranteed or is
responsible or liable, directly or indirectly, as obligor or otherwise.
"Indemnified Person" means the Trustee, any Affiliate of the Trustee, or
any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Trustee.
5
"Indenture" or "Junior Indenture" means this Junior Indenture, as amended
or supplemented from time to time in accordance with the terms hereof, including
the provisions of the TIA that are deemed to be a part hereof.
"Interest Payment Date", when used with respect to the Debentures of any
series, means the stated maturity of any installment of interest on the
Debentures of that series.
"Issue Date", with respect to a series of Debentures, means the date on
which the Debentures of such series are originally issued.
"Junior Indenture" means this Junior Indenture, as amended or supplemented
from time to time in accordance with the terms hereof, including the provisions
of the TIA that are deemed to be a part hereof.
"Officer" means, with respect to any corporation, the Chairman of the
Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of such corporation.
"Officer's Certificate" means a written certificate containing the
applicable information specified in Sections 12.04 and 12.05 hereof, signed in
the name of the Company by any one or more of its Officers, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion containing the applicable
information specified in Sections 12.04 and 12.05 hereof, by legal counsel (who
may be counsel to the Company) and is reasonably acceptable to the Trustee.
"Paying Agent" means any Person authorized by the Company to pay the
principal of and premium, if any, and interest on the Debentures of any series
on behalf of the Company.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Predecessor Debentures" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular Debenture; and for purposes of this definition, any Debenture
authenticated and delivered under Section 2.09 hereof in exchange for or in lieu
of a mutilated, destroyed, lost or stolen Debenture shall be deemed to evidence
the same debt as the mutilated, destroyed, lost or stolen Debenture.
6
"Property Trustee II" means The Bank of New York and its successors and
assigns, as property trustee under the Trust II Agreement.
"Record Date", with respect to any series of the Debentures, means the
Regular Record Date, the Special Record Date or any date set to determine the
Holders of Debentures of such series entitled to vote, consent, make a request
or exercise any other right associated with such series of Debentures.
"Redemption Date", with respect to any Debentures of any series to be
redeemed, means the date specified for the redemption thereof in accordance with
the terms thereof and pursuant to Article 3 of this Junior Indenture.
"Redemption Price", with respect to any Debentures of any series to be
redeemed, means the price at which such Debenture is to be redeemed in
accordance with the terms thereof and pursuant to Article 3 of this Junior
Indenture.
"Regular Record Date", with respect to an interest payment on any
Debentures of any series, means the date specified for the determination of
Holders entitled to receive payment of interest on the next succeeding Interest
Payment Date in accordance with the terms thereof or this Indenture.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means, with respect to the Company, the principal of
(and premium, if any) and interest, if any (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization relating to
the Company whether or not such claim for post-petition interest is allowed in
such proceeding), on Indebtedness, whether incurred on or prior to the date of
this Indenture or thereafter incurred, unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are not superior in right of payment to the Debentures or
to other Indebtedness which is pari passu with, or subordinated to, the
Debentures; provided, however, that Senior Indebtedness shall not be deemed to
include (i) any Indebtedness of the Company which, when incurred and without
respect to any election under Section 1111(b) of the Bankruptcy Code, was
without recourse to the Company, (ii) any Indebtedness of the Company to any of
its subsidiaries, (iii) Indebtedness to any employee of the
7
Company, (iv) any liability for taxes, and (v) indebtedness or monetary
obligations to trade creditors or assumed by the Company or any of its
subsidiaries in the ordinary course of business in connection with the obtaining
of materials or services.
"Series 1998 Debentures" means any of the Company's 7.30% Junior
Subordinated Deferrable Interest Debentures, Series 1998 issued under this
Junior Indenture.
"Special Record Date" for the payment of any Defaulted Interest on the
Debentures of any series means the date determined pursuant to Section 2.03(c)
hereof.
"Stated Maturity Date", with respect to any Debenture or any installment of
principal thereof, means the date specified for such Debenture as the fixed date
on which the principal of such Debenture or such installment is due and payable,
as such date may be shortened or extended pursuant to the terms thereof or this
Indenture.
"Subsidiary" means any corporation, association, partnership, trust or
other business entity of which more than 50% of the total voting power of shares
of Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) the Company, (ii) the Company and one or more
Subsidiaries or (iii) one or more Subsidiaries.
"TIA" means the Trust Indenture Act of 1939, as amended and as in effect on
the date of this Junior Indenture; provided, however, that if the TIA is amended
after such date, TIA means, to the extent required by any such amendment, the
TIA as so amended.
"Trust" means any statutory business trust created by the Company to issue
Trust Securities and to use the proceeds from the sale thereof to purchase
Debentures.
"Trust Common Securities" means common securities of a Trust, representing
undivided beneficial interests, excluding the interests represented by Trust
Preferred Securities, in the assets of such Trust.
"Trust II" means HECO Capital Trust II, a Delaware statutory business trust
created under the Delaware Business Trust Act, Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. (S) 3801, et seq.
8
"Trust II Agreement" means the Amended and Restated Trust Agreement dated
as of December 1, 1998, among the Company, as depositor, the Property Trustee
II, the Delaware Trustee II and the Administrative Trustees named therein and
the holders, from time to time, of undivided beneficial interests in the assets
of Trust II, as the same may be amended and modified from time to time.
"Trust II Common Securities" means the Trust Common Securities of Trust II,
representing the undivided beneficial interests, excluding the interests
represented by Trust II Preferred Securities, in the assets of Trust II.
"Trust II Guarantee Agreement" means the Trust Guarantee Agreement dated as
of December 1, 1998 from HECO, as guarantor, to The Bank of New York, as Trust
Guarantee Trustee, with respect to the Trust II Preferred Securities.
"Trust II Preferred Securities" means the Trust Preferred Securities of
Trust II, representing the undivided preferred beneficial interests, with
certain preferences, in the assets of Trust II, having a liquidation preference
of $25 per security and having rights provided therefor in the Trust II
Agreement.
"Trust Officer", when used with respect to the Trustee, means any Vice
President, any Assistant Vice President, any trust officer, or assistant trust
officer or any other officer of the corporate trust department of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Trust Preferred Securities" means preferred securities of a Trust,
representing undivided beneficial interests in the assets of such Trust with a
preference under certain circumstances with respect to cash distributions and
amounts payable on liquidation, redemption or otherwise.
"Trust Securities" means the undivided beneficial interests in the assets
of a Trust.
"Trustee" means The Bank of New York, solely in its capacity as Trustee
under this Junior Indenture, unless and until a successor replaces it pursuant
to the applicable provisions of this Junior Indenture and, thereafter, shall
mean such successor.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any
9
agency or instrumentality thereof) for the payment of which the full faith and
credit of the United States of America is pledged and which are not callable at
the issuer's option.
SECTION 1.02. Other Definitions.
TERM DEFINED IN SECTION
---- ------------------
"Act".......................................... 1.05(a)
"Bankruptcy Law"............................... 6.01(c)
"Custodian".................................... 6.01(c)
"Defaulted Interest"........................... 2.03(c)
"Depository"................................... 2.12(a)
"Event of Default"............................. 6.01(a)
"Global Debenture"............................. 2.12(a)
"Legal Holiday"................................ 12.08
"Notice of Default"............................ 6.01(a)
"Registrar".................................... 2.05(a)
"Securities Register".......................... 2.05(a)
"Special Event"................................ 3.01(a)
"Successor".................................... 5.01(a)
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Junior Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Junior
Indenture. The following TIA terms used in this Junior Indenture have the
following meanings:
"Junior Indenture securities" means the Debentures.
"Junior Indenture security holder" means a Debentureholder or Holder.
"Junior Indenture to be qualified" means this Junior Indenture.
"Junior Indenture trustee" or "institutional trustee" means the
Trustee.
"Obligor" on the Junior Indenture securities means the Company and any
other obligor on the Debentures.
All other TIA terms used in this Junior Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rules have the
meanings assigned to them by such definitions.
10
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) Each capitalized term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including, without limitation;
(e) words in the singular include the plural, and words in the plural
include the singular; and
(f) "herein," "hereof" and other words of similar import refer to this
Junior Indenture as a whole and not to any particular Article, Section or
other subdivision.
SECTION 1.05. Acts of Holders and Holders of Trust Preferred Securities.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Junior Indenture to be given or taken by
Holders or by holders of Trust Preferred Securities may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders or holders of Trust Preferred Securities, as applicable, in person
or by an agent duly appointed in writing and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of Holders or holders of Trust Preferred Securities signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Junior Indenture and conclusive in favor of the Trustee and the Company, if made
in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The ownership of Debentures shall be proved by the Securities
Register.
11
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Debenture shall bind every future Holder of
the same Debenture and the Holder of every Debenture issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Debenture.
(e) If the Company solicits from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a resolution of its Board of Directors, fix in
advance a Record Date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
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 Act may be given before or after such Record Date, but only Holders of
record at the close of business on such Record Date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of outstanding Debentures have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the outstanding Debentures shall be computed as of
such Record Date.
ARTICLE 2. THE DEBENTURES; THE SERIES 0000 XXXXXXXXXX
XXXXXXX 2.01. Issue of Debentures Generally.
(a) The aggregate principal amount of any series of Debentures which may
be authenticated and delivered under this Junior Indenture is unlimited.
(b) The Debentures may be issued in one or more series as from time to
time shall be authorized by the Board of Directors pursuant to one or more
indentures supplemental hereto or Officer's Certificates authorized pursuant to
Board Resolutions. The Debentures of each series shall be 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 10.01 hereof providing for such indebtedness being junior and
subordinate in right of payment to all Senior Indebtedness.
12
(c) The Debentures of each series and the Trustee's Certificate of
Authentication shall be substantially in the form attached to this Junior
Indenture as Exhibit A or, in the case of any series other than the Series 1998
Debentures, substantially in the forms to be attached as exhibits to an
indenture supplemental hereto or an Officer's Certificate authorized pursuant to
a Board Resolution creating such series with such inclusions, omissions and
variations as to letters, years, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Junior 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 securities exchange on which such Debentures may be listed, or
to conform to usage.
(d) Other series of Debentures may differ from the Series 1998 Debentures,
and as and between series, in respect of any or all of the following matters:
(1) designation;
(2) Stated Maturity Date or Dates, which may be serial, and the
Company's option, if any, to shorten or extend the Stated Maturity Date or
Dates;
(3) interest rate or method of determination of the interest rate;
(4) the basis upon which interest shall be computed if other than a
360-day year composed of twelve 30-day months;
(5) Interest Payment Dates and Regular Record Dates therefor;
(6) the maximum duration of the Extension Period;
(7) Issue Date or Dates and interest accrual provisions;
(8) authorized denominations;
(9) the place or places for the payment of principal (and premium,
if any) and interest;
(10) the aggregate principal amount of Debentures of such series
which may be issued;
13
(11) the optional and mandatory redemption provisions, if any;
(12) provisions, if any, for any sinking or analogous fund;
(13) the currency or currencies in which the principal of and
premium, if any, and interest on the Debentures may be paid by the Company;
(14) if the Debentures of any series will be issued as Global
Debentures pursuant to Section 2.12 hereof, the identity of the Depository
and any other terms relating thereto to the extent not set forth in Section
2.12 hereof; and
(15) any other provisions expressing or referring to the terms and
conditions upon which the Debentures of such series are to be issued under
this Junior Indenture which are not in conflict with the provisions of this
Junior Indenture;
in each case as determined by the Board of Directors and specified in an
indenture supplemental hereto or in an Officer's Certificate authorized pursuant
to a Board Resolution creating such series.
SECTION 2.02. Terms and Form of the Series 1998 Debentures.
(a) The Series 1998 Debentures shall be designated "Maui Electric Company,
Limited, 7.30% Junior Subordinated Deferrable Interest Debentures, Series 1998."
The Series 1998 Debentures and the Trustee's Certificate of Authentication shall
be substantially in the form of Exhibit A attached hereto. The Series 1998
Debentures shall initially be represented by a single certificate registered in
the name of The Bank of New York as Property Trustee II for the benefit of Trust
II. The terms and provisions contained in the Series 1998 Debentures shall
constitute, and are hereby expressly made, a part of this Junior Indenture. The
Company, the Trustee and the Guarantor, by their execution and delivery of this
Junior Indenture, expressly agree to such terms and provisions and to be bound
thereby.
(b) The Series 1998 Debentures shall be issued at 100% of their principal
amount.
(c) The aggregate principal amount of Series 1998 Debentures outstanding
at any time may not exceed $10,000,000, except as provided in Section 2.09
hereof. The Series 1998
14
Debentures shall be authenticated and delivered upon receipt by the Trustee of
the items specified in Section 2.04(d) hereof.
(d) The Stated Maturity Date of the Series 1998 Debentures is December 15,
2028. Upon the shortening or extension of the fixed date on which the principal
of the HECO Series 1998 Debentures is due and payable pursuant to the HECO
Junior Indenture, the Stated Maturity Date for the Series 1998 Debentures shall
be shortened or extended at the same time for the same period as the HECO Series
1998 Debentures, without any action on the part of the Company or any other
Person.
(e) The interest rate for the Series 1998 Debentures is 7.30% per annum.
The Interest Payment Dates for the Series 1998 Debentures are March 31, June 30,
September 30 and December 31 of each year, commencing March 31, 1999. In the
event that any date on which interest is payable on the Series 1998 Debentures
is not a Business Day, then payment of the 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 the date such payment was originally payable. The Regular
Record Date for each Interest Payment Date for the Series 1998 Debentures shall
be the close of business on the Business Day immediately preceding such Interest
Payment Date; provided that in the event that the Series 1998 Debentures are
issued in definitive form while they are not held by Trust II, the Regular
Record Date for each Interest Payment Date for the Series 1998 Debentures shall
be the close of business on the date that is 15 days prior to such Interest
Payment Date, whether or not such date is a Business Day.
(f) Each Series 1998 Debenture shall bear interest from its Issue Date or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for with respect to such Series 1998 Debenture; except that, so
long as there is no existing Defaulted Interest or Extension Period on the
Series 1998 Debentures, any Series 1998 Debenture authenticated by the Trustee
between the Regular Record Date for any Interest Payment Date and such Interest
Payment Date shall bear interest from such Interest Payment Date.
(g) Defaulted Interest on any Series 1998 Debenture shall bear additional
interest at the rate per annum of 2% thereof compounded quarterly (to the extent
permitted by applicable law).
15
(h) Overdue principal of any Series 1998 Debenture shall bear interest at
a rate per annum equal to the interest rate per annum payable on such Series
1998 Debenture.
(i) Interest on any Series 1998 Debenture which has been deferred pursuant
to Section 4.01(b) hereof shall bear interest (to the extent that the payment of
such interest shall be legally enforceable) at a rate per annum equal to the
interest rate per annum payable on such Series 1998 Debenture, compounded
quarterly from the most recent Interest Payment Date therefor.
(j) The Series 1998 Debentures shall be redeemable prior to maturity as
provided in Section 3.01(a) hereof.
(k) The Series 1998 Debentures shall be issuable only in registered form
without coupons and only in denominations of $25 and any integral multiple
thereof.
(l) The maximum Extension Period for the Series 1998 Debentures shall be
20 consecutive quarters.
(m) The Guarantee with respect to the Series 1998 Debentures shall
terminate as set forth in Section 11.11 hereof and, in addition, shall terminate
upon the distribution of the Distributable Debentures (as defined in the HECO
Junior Indenture) to the holders of the Trust II Preferred Securities.
SECTION 2.03. Payment of Principal and Interest.
(a) Unless otherwise specified pursuant to Section 2.01(d) hereof,
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
calendar month, interest will be computed on the basis of the actual number of
days elapsed in such period.
(b) Unless otherwise provided with respect to a series of Debentures,
(1) the principal and Redemption Price of and interest on each
Debenture shall be payable in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public
and private debts;
(2) the principal and Redemption Price of any Debenture and
interest payable on the Stated Maturity Date (if other than an Interest
Payment Date) or Redemption Date shall be payable upon surrender of such
Debenture at the office or agency of any Paying Agent therefor;
16
provided, however, that payments of such principal, Redemption Price or
interest in respect of the Series 1998 Debentures to Trust II as the sole
holder thereof or in respect of Global Debentures shall be made in
immediately available funds to Property Trustee II on behalf of Trust II or
to the Depository pursuant to Section 2.12 hereof, as the case may be; and
(3) interest on any Debenture (other than on the Stated Maturity
Date or Redemption Date) shall be paid on each Interest Payment Date
therefor to the Holder thereof at the close of business on the Regular
Record Date therefor, such interest to be payable at the option of the
Company by (i) check mailed to the address of the Person entitled thereto
as such address appears on the Securities Register or (ii) by transfer to
an account maintained by the person entitled thereto as specified in the
Securities Register; provided that proper and timely transfer instructions
have been received ten Business Days prior to the Regular Record Date;
provided however, that (aa) at the written request of the Holder of at
least $10,000,000 aggregate principal amount of Debentures received by the
Registrar not later than ten Business Days prior to the Regular Record Date
for such Interest Payment Date, such interest accrued on such Debenture
will be payable by wire transfer within the continental United States in
immediately available funds to the bank account number of such Holder
specified in such request and entered on the Securities Register by the
Registrar and (bb) payments of such interest made in respect of the Series
1998 Debentures to Trust I as the sole holder thereof or in respect of
Global Debentures shall be made in immediately available funds to Property
Trustee II on behalf of Trust II or the Depository pursuant to Section 2.12
hereof, as the case may be.
(c) Except as specified pursuant to Section 2.01 or Section 4.01(b)
hereof, interest on any Debenture which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Debenture (or one or more Predecessor Debentures) is registered
at the close of business on the Regular Record Date for such interest. Any
interest (as used in this Indenture, the term "interest" shall include quarterly
interest payments, interest on quarterly interest payments not paid on the
applicable Interest Payment Date, and Additional Sums, as applicable) on any
Debenture which is payable, but is not punctually paid or duly provided for, on
any Interest Payment Date (herein called "Defaulted Interest") shall forthwith
cease to be payable to the Holder on the relevant Regular Record Date by virtue
of having been such Holder, and such Defaulted
17
Interest may be paid by the Company, at its election in each case, as provided
in Clause (1) and (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the 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, not less than 15
Business Days prior to the date of the proposed payment, notify the Trustee
and the Paying Agent in writing of the amount of Defaulted Interest
proposed to be paid on each Debenture and the date of the proposed payment,
and at the same time the Company shall deposit with the Paying Agent 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 Paying Agent 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.
The Special Record Date for the payment of such Defaulted Interest shall be
the close of business on the tenth calendar day prior to the date of the
proposed payment. The Trustee shall, in the name and at the expense of the
Company, cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be given to the Holders thereof,
not less than 7 calendar days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been given, such Defaulted Interest shall be paid to the
Persons in whose names the Debentures (or their respective Predecessor
Debentures) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
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 and the Paying Agent of the
proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Paying Agent.
(d) Subject to the foregoing provisions of this Section, each Debenture
delivered under this Junior Indenture upon registration of transfer of or in
exchange for or in lieu of any other Debenture shall carry the rights to
interest accrued
18
and unpaid, and to accrue, which were carried by such other Debenture.
SECTION 2.04. Execution, Authentication and Delivery.
(a) The Debentures shall be executed on behalf of the Company by any two
of its Chairman, its President, its Financial Vice President or any of its
Assistant Treasurers, under its corporate seal imprinted or reproduced thereon.
The signature of any such Officer on the Debentures may be manual or facsimile.
(b) 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 or did not
hold such offices at the date of such Debentures.
(c) No Debenture shall be entitled to any benefit under this Junior
Indenture or be valid or obligatory for any purpose unless there appears on such
Debenture a Certificate of Authentication duly executed by the Trustee by manual
signature of an authorized signatory, and such Certificate of Authentication
upon any Debenture shall be conclusive evidence, and the only evidence, that
such Debenture has been duly authenticated and made available for delivery
hereunder.
(d) The Trustee shall authenticate and deliver Debentures of a series, for
original issue, at one time or from time to time in accordance with the Company
Order referred to below, upon receipt by the Trustee of:
(1) a Board Resolution approving the form or forms and terms of such
Debentures;
(2) a Company Order requesting the authentication and delivery of
such Debentures;
(3) unless previously delivered, this Junior Indenture, and, with
respect to each series of Debentures other than the Series 1998 Debentures,
an indenture supplemental hereto or an Officer's Certificate authorized
pursuant to a Board Resolution setting forth the form of such Debentures
and establishing the terms thereof;
(4) the Debentures of such series, executed on behalf of the Company
in accordance with Section 2.04(a) hereof;
19
(5) an Officer's Certificate certifying that no Default or Event of
Default has occurred and is continuing; and
(6) an Opinion of Counsel to the effect that:
(A) the form or forms and the terms of such Debentures have been
duly authorized by the Company and have been established in conformity with
the provisions of this Junior Indenture; and
(B) such Debentures, when authenticated and delivered by the
Trustee and issued and delivered by the Company in the manner and subject
to any conditions specified in such Opinion of Counsel, will have been duly
issued under this Junior Indenture and will constitute valid and legally
binding obligations of the Company, entitled to the benefits provided by
this Junior Indenture, and enforceable against the Company in accordance
with their terms, subject, as to enforcement to laws relating to or
affecting generally the enforcement of creditors' rights, including,
without limitation, bankruptcy and insolvency laws and to general
principles of equity (whether considered in a proceeding in equity or at
law); and
(C) that this Junior Indenture or any supplemental Junior
Indenture referred to in clause (3) above has been duly authorized,
executed and delivered by the Company and is a valid instrument legally
binding upon the Company, enforceable against the Company in accordance
with its terms, subject as to enforcement to laws relating to or affecting
creditors' rights, including, without limitation, bankruptcy and insolvency
laws and to general principles of equity (whether considered in a
proceeding in equity or at law); and
(D) that all consents, approvals and orders of any commission,
governmental authority or agency required in connection with the issuance
and delivery of such Debentures have been obtained.
(e) The Trustee shall act as the initial authenticating agent.
Thereafter, the Trustee may appoint an authenticating agent. An authenticating
agent may authenticate Debentures whenever the Trustee may do so. Each
reference in this Junior Indenture to authentication by the Trustee includes
authentication by such agent. The Company shall pay any
20
authenticating agent appointed by the Trustee reasonable compensation for its
services. The provisions set forth in Section 7.02, Section 7.03, Section 7.04
and Section 7.07 hereof shall be applicable to any authenticating agent.
(f) The Trustee shall have the right to decline to authenticate and
deliver any Debentures under this Section 2.04 if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken or if the Trustee
in good faith shall determine that such action would expose the Trustee to
personal liability to existing Holders.
SECTION 2.05. Registrar and Paying Agent.
(a) The Company shall maintain or cause to be maintained, within or
outside the State of New York, an office or agency where Debentures of any
series may be presented for registration of transfer or for exchange
("Registrar") for each place of payment for such series of Debentures, a Paying
Agent at whose office such series of Debentures may be presented or surrendered
for payment, and an office or agency where notices and demands to or upon the
Company in respect of the Debentures and this Junior Indenture may be served.
The Registrar shall keep a register (the "Securities Register") of such series
of Debentures and of their transfer and exchange. The Company may have one or
more co-Registrars and one or more additional Paying Agents. The term Registrar
includes any additional registrar and the term Paying Agent includes any
additional paying agent. The principal corporate trust office of the Trustee in
New York, New York, shall initially be the Registrar for the Series 1998
Debentures and agent for service of notice or demands on the Company, and the
Trustee shall initially be the Paying Agent for the Series 1998 Debentures.
(b) The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-Registrar (if not the Company or the Trustee or an
affiliate of the Trustee). The agreement shall implement the provisions of this
Junior Indenture that relate to such agent. The Company shall give prompt
written notice to the Trustee and to the Holders of any change of location of
such office or agency. If at any time the Company shall fail to maintain or
cause to be maintained any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 12.02 hereof. The Company shall notify the Trustee of the name
and address of any such agent. If the Company fails to maintain a Registrar,
Paying Agent or agent for service of notices or demands, the Trustee shall act
as such and shall be entitled to appropriate compensation therefor pursuant to
Section 7.07 hereof. The
21
Company or any Affiliate of the Company may act as Paying Agent, Registrar or
co-Registrar or agent for service of notices and demands.
(c) The Company may also from time to time designate one or more other
offices or agencies where Debentures of any series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice to the Trustee and to
the Holders of any such designation or rescission and of any change in location
of any such other office or agency.
SECTION 2.06. Paying Agent to Hold Money in Trust.
(a) Except as otherwise provided herein, prior to or on each due date of
the principal of and premium (if any) and interest on any Debenture, the Company
shall deposit with the Paying Agent a sum of money sufficient to pay such
principal, premium (if any) and interest so becoming due. The Company shall
require each Paying Agent (other than the Trustee or the Company) to agree in
writing that such Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal of
and premium (if any) and interest on the Debentures and shall notify the Trustee
of any Default by the Company in making any such payment. At any time during
the continuance of any such Default, the Paying Agent shall, upon the request of
the Trustee, forthwith pay to the Trustee all money so held in trust and account
for any money disbursed by it. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and to account for any money
disbursed by it. Upon doing so, the Paying Agent shall have no further
liability for the money so paid over to the Trustee. If the Company, a
Subsidiary or an Affiliate of either of them acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund.
(b) The Companies may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent; however, the Companies shall at all
times be required to maintain a Paying Agent in each place of payment for any
series of Debentures.
(c) Any monies deposited with the Trustee or any Paying Agent, or then
held by the Company in trust, for the payment of the principal of and premium,
if any, or interest on any series of Debentures and remaining unclaimed for two
years after such principal, premium, if any, or interest has become due and
payable shall, at the written request of the Company, be repaid to the Company
and the Holder of such Debentures shall
22
thereafter look, as a general unsecured creditor, only to the Company for
payment thereof.
SECTION 2.07. Debentureholder Lists.
The 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
Debentureholders. If the Trustee is not the Registrar, the Company shall cause
to be furnished to the Trustee on or before the Record Date for each Interest
Payment Date and at such other times as the Trustee may request in writing,
within five Business Days of such request, a list, in such form as the Trustee
may reasonably require of the names and addresses of Debentureholders.
SECTION 2.08. Transfer and Exchange.
(a) When Debentures are presented to the Registrar or a co- Registrar with
a request to register the transfer or to exchange them for an equal aggregate
principal amount of Debentures of the same series of other authorized
denominations having the same date of original issuance and Stated Maturity Date
and bearing the same interest rate, the Registrar shall register the transfer or
make the exchange as requested if its reasonable requirements for such
transactions are met. To permit registrations of transfer and exchanges, the
Company shall execute and the Trustee shall authenticate Debentures, all at the
Registrar's request.
(b) Every Debenture presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by the Holder or his attorney duly
authorized in writing.
(c) The Company shall not require payment of a service charge for any
registration of transfer or exchange of Debentures, but the Company may require
payment of a sum sufficient to pay all taxes, assessments or other governmental
charges that may be imposed in connection with the registration of the transfer
or exchange of Debentures from the Debentureholder requesting such transfer or
exchange (other than any exchange of a temporary Debenture for a definitive
Debenture not involving any change in ownership).
(d) In the event of any redemption, (i) the Company shall not be required
to issue any Debenture or to make, and the Registrar need not register,
transfers or exchanges of any Debenture for a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of Debentures
23
and ending at the close of business on the day of such mailing or (ii) the
Company shall not be required to make, and the Registrar need not register,
transfers or exchanges of any Debenture selected, called or being called for
redemption, except, in the case of any Debenture to be redeemed in part, the
portion thereof not to be redeemed.
SECTION 2.09. Replacement Debentures.
(a) If (i) any mutilated Debenture is surrendered to the Company or the
Trustee, or (ii) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Debenture, and there is
delivered to the Company and the Trustee such bond or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Debenture has been acquired by a bona
fide purchaser, the Company shall execute in exchange for any such mutilated
Debenture or in lieu of any such destroyed, lost or stolen Debenture, a new
Debenture of the same series and of like tenor and principal amount, bearing a
number not contemporaneously outstanding, and the Trustee shall authenticate and
make such new Debenture available for delivery.
(b) In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, or is about to be redeemed by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Debenture, pay or purchase such Debenture, as the case may be.
(c) Upon the issuance of any new Debentures under this Section 2.09, 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) in connection
therewith.
(d) Every new Debenture issued pursuant to this Section 2.09 in lieu of
any mutilated, destroyed, lost or stolen Debenture shall constitute an original
additional contractual obligation of the Company (whether or not the mutilated,
destroyed, lost or stolen Debenture shall be at any time enforceable) and shall
be entitled to all benefits of this Junior Indenture equally and ratably with
any and all other Debentures duly issued hereunder.
(e) The provisions of this Section 2.09 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debentures.
24
SECTION 2.10. Outstanding Debentures; Determinations of Holders' Action.
(a) Debentures outstanding at any time are all the Debentures
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those mutilated, destroyed, lost or stolen Debentures
referred to in Section 2.09 hereof, those redeemed by the Company pursuant to
Article 3 hereof, and those described in this Section 2.10 as not outstanding.
A Debenture does not cease to be outstanding because the Company or an Affiliate
thereof holds the Debenture; provided, however, that in determining whether the
Holders of the requisite principal amount of Debentures have given or concurred
in any request, demand, authorization, direction, notice, consent or waiver
hereunder, Debentures actually known by the Trustee to be owned by the Company
or an Affiliate (other than any Trust so long as any of the Trust Preferred
Securities of such Trust are outstanding) shall be disregarded and deemed not to
be outstanding.
(b) Subject to the foregoing, only Debentures outstanding at the time of
such determination shall be considered in any such determination (including
determinations pursuant to Articles 3, 6 and 9).
(c) If a Debenture is replaced pursuant to Section 2.09 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Debenture is held by a bona fide purchaser.
(d) If the Paying Agent (other than the Company) holds, in accordance with
this Junior Indenture, at the Stated Maturity Date or on a Redemption Date,
money sufficient to pay the Debentures payable on that date, then immediately on
the Stated Maturity Date or such Redemption Date, as the case may be, such
Debentures shall cease to be outstanding, and interest, if any, on such
Debentures shall cease to accrue.
SECTION 2.11. Temporary Debentures.
(a) The Company may execute temporary Debentures, and upon the Company's
Order, the Trustee shall authenticate and make such temporary Debentures
available for delivery. Temporary Debentures shall be printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
in the same series and principal amount and of like tenor as the definitive
Debentures in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the Officers of the
Company executing such Debentures may determine, as conclusively evidenced by
their execution of such Debentures.
25
(b) After the preparation of definitive Debentures, the temporary
Debentures shall be exchangeable for definitive Debentures of the same series
upon surrender of the temporary Debentures at the office or agency of the
Company designated for such purpose pursuant to Section 2.05 hereof, without
charge to the Holders thereof. Upon surrender for cancellation of any one or
more temporary Debentures, the Company shall execute a like principal amount of
definitive Debentures of the same series of authorized denominations, and the
Trustee, upon receipt of a Company Order, shall authenticate and make such
Debentures available for delivery in exchange therefor. Until so exchanged, the
temporary Debentures shall in all respects be entitled to the same benefits
under this Junior Indenture as definitive Debentures.
SECTION 2.12. Book-Entry System.
(a) In order to utilize a book-entry-only system for all or any portion of
the Debentures of any series, all or a portion of the Debentures of any series
may be issued in the form of one or more fully registered Debentures of the same
series for the aggregate principal amount of such Debentures of each Issue Date,
interest rate and Stated Maturity Date (a "Global Debenture"), which Global
Debenture shall be registered in the name of a depository (the "Depository")
selected by the Company or in the name of such Depository's nominee. Each
Global Debenture shall be delivered by the Trustee to the Depository or pursuant
to the Depository's instruction and shall bear a legend substantially to the
following effect: "Except as otherwise provided in Section 2.12 of the Junior
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 any other provision of this Section 2.12 or of Section
2.08 hereof, a Global Debenture may be transferred in whole but not in part and
in the manner provided in Section 2.08 hereof only to a nominee of such
Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by the Depository or any nominee to a successor
Depository or any nominee of such successor.
(c) So long as the Depository for a Global Debenture, or its nominee, is
the registered owner of such Global Debenture, such Depository or such nominee,
as the case may be, shall be considered the sole owner or Holder of the
Debenture represented by such Global Debenture for all purposes under this
Indenture. Except as provided below, owners of beneficial interests in a Global
Debenture shall not be entitled to have any of the individual Debentures of the
series represented by
26
such Global Debenture registered in their names, shall not receive or be
entitled to receive physical delivery of any such Debenture in definitive form
and shall not be considered the owners or Holders thereof under this Indenture.
(d) Payments of principal of and premium, if any, and interest on
individual Debentures represented by a Global Debenture registered in the name
of a Depository or its nominee shall be made to the Depository or its nominee,
as the case may be, as the registered owner of the Global Debenture representing
such Debentures. None of the Company, the Trustee, any Paying Agent or the
Registrar for such Debenture shall have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Debenture representing such Debenture or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
(e) If (i) at any time the Depository for Global Debentures of any series
of Debentures notifies the Company that it is unwilling or unable to continue as
Depository for such Global Debentures and no successor depository shall have
been appointed within 90 days after the Company receives such notice, or if at
any time the Depository ceases to be a clearing agency registered under the
Exchange Act or other applicable statute or regulation at a time when the
Depository is required to be so registered to act as such depository, (ii) the
Company determines in its sole discretion, that the Debentures of any series
shall no longer be represented by one or more Global Debentures and delivers to
the Trustee an Officer's Certificate evidencing such determination, or (iii) an
Event of Default with respect to such Global Debenture occurs and is continuing,
then the provisions of this Section 2.12 shall no longer apply to the Debentures
of such series. In such event, the Company will execute and the Trustee, upon
receipt of an Officer's Certificate evidencing such determination by the
Company, will authenticate and deliver Debentures of such series and of like
tenor in definitive registered form, in authorized denominations, and in
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 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 Global Debentures pursuant to this Section 2.12 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
27
Trustee shall deliver such Debentures to the Persons in whose names such
Debentures are so registered.
(f) Members of or participants in the Depository shall have no rights
under this Junior Indenture with respect to any Global Debenture held on their
behalf by the Depository, and such Depository or its nominee, as the case may
be, may be treated by the Company, the Trustee, and any agent of the Company or
the Trustee as the Holder of such Global Debentures for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee, or any agent of the Company or the Trustee, from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its members or participants, the
operation of customary practices governing exercise of the rights of a Holder of
any Debenture, including without limitation the granting of proxies or other
authorization of participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a Holder
is entitled to give or take under this Junior Indenture.
SECTION 2.13. Cancellation.
All Debentures surrendered for payment, redemption by the Company pursuant
to Article 3 hereof or registration of transfer or exchange shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by the Trustee. The Company may at any time
deliver to the Trustee for cancellation any Debentures previously authenticated
and made available for delivery hereunder which the Company may have acquired in
any manner whatsoever, and all Debentures so delivered shall be promptly
canceled by the Trustee. The Company may not reissue or issue new Debentures to
replace Debentures it has paid or delivered to the Trustee for cancellation. No
Debentures shall be authenticated in lieu of or in exchange for any Debentures
canceled as provided in this Section 2.13, except as expressly permitted by this
Junior Indenture. All canceled Debentures held by the Trustee shall be returned
by the Trustee to the Company.
SECTION 2.14. CUSIP Numbers.
The Company in issuing any series of 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 Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on such series of Debentures or as contained in any notice of
redemption and that reliance may be
28
placed only on the other identification numbers printed on such series of
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 3. REDEMPTION
SECTION 3.01. Redemption; Notice to Trustee.
(a) At any time on or after December 15, 2003, at the option of the
Company, the Series 1998 Debentures shall be redeemable in whole or in part.
Notwithstanding the foregoing, if a Special Event (as defined in the HECO Junior
Indenture) shall occur and be continuing, then, if HECO opts to redeem the HECO
Series 1998 Debentures pursuant to the HECO Junior Indenture, the Series 1998
Debentures shall be redeemable in whole (but not in part), on the same terms and
at the same time as the HECO Series 1998 Debentures. In the case of any
redemption, the Series 1998 Debentures shall be redeemable at 100% of the
principal amount thereof plus accrued and unpaid interest to the Redemption
Date. The Series 1998 Debentures shall not be subject to any sinking fund.
Series 1998 Debentures in denominations larger than $25 may be redeemed in part
but only in integral multiples of $25.
(b) The redemption terms for any additional series of Debentures shall be
as specified in an indenture supplemental hereto or in an Officer's Certificate
authorized by a Board Resolution creating such series of Debentures.
(c) If any or all of the Debentures are to be redeemed pursuant to Section
3.01 (a) or (b) hereof, the Company shall deliver to the Trustee at least 45
days prior to the Redemption Date a Company Order specifying the series and
principal amount of Debentures to be redeemed and the Redemption Date and
Redemption Price for such Debentures. Such Company Order shall be accompanied
by a Board Resolution authorizing such redemption. If the Debentures of a
series are held by a Trust, the Company shall also deliver a copy of such
Company Order to the Property Trustee for such Trust.
SECTION 3.02. Selection of Debentures to be Redeemed.
If less than all the outstanding Debentures of a series are to be redeemed
at any time, the Trustee shall select the Debentures of such series to be
redeemed by lot or by any other method the Trustee considers fair and
appropriate. The Trustee shall make the selection at least 30 but not more than
60 days before the Redemption Date from outstanding Debentures of such
29
series not previously called for redemption. Provisions of this Junior Indenture
that apply to Debentures called for redemption also apply to portions of
Debentures called for redemption. The Trustee shall notify the Company promptly
of the Debentures or portions of Debentures to be redeemed.
SECTION 3.03. Notice of Redemption.
(a) At least 30 days but not more than 60 days before the Redemption Date,
the Trustee, in the Company's name and at the Company's expense, shall mail or
cause to be mailed a notice of redemption by first-class mail, postage prepaid,
to each Holder of Debentures to be redeemed at such Holder's last address as it
appears in the Securities Register.
(b) The notice of redemption shall identify the Debentures to be redeemed,
the provision of the Debentures or this Junior Indenture pursuant to which the
Debentures called for redemption are being redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that payment of the Redemption Price of Debentures called for
redemption will be made only upon surrender of such Debentures to the
Paying Agent;
(5) if fewer than all the outstanding Debentures of any series are to
be redeemed, the identification and principal amounts of the particular
Debentures to be redeemed and that, on and after the Redemption Date, upon
surrender of such Debentures, a new Debenture or Debentures of the same
series and of like tenor and in a principal amount equal to the unredeemed
portion thereof will be issued; and
(6) that, unless the Company defaults in paying the Redemption Price
of the Debentures called for redemption, plus accrued interest thereon to
the Redemption Date, interest will cease to accrue on such Debentures on
and after the Redemption Date.
(c) Any notice of redemption given in the manner provided herein shall be
conclusively presumed to have been given, whether or not such notice is actually
received. Failure to mail any notice or defect in the mailed notice or the
mailing thereof in respect of any Debenture shall not affect the validity of the
redemption of any other Debenture.
30
SECTION 3.04. Effect of Notice of Redemption.
After notice of redemption has been given, Debentures called for redemption
shall become due and payable on the Redemption Date and at the Redemption Price
and from and after the Redemption Date (unless the Company shall default in the
payment of the Redemption Price and accrued interest, in which event interest
shall continue to accrue at the same rate until the Redemption Price is paid in
full), such Debentures shall cease to bear interest. Upon the later of the
Redemption Date and the date such Debentures are surrendered to the Paying
Agent, such Debentures shall be paid at the Redemption Price, plus accrued
interest to the Redemption Date; provided that installments of interest on
Debentures with an Interest Payment Date which is on or prior to the Redemption
Date shall be payable to the Holders of such Debentures, or one or more
Predecessor Debentures, registered as such at the close of business on the
Regular Record Dates therefor according to their terms and provisions.
SECTION 3.05. Deposit of Redemption Price.
On or prior to the Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or an Affiliate is the Paying Agent, shall
segregate and hold in trust or cause such Affiliate to segregate and hold in
trust) money sufficient to pay the Redemption Price of, and accrued interest on,
all Debentures to be redeemed on that Redemption Date. The Paying Agent shall
return to the Company any money in excess of the amount sufficient to pay the
Redemption Price of, and accrued interest on, all Debentures to be redeemed.
SECTION 3.06. Debentures Redeemed in Part.
Upon surrender of a Debenture that is redeemed in part, the Trustee shall
authenticate for the Holder a new Debenture of the same series and in a
principal amount equal to the unredeemed portion of such Debenture.
ARTICLE 4. COVENANTS
SECTION 4.01. Payment of Debentures.
(a) The Company shall pay the principal of and premium, if any, and
interest (including interest accruing during an Extension Period and/or on or
after the filing of a petition in bankruptcy or reorganization relating to the
Company, whether or not a claim for post-filing interest is allowed in such
proceeding) on the Debentures on or prior to the dates and in the manner
provided in such Debentures or pursuant to this Junior Indenture. An
installment of principal, premium, if any, or interest shall be considered paid
on the applicable due
31
date if on such date the Trustee or the Paying Agent holds, in accordance with
this Junior Indenture, money sufficient to pay all of such installment then due.
With respect to any Debenture, the Company shall pay interest on overdue
principal and interest on overdue installments of interest (including interest
accruing during an Extension Period and/or on or after the filing of a petition
in bankruptcy or reorganization relating to the Company, whether or not a claim
for post-filing interest is allowed in such proceeding), to the extent lawful,
at the rate per annum borne by such Debenture, compounded quarterly. Interest on
overdue interest shall accrue from the date such amounts become overdue.
(b) Notwithstanding the provisions of Section 4.01(a) hereof or any other
provision herein to the contrary, the Company shall have the right in its sole
and absolute discretion at any time and from time to time while the Debentures
of any series are outstanding, so long as no Event of Default with respect to
such series of Debentures has occurred and is continuing, to defer payments of
interest by extending the interest payment period for such series of Debentures
for the Extension Period specified pursuant to Section 2.01 hereof for such
series of Debentures; provided that such Extension Period shall not extend
beyond the Stated Maturity Date or Redemption Date of any Debenture of such
series, and provided further that at the end of each Extension Period the
Company shall pay all amounts then due on any Interest Payment Date, including
interest then accrued and unpaid (together with interest thereon to the extent
permitted by applicable law at the rate per annum provided for such interest for
such series of Debentures). Prior to the termination of an Extension Period, the
Company may shorten or may further extend the interest payment period for such
series of Debentures; provided that any such further extension of the Extension
Period, together with all previous extensions thereof, may not exceed the
maximum duration of the Extension Period for such series of Debentures specified
pursuant to Section 2.01 hereof or extend beyond the Stated Maturity Date or
Redemption Date of any Debenture of such series. The Company shall give the
Trustee notice of the Company's election to begin an Extension Period for any
series of Debentures and any shortening or extension thereof at least one
Business Day prior to the date the notice of the record or payment date of the
related distribution on the Trust Preferred Securities issued by any Trust which
is the Holder of the Debentures of such series or the date payment of interest
on such Debentures is required to be given to any national securities exchange
on which such Trust Preferred Securities or Debentures are then listed or other
applicable self-regulatory organization, but in any event not less than two
Business Days prior to the Record Date fixed by the Company for the payment of
such interest.
32
The Company shall give or cause the Trustee to give notice (a form of which
shall be provided by the Company to the Trustee) of the Company's election to
begin an Extension Period to the Holders by first-class mail, postage prepaid.
Upon the termination of any such Extension Period and the payment of all amounts
then due on any Interest Payment Date, the Company may elect to begin a new
Extension Period subject to the requirements set forth herein.
SECTION 4.02. Prohibition on Distributions, Etc.
The Company shall not, either directly or indirectly through a Subsidiary,
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its Capital Stock,
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any of its debt securities (including other Debentures)
that rank pari passu with or junior in interest to any series of Debentures, or
(iii) make any guarantee payments with respect to any guarantee issued by the
Company if such guarantee ranks pari passu with or junior in interest to such
series of Debentures (other than (a) 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 (b) purchases by the Company of its common stock required
to prevent the loss or secure the renewal or reinstatement of any government
license or franchise held by the Company) if at such time (i) there shall have
occurred any event of which the Company has actual knowledge that (a) with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default with respect to such series of Debentures and (b) in respect of which
the Company shall not have taken reasonable steps to cure in accordance with
this Junior Indenture, or (ii) the Company shall have given notice of its
election of an Extension Period for such Debentures and shall not have rescinded
such notice, or such Extension Period, or any extension thereof, shall be
continuing.
SECTION 4.03. SEC Reports.
(a) The Company shall file with the Trustee, within 15 days after it files
them with the SEC, copies of its annual report and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which the Company is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Company
is not subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the Trustee such information,
33
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which are specified in
Sections 13 or 15(d) of the Exchange Act; provided, however, that this
requirement shall be satisfied if HECO files reports with the SEC that include
the operations of the Company on a consolidated basis. The Company shall also
comply with the provisions of Section 314(a) of the TIA.
(b) Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
SECTION 4.04. Compliance Certificates.
(a) The Company shall deliver to the Trustee, within 90 days after the end
of each of the Company's fiscal years, commencing with the Company's fiscal year
ending December 31, 1998, an Officer's Certificate stating whether or not the
signer knows of any Default or Event of Default. Such certificate shall contain
a certification from the principal executive officer, principal financial
officer or principal accounting officer of the Company as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Junior Indenture. For purposes of this Section 4.04(a), such compliance
shall be determined without regard to any period of grace or requirement of
notice provided under this Junior Indenture. If such Officer does know of such a
Default or Event of Default, the Officer's Certificate shall describe any such
Default or Event of Default, and its status. Such Officer's Certificate need not
comply with Sections 12.04 and 12.05 hereof.
(b) The Company shall deliver to the Trustee any information reasonably
requested by the Trustee in connection with the compliance by the Trustee or the
Company with the TIA.
(c) The Company shall deliver to the Trustee, as soon as possible and in
any event within five days after the Company becomes aware of the occurrence of
any Event of Default or an event which, with notice or the lapse of time or
both, would constitute an Event of Default, an Officer's Certificate setting
forth the details of such Event of Default or default and the action that the
Company proposes to take with respect thereto.
34
SECTION 4.05. Further Instruments and Acts.
Upon request of the Trustee, the Company shall execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Junior Indenture.
SECTION 4.06. Additional Sums.
If and so long as a Trust is the Holder of all Debentures of a particular
series, the Company shall pay to such Trust such Additional Sums on the
Debentures of such series in proportion to the amount of assets of such Trust
made up by the Debentures of such series.
SECTION 4.07. Payment of Expenses of Trust.
If and so long as a Trust is the Holder of all Debentures of a particular
series, the Company covenants for the benefit of the Holders of such Debentures
to pay all of the obligations, costs and expenses of such Trust in accordance
with the terms of the trust agreement for said Trust and to pay the taxes of
said Trust (if any) in accordance with the terms of said trust agreement in
order to permit said Trust to make distributions on and redemptions of the
applicable Trust Preferred Securities in accordance with the terms of said trust
agreement.
SECTION 4.08. Ownership of Trust Common Securities.
If and so long as a Trust is the Holder of all Debentures of a particular
series, the Company shall (i) maintain, directly or indirectly, 100% ownership
of said Trust's Trust Common Securities; provided that certain successors to the
Company which are permitted as provided below may succeed to the Company's
ownership of said Trust Common Securities, (ii) not voluntarily dissolve, wind-
up or liquidate said Trust, except (a) in connection with a distribution of said
Debentures to the holders of said Trust's Trust Preferred Securities in
liquidation of said Trust or (b) in connection with certain mergers,
consolidations or amalgamations as permitted by said Trust's trust agreement,
and (iii) use its reasonable efforts, consistent with the terms and provisions
of said trust agreement, to cause said Trust to remain classified as a grantor
trust and not as an association taxable as a corporation for United States
federal income tax purposes.
35
ARTICLE 5. SUCCESSOR CORPORATION
SECTION 5.01. When the Company May Merge, Etc.
(a) The Company may not consolidate with or merge with or into, or sell,
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety (either in one transaction or a series of
transactions) to any Person and no Person shall consolidate or merge with or
into the Company, or sell, convey, transfer or lease its properties and assets
as an entirety or substantially as an entirety (either in one transaction or a
series of transactions) to the Company unless:
(1) the Person formed by or surviving such consolidation or merger or
to which such sale, conveyance, transfer or lease shall have been made (the
"Successor") if other than the Company, (i) is organized under the laws of
the United States of America or any state thereof or the District of
Columbia, and (ii) shall expressly assume by a supplemental Junior
Indenture, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company under the Debentures and
this Junior Indenture;
(2) immediately prior to and after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the Successor
Person as a result of such transaction as having been incurred by such
Person at the time of such transaction), no Default or Event of Default,
and no event which, after notice or lapse of time or both, would become an
Event of Default, shall have occurred and be continuing;
(3) such transaction is permitted under the Trust II Agreement (if
applicable) and does not give rise to a breach or violation of the Trust II
Agreement (if applicable); and
(4) the Company delivers to the Trustee an Officer's Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, sale,
conveyance, transfer or lease and such supplemental Junior Indenture
complies with this Junior Indenture.
(b) The Successor will be the successor to the Company, and will be
substituted for, and may exercise every right and power and become the obligor
on the Debentures, with the same effect as if the Successor had been named as
the Company herein but, in the case of a sale, conveyance, transfer or lease of
all or substantially all of the assets of the Company, the
36
predecessor Company will not be released from its obligation to pay the
principal of and premium, if any, and interest on the Debentures.
ARTICLE 6. DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
(a) An "Event of Default" occurs with respect to the Debentures of any
series if one of the following shall have occurred and be continuing:
(1) The Company defaults in the payment, when due and payable, of (i)
interest on any Debenture of that series and the default continues for a
period of 30 days; provided, that during an Extension Period for the
Debentures of that series, failure to pay interest on the Debentures of
that series shall not constitute a Default or Event of Default hereunder,
or (ii) the principal of or premium, if any, on any Debentures of that
series when the same becomes due and payable on the Stated Maturity Date
thereof, upon acceleration, on any Redemption Date, or otherwise;
(2) The Company defaults in the performance of or fails to comply
with, in a material respect, any of its other covenants or agreements in
the Debentures of that series or this Junior Indenture or in any indenture
supplemental hereto or Officer's Certificate authorized by a Board
Resolution under which the Debentures of that series may have been issued
(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 such failure continues for 90 days after
receipt by the Company of a written "Notice of Default"; provided that such
90-day period shall be automatically extended if corrective action is
initiated by the Company within such period and is being diligently
pursued;
(3) The Company or HECO, pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it in
an involuntary case or proceeding;
37
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property, and such Custodian is not
discharged within 60 days;
(D) makes a general assignment for the benefit of its creditors;
or
(E) admits in writing its inability to pay its debts generally
as they become due; or
(4) A court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or HECO in an involuntary
case or proceeding;
(B) appoints a Custodian of the Company or HECO for all or
substantially all of its properties;
(C) orders the liquidation of the Company or HECO; and
(D) in each case the order or decree remains unstayed and in
effect for 60 days.
(b) The foregoing will constitute an Event of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
(c) The term "Bankruptcy Law" means Title 11 of the United States Code, or
any similar federal or state law for the relief of debtors. "Custodian" means
any receiver, trustee, assignee, liquidator, sequestrator, custodian or similar
official under any Bankruptcy Law.
(d) A Default under clause (2) above is not an Event of Default until (i)
the Trustee provides a written "Notice of Default" to the Company or the
Holders of at least 25% in aggregate principal amount of the Debentures of that
series at the time outstanding or, if that series of Debentures is held by a
Trust, the holders of at least 25% in aggregate liquidation preference of the
outstanding Trust Preferred Securities of that Trust, provide a written "Notice
of Default" to the Company and the Trustee and (ii) the Company does not cure
such Default within the time specified in clause (2) above (including any
automatic extensions thereof) after receipt of such notice. Any such notice must
be in writing, specify the
38
Default, demand that it be remedied and state that such notice is a "Notice of
Default."
SECTION 6.02. Acceleration.
(a) If any Event of Default with respect to the Debentures of any series
other than an Event of Default under clause (3) or (4) of Section 6.01 hereof
occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Debentures of that series then outstanding may
declare the principal of all the Debentures of that series due and payable;
provided that in the case of a series of Debentures then held by a Trust, if
upon an Event of Default with respect to the Debentures of that series the
Trustee has, or the Holders of at least 25% in aggregate principal amount of the
Debentures of that series have, failed to declare the principal of the
Debentures of that series to be immediately due and payable, the holders of at
least 25% in aggregate liquidation preference of the outstanding Trust Preferred
Securities of that Trust shall have such right by a notice in writing to the
Company and the Trustee. If an Event of Default specified in clause (3) or (4)
of Section 6.01 hereof occurs, the principal of and interest on all the
Debentures shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Debentureholders.
Upon such an acceleration, such principal, together with all interest accrued
thereon, shall be due and payable immediately.
(b) The Holders of at least a majority in aggregate principal amount of
the Debentures of that series at the time outstanding, in each case, by notice
to the Trustee, may rescind and annul such an acceleration and waive its
consequences if the rescission, annulment and waiver would not conflict with any
judgment or decree and if all existing Events of Default with respect to such
series of Debentures have been cured or waived, except nonpayment of principal
that has become due solely because of acceleration, and a sum sufficient to pay
all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Trustee; provided that if the principal
of a series of Debentures has been declared due and payable by the holders of
the Trust Preferred Securities of a Trust, no rescission of acceleration will be
effective unless consented to by the holders of at least a majority in aggregate
liquidation preference of the Trust Preferred Securities of that Trust and
further provided that should the Holders of such Debentures fail to rescind or
annul such declaration and waive such default, the holders of a majority in
aggregate liquidation preference of the Trust Preferred Securities of a Trust
that holds such Debentures may make such rescission, annulment and
39
waiver. No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.03. Other Remedies.
(a) If an Event of Default occurs and is continuing, the Trustee may, in
its own name or as trustee of an express trust, institute, pursue and prosecute
any proceeding, including, without limitation, any action at law or suit in
equity or other judicial or administrative proceeding to collect the payment of
principal of or premium, if any, or interest on the Debentures of the series
that is in default, to enforce the performance of any provision of the
Debentures of that series or this Junior Indenture or to obtain any other
available remedy.
(b) The Trustee may maintain a proceeding even if it does not possess any
of the Debentures or does not produce any of the Debentures in the proceeding.
A delay or omission by the Trustee, any Debentureholder or the holders of Trust
Preferred Securities in exercising any right or remedy accruing upon an Event of
Default shall not impair such right or remedy or constitute a waiver of, or
acquiescence in, such Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults.
If a Default or Event of Default with respect to a series of Debentures has
occurred and is continuing, the Holders of at least a majority in aggregate
principal amount of the Debentures of that series at the time outstanding, or,
if that series of Debentures is held by a Trust, the holders of at least a
majority in aggregate liquidation preference of the Trust Preferred Securities
of that Trust, in each case by notice to the Trustee and the Company, may waive
an existing Default or Event of Default and its consequences except a Default or
Event of Default in the payment of the principal of or premium, if any, or
interest on any Debenture of that series (unless such default has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Trustee) or a default
in respect of a covenant or provisions which under this Indenture cannot be
modified or amended without the consent of the Holder of each of such
outstanding Debentures. When a Default or Event of Default is waived, it is
deemed cured and shall cease to exist, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any consequent right.
40
SECTION 6.05. Control by Majority.
The Holders of a majority in aggregate principal amount of the Debentures
of each series affected (with each such series voting as a class) may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee. If
the Debentures of such series are held by a Trust and the Trustee and the
trustee of such Trust have failed to so direct or to so exercise, the holders of
at least 25% in aggregate liquidation preference of the outstanding Trust
Preferred Securities of that Trust may institute proceedings to so direct or so
exercise. However, the Trustee may refuse to follow any direction that
conflicts with law or this Junior Indenture or that the Trustee determines in
good faith is unduly prejudicial to the rights of other Debentureholders or may
involve the Trustee in personal liability. The Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction, including withholding notice to the Holders of the Debentures of such
series of continuing default (except in the payment of the principal of (other
than any mandatory sinking fund payment) or premium, if any, or interest on any
Debentures) if the Trustee considers it in the interest of the Holders of the
Debentures to do so.
SECTION 6.06. Limitation on Suits.
(a) Except as provided in Sections 6.07 and 6.13 hereof, no Holder of
Debentures and no holder of Trust Preferred Securities of a Trust which is the
Holder of all the Debentures of such series may pursue any remedy with respect
to this Junior Indenture or the Debentures of such series unless:
(1) the Holders of Debentures or the holders of such Trust Preferred
Securities give to the Trustee written notice stating that an Event of
Default with respect to the corresponding Debentures is continuing;
(2) the Holders of at least 25% in aggregate principal amount of the
Debentures of that series or the holders of at least 25% in aggregate
liquidation preference of such Trust Preferred Securities make a written
request to the Trustee to pursue a remedy;
(3) the Holders of Debentures or the holders of such Trust Preferred
Securities provide to the Trustee reasonable security and indemnity against
any loss, liability or expense satisfactory to the Trustee;
41
(4) the Trustee does not comply with the request within 60 days after
receipt of the notice, the request and the offer of security and indemnity;
and
(5) during such 60-day period, the Holders of at least a majority in
aggregate principal amount of the Debentures of that series or the holders
of at least a majority in aggregate liquidation preference of such Trust
Preferred Securities do not give the Trustee a direction inconsistent with
the request.
In addition, no holder of Trust Preferred Securities of the Trust which is the
Holder of that series of Debentures may pursue any remedy with respect to this
Junior Indenture or the Debentures unless the above conditions have been
complied with and the Property Trustee for such Trust has also failed to act for
60 days. In such a case, the Holders of at least 25% in aggregate liquidation
preference of such outstanding Trust Preferred Securities may institute
proceedings to pursue a remedy provided for herein.
(b) A Holder of Debentures or a holder of Trust Preferred Securities may
not use this Junior Indenture to prejudice the rights of another Debentureholder
or a holder of Trust Preferred Securities or to obtain a preference or priority
over another Debentureholder or holder of Trust Preferred Securities.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Junior Indenture, the right of
any Holder to receive payment of the principal of and premium (if any) or
interest on the Debentures held by such Holder, on or after the respective due
dates expressed in the Debentures (in the case of interest, as the same may be
extended pursuant to Section 4.01(b) hereof) or any Redemption Date, is absolute
and unconditional and such right and the right to bring suit for the enforcement
of any such payment on or after such respective dates shall not be impaired or
affected adversely without the consent of such Holder.
SECTION 6.08. Collection Suit by the Trustee.
If an Event of Default described in Section 6.01(1) hereof occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company or any obligor on the Debentures for the
whole amount owing with respect to the Debentures and the amounts provided for
in Section 7.07 hereof.
42
SECTION 6.09. The Trustee May File Proofs of Claim.
(a) In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or its properties or assets, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(1) to file and prove a claim for the whole amount of the principal
of and premium, if any, and interest on the Debentures and to file such
other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding;
and
(2) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and any
Custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
7.07 hereof.
(b) Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debentures
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
(a) If the Trustee collects any money pursuant to this Article 6, it
shall, subject to Article 10 hereof, pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07 hereof;
SECOND: to Holders of Debentures in respect of which or for the benefit
of which such money has been collected for amounts due and unpaid on such
Debentures for the principal amount, Redemption
43
Price or interest, if any, as the case may be, ratably, without preference
or priority of any kind, according to such amounts due and payable on such
Debentures; and
THIRD: the balance, if any, to the Company.
(b) Except as otherwise set forth in the Debentures, the Trustee may fix a
Record Date and payment date for any payment to Debentureholders pursuant to
this Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Junior
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant (other than the Trustee) in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 6.11 does not apply to a suit
by the Trustee, a suit by a Holder of Debentures or holder of Trust Preferred
Securities pursuant to Section 6.07 hereof or a suit by Holders of Debentures of
more than 10% in aggregate principal amount of the Debentures of any series or,
if a series of Debentures is held by a Trust, the holders of more than 10% in
aggregate liquidation preference of the Trust Preferred Securities of that
Trust.
SECTION 6.12. Waiver of Stay; Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, that would
prohibit or forgive the Company from paying all or any portion of the principal
of or premium, if any, or interest on the Debentures as contemplated herein or
affect the covenants or the performance by the Company of its obligations under
this Junior Indenture; and the Company (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
44
SECTION 6.13. Suits by Holders of Trust Preferred Securities.
Notwithstanding anything else contained herein, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Company to pay interest or principal on Debentures held by a Trust on the date
such interest or principal is otherwise payable, a holder of Trust Preferred
Securities of such Trust may institute a direct action for payment against the
Company after such respective due date and this Indenture may not be amended to
remove the foregoing right to bring such a direct action without the prior
written consent of all the Holders of such Trust Preferred Securities affected
thereby. Notwithstanding any payment made to such holder of Trust Preferred
Securities in connection with a direct action, the Company shall remain
obligated to pay the principal of, premium on, if any, or interest on the
Debentures held by such Trust or the relevant Property Trustee and shall be
subrogated to the rights of the holders of such Trust Preferred Securities with
respect to payments on such Trust Preferred Securities to the extent of any
payments made by the Company to such holder in any direct action.
ARTICLE 7. THE TRUSTEE
SECTION 7.01. Duties of the Trustee.
(a) If an Event of Default occurs and is continuing with respect to the
Debentures of any series, the Trustee shall exercise the rights and powers
vested in it by this Junior Indenture with respect to that series and use the
same degree of care and skill in its exercise as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default with respect to
the Debentures of any series, (i) the Trustee need perform only those duties
with respect to that series that are specifically set forth in this Junior
Indenture or the TIA and no others; and (ii) in the absence of bad faith on its
part, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Junior
Indenture. However, in the case of any certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Junior Indenture.
45
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) this Section 7.01(c) does not limit the effect of Section 7.01(b)
hereof;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Every provision of this Junior Indenture that in any way relates to
the Trustee is subject to Section 7.01(a), (b), (c) and (e) and Section 7.02
hereof.
(e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives security and indemnity reasonably satisfactory to it against
any loss, liability or expense (including reasonable counsel fees).
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. Except as otherwise
agreed in writing, the Trustee shall not be liable for interest on any money
held by it hereunder.
SECTION 7.02. Rights of the Trustee.
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate and an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officer's Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
46
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it reasonably believes to be authorized or within its
rights or powers.
(e) 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, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Junior Indenture at the request or direction of
any of the Holders pursuant to this Junior Indenture, unless such Holders shall
have offered to the Trustee reasonable security and indemnity against the costs,
expenses and liabilities (including reasonable counsel fees) which might be
incurred by it in compliance with such request or direction.
(g) The Trustee shall not be deemed to have notice of any Event of Default
unless a Trust Officer of the Trustee has actual knowledge thereof or unless
written notice of any event that is in fact such a default is received by the
Trustee at the principal corporate trust office of the Trustee, and such notice
references the applicable series of Debentures and this Indenture.
SECTION 7.03. Individual Rights of the Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Debentures and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee. Any Paying Agent,
Registrar or co-Registrar may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11 hereof.
SECTION 7.04. The Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Junior Indenture or the Debentures. The Trustee shall not be accountable for
the Company's use of the proceeds from the Debentures, and the Trustee shall not
be responsible for any statement in this Junior Indenture or the Debentures or
any report or certificate issued by the Company hereunder or any registration
statement relating to the Debentures (other than the Trustee's Certificate of
Authentication and the Trustee's Statement of Eligibility on Form T-1), or the
determination as to which beneficial owners are entitled to receive any notices
hereunder.
47
SECTION 7.05. Notice of Defaults.
If a Default occurs and is continuing with respect to the Debentures of any
series and if it is known to the Trustee, the Trustee shall mail to each Holder
of a Debenture of that series notice of the Default within 90 days after the
occurrence thereof unless such Default shall have been cured or waived. Except
in the case of a Default described in Section 6.01(1) hereof, the Trustee may
withhold such notice if and so long as a committee of Trust Officers in good
faith determines that the withholding of such notice is in the interests of the
Holders of the Debentures of that series. The Trustee shall not be charged with
knowledge of any Default (except in the case of a Default under Section 6.01(1)
hereof) unless a responsible Trust Officer assigned to the Corporate Trust
Department of the Trustee shall have actual knowledge of the Default. The
second sentence of this Section 7.05 shall be in lieu of the proviso to TIA
Section 315(b). Said proviso is hereby expressly excluded from this Junior
Indenture, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
(a) Within 60 days after each May 31, beginning with the May 31 next
following the date of this Junior Indenture, the Trustee shall mail to each
Debentureholder, and such other holders that have submitted their names to the
Trustee for such purpose, a brief report dated as of such May 31 in accordance
with and to the extent required under TIA Section 313.
(b) A copy of each report at the time of its mailing to Debentureholders
shall be filed with the Company, the SEC and any securities exchange on which
the Debentures are listed. The Company agrees to promptly notify the Trustee
whenever the Debentures become listed on any securities exchange and of any
listing thereof.
SECTION 7.07. Compensation and Indemnity.
(a) The Company agrees:
(1) to pay to the Trustee from time to time such compensation as
shall be agreed in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation, to the fullest
extent permitted by applicable law, shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust);
(2) to reimburse the Trustee upon its request for reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of
48
this Junior Indenture (including the reasonable compensation and the
expenses, and advances of its agents and counsel; provided that prior to
any Event of Default, the Trustee shall only have one counsel at the same
time), including all reasonable expenses and advances incurred or made by
the Trustee in connection with any Event of Default or any membership on
any creditors' committee, except any such expense or advance as may be
attributable to its negligence, willful misconduct or bad faith; and
(3) to indemnify the Trustee, its officers, directors and
shareholders, for, and to hold it harmless against, any and all loss,
liability, damage, claim or expense, including taxes (other than taxes
based on the income of the Trustee), incurred without negligence or willful
misconduct on its part, 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 or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
(b) Before, after or during an Event of Default with respect to the
Debentures of a series, the Trustee shall have a claim and lien prior to the
Debentures of that series as to all property and funds held by it hereunder for
any amount owing it for its fees and expenses or any predecessor Trustee
pursuant to this Section 7.07, except with respect to funds held by the Trustee
or any Paying Agent in trust for the payment of principal of or premium, if any,
or interest on particular Debentures pursuant to Section 2.06 or Section 8.01
hereof.
(c) The Company's payment obligations pursuant to this Section 7.07 are
not subject to Article 10 of this Junior Indenture and shall survive the
discharge of this Junior Indenture. When the Trustee renders services or incurs
expenses after the occurrence of a Default specified in Section 6.01 hereof, the
compensation for services and expenses are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
(a) The Trustee may resign at any time by so notifying the Company in
writing at least 30 days prior to the date of the proposed resignation;
provided, however, no such resignation shall be effective until a successor
Trustee has accepted its appointment pursuant to this Section 7.08. The Holders
of at least a majority in aggregate principal amount of the Debentures at the
time outstanding may remove the Trustee by so notifying the Trustee in writing
and may appoint a
49
successor Trustee, which shall be subject to the consent of the Company unless
an Event of Default has occurred and is continuing. The Trustee shall resign if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable to act.
If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. Thereupon the resignation or removal of
the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Junior
Indenture. The successor Trustee shall mail a notice of its succession to
Debentureholders. Subject to payment of all amounts owing to the Trustee under
Section 7.07 hereof and subject further to its lien under Section 7.07, the
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee. If a successor Trustee does not take office within 30
days after the retiring Trustee resigns or is removed, the Company, the
resigning Trustee or the Holders of at least a majority in aggregate principal
amount of the Debentures at the time outstanding may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(b) If the Trustee fails to comply with Section 7.10 hereof, any
Debentureholder may petition any court of competent jurisdiction for its removal
and the appointment of a successor Trustee.
SECTION 7.09. Successor Trustee by Merger.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
50
SECTION 7.10. Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA Sections
310(a) to the extent applicable. The Trustee (or any Affiliate thereof which
has unconditionally guaranteed the obligations of the Trustee hereunder) shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recently published annual report of condition. The Trustee shall comply
with TIA Section 310(b). In determining whether the Trustee has conflicting
interests as defined in TIA Section 310(b)(1), the provisions contained in the
proviso to TIA Section 310(b)(1) and the Trustee's Statement of Eligibility on
Form T-1 shall be deemed incorporated herein.
SECTION 7.11. Preferential Collection of Claims Against the Company.
If and when the Trustee shall be or become a creditor of the Company under
TIA Section 311(a), the Trustee shall be subject to the provisions of the TIA
regarding the collection of claims against the Company contained in TIA Section
311 to the extent applicable.
ARTICLE 8. SATISFACTION AND DISCHARGE OF JUNIOR
INDENTURE; DEFEASANCE OF CERTAIN OBLIGATIONS;
UNCLAIMED MONIES
SECTION 8.01. Satisfaction and Discharge of Junior Indenture.
(a) The Company shall be deemed to have paid, satisfied and discharged the
entire indebtedness on any series of the Debentures outstanding on the date when
all Debentures issued in such series not previously delivered to the Trustee for
cancellation as provided herein have become due and payable and the Company has
irrevocably deposited or caused to be irrevocably deposited with the Trustee or
any Paying 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 (which may be held in a non-interest bearing account insured by
the Federal Deposit Insurance Corporation), in the currency or currencies in
which such Debentures are payable, in an amount, or (ii) U.S. Government
Obligations, maturing as to principal and interest at such times and in such
amounts as will ensure the availability of cash, or (iii) a combination thereof,
sufficient to pay the principal of and premium, if any, and interest on all
Debentures of such series then outstanding on the date of the deposit or to the
Stated Maturity Date, as the case may be; provided that in the case of
redemption, notice of redemption shall have been given or the Company shall have
51
irrevocably instructed the Trustee to give such notice, and further provided
that the following conditions shall have been met:
(1) no Default or Event of Default with respect to the Debentures of
such series has occurred and is continuing on the date of such deposit or
occurs as a result of such deposit;
(2) the Company has delivered to the Trustee an Officer's Certificate
certifying that there does not exist (i) a default in the payment of all or
any portion of any Senior Indebtedness or (ii) any other default affecting
Senior Indebtedness permitting its acceleration as the result of which the
maturity of Senior Indebtedness has been accelerated;
(3) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
relating to the defeasance contemplated by this provision have been
complied with; and
(4) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that (i) the deposit shall not result in the Company, the
Trustee or, if the Debentures of such series are held by a Trust, such
Trust being deemed to be an "investment company" under the Investment
Company Act of 1940, as amended, and (ii) such deposit creates a valid
trust in which the Holders of the Debentures of such series have the sole
beneficial interest or that the Holders of the Debentures of such series
have a nonavoidable first priority security interest in such trust.
Upon such deposit, provisions of this Junior Indenture with respect to such
series of Debentures shall no longer be in effect (except as to (i) the rights
of registration of transfer and exchange of Debentures of such series, (ii) the
replacement of apparently mutilated, defaced, destroyed, lost or stolen
Debentures of such series, (iii) the rights of the Holders of the Debentures of
such series to receive payments of the principal thereof and premium, if any,
and interest thereon, (iv) the rights of the Holders of the Debentures of such
series as beneficiaries hereof with respect to the property so deposited with
the Trustee payable to all or any of them, (v) the obligation of the Company to
maintain an office or agency for payments on and registration of transfer of the
Debentures of such series, (vi) the rights, obligations and immunities of the
Trustee hereunder, and (vii) the obligations of the Company to the Trustee for
compensation and indemnity under Section
52
7.07 hereof); and the Trustee shall, at the written request and expense of the
Company, execute proper instruments acknowledging the same.
(b) The Company shall be deemed to have paid, satisfied and discharged the
entire indebtedness on any series of the Debentures outstanding when all
Debentures issued in such series not previously delivered to the Trustee for
cancellation as provided herein will become due and payable at their Stated
Maturity Date within one year and shall be so deemed on the date the Company has
irrevocably deposited or caused to be irrevocably deposited with the Trustee or
any Paying 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 (which may be held in a non-interest bearing account insured by
the Federal Deposit Insurance Corporation), in the currency or currencies in
which such Debentures are payable, in an amount, or (ii) U.S. Government
Obligations, maturing as to principal and interest at such times and in such
amounts as will ensure the availability of cash, or (iii) a combination thereof,
sufficient to pay the principal of and premium, if any, and interest on all
Debentures of such series then outstanding on the date of the deposit or to the
Stated Maturity Date, as the case may be; provided that in the case of
redemption, notice of redemption shall have been given or the Company shall have
irrevocably instructed the Trustee to give such notice; and further provided
that the following conditions shall have been met:
(1) no Default or Event of Default with respect to the Debentures of
such series has occurred and is continuing on the date of such deposit or
occurs as a result of such deposit or, insofar as Section 6.01(a)(3) or
6.01(a)(4) hereof is concerned, at any time during the period ending on the
91st day after the date of such deposit (it being understood that this
condition shall not be satisfied until the expiration of such period);
(2) no event or condition shall exist that, pursuant to the
provisions of Section 10.02 hereof, would prevent the Company from making
payments of the principal of or interest 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):
(3) the Company has delivered to the Trustee an Officer's Certificate
certifying that there does not exist (i) a default in the payment of all or
any portion of any Senior Indebtedness or (ii) any other default affecting
53
Senior Indebtedness permitting its acceleration as the result of which the
maturity of Senior Indebtedness has been accelerated;
(4) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
relating to the defeasance contemplated by this provision have been
complied with; and
(5) the Company has delivered to the Trustee (i) either a private
Internal Revenue Service ruling or, based upon a change in law since the
date of this Indenture, an Opinion of Counsel, in either case, to the
effect that the Holders of the Debentures of such series will not recognize
income, gain or loss for United States federal income tax purposes as a
result of such deposit, defeasance and discharge and will be subject to
United States federal income tax on the same amount and in the manner and
at the same times as would have been the case if such deposit, defeasance
and discharge had not occurred, and (ii) an Opinion of Counsel to the
effect that (A) the deposit shall not result in the Company, the Trustee
or, if the Debentures of such series are held by a Trust, such Trust being
deemed to be an "investment company" under the Investment Company Act of
1940, as amended, and (B) such deposit creates a valid trust in which the
Holders of the Debentures of such series have the sole beneficial interest
or that the Holders of the Debentures of such series have a nonavoidable
first priority security interest in such trust.
Upon such deposit, provisions of this Junior Indenture with respect to such
series of Debentures shall no longer be in effect (except as to (i) the rights
of registration of transfer and exchange of Debentures of such series, (ii) the
replacement of apparently mutilated, defaced, destroyed, lost or stolen
Debentures of such series, (iii) the rights of the Holders of the Debentures of
such series to receive payments of the principal thereof and premium, if any,
and interest thereon, (iv) the rights of the Holders of the Debentures of such
series as beneficiaries hereof with respect to the property so deposited with
the Trustee payable to all or any of them, (v) the obligation of the Company to
maintain an office or agency for payments on and registration of transfer of the
Debentures of such series, (vi) the rights, obligations and immunities of the
Trustee hereunder, and (vii) the obligations of the Company to the Trustee for
compensation and indemnity under Section 7.07 hereof); and the Trustee shall, at
the written request and expense of the Company, execute proper instruments
acknowledging the same.
54
SECTION 8.02. Application by Trustee of Funds Deposited for Payment of
Debentures; Miscellaneous.
(a) Subject to Section 8.04 hereof, all monies deposited with the Trustee
pursuant to Section 8.01 hereof 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 Debentures of the series
for the payment or redemption of which such monies 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.
(b) The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U. S. Government Obligations
deposited pursuant to Section 8.01 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of outstanding Debentures.
SECTION 8.03. Repayment of Monies Held by Paying Agent.
In connection with the satisfaction and discharge of this Junior Indenture,
all monies then held by any Paying Agent under this Junior Indenture 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 8.04. Return of Monies Held by the Trustee and Paying Agent Unclaimed
for Two Years.
Any monies deposited with or paid to the Trustee or any Paying Agent for
the payment of the principal of and premium, if any, or interest on the
Debentures of any series and not applied but remaining unclaimed for two years
after the date when such principal, premium, if any, or interest shall have
become due and payable shall, unless otherwise required by mandatory provisions
of applicable escheat or abandoned or unclaimed property law, be repaid, upon
written request, to the Company by the Trustee or such Paying Agent, and the
Holders of such Debentures shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property laws,
thereafter look only to the Company for any payment which such Holder may be
entitled to collect, and all liability of the Trustee or any Paying Agent with
respect to such monies shall thereupon cease.
55
ARTICLE 9. AMENDMENTS
SECTION 9.01. Without Consent of Holders.
From time to time, when authorized by a resolution of the Board of
Directors, the Company and the Trustee, without notice to or the consent of any
Holders of the Debentures, may amend, waive or supplement this Junior Indenture:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to comply with Article 5 hereof;
(iii) to provide for uncertificated Debentures in addition to or in
place of certificated Debentures;
(iv) to comply with any requirement of the SEC in connection with
the qualification of this Junior Indenture under the TIA; or
(v) to set forth the terms and conditions, which shall not be
inconsistent with this Junior Indenture, of any series of Debentures (other
than the Series 1998 Debentures), that are to be issued hereunder and the
form of Debentures of such series;
provided that any such action does not adversely affect the Holders of such
Debentures and, in the case of the outstanding Debentures of a series then held
by a Trust, any such action does not adversely affect the holders of the Trust
Preferred Securities of that Trust.
SECTION 9.02. With Consent of Holders.
(a) The Company and the Trustee may amend or supplement this Junior
Indenture in any manner not permitted by Section 9.01 hereof, or may waive
future compliance by the Company with any provisions of this Junior Indenture,
with the consent of the Holders of at least a majority in aggregate principal
amount of the Debentures of each series affected thereby. Such an amendment or
waiver may not, without the consent of each Holder of the Debentures affected
thereby:
(1) reduce the principal amount of such Debentures;
(2) reduce the percentage of principal amount of such Debentures the
Holders of which must consent to an amendment of this Junior Indenture or a
waiver;
56
(3) change the stated maturity of the principal of or the interest on
or rate of interest of such Debentures; or
(4) extend the time of payment of interest on such Debentures, except
as provided herein;
provided that, in the case of the outstanding Debentures of a series then held
by a Trust, (i) no such amendment shall be made that adversely affects the
holders of the Trust Preferred Securities of that Trust, (ii) no termination of
the Indenture may occur, and (iii) no waiver of any Event of Default with
respect to the Debentures of that series or compliance with any covenant under
this Indenture shall be effective, in each case without the prior consent of the
holders of at least a majority of the aggregate liquidation preference of the
outstanding Trust Preferred Securities of that Trust or the holder of each such
Trust Preferred Security, as applicable.
(b) A supplemental Junior Indenture that changes or eliminates any
covenant or other provision of this Junior Indenture that has expressly been
included solely for the benefit of one or more particular series of Debentures,
or which modifies the rights of the Holders of Debentures of such series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under this Junior Indenture of the Holders of Debentures of any other
series.
(c) It shall not be necessary for the consent of the Holders of Debentures
or holders of Trust Preferred Securities under this Section 9.02 to approve the
particular form of any proposed amendment, but it shall be sufficient if such
consent approves the substance thereof.
(d) If certain Holders agree to defer or waive certain obligations of the
Company hereunder with respect to Debentures held by them, such deferral or
waiver shall not affect the rights of any other Holder to receive the payment or
performance required hereunder in a timely manner.
(e) After an amendment or waiver under this Section 9.02 becomes
effective, the Company shall mail to each Holder a notice briefly describing the
amendment or waiver. Any failure of the Company to mail such notices, or any
defect therein, shall not, however, in any way impair or affect the validity of
such amendment or waiver.
SECTION 9.03. Compliance with Trust Indenture Act.
Every supplemental Junior Indenture executed pursuant to this Article 9
shall comply with the TIA.
57
SECTION 9.04. Revocation and Effect of Consents; Waivers and Actions.
(a) Until an amendment, waiver or other action by Holders becomes
effective, a consent to it or any other action by a Holder of a Debenture
hereunder is a continuing consent by the Holder and every subsequent Holder of
that Debenture or portion of the Debenture that evidences the same obligation as
the consenting Holder's Debenture, even if notation of the consent, waiver or
action is not made on such Debenture. However, any such Holder or subsequent
Holder may revoke the consent, waiver or action as to such Holder's Debenture or
portion of the Debenture if the Trustee receives the notice of revocation before
the consent of the requisite aggregate principal amount of such Debentures then
outstanding has been obtained and not revoked. After an amendment, waiver or
action becomes effective, it shall bind every Holder of the Debentures of the
related series, except as provided in Section 9.02 hereof.
(b) The Company may, but shall not be obligated to, fix a Record Date for
the purpose of determining the Persons entitled to consent to any amendment or
waiver. If a Record Date is fixed, then, notwithstanding the first two
sentences of the immediately preceding paragraph, only Holders of Debentures or
holders of Trust Preferred Securities, as applicable, on such Record Date or
their duly designated proxies, and only those Persons, shall be entitled to
consent to such amendment, supplement or waiver or to revoke any consent
previously given, whether or not such Persons continue to be such after such
Record Date. No such consent shall be valid or effective for more than 90 days
after such Record Date.
SECTION 9.05. Notation on or Exchange of Debentures.
Debentures of the related series authenticated and made available for
delivery after the execution of any supplemental Junior Indenture pursuant to
this Article 9 may, and shall, if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in such supplemental
Junior Indenture. If the Company shall so determine, new Debentures so modified
as to conform, in the opinion of the Trustee and the Board of Directors, to any
such supplemental Junior Indenture may be prepared and executed by the Company
and authenticated and made available for delivery by the Trustee in exchange for
outstanding Debentures.
SECTION 9.06. Trustee to Execute Supplemental Junior Indentures.
The Trustee shall execute any supplemental Junior Indenture authorized
pursuant to this Article 9 if the supplemental Junior Indenture does not
adversely affect the
58
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, execute it. In executing such supplemental Junior
Indenture the Trustee shall be entitled to receive, and shall be fully protected
in relying upon, an Officer's Certificate and Opinion of Counsel stating that
such supplemental Junior Indenture is authorized or permitted by this Junior
Indenture.
SECTION 9.07. Effect of Supplemental Junior Indentures.
Upon the execution of any supplemental Junior Indenture under this Article
9, this Junior Indenture shall be modified in accordance therewith, and such
supplemental Junior Indenture shall form a part of this Junior Indenture for all
purposes and every Holder of Debentures of the related series theretofore or
thereafter authenticated and made available for delivery hereunder shall be
bound thereby.
ARTICLE 10. SUBORDINATION
SECTION 10.01. Debentures Subordinated to Senior Indebtedness.
Notwithstanding the provisions of Section 6.10 hereof or any other
provision herein or in any Debenture, each of the Company and the Trustee and,
by their acceptance thereof, the Holders of each series of Debentures (a)
covenant and agree that all payments by the Company of the principal of and
premium, if any, and interest on such series of Debentures (other than any
series of Debentures which have been discharged pursuant to Article 8 hereof)
shall be junior and subordinated in accordance with the provisions of this
Article 10 to the prior payment in full, in cash or cash equivalents, of all
amounts payable on, under or in connection with Senior Indebtedness, and (b)
acknowledge that holders of Senior Indebtedness are or shall be relying on this
Article 10.
SECTION 10.02. Priority and Payment of Proceeds in Certain Events; Remedies
Standstill.
(a) Upon any payment or distribution of the Company's assets, of any kind
or character, whether in cash, property or securities, to creditors upon any
dissolution or winding up or total or partial liquidation or reorganization of
the Company, whether voluntary or involuntary, or assignment for the benefit of
creditors, marshaling of assets or bankruptcy, insolvency, debt restructuring or
other similar proceedings in connection with any insolvency or bankruptcy
proceeding of the Company, any amounts payable on, under or in connection with
Senior Indebtedness (including any interest accruing on such Senior Indebtedness
subsequent to the commencement of a bankruptcy, insolvency or similar
proceeding) shall first be paid in full
59
in cash, or payment provided for in cash or cash equivalents, before the Holders
or the Trustee on behalf of the Holders or the holders of Trust Preferred
Securities shall be entitled to receive from the Company any payment of
principal of or premium, if any, or interest on any series of Debentures or
distribution of any assets or securities.
(b) No direct or indirect payment by or on behalf of the Company of
principal of or premium, if any, or interest on any series of Debentures (other
than any series of Debentures which has been discharged pursuant to Article 8
hereof), whether pursuant to the terms of such series of Debentures or upon
acceleration or otherwise, shall be made if, at the time of such payment, there
exists (i) a default in the payment of all or any portion of any Senior
Indebtedness and the Trustee has received written notice thereof from the
Company, from holders of Senior Indebtedness or from any trustee, representative
or agent therefor, (ii) any other default affecting Senior Indebtedness as a
result of which the maturity of Senior Indebtedness has been accelerated and the
Trustee has received written notice from the Company, from holders of Senior
Indebtedness or from any trustee, representative or agent therefor, or (iii) any
judicial proceedings are pending with respect to any such defaults, and such
default shall not have been cured or waived by or on behalf of the holders of
such Senior Indebtedness.
(c) If, notwithstanding the foregoing provisions prohibiting such payment
or distribution, the Trustee or any Holder shall have received any payment on
account of the principal of or premium, if any, or interest on any series of
Debentures when such payment is prohibited by this Section 10.02 and before all
amounts payable on, under or in connection with Senior Indebtedness are paid in
full in cash or cash equivalents, then and in such event (subject to the
provisions of Section 10.08 hereof) such payment or distribution shall be
received and held in trust for the holders of Senior Indebtedness and, at the
written direction of the trustee, representative or agent for the holders of the
Senior Indebtedness, shall be paid to the holders of the Senior Indebtedness
remaining unpaid to the extent necessary to pay such Senior Indebtedness in full
in cash or cash equivalents.
(d) Upon any payment or distribution of assets or securities referred to
in this Article 10, the Trustee and the Holders shall be entitled to rely upon
any order or decree of a court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are pending,
and upon a certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making any such payment or distribution,
delivered to the Trustee for the purpose of ascertaining the Persons entitled to
participate
60
in such distribution, the holders of Senior Indebtedness and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 10.
SECTION 10.03. Payments Which May Be Made Prior to Notice.
Nothing in this Article 10 or elsewhere in this Junior Indenture shall
prevent (i) the Company, except under the conditions described in Section 10.02
hereof, from making payments of principal of or premium, if any, or interest on
any series of Debentures or from depositing with the Trustee any monies for such
payments, or (ii) the application by the Trustee of any monies deposited with it
for the purpose of making such payments of principal of or premium, if any, or
interest on such series of Debentures, to the Holders entitled thereto, unless
at least one Business Day prior to the date when such payment would otherwise
(except for the prohibitions contained in Section 10.02 hereof) become due and
payable the Trustee shall have received the written notice provided for in
Section 10.02(b)(i) or 10.02(b)(ii) hereof.
SECTION 10.04. Rights of Holders of Senior Indebtedness Not To Be Impaired.
(a) No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time or in any way be
prejudiced or impaired by any act, or failure to act, in good faith by any
such holder, or by any noncompliance by the Company with the terms and
provisions and covenants herein regardless of any knowledge thereof any such
holder may have or otherwise be charged with.
(b) The provisions of this Article 10 are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Senior Indebtedness.
Notwithstanding anything to the contrary in this Article 10, to the extent any
Holders or the Trustee have paid over or delivered to any holder of Senior
Indebtedness any payment or distribution received on account of the principal of
or premium (if any) or interest on any series of Debentures to which any other
holder of Senior Indebtedness shall be entitled to share in accordance with
Section 10.02 hereof, no holder of Senior Indebtedness shall have a claim or
right against any Holders or the Trustee with respect to any such payment or
distribution or as a result of the failure to make payments or distributions to
such other holder of Senior Indebtedness.
61
SECTION 10.05. Trustee May Take Action to Effectuate Subordination.
Each Holder of a Debenture, by such Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
required by the trustee, representative or agent for holders of Senior
Indebtedness or by the Company to effectuate, as between the holders of Senior
Indebtedness and the Holders, the subordination as provided in this Article 10
and appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.
SECTION 10.06. Subrogation.
(a) Upon the payment in full, in cash or cash equivalents, of all Senior
Indebtedness, Holders of each series of Debentures shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments or
distributions of assets of the Company made on such Senior Indebtedness until
all series of Debentures shall be paid in full; and for the purposes of such
subrogation, no payments or distributions to holders of such Senior Indebtedness
of any cash property or securities to which Holders of any series of Debentures
would be entitled except for this Article 10, and no payment pursuant to this
Article 10 to holders of such Senior Indebtedness by Holders of such series of
Debentures, shall, as between the Company, its creditors other than holders of
such Senior Indebtedness and such Holders of such series of Debentures, be
deemed to be a payment by the Company to or on account of such Senior
Indebtedness, it being understood that the provisions of this Article 10 are
solely for the purpose of defining the relative rights of the holders of such
Senior Indebtedness, on the one hand, and such Holders of such series of
Debentures, on the other hand.
(b) If any payment or distribution to which Holders of any series of
Debentures would otherwise have been entitled but for the provisions of this
Article 10 shall have been applied, pursuant to this Article 10, to the payment
of all Senior Indebtedness then and in such case Holders of such series of
Debentures shall be entitled to receive from the holders of such Senior
Indebtedness at the time outstanding any payments or distributions received by
such holders of Senior Indebtedness in excess of the amount sufficient to pay,
in cash or cash equivalents, all such Senior Indebtedness in full.
SECTION 10.07. Obligations of Company Unconditional; Reinstatement.
(a) Nothing in this Article 10 or elsewhere in this Junior Indenture or in
any Debenture is intended to or shall impair, as between the Company and Holders
of any series of
62
Debentures, the obligations of the Company, which are absolute and
unconditional, to pay to such Holders the principal of and premium, if any, and
interest on such series of Debentures as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of Holders of such series of Debentures and creditors of the
Company other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee or any Holder of such series of Debentures
or holder of Trust Preferred Securities, as applicable, from exercising all
remedies otherwise permitted by applicable law under this Junior Indenture,
subject to the rights, if any, under this Article 10 of the holders of such
Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
(b) The failure to make a scheduled payment of principal of or premium, if
any, or interest on any series of Debentures by reason of Section 10.02 hereof
shall not be construed as preventing the occurrence of an Event of Default under
Section 6.01 hereof; provided, however, that if (i) the conditions preventing
the making of such payment no longer exist, and (ii) Holders of such series of
Debentures are made whole with respect to such omitted payments, the Event of
Default relating thereto (including any failure to pay any accelerated
amounts) shall be automatically waived, and the provisions of this Junior
Indenture shall be reinstated as if no such Event of Default had occurred.
SECTION 10.08. Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice.
(a) The Company shall give prompt written notice to the Trustee of any
fact known to the Company that would prohibit the making of any payment to or by
the Trustee in respect of any series of Debentures. Failure to give such notice
shall not affect the subordination of the Debentures to Senior Indebtedness.
Notwithstanding the provisions of this or any other provisions of this Junior
Indenture, the Trustee or Paying Agent shall not be charged with the knowledge
of the existence of any default in the payment of all or a portion of any Senior
Indebtedness or any other default affecting Senior Indebtedness as a result of
which the maturity of the Senior Indebtedness has been accelerated, unless and
until the Trustee or Paying Agent shall have received written notice thereof
from the Company or one or more holders of Senior Indebtedness or from any
trustee, representative or agent therefor or unless the Trustee or Paying Agent
otherwise had actual knowledge thereof; and, prior to the receipt of any such
written notice or actual knowledge of a responsible Trust Officer in the
corporate trust department of the Trustee or Paying Agent, the
63
Trustee or Paying Agent may conclusively assume that no such facts exist.
(b) Unless at least one Business Day prior to the date when by the terms
of this Junior Indenture any monies are to be deposited by the Company with the
Trustee or any Paying Agent for any purpose (including, without limitation, the
payment of the principal of or premium, if any, or interest on any Debenture),
the Trustee or Paying Agent shall have received with respect to such monies the
notice provided for in Section 10.02 hereof or a responsible Trust Officer in
the corporate trust department of the Trustee or Paying Agent shall have actual
knowledge of default in the payment of all or a portion of any Senior
Indebtedness or any other default affecting Senior Indebtedness as the result of
which the maturity of the Senior Indebtedness has been accelerated, the Trustee
or Paying Agent shall have full power and authority to receive and apply such
monies to the purpose for which they were received. Neither of them shall be
affected by any notice to the contrary, which may be received by either on or
after such date. The foregoing shall not apply to the Paying Agent if the
Company is acting as Paying Agent. Nothing in this Section 10.08 shall limit the
right of the holders of Senior Indebtedness to recover payments as contemplated
by Section 10.02 hereof. The Trustee or Paying Agent shall be entitled to rely
on the delivery to it of a written notice by a Person representing himself or
itself to be a holder of such Senior Indebtedness (or a trustee, representative
or agent on behalf of such holder) to establish that such notice has been given
by a holder of such Senior Indebtedness or a trustee, representative or agent on
behalf of any such holder. The Trustee shall not be deemed to have any duty to
the holders (and shall be fully protected in relying upon such notice) of Senior
Indebtedness.
SECTION 10.09. Right of Trustee to Hold Senior Indebtedness.
(a) The Trustee and any Paying Agent shall be entitled to all of the
rights set forth in this Article 10 in respect of any Senior Indebtedness at any
time held by them to the same extent as any other holder of such Senior
Indebtedness, and nothing in this Junior Indenture shall be construed to deprive
the Trustee or any Paying Agent of any of its rights as such holder.
(b) Nothing in this Article 10 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.07 hereof.
64
SECTION 10.10. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee, and the Holders of each series of Debentures shall
be entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Holders of such series of Debentures, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 10.
SECTION 10.11. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee 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 the Trustee
shall in good faith mistakenly pay over or distribute to Holders of such series
of Debentures or to the Company or to any other person cash, property or
securities to which any holders of Senior Indebtedness shall be entitled by
virtue of this Article 10 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 10 and no
implied covenants or obligations with respect to holders of Senior Indebtedness
shall be read into this Junior Indenture against the Trustee.
ARTICLE 11. GUARANTEE OF OBLIGATIONS OF THE COMPANY
SECTION 11.01. Guarantee.
The Guarantor, pursuant to the terms of the Guarantee set forth in this
Article 11 (this "Guarantee"), irrevocably and unconditionally guarantees to the
Trustee (for its own benefit and the benefit of the Holders) and the Holders,
and agrees to pay in full, perform and observe, from time to time the due and
punctual payment, observance and performance of all of the Guaranteed
Obligations (without duplication of amounts theretofore paid by the Company), in
accordance with their respective terms and as and when due (whether at maturity,
by
65
reason of acceleration or otherwise, but after giving effect to a valid
extension of an interest payment period by the Company pursuant to the terms of
the Debentures), regardless of any defense, right of set-off or counterclaim
which the Company 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 Company to pay such amounts to
the Holders.
SECTION 11.02. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of and reliance on this
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 Company
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, diligence and all other defenses under applicable law that would, but
for this Section 11.02, be available to the Guarantor as a defense against or a
reduction of its obligations hereunder.
SECTION 11.03. Obligations Not Affected.
(a) The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(1) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Company of the Guaranteed Obligations or
any discharge, disallowance, invalidity, illegality, voidness or other
unenforceability thereof;
(2) the extension of time for the payment by the Company of all or
any portion of the interest, principal or premiums, if any, or any other
sums payable in respect of the Guaranteed Obligations (other than as
provided in Section 11.01 hereof with respect to an extension of time for
payment of interest during an Extension Period) or any increase in the
principal of, or interest rate applicable to, the Debentures;
(3) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders in respect of the Guaranteed Obligations or
any action on the part of the Holders granting indulgence or extension of
any kind;
66
(4) the voluntary or involuntary liquidation, termination, 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
Company or any of the assets of the Company;
(5) any invalidity of, or defect or deficiency in, the Guaranteed
Obligations;
(6) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred;
(7) any termination of or change in any relationship between the
Company and the Guarantor, including any resulting from a change in the
ownership of the Company; or
(8) to the extent permitted by law, 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 11.03 that the
obligations of the Guarantor hereunder shall be irrevocable, absolute and
unconditional under any and all circumstances.
(b) There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 11.04. Prohibition on Distributions, Etc.
If (i) there shall have occurred any event of which the Company has actual
knowledge that (a) with the giving of notice or the lapse of time, or both,
would constitute an Event of Default with respect to any series of Debentures
and (b) in respect of which the Company shall not have taken reasonable steps to
cure and (ii) the Guarantor defaults in the performance of the Guaranteed
Obligations, the Guarantor shall not, directly or indirectly through a
Subsidiary, (aa) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
Capital Stock, (bb) make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any of its debt securities that rank pari
passu with or junior in interest to the Guarantor's obligations under this
Guarantee, or (cc) make any guarantee payments with respect to any guarantee
issued by the Guarantor if such guarantee ranks pari passu with or junior in
interest to the Guarantor's obligations under this Guarantee (other than (x)
dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of its common stock and exchanges or
67
conversions of common stock of one class for common stock of another class, (y)
payments by the Guarantor under any Trust Guarantee Agreement (as defined in the
HECO Junior Indenture) and pursuant to this Guarantee, and (z) purchases by the
Guarantor of its common stock required to prevent the loss or secure the renewal
or reinstatement of any government license or franchise held by the Guarantor).
SECTION 11.05. Rights of Holders.
(a) The Guarantor expressly acknowledges that: (i) the Guarantee set
forth in this Article 11 is for the benefit of the Trustee (for its own benefit
and the benefit of the Holders) and the Holders; (ii) the Trustee has the right
to enforce this Guarantee on behalf of the Holders; (iii) the Holders of a
majority in aggregate principal amount of the Debentures have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee in respect of this Guarantee or exercising any trust or
power conferred upon the Trustee under this Guarantee.
(b) If the Trustee fails to enforce its rights under this Guarantee after
a Holder has made a written request, such Holder may institute a legal
proceeding directly against the Guarantor to enforce the Trustee's rights under
this Guarantee, without first instituting a legal proceeding against the
Company, the Trustee or any other Person or entity. Notwithstanding the
foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder may
directly institute a proceeding in such Holder's own name against the Guarantor
for enforcement of the Guarantee of such payment. The Guarantor waives any
right or remedy to require that any action be brought first against the Company,
the Trustee or any other Person or entity before proceeding directly against the
Guarantor.
SECTION 11.06. Guarantee of Payment.
This Guarantee creates a guarantee of payment and not of collection. This
Guarantee will not be discharged except by payment, observance and performance
in full of the Guaranteed Obligations (without duplication of amounts
theretofore paid by or on behalf of the Company pursuant to this Junior
Indenture).
SECTION 11.07. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Company in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee and shall have the right to waive payment by the
Company's subsidiaries pursuant to Section 11.01 hereof; provided, however, that
the Guarantor shall not (except to the extent
68
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
Guarantee, until the prior payment, observance and performance in full of the
Guaranteed Obligations. 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 11.08. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Company with respect to the Debentures and that the
Guarantor shall be liable as principal and as debtor hereunder to pay, observe
and perform the Guaranteed Obligations pursuant to the terms of this Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)(1)
through (a)(8), inclusive, of Section 11.03 hereof.
SECTION 11.09. Subordination.
This Guarantee shall constitute an unsecured obligation of the Guarantor
and shall rank subordinate and junior in right of payment to all general
liabilities of the Guarantor.
SECTION 11.10. Pari Passu Guarantees.
This Guarantee shall rank pari passu with any similar guarantee agreements
issued by the Guarantor on behalf of the holders of securities similar to any
series of Debentures issued by any subsidiary of the Guarantor in the past or
future.
SECTION 11.11. Termination.
This Guarantee shall terminate, with respect to any series of Debentures,
upon the payment in full of the Guaranteed Payments with respect to such series
of Debentures. Notwithstanding the foregoing, this Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder of Debentures of any series must restore payment of any sums paid under
such Debentures or under this Guarantee or any payment, observance or
performance of any of the Guaranteed Obligations with respect to such series of
Debentures is otherwise recovered from or paid over by or for the account of the
Trustee or the Holders for any reason, including as a preference or fraudulent
transfer, whether effected by judgment, decree or order of any governmental
authority, by any plan of reorganization or by any settlement or compromise.
69
SECTION 11.12. 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 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 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 might properly be paid.
SECTION 11.13. 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 11.13 shall survive the termination of
this Guarantee or the earlier resignation or removal of the Trustee.
ARTICLE 12. MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls.
If any provision of this Junior Indenture limits, qualifies or conflicts
with the duties imposed by operation of
70
subsection (c) of Section 318 of the TIA, the imposed duties shall control. The
provisions of Sections 310 to 317, inclusive, of the TIA that impose duties on
any Person (including provisions automatically deemed included in a Junior
Indenture unless the Junior Indenture provides that such provisions are
excluded) are a part of and govern this Junior Indenture, except as, and to the
extent, they are expressly excluded from this Junior Indenture, as permitted by
the TIA.
SECTION 12.02. Notices.
(a) Any notice, request or other communication required or permitted to be
given hereunder shall be in writing and delivered, telecopied or mailed by
first-class mail, postage prepaid, addressed as follows:
if to the Company:
Maui Electric Company, Limited
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attention: Treasurer
with a copy to:
Hawaiian Electric Company, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust Trustee
Administration
if to the Guarantor:
Hawaiian Electric Company, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
(b) The Company or the Trustee, by giving notice to the other, may
designate additional or different addresses for subsequent notices of
communications.
71
(c) Any notice or communication given to a Debentureholder shall be mailed
or delivered to the Debentureholder at the Debentureholder's address as it
appears on the Securities Register of the Registrar and shall be sufficiently
given if mailed within the time prescribed.
(d) Failure to mail a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.
(e) If the Company mails a notice or communication to the
Debentureholders, it shall mail a copy to the Trustee and each Registrar, Paying
Agent or co-Registrar.
SECTION 12.03. Communication by Holders with Other Holders.
Debentureholders may communicate, pursuant to TIA Section 312(b), with
other Debentureholders with respect to their rights under this Junior Indenture
or any series of Debentures. The Company, the Trustee, the Registrar, the
Paying Agent, if any, and anyone else shall have the protection of TIA Section
312(c).
SECTION 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Junior Indenture, the Company shall furnish to the Trustee:
(i) an Officer's Certificate (complying with Section 12.05 hereof)
stating that, in the opinion of such Officer, all conditions precedent to
the taking of such action have been complied with; and
(ii) if appropriate, an Opinion of Counsel (complying with Section
12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent to the taking of such action have been complied with.
SECTION 12.05. Statements Required in Certificate or Opinion.
Each Officer's Certificate and Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Junior Indenture
shall include:
(i) a statement that each Person making such Officer's Certificate
or Opinion of Counsel has read such covenant or condition;
72
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officer's Certificate or Opinion of Counsel are based;
(iii) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to enable
such Person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
Person, such covenant or condition has been complied with; provided,
however, that with respect to matters of fact not involving any legal
conclusion, an Opinion of Counsel may rely on an Officer's Certificate or
certificates of public officials.
SECTION 12.06. Severability Clause.
If any provision in this Junior Indenture or in any series of Debentures
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 12.07. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or for a meeting of
Debentureholders. The Registrar and Paying Agent may make reasonable rules for
their functions.
SECTION 12.08. Legal Holidays.
A "Legal Holiday" is any day other than a Business Day. If any specified
date (including a date for giving notice) is a Legal Holiday, the action to be
taken on such date shall be taken on the next succeeding day that is not a Legal
Holiday, and if such action is a payment in respect of any series of Debentures,
unless otherwise specified pursuant to Section 2.01 hereof, no principal,
premium (if any) or interest installment shall accrue for the intervening
period; except that if any interest payment is due on a Legal Holiday and the
next succeeding day is in the next succeeding calendar year, such payment shall
be made on the Business Day immediately preceding such Legal Holiday.
SECTION 12.09. Governing Law.
This Junior Indenture and each series of Debentures shall be governed by
and construed in accordance with the internal laws of the State of New York.
73
SECTION 12.10. No Recourse Against Others.
No director, officer, employee or stockholder, as such, of the Company
shall have any liability for any obligations of the Company under the Debentures
or this Junior Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. By accepting a Debenture, each
Debentureholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of each series of
Debentures.
SECTION 12.11. Successors.
All agreements of the Company in this Junior Indenture and Debentures shall
bind its successors and assigns. All agreements of the Trustee in this Junior
Indenture shall bind its successors and assigns.
SECTION 12.12. Multiple Original Copies of this Junior Indenture.
The parties may sign any number of copies of this Junior Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement. Any signed copy shall be sufficient proof of this Junior Indenture.
SECTION 12.13. No Adverse Interpretation of Other Agreements.
This Junior Indenture may not be used to interpret another Junior
Indenture, loan or debt agreement of the Company or any subsidiary. Any such
Junior Indenture, loan or debt agreement may not be used to interpret this
Junior Indenture.
SECTION 12.14. Table of Contents; Headings, Etc.
The Table of Contents, Cross-Reference Table, and headings of the Articles
and Sections of this Junior Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 12.15. Benefits of this Junior Indenture.
Except as otherwise expressly provided herein with respect to holders of
Senior Indebtedness and holders of Trust Preferred Securities, nothing in this
Junior Indenture or in any series of Debentures, express or implied, shall give
to any person, other than the parties hereto and their successors hereunder and
the Holders of such series of Debentures, any benefit or any legal or equitable
right, remedy or claim under this Junior Indenture.
74
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Junior Indenture on behalf of the respective parties hereto as of the date
first above written.
MAUI ELECTRIC COMPANY, LIMITED
By: /s/ Xxxx Xxxx
_____________________________
Xxxx X. Xxxx
Financial Vice President
and Treasurer
By: /s/ Xxxxxx X. Xxxxxxxxx
_____________________________
Xxxxxx X. Xxxxxxxxx
Assistant Treasurer
THE BANK OF NEW YORK,
AS TRUSTEE
By: /s/ X.X. Xxxxxx
________________________________
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
HAWAIIAN ELECTRIC COMPANY, INC.,
AS GUARANTOR
By: /s/ Xxxx Xxxx
_____________________________
Xxxx X. Xxxx
Financial Vice President
and Treasurer
By: /s/ Xxxxxx X. Xxxxxxxxx
_____________________________
Xxxxxx X. Xxxxxxxxx
Assistant Treasurer
75
Exhibit A
[No. ME-1] $10,000,000
MAUI ELECTRIC COMPANY, LIMITED
7.30% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES 1998
MAUI ELECTRIC COMPANY, LIMITED, a Hawaii corporation (the "Company",
which term includes any successor corporation under the Junior Indenture
hereinafter referred to), for value received, hereby promises to pay to The Bank
of New York, as Property Trustee (the "Property Trustee") for, and for the
benefit of, HECO Capital Trust II (the "Trust") or registered assigns, the
principal sum of Ten Million Dollars ($10,000,000) on December 15, 2028, or on
such other date which may be established by the Company in accordance with the
terms of said Junior Indenture but which may not, in any event, be a date
earlier than December 15, 2003 or a date later than December 15, 2047, and to
pay interest on said principal sum from December 15, 1997 or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, quarterly in arrears on March 31, June 30, September 30
and December 31, commencing March 31, 1999 (each, an "Interest Payment Date"),
at the rate of 7.30% per annum until the principal hereof shall have become 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 same rate per annum. 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, and for any period shorter than a full calendar month, interest
will be computed on the basis of the actual number of days elapsed in such
period. In the event that any Interest Payment Date is not a Business Day, then
interest will be payable 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 payment 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 Junior Indenture, be paid to the Person in whose
name this Debenture is registered at the close of business on the Regular Record
Date for such interest installment, as more fully provided in the Junior
Indenture. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the Person in whose name this Debenture is
registered at the close of business on a Special Record Date to be fixed by the
Trustee (as defined below) for the payment of such defaulted interest, notice
whereof shall be given to the Holders of the Series 1998 Debentures not less
than 7 calendar days prior to such Special Record Date, as more fully provided
in the Junior Indenture.
Payment of the principal of and interest on this Debenture will be
made in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. If this
Debenture is not held by a depository or the Property Trustee, payment of any
interest on this Debenture (other than on the Stated Maturity Date or Redemption
Date) shall be made at the office of the Trustee in the City of New York or at
the office of such Paying Agent or Paying Agents as the Company may designate
from time to time, except that at the option of the Company payment of any
interest may be made (i) by check mailed to the address of the person entitled
thereto as such address shall appear in the Securities Register or (ii) by
transfer to an account maintained by the person entitled thereto as specified in
the Securities Register, provided that proper and timely transfer instructions
have been received by the Regular Record Date; provided, however, that at the
request of a Holder of at least $10,000,000 aggregate principal amount of Series
1998 Debentures, interest on such Debentures will be payable by wire transfer
within the continental United States in immediately available funds to the bank
account number specified in writing by such Holder to the Registrar prior to the
Regular Record Date.
If this Debenture is not held by a depository or the Property Trustee,
the principal amount hereof, any premium and any interest due on the Stated
Maturity Date or a Redemption Date (other than an Interest Payment Date) will be
paid only upon surrender of this Debenture at the principal corporate office of
The Bank of New York, Paying Agent, in New York, New York, or at such other
office or agency of the Paying Agent as the Company shall designate by written
notice to the Holder of this Debenture.
As long as this Debenture is held by the Property Trustee or if this
Debenture is held by a depository, any payments of principal of and premium, if
any, and interest on this Debenture will be made pursuant to the terms of the
Junior Indenture.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Junior Indenture, subordinate and
2
subject 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
Junior Indenture with respect thereto. The 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 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 attorney-in-fact for any and all such
purposes. The Holder of this Debenture, by his acceptance hereof, hereby waives
all notice of the acceptance of the subordination provisions contained herein
and in the Junior Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Series 1998 Debentures"),
specified in the Junior Indenture, limited in aggregate principal amount to
$10,000,000, issued under and pursuant to a Junior Indenture dated as of
December 1, 1998 (the "Junior Indenture") executed and delivered between the
Company and The Bank of New York, as trustee (the "Trustee"). The Series 1998
Debentures are initially being issued to the Trust, to be held on behalf of the
Trust by its property trustee (the "Property Trustee"). Concurrently with the
issuance of the Series 1998 Debentures, the Trust is issuing its trust
securities, including the Trust's 7.30% Cumulative Quarterly Income Preferred
Securities, Series 1998 (the "Trust Preferred Securities"), representing common
and preferred undivided beneficial interests in the assets of the Trust and
having an aggregate liquidation preference equal to the aggregate principal
amount of (i) the Series 1998 Debentures, (ii) the HECO Series 1998 Debentures
issued by Hawaiian Electric Company, Inc., a Hawaii corporation and the
Company's sole owner ("HECO"), and (iii) the junior subordinated deferrable
interest debentures issued by Hawaii Electric Light Company, Inc., a Hawaii
corporation which is also a wholly-owned subsidiary of HECO. By the terms of the
Junior Indenture, Debentures are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as provided in the
Junior Indenture. Reference is made to the Junior Indenture for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and Holders of the Debentures. Each term used in
this Debenture which is defined in the Junior Indenture and not defined herein
shall have the meaning assigned to it in the Junior Indenture.
At any time on or after December 15, 2003, at the option of the
Company, the Series 1998 Debentures shall be redeemable
3
in whole or in part. Notwithstanding the foregoing, if a Special Event (as
defined in the HECO Junior Indenture) shall occur and be continuing, then, if
HECO opts to redeem the HECO Series 1998 Debentures pursuant to the HECO Junior
Indenture, the Series 1998 Debentures shall be redeemable in whole (but not in
part) on the same terms and at the same time as the HECO Series 1998 Debentures.
In the case of any redemption, a Series 1998 Debenture shall be redeemable at
100% of the principal amount thereof plus accrued and unpaid interest to the
Redemption Date.
At least 30 days but not more than 60 days before the Redemption Date,
the Trustee shall mail or caused to be mailed a notice of redemption by first-
class mail, postage prepaid, to each Holder of Series 1998 Debentures to be
redeemed.
The Series 1998 Debentures shall not be subject to any sinking fund.
Series 1998 Debentures in denominations larger than $25 may be redeemed in part
but only in integral multiples of $25.
In the event of redemption of this Debenture in part only, a new
Series 1998 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 Series 1998 Debentures
occurs and is continuing, the principal of and interest on the Series 1998
Debentures may (and, in certain circumstances, shall) 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 Junior Indenture.
The Junior Indenture contains provisions for defeasance within one
year of the Stated Maturity Date of the entire indebtedness of this Debenture
upon compliance by the Company with certain conditions set forth therein.
Subject to certain exceptions in the Junior Indenture which require
the consent of every Holder, the Company and the Trustee may amend the Junior
Indenture or may waive future compliance by the Company with any provisions of
the Junior Indenture, with the consent of the Holders of at least a majority in
aggregate principal amount of the Series 1998 Debentures of each series affected
thereby; provided that if the Series 1998 Debentures are held by the Trust, no
such amendment or waiver that adversely affects the holders of the Trust
Preferred Securities shall be effective without the prior consent of the holders
of at least a majority in aggregate liquidation preference of the outstanding
Trust Preferred
4
Securities. Subject to certain exceptions in the Junior Indenture, without the
consent of any Debentureholder, the Company and the Trustee may amend the Junior
Indenture to cure any ambiguity, defect or inconsistency, to bind a successor to
the obligations of the Junior Indenture, to provide for uncertificated
Debentures in addition to certificated Debentures, to comply with any
requirements of the Debentures and the Securities and Exchange Commission in
connection with the qualification of the Junior Indenture under the TIA;
provided that any such action does not adversely affect the rights of any
Debentureholder and, in the case of Series 1998 Debentures held by the Trust,
the rights of any holder of Trust Preferred Securities. Amendments bind all
Holders and subsequent Holders.
No reference herein to the Junior Indenture and no provision of this
Debenture or the Junior Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
So long as no Event of Default with respect to the Series 1998
Debentures has occurred and is continuing, the Company shall have the right at
any time and from time to time to extend the interest payment period of the
Series 1998 Debentures for up to 20 consecutive quarters (the "Extension
Period"); provided that no Extension Period shall extend beyond the Stated
Maturity Date or Redemption Date of any Series 1998 Debenture. At the end of
the Extension Period, the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Series 1998
Debentures, compounded quarterly, to the extent that payment of such interest is
enforceable under applicable law). During such Extension Period, subject to
certain exceptions contained in the Junior Indenture, the Company may
not, directly or indirectly through a subsidiary, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to any of its capital stock, (ii) make any
payment of principal, interest or premium, if any, on or repay, repurchase or
redeem any of its debt securities (including other Debentures) that rank pari
passu with or junior in interest to the Series 1998 Debentures, or (iii) make
any guarantee payments with respect to any guarantee issued by the Company if
such guarantee ranks pari passu with or junior in interest to the Debentures.
Prior to the termination of any such Extension Period, the Company may further
extend such Extension Period; provided that such Extension Period, together with
all such previous and further extensions, shall not exceed 20 consecutive
quarters and shall not extend beyond the Stated Maturity Date or Redemption Date
5
of any Series 1998 Debenture. At the termination of any such Extension Period
and upon the payment of all amounts then due, the Company may elect to begin a
new Extension Period, subject to the foregoing restrictions.
Series 1998 Debentures are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As provided
in the Junior Indenture and subject to certain limitations therein set forth,
this Debenture is exchangeable for a like aggregate principal amount of Series
1998 Debentures of a different authorized denomination, as requested by the
Holder surrendering the same.
As provided in the Junior Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the Holder hereof upon
surrender of this Debenture for registration of transfer at the office or agency
of the Registrar accompanied by a written instrument or instruments of transfer
in form satisfactory to the Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Series 1998
Debentures of authorized denominations and for the same aggregate principal
amount 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.
Prior to presentment for registration of transfer of this Debenture,
the Company, the Trustee, any Paying Agent and any Registrar may deem and treat
the 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 Registrar) for the purpose of receiving
payment of or on account of the principal hereof and interest due hereon and for
all other purposes, and neither the Company nor the Trustee nor any Paying Agent
nor any 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 Junior 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.
6
This Debenture shall not be valid until an authorized signatory of the
Trustee manually signs and dates the Trustee's Certificate of Authentication
below.
This Debenture will be governed by and construed under the internal
laws of the State of New York.
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed
manually or by facsimile by its duly authorized officers and its corporate seal
or a facsimile thereof to be affixed hereto or imprinted hereon.
MAUI ELECTRIC COMPANY, LIMITED
By: _____________________________
Xxxx X. Xxxx
Financial Vice President
and Treasurer
By: _____________________________
Xxxxxx X. Xxxxxxxxx
Assistant Treasurer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE DEBENTURES, OF THE SERIES DESIGNATED, REFERRED TO IN THE
WITHIN-MENTIONED JUNIOR INDENTURE.
THE BANK OF NEW YORK, as Trustee
By: _____________________________
Authorized Signatory
Dated: December 15, 1998
7
ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or (we) assign
and transfer this Debenture to:
________________________________________________________________________________
(Insert assignee's social security or tax I.D. number)
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________ agent to transfer this Debenture on
the books of the Securities Register. The agent may substitute another to act
for him.
Dated: __________________ Signature: ______________________
(Sign exactly as your name appears
on the other side of this Debenture)
Signature Guaranty: ____________________
