Exhibit 4(f)
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AMENDED AND RESTATED
TRUST AGREEMENT
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST __
DATED AS OF , 1997
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TABLE OF CONTENTS
Page
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ARTICLE I--INTERPRETATION AND DEFINITIONS
1.1 Definitions.................................. 1
ARTICLE II--TRUST INDENTURE ACT
2.1 Trust Indenture Act; Application............. 13
2.2 Lists of Holders of Trust Securities......... 13
2.3 Reports by the Property Trustee.............. 14
2.4 Periodic Reports to Property Trustee......... 14
2.5 Evidence of Compliance
with Conditions Precedent.................... 14
2.6 Trust Enforcement Events; Waiver............. 15
2.7 Trust Enforcement Event; Notice.............. 17
ARTICLE III--ORGANIZATION
3.1 Name......................................... 18
3.2 Office....................................... 18
3.3 Purpose...................................... 18
3.4 Authority.................................... 18
3.5 Title to Property of the Trust............... 19
3.6 Powers and Duties of the Regular Trustees.... 19
3.7 Prohibition of Actions by the Trust
and the Trustees............................. 22
3.8 Powers and Duties of the Property Trustee.... 23
3.9 Certain Duties and Responsibilities
of the Property Trustee...................... 26
3.10 Certain Rights of Property Trustee........... 28
3.11 Delaware Trustee............................. 31
3.12 Execution of Documents....................... 31
3.13 Not Responsible for Recitals
or Issuance of Trust Securities.............. 32
3.14 Duration of Trust............................ 32
3.15 Mergers...................................... 32
ARTICLE IV--SPONSOR
4.1 Responsibilities of the Sponsor.............. 34
4.2 Indemnification and Expenses
of the Property Trustee and the Delaware
Trustee...................................... 36
ARTICLE V--TRUST COMMON SECURITIES HOLDER
5.1 Company's Purchase of Trust
Common Securities............................ 36
5.2 Covenants of the Trust Common
Securities Holder............................ 36
ARTICLE VI--TRUSTEES
6.1 Number of Trustees........................... 36
6.2 Delaware Trustee............................. 37
6.3 Property Trustee; Eligibility................ 37
6.4 Qualifications of Regular Trustees
and Delaware Trustee Generally............... 38
6.5 Regular Trustees............................. 38
6.6 Delaware Trustee............................. 39
6.7 Appointment, Removal and Resignation
of Trustees.................................. 39
6.8 Vacancies among Trustees..................... 41
6.9 Effect of Vacancies.......................... 41
6.10 Meetings..................................... 41
6.11 Delegation of Power.......................... 42
6.12 Merger, Conversion, Consolidation
or Succession to Business.................... 42
ARTICLE VII--DISTRIBUTIONS
7.1 Distributions................................ 43
ARTICLE VIII--ISSUANCE OF TRUST SECURITIES
8.1 Designation and General Provisions
Regarding Trust Securities................... 45
8.2 Redemption of Trust Securities............... 48
8.3 Redemption Procedures........................ 50
8.4 Voting Rights of Trust Preferred
Securities................................... 52
8.5 Voting Rights of Trust Common Securities..... 56
8.6 Paying Agent................................. 58
8.7 Listing...................................... 59
8.8 Acceptance of Trust Agreement,
Affiliate Investment Instruments,
Guarantees and Agreement of Limited
Partnership.................................. 59
ARTICLE IX--TERMINATION AND LIQUIDATION OF THE TRUST
9.1 Dissolution of Trust......................... 59
9.2 Liquidation Distribution Upon
Termination and Dissolution of the Trust..... 60
ARTICLE X--TRANSFER OF INTERESTS
10.1 Transfer of Trust Securities................. 62
10.2 Transfer of Certificates..................... 63
10.3 Deemed Security Holders...................... 63
10.4 Book-Entry Interests......................... 63
10.5 Notices to Clearing Agency................... 65
10.6 Appointment of Successor Clearing Agency..... 65
10.7 Definitive Trust Preferred
Security Certificates........................ 65
10.8 Mutilated, Destroyed, Lost
or Stolen Certificates....................... 66
ARTICLE XI--LIMITATION OF LIABILITY OF HOLDERS OF TRUST
SECURITIES, TRUSTEES OR OTHERS
11.1 Liability.................................... 67
11.2 Exculpation.................................. 68
11.3 Fiduciary Duty............................... 68
11.4 Indemnification.............................. 70
11.5 Outside Businesses........................... 74
ARTICLE XII--ACCOUNTING
12.1 Fiscal Year.................................. 74
12.2 Certain Accounting Matters................... 75
12.3 Banking...................................... 76
12.4 Withholding.................................. 76
ARTICLE XIII--AMENDMENTS AND MEETINGS
13.1 Amendments................................... 77
13.2 Meetings of the Holders of Trust
Securities; Action by Written Consent........ 80
ARTICLE XIV--REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
14.1 Representations and Warranties
of Property Trustee.......................... 82
14.2 Representations and Warranties
of Delaware Trustee.......................... 83
ARTICLE XV--MISCELLANEOUS
15.1 Notices...................................... 84
15.2 Governing Law................................ 85
15.3 Intention of the Parties..................... 85
15.4 Headings..................................... 85
15.5 Successors and Assigns....................... 85
15.6 Partial Enforceability....................... 86
15.7 Counterparts................................. 86
EXHIBIT A-1 -- FORM OF PREFERRED SECURITY CERTIFICATE..... A-1.1
EXHIBIT A-2 -- FORM OF COMMON SECURITY CERTIFICATE........ A-2.1
CROSS-REFERENCE TABLE*
SECTION OF
SECTION OF ACT TRUST AGREEMENT
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310(a)(1) and (2)........................ 6.3(a)
310(a)(3) and (4)........................ Inapplicable
310(b)................................... 6.3(b)
310(c)................................... Inapplicable
311(a)................................... 2.2(b)
311(b)................................... 2.2(b)
311(c)................................... Inapplicable
312(a)................................... 2.2(a)
312(b)................................... 2.2(b)
312(c)................................... 2.2(b)
313(a),(b)(2),(c) and (d)................ 2.3, 12.2(b)
313(b)(1)................................ Inapplicable
314(a)................................... 2.4
314(b)................................... Inapplicable
314(c)(1) and (2)........................ 2.5
314(c)(3)................................ Inapplicable
314(d)................................... Inapplicable
314(e)................................... 1.1
314(f)................................... Inapplicable
315(a) and (d)........................... 3.9(b)
315(b)................................... 2.7
315(c)................................... 3.9(a)
315(e)................................... 2.1(a)
316(a)(1)................................ 2.6, 8.4, and 8.5
316(a)(2)................................ Not required
316(a) (last sentence)................... 1.1
316(b)................................... 2.1
316(c)................................... 3.6(d)
317(a)................................... 2.1
317(b)................................... 3.8(g)
318(a)................................... 2.1(c)
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* This Cross-Reference Table does not constitute part of this Trust
Agreement and shall not affect the interpretation of any of its terms or
provisions.
AMENDED AND RESTATED
TRUST AGREEMENT
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST __
AMENDED AND RESTATED TRUST AGREEMENT (this "Trust Agreement") dated
and effective as of _____________, 1997, by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the Holders (as defined herein), from
time to time, of undivided beneficial interests in the Trust to be issued
pursuant to this Trust Agreement;
WHEREAS, certain of the Trustees and the Sponsor established HAWAIIAN
ELECTRIC INDUSTRIES CAPITAL TRUST __ (the "Trust"), a statutory business trust
created under the Business Trust Act (as defined herein) pursuant to a Trust
Agreement dated as of December 19, 1996 (the "Original Declaration"), and a
Certificate of Trust filed with the Secretary of State of the State of Delaware
on December 23, 1996, for the sole purpose of issuing and selling certain
securities representing undivided beneficial interests in the assets of the
Trust and investing the proceeds thereof in the Partnership Preferred Securities
(as defined herein);
WHEREAS, the parties hereto by this Trust Agreement, wish to amend and
restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the Holders, from time to time, of the securities
representing undivided beneficial ownership interests in the assets of the Trust
issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions.
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Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "this Trust Agreement" are to this Trust
Agreement as modified, supplemented or amended from time to time;
(d) all references in this Trust Agreement to Articles and Sections
and Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Trust Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Trust Agreement unless otherwise defined in this Trust
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) a term used in this Trust Agreement and not otherwise defined
herein shall have the meaning ascribed to such term in the Agreement of Limited
Partnership.
"Affiliate" means, with respect to any specified person, any other
person that directly or indirectly controls or is controlled by, or is under
common control with such specified person.
1
"Affiliate Investment Instruments" has the meaning set forth in
Section 7.1 of the Agreement Limited Partnership.
"Agreement of Limited Partnership" means the Amended and Restated
Agreement of Limited Partnership of HEI Preferred Funding, LP dated as of
1997.
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"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as set forth in Section 10.4 of this
Trust Agreement.
"Business Day" means any day other than a day on which banking
institutions in The City of New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. Section 3801 et seq., as it may be amended from time to time,
or any successor legislation.
"Certificate" means a Trust Common Security Certificate or a Trust
Preferred Security Certificate.
"Change in 1940 Act Law" means any change on or after the date of the
prospectus supplement relating to the issuance of the Trust Preferred
Securities in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority with the result that there is more than an insubstantial
risk that the Trust is or will be considered an "investment company" which is
required to be registered under the 1940 Act.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Trust Preferred Securities and in whose name or in the name of a nominee
of that organization shall be registered a Global Certificate and which shall
undertake to effect book-entry transfers and pledges of beneficial interests in
the Trust Preferred Securities.
2
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book-entry transfers and pledges of interest in securities
deposited with the Clearing Agency.
"Closing Date" means _______________, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security Holder of the Trust" means the Company in its
capacity as Holder of the Trust Common Security.
"Company" means Hawaiian Electric Industries, Inc., a Hawaii
corporation.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, director, shareholder, member, partner, employee,
representative or agent of the Trust or its Affiliates.
"Compounded Distributions" has the meaning set forth in Section 7.1(a)
of this Trust Agreement.
"Corporate Trust Office" means the principal corporate trust office of
the Property Trustee at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at
000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Trust Securities.
3
"Definitive Trust Preferred Security Certificates" has the meaning set
forth in Section 10.4 of this Trust Agreement.
"Delaware Trustee" has the meaning set forth in Section 6.2 of this
Trust Agreement.
"Distribution" has the meaning set forth in Section 7.1(a) of this
Trust Agreement.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
11.4(b) of this Trust Agreement.
"Fiscal Period" has the meaning set forth in Section 1.1 of the
Agreement of Limited Partnership.
"Fiscal Year" has the meaning set forth in Section 12.1 of this Trust
Agreement.
"General Partner" means Hycap Management, Inc., a Delaware
corporation and wholly-owned subsidiary of the Company, in its capacity as the
general partner of the Partnership, its permitted successors, or any successor
general partner in the Partnership admitted as such pursuant to the Agreement of
Limited Partnership.
"Global Certificate" has the meaning set forth in Section 10.4 of this
Trust Agreement.
"Holder" means a Person in whose name a certificate representing a
Trust Security is registered, such Person being a beneficial owner within the
meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
4
"Initial Debentures" has the meaning set forth in Section 7.1(b) of
the Agreement of Limited Partnership.
"Investment Affiliate" means the Company or any corporation,
partnership, limited liability company or other entity (other than the
Partnership or the Trust) that is controlled by the Company and is not an
Investment Company by reason of Section 3(a) or 3(b) of the 1940 Act.
"Investment Company" means an investment company as defined in the
1940 Act.
"Investment Guarantee" means any guarantee by the Company with respect
to (1) payment of interest, principal and other payment terms of Affiliate
Investment Instruments that are debt securities of an Investment Affiliate and
(2) the payment of dividends, distributions and other payment terms of Affiliate
Investment Instruments that are preferred or preference stock of an Investment
Affiliate when, as and if declared by such Investment Affiliate.
"Legal Action" has the meaning set forth in Section 3.6(h) of this
Trust Agreement.
"List of Holders" has the meaning set forth in Section 2.2(a) of this
Trust Agreement.
"Majority in liquidation amount of the Trust Securities" means, except
as provided in the terms of the Trust Preferred Securities or by the Trust
Indenture Act, Holders of outstanding Trust Securities voting together as a
single class or, as the context may require, Holders of outstanding Trust
Preferred Securities or the Holder of the outstanding Trust Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Trust Securities or all outstanding Trust Securities of the relevant class, as
the case may be.
5
"Ministerial Action" means, a ministerial action (such as filing a
form or making an election or pursuing some other similar reasonable measure)
which in the sole judgment of the Company has or will cause no adverse effect on
the Trust, the Partnership, the Company, or the Holders of the Trust Securities
and will involve no material cost.
"Nasdaq" means the National Association of Securities Dealers
Automated Quotation System.
"1940 Act" means the Investment Company Act of 1940, as amended from
time to time, or any successor legislation.
"Officers' Certificate" means, with respect to any Person (who is not
an individual), a certificate signed by two authorized officers of such Person,
and, with respect to a natural person, a certificate signed by such person. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Partnership" means HEI Preferred Funding, LP, a Delaware limited
partnership formed pursuant to the Agreement of Limited Partnership and any
successor entity thereto.
6
"Partnership Enforcement Event" has the meaning set forth in Section
6.2(h)(i) of the Agreement of Limited Partnership.
"Partnership Guarantee" means the Partnership Guarantee Agreement
between the Company and The Bank of New York, as trustee, dated as of
_____________, 1997, by the Company in favor of the Partnership Preferred
Security Holders with respect to the Partnership Preferred Securities, as
amended or supplemented from time to time.
"Partnership Preferred Securities" has the meaning set forth in
Section 1.1 of the Agreement of Limited Partnership.
"Partnership Special Event" has the meaning set forth in Section 1.1
of the Agreement of Limited Partnership.
"Payment Amount" has the meaning set forth in Section 7.1(a) of this
Trust Agreement.
"Paying Agent" has the meaning set forth in Section 3.8(g) of this
Trust Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Security Beneficial Owner" means, with respect to a Book-
Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, and in each case in accordance
with the rules of such Clearing Agency).
"Property Account" has the meaning set forth in Section 3.8(c) of this
Trust Agreement.
7
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 6.3 of this Trust Agreement.
"Pro Rata" means, in reference to any distributions on or redemptions
of Trust Securities or the distribution of Partnership Preferred Securities or
any other payment with respect to Trust Securities in connection with a Trust
Special Event or liquidation of the Trust, pro rata to each Holder of Trust
Securities according to the aggregate liquidation amount of the Trust Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Trust Securities outstanding.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Redemption Price" has the meaning set forth in Section 8.2(a) of this
Trust Agreement.
"Regular Trustee" has the meaning set forth in Section 6.1 of this
Trust Agreement.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
officer within the Corporate Trust Office of the Property Trustee, including any
vice-president, any assistant vice-president, any secretary, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Property Trustee customarily performing functions
similar to those performed by any of the above designated officers, who has
direct responsibility for the administration of the Trust, and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Rule 3a-5" means Rule 3a-5 under the 1940 Act.
8
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Special Representative" has the meaning set forth in Section
6.2(h)(i) of the Agreement of Limited Partnership.
"Sponsor" means the Company or any successor entity in a merger,
conversion, consolidation or amalgamation, in its capacity as sponsor of the
Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
6.7(b) of this Trust Agreement.
"Successor Entity" has the meaning set forth in Section 3.15 of this
Trust Agreement.
"Successor Property Trustee" has the meaning set forth in Section
6.7(b) of this Trust Agreement.
"Successor Trust Securities" has the meaning set forth in Section 3.15
of this Trust Agreement.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii) of
this Trust Agreement.
"Tax Action" means (a) an amendment to, change in or announced
proposed change in the laws (or any regulations thereunder) of the United States
or any political subdivision or taxing authority thereof or therein, (b) a
judicial decision interpreting, applying or clarifying such laws or regulations,
(c) an administrative pronouncement or action that represents an official
position (including a clarification of an official position) of the governmental
authority or regulatory body making such administrative pronouncement or taking
such action, or (d) a threatened challenge asserted in connection with an audit
of the Company or any of its subsidiaries, the Partnership or the Trust, or a
threatened challenge asserted in writing against any other taxpayer that has
raised capital through the issuance of securities that are substantially similar
to the Initial Debentures, the Partnership Preferred Securities or the Trust
Preferred Securities, which amendment or change is adopted or which decision,
pronouncement or
9
proposed change is announced or which action, clarification or challenge occurs
on or after the date of the prospectus related to the issuance of the Trust
Preferred Securities.
"10% in liquidation amount of the Trust Securities" means, except as
provided in the terms of the Trust Preferred Securities or by the Trust
Indenture Act, Holders of outstanding Trust Securities voting together as a
single class or, as the context may require, Holders of outstanding Trust
Preferred Securities or the Holder of the outstanding Trust Common Securities
voting separately as a class, who are the record owners of 10% or more of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Trust Securities or all outstanding Trust Securities of the relevant class, as
the case may be.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury Department, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust Common Security" has the meaning set forth in Section 8.1 of
this Trust Agreement.
"Trust Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
"Trust Common Securities Guarantee" means the Trust Common Securities
Guarantee Agreement dated as of ____________, 1997, entered into by the Company,
as Guarantor, for the benefit of the holders of the Trust Common Securities.
"Trust Dissolution Tax Opinion" means an opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that there has been a Trust Tax Event.
10
"Trust Enforcement Event" means the occurrence, at any time, of (i)
arrearages on distributions on the Trust Preferred Securities that shall exist
for six consecutive quarterly distribution periods, (ii) a default by the
Company in respect of any of its obligations under the Trust Preferred
Securities Guarantee or (iii) a Partnership Enforcement Event.
"Trust Guarantees" means the Trust Common Securities Guarantee and the
Trust Preferred Securities Guarantee, collectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trust Investment Company Event" means that the Company shall have
requested and received and shall have delivered to the Regular Trustees an
opinion of nationally recognized independent legal counsel experienced in such
matters to the effect that, as a result of a Change in 1940 Act Law, there is
more than an insubstantial risk that the Trust is or will be considered an
"investment company" which is required to be registered under the 1940 Act.
"Trust Liquidation" has the meaning set forth in Section 9.2(a) of
this Trust Agreement.
"Trust Liquidation Distribution" has the meaning set forth in Section
9.2(a) of this Trust Agreement.
"Trust Preferred Securities Guarantee" has the meaning set forth in
Section 1.1 of the Agreement of Limited Partnership.
"Trust Preferred Security" has the meaning set forth in Section 8.1(a)
of this Trust Agreement.
"Trust Preferred Security Beneficial Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in
11
each case in accordance with the rules of such Clearing Agency).
"Trust Preferred Security Certificate" means a certificate
representing a Trust Preferred Security substantially in the form of
Exhibit A-1.
"Trust Redemption Tax Opinion" means an opinion of nationally
recognized independent tax counsel (which may be counsel for the Company)
experienced in such matters that there has been a Trust Tax Event, and following
such Trust Tax Event there is more than an insubstantial risk that interest
payable by one or more of the Investment Affiliates with respect to the Initial
Debentures issued by such Investment Affiliate is not, or will not be,
deductible by such Investment Affiliate for United States federal income tax
purposes even if the Partnership Preferred Securities were distributed to the
Holders of the Trust Securities in liquidation of such Holders' interests in the
Trust.
"Trust Securities" means the Trust Common Securities and the Trust
Preferred Securities.
"Trust Special Event" means a Trust Tax Event or a Trust Investment
Company Event.
"Trust Tax Event" means that the Company shall have requested and
received and shall have delivered to the Regular Trustees, a Trust Dissolution
Tax Opinion to the effect that there has been a Tax Action that results in there
being more than an insubstantial risk that (i) the Trust is, or will be, subject
to United States federal income tax with respect to income accumulated or
received on the Partnership Preferred Securities, (ii) the Trust is, or will be,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges or (iii) interest payable by an Investment Affiliate with
respect to the Initial Debentures is not, or will not be, deductible by such
Investment Affiliate for United States federal income tax purposes.
"Trustee" or "Trustees" means each Person who has signed this Trust
Agreement as a trustee, so long as such Person shall continue in office in
accordance with the terms
12
hereof, and all other Persons who may from time to time be duly appointed,
qualified and serving as Trustees in accordance with the provisions hereof, and
references herein to a Trustee or the Trustees shall refer to such Person or
Persons solely in their capacity as trustees hereunder.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions, including, but not
limited to, Sections 315(e), 316(b) and 317(a) of the Trust Indenture Act.
(b) The Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Trust Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such duties imposed by the Trust
Indenture Act shall control.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
Section 2.2 Lists of Holders of Trust Securities.
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(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the Trust
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Property Trustee by the
Sponsor and the Regular Trustees on
13
behalf of the Trust, and (ii) at any other time, within 30 days of receipt by
the Trust of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it or which
it receives in the capacity as Paying Agent (if acting in such capacity)
provided that the Property Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act. The Property
Trustee and Sponsor are protected under Section 312(c) of the Trust Indenture
Act.
Section 2.3 Reports by the Property Trustee. Within 60 days after
-------------------------------
May 15 of each year, the Property Trustee shall provide to the Holders of the
Trust Preferred Securities such reports as are required by Section 313(a) of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Property Trustee shall also comply with
Section 313(b) of the Trust Indenture Act, if and as required, in the form and
manner provided by Section 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of Section 313(d) of the Trust Indenture
Act.
Section 2.4 Periodic Reports to Property Trustee. Each of the
------------------------------------
Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee such documents, reports and information as required by Section
314(a) of the Trust Indenture Act, if any, and the compliance certificate
required by Section 314(a) of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314(a) of the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions Precedent. Each
------------------------------------------------
of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to
the Property Trustee such evidence of compliance with any conditions precedent,
if any, provided for in this Trust Agreement that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may be
given in the form of an Officers' Certificate.
14
Section 2.6 Trust Enforcement Events; Waiver.
--------------------------------
(a) The Holders of a Majority in liquidation amount of Trust Preferred
Securities may, by vote, on behalf of the Holders of all of the Trust Preferred
Securities, waive any past Trust Enforcement Event in respect of the Trust
Preferred Securities and its consequences, provided that, if the underlying
event of default or Partnership Enforcement Event:
(i) is not waivable under the Trust Preferred Securities
Guarantee or the Agreement of Limited Partnership, the Trust Enforcement Event
under this Trust Agreement shall also not be waivable; or
(ii) requires the consent or vote of the Holders of greater than
a Majority in liquidation amount of the Trust Preferred Securities to be waived
under the Trust Preferred Securities Guarantee or the Partnership Preferred
Securities to be waived under the Agreement of Limited Partnership (a "Super
Majority"), the Trust Enforcement Event under this Trust Agreement may only be
waived by the vote of the Holders of at least the relevant Super Majority in
liquidation amount of the Trust Preferred Securities.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Trust Agreement and
the Trust Securities, as permitted by the Trust Indenture Act. Upon such
waiver, any such default shall cease to exist, and any Trust Enforcement Event
with respect to the Trust Preferred Securities arising therefrom shall be deemed
to have been cured, for every purpose of this Trust Agreement, but no such
waiver shall extend to any subsequent or other default or Trust Enforcement
Event with respect to the Trust Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Trust Preferred Securities
of Trust Enforcement Events with respect to the Trust Preferred Securities shall
also be deemed to constitute a waiver by the Holder of the Trust Common
Securities of any such Trust Enforcement Event with respect to the Trust Common
Securities for all purposes of this Trust Agreement without any further
15
act, vote, or consent of the Holder of the Trust Common Securities.
(b) The Holder of the Trust Common Securities may waive any past
Trust Enforcement Event with respect to the Trust Common Securities and its
consequences, provided that, if the underlying event of default or Partnership
Enforcement Event:
(i) is not waivable under the Trust Common Securities
Guarantee or the Agreement of Limited Partnership, except where the Holder of
the Trust Common Securities is deemed to have waived such Trust Enforcement
Event under this Trust Agreement as provided below in this Section 2.6(b), the
Trust Enforcement Event under this Trust Agreement shall also not be waivable;
or
(ii) requires the consent or vote of the Holders of a Super
Majority to be waived, except where the Holder of the Trust Common Securities is
deemed to have waived such Trust Enforcement Event under the Trust Agreement as
provided below in this Section 2.6(b), the Trust Enforcement Event under this
Trust Agreement may only be waived by the vote of the Holder of the Trust Common
Securities; provided further, the Holder of Trust Common Securities will be
deemed to have waived any such Trust Enforcement Event and all Trust Enforcement
Events with respect to the Trust Common Securities and its consequences until
all Trust Enforcement Events with respect to the Trust Preferred Securities have
been cured, waived or otherwise eliminated, and until such Trust Enforcement
Events have been so cured, waived or otherwise eliminated, the Property Trustee
will be deemed to be acting solely on behalf of the Holders of the Trust
Preferred Securities and only the Holders of the Trust Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Trust Securities. The foregoing provisions of this Section 2.6(b) shall be
in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and
such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Trust Agreement and the Trust Securities, as
permitted by the Trust Indenture Act.
16
Subject to the foregoing provisions of this Section 2.6(b), upon such waiver,
any such default shall cease to exist and any Trust Enforcement Event with
respect to the Trust Common Securities arising therefrom shall be deemed to have
been cured for every purpose of this Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Trust Enforcement Event with
respect to the Trust Common Securities or impair any right consequent thereon.
(c) A waiver of Partnership Enforcement Events under the Agreement of
Limited Partnership by the Property Trustee at the direction of the Holders of
the Trust Preferred Securities constitutes a waiver of the corresponding Trust
Enforcement Event under this Trust Agreement. The foregoing provisions of this
Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture
Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Trust Agreement and the Trust Securities, as permitted by the
Trust Indenture Act.
Section 2.7 Trust Enforcement Event; Notice. The Property Trustee
-------------------------------
shall, within 90 days after the occurrence of a Trust Enforcement Event,
transmit by mail, first class postage prepaid, to the Holders of the Trust
Securities as the names and addresses of the Holders appear on the books and
records of the Trust, notices of all defaults with respect to the Trust
Securities actually known to a Responsible Officer of the Property Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7 being hereby defined to be
defaults as defined in the Trust Guarantees or the Agreement of Limited
Partnership, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Affiliate Investment Instruments or in the payment of any
sinking fund installment established for the Affiliate Investment Instruments,
the Property Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Property Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Trust Securities.
17
ARTICLE III
ORGANIZATION
Section 3.1 Name. The Trust is named "Hawaiian Electric Industries
----
Capital Trust __", as such name may be modified from time to time by the Regular
Trustees following written notice to the Holders of Trust Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.
Section 3.2 Office. The address of the principal office of the Trust
------
is c/o Hycap Management, Inc., 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx,
Xxxxxxxx 00000. On ten Business Days written notice to the Holders of Trust
Securities, the Regular Trustees may designate another principal office.
Section 3.3 Purpose. The exclusive purposes and functions of the
-------
Trust are (a) to issue and sell Trust Securities and to use the proceeds from
such sale to acquire the Partnership Preferred Securities, and (b) except as
otherwise limited herein, to engage in only those other activities necessary or
incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any activity that would be inconsistent
with the Trust being classified for United States federal income tax purposes as
a grantor trust.
Section 3.4 Authority. Subject to the limitations provided in this
---------
Trust Agreement and to the specific duties of the Property Trustee, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees and the Sponsor in
accordance with their powers shall constitute the act of and serve to bind the
Trust and an action taken by the Property Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees and the Sponsor acting on behalf of the
Trust, no Person shall be required to inquire into the authority of the Trustees
or the Sponsor to bind the Trust. Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees and the Sponsor
as set forth in this Trust Agreement.
18
Section 3.5 Title to Property of the Trust. Except as provided in
------------------------------
Section 3.8 with respect to the Partnership Preferred Securities and the
Property Account or as otherwise provided in this Trust Agreement, legal title
to all assets of the Trust shall be vested in the Trust. The Holders shall not
have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial ownership interest in the assets of the Trust.
Section 3.6 Powers and Duties of the Regular Trustees. The Regular
-----------------------------------------
Trustees shall have the exclusive power, duty and authority to cause the Trust
to engage in the following activities:
(a) To issue and sell the Trust Securities in accordance with this
Trust Agreement, and to execute and deliver (after authentication thereof by the
Property Trustee if such execution is by the facsimile signature of a Regular
Trustee) certificates representing the Trust Securities; provided, however, that
the Trust may issue no more than one series of Trust Preferred Securities and no
more than one series of Trust Common Securities, and, provided further, that
there shall be no interests in the Trust other than the Trust Securities, and
the issuance of Trust Securities shall be limited to a one-time, simultaneous
issuance of both Trust Preferred Securities and Trust Common Securities on the
Closing Date;
(b) To acquire the Partnership Preferred Securities with the proceeds
of the sale of the Trust Securities, including the execution and delivery of the
Agreement of Limited Partnership in connection therewith on behalf of the Trust,
as the initial limited partner; provided, however, that the Regular Trustees
shall cause legal title to the Partnership Preferred Securities to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Trust Preferred Securities and the Holder of the Trust Common Securities;
(c) To give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Trust Special Event; provided that the Regular Trustees
shall consult with the Sponsor and the Property Trustee before taking or
refraining from taking any Ministerial Action in relation to a Trust Special
Event;
19
(d) To establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Trust Preferred Securities and the Holder of the Trust
Common Securities as to such actions and applicable record dates;
(e) To give prompt written notice to the Holders of the Trust
Securities of any notice received from the Partnership of the General Partner's
election not to make a current, quarterly distribution on the Partnership
Preferred Securities under the Agreement of Limited Partnership;
(f) To take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Trust Securities;
(g) To bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless, pursuant to Section 3.8(f), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) To employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) To cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) To give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
(k) To incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) To act as, or appoint another Person to act as, registrar and
transfer agent for the Trust Securities;
20
(m) To execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(n) To take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Trust Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created; and
(o) To take any action, or to take no action, not inconsistent with
this Trust Agreement or with applicable law, that the Regular Trustees determine
in their discretion to be necessary or desirable in carrying out the activities
of the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the 1940 Act; and
(ii) taking no action which would be inconsistent with the Trust
being classified as a grantor trust for United States federal income tax
purposes; provided that such action does not materially adversely affect the
interests of Holders; and
(p) To take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
21
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Partnership pursuant to Section 9.1 of the
Agreement of Limited Partnership.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
The Trust shall not, and the Trustees (including the Property Trustee) shall
cause the Trust not to, engage in any activity other than as required or
authorized by this Trust Agreement. In particular, the Trust shall not and the
Trustees (including the Property Trustee) shall cause the Trust not to:
(a) invest any proceeds received by the Trust from holding the
Partnership Preferred Securities, but shall distribute all such proceeds to
Holders of Trust Securities pursuant to the terms of this Trust Agreement and of
the Trust Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans or incur any indebtedness or acquire any securities
other than the Partnership Preferred Securities;
(e) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Trust Securities in any way whatsoever;
(f) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Trust Securities;
(g) other than as set forth herein, (A) cause the Special
Representative to direct the time, method and place of conducting any proceeding
for any remedy available to the
22
Special Representative or exercising any trust or power conferred upon the
Special Representative with respect to the Partnership Preferred Securities, the
Affiliate Investment Instruments, and the Investment Guarantees, (B) cause the
Special Representative to waive any past default that is waivable under the
Agreement of Limited Partnership, the Affiliate Investment Instruments or the
Investment Guarantees, (C) cause the Special Representative to exercise any
right to rescind or annul any declaration that the principal of, or other
amounts in respect of, any Affiliate Investment Instruments is due and payable
or (D) consent to any amendment, modification or termination of the Agreement of
Limited Partnership or the Partnership Preferred Securities where such consent
shall be required; and
(h) other than in connection with the liquidation of the Trust
pursuant to a Trust Special Event or upon redemption of all the Trust
Securities, file a certificate of cancellation of the Trust.
Section 3.8 Powers and Duties of the Property Trustee.
-----------------------------------------
(a) The legal title to the Partnership Preferred Securities shall be
owned by and held of record in the name of the Property Trustee in trust for the
benefit of the Holders of the Trust Securities. The right, title and interest
of the Property Trustee to the Partnership Preferred Securities shall vest
automatically in each Person who may hereafter be appointed as Property Trustee
in accordance with Section 6.7. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Partnership
Preferred Securities have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Partnership Preferred Securities to the Regular Trustees or to
the Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
23
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the Trust Securities
and, upon the receipt of payments of funds made in respect of the Partnership
Preferred Securities held by the Property Trustee, deposit such funds into the
Property Account and make payments to the Holders of the Trust Securities from
the Property Account in accordance with Section 7.1. Funds in the Property
Account shall be held uninvested until disbursed in accordance with this Trust
Agreement. The Property Account shall be an account that is maintained with a
banking institution authorized to exercise corporate trust powers and having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authority;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Trust Securities to the
extent the Partnership Preferred Securities are redeemed; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Trust Securities, engage in
such ministerial activities as shall be necessary or appropriate to effect the
distribution of the Partnership Preferred Securities to Holders of Trust
Securities upon the occurrence of a Trust Special Event.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Trust Securities.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with (i) a Trust Enforcement Event of which a Responsible
Officer of the Property Trustee has actual knowledge or (ii) the Property
Trustee's duties and obligations under this Trust Agreement or the Trust
Indenture Act.
(f) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a
24
Holder of Partnership Preferred Securities and, if a Trust Enforcement Event
occurs and is continuing, the Property Trustee shall, for the benefit of Holders
of the Trust Securities, enforce its rights as Holder of the Partnership
Preferred Securities subject to the rights of the Holders pursuant to the terms
of such Trust Securities.
(g) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Trust Securities and any
such Paying Agent shall comply with Section 317(b) of the Trust Indenture Act.
Any Paying Agent may be removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Property Trustee.
(h) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Trust Securities pursuant to
the terms of the Trust Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 6.7.
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
25
Section 3.9 Certain Duties and Responsibilities of the Property
---------------------------------------------------
Trustee.
-------
(a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the curing or waiver of all Trust Enforcement Events
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Trust Agreement and no implied covenants shall be
read into this Trust Agreement against the Property Trustee. In case a Trust
Enforcement Event has occurred (that has not been cured or waived pursuant to
Section 2.6) of which a Responsible Officer of the Property Trustee has actual
knowledge, the Property Trustee shall exercise such of the rights and powers
vested in it by this Trust Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event and
after the curing or waiving of all such Trust Enforcement Events that may have
occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this Trust Agreement and the
Property Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Trust Agreement, and no
implied covenants or obligations shall be read into this Trust Agreement against
the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee and conforming to the
requirements of this Trust Agreement; but in the case of any such certificates
or opinions that by any
26
provision hereof are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Trust
Agreement;
(ii) the Property Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
(iii) subject to the requirement of the Property Trustee
receiving a tax opinion as set forth in Section 8.4(d) or 8.5(c), as the case
may be, the Property Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation amount of
the Trust Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this Trust Agreement;
(iv) no provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Trust Agreement or indemnity reasonably
satisfactory to the Property Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safekeeping and physical preservation of the Partnership Preferred
Securities and the Property Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability afforded to the
Property Trustee under this Trust Agreement and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness,
27
existence or sufficiency of the Partnership Preferred Securities or the payment
of any taxes or assessments levied thereon or in connection therewith;
(vii) money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Account maintained by
the Property Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Trust Agreement, nor shall the Property Trustee be
liable for any default or misconduct of the Regular Trustees or the Sponsor.
Section 3.10 Certain Rights of Property Trustee.
----------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees acting on behalf of the Trust contemplated by this Trust Agreement
shall be sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Trust Agreement,
the Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees;
28
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may, at the expense of the Sponsor,
consult with counsel or other experts and the advice or opinion of such counsel
and experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion; such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement at the
request or direction of any Holder, unless (a) such Holder shall have provided
to the Property Trustee security and indemnity, reasonably satisfactory to the
Property Trustee, against the fees, charges, costs, expenses (including
attorneys' fees and expenses and the expenses of the Property Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable advances as
may be requested by the Property Trustee and (b) the Property Trustee has
obtained the legal opinions, if any, required by Section 8.4(d) or 8.5(c), as
the case may be, of this Agreement; provided, that, nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the
occurrence of a Trust Enforcement Event, of its obligation to exercise the
rights and powers vested in it by this Trust Agreement;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond,
29
debenture, note, other evidence of indebtedness or other paper or document, but
the Property Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Trust Securities, and the
signature of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be required to
inquire as to the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this Trust Agreement, both of
which shall be conclusively evidenced by the Property Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Trust Agreement
the Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action hereunder,
the Property Trustee (a) may request instructions from the Holders of the Trust
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Trust Securities as would be entitled to
direct the Property Trustee under the terms of the Trust Securities in respect
of such remedy, right or action, (b) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(c) shall be protected in conclusively relying on or acting in accordance with
such instructions; provided, however, that the Property Trustee shall not be
required to take any action unless it shall have obtained such legal opinions,
if any, required by Sections 8.4(d) or 8.5(c), as the case may be, of this
Agreement; and
(xi) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under
30
any obligation to take any action that is discretionary under the provisions of
this Trust Agreement.
In the event that the Property Trustee is also acting as
authenticating agent, Paying Agent, transfer agent and security registrar, the
rights and protections afforded to the Property Trustee pursuant to this Article
III shall also be afforded to such authenticating agent, Paying Agent, transfer
agent and security registrar.
(b) No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 3.11 Delaware Trustee. Notwithstanding any provision of this
----------------
Trust Agreement other than Section 6.2, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Regular Trustees or the Property Trustee
described in this Trust Agreement. Except as set forth in Section 6.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act. In no
event shall the Property Trustee or the Delaware Trustee be liable for any act
or omission of any of the Regular Trustees hereunder.
Section 3.12 Execution of Documents. Unless otherwise determined by
----------------------
the Regular Trustees, and except as otherwise required by the Business Trust Act
or applicable law, any Regular Trustee is authorized to execute on behalf of the
Trust any documents that the Regular Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6.
31
Section 3.13 Not Responsible for Recitals or Issuance of Trust
-------------------------------------------------
Securities. The recitals contained in this Trust Agreement and the Trust
----------
Securities shall be taken as the statements of the Sponsor, and the Trustees do
not assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or any
part thereof. The Trustees make no representations as to the validity or
sufficiency of this Trust Agreement or the Trust Securities.
Section 3.14 Duration of Trust. The Trust, unless dissolved pursuant
-----------------
to the provisions of Article IX hereof, shall have perpetual existence.
Section 3.15 Mergers.
-------
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c) or Section 9.2(a).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Trust Securities, the Delaware Trustee or the
Property Trustee, consolidate, amalgamate, merge with or into, or be replaced by
a trust organized as such under the laws of any State of the United States;
provided that:
(i) if the Trust is not the survivor, such successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Trust Securities; or
(B) substitutes for the Trust Preferred Securities other
securities having substantially the same terms as the Trust Preferred Securities
(the "Successor Trust Securities") so long as the Successor Trust Securities
rank the same as the Trust Preferred Securities rank with respect to
Distributions, assets and payments upon liquidation, redemption and otherwise;
32
(ii) the Company expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the Property
Trustee as the Holder of the Partnership Preferred Securities;
(iii) the Trust Preferred Securities or any Successor Trust
Securities are listed, or any Successor Trust Securities will be listed upon
notification of issuance, on any national securities exchange or with another
organization on which the Trust Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Trust Preferred Securities (including any Successor Trust
Securities) to be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the Holders
of the Trust Preferred Securities (including any Successor Trust Securities) in
any material respect;
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) the Company guarantees the obligations of such Successor
Entity under the Successor Trust Securities at least to the extent provided by
the Trust Guarantees; and
(viii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally recognized
independent counsel (which may be counsel to the Sponsor) to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement will not adversely affect the rights, preferences and privileges of
the Holders of the Trust Preferred Securities (including any Successor Trust
Securities) in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity);
33
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be required to
register as an Investment Company under the 1940 Act;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will not be classified as an
association or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes; and
(D) following such merger, consolidation, amalgamation or
replacement, the Partnership will not be classified as an association or a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Trust Preferred
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as an
association or a publicly traded partnership taxable as a corporation for
United States federal income tax purposes.
ARTICLE IV
SPONSOR
Section 4.1 Responsibilities of the Sponsor. In connection with the
-------------------------------
issue and sale of the Trust Preferred Securities, the Sponsor shall have the
exclusive right and responsibility to engage in the following activities:
(a) To execute and file with the Commission the registration statement
on Form S-3, including any amendments thereto, pertaining to the Trust Preferred
Securities;
34
(b) To execute and file any documents or take any action as determined
necessary by the Sponsor in order to qualify or register all or part of the
Trust Preferred Securities in any jurisdiction;
(c) To execute and file an application to the New York Stock Exchange,
Inc. or any other national stock exchange or the Nasdaq Stock Market's National
Market System for listing upon notice of issuance of the Trust Preferred
Securities;
(d) To execute and file with the Commission a registration statement
on Form 8-A, including any amendments thereto, relating to the registration of
the Trust Preferred Securities under Section 12(b) of the Exchange Act;
(e) To negotiate, execute and enter into an underwriting agreement
providing for the sale of the Trust Preferred Securities; and
(f) To execute and enter into the Agreement of Limited Partnership;
Section 4.2 Indemnification and Expenses of the Property Trustee and
--------------------------------------------------------
the Delaware Trustee. To the extent the Partnership fails to do so, the Sponsor
--------------------
agrees to indemnify the Property Trustee and the Delaware Trustee and their
respective officers, directors, employees and agents for, and to hold each of
them harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Property Trustee or the Delaware
Trustee, as the case may be, arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including the costs and
expenses of defending either of them against any claim or liability in
connection with the exercise or performance of any of their respective powers or
duties hereunder; the provisions of this Section 4.2 shall survive
the resignation or removal of the Delaware Trustee or the Property Trustee or
the termination of this Trust Agreement.
35
ARTICLE V
TRUST COMMON SECURITIES HOLDER
Section 5.1 Company's Purchase of Trust Common Securities. On the
---------------------------------------------
Closing Date the Company will purchase all of the Trust Common Securities issued
by the Trust, for an amount at least equal to 3% of the capital of the Trust, at
the same time as the Trust Preferred Securities are sold.
Section 5.2 Covenants of the Trust Common Securities Holder. For so
-----------------------------------------------
long as the Trust Preferred Securities remain outstanding, the Company will
covenant (i) to maintain directly 100 percent ownership of the Trust Common
Securities, (ii) to cause the Trust to remain a statutory business trust and not
to voluntarily dissolve, wind up, liquidate, or be terminated, except as
permitted by this Trust Agreement, (iii) to use its commercially reasonable
efforts to ensure that the Trust will not be an Investment Company for purposes
of the 1940 Act, and (iv) to take no action which would be reasonably likely to
cause the Trust to be classified as an association or a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes.
ARTICLE VI
TRUSTEES
Section 6.1 Number of Trustees. The number of Trustees initially
------------------
shall be five (5), and:
(a) At any time before the issuance of any Trust Securities, the
Sponsor may, by written instrument, increase or decrease the number of Trustees;
and
(b) After the issuance of any Trust Securities, the number of Trustees
may be increased or decreased by vote of the Holder of Trust Common Securities
voting as a class; provided, however, that the number of Trustees shall in no
event be less than three (3); provided further that (1) if required by the
Business Trust Act, one Trustee is the Delaware Trustee; (2) there shall be at
least one Trustee who is an employee or officer of, or is affiliated
36
with the Company (each, a "Regular Trustee"); and (3) one Trustee shall be the
Property Trustee for so long as this Trust Agreement is required to qualify as
an indenture under the Trust Indenture Act, and such Property Trustee may also
serve as Delaware Trustee if it meets the applicable requirements.
Section 6.2 Delaware Trustee. If required by the Business Trust Act,
----------------
one Trustee (the "Delaware Trustee") shall be:
(a) A natural person who is a resident of the State of Delaware; or
(b) If not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law, provided that, if the Property Trustee has its principal place
of business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee may also be the Delaware Trustee (in
which case Section 3.11 shall have no application).
Section 6.3 Property Trustee; Eligibility.
-----------------------------
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial or District of Columbia authority. If
such Person publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 6.3(a)(ii), the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus
37
as set forth in its most recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 6.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 6.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Trust Common Securities (as if it were
the obligor referred to in Section 310(b) of the Trust Indenture Act) shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Trust Preferred Securities Guarantee shall be deemed to be
specifically described in this Trust Agreement for purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
Section 6.4 Qualifications of Regular Trustees and Delaware Trustee
-------------------------------------------------------
Generally. Each Regular Trustee and the Delaware Trustee (unless the Property
---------
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
Section 6.5 Regular Trustees.
----------------
The initial Regular Trustees shall be:
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxxxx X. Xxx
Except as expressly set forth in this Trust Agreement and except if a meeting of
the Regular Trustees is called with respect to any matter over which the Regular
Trustees have
38
power to act, any power of the Regular Trustees may be exercised by, or with the
consent of, any one such Regular Trustee.
Section 6.6 Delaware Trustee. The initial Delaware Trustee shall be:
----------------
The Bank of New York (Delaware)
Section 6.7 Appointment, Removal and Resignation of Trustees.
------------------------------------------------
(a) Subject to Section 6.7(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Trust Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Trust Securities, by vote of the
Holders of a Majority in liquidation amount of the Trust Common Securities
voting as a class at a meeting of the Holders of the Trust Common Securities.
(b) (i) the Trustee that acts as Property Trustee shall not be
removed in accordance with Section 6.7(a) until a successor Trustee possessing
the qualifications to act as Property Trustee under Section 6.3 (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor;
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 6.7(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 6.2 and 6.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor;
(iii) no such removal of the Property Trustee or the Delaware
Trustee shall be effective until all of the fees, charges, and expenses incurred
by such entity have been paid.
39
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such Successor Property
Trustee and delivered to the Trust, the Sponsor and the resigning Property
Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the Holders of the Trust
Securities;
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been appointed
and has accepted such appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor and the resigning
Delaware Trustee; and
(iii) no such resignation of the Property Trustee or the Delaware
Trustee shall be effective until all of the fees, charges, and expenses incurred
by such entity have been paid.
(d) The Holder of the Trust Common Securities shall use its best
efforts to promptly appoint a Successor Delaware Trustee or Successor Property
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 6.7.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
6.7 within 60 days
40
after delivery to the Sponsor and the Trust of an instrument of resignation, the
resigning Property Trustee or Delaware Trustee, as applicable, may petition any
court of competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or successor Delaware
Trustee, as the case may be.
Section 6.8 Vacancies among Trustees. If a Trustee ceases to hold
------------------------
office for any reason and the number of Trustees is not reduced pursuant to
Section 6.1, or if the number of Trustees is increased pursuant to Section 6.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy by
the Regular Trustees or, if there are more than two, a majority of the Regular
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 6.7.
Section 6.9 Effect of Vacancies. The death, resignation, retirement,
-------------------
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to dissolve, terminate or
annul the Trust. Whenever a vacancy in the number of Regular Trustees shall
occur, until such vacancy is filled by the appointment of a Regular Trustee in
accordance with Section 6.7, the Regular Trustees in office, regardless of their
number, shall have all the powers granted to the Regular Trustees and shall
discharge all the duties imposed upon the Regular Trustees by this Trust
Agreement.
Section 6.10 Meetings. If there is more than one Regular Trustee,
--------
meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any in-
person meetings of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meetings of the Regular Trustees or any committee thereof shall be hand
delivered or otherwise delivered in writing (including by
41
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of notice
of such meeting except where a Regular Trustee attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Trust Agreement, any action of the Regular Trustees may be taken at a
meeting by vote of a majority of the Regular Trustees present (whether in person
or by telephone) and eligible to vote with respect to such matter, provided that
a Quorum is present, or without a meeting by the unanimous written consent of
the Regular Trustees. Notwithstanding the foregoing, any and all actions of the
Regular Trustees may be taken by the unanimous written consent of all Regular
Trustees.
Section 6.11 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6.
(b) The Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
Section 6.12 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any Person into which the Property Trustee or the Delaware Trustee,
--------
as the case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
42
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of the Property Trustee or the Delaware Trustee, as
the case may be, shall be the successor of the Property Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
ARTICLE VII
DISTRIBUTIONS
Section 7.1 Distributions.
-------------
(a) Holders of Trust Securities shall be entitled to receive
cumulative cash distributions at the rate per annum of _____% of the stated
liquidation amount of $25 per Trust Security, calculated on the basis of a 360-
day year consisting of twelve 30-day months. For any period shorter than a full
90-day quarter, distributions will be computed on the basis of the actual number
of days elapsed in such 90-day quarter. Distributions shall be made on the
Trust Preferred Securities and the Trust Common Securities on a Pro Rata basis.
Distributions on the Trust Securities shall, from the date of original issue,
accumulate and be cumulative and shall be payable quarterly only to the extent
that the Trust has funds legally available for the payment of such Distributions
in the Property Account. Distributions not paid on the scheduled payment date
will accumulate and compound quarterly at the rate of __% per annum ("Compounded
Distributions"). "Distributions" shall mean ordinary cumulative distributions
in respect of each Fiscal Period together with any Compounded Distributions. If
and to the extent that the Partnership makes a distribution on the Partnership
Preferred Securities held by the Property Trustee or the Company makes a payment
under the Partnership Guarantee (the amount of any such partnership
distribution, including any compounded partnership distributions, or guarantee
payment being a "Payment Amount"), the Trust shall and the Property Trustee is
directed, to the extent funds are
43
available for that purpose pursuant to Section 7.1(c), to make a Pro Rata
Distribution of the Payment Amount to Holders.
(b) Distributions on the Trust Securities will be cumulative, will
accumulate from the date of initial issuance and will be payable quarterly in
arrears on each March 31, June 30, September 30 and December 31, commencing
March 31, 1997, when, as and if legally available for payment, by the Property
Trustee, except as otherwise described below. If Distributions are not paid
when scheduled, the accumulated Distributions shall be paid to the Holders of
record of Trust Securities as they appear on the books and records of the Trust
on the record date as determined under Section 7.1(d) below with respect to the
actual payment date for the Trust Securities, which will correspond to the
actual payment date fixed by the Partnership with respect to the payment of
cumulative distributions on the Partnership Preferred Securities not declared
and paid when regularly scheduled.
(c) Amounts available to the Trust for distribution to the Holders of
the Trust Securities will be limited to payments received by the Trust from the
Partnership on the Partnership Preferred Securities or from the Company on the
Partnership Guarantee or the Trust Guarantee. If the Property Trustee, as the
holder of the Partnership Preferred Securities for the benefit of the Holders of
the Trust Securities, receives written notice of any determination by the
Partnership not to pay distributions on such Partnership Preferred Securities,
the Property Trustee shall give notice of such determination to the Holders.
(d) Distributions on the Trust Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which relevant record dates, as long as the Trust
Preferred Securities remain in book-entry only form, will be one Business Day
prior to the relevant payment dates. Such distributions will be paid through
the Property Trustee who will hold amounts received in respect of the
Partnership Preferred Securities in the Property Account for the benefit of the
Holders of the Trust Securities. In the event that the Trust Securities do not
remain in book-entry only form, the relevant record dates shall be the 15th day
of the month of the relevant payment
44
dates. In the event that any date on which distributions are payable on the
Trust Securities is not a Business Day, payment of the distribution payable on
such date will be made on the next succeeding day which is a Business Day
(without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day (without any reduction
in interest or other payments in respect of such early payment), in each case
with the same force and effect as if made on such date.
ARTICLE VIII
ISSUANCE OF TRUST SECURITIES
Section 8.1 Designation and General Provisions Regarding Trust
--------------------------------------------------
Securities.
----------
(a) The Regular Trustees shall on behalf of the Trust issue one class
of preferred securities representing undivided beneficial ownership interests in
the assets of the Trust (the "Trust Preferred Securities") and one class of
common securities representing undivided beneficial ownership interests in the
assets of the Trust (the "Trust Common Securities" and, together with the Trust
Preferred Securities, the "Trust Securities") as follows:
(i) Trust Preferred Securities. 4,000,000 Trust Preferred
--------------------------
Securities of the Trust with an aggregate liquidation amount with respect to the
assets of the Trust of one hundred million dollars ($100,000,000) and a
liquidation amount with respect to the assets of the Trust of $25 per preferred
security, are hereby designated for the purpose of identification only as
______% Trust Originated Preferred Securities. The Trust Preferred Security
Certificates evidencing the Trust Preferred Securities shall be substantially in
the form of Exhibit A-1 to this Trust Agreement, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange on which the Trust
Preferred Securities are listed.
45
(ii) Trust Common Securities. 123,732 Trust Common Securities of
-----------------------
the Trust with an aggregate liquidation amount with respect to the assets of the
Trust of three million ninety-three thousand dollars ($3,093,000) and a
liquidation amount with respect to the assets of the Trust of $25 per common
security, are hereby designated for the purposes of identification only as
_____% Trust Common Securities. The Trust Common Security Certificates
evidencing the Trust Common Securities shall be substantially in the form of
Exhibit A-2 to the Trust Agreement, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
(b) Except as provided in Section 9.2(b) of this Trust Agreement, the
Trust Preferred Securities rank pari passu and payment thereon shall be made Pro
Rata with the Trust Common Securities. The Trust shall issue no securities or
other interests in the assets of the Trust other than the Trust Preferred
Securities and the Trust Common Securities.
(c) One or more Regular Trustees shall sign the Trust Securities
Certificates for the Trust by manual or facsimile signature. In case any
Regular Trustee of the Trust who shall have signed any of the Trust Securities
shall cease to be a Regular Trustee before the certificates so signed shall be
delivered by the Trust, such certificates nevertheless may be delivered as
though the person who signed such certificates had not ceased to be such Regular
Trustee; and any certificate may be signed on behalf of the Trust by such
persons who, at the actual date of execution of such Trust Security, shall be
the Regular Trustees of the Trust, although at the date of the execution and
delivery of this Trust Agreement any such person was not such a Regular Trustee.
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements as
the Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation of any stock exchange on which Trust
Securities may be listed, or to conform to usage.
46
If executed by the facsimile signature of a Regular Trustee, a Trust
Security shall not be valid until authenticated by the manual signature of an
authorized officer of the Property Trustee. Such signature shall be conclusive
evidence that the Trust Security has been authenticated under this Trust
Agreement.
Upon a written order of the Trust, signed by at least one Regular
Trustee, directing the Property Trustee to authenticate and deliver Trust
Securities (if the Trust Securities Certificates are executed by the facsimile
signature of a Regular Trustee), the Property Trustee shall authenticate and
deliver the Trust Securities for original issue. The aggregate number of Trust
Securities outstanding at any time shall not exceed the number set forth in this
Trust Agreement.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Trust Securities. An authenticating agent may
authenticate Trust Preferred Securities whenever the Property Trustee may do so.
Each reference in this Trust Agreement to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Sponsor or an Affiliate of the
Sponsor.
(d) The consideration received by the Trust for the issuance of the
Trust Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(e) Upon issuance of the Trust Securities as provided in this Trust
Agreement, the Trust Securities so issued shall be deemed to be validly issued,
fully paid and nonassessable, subject to Section 11.1 with respect to the Trust
Common Securities.
(f) Every Person, by virtue of having become a Holder or a Trust
Preferred Security Beneficial Owner in accordance with the terms of this Trust
Agreement, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Trust Agreement.
47
Section 8.2 Redemption of Trust Securities.
------------------------------
(a) Upon a purchase of the Partnership Preferred Securities by the
Partnership upon redemption or otherwise, the proceeds from such purchase shall
be simultaneously applied Pro Rata to redeem Trust Securities having an
aggregate liquidation preference equal to the aggregate liquidation preference
of the Partnership Preferred Securities so purchased or redeemed for an amount
equal to $25 per Trust Security plus an amount equal to accumulated and unpaid
Distributions, including any Compounded Distributions thereon through the date
of the redemption or such lesser amount as shall be received by the Trust in
respect of the Partnership Preferred Securities so purchased or redeemed as
calculated by the Regular Trustees (the "Redemption Price"). Holders will be
given not less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Trust Securities are to be so
redeemed, the Trust Common Securities and the Trust Preferred Securities will be
redeemed Pro Rata and the Trust Preferred Securities to be redeemed will be
redeemed as described in Section 8.3 below.
(c) If, at any time, a Trust Special Event shall occur and be
continuing, the Regular Trustees shall, unless the Partnership Preferred
Securities are redeemed in the limited circumstances described below, within 90
days following the occurrence of such Trust Special Event elect to either
(i) dissolve the Trust upon not less than 30 nor more than 60 days' notice with
the result that, after satisfaction of creditors, if any, of the Trust,
Partnership Preferred Securities with an aggregate liquidation preference equal
to the aggregate stated liquidation amount of, with a distribution rate
identical to the distribution rate of, and accumulated and unpaid distributions
equal to accumulated and unpaid distributions on, and having the same record
date for payment as, the Trust Preferred Securities and the Trust Common
Securities outstanding at such time would be distributed on a Pro Rata basis to
the Holders of the Trust Preferred Securities and the Trust Common Securities in
liquidation of such Holders' interests in the Trust; provided, however, that if
at the time there is available to the Trust the opportunity to eliminate,
48
within such 90-day period, the Trust Special Event by taking some ministerial
action, such as filing a form or making an election, or pursuing some other
similar reasonable measure which in the sole judgment of the Sponsor has or will
cause no adverse effect on the Trust, the Partnership, the Sponsor or the
Holders of the Trust Securities and will involve no material cost, the Trust
will pursue such measure in lieu of dissolution or (ii) cause the Trust
Preferred Securities to remain outstanding, provided that in the case of this
clause (ii), the Sponsor shall pay any and all expenses incurred by or payable
by the Trust attributable to the Trust Special Event. Furthermore, if in the
case of the occurrence of a Trust Tax Event, the Regular Trustees have received
a Trust Redemption Tax Opinion, then the General Partner shall have the right,
within 90 days following the occurrence of such Trust Tax Event, to elect to
cause the Partnership to redeem the Partnership Preferred Securities in whole
(but not in part) for cash upon not less than 30 nor more than 60 days' notice
and promptly following such redemption, the Trust Securities will be redeemed by
the Trust at the Redemption Price.
(d) If the Partnership Preferred Securities are distributed to the
Holders of the Trust Preferred Securities, the Sponsor will use its best efforts
to cause the Partnership Preferred Securities to be listed on the New York Stock
Exchange or on such other national securities exchange or similar organization
as the Trust Preferred Securities are then listed or quoted.
(e) On the date fixed for any distribution of Partnership Preferred
Securities, upon dissolution of the Trust, (i) the Trust Preferred Securities
and the Trust Common Securities will no longer be deemed to be outstanding and
(ii) certificates representing Trust Securities will be deemed to represent the
Partnership Preferred Securities having an aggregate principal preference equal
to the stated liquidation amount of, and bearing accumulated and unpaid
distributions equal to accumulated and unpaid distributions on, such Trust
Securities until such certificates are presented to the Sponsor or its agent for
transfer or reissuance.
49
Section 8.3 Redemption Procedures.
---------------------
(a) Notice of any redemption of, or notice of distribution of
Partnership Preferred Securities in exchange for, the Trust Securities
(a "Redemption/Distribution Notice") will be given by the Trust by mail to each
Holder of Trust Securities to be redeemed or exchanged not fewer than 30 nor
more than 60 days before the date fixed for redemption or exchange thereof
which, in the case of a redemption, will be the date fixed for redemption of the
Partnership Preferred Securities. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given pursuant to this
Section 8.3, a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to Holders
of Trust Securities. Each Redemption/Distribution Notice shall be addressed to
the Holders of Trust Securities at the address of each such Holder appearing in
the books and records of the Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings with respect to
any other Holder.
(b) In the event that fewer than all the outstanding Trust Securities
are to be redeemed, the Trust Securities to be redeemed shall be redeemed
Pro Rata from each Holder of Trust Securities, provided that, in respect of
Trust Preferred Securities registered in the name of and held of record by DTC
or its nominee (or any successor Clearing Agency or its nominee), the
distribution of the proceeds of such redemption will be made to each Clearing
Agency Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by DTC or such Clearing
Agency or nominee. The Trust may not redeem fewer than all of the outstanding
Trust Preferred Securities unless all accumulated and unpaid Distributions
(including Compounded Distributions) have been paid on all Trust Preferred
Securities for all quarterly distribution periods terminating on or prior to the
date of redemption.
(c) If Trust Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may
50
only be issued if the Partnership Preferred Securities are redeemed as set out
in this Section 8.3 (which notice will be irrevocable), then (A) while the Trust
Preferred Securities are in book-entry only form, by 12:00 noon, New York City
time, on the redemption date, the Property Trustee will deposit irrevocably with
the DTC or its nominee (or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with respect to the Trust
Preferred Securities and will give the DTC irrevocable instructions and
authority to pay the Redemption Price to the Trust Preferred Securities
Beneficial Owners, and (B) with respect to Trust Preferred Securities issued in
certificated form and Trust Common Securities, the Property Trustee will pay the
relevant Redemption Price to the Holders of such Trust Securities by check
mailed to the address of the relevant Holder appearing on the books and records
of the Trust on the redemption date. If a Redemption/Distribution Notice shall
have been given and funds deposited as required, if applicable, then immediately
prior to the close of business on the date of such deposit, or on the redemption
date, as applicable, distributions will cease to accumulate on the Trust
Securities so called for redemption and all rights of Holders of such Trust
Securities will cease, except the right of the Holders of such Trust Securities
to receive the Redemption Price, but without interest on such Redemption Price
and, from and after the date fixed for redemption, such Trust Securities will
not accumulate Distributions or bear interest. If any date fixed for redemption
of Trust Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay)
except that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day (without any reduction in
interest or other payments in respect of such early payment). If payment of the
Redemption Price in respect of any Trust Securities is improperly withheld or
refused and not paid either by the Property Trustee or by the Sponsor pursuant
to the Trust Preferred Securities Guarantee, Distributions on such Trust
Securities will continue to accumulate at the then applicable rate from the
original redemption date to the actual date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
51
calculating the Redemption Price. For these purposes, the applicable Redemption
Price shall not include Distributions which are being paid to Holders who were
Holders on a relevant record date.
Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Trust Securities that
have been called for redemption.
(d) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Company or its
subsidiaries may at any time and from time to time purchase outstanding Trust
Preferred Securities by tender, in the open market or by private agreement.
Section 8.4 Voting Rights of Trust Preferred Securities.
-------------------------------------------
(a) Except as provided under Sections 2.6, 6.1(b) and this Article
VIII and as otherwise required by the Business Trust Act, the Trust Indenture
Act and other applicable law, the Holders of the Trust Preferred Securities will
have no voting rights.
(b) Subject to the requirement of the Property Trustee obtaining a tax
opinion in certain circumstances set forth in Section 8.4(d) below, the Holders
of a Majority in liquidation amount of the Trust Preferred Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or direct the exercise of any trust or
power conferred upon the Property Trustee under this Trust Agreement, including
the right to direct the Property Trustee, as Holder of the Partnership Preferred
Securities, to (i) exercise the remedies available to it under the Agreement of
Limited Partnership as a
52
Holder of the Partnership Preferred Securities, including the right to direct
the Special Representative of the Partnership as elected by the Holders of the
Partnership Preferred Securities in accordance with the Agreement of Limited
Partnership to enforce, to the fullest extent permitted by law, (A) the
Partnership's creditors rights and other rights with respect to the Affiliate
Investment Instruments and any Investment Guarantees, (B) the rights of the
holders of the Partnership Preferred Securities under the Partnership Guarantee,
and (C) the rights of the holders of the Partnership Preferred Securities to
receive distributions (if and to the extent such distributions have been
declared out of funds legally available therefor by the General Partner in its
sole discretion) on the Partnership Preferred Securities or (ii) consent to any
amendment, modification, or termination of the Agreement of Limited Partnership
or the Partnership Preferred Securities where such consent shall be required;
provided, however, that where a consent or action under the Agreement of Limited
Partnership would require the consent or act of the Holders of more than a
majority of the aggregate liquidation amount of Partnership Preferred Securities
affected thereby, only the Holders of the percentage of the aggregate stated
liquidation amount of the Trust Preferred Securities which is at least equal to
the percentage required under the Agreement of Limited Partnership may direct
the Property Trustee to give such consent or take such action on behalf of the
Trust.
(c) If the Property Trustee fails to enforce its rights under the
Partnership Preferred Securities after a Holder of record of Trust Preferred
Securities has made a written request, such Holder of record of Trust Preferred
Securities may, to the fullest extent permitted by law, directly institute a
legal proceeding against the General Partner or the Special Representative, to
enforce the Property Trustee's rights under the Partnership Preferred Securities
without first instituting any legal proceeding against the Property Trustee, the
Trust or any other Person. Notwithstanding the foregoing, for so long as the
Property Trustee is the holder of any Partnership Preferred Securities, if a
Trust Enforcement Event has occurred and is continuing and such event is
attributable to the failure of an Investment Affiliate to make any required
payment when due on any
53
Affiliate Investment Instrument and the failure of the Company to make any
required payment with respect thereto when due on any Investment Guarantee, then
a Holder of Trust Preferred Securities may, on behalf of the Partnership,
directly institute a proceeding against such Investment Affiliate with respect
to such Affiliate Investment Instrument or against the Company with respect to
any such Investment Guarantee, in each case for enforcement of payment.
(d) The Property Trustee shall notify all Holders of the Trust
Preferred Securities of any notice of any Partnership Enforcement Event received
from the General Partner with respect to the Partnership Preferred Securities
and the Affiliate Investment Instruments. Such notice shall state that such
Partnership Enforcement Event also constitutes a Trust Enforcement Event.
Except with respect to directing the time, method, and place of conducting a
proceeding for a remedy, the Property Trustee shall be under no obligation to
take any of the actions described in clause 8.4(b)(i) and (ii) above unless the
Property Trustee has obtained an opinion of independent tax counsel to the
effect that as a result of such action, the Trust will not be classified as an
association or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes and each Holder will continue to be treated
as owning an undivided beneficial ownership interest in the Partnership
Preferred Securities.
(e) In the event the consent of the Property Trustee, as the Holder of
the Partnership Preferred Securities, is required under the Agreement of Limited
Partnership with respect to any amendment, modification or termination of the
Agreement of Limited Partnership, the Property Trustee shall request the
direction of the Holders of the Trust Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a Majority in liquidation amount of
the Trust Securities voting together as a single class; provided, however, that
where a consent under the Agreement of Limited Partnership would require the
consent of the Holders of more than a majority of the aggregate principal amount
of the Partnership Preferred Securities, the Property Trustee may only give such
consent at the direction of the Holders of at least the same proportion in
aggregate stated liquidation amount of the Trust Securities. The Property
Trustee shall not take any such action in accordance with the directions of the
Holders of
54
the Trust Securities unless the Property Trustee has obtained an opinion of tax
counsel to the effect that such action is not inconsistent with the Trust being
classified as a grantor trust for United States federal income tax purposes.
(f) A waiver of a Partnership Enforcement Event with respect to the
Partnership Preferred Securities will constitute a waiver of the corresponding
Trust Enforcement Event.
(g) Any required approval or direction of Holders of Trust Preferred
Securities may be given at a separate meeting of Holders of Trust Preferred
Securities convened for such purpose, at a meeting of all of the Holders of
Trust Securities or pursuant to written consent. The Regular Trustees will
cause a notice of any meeting at which Holders of Trust Preferred Securities are
entitled to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Trust Preferred
Securities. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents.
(h) No vote or consent of the Holders of Trust Preferred Securities
will be required for the Trust to redeem and cancel Trust Preferred Securities
or distribute Partnership Preferred Securities in accordance with the Trust
Agreement.
(i) Notwithstanding that Holders of Trust Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Trust Securities that are beneficially owned at such time by the Company
or any entity directly or indirectly controlled by, or under direct or indirect
common control with, the Company, shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if such Trust
Securities were not outstanding, provided, however that persons otherwise
eligible to vote to whom the Company or any of its subsidiaries have pledged
Trust Preferred Securities may vote or consent
55
with respect to such pledged Trust Preferred Securities under any of the
circumstances described herein.
(j) Holders of the Trust Preferred Securities will have no rights to
appoint or remove the Regular Trustees, who may be appointed, removed or
replaced solely by the Company, as the Holder of all of the Trust Common
Securities.
Section 8.5 Voting Rights of Trust Common Securities.
----------------------------------------
(a) Except as provided under this Section 8.5 or as otherwise required
by the Business Trust Act, the Trust Indenture Act or other applicable law or
provided by the Trust Agreement, the Holders of the Trust Common Securities will
have no voting rights.
(b) The Holder of the Trust Common Securities is entitled, subject
to Article VI hereof, to vote to appoint, remove or replace any Trustee or to
increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Trust Agreement and only after all
Trust Enforcement Events with respect to the Trust Preferred Securities have
been cured, waived, or otherwise eliminated and subject to the requirement of
the Property Trustee obtaining a tax opinion in certain circumstances set forth
in this paragraph (c), the Holder of the Trust Common Securities has the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or direct the exercise of any trust or
power conferred upon the Property Trustee under this Trust Agreement, including
the right to direct the Property Trustee, as Holder of the Partnership Preferred
Securities, to (i) exercise the remedies available to it under the Agreement of
Limited Partnership as a Holder of the Partnership Preferred Securities,
including the right to direct the Special Representative of the Partnership as
elected by the Holders of the Partnership Preferred Securities in accordance
with the Agreement of Limited Partnership to enforce, to the fullest extent
permitted by law, (A) the Partnership's creditors rights and other rights with
respect to the Affiliate Investment
56
Instruments and any Investment Guarantees, (B) the rights of the Holders of the
Partnership Preferred Securities under the Partnership Guarantee, and (C) the
rights of the Holders of the Partnership Preferred Securities to receive
distributions (if and to the extent such distributions have been declared out of
funds legally available therefor by the General Partner in its sole discretion)
on the Partnership Preferred Securities or (ii) consent to any amendment,
modification, or termination of the Agreement of Limited Partnership or the
Partnership Preferred Securities where such consent shall be required; provided,
however, that where a consent or action under the Agreement of Limited
Partnership would require the consent or act of the Holders of more than a
majority of the aggregate liquidation amount of Partnership Preferred Securities
affected thereby, only the Holders of the percentage of the aggregate stated
liquidation amount of the Trust Common Securities which is at least equal to the
percentage required under the Agreement of Limited Partnership may direct the
Property Trustee to give such consent or take such action on behalf of the
Trust. Except with respect to directing the time, method, and place of
conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clause 8.5(c)(i) and (ii)
above unless the Property Trustee has obtained an opinion of independent tax
counsel to the effect that, as a result of such action, for United States
federal income tax purposes the Trust will not be classified as an association
or a publicly traded partnership taxable as a corporation.
(d) If the Property Trustee fails to enforce its rights under the
Partnership Preferred Securities after a Holder of record of Trust Common
Securities has made a written request, such Holder of record of Trust Common
Securities may, to the fullest extent permitted by law, directly institute a
legal proceeding directly against the General Partner of the Partnership or the
Special Representative, to enforce the Property Trustee's rights under the
Partnership Preferred Securities without first instituting any legal proceeding
against the Property Trustee, the Trust or any other Person. Notwithstanding the
foregoing, if a Trust Enforcement Event has occurred and is continuing and such
event is attributable to the failure of an Investment Affiliate to make any
required payment when due on any Affiliate Investment
57
Instrument, then a Holder of Trust Common Securities may directly institute a
proceeding against such Investment Affiliate for enforcement of payment with
respect to such Affiliate Investment Instrument.
(e) A waiver of a Partnership Enforcement Event with respect to the
Partnership Preferred Securities will constitute a waiver of the corresponding
Trust Enforcement Event.
(f) Any required approval or direction of the Holder of the Trust
Common Securities may be given at a separate meeting of the Holder of the Trust
Common Securities convened for such purpose, at a meeting of all of the Holders
of Trust Securities or pursuant to written consent. The Regular Trustees will
cause a notice of any meeting at which the Holder of the Trust Common Securities
is entitled to vote, or of any matter upon which action by written consent of
such Holder is to be taken, to be mailed to the Holder of record of the Trust
Common Securities. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holder is entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents.
(g) No vote or consent of the Holder of the Trust Common Securities
shall be required for the Trust to redeem and cancel Trust Common Securities or
to distribute Partnership Preferred Securities in accordance with the Trust
Agreement and the terms of the Trust Securities.
Section 8.6 Paying Agent. In the event that the Trust Preferred
------------
Securities are not in book-entry only form, the Trust shall maintain in the
Borough of Manhattan, City of New York, State of New York, an office or agency
where the Trust Preferred Securities may be presented for payment ("Paying
Agent"). The Trust may appoint the Paying Agent and may appoint one or more
additional paying agents in such other locations as it shall determine. The
term "Paying Agent" includes any additional paying agent. The Trust may change
any Paying Agent without prior notice to any Holder. The Trust shall notify the
Property Trustee of the name and address of
58
any Paying Agent not a party to this Trust Agreement. If the Trust fails to
appoint or maintain another entity as Paying Agent, the Property Trustee shall
act as such. The Trust or any of its Affiliates may act as Paying Agent. The
Bank of New York shall initially act as Paying Agent for the Trust Preferred
Securities and the Trust Common Securities.
Section 8.7 Listing. The Sponsor shall use its best efforts to cause
-------
the Trust Preferred Securities to be listed for quotation on the New York Stock
Exchange.
Section 8.8 Acceptance of Trust Agreement, Affiliate Investment
---------------------------------------------------
Instruments, Guarantees and Agreement of Limited Partnership. Each Holder of
------------------------------------------------------------
Trust Preferred Securities and Trust Common Securities, by the acceptance
thereof, agrees to the provisions of this Trust Preferred Securities Agreement,
the Trust Guarantee, the Partnership Guarantee, any Investment Guarantee and the
Agreement of Limited Partnership, respectively, including the subordination
provisions therein.
ARTICLE IX
DISSOLUTION AND LIQUIDATION OF THE TRUST
Section 9.1 Dissolution of Trust.
--------------------
(a) The Trust shall dissolve:
(i) upon the bankruptcy, insolvency or dissolution of the Holder
of Trust Common Securities or the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor, the filing of a certificate of
cancellation with respect to the Trust after having obtained the consent of at
least a Majority in liquidation amount of the Trust Securities, voting together
as a single class, to file such certificate of cancellation, or the revocation
of the Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
59
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor or the Trust;
(iv) when all of the Trust Securities shall have been called
for redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders in accordance with the terms of the Trust Securities;
(v) upon the election of the Regular Trustees, following the
occurrence and continuation of a Trust Special Event, pursuant to which the
Trust shall have been dissolved in accordance with the terms of the Trust
Securities and, after satisfaction of the Trust's liabilities, all of the
Partnership Preferred Securities shall have been distributed to the Holders of
Trust Securities in exchange for all of the Trust Securities; or
(vi) before the issuance of any Trust Securities, with the
consent of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 9.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article XI shall survive the
termination of the Trust.
Section 9.2 Liquidation Distribution Upon Termination and Dissolution
---------------------------------------------------------
of the Trust.
------------
(a) In the event of any voluntary or involuntary liquidation,
dissolution, winding-up or termination of the Trust (each a "Trust
Liquidation"), the Holders of the Trust Preferred Securities on the date of the
Trust Liquidation will be entitled to receive, out of the assets of the Trust
available for distribution to Holders of Trust Securities after satisfaction of
the Trusts' liabilities to creditors, distributions in cash or other immediately
available funds in an amount equal to the aggregate of the stated liquidation
amount of $25 per Trust Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being
60
the "Trust Liquidation Distribution"), unless, in connection with such Trust
Liquidation, Partnership Preferred Securities in an aggregate stated liquidation
preference equal to the aggregate stated liquidation amount of, with a
distribution rate identical to the distribution rate of, and accrued and unpaid
distributions equal to accumulated and unpaid distributions on, such Trust
Securities shall be distributed on a Pro Rata basis to the Holders of the Trust
Securities in exchange for such Trust Securities.
(b) If, upon any such Trust Liquidation, the Trust Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
legally available to pay in full the aggregate Trust Liquidation Distribution,
then, except as provided below, the amounts payable directly by the Trust on the
Trust Securities shall be paid on a Pro Rata basis. The Holders of the Trust
Common Securities will be entitled to receive distributions upon any such Trust
Liquidation Pro Rata with the Holders of the Trust Preferred Securities except
that if the Company is in default on any of its obligations under the Trust
Preferred Securities Guarantee or the Partnership Guarantee, or if any
Investment Event of Default has occurred and is continuing with respect to an
Affiliate Investment Instrument and the Company is in default on any of its
obligations with respect thereto under an applicable Investment Guarantee, the
Trust Preferred Securities shall have a preference over the Trust Common
Securities with regard to such distributions as provided below. Such preference
is effectuated by the Holder of the Trust Common Securities hereby agreeing to
provide limited recourse guarantees (such recourse being limited to the
interests in the Trust represented by the Trust Common Securities) as follows:
(i) to the Holders of the Trust Preferred Securities, of the Company's
obligations under the Trust Preferred Securities Guarantee; (ii) to the Trust
and the Holders of the Trust Preferred Securities, of the Company's obligations
under the Partnership Guarantee; and (iii) to the Partnership and the Holders of
the Trust Preferred Securities, of the Company's obligations under any
Investment Guarantee and/or the obligations of any Investment Affiliate under an
Affiliate Investment Instrument. In the case of the limited recourse guarantee
given by the Holder of the Trust Common Securities to the Partnership and the
Holder of the Trust Preferred Securities in respect of the Company's obligations
61
under any Investment Guarantee and/or any Investment Affiliate's obligations
under an Affiliate Investment Instrument, (i) the Trust Common Securities Holder
will be deemed to have pledged the amount due in respect of its Trust Common
Securities upon a liquidation of the Trust to the Partnership and the Holders of
Trust Preferred Securities; (ii) the Trust Common Securities Holder will be
deemed to have paid such amount to the Partnership in respect of such defaulted
Investment Guarantee and/or Affiliate Investment Instrument, as the case may be;
(iii) the Partnership will be deemed to have paid such amount to the Trust; and
(iv) the Property Trustee is hereby authorized to distribute such amount to the
Holders of Trust Preferred Securities (on a Pro Rata basis among such Trust
Preferred Securities Holders) in respect of the Trust Common Securities Holder's
pledge of such amounts to such Trust Preferred Securities Holders. In the case
of a limited recourse guarantee given by the Holder of the Trust Common
Securities to the Trust and the Holders of the Trust Preferred Securities in
respect of the Company's obligations under the Partnership Guarantee, (i) the
Holder of the Trust Common Securities will be deemed to have pledged the amount
due in respect of its Trust Common Securities upon a liquidation of the Trust to
the Trust and the Holders of the Trust Preferred Securities; (ii) the Holder of
the Trust Common Securities will be deemed to have paid such amount to the Trust
in respect of its obligations under the Partnership Guarantee; and (iii) the
Property Trustee is hereby authorized to distribute such amount to the Holders
of the Trust Preferred Securities (on a Pro Rata basis among such Trust
Preferred Securities Holders) in respect of the Trust Common Securities Holder's
pledge of such amount to such Trust Preferred Securities Holders.
ARTICLE X
TRANSFER OF INTERESTS
Section 10.1 Transfer of Trust Securities.
----------------------------
(a) Trust Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Trust Agreement and
in the terms of the Trust Securities. Any transfer or purported transfer of any
Trust
62
Security not made in accordance with this Trust Agreement shall be null and
void.
(b) Subject to this Article X, Trust Preferred Securities shall be
freely transferable.
Section 10.2 Transfer of Certificates. The Regular Trustees shall
------------------------
provide for the registration of certificates and of transfers of certificates,
which will be effected without charge but only upon payment (with such indemnity
as the Regular Trustees may require) in respect of any tax or other government
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any certificate, the Regular Trustees shall cause one or more new
certificates to be issued in the name of the designated transferee or
transferees. Every certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer in form satisfactory to the
Regular Trustees duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each certificate surrendered for registration of
transfer shall be canceled by the Regular Trustees. A transferee of a
certificate shall be entitled to the rights and be subject to the obligations of
a Holder hereunder upon the receipt by such transferee of a certificate. By
acceptance of a certificate, each transferee shall be deemed to have agreed to
be bound by this Trust Agreement.
Section 10.3 Deemed Security Holders. The Trustees may treat the
-----------------------
Person in whose name any certificate shall be registered on the books and
records of the Trust as the sole Holder of such certificate and of the Trust
Securities represented by such certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
certificate or in the Trust Securities represented by such certificate on the
part of any Person, whether or not the Trust shall have actual or other notice
thereof.
Section 10.4 Book-Entry Interests. Unless otherwise specified in the
--------------------
terms of the Trust Preferred Securities, the Trust Preferred Securities
Certificates, on original issuance, will be issued in the form of one or more
fully registered,
63
global Trust Preferred Security Certificates (each a "Global Certificate"), to
be delivered to DTC, the initial Clearing Agency, or its custodian by, or on
behalf of, the Trust. Such Global Certificates shall initially be registered on
the books and records of the Trust in the name of Cede & Co., the nominee of
DTC, and no Trust Preferred Security Beneficial Owner will receive a Definitive
Trust Preferred Security Certificate representing such Trust Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 10.7. Unless and until definitive, fully registered Trust Preferred
Security Certificates (the "Definitive Trust Preferred Security Certificates")
have been issued to the Trust Preferred Security Beneficial Owners pursuant to
Section 10.7:
(a) the provisions of this Section 10.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Trust Agreement (including the payment
of Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Trust Preferred Securities and the sole
Holder of the Global Certificates and shall have no obligation to the Trust
Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 10.4 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 10.4 shall control; and
(d) the rights of the Trust Preferred Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Trust Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and the Clearing Agency shall receive and transmit payments of
Distributions on the Global Certificates to such Clearing Agency Participants.
The Clearing Agency will make book-entry transfers among the Clearing Agency
Participants; provided, that solely for the purposes of determining whether the
Holders of the requisite amount of Trust Preferred Securities have voted on any
matter provided for in this Trust Agreement, so long as Definitive Trust
Preferred Security
64
Certificates have not been issued, the Trustees may conclusively rely on, and
shall be fully protected in relying on, any written instrument (including a
proxy) delivered to the Trustees by the Clearing Agency setting forth the Trust
Preferred Security Beneficial Owners' votes or assigning the right to vote on
any matter to any other Persons either in whole or in part.
Section 10.5 Notices to Clearing Agency. Whenever a notice or other
--------------------------
communication to the Trust Preferred Security Holders is required under this
Trust Agreement, unless and until Definitive Trust Preferred Security
Certificates shall have been issued to the Trust Preferred Security Beneficial
Owners pursuant to Section 10.7, the Regular Trustees shall give all such
notices and communications specified herein to be given to the Trust Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Trust Preferred Security Beneficial Owners.
Section 10.6 Appointment of Successor Clearing Agency. If any
----------------------------------------
Clearing Agency elects to discontinue its services as securities depositary with
respect to the Trust Preferred Securities, the Regular Trustees may, in their
sole discretion, appoint a successor Clearing Agency with respect to such Trust
Preferred Securities.
Section 10.7 Definitive Trust Preferred Security Certificates. If
------------------------------------------------
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Trust Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 10.6; (b) the Regular Trustees elect after consultation with
the Sponsor to terminate the book-entry system through the Clearing Agency with
respect to the Trust Preferred Securities; or (c) there is a Trust Enforcement
Event; then:
(i) Definitive Trust Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect to such
Trust Preferred Securities; and
(ii) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration
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instructions, the Regular Trustees shall cause Definitive Trust Preferred
Security Certificates to be delivered to Trust Preferred Security Beneficial
Owners in accordance with the instructions of the Clearing Agency. Neither the
Trustees nor the Trust shall be liable for any delay in delivery of such
instructions and each of them may conclusively rely on and shall be protected in
relying on, said instructions of the Clearing Agency. The Definitive Trust
Preferred Security Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by one or more of their execution thereof, and may have
such letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which Trust
Preferred Securities may be listed, or to conform to usage.
Section 10.8 Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
(a) any mutilated certificates should be surrendered to the Regular Trustees, or
if the Regular Trustees shall receive evidence to their satisfaction of the
destruction, loss or theft of any certificate; and (b) there shall be delivered
to the Regular Trustees such security or indemnity as may be required by them to
keep each of them harmless, then, in the absence of notice that such certificate
shall have been acquired by a bona fide purchaser, one or more Regular Trustees
on behalf of the Trust shall execute and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen certificate, a new certificate of
like denomination. In connection with the issuance of any new certificate under
this Section 10.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate certificate issued pursuant to this Section
shall constitute conclusive evidence of an ownership interest in the relevant
Trust Securities, as if originally issued, whether or not the lost, stolen or
destroyed certificate shall be found at any time.
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ARTICLE XI
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
Section 11.1 Liability.
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(a) Except as expressly set forth in this Trust Agreement, the Trust
Guarantees and the terms of the Trust Securities, the Sponsor and the Trustees
shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the Trust
Securities which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Trust
Securities any deficit upon dissolution of the Trust or otherwise.
(b) Notwithstanding any other provision herein, the Holder of the
Trust Common Securities, by entering into this Agreement, agrees that it shall
be liable directly to any creditor or claimant of or against the Trust for the
entire amount of all of the debts and obligations of the Trust (other than
obligations to the Holders of Trust Securities in their capacities as Holders)
to the extent not satisfied out of the Trust's assets as if the Holder of the
Trust Common Securities were the general partner of a limited partnership
organized under the Delaware Revised Uniform Limited Partnership Act. This
Section 11.1(b) will automatically terminate upon (i) the adoption of final or
temporary United States federal tax regulations which, if the Trust were not
classified as a grantor trust for United States federal income tax purposes,
would result in the classification of the Trust as a partnership for
United States federal tax purposes without regard to its organic characteristics
and (ii) the taking of such action, if any, by the Trust or the Holders of Trust
Securities as may be necessary to achieve such classification.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders
of the Trust Preferred Securities shall
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be entitled to the same limitation of personal liability extended to
shareholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
Section 11.2 Exculpation.
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(a) No Company Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Company Indemnified Person in good faith on behalf of the Trust
and in a manner such Company Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Company Indemnified Person by this
Trust Agreement or by law, except that a Company Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Company
Indemnified Person's gross negligence or willful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Trust Securities might properly be paid.
Section 11.3 Fiduciary Duty.
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(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Trust Agreement shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust Agreement. The
provisions of this Trust Agreement, to the extent that they restrict the duties
and liabilities of
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an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein or therein provides that an Indemnified Person shall act in
a manner that is, or provides terms that are, fair and reasonable to the Trust
or any Holder of Trust Securities, the Indemnified Person shall resolve such
conflict of interest, take such action or provide such terms, considering in
each case the relative interest of each party (including its own interest) to
such conflict, agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry practices, and
any applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or term
so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Trust Agreement or any other agreement contemplated herein or of
any duty or obligation of the Indemnified Person at law or in equity or
otherwise.
(c) Whenever in this Trust Agreement an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or obligation
to give any consideration to any interest of or factors affecting the Trust or
any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or
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different standard imposed by this Trust Agreement or by applicable law.
Section 11.4 Indemnification.
---------------
(a) (i) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless any Company Indemnified Person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by reason
of the fact that he is or was a Company Indemnified Person against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the fullest extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by reason of the fact that
he is or was a Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust
and except that no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the
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extent that the Court of Chancery of Delaware or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
such Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 11.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the fullest extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 11.4(a) (unless ordered by a court) shall be made by the Sponsor only as
authorized in the specific case upon a determination that indemnification of the
Company Indemnified Person is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority vote of a
quorum consisting of such Regular Trustees who were not parties to such action,
suit or proceeding, (2) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the Holder of the
Trust Common Securities.
(v) To the fullest extent permitted by law, expenses (including
attorneys' fees) incurred by a Company Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 11.4(a) shall be paid by the Sponsor
in advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified Person to
repay such amount if it shall ultimately be
71
determined that he is not entitled to be indemnified by the Sponsor as
authorized in this Section 11.4(a). Notwithstanding the foregoing, no advance
shall be made by the Sponsor if a determination is reasonably and promptly made
(i) by the Regular Trustees by a majority vote of a Quorum of disinterested
Regular Trustees, (ii) if such a Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion or (iii) the Holder of the Trust
Common Securities, that, based upon the facts known to the Regular Trustees,
counsel or the Holder of the Trust Common Securities at the time such
determination is made, such Company Indemnified Person acted in bad faith or in
a manner that such Person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances where
the Regular Trustees, independent legal counsel or Holder of the Trust Common
Securities reasonably determine that such Person deliberately breached his duty
to the Trust or the Holder of the Trust Common Securities.
(vi) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 11.4(a) shall not
be deemed exclusive of any other rights to which those seeking indemnification
and advancement of expenses may be entitled under any agreement, vote of
shareholders or disinterested directors of the Sponsor or Holders of the Trust
Preferred Securities or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. All rights to
indemnification under this Section 11.4(a) shall be deemed to be provided by a
contract between the Sponsor and each Company Indemnified Person who serves in
such capacity at any time while this Section 11.4(a) is in effect. Any repeal or
modification of this Section 11.4(a) shall not affect any rights or obligations
then existing.
(vii) The Sponsor or the Trust may purchase and maintain insurance
on behalf of any Person who is or was a Company Indemnified Person against any
liability asserted
72
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Sponsor would have the power to indemnify him
against such liability under the provisions of this Section 11.4(a).
(viii) For purposes of this Section 11.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any Person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 11.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 11.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a Person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Property Trustee, (ii) the
Delaware Trustee, (iii) any Affiliate of the Property Trustee and the Delaware
Trustee, and (iv) any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the Property
Trustee and the Delaware Trustee (each of the Persons in (i) through (iv) being
referred to as a "Fiduciary Indemnified Person") for, and to hold each Fiduciary
Indemnified Person harmless against, any loss, damage, claim, liability or
expense including taxes (other than taxes based on the income of the Trustee)
incurred without negligence or bad faith on the part of the Fiduciary
Indemnified Person arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or
73
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The obligation to indemnify as set forth in this
Section 11.4(b) shall survive the satisfaction and discharge of this Trust
Agreement.
Section 11.5 Outside Businesses. Any Covered Person, the Sponsor,
------------------
the Delaware Trustee and the Property Trustee (subject to Section 6.3(c)) may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Trust, and the Trust and the Holders of Trust Securities shall have no
rights by virtue of this Trust Agreement in and to such independent ventures or
the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, nor the
Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of Holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XII
ACCOUNTING
Section 12.1 Fiscal Year. The fiscal year ("Fiscal Year") of the
-----------
Trust shall be the calendar year, or such other year as is required by the Code
or the Treasury Regulations.
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Section 12.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied.
(b) Within 60 days after May 15 of each year, the Property Trustee
shall provide to the Holders of the Trust Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313(a) of the Trust Indenture Act. The Property
Trustee shall also comply with Section 313(b) of the Trust Indenture Act, if and
as required, in the form and manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Trust Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Trust Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return on such form or statement as may be appropriate under United States
federal income tax law, and any other annual income tax returns required to be
filed by the Regular Trustees on behalf of the Trust with any state or local
taxing authority.
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Section 12.3 Banking. The Trust shall maintain one or more bank
-------
accounts in the name and for the sole benefit of the Trust; provided, however,
that all payments of funds in respect of the Partnership Preferred Securities
held by the Property Trustee shall be made directly to the Property Account and
no other funds of the Trust shall be deposited in the Property Account. The
sole signatories for such accounts shall be designated by the Regular Trustees;
provided, however, that the Property Trustee shall designate the signatories for
the Property Account.
Section 12.4 Withholding. The Regular Trustees shall cause the Trust
-----------
to comply with all withholding requirements under United States federal, state
and local law. The Trust shall request, and the Holders shall provide to the
Trust, such forms or certificates as are necessary to establish an exemption
from withholding with respect to each Holder, and any representations and forms
as shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Regular Trustees
shall file required forms with applicable jurisdictions and, unless an exemption
from withholding is properly established by a Holder, shall remit amounts
withheld with respect to the Holder to applicable jurisdictions. To the extent
that the Trust is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a distribution in the amount of the withholding to the
Holder. In the event of any claimed overwithholding, Holders shall be limited
to an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding. Notwithstanding
anything herein to the contrary, the Regular Trustees shall cause the Trust,
absent receipt of an opinion of nationally recognized tax counsel to the
contrary, to withhold thirty percent (30%) (or such other rate as may be imposed
as a result of an amendment to the Code or such lower rate as may be imposed
under an applicable income tax treaty) on the gross amount of any Distributions
on Trust Preferred Securities held by a Holder that is not a "United States
person" within the meaning of Section 7701(a)(30) of the Code.
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ARTICLE XIII
AMENDMENTS AND MEETINGS
Section 13.1 Amendments.
----------
(a) Except as otherwise provided in this Trust Agreement or by any
applicable terms of the Trust Securities, this Trust Agreement may only be
amended by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee and the Delaware Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this Trust Agreement (including the
terms of the Trust Securities);
(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the Property Trustee or
the Delaware Trustee, the Property Trustee or the Delaware Trustee, as the case
may be, shall have first received an opinion of counsel (who may be counsel to
the Sponsor or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Trust Agreement (including the terms of the Trust Securities);
and
(iii) to the extent the result of such amendment would be to:
77
(A) cause the Trust to be classified for purposes of
United States federal income taxation as an association or a publicly traded
partnership taxable as a corporation;
(B) cause the Partnership to be classified for
purposes of United States federal income tax as an association or a publicly
traded partnership taxable as a corporation;
(C) reduce or otherwise adversely affect the powers of
the Property Trustee in contravention of the Trust Indenture Act; or
(D) cause the Trust to be deemed to be an Investment
Company required to be registered under the 1940 Act.
(c) In the event the consent of the Property Trustee, as the Holder of
the Partnership Preferred Securities is required under the Agreement of Limited
Partnership with respect to any amendment, modification or termination of the
Agreement of Limited Partnership or the Partnership Preferred Securities the
Property Trustee shall request the direction of the Holders of the Trust
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Trust Securities voting together as a
single class; provided, however, that where a consent under the Agreement of
Limited Partnership would require the consent of a Super Majority of the Holders
of Partnership Preferred Securities the Property Trustee may only give such
consent at the direction of the Holders of at least the proportion in
liquidation amount of the Trust Securities which the relevant Super Majority
represents of the aggregate liquidation amount of the Partnership Preferred
Securities outstanding; provided, further, that the Property Trustee shall not
be obligated to take any action in accordance with the directions of the Holders
of the Trust Securities under this Section 13.1(c) unless the Property Trustee
has obtained an opinion of independent tax counsel to the effect that such
action is not inconsistent with the
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being classified as a grantor trust for United States federal income tax
purposes
(d) At such time after the Trust has issued any Trust Securities that
remain outstanding, any amendment that would (i) adversely affect the powers,
preferences or special rights of the Trust Securities or (ii) provide for the
dissolution, winding-up or termination of the Trust other than pursuant to the
terms of this Trust Agreement, may be effected only with the approval of the
Holders of at least a Majority in liquidation amount of the Trust Securities
affected thereby; provided, that if any amendment or proposal referred to in
clause (i) hereof would adversely affect only the Trust Preferred Securities or
the Trust Common Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of a Majority in liquidation amount of such
class of Trust Securities;
(e) Section 11.1(c) and this Section 13.1 shall not be amended without
the consent of all of the Holders of the Trust Securities;
(f) Article V shall not be amended without the consent of the Holder
of the Trust Common Securities;
(g) The rights of the Holder of the Trust Common Securities under
Article VI to increase or decrease the number of, and appoint and remove,
Trustees shall not be amended without the consent of the Holder of the Trust
Common Securities; and
(h) Notwithstanding Section 13.1(c), this Trust Agreement may be
amended without the consent of the Holders of the Trust Securities:
(i) to cure any ambiguity;
(ii) to correct or supplement any provision in this Trust
Agreement that may be defective or inconsistent with any other provision of this
Trust Agreement;
79
(iii) to add to the covenants, restrictions or obligations of
the Sponsor;
(iv) to conform to any change in the 1940 Act or written change
in interpretation or application of the rules and regulations promulgated
thereunder by any legislative body, court, government agency or regulatory
authority;
(v) to conform to any change in the Trust Indenture Act or
written change in interpretation or application of the rules and regulations
promulgated thereunder by any legislative body, court, government agency or
regulatory authority; and
(vi) to modify, eliminate and add to any provision of this Trust
Agreement to such extent as may be necessary or desirable; provided that such
amendments do not have a material adverse effect on the rights, preferences or
privileges of the Holders of the Trust Securities.
Section 13.2 Meetings of the Holders of Trust Securities; Action by
------------------------------------------------------
Written Consent.
---------------
(a) Meetings of the Holders of any class of Trust Securities may be
called at any time by the Regular Trustees (or as provided in the terms of the
Trust Securities) to consider and act on any matter on which Holders of such
class of Trust Securities are entitled to act under the terms of this Trust
Agreement, the terms of the Trust Securities, the Agreement of Limited
Partnership, the rules of any stock exchange on which the Trust Preferred
Securities are listed or admitted for trading, the Business Trust Act or other
applicable law. The Regular Trustees shall call a meeting of the Holders of
such class if directed to do so by the Holders of at least 10% in liquidation
amount of such class of Trust Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in writing stating that the
signing Holders of Trust Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Trust Securities calling a meeting shall specify in writing the certificates
held by the Holders of Trust Securities exercising the right to call a meeting
and only those Trust Securities specified shall
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be counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the Trust
Securities, the following provisions shall apply to meetings of Holders of Trust
Securities:
(i) notice of any such meeting shall be given to all the Holders
of Trust Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Any action that may be taken at a
meeting of the Holders of Trust Securities may be taken without a meeting if a
consent in writing setting forth the action so taken is signed by the Holders of
Trust Securities owning not less than the minimum amount of Trust Securities in
liquidation amount that would be necessary to authorize or take such action at a
meeting at which all Holders of Trust Securities having a right to vote thereon
were present and voting. Prompt notice of the taking of action without a meeting
shall be given to the Holders of Trust Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that any written ballot
submitted to the Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Trust Security may authorize any Person to
act for it by proxy on all matters in which a Holder of Trust Securities is
entitled to participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Holder of Trust Securities executing
it. Except as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General Corporation Law
of the State of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders of the
Trust Securities were shareholders of a Delaware corporation;
81
(iii) each meeting of the Holders of the Trust Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Trust Agreement, the terms
of the Trust Securities, the Trust Indenture Act or the listing rules of any
stock exchange on which the Trust Preferred Securities are then listed for
trading, otherwise provide, the Regular Trustees, in their sole discretion,
shall establish all other provisions relating to meetings of Holders of Trust
Securities, including notice of the time, place or purpose of any meeting at
which any matter is to be voted on by any Holders of Trust Securities, waiver of
any such notice, action by consent without a meeting, the establishment of a
record date, quorum requirements, voting in person or by proxy or any other
matter with respect to the exercise of any such right to vote.
ARTICLE XIV
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 14.1 Representations and Warranties of Property Trustee. The
--------------------------------------------------
Trustee that acts as initial Property Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Trust Agreement, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a New York banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the State of New York, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the Trust
Agreement;
(b) The execution, delivery and performance by the Property Trustee of
the Trust Agreement has been duly authorized by all necessary corporate action
on the part of the Property Trustee. The Trust Agreement has been duly executed
and delivered by the Property Trustee;
82
(c) The execution, delivery and performance of the Trust Agreement by
the Property Trustee does not conflict with or constitute a breach of the
Articles of Incorporation or Bylaws of the Property Trustee; and
(d) The Property Trustee, pursuant to this Trust Agreement, shall hold
legal title to, and a valid ownership interest on behalf of the Holders of the
Trust Securities, in the Partnership Preferred Securities and agrees that,
except as expressly provided or contemplated by this Agreement, it will not
create, incur or assume, or suffer to exist any mortgage, pledge, hypothecation,
encumbrance, lien or other charge or security interest upon the Partnership
Preferred Securities.
Section 14.2 Representations and Warranties of Delaware Trustee. The
--------------------------------------------------
Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Trust Agreement, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a Delaware corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with power and authority to execute and deliver, and to carry out and perform
its obligations under the terms of, the Trust Agreement;
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Trust Agreement; and
(c) The Delaware Trustee is an entity which has its principal place of
business in the State of Delaware.
83
ARTICLE XV
MISCELLANEOUS
Section 15.1 Notices. All notices provided for in this Trust
-------
Agreement shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by registered or certified mail, as
follows:
(a) If given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Trust Securities):
Hawaiian Electric Industries Capital Trust I
x/x Xxx Xxxx xx Xxx Xxxx
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
(b) If given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
other Trustees):
The Bank of New York (Delaware)
Xxxxx Xxxx Center, Xxxxx 000
Xxxxxx, XX 00000
Attention: Corporate Trust Trustee Department
(c) If given to the Property Trustee, at the mailing address set forth
below (or such other address as the Property Trustee may give notice of to the
Holders of the Trust Securities and the other Trustee):
The Bank of New York
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Global Trust Services
(d) If given to the Holder of the Trust Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Trust Common Securities may give notice of to the Trust):
84
Hawaiian Electric Industries, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Treasury Department
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 15.2 Governing Law. This Trust Agreement and the rights of
-------------
the parties hereunder shall be governed by and construed in accordance with the
internal laws of the State of Delaware and all rights and remedies shall be
governed by such laws without regard to principles of conflict of laws.
Section 15.3 Intention of the Parties. It is the intention of the
------------------------
parties hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Trust Agreement shall be
interpreted to further this intention of the parties.
Section 15.4 Headings. Headings contained in this Trust Agreement
--------
are inserted for convenience of reference only and do not affect the
interpretation of this Trust Agreement or any provision hereof.
Section 15.5 Successors and Assigns. Whenever in this Trust
----------------------
Agreement any of the parties hereto is named or referred to, the successors and
assigns of such party shall be deemed to be included, and all covenants and
agreements in this Trust Agreement by the Sponsor and the Trustees shall bind
and inure to the benefit of their respective successors and assigns, whether so
expressed.
85
Section 15.6 Partial Enforceability. If any provision of this Trust
----------------------
Agreement, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Trust Agreement, or the application
of such provision to persons or circumstances other than those to which it is
held invalid, shall not be affected thereby.
Section 15.7 Counterparts. This Trust Agreement may contain more
------------
than one counterpart of the signature page and this Trust Agreement may be
executed by the affixing of the signature of each of the Trustees and a duly
authorized officer of the Sponsor to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
IN WITNESS WHEREOF, each of the undersigned has caused these presents
to be executed as of the day and year first above written.
______________________________________
Xxxxxx X. Xxxxxx, as Regular Trustee
______________________________________
Xxxxxx X. Xxxxxxx, as Regular Trustee
______________________________________
Xxxxxxxxx X. Xxx, as Regular Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: __________________________________
Name:
Title:
00
XXX XXXX XX XXX XXXX, as Property
Trustee
By: __________________________________
Name:
Title:
HAWAIIAN ELECTRIC INDUSTRIES, INC.,
as Sponsor
By: __________________________________
Name:
Title:
By: __________________________________
Name:
Title:
87
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
This Trust Preferred Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This Trust Preferred Security is exchangeable for Trust Preferred
Securities registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Trust Preferred Security (other than a transfer of this Trust
Preferred Security as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Trust Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx), a New York corporation, to the Trust or its agent for registration of
transfer, exchange or payment, and any Trust Preferred Security issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of the Depositary and any payment hereon is made to
Cede & Co. or such other entity as is requested by an authorized representative
of the Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
A-1.1
TP-1
[ ]
CUSIP NO. _________
CERTIFICATE EVIDENCING TRUST PREFERRED SECURITIES
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST __
____% Trust Preferred Securities (liquidation amount $25 per Trust
Preferred Security)
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST __, a statutory business
trust created under the laws of the State of Delaware (the "Trust"), hereby
certifies that Cede & Co. (the "Holder") is the registered owner of __________
preferred securities of the Trust representing undivided beneficial ownership
interests in the assets of the Trust designated the _____% Trust Preferred
Securities (liquidation amount $25 per Trust Preferred Security) (the "Trust
Preferred Securities"). The Trust Preferred Securities are freely transferable
on the books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer. The designation, rights, powers, privileges, restrictions,
preferences and other terms and provisions of the Trust Preferred Securities
represented hereby are set forth in, issued under and shall in all respects be
subject to the provisions of the Amended and Restated Trust Agreement dated as
of _____________, 1997, as the same may be amended from time to time (the "Trust
Agreement"). Capitalized terms used herein but not defined shall have the
meaning given them in the Trust Agreement. The Holder is entitled to the
benefits of the Trust Preferred Securities Guarantee to the extent provided
therein. Each Holder of a Trust Preferred Security, by acceptance of this
certificate and each Trust Preferred Security Beneficial Owner, by acquisition
of a beneficial interest in a certificate,
A-1.2
agrees to treat the Initial Debentures, and any other Affiliate Investment
Instruments that are treated as debt instruments by the relevant Investment
Affiliate and by the Partnership, as indebtedness for United States federal
income tax purposes. The Sponsor will provide a copy of the Trust Agreement, the
Trust Preferred Securities Guarantee and the Agreement of Limited Partnership to
a Holder without charge upon written request to the Trust at its principal place
of business.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of _______________, 1997.
HAWAIIAN ELECTRIC INDUSTRIES
CAPITAL TRUST __
---------------------------------
_______________, as Regular
Trustee
---------------------------------
_______________, as Regular
Trustee
---------------------------------
_______________, as Regular
Trustee
A-1.3
CERTIFICATE OF AUTHENTICATION
This certificate is one of the issue of Trust Preferred Securities
described in the Trust Agreement.
Date of Authentication: _______________.
THE BANK OF NEW YORK,
as Property Trustee
By: ____________________________
Name:
Title:
(See reverse for additional terms)
A-1.4
[REVERSE OF SECURITY]
Holders of Trust Preferred Securities shall be entitled to receive
cumulative cash distributions at a rate per annum of _____% of the stated
liquidation amount of $25 per Trust Preferred Security. Distributions on the
Trust Preferred Securities shall, from the date of original issue, accumulate
and be cumulative and shall be payable quarterly only to the extent that the
Trust has funds available for the payment of such distributions in the Property
Account. Distributions not paid on the scheduled payment date will accumulate
and compound quarterly (to the extent permitted by applicable law) at the rate
of _____% per annum. The term "Distributions" as used herein shall mean ordinary
cumulative distributions in respect of each Fiscal Period together with any such
Compounded Distributions. Amounts available to the Trust for distribution to the
Holders of the Trust Preferred Securities will be limited to payments received
by the Trust from the Partnership on the Partnership Preferred Securities or
from the Company on the Partnership Guarantee. Distributions on the Partnership
Preferred Securities will be paid only if, as and when declared in the sole
discretion of the General Partner of the Partnership. If and to the extent that
the Partnership makes a distribution on the Partnership Preferred Securities
held by the Property Trustee or the Company makes a payment under the
Partnership Guarantee (the amount of any such partnership distribution,
including any compounded partnership distributions or guarantee payment being a
"Payment Amount"), the Trust shall and the Property Trustee is directed, to the
extent funds are legally available for that purpose, to make a Pro Rata
Distribution of the Payment Amount to Holders.
The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period on the basis of the actual number of days elapsed in a
90-day quarter.
A-1.5
Except as otherwise described herein, distributions on the Trust
Preferred Securities will be cumulative, will accumulate from the date of
initial issuance and will be payable quarterly in arrears, on March 31, June 30,
September 30 and December 31 of each year, commencing on March 31, 1997 if, as
and when legally available for payment by the Property Trustee. If the Trust
Preferred Securities (or, if the Trust is liquidated, the Partnership Preferred
Securities) are in book-entry-only form, Distributions will be payable to the
Holders of record of Trust Preferred Securities as they appear on the books and
records of the Trust on the relevant record dates, which will be one Business
Day prior to the relevant payment dates. If the Trust Preferred Securities (or,
if the Trust is liquidated, the Partnership Preferred Securities) do not remain
in book-entry-only form, the relevant record dates shall be the 15th day of the
month of the relevant payment dates. In the event that any date on which
distributions are payable is not a Business Day, payment of such Distribution
shall be made on the next succeeding day which is a Business Day (without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day (without any reduction of
interest or other payments in respect of such early payment). Payments of
accumulated Distributions will be payable to Holders of record of Trust
Preferred Securities as they appear on the books and records of the Trust on the
record date with respect to the payment date for the Trust Preferred Securities
which corresponds to the payment date fixed by the Partnership with respect to
the payment of cumulative distributions on the Partnership Preferred Securities.
The Trust Preferred Securities shall be redeemable as provided in the
Trust Agreement.
A-1.6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Preferred Security Certificate to:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
(Insert assignee's social security or tax identification number)
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
agent to transfer this Trust Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: ______________________________
Signature: _________________________
(Sign exactly as your name appears on the other side of this Trust Preferred
Security Certificate)
A-1.7
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
CS-1 [ ]
CERTIFICATE EVIDENCING TRUST COMMON SECURITIES
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST __
____% Trust Common Securities (liquidation amount $25 per Trust
Common Security)
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST __, a statutory business
trust created under the laws of the State of Delaware (the "Trust"), hereby
certifies that Hawaiian Electric Industries, Inc., a Hawaii corporation (the
"Holder") is the registered owner of _____ common securities of the Trust
representing undivided beneficial ownership interests in the assets of the Trust
designated the ____% Trust Common Securities (liquidation amount $25 per Trust
Common Security) (the "Trust Common Securities"). The designation, rights,
powers, privileges, restrictions, preferences and other terms and provisions of
the Trust Common Securities represented hereby are set forth in, issued under
and shall in all respects be subject to the provisions of the Amended and
Restated Trust Agreement dated as of ______________, 1997, as the same may be
amended from time to time (the "Trust Agreement"). Capitalized terms used
herein but not defined shall have the meaning given them in the Trust Agreement.
The Holder is entitled to the benefits of the Trust Common Securities Guarantee
to the extent provided therein. Each Holder of a Trust Common Security, by
acceptance of this certificate, agrees to treat the Initial Debentures, and any
other Affiliate Investment Instruments that
A-2.1
are treated as debt instruments by the relevant Investment Affiliate and by the
Partnership, as indebtedness for United States federal income tax purposes. The
Sponsor will provide a copy of the Trust Agreement, the Trust Common Securities
Guarantee and the Agreement of Limited Partnership to a Holder without charge
upon written request to the Sponsor at its principal place of business. THE
TRUST COMMON SECURITIES ARE TRANSFERABLE ON THE BOOKS AND RECORDS OF THE TRUST
ONLY IN ACCORDANCE WITH THE TERMS OF THE TRUST AGREEMENT.
A-2.2
Upon receipt of this certificate, the Sponsor is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of _______________, 1997.
HAWAIIAN ELECTRIC INDUSTRIES
CAPITAL TRUST I
_________________________________
_____________________, as Regular
Trustee
_________________________________
_____________________, as Regular
Trustee
_________________________________
_____________________, as Regular
Trustee
CERTIFICATE OF AUTHENTICATION
This certificate is one of the issue of Trust Common Securities
described in the Trust Agreement.
Date of Authentication: _______________.
THE BANK OF NEW YORK,
as Property Trustee
By: ____________________________
Name:
Title:
(See reverse for additional terms)
A-2.3
FORM OF REVERSE OF SECURITY
The Holder of Trust Common Securities shall be entitled to receive
cumulative cash distributions at a rate per annum of _____% of the stated
liquidation amount of $25 per Trust Common Security. Distributions on the Trust
Common Securities shall, from the date of original issue, accrue and be
cumulative and shall be payable quarterly only to the extent that the Trust has
funds available for the payment of such distributions in the Property Account.
Distributions not paid on the scheduled payment date will accumulate and
compound quarterly (to the extent permitted by applicable law) at the rate of
____% per annum. The term "Distributions" as used herein shall mean ordinary
cumulative distributions in respect of each Fiscal Period together with any such
Compounded Distributions. Amounts available to the Trust for distribution to the
Holder of the Trust Common Securities will be limited to payments received by
the Trust from the Partnership on the Partnership Preferred Securities or from
the Company on the Partnership Guarantee. Distributions on the Partnership
Preferred Securities will be paid only if, as and when declared in the sole
discretion of the General Partner of the Partnership. If and to the extent that
the Partnership makes a distribution on the Partnership Preferred Securities
held by the Property Trustee or the Company makes a payment under the
Partnership Guarantee (the amount of any such partnership distribution,
including any compounded partnership distributions or guarantee payment being a
"Payment Amount"), the Trust shall and the Property Trustee is directed, to the
extent funds are available for that purpose, to make a Pro Rata Distribution of
the Payment Amount to Holders.
The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period on the basis of the actual number of days elapsed in a 90-
day quarter.
Except as otherwise described herein, distributions on the Trust
Common Securities will be cumulative, will accrue
A-2.4
from the date of initial issuance and will be payable quarterly in arrears, on
March 31, June 30, September 30 and December 31 of each year, commencing on
March 31, 1997 if, as and when legally available for payment by the Property
Trustee. Distributions will be payable to the Holder of record of the Trust
Common Securities as they appear on the books and records of the Trust on the
relevant record dates, which will be one Business Day prior to the relevant
payment dates. In the event that any date on which distributions are payable is
not a Business Day, payment of the Distribution shall be made on the next
succeeding day which is a Business Day (without any interest or other payment in
respect of any such delay) except that, if such Business Day falls in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day (without any reduction of interest or other payments in
respect of such early payment). Payments of accumulated Distributions will be
payable to the Holder of record of the Trust Common Securities as recorded in
the books and records of the Trust on the record date with respect to the
payment date for the Trust Common Securities which corresponds to the payment
date fixed by the Partnership with respect to the payment of cumulative
distributions on the Partnership Preferred Securities.
The Trust Common Securities shall be redeemable as provided in the
Trust Agreement.
A-2.5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Common Security Certificate to:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Insert address and zip code of assignee) and irrevocably appoints
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
agent to transfer this Trust Common Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: _____________________________
Signature: ________________________
(Sign exactly as your name appears on the other side of this Trust Common
Security Certificate)
A-2.6
