Exhiibit 4(i)
HAWAIIAN ELECTRIC INDUSTRIES, INC.
AND
THE BANK OF NEW YORK,
AS TRUSTEE
____________________________
JUNIOR INDENTURE
Dated as of February 1, 1997
____________________________
TABLE OF CONTENTS
PARTIES ............................................................... 1
RECITALS:
Purpose of Indenture................................................... 1
Compliance with legal requirements..................................... 1
Purpose of and consideration for Indenture............................. 1
ARTICLE ONE
Definitions
SECTION 1.01. Definitions............................................ 2
Additional Interest.................................... 2
Affiliate.............................................. 2
Agreement of Limited Partnership....................... 2
Authenticating Agent................................... 3
Board of Directors..................................... 3
Board Resolution....................................... 3
Business day........................................... 3
Certificate............................................ 3
Company................................................ 3
Corporate Trust Office................................. 3
Debenture or Debentures................................ 3
Debenture Register..................................... 4
Debentureholder........................................ 4
Default................................................ 4
Defeasance Agent....................................... 4
Depository............................................. 4
Event of Default....................................... 4
General Partner........................................ 4
Global Debenture....................................... 4
Governmental Obligations............................... 5
Hawaiian Electric Industries Capital Trust............. 5
Indenture ............................................. 5
Interest Payment Date.................................. 5
Officer's Certificate.................................. 5
Opinion of Counsel..................................... 6
Outstanding............................................ 6
Partnership............................................ 6
Partnership Guarantee.................................. 6
Partnership Preferred Securities....................... 6
Person................................................. 6
Place of Payment....................................... 7
Predecessor Debenture.................................. 7
Property Trustee....................................... 7
(i)
Responsible Officer.................................... 7
Security............................................... 7
Security Exchange...................................... 7
Senior Indebtedness.................................... 8
Subsidiary............................................. 8
Trust Agreement........................................ 9
Trust Common Securities................................ 9
Trust Guarantee........................................ 9
Trust Indenture Act.................................... 9
Trust Preferred Securities............................. 9
Trustee................................................ 9
ARTICLE TWO
The Debentures
SECTION 2.01. Designation, Terms, Amount, Authentication
and Delivery of Debentures............................. 9
SECTION 2.02. Form of Debentures and Trustee's
Certificate............................................ 12
SECTION 2.03. Date and Denominations of Debentures;
Payment of Principal, Premium
and Interest........................................... 13
SECTION 2.04. Execution of Debentures................................ 15
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen
Debentures............................................. 16
SECTION 2.06. Temporary Debentures................................... 17
SECTION 2.07. Exchange of Debentures................................. 18
SECTION 2.08. Cancellation........................................... 19
SECTION 2.09. Beneficiaries.......................................... 20
SECTION 2.10. Appointment of Authenticating Agent.................... 20
SECTION 2.11. Global Debenture....................................... 21
SECTION 2.12. CUSIP Numbers.......................................... 22
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions
SECTION 3.01. Redemption of Debentures............................... 22
SECTION 3.02. Notice of Redemption; Selection by
Trustee of Debentures to be Redeemed................... 23
SECTION 3.03. Debentures Payable on Redemption Date;
Debentures Redeemed in Part............................ 24
SECTION 3.04. Sinking Fund for Debentures............................ 25
SECTION 3.05. Satisfaction of Sinking Fund Payments With
Debentures ............................................ 25
SECTION 3.06. Redemption of Debentures for Sinking Fund.............. 26
(ii)
ARTICLE FOUR
Particular Covenants of the Company
SECTION 4.01. Payment of Principal, Premium and
Interest .............................................. 26
SECTION 4.02. Maintenance of Office or Agency........................ 26
SECTION 4.03. Paying Agent; Money for Debenture Payments
to be Held in Trust.................................... 27
SECTION 4.04. Appointment to Fill Vacancy............................ 28
SECTION 4.05. Payment of Additional Interest......................... 28
SECTION 4.06. Maintenance of the Hawaiian Electric
Industries Capital Trust............................... 29
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee
SECTION 5.01. Company to Furnish Trustee Names and
Addresses of Debentureholders.......................... 30
SECTION 5.02. Preservation of Information;
Communications to Holders.............................. 30
SECTION 5.03. Reports by Company..................................... 32
SECTION 5.04. Reports by Trustee..................................... 33
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default
SECTION 6.01. Events of Default...................................... 35
SECTION 6.02. Collection of Indebtedness and
Suits for Enforcement by Trustee....................... 38
SECTION 6.03. Application of Moneys Collected........................ 40
SECTION 6.04. Limitation on Suits; Unconditional
Right of Debentureholders to Institute
Certain Suits.......................................... 41
SECTION 6.05. Rights and Remedies Cumulative; Delay or
Omission Not A Waiver.................................. 42
SECTION 6.06. Control by Debentureholders;
Waiver of Past Defaults................................ 42
SECTION 6.07. Notice of Defaults..................................... 43
SECTION 6.08. Undertaking for Costs.................................. 44
SECTION 6.09. Certain Additional Covenants........................... 44
(iii)
ARTICLE SEVEN
Concerning the Trustee
SECTION 7.01. Certain Duties and Responsibilities.................... 45
SECTION 7.02. Certain Rights of Trustee.............................. 47
SECTION 7.03. Limitations of Liability............................... 48
SECTION 7.04. Ownership of Debentures................................ 49
SECTION 7.05. Moneys Held Without Interest........................... 49
SECTION 7.06. Compensation and Reimbursement......................... 49
SECTION 7.07. Reliance on Certificate of Officers
of Company............................................. 50
SECTION 7.08. Conflicts of Interest.................................. 50
SECTION 7.09. Requirements for Eligibility........................... 57
SECTION 7.10. Resignation and Removal................................ 58
SECTION 7.11. Acceptance of Appointment by Successor................. 59
SECTION 7.12. Successor to Trustee by Merger,
Consolidation or Succession to Business................ 61
SECTION 7.13. Preferential Collection of Claims
Against Issuer......................................... 62
ARTICLE EIGHT
Concerning the Debentureholders
SECTION 8.01. Evidence of Action by Debentureholders................. 66
SECTION 8.02. Proof of Execution of Instruments and of
Holding of Debentures.................................. 67
SECTION 8.03. Persons Deemed Owners of Debentures.................... 68
SECTION 8.04. Debentures Owned by Company or Controlled
or Controlling Companies Disregarded for
Certain Purposes....................................... 68
SECTION 8.05. Instruments Executed by Debentureholders
Bind Future Holders.................................... 69
ARTICLE NINE
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without
Consent of Debentureholders............................ 69
SECTION 9.02. Modification of Indenture With Consent of
Debentureholders....................................... 71
SECTION 9.03. Effect of Supplemental Indentures...................... 72
SECTION 9.04. Debentures May Bear Notation of Changes by
Supplemental Indentures................................ 72
SECTION 9.05. Opinion of Counsel..................................... 73
(iv)
ARTICLE TEN
Consolidation, Merger, Sale or Conveyance
SECTION 10.01. Company May Consolidate, Etc., Only on
Certain Terms.......................................... 73
SECTION 10.02. Successor Corporation Substituted...................... 73
SECTION 10.03. Opinion of Counsel..................................... 74
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Defeasance; Unclaimed Moneys
SECTION 11.01. Satisfaction and Discharge of Indenture................ 74
SECTION 11.02. Application by Trustee of Funds Deposited
for Payment of Debentures.............................. 79
SECTION 11.03. Application by Trustee of Funds Deposited
for Payment of Debentures.............................. 79
SECTION 11.04. Repayment of Moneys Held by Paying Agent............... 79
SECTION 11.05. Repayment of Moneys Held by Trustee.................... 80
ARTICLE TWELVE
Immunity of Incorporators, Stockholders,
Officers and Directors
SECTION 12.01. Immunity From Individual Liability..................... 80
ARTICLE THIRTEEN
Miscellaneous Provisions
SECTION 13.01. Successors and Assigns................................. 81
SECTION 13.02. Acts of Board, Committee or Officer of
Successor Company...................................... 81
SECTION 13.03. Surrender of Powers of Company......................... 81
SECTION 13.04. Required Notices or Demands Served
by Mail................................................ 81
SECTION 13.05. Governing Law.......................................... 82
SECTION 13.06. Officer's Certificates and
Opinions of Counsel.................................... 82
SECTION 13.07. Payments Due on Saturdays, Sundays
or Holidays............................................ 82
SECTION 13.08. Provisions Required by
Trust Indenture Act.................................... 83
SECTION 13.09. Indenture May be Executed in Counterparts.............. 83
(v)
SECTION 13.10. Severability of Indenture Provisions................... 83
SECTION 13.11. Assignment by Company to Subsidiary.................... 83
SECTION 13.12. Holders of Trust Preferred Securities
as Third Party Beneficiaries
of This Indenture...................................... 83
ARTICLE FOURTEEN
Subordination of Debentures
SECTION 14.01. Agreement to Subordinate............................... 84
SECTION 14.02. Rights of Senior Indebtedness in the Event
of Insolvency, Etc., of the Company.................... 84
SECTION 14.03. Payment Over of Proceeds Received on
Debentures............................................. 86
SECTION 14.04. Payments to Debentureholders........................... 88
SECTION 14.05. Holders of Debentures Authorize Trustee to
Effectuate Subordination of Debentures................. 88
SECTION 14.06. Notice to Trustee...................................... 89
SECTION 14.07. Trustees May Hold Senior Indebtedness.................. 89
SECTION 14.08. Not Applicable to Trustee's Compensation and
Reimbursement.......................................... 89
SECTION 14.09. Applicability of Article Fourteen to Paying
Agents................................................. 89
ACCEPTANCE OF TRUST BY TRUSTEE........................................ 90
SIGNATURES............................................................ 90
(vi)
CROSS REFERENCE SHEET(*)
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as
of February 1, 1997 between HAWAIIAN ELECTRIC INDUSTRIES, INC. and THE BANK OF
NEW YORK, Trustee:
Section of the Act Section of Indenture
------------------ --------------------
310(a)(1) and (2)..................................................... 7.09
310(a)(3) and (4)..................................................... Inapplicable
310(b)................................................................ 7.08, 7.10 and 7.11
310(c)................................................................ Inapplicable
311(a)................................................................ 7.13(a)
311(b)................................................................ 7.13(b)
311(c)................................................................ Inapplicable
312(a)................................................................ 5.01 and 5.02
312(b)................................................................ 5.02
312(c)................................................................ 5.02
313(a)................................................................ 5.04
313(b)(1)............................................................. Inapplicable
313(b)(2)............................................................. 5.04
313(c)................................................................ 5.04
313(d)................................................................ 5.04
314(a)................................................................ 5.03
314(b)................................................................ Inapplicable
314(c)(1) and (2)..................................................... 13.06
314(c)(3)............................................................. Inapplicable
314(d)................................................................ Inapplicable
314(e)................................................................ 13.06
314(f)................................................................ Inapplicable
315(a), (c) and (d)................................................... 7.01
315(b)................................................................ 6.07
315(e)................................................................ 6.08
316(a)(1)............................................................. 6.06
316(a)(2)............................................................. Inapplicable
316(a) (last sentence)................................................ 8.04
316(b)................................................................ 6.04
317(a)................................................................ 6.02
317(b)................................................................ 4.03
318(a)................................................................ 13.08
(*) This Cross Reference Sheet is not part of the Indenture.
(vii)
THIS INDENTURE, is dated as of the 1st day of February, 1997, between
HAWAIIAN ELECTRIC INDUSTRIES, INC., a corporation duly organized and existing
under the laws of the State of Hawaii (hereinafter sometimes referred to as the
"Company"), and THE BANK OF NEW YORK, a New York banking corporation, as Trustee
(hereinafter sometimes referred to as the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has fully
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured debentures (hereinafter referred to as the "Debentures"),
in an unlimited aggregate principal amount to be issued from time to time in one
or more series as in this Indenture provided, as registered Debentures without
coupons, to be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication to be
borne by the Debentures (the "Certificate of Authentication") are to be
substantially in such forms as may be approved by the Board of Directors (as
defined below) in or pursuant to a Board Resolution (as defined below) or set
forth in any indenture supplemental to this Indenture;
AND WHEREAS, all acts and things necessary to make the Debentures
issued pursuant hereto, when executed by the Company and authenticated and
delivered by the Trustee as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
indenture and agreement according to its terms, have been done and performed or
will be done and performed prior to the issuance of such Debentures, and the
execution of this Indenture has been and the issuance hereunder of the
Debentures has been or will be prior to issuance in all respects duly
authorized, and the Company, in the exercise of the legal right and power in it
vested, executes this Indenture and proposes to make, execute, issue and deliver
the Debentures:
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are and are to be authenticated, issued and delivered, and in
consideration of the premises and of the acquisition and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee, for the equal and proportionate benefit (subject to
the provisions of this Indenture) of the respective holders from time to time
of the Debentures, without any discrimination, preference or priority of any one
Debenture over any other by reason of priority in the time of issue, sale or
negotiation thereof, or otherwise, except as provided herein, as follows:
ARTICLE ONE
Definitions
SECTION 1.01. Definitions.
-----------
The terms defined in this Section (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture, any resolution of the Board of Directors of the
Company and of any indenture supplemental hereof shall have the respective
meanings specified in this Section. All other terms used in this Indenture
which are defined in the Trust Indenture Act of 1939, as amended, or which are
by reference in such Act defined in the Securities Act of 1933, as amended
(except as herein otherwise expressly provided or unless the context otherwise
requires), shall have the meanings assigned to such terms in said Trust
Indenture Act and in said Securities Act as in force at the date of this
instrument.
Additional Interest: The term "Additional Interest" shall mean the
-------------------
additional interest as provided in Section 4.05.
Affiliate: The term "Affiliate" of the Company shall mean any company
---------
at least a majority of whose outstanding voting stock shall at the time be owned
by the Company, or by one or more direct or indirect subsidiaries of the Company
or by the Company and one or more direct or indirect subsidiaries of the
Company. For the purposes only of this definition of the term "Affiliate", the
term "voting stock", as applied to the stock of any company, shall mean stock of
any class or classes having ordinary voting power for the election of a majority
of the directors of such company, other than stock having such power only by
reason of the occurrence of a contingency.
Agreement of Limited Partnership: The term "Agreement of Limited
--------------------------------
Partnership" means the Amended and Restated Agreement of Limited Partnership,
dated as of February 1, 1997, of the Partnership, as amended, modified or
otherwise supplemented from time to time.
2
Authenticating Agent: The term "Authenticating Agent" means an
--------------------
authenticating agent with respect to all or any of the series of Debentures, as
the case may be, appointed with respect to all or any series of the Debentures,
as the case may be, by the Trustee pursuant to Section 2.10.
Board of Directors: The term "Board of Directors" shall mean the
------------------
Board of Directors of the Company, or any committee of such Board duly
authorized to act hereunder.
Board Resolution: The term "Board Resolution" shall mean a copy of
----------------
one or more resolutions, certified by the secretary or an assistant secretary of
the Company to have been adopted or consented to by the Board of Directors and
to be in full force and effect, and delivered to the Trustee.
Business Day: The term "business day", with respect to any Place of
------------
Payment for a series of Debentures, shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in such
Place of Payment are authorized or obligated by law or executive order to close.
Certificate: The term "Certificate" shall mean a certificate signed
-----------
by the principal executive officer, the principal financial officer or the
principal accounting officer of the Company. The Certificate need not comply
with the provisions of Section 13.06.
Company: The term "Company" shall mean Hawaiian Electric Industries,
-------
Inc., a corporation duly organized and existing under the laws of the State of
Hawaii, and, subject to the provisions of Article Ten, shall also include its
successors and assigns.
Corporate Trust Office: The term "Corporate Trust Office" shall mean
----------------------
the office of the Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the date of the
execution of this Indenture is located at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Trustee Administration.
Debenture or Debentures: The term "Debenture" or "Debentures" shall
-----------------------
mean any Debenture or Debentures, as the case may be, authenticated and
delivered under this Indenture. The term "Debenture" or Debentures" also
include unsecured notes and other evidences of indebtedness, which may be issued
pursuant to this Indenture.
3
Debenture Register: The term "Debenture Register" shall mean the book
------------------
in which the Company will keep and register, or cause to be kept and registered,
a record of the name and addresses of the holder of record of each Debenture as
provided in Section 2.07 and in accordance with the terms of this Indenture.
Debentureholder: The term "Debentureholder", "holder of Debentures",
---------------
"registered holder", or other similar term, shall mean the person or persons in
whose name or names a particular Debenture shall be registered in the Debenture
Register.
Default: The term "Default" shall mean any event, act or condition
-------
which with notice or lapse of time, or both, would constitute an Event of
Default.
Defeasance Agent: The term "Defeasance Agent" shall mean the Person,
----------------
if any, selected by the Company and approved by the Trustee to receive the
payments of money and any Governmental Obligations as provided in Section 11.01.
Depository: The term "Depository" shall mean, with respect to
----------
Debentures of any series, for which the Company shall determine that such
Debentures will be issued as a Global Debenture, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a
clearing agency under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to either Section 2.01 or 2.11.
Event of Default: The term "Event of Default" with respect to
----------------
Debentures of a particular series shall mean any event specified in Section
6.01(a), continued for the period of time, if any, therein designated.
General Partner: The term "General Partner" means Hycap Management,
---------------
Inc., a Delaware corporation and subsidiary of the Company, in its capacity as
general partner of the Partnership, and its successors and assigns.
Global Debenture: The term "Global Debenture" shall mean, with
----------------
respect to any series of Debentures, a Debenture executed by the Company and
delivered by the Trustee to the Depository or pursuant to the Depository's
instruction, all in accordance with the Indenture, which shall be registered in
the name of the Depository or its nominee.
4
Governmental Obligations: The term, "Governmental Obligations" shall
------------------------
mean securities that are (i) direct obligations of the United States of America
for the payment of which its full faith and credit is pledged or (ii)
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as
amended) as custodian with respect to any such Governmental Obligation or a
specific payment of principal of or interest on any such Governmental Obligation
held by such custodian for the account of the holder of such depository receipt;
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the Governmental
Obligation or the specific payment of principal of or interest on the
Governmental Obligation evidenced by such depository receipt.
Hawaiian Electric Industries Capital Trust: The term "Hawaiian
------------------------------------------
Electric Industries Capital Trust" shall mean such statutory business trust
created under the laws of the State of Delaware specified in or pursuant to the
applicable Board Resolution or supplemental indenture establishing a particular
series of Debentures pursuant to Section 2.01 hereof.
Indenture: The term "Indenture" shall mean this instrument as
---------
originally executed, or, if amended or supplemented as herein provided, as so
amended or supplemented from time to time.
Interest Payment Date: The term "Interest Payment Date" when used
---------------------
with respect to any installment of interest on a Debenture of a particular
series shall mean the date specified in such Debenture or in or pursuant to a
Board Resolution or in an indenture supplemental hereto with respect to such
series as the fixed date on which an installment of interest with respect to
Debentures of that series is due and payable.
Officer's Certificate: The term "Officer's Certificate" shall mean a
---------------------
certificate signed by the President, any Vice President, the Treasurer or the
Controller of the Company. Each such certificate shall include the statements
provided for in Section 13.06, if and to the extent required by the provisions
thereof.
5
Opinion of Counsel: The term "Opinion of Counsel" shall mean an
------------------
opinion in writing signed by legal counsel, who may be an employee of or counsel
for the Company or a Subsidiary and who shall be satisfactory to the Trustee.
Each such opinion shall include the statements provided for in Section 13.06, if
and to the extent required by the provisions thereof.
Outstanding: The term "Outstanding", when used with reference to
-----------
Debentures of any series, shall, subject to the provisions of Section 8.01,
mean, as of any particular time, all Debentures of that series theretofore
authenticated and delivered by the Trustee under this Indenture, except (a)
Debentures theretofore canceled by the Trustee or any paying agent, or delivered
to the Trustee or any paying agent for cancellation or which have previously
been canceled; (b) Debentures or portions thereof for the payment or redemption
of which moneys or Governmental Obligations in the necessary amount shall have
been deposited in trust with the Trustee or with any paying agent (other than
the Company) or shall have been set aside and segregated in trust for the
holders of such Debentures by the Company (if the Company shall act as its own
paying agent); provided, however, that if such Debentures or portions of such
Debentures are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article Three provided, or provision
satisfactory to the Trustee shall have been made for giving such notice; (c)
Debentures in lieu of or in substitution for which other Debentures shall have
been authenticated and delivered pursuant to the terms of Section 2.07; and (d)
Debentures paid pursuant to Section 2.05.
Partnership: The term "Partnership" means HEI Preferred Funding, LP,
-----------
a Delaware limited partnership, and its successors and assigns.
Partnership Guarantee: The term "Partnership Guarantee" shall mean
---------------------
the guarantee, if any, that the Company may enter into that operates directly or
indirectly for the benefit of holders of Partnership Preferred Securities, if
any, issued by the Partnership.
Partnership Preferred Securities: The term "Partnership Preferred
--------------------------------
Securities" means the limited partnership interests, if any, issued pursuant to
the Agreement of Limited Partnership.
Person: The term "Person" means any individual, corporation, joint
------
venture, association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
6
Place of Payment: The term "Place of Payment", when used with respect
----------------
to the Debentures of any series, means the place or places where the principal
of (and premium, if any) and interest on the Debentures of that series are
payable as specified in or pursuant to a Board Resolution or supplemental
indenture as contemplated by Section 2.01.
Predecessor Debenture: The term "Predecessor Debenture" of any
---------------------
particular Debenture shall mean every previous Debenture evidencing all or a
portion of the same debt as that evidenced by such particular Debenture; and,
for the purposes of this definition, any Debenture authenticated and delivered
under Section 2.05 in lieu of a lost, destroyed or stolen Debenture shall be
deemed to evidence the same debt as the lost, destroyed or stolen Debenture.
Property Trustee: The term "Property Trustee" means the entity
----------------
performing the function of the Property Trustee under the applicable Trust
Agreement of a Hawaiian Electric Industries Capital Trust.
Responsible Officer: The term "Responsible Officer" when used with
-------------------
respect to the Trustee shall mean any vice president, any trust officer, any
corporate trust officer or any other officer or assistant officer of the
Corporate Trust Office of the Trustee customarily performing functions similar
to those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
or her knowledge of and familiarity with the particular subject.
Security: Except as provided in Section 7.08, the word "security" or
--------
"securities" as used in this Indenture shall mean any note, stock, treasury
stock, bond, debenture, evidence of indebtedness, certificate of interest or
participation in any profit-sharing agreement, collateral trust certificate,
pre-organization certificate or subscription, transferable share, investment
contract, voting trust certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other mineral rights, or, in
general, any interest or instrument commonly known as a "security", or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to or purchase,
any of the foregoing.
Security Exchange: "Security Exchange" when used with respect to the
-----------------
Debentures of any series that are held as trust assets of a Hawaiian Electric
Industries Capital Trust pursuant to the Trust Agreement of such Hawaiian
Electric
7
Industries Capital Trust, means the distribution of the Debentures of such
series by such Hawaiian Electric Industries Capital Trust in exchange for the
Trust Preferred Securities and Trust Common Securities of such Hawaiian Electric
Industries Capital Trust in dissolution of such Hawaiian Electric Industries
Capital Trust pursuant to such Trust Agreement.
Senior Indebtedness: The term "Senior Indebtedness" means the
-------------------
principal of and premium, if any, and interest on (a) all indebtedness of the
Company, whether outstanding on the date of this Indenture or thereafter
created, (i) for money borrowed by the Company, (ii) for money borrowed by, or
obligations of, others and either assumed or guaranteed, directly or indirectly,
by the Company, (iii) in respect of letters of credit and acceptances issued or
made by banks, or (iv) constituting purchase money indebtedness, or indebtedness
secured by property included in the property, plant and equipment accounts of
the Company at the time of the acquisition of such property by the Company, for
the payment of which the Company is directly liable, and (b) all deferrals,
renewals, extensions and refundings of, and amendments, modifications and
supplements to, any such indebtedness. As used in the preceding sentence the
term "purchase money indebtedness" means indebtedness evidenced by a note,
debenture, bond or other instrument (whether or not secured by any lien or other
security interest) issued or assumed as all or a part of the consideration for
the acquisition of property, whether by purchase, merger, consolidation or
otherwise, unless by its terms such indebtedness is subordinate to other
indebtedness of the Company. Notwithstanding anything to the contrary in this
Indenture or the Debentures, Senior Indebtedness shall not include (i) any
indebtedness of the Company which, by its terms or the terms of the instrument
creating or evidencing it, is subordinate in right of payment to or pari passu
with the Debentures, as the case may be, or (ii) any indebtedness of the Company
to a Subsidiary.
Subsidiary: The term "Subsidiary" shall mean any corporation at least
----------
a majority of whose outstanding voting stock shall at the time be owned by the
Company or by one or more subsidiaries or by the Company and one or more
Subsidiaries. For the purposes only of this definition of the term
"Subsidiary", the term "voting stock", as applied to the stock of any
corporation, shall mean stock of any class or classes having ordinary voting
power for the election of a majority of the directors of such corporation, other
than stock having such power only by reason of the occurrence of a contingency.
8
Trust Agreement: The term "Trust Agreement" shall mean the respective
---------------
Trust Agreement, as it may be amended from time to time, of the Hawaiian
Electric Industries Capital Trusts, if any, specified in or pursuant to the
applicable Board Resolution or supplemental indenture establishing a particular
series of Debentures pursuant to Section 2.01 hereof.
Trust Common Securities: The term "Trust Common Securities" shall
-----------------------
mean the common undivided beneficial interests, if any, in the assets of the
applicable Hawaiian Electric Industries Capital Trust or Trusts.
Trust Guarantee: The term "Trust Guarantee" shall mean the guarantee,
---------------
if any, that the Company may enter into that operates directly or indirectly for
the benefit of holders of Trust Preferred Securities, if any, issued by a
Hawaiian Electric Industries Capital Trust.
Trust Indenture Act: The term "Trust Indenture Act", subject to the
-------------------
provisions of Sections 9.01 and 9.02, shall mean the Trust Indenture Act of
1939, as amended and in effect at the date of execution of this Indenture.
Trust Preferred Securities: The term "Trust Preferred Securities"
--------------------------
shall mean the preferred undivided beneficial interests, if any, in the assets
of the applicable Hawaiian Electric Industries Capital Trust.
Trustee: The term "Trustee" shall mean The Bank of New York and,
-------
subject to the provisions of Article Seven, shall also include its successors
and assigns, and, if at any time there is more than one person acting in such
capacity hereunder, "Trustee" shall mean each such person. The term "Trustee"
as used with respect to a particular series of the Debentures shall mean the
trustee with respect to that series.
ARTICLE TWO
The Debentures
SECTION 2.01. Designation, Terms, Amount, Authentication and
Delivery of Debentures.
----------------------------------------------
The aggregate principal amount of Debentures which may be
authenticated and delivered under this Indenture is unlimited.
9
The Debentures may be issued in one or more series up to the aggregate
principal amount of Debentures of that series from time to time authorized by or
pursuant to a Board Resolution or pursuant to one or more indentures
supplemental hereto, prior to the initial issuance of Debentures of a particular
series and shall rank pari passu with the Debentures of each other series. The
Debentures of each series shall be (i) junior and subordinate in right of
payment to any and all notes, debentures and other evidences of indebtedness of
the Company that shall contain or have applicable thereto subordination
provisions substantially identical in effect to the subordination provisions set
forth in Section 13.02 of the form of the Senior Subordinated Indenture filed by
the Company as Exhibit 4(h) to its Registration Statement on Form S-3 (File No.
333-18809) providing for such indebtedness being junior and subordinate in right
of payment to all Senior Indebtedness (as defined in such form) and (ii) pari
passu with any and all other notes, debentures and other evidences of
indebtedness of the Company that shall contain or have applicable thereto
subordination provisions substantially identical in effect to the subordination
provisions set forth in Section 14.02 providing for such indebtedness being
junior and subordinate in right of payment to all Senior Indebtedness (as
defined herein). Prior to the initial issuance of Debentures of any series,
there shall be established in a Board Resolution, or pursuant to a Board
Resolution and set forth in an Officer's Certificate, or established in one or
more indentures supplemental hereto:
(1) the title of the Debentures of the series (which shall distinguish
the Debentures of the series from all other Debentures);
(2) any limit upon the aggregate principal amount of the Debentures of
that series which may be authenticated and delivered under this Indenture
(except for Debentures authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Debentures of that
series);
(3) the percentage of the principal amount of which the Debentures
will be issued, and the date or dates on which the principal of the
Debentures of the series is payable;
(4) the rate or rates at which the Debentures of the series shall bear
interest or the manner of calculation of such rate or rates, if any;
10
(5) the place or places where the principal of (and premium, if any)
and interest on Debentures of the series shall be payable or surrendered
for registration of transfer or exchange;
(6) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the manner
of determination of such Interest Payment Dates and the record dates for
the determination of holders to whom interest is payable on any such
Interest Payment Dates;
(7) the right, if any, to extend the interest payment periods and the
duration of such extension;
(8) the period or periods, if any, within which, the price or prices
at which, and the terms and conditions upon which, Debentures of the series
may be redeemed, in whole or in part, at the option of the Company;
(9) the provisions, if any, for a sinking, purchase or other
analogous fund and the obligation, if any, of the Company to redeem or
purchase Debentures of the series pursuant to any sinking fund or analogous
provisions (including payments made in cash in anticipation of future
sinking fund obligations) or at the option of a holder thereof and the
period or periods within which, the price or prices at which, and the terms
and conditions upon which, Debentures of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(10) the form of the Debentures of the series including the form of
the Certificate of Authentication for such series;
(11) if other than denominations of $25 or any integral multiple
thereof, the denominations in which the Debentures of the series shall be
issuable;
(12) whether the Debentures are issuable as a Global Debenture and, in
such case, the identity of the Depository for such series;
(13) if the Debentures of such series are to be deposited as trust
assets in a Hawaiian Electric Industries Capital Trust, the name of the
applicable Hawaiian Electric Industries Capital Trust (which shall
distinguish such statutory business trust from all other Hawaiian Electric
Industries Capital Trusts) into which the Debentures of such series are to
be deposited as trust assets and the date of its Trust Agreement;
11
(14) if the Debentures of such series are to be deposited as
partnership assets in a limited partnership, such as the Partnership, the
name of the applicable limited partnership (which shall distinguish such
limited partnership from any other limited partnership of the Company) into
which the Debentures of such series are to be deposited as partnership
assets and the date of its limited partnership agreement;
(15) whether or not the Debentures are to be sold to Persons who are
not directly or indirectly owned or controlled by the Company and who are
not Affiliates of the Company;
(16) if the Debentures are to be denominated in a currency or currency
unit other than United States dollars, the denomination in which such
Debentures will be issued and the coin or currency in which the principal,
premium, if any, and interest, if any, on such Debentures will be payable,
which may be United States dollars based upon the exchange rate for such
other currency or currency unit existing on or about the time a payment is
due; and
(17) any and all other terms with respect to such series (which terms
shall not be inconsistent with the terms of this Indenture).
All Debentures of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to any such Board Resolution or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officer's
Certificate setting forth the terms of the series.
SECTION 2.02. Form of Debentures and Trustee's Certificate.
--------------------------------------------
The Debentures of any series and the Trustee's certificate of
authentication to be borne by such Debentures shall be substantially of the
tenor and purport as set forth in one or more indentures supplemental hereto or
as provided in a Board Resolution, or pursuant to a Board Resolution and set
forth in an Officer's Certificate, and may have such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not
12
inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Debentures of that series
may be listed, or to conform to usage.
SECTION 2.03. Date and Denominations of Debentures; Payment of
Principal, Premium and Interest.
------------------------------------------------
The Debentures shall be issuable as registered Debentures without
coupons and in the denominations of $25 or any integral multiple thereof,
subject to Sections 2.01(10) and 2.01(16). The Debentures of a particular
series shall bear interest payable on the dates and at the rate specified with
respect to that series. Unless otherwise provided in a Supplemental Indenture
or Officer's Certificate for a series of Debentures, the principal of and the
interest on the Debentures of any series, as well as any premium thereon in case
of redemption thereof prior to maturity, shall be payable in the coin or
currency of the United States of America which at the time is legal tender for
public and private debt, at the office or agency of the Company maintained for
that purpose in the Place of Payment for that series of Debentures. Each
Debenture shall be dated the date of its authentication. Interest on the
Debentures shall be computed on the basis of a 360-day year composed of twelve
30-day months, except that for any period shorter than a full 90-day quarter,
interest will be computed on the basis of the actual number of days elapsed in
such 90-day quarter.
The interest installment on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name said
Debenture (or one or more Predecessor Debentures) is registered on the Debenture
Register at the close of business on the regular record date for such interest
installment. In the event that any Debenture of a particular series or portion
thereof is called for redemption and the redemption date is subsequent to a
regular record date with respect to any Interest Payment Date and prior to such
Interest Payment Date, interest on such Debenture will be paid upon presentation
and surrender of such Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Debentures of the
same series (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered holder on the relevant regular record date by
13
virtue of having been such holder; and such Defaulted Interest shall be paid
by the Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or their
respective Predecessor Debentures) are registered at the close of business
on a special record date for the payment of such Defaulted Interest, which
shall be fixed in the following manner: the Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each such Debenture and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest
which shall not be more than 15 nor less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Debentureholder at its address as it appears
in the Debenture Register, not less than 10 days prior to such special
record date. Notice of the proposed payment of such Defaulted Interest and
the special record date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the persons in whose names such
Debentures (or their Predecessor Debentures) are registered on such special
record date and shall be no longer payable pursuant to the following clause
(2).
(2) The Company may make payment of any Defaulted Interest on any
Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
14
Unless otherwise set forth in or pursuant to a Board Resolution or one
or more indentures supplemental hereto establishing the terms of any series of
Debentures pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Debentures with respect to any
Interest Payment Date for such series shall mean either the fifteenth day of the
month immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall occur, if such
Interest Payment Date is the first day of a month, or the last day of the month
immediately preceding the month in which an Interest Payment Date established
for such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the fifteenth day of a month, whether or not such date is a
business day.
Subject to the foregoing provisions of this Section, each Debenture of
a series delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debenture of such series shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Debenture.
SECTION 2.04. Execution of Debentures.
-----------------------
The Debentures shall, subject to the provisions of Section 2.06, be
printed on steel engraved borders or fully or partially engraved, or legibly
typed, as the proper officers of the Company may determine, and shall be signed
on behalf of the Company by its President or any Vice President and by its
Treasurer, Controller or Secretary or an Assistant Treasurer or Assistant
Secretary, under its corporate seal or a facsimile thereof reproduced thereon.
The signature of any of these officers on the Debentures may be manual or
facsimile. The seal of the Company may be in the form of a facsimile of the
seal of the Company and may be impressed, affixed, imprinted or otherwise
reproduced on the Debentures.
Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures and did not
hold such offices at the date of such Debentures.
Only such Debentures as shall bear thereon a Certificate of
Authentication substantially in the form established for such Debentures,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Debentures, shall be entitled to the
15
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate executed by the Trustee, or by any Authenticating Agent appointed by
the Trustee with respect to such Debentures, upon any Debenture executed by the
Company shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures of any series executed by the
Company to the Trustee for authentication, together with a written order of the
Company for the authentication and delivery of such Debentures, signed by its
President or any Vice President and by its Treasurer, Controller or Secretary or
any Assistant Treasurer or Assistant Secretary, and the Trustee in accordance
with such written order shall authenticate and make available for delivery such
Debentures.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and
terms thereof have been established in conformity with the provisions of this
Indenture.
The Trustee shall not be required to authenticate such Debentures if
the issue of such Debentures pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Debentures and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Debentures.
-----------------------------------------------
In case any temporary or definitive Debenture shall become mutilated
or be destroyed, lost or stolen, the Company (subject to the next succeeding
sentence) shall execute, and upon its request the Trustee (subject as aforesaid)
shall authenticate and deliver, a new Debenture of the same series bearing a
number not contemporaneously Outstanding, in exchange and substitution for the
mutilated Debenture, or in lieu of and in substitution for the Debenture so
destroyed, lost or stolen. In every case the applicant for a substituted
Debenture shall furnish to the Company and to the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and to the Trustee evidence to their satisfaction of the
destruction, loss or
16
theft of the applicant's Debenture and of the ownership thereof. The Trustee
may authenticate any such substituted Debenture and deliver the same upon the
written request or authorization of any officer of the Company. Upon the
issuance of any substituted Debenture, the Company may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. In case any Debenture which has matured or is
about to mature shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Debenture, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
Debenture) if the applicant for such payment shall furnish to the Company and to
the Trustee such security or indemnity as they may require to save them
harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Debenture and of the ownership thereof.
Every Debenture issued pursuant to the provisions of this Section in
substitution for any Debenture which is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Debenture shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debentures of
the same series duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.06. Temporary Debentures.
--------------------
Pending the preparation of definitive Debentures of any series, the
Company may execute, and the Trustee shall authenticate and deliver, temporary
Debentures (printed, lithographed or typewritten) of any authorized
denomination, and substantially in the form of the definitive Debentures in lieu
of which they are issued, but with such omissions, insertions and variations as
may be appropriate for temporary Debentures, all as may be determined by the
Company. Every temporary Debenture of any series shall be executed by the
Company and be authenticated by the Trustee upon the same
17
conditions and in substantially the same manner, and with like effect, as the
definitive Debentures of such series. Without unnecessary delay the Company
will execute and will furnish definitive Debentures of such series and thereupon
any or all temporary Debentures of such series may be surrendered in exchange
therefor (without charge to the holders), at the office or agency of the Company
designated for the purpose in a Place of Payment for that series, and the
Trustee shall authenticate and such office or agency shall deliver in exchange
for such temporary Debentures an equal aggregate principal amount of definitive
Debentures of such series, unless the Company advises the Trustee to the effect
that definitive Debentures need not be executed and furnished until further
notice from the Company. Until so exchanged, the temporary Debentures of such
series shall be entitled to the same benefits under this Indenture as definitive
Debentures of such series authenticated and delivered hereunder.
SECTION 2.07. Exchange of Debentures.
----------------------
(a) Debentures of any series may be exchanged upon presentation
thereof at the office or agency of the Company in a Place of Payment for that
series, for other Debentures of such series of authorized denominations, and for
a like aggregate principal amount, upon payment of a sum sufficient to cover any
tax or other governmental charge in relation thereto, all as provided in this
Section. In respect of any Debentures so surrendered for exchange, the Company
shall execute, the Trustee shall authenticate and such office or agency shall
deliver in exchange therefor the Debenture or Debentures of the same series
which the Debentureholder making the exchange shall be entitled to receive,
bearing numbers not contemporaneously Outstanding.
(b) The Company shall keep, or cause to be kept, at the Corporate
Trust Office of the Trustee, or such other location designated by the Company in
the Place of Payment, a register or registers (the "Debenture Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall register the Debentures and the transfers of Debentures as in this Article
provided and which at all reasonable times shall be open for inspection by the
Trustee. Unless otherwise provided by Board Resolution for a series of
Debentures, the Trustee is hereby appointed as the registrar for the purpose of
registering Debentures and transferring Debentures as herein provided (the
"Debenture Registrar").
Upon surrender for transfer of any Debenture at the Corporate Trust
Office of the Trustee or such other location designated by the Company, the
Company shall execute, the Trustee shall authenticate and such office or agency
shall make
18
available for delivery in the name of the transferee or transferees a new
Debenture or Debentures of the same series as the Debenture presented for a like
aggregate principal amount.
All Debentures presented or surrendered for exchange or registration
of transfer, as provided in this Section, shall be accompanied (if so required
by the Company or the Debenture Registrar) by a written instrument or
instruments of transfer, in form satisfactory to the Company or the Debenture
Registrar, duly executed by the registered holder or by its duly authorized
attorney in writing.
(c) No service charge shall be made for any exchange or registration
of transfer of Debentures, or issue of new Debentures in case of partial
redemption of any series, but the Company or the Trustee may require payment of
a sum sufficient to cover any tax or other governmental charge in relation
thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and
Section 9.04 not involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Debentures during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
less than all the Outstanding Debentures of the same series and ending at the
close of business on the day of such mailing, nor (ii) to register the transfer
of or exchange any Debentures of any series or portions thereof called for
redemption. The provisions of this Section 2.07 are, with respect to any Global
Debenture, subject to Section 2.11 hereof.
SECTION 2.08. Cancellation.
------------
All Debentures surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any
paying agent, be delivered to the Trustee for cancellation, or, if surrendered
to the Trustee, shall be canceled by it, and no Debentures shall be issued in
lieu thereof except as expressly required or permitted by any of the provisions
of this Indenture. On request of the Company, the Trustee shall deliver to the
Company canceled Debentures held by the Trustee. In the absence of such request
the Trustee may dispose of canceled Debentures in accordance with its standard
procedures and deliver a certificate of disposition to the Company. If the
Company shall otherwise acquire any of the Debentures, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Debentures unless and until the same are delivered to the
Trustee for cancellation.
19
SECTION 2.09. Beneficiaries.
-------------
Nothing in this Indenture or in the Debentures, express or implied,
shall give or be construed to give to any person, firm or corporation, other
than the parties hereto and the holders of the Debentures, any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under
any covenant, condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties hereto and
of the holders of the Debentures.
SECTION 2.10. Appointment of Authenticating Agent.
-----------------------------------
So long as any of the Debentures of any series remain Outstanding
there may be an Authenticating Agent for any or all such series of Debentures
which the Trustee shall have the right to appoint. Said Authenticating Agent
shall be authorized to act on behalf of the Trustee to authenticate Debentures
of such series issued upon exchange, transfer or partial redemption thereof, and
Debentures so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. All references in this Indenture to the authentication of
Debentures by the Trustee shall be deemed to include authentication by an
Authenticating Agent for such series except for authentication upon original
issuance or pursuant to Section 2.05 hereof. Each Authenticating Agent shall be
acceptable to the Company and shall be a corporation which has a combined
capital and surplus, as most recently reported or determined by it, sufficient
under the laws of any jurisdiction under which it is organized or in which it is
doing business to conduct a trust business, and which is otherwise authorized
under such laws to conduct such business and is subject to supervision or
examination by Federal or State authorities. If at any time any Authenticating
Agent shall cease to be eligible in accordance with these provisions, it shall
resign immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
20
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
SECTION 2.11. Global Debenture.
----------------
(a) If the Company shall establish pursuant to Section 2.01 that the
Debentures of a particular series are to be issued in whole as one or more
Global Debentures, then the Company shall execute and the Trustee shall, in
accordance with Section 2.04, authenticate and deliver, one or more Global
Debentures which (i) shall represent, and shall be denominated in an aggregate
amount equal to the aggregate principal amount of, all of the Outstanding
Debentures of such series, (ii) shall be registered in the name of the
Depository or its nominee, (iii) shall be delivered by the Trustee to the
Depository or pursuant to the Depository's instruction and (iv) shall bear a
legend substantially to the following effect: "Except as otherwise provided in
Section 2.11 of the Indenture, this Debenture may be transferred, in whole but
not in part, only to another nominee of the Depository or to a successor
Depository or to a nominee of such successor Depository."
(b) Notwithstanding the provisions of Section 2.07, unless and until
it is exchanged in whole or in part for Debentures in definitive registered
form, the Global Debenture or Debentures of a series may be transferred, in
whole but not in part and in the manner provided in Section 2.07, only to
another nominee of the Depository for such series, or to a successor Depository
for such series selected or approved by the Company or to a nominee of such
successor Depository.
(c) If at any time the Depository for a series of Debentures notifies
the Company that it is unwilling or unable to continue as Depository for such
series or if at any time the Depository for such series shall no longer be
registered or in good standing under the Exchange Act, or other applicable
statute or regulation and a successor Depository for such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, this Section 2.11 shall
no longer be applicable to the Debentures of such series and the Company will
execute and, subject to Section 2.07, the Trustee will authenticate and make
available for delivery Debentures of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debentures of such series in
exchange for such Global Debenture. In addition, the Company may at any time
determine that the Debentures of any series shall no longer be represented by
one or more Global
21
Debentures and that the provisions of this Section 2.11 shall no longer apply
to the Debentures of such series. In such event the Company will execute and,
subject to Section 2.07, the Trustee, upon receipt of an Officer's Certificate
evidencing such determination by the Company, will authenticate and make
available for delivery Debentures of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debentures of such series in
exchange for such Global Debentures. Upon the exchange of the Global Debentures
for such Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debentures shall be canceled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Debentures pursuant to this Section 2.11(c) shall be registered in such names
and in such authorized denominations as the Depository, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Debentures to the Depository for
delivery to the persons in whose names such Debentures are so registered.
SECTION 2.12. CUSIP Numbers.
-------------
The Company in issuing the Debentures may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Debentureholders; provided that any such notice
--------
may state that no representation is made as to the correctness of such numbers
either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE THREE
Redemption of Debentures and
Sinking Fund Provisions
SECTION 3.01. Redemption of Debentures.
------------------------
The Company may redeem the Debentures of any series issued hereunder
on and after the dates and in accordance with the terms established for such
series pursuant to Section 2.01 hereof.
22
SECTION 3.02. Notice of Redemption; Selection by Trustee of
Debentures to be Redeemed.
---------------------------------------------
(a) In case the Company shall desire to exercise such right to redeem
all or, as the case may be, a portion of the Debentures of any series in
accordance with the right reserved so to do, it shall give notice of such
redemption to holders of the Debentures of such series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less than
30 days and not more than 60 days before the date fixed for redemption of that
series to such holders at their last addresses as they shall appear upon the
Debenture Register. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
registered holder receives the notice. In any case, failure duly to give such
notice to the holder of any Debenture of any series designated for redemption in
whole or in part, or any defect in the notice, shall not affect the validity of
the proceedings for the redemption of any other Debentures of such series or any
other series. In the case of any redemption of Debentures prior to the
expiration of any restriction on such redemption provided in the terms of such
Debentures or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officer's Certificate evidencing compliance with any such restriction.
Each such notice of redemption shall identify the Debentures to be
redeemed (including CUSIP numbers) and shall specify the date fixed for
redemption and the redemption price at which Debentures of that series are to be
redeemed, and shall state the place or places where such Debentures are to be
presented and surrendered for payment of the redemption price of such Debentures
to be redeemed, that interest accrued to the date fixed for redemption will be
paid as specified in said notice, that from and after said date interest will
cease to accrue and that the redemption is for a sinking fund, if such is the
case. If less than all the Debentures of a series are to be redeemed, the
notice to the holders of Debentures of that series to be redeemed in whole or in
part shall specify the particular Debentures to be so redeemed. In case any
Debenture is to be redeemed in part only, the notice which relates to such
Debenture shall state the portion of the principal amount thereof to be
redeemed, and shall state that on and after the redemption date, upon surrender
of such Debenture, a new Debenture or Debentures of such series in principal
amount equal to the unredeemed portion thereof will be issued.
(b) If the Debentures of a series are to be redeemed, the Company
shall give the Trustee at least 45 days' notice in advance of the date fixed for
redemption as to the aggregate principal amount of Debentures of the series to
be
23
redeemed, and thereupon the Trustee shall select, by lot or in such other manner
as it shall deem appropriate and fair in its discretion and which may provide
for the selection of a portion or portions (equal to $25 or any integral
multiple thereof) of the principal amount of such Debentures of a denomination
larger than $25, the Debentures to be redeemed and shall thereafter promptly
notify the Company in writing of the numbers of the Debentures to be redeemed,
in whole or in part.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President, any Vice President or its
Treasurer, Controller or Secretary, instruct the Trustee or any paying agent to
call all or any part of the Debentures of a particular series for redemption and
to give notice of redemption in the manner set forth in this Section, such
notice to be in the name of the Company or its own name as the Trustee or such
paying agent may deem advisable. In any case in which notice of redemption is
to be given by the Trustee or any such paying agent, the Company shall deliver
or cause to be delivered to, or permit to remain with, the Trustee or such
paying agent, as the case may be, such Debenture Register, transfer books or
other records, or suitable copies or extracts therefrom, sufficient to enable
the Trustee or such paying agent to give any notice by mail that may be required
under the provisions of this Section.
SECTION 3.03. Debentures Payable on Redemption Date;
Debentures Redeemed in Part.
--------------------------------------
(a) If the giving of notice of redemption shall have been completed
as above provided, the Debentures or portions of Debentures of the series to be
redeemed specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption and interest on such
Debentures or portions of Debentures shall cease to accrue on and after the date
fixed for redemption, unless the Company shall default in the payment of such
redemption price and accrued interest with respect to any such Debenture or
portion thereof. On presentation and surrender of such Debentures on or after
the date fixed for redemption at the place of payment specified in the notice,
said Debentures shall be paid and redeemed at the applicable redemption price
for such series, together with interest accrued thereon to the date fixed for
redemption (but if the date fixed for redemption is an interest payment date,
the interest installment payable on such date shall be payable to the registered
holder at the close of business on the applicable record date pursuant to
Section 2.03).
24
(b) Upon presentation of any Debenture of such series which is to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Debenture is presented shall
deliver to the holder thereof, at the expense of the Company, a new Debenture or
Debentures of the same series, of authorized denominations in principal amount
equal to the unredeemed portion of the Debenture so presented.
SECTION 3.04. Sinking Fund for Debentures.
---------------------------
The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to
any sinking fund for the retirement of Debentures of a series, except as
otherwise specified in or pursuant to a Board Resolution or supplemental
indenture as contemplated by Section 2.01 for Debentures of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debentures of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Debentures of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Debentures for any
series, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 3.05. Each sinking fund payment shall be applied to the
redemption of Debentures of any series as provided for by the terms of
Debentures of such series.
SECTION 3.05. Satisfaction of Sinking Fund Payments With
Debentures.
------------------------------------------
The Company (i) may deliver Outstanding Debentures of a series (other
than any previously called for redemption) and (ii) may apply as a credit
Debentures of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Debentures or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Debentures, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Debentures of such series required to be made
pursuant to the terms of such Debentures as provided for by the terms of such
series; provided that such Debentures have not been previously so credited.
Such Debentures shall be received and credited for such purpose by the Trustee
at the redemption price specified in such Debentures for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
25
SECTION 3.06. Redemption of Debentures for Sinking Fund.
-----------------------------------------
Not less than 45 days prior to each sinking fund payment date for any
series of Debentures, the Company will deliver to the Trustee an Officer's
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms for that series, the portion thereof, if any,
which is to be satisfied by delivering and crediting Debentures of that series
pursuant to Section 3.05 and the basis for such credit and will, together with
such Officer's Certificate, deliver to the Trustee any Debentures to be so
delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Debentures to be redeemed upon such sinking fund
payment date in the manner specified in Section 3.02 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 3.02. Such notice having been duly given, the
redemption of such Debentures shall be made upon the terms and in the manner
stated in Section 3.03.
ARTICLE FOUR
Particular Covenants of the Company
The Company covenants and agrees for each series of the Debentures as
follows:
SECTION 4.01. Payment of Principal, Premium and Interest.
------------------------------------------
The Company will duly and punctually pay or cause to be paid the
principal of (and premium, if any) and interest on the Debentures of that series
at the time and place and in the manner provided herein and established with
respect to such Debentures.
SECTION 4.02. Maintenance of Office or Agency.
-------------------------------
So long as any series of the Debentures remain Outstanding, the
Company agrees to maintain an office or agency in the Place of Payment with
respect to each such series and at such other location or locations as may be
designated as provided in this Section 4.02, where (i) Debentures of that series
may be presented for payment, (ii) Debentures of that series may be presented as
hereinabove authorized for registration of transfer and exchange, and (iii)
notices and demands to or upon the Company in respect of the Debentures of that
series and this Indenture may be given or served, such designation to continue
with respect to such office or agency
26
until the Company shall, by written notice signed by its President, any Vice
President or its Treasurer, Controller or Secretary and delivered to the
Trustee, designate some other office or agency for such purposes or any of them.
So long as any series of the Debentures remain Outstanding, such presentations,
notices and demands may also be made or served at the Corporate Trust Office of
the Trustee, and the Company hereby appoints the Trustee as its agent to receive
all such presentations, notices and demands. Notwithstanding anything else
contained in this Indenture, payment of interest, if any, on Debentures that are
not registered to a Hawaiian Electric Industries Capital Trust or the
Partnership may be made at the option of the Company by check mailed to the
address of the Person entitled thereto as it appears on the Debenture Register
or by wire transfer to an account appropriately designated by the Person
entitled thereto as it appears on the Debenture Register.
SECTION 4.03. Paying Agent; Money for Debenture Payments to be Held in Trust.
--------------------------------------------------------------
(a) If the Company shall appoint one or more paying agents for all or
any series of the Debentures, other than the Trustee, the Company will cause
each such paying agency to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the provisions of this
Section:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of (and premium, if any) or interest on the
Debentures of that series (whether such sums have been paid to it by the
Company or by any other obligor of such Debentures) in trust for the
benefit of the persons entitled thereto;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor of such Debentures) to make any payment of
the principal of (and premium, if any) or interest on the Debentures of
that series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any failure
referred to in subsection (a)(2) above, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such
paying agent; and
(4) that it will perform all other duties of paying agent as set
forth in this Indenture.
27
(b) If the Company shall act as its own paying agent with respect to
any series of the Debentures, it will on or before each due date of the
principal of (and premium, if any) or interest on Debentures of that series, set
aside, segregate and hold in trust for the benefit of the persons entitled
thereto a sum sufficient to pay such principal (and premium, if any) or interest
so becoming due on Debentures of that series until such sums shall be paid to
such persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of such action, or any failure (by it or any other obligor on
such Debentures) to take such action. Whenever the Company shall have one or
more paying agents for any series of Debentures, it will, prior to each due date
of the principal of (and premium, if any) or interest on any Debentures of that
series, deposit with the paying agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the persons entitled to such principal, premium or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
(c) Anything in this Section to the contrary notwithstanding, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.05, and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for any
other purpose, pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions as those upon which such sums were
held by the Company or such paying agent; and, upon such payment by any paying
agent to the Trustee, such paying agent shall be released from all further
liability with respect to such money.
SECTION 4.04. Appointment to Fill Vacancy.
---------------------------
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 7.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 4.05. Payment of Additional Interest.
------------------------------
If, at any time while the Property Trustee is a Debentureholder of any
Debentures issued to a Hawaiian Electric Industries Capital Trust or the
Property Trustee is a holder of Partnership Preferred Securities in the
Partnership which in turn is a Debentureholder of any Debentures, such Trust,
the Property Trustee, the Partnership or the General Partner shall
28
be required to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes or taxes or charges imposed by
reason of the transfer of the Trust Preferred Securities or beneficial interests
therein) imposed by the United States, or any other taxing authority, then, in
any such case, the Company shall promptly pay as additional interest (the
"Additional Interest") on the Debentures held by the Property Trustee or the
Partnership, such additional amounts as shall be required so that the net
amounts received and retained by such Trust and the Property Trustee, or by the
Partnership and the General Partner, whichever the case may be, after paying any
such taxes, duties, assessments or other governmental charges will be equal to
the amounts such Trust and the Property Trustee, or the Partnership and the
General Partner, as the case may be, would have received had no such taxes,
duties, assessments or other governmental charges been imposed.
SECTION 4.06. Maintenance of the Hawaiian Electric Industries Capital Trust.
-------------------------------------------------------------
In the event any Debentures are issued to a Hawaiian Electric
Industries Capital Trust, or a Trustee of such a Trust, or to the Partnership in
connection with the issuance of Trust Preferred Securities of a Hawaiian
Electric Industries Capital Trust, for so long as such Trust Preferred
Securities remain Outstanding, the Company will covenant (i) to directly or
indirectly maintain 100 percent ownership of the Trust Common Securities of such
Trust; provided, however, that any permitted successor of the Company under this
Indenture may succeed to the Company's ownership of such Trust Common
Securities, (ii) to use its reasonable efforts to cause such Trust (a) to remain
a statutory business trust, except in connection with the distribution of the
Debentures to the holders of Trust Preferred Securities and Trust Common
Securities in liquidation of such Trust, the redemption of all of the Trust
Preferred Securities and Trust Common Securities of such Trust, or the mergers,
consolidations or amalgamations, each as permitted by the Trust Agreement of
such Trust, and (b) to otherwise continue not to be treated as an association
taxable as a corporation or a partnership for United States federal income tax
purposes, and (iii) to use its reasonable efforts to cause each holder of Trust
Common Securities and Trust Preferred Securities to be treated as owning an
undivided beneficial interest in the Debentures.
29
ARTICLE FIVE
Debentureholders' Lists and
Reports by the Company and the Trustee
SECTION 5.01. Company to Furnish Trustee Names and Addresses of
Debentureholders.
-------------------------------------------------
The Company shall furnish or cause to be furnished to the Trustee (a)
on each regular record date (as defined in Section 2.03), a list in such form as
the Trustee may reasonably require, of the names and addresses of the holders of
each series of Debentures as of such regular record date, provided, that the
Company shall not be obligated to furnish or cause to furnish such list at any
time that the list shall not differ in any respect from the most recent list
furnished to the Trustee by the Company and (b) at such other times as the
Trustee may request in writing within 30 days after the receipt by the Company
of any such request, a list of similar form and content as of a date not more
than 15 days prior to the time such list is furnished; provided, however, no
such list need be furnished for any series for which the Trustee shall be the
Debenture Registrar.
SECTION 5.02. Preservation of Information; Communications to Holders.
------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debentures contained in the most recent list furnished to it as provided in
Section 5.01 and as to the names and addresses of holders of Debentures received
by the Trustee in its capacity as Debenture Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Debentures of a series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Debenture for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Debentures of such series or holders of all
Debentures with respect to their rights under this Indenture or under such
Debentures, and is accompanied by a copy of the form of proxy or other
30
communication which such applicants propose to transmit, then the Trustee shall
within five business days after the receipt of such application, at its
election, either:
(1) afford to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a)
of this Section 5.02; or
(2) inform such applicants as to the approximate number of holders
of Debentures of such series or of all Debentures, as the case may be,
whose names and addresses appear in the information preserved at the time
by the Trustee, in accordance with the provisions of subsection (a) of this
Section 5.02, and as to the approximate cost of mailing to such
Debentureholders the form of proxy or other communication, if any,
specified in such application.
(d) If the Trustee shall elect not to afford such applicants access
to such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of such series or of all Debentures, as the case
may be, whose name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of subsection (a) of this
Section 5.02, a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission (the "Commission"), together with a copy of
the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interests of
the holders of Debentures of such series or of all Debentures, as the case may
be, or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all such Debentureholders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise, the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
31
(e) Each and every holder of the Debentures, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any paying agent nor any Debenture Registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Debentures in accordance with the provisions of
subsection (b) of this Section, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said subsection
(b).
SECTION 5.03. Reports by Company.
------------------
(a) The Company covenants and agrees to file with the Trustee, within
15 days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act, in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) Delivery of reports, information and documents to the Trustee as
provided in subsection (a) above is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officer's
Certificates).
32
(d) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable overnight delivery service which provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to subsections (a) and (b) of this Section
as may be required by rules and regulations prescribed from time to time by the
Commission.
(e) The Company covenants and agrees to furnish to the Trustee,
within 120 days after the end of each fiscal year of the Company for each fiscal
year in which any of the Debentures are Outstanding, or on or before such other
day in each calendar year as the Company and the Trustee may from time to time
agree upon, a Certificate as to the signing officer's best knowledge of the
Company's compliance with the conditions and covenants under this Indenture
requiring compliance by the Company. For purposes of this subsection (e), such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture.
SECTION 5.04. Reports by Trustee.
------------------
(a) Within 60 days after May 15 of each year in which any of the
Debentures are Outstanding, the Trustee shall transmit by mail, first class
postage prepaid, to the Debentureholders, as their names and addresses appear
upon the Debenture Register, a brief report with respect to any of the following
events which may have occurred within the previous twelve months (but if no such
event has occurred within such period no report need be transmitted):
(1) any change to its eligibility under Section 7.09, and its
qualifications under Section 7.08;
(2) the creation of or any material change to a relationship
specified in subsections (c)(1) through (c)(10) of Section 7.08;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Debentures, on any property or funds held or collected
by it as Trustee if such advances so remaining unpaid aggregate more than
1/2 of 1% of the principal amount of the Debentures Outstanding on the date
of such report;
33
(4) the amount, interest rate, and maturity date of all other
indebtedness owing by the Company, or by any other obligor on the
Debentures, to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except any indebtedness based upon a creditor
relationship arising in any manner described in subsections (b)(2), (b)(3),
(b)(4), or (b)(6) of Section 7.13;
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any change to any release, or release and substitution, of
property, if any, subject to the lien of this Indenture (and the
consideration thereof, if any) which it has not previously reported;
(7) any additional issue of Debentures which the Trustee has not
previously reported; and
(8) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in its
opinion materially affects the Debentures or the Debentures of any series,
except any action in respect of a Default, notice of which has been or is
to be withheld by it in accordance with the provisions of Section 6.07.
(b) The Trustee shall transmit by mail, first class postage prepaid,
to the Debentureholders, as their names and addresses appear upon the Debenture
Register, a brief report with respect to the character and amount of any
advances (and if the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee as such since the date of the last
report transmitted pursuant to the provisions of subsection (a) of this Section
(or if no such report has yet been so transmitted, since the date of execution
of this Indenture), for the reimbursement of which it claims or may claim a lien
or charge prior to that of the Debentures of any series on property or funds
held or collected by it as Trustee, and which it has not previously reported
pursuant to this subsection if such advances remaining unpaid at any time
aggregate more than 10% of the principal amount of Debentures of such series
Outstanding at such time, such report to be transmitted within 90 days after
such time.
34
(c) A copy of each such report shall, at the time of such
transmission to Debentureholders, be filed by the Trustee with the Company, with
each stock exchange upon which any Debentures are listed (if so listed) and also
with the Commission. The Company agrees to promptly notify the Trustee when any
Debentures become listed on any stock exchange.
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default
SECTION 6.01. Events of Default.
-----------------
(a) Whenever used herein with respect to Debentures of a particular
series, "Event of Default" means any one or more of the following events which
has occurred and is continuing:
(1) default in the payment of any installment of interest, including
any Additional Interest in respect thereon, upon any of the Debentures of
that series, as and when the same shall become due and payable, and
continuance of such default for a period of 30 days; provided, however,
that a valid extension of an interest payment period by the Company shall
not constitute a default in the payment of interest for this purpose;
(2) default in the payment of the principal of (or premium, if any,
on) any of the Debentures of that series as and when the same shall become
due and payable whether at maturity, upon redemption, by declaration or
otherwise; provided, however, that a valid extension of the maturity of
such Debentures shall not constitute a default for that purpose;
(3) default in the performance by the Company of any other of the
covenants or agreements on the part of the Company with respect to that
series contained in such Debentures or otherwise established with respect
to that series of Debentures pursuant to Section 2.01 hereof or contained
in this Indenture (other than a covenant or agreement which has been
expressly included in this Indenture solely for the benefit of one or more
series of Debentures other than such series), and the continuance of such
default for a period of 90 days after the date on which written notice of
such default, requiring the same to be remedied and stating that such
notice is a "Notice of Default" hereunder, shall have been given to the
35
Company by the Trustee, by registered or certified mail, or to the Company
and the Trustee by the holders of at least 25% in aggregate principal
amount of the Debentures of that series at the time Outstanding, unless the
Trustee or the holders of not less than the aggregate principal amount of
such series, the holders of which gave such notice, as the case may be,
agree in writing to an extension of such period prior to its expiration;
(4) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company as bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation or
reorganization of the Company under the Federal Bankruptcy Code or any
other similar applicable Federal or State law, and such decree or order
shall have continued unvacated and unstayed for a period of 90 days; or an
involuntary case shall be commenced under such Code in respect of the
Company and shall continue undismissed for a period of 90 days or an order
for relief in such case shall have been entered; or a decree or order of a
court having jurisdiction in the premises shall have been entered for the
appointment on the ground of insolvency or bankruptcy of a receiver or
custodian or liquidator or trustee or assignee in bankruptcy or insolvency
of the Company or of its property, or for the winding up or liquidation of
its affairs, and such decree or order shall have remained in force
unvacated and unstayed for a period of 90 days; or
(5) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent
seeking liquidation or reorganization under the Federal Bankruptcy Code or
any other similar applicable Federal or State law, or shall consent to the
filing of any such petition, or shall consent to the appointment on the
ground of insolvency or bankruptcy of a receiver or custodian or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of its
property, or shall make an assignment for the benefit of creditors.
(b) If an Event of Default with respect to the Debentures of any
series at the time Outstanding occurs and is continuing, then, unless the
principal of all the Debentures of that series shall have already become due and
payable, either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Debentures of that series then Outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by such
Debentureholders), may declare
36
the principal of all the Debentures of that series to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything contained in this Indenture or in the
Debentures of that series or established with respect to that series pursuant to
Section 2.01 hereof to the contrary notwithstanding except for subsection (c) of
this Section.
(c) Section 6.01(b), however, is subject to the condition that if, at
any time after the principal of the Debentures of that series shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Debentures of that series and the
principal of (and premium, if any, on) any and all Debentures of that series
which shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at the
rate per annum expressed in the Debentures of that series to the date of such
payment or deposit) and the amount payable to the Trustee under Section 7.06,
and any and all Defaults under the Indenture, other than the nonpayment of
principal on Debentures of that series which shall not have become due by their
terms, shall have been remedied or waived as provided in Section 6.06, then and
in every such case the holders of a majority in aggregate principal amount of
the Debentures of that series then Outstanding, by written notice to the Company
and to the Trustee, may rescind and annul such declaration and its consequences
with respect to that series of Debentures; but no such rescission and annulment
shall extend to or shall affect any subsequent Default, or shall impair any
right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right
with respect to Debentures of that series under this Indenture and such
proceedings shall have been discontinued or abandoned because of such rescission
or annulment or for any other reason or shall have been determined adversely to
the Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
(e) In the case of any series of Debentures held as trust assets of a
Hawaiian Electric Industries Capital Trust prior to a Security Exchange with
respect to the Debentures of that series, or held as partnership assets of the
Partnership,
37
if an Event of Default with respect to the Debentures of such series shall have
occurred, the Company expressly acknowledges that under the circumstances set
forth in the applicable Trust Agreement or the Agreement of Limited Partnership,
any holder of Trust Preferred Securities of the applicable Hawaiian Electric
Industries Capital Trust or of Partnership Preferred Securities may enforce
directly against the Company the applicable Property Trustee's or Partnership's
rights hereunder, as the case may be. In furtherance of the foregoing and for
the avoidance of any doubt, the Company acknowledges that, under the
circumstances described in the applicable Trust Agreement or in the Agreement of
Limited Partnership, any such holder of Trust Preferred Securities, in its own
name, in the name of the applicable Hawaiian Electric Industries Capital Trust
or in the name of the holders of the Trust Preferred Securities issued by such
Hawaiian Electric Industries Capital Trust, and any holder of Partnership
Preferred Securities, in its own name, in the name of the Partnership or in the
name of the holders Partnership Preferred Securities, may institute or cause to
be instituted a proceeding, including, without limitation, any suit in equity,
an action at law or other judicial or administrative proceeding, to enforce the
applicable Property Trustee's or Partnership's rights hereunder directly against
the Company as issuer of the applicable series of Debentures, and may prosecute
such proceeding to judgment or final decree, and enforce the same against the
Company.
SECTION 6.02. Collection of Indebtedness and
Suits for Enforcement by Trustee.
--------------------------------
(a) The Company covenants that (1) in case Default shall be made in
the payment of any installment of interest on any of the Debentures of a series,
or any payment required by any sinking or analogous fund established with
respect to that series as and when the same shall have become due and payable,
and such Default shall have continued for a period of 30 days, or (2) in case
Default shall be made in the payment of the principal of (or premium, if any,
on) any of the Debentures of a series when the same shall have become due and
payable, whether upon maturity of the Debentures of a series or upon redemption
or upon declaration or otherwise, then, upon demand of the Trustee, the Company
will pay to the Trustee, for the benefit of the holders of the Debentures of
that series, the whole amount that then shall have become due and payable on all
such Debentures for principal (and premium, if any) or interest, or both, as the
case may be, with interest upon the overdue principal (and premium, if any) and
(to the extent that payment of such interest is enforceable under applicable law
and without duplication of any other amounts paid by the Company or the
applicable Hawaiian Electric Industries Capital
38
Trust or the Partnership in respect thereof) upon overdue installments of
interest at the rate per annum expressed in the Debentures of that series; and,
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, and the amount payable to the Trustee under
Section 7.06.
(b) In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law or
in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company or other obligor upon the
Debentures of that series and collect in the manner provided by law out of the
property of the Company or other obligor upon the Debentures of that series
wherever situated the moneys adjudged or decreed to be payable.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or other judicial
proceedings affecting the Company, any other obligor on such Debentures, or the
creditors or property of either, the Trustee shall have the power to intervene
in such proceedings and take any action therein that may be permitted by the
court and shall (except as may be otherwise provided by law) be entitled to file
such proofs of claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of the holders of
Debentures of such series allowed for the entire amount due and payable by the
Company or such other obligor under the Indenture at the date of institution of
such proceedings and for any additional amount which may become due and payable
by the Company or such other obligor after such date, and to collect and receive
any moneys or other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to the Trustee
under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Debentures of such
series to make such payments to the Trustee, and, in the event that the Trustee
shall consent to the making of such payments directly to such Debentureholders,
to pay to the Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to Debentures of
that series, may be enforced by the Trustee without the possession of any of
such Debentures, or the production thereof at any trial or other proceeding
39
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for payment to the Trustee of any
amounts due under Section 7.06, be for the ratable benefit of the holders of the
Debentures of such series.
In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in the Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Debentureholder in any such
proceeding.
SECTION 6.03. Application of Moneys Collected.
-------------------------------
Any moneys collected by the Trustee pursuant to Section 6.02 with
respect to a particular series of Debentures shall be applied in the order
following, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal (or premium, if any) or
interest, upon presentation of the several Debentures of that series, and
stamping thereon the payment, if only partially paid, and upon surrender thereof
if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.06; and
SECOND: To the payment of the amounts then due and unpaid upon
Debentures of such series for principal (and premium, if any) and interest, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Debentures for principal (and premium, if any) and
interest, respectively.
40
SECTION 6.04. Limitation on Suits; Unconditional Right of
Debentureholders to Institute Certain Suits.
-------------------------------------------
No holder of any Debenture of any series shall have any right by
virtue or by availing of any provision of this Indenture to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof with respect to
Debentures of such series specifying such Event of Default, as hereinbefore
provided;
(b) the holders of not less than 25% in aggregate principal amount of
the Debentures of such series then Outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
trustee hereunder;
(c) such holder or holders have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity, shall have failed to institute any such action, suit or
proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the holders of a majority in
principal amount of the Outstanding Debentures of that series;
it being understood and intended, and being expressly covenanted by the taker
and holder of every Debenture of such series with every other such taker and
holder and Trustee, that no one or more holders of Debentures of such series
shall have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the
holders of any other of such Debentures, or to obtain or seek to obtain priority
over or preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Debentures of such series. For the protection
and enforcement of the provisions of this Section, each and every
Debentureholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
41
Notwithstanding any other provisions of this Indenture, however, the
right of any holder of any Debenture to receive payment of the principal of (and
premium, if any) and interest on such Debenture, as therein provided, on or
after the respective due dates expressed in such Debenture (or in the case of
redemption, on the redemption date) as the same may be extended, or to institute
suit for the enforcement of any such payment on or after such respective dates
or redemption date, shall not be impaired or affected without the consent of
such holder.
SECTION 6.05. Rights and Remedies Cumulative; Delay or
Omission Not A Waiver.
----------------------------------------
(a) All powers and remedies given by this Article to the Trustee or
to the Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any others thereof or of any other powers and
remedies available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce performance or observance of the covenants
and agreements contained in this Indenture or otherwise established with respect
to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of
the Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such Default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or to the Debentureholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Debentureholders.
SECTION 6.06. Control by Debentureholders;
Waiver of Past Defaults.
----------------------------
The holders of a majority in aggregate principal amount of the
Debentures of any series at the time Outstanding, determined in accordance with
Article Eight, shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee with respect to such series;
provided that (1) such direction shall not be in conflict with any rule of law
or with this Indenture or unduly prejudicial to the rights of holders of
Debentures of any other series at the time Outstanding determined in accordance
with Article Eight, and (2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction. Subject to the
provisions of
42
Section 7.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so directed would involve
the Trustee in personal liability. The holders of a majority in aggregate
principal amount of the Debentures of any series at the time Outstanding
affected thereby, determined in accordance with Article Eight, may on behalf of
the holders of all of the Debentures of such series waive any past Default in
the performance of any of the covenants contained herein or established pursuant
to Section 2.01 with respect to such series and its consequences, except a
Default in the payment of the principal of, or premium, if any, or interest on,
any of the Debentures of that series as and when the same shall become due by
the terms of such Debentures otherwise than by acceleration (unless such Default
has been cured and a sum sufficient to pay all matured installments of interest
and principal and any premium has been deposited with the Trustee (in accordance
with Section 6.01(c)) or a call for redemption of Debentures of that series.
Upon any such waiver, the Default covered thereby shall be deemed to be cured
for all purposes of this Indenture and the Company, the Trustee and the holders
of the Debentures of such series shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.07. Notice of Defaults.
------------------
The Trustee shall, within 90 days after the occurrence of an Event of
Default with respect to a particular series, transmit by mail, first class
postage prepaid, to the holders of Debentures of that series, as their names and
addresses appear upon the Debenture Register, notice of all Defaults with
respect to that series known to the Trustee, unless such Defaults shall have
been cured before the giving of such notice (Defaults in this context shall not
include any periods of grace provided for therein and shall be irrespective of
the giving of notice provided for by subsection (3) of Section 6.01(a));
provided, that, except in the case of Default in the payment of the principal of
(or premium, if any) or interest on any of the Debentures of that series or in
the payment of any sinking fund installment established with respect to that
series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers, of the Trustee in good faith determine
that the withholding of such notice is in the interests of the holders of
Debentures of that series; provided further, that in the case of any Default of
the character
43
specified in Section 6.01(a)(3) with respect to Debentures of such series no
such notice to the holders of the Debentures of that series shall be given until
at least 30 days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any Default,
except (i) a Default under subsection (a)(1) or (a)(2) of Section 6.01 as long
as the Trustee is acting as paying agent for such series of Debentures or (ii)
any Default as to which the Trustee shall have received written notice or a
Responsible Officer charged with the administration of this Indenture shall have
obtained written notice.
SECTION 6.08. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each holder of any Debentures
by its acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders, holding more than 10% in aggregate principal amount of the
Outstanding Debentures of any series, or to any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture of such series, on or after the
respective due dates expressed in such Debenture or established pursuant to this
Indenture.
SECTION 6.09. Certain Additional Covenants.
----------------------------
If (i) there shall have occurred any Event of Default relating to any
series of Debentures, (ii) the Company shall be in Default with respect to its
payments of any obligations under a related Trust Guarantee or Partnership
Guarantee, or (iii) the Company shall have given notice of its election to defer
payments of interest on any series of Debentures by extending the interest
payment period as provided in and permitted by a supplemental indenture to this
Indenture or in or pursuant to a Board Resolution, and such period, or any
extension thereof, shall be continuing, then (a) the Company shall not declare
or pay any dividend on, make any
44
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (except for
dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, its common stock and other than (x)
purchases or acquisitions of shares of the Company's common stock in connection
with the satisfaction by the Company of its obligations under any employee
benefit, dividend reinvestment, stock purchase or other stock plans or any other
contractual obligation of the Company (other than a contractual obligation
ranking pari passu with or junior to the Debentures), (y) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock, or (z) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock of the Company or the security being converted
or exchanged), (b) the Company shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Company which rank pari passu with or junior to such Debentures, provided
that, if only the event referred to in clause (iii) above (and not the events
referred to in clause (i) or (ii)) has occurred, this restriction shall apply
only to other series of Debentures or debt securities with equivalent deferral
options, and (c) the Company shall not make any guarantee payments with respect
to the foregoing (other than pursuant to the Trust Guarantee, Partnership
Guarantee or any other guarantee by the Company with respect to comparable
securities).
ARTICLE SEVEN
Concerning the Trustee
SECTION 7.01. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default, the Trustee
undertakes to perform with respect to Debentures of such series such duties and
only such duties as are specifically set forth in this Indenture, and no implied
covenants shall be read into this Indenture against the Trustee. In case an
Event of Default with respect to Debentures of a series has occurred (which has
not been cured or waived), the Trustee shall exercise with respect to Debentures
of that series such rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of its own affairs.
45
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with respect to
Debentures of a series and after the curing or waiving of all such Events
of Default with respect to that series which may have occurred:
(i) the duties and obligations of the Trustee shall with
respect to Debentures of such series be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable with respect to Debentures of such series except for the
performance of such duties and obligations as are specifically set
forth in this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to Debentures of such series conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the holders of not less than a majority in principal amount of the
Debentures of any series at the time Outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee
under this Indenture with respect to the Debentures of that series; and
46
(4) none of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity
against such risk is not reasonably assured to it.
SECTION 7.02. Certain Rights of Trustee.
-------------------------
Except as otherwise provided in Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security or
other paper or document believed by it to be the genuine and to have been signed
or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by its President, any Vice President or its
Treasurer, Controller or Secretary (unless other evidence in respect thereof is
specifically prescribed herein);
(c) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e) The Trustee shall not be liable for any action taken or omitted
to be taken by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond,
47
security, or other papers or documents, unless requested in writing so to do
by the holders of not less than a majority in principal amount of the
Outstanding Debentures of the particular series affected thereby (determined as
provided in Article Eight); provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such costs, expenses or liabilities as a condition to so proceeding.
The reasonable expense of every such examination shall be paid by the Company
or, if paid by the Trustee, shall be repaid by the Company upon demand;
(g) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) The Trustee shall not be deemed to have notice of any Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a Default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Debentures and this Indenture.
SECTION 7.03. Limitations of Liability.
------------------------
(a) The recitals contained herein and in the Debentures (other than
the Certificate of Authentication on the Debentures) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or application
by the Company of any of the Debentures or of the proceeds of such Debentures,
or for the use or application of any moneys paid over by the Trustee in
accordance with any provision of this Indenture or established pursuant to
Section 2.01, or for the use or application of any moneys received by any paying
agent other than the Trustee.
48
SECTION 7.04. Ownership of Debentures.
-----------------------
The Trustee or any paying agent or Debenture Registrar, in its
individual or any other capacity, may become the owner or pledgee of Debentures
with the same rights it would have if it were not Trustee, paying agent or
Debenture Registrar.
SECTION 7.05. Moneys Held Without Interest.
----------------------------
Subject to the provisions of Section 11.05, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder except such as it
may agree in writing with the Company to pay thereon.
SECTION 7.06. Compensation and Reimbursement.
------------------------------
(a) The Company covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as the Company
and the Trustee shall from time to time agree (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trusts hereby created
and in the exercise and performance of any of the powers and duties hereunder of
the Trustee, and the Company will pay or reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Indenture (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify the Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any loss,
liability, damage, claim or expense, including taxes (other than taxes based on
the income of the Trustee) incurred without negligence or bad faith on the part
of the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to
49
that of the Debentures upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the holders of
particular Debentures.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.01(a)(4) or Section 6.01(a)(5),
the expenses (including the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 7.07. Reliance on Certificate of Officers of Company.
----------------------------------------------
Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting to take any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officer's Certificate delivered to the
Trustee and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.
SECTION 7.08. Conflicts of Interest.
---------------------
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, with respect to the Debentures of any series, it shall,
within 90 days after ascertaining that it has such conflicting interest, either
eliminate such conflicting interest or, except as otherwise provided in this
Section 7.08, resign with respect to the Debentures of that series in the manner
and with the effect specified in Section 7.10 and the Company shall promptly
appoint a successor Trustee in the manner provided herein.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section with respect to the Debentures of
any series the Trustee shall, within ten days after the expiration of such 90-
day period, transmit notice of such failure by mail, first class postage
prepaid, to the Debentureholders of that series as their names
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and addresses appear upon the registration books. Unless the Trustee's duty
to resign is stayed as provided herein, any Debentureholder who has been a bona
fide holder of Debentures for at least six months may, on behalf of itself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee, and the appointment of a successor Trustee, if such
Trustee fails, after written request thereof by such holder to comply with the
provisions of subsection (a) of this Section.
(c) For the purposes of this Section the Trustee shall be deemed to
have a conflicting interest with respect to the Debentures of any series if a
Default has occurred and is continuing and:
(1) the Trustee is trustee under this Indenture with respect to the
Outstanding Debentures of any series other than that series, or is trustee
under another indenture under which any other securities, or certificates
of interest or participation in any other securities, of the Company are
outstanding, unless such other indenture is a collateral trust indenture
under which the only collateral consists of Debentures issued under this
Indenture; provided that there shall be excluded from the operation of this
subsection (c)(1) the Debentures of any series other than that series and
any other indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the
Company are outstanding if (i) this Indenture and such other indenture or
indentures and all series of securities issuable thereunder are wholly
unsecured and rank equally and such other indenture or indentures (and such
series) are hereafter qualified under the Trust Indenture Act, unless the
Commission shall have found and declared by order pursuant to subsection
(b) of Section 305 or subsection (c) of Section 307 of the Trust Indenture
Act, that differences exist between (A) the provisions of this Indenture
with respect to Debentures of that series and with respect to one or more
other series or (B) the provisions of this Indenture and the provisions of
such other indenture or indentures (or such series), which are so likely to
involve a material conflict of interest as to make it necessary in the
public interest or for the protection of investors to disqualify the
Trustee from acting as such under this Indenture with respect to the
Debentures of that series and such other series or such other indenture or
indentures, or (ii) the Company shall have sustained the burden of proving,
on application to the Commission and after opportunity for hearing thereon,
that the trusteeship under this Indenture with respect to Debentures of
that series and such other series or such other indenture or indentures is
not so likely to involve
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a material conflict of interest as to make it necessary in the public
interest or for the protection of investors to disqualify the Trustee from
acting as such under this Indenture with respect to Debentures of that
series and such other series or under such other indentures;
(2) the Trustee or any of its directors or executive officers is an
underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with
an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company, or of an underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of underwriting, except
that (A) one individual may be a director and/or an executive officer of
the Trustee and a director and/or an executive officer of the Company, but
may not be at the same time an executive officer of both the Trustee and
the Company; (B) if and so long as the number of directors of the Trustee
in office is more than nine, one additional individual may be a director
and/or an executive officer of the Trustee and a director of the Company;
and (C) the Trustee may be designated by the Company or by an underwriter
for the Company to act in the capacity of transfer agent, registrar,
custodian, paying agent, fiscal agent, escrow agent, or depository, or in
any other similar capacity, or, subject to the provisions of subsection
(c)(1) of this Section, to act as trustee, whether under an indenture or
otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner, or
executive officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such persons; or
10% or more of the voting securities of the Trustee is beneficially owned
either by an underwriter for the Company or by any director, partner, or
executive officer thereof, or is beneficially owned, collectively, by any
two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
subsection (c) defined), (A) 5% or more of the voting securities, or 10% or
more of any other class of security, of the Company, not including the
Debentures issued under this Indenture and securities
52
issued under any other indenture under which the Trustee is also trustee,
or (B) 10% or more of any class of security of an underwriter for the
Company;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
subsection (c) defined), 5% or more of the voting securities of any person
who, to the knowledge of the Trustee, owns 10% or more of the voting
securities of, or controls directly or indirectly or is under direct or
indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
subsection (c) defined), 10% or more of any class of security of any person
who, to the knowledge of the Trustee, owns 50% or more of the voting
securities of the Company;
(9) the Trustee owns, on the date of Default upon the Debentures of
any series or any anniversary of such Default while such Default upon the
Debentures issued under this Indenture remains Outstanding, in the capacity
of executor, administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an aggregate of
25% or more of the voting securities, or of any class of security, of any
person, the beneficial ownership of a specified percentage of which would
have constituted a conflict interest under subsection (c)(6), (c)(7) or
(c)(8) of this Section. As to any such securities of which the Trustee
acquired ownership through becoming executor, administrator or testamentary
trustee of an estate which includes them, the provisions of the preceding
sentence shall not apply for a period of not more than two years from the
date of such acquisition, to the extent that such securities in such estate
do not exceed 25% of such voting securities or 25% of any such class of
security. Promptly after the dates of any such Default upon the Debentures
issued under this Indenture and annually in each succeeding year that the
Debentures issued under this Indenture remain in Default, the Trustee shall
make a check of its holding of such securities in any of the above-
mentioned capacities as of such dates. If the Company fails to make
payment in full of principal of or interest on any of the Debentures when
and as the same becomes due and payable, and such failure continues for 30
days thereafter, the Trustee shall make a prompt check of its holding of
such securities in any of the above-mentioned capacities as of the date of
the expiration of such 30-day period, and after such date, notwithstanding
the foregoing provisions of this
53
subsection (c)(9), all such securities so held by the Trustee, with sole or
joint control over such securities vested in it, shall, but only so long as
such failure shall continue, be considered as though beneficially owned by
the Trustee for the purposes of subsections (c)(6), (c)(7) and (c)(8) of
this Section; or
(10) except under the circumstances described in subsections (b)(1),
(b)(3), (b)(4), (b)(5) or (b)(6) of Section 7.13 the Trustee shall be or
shall become a creditor of the Company.
For purposes of subsection (c)(1) of this Section, and Section 6.06,
the term "series of securities" or "securities" means a series, class or group
of securities issuable under an indenture pursuant to whose terms holders of one
such series may vote to direct the indenture trustee, or otherwise take action
pursuant to a vote of such holders, separately from holders of another such
series; provided, that, "series of securities" or "series" shall not include any
series of securities issuable under an indenture if all such series rank equally
and are wholly secured.
The specification of percentages in subsections (c)(5) to (c)(9),
inclusive, of this Section shall not be construed as indicating that the
ownership of such percentages of securities of a person is or is not necessary
or sufficient to constitute direct or indirect control for the purposes of
subsections (c)(3) or (c)(7) of this Section.
For the purposes of subsections (c)(6), (c)(7), (c)(8) and (c)(9) of
this Section only, (A) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (B) an obligation shall be deemed to
be in "default", when a default in payment of principal shall have continued for
30 days or more and shall not have been cured; and (C) the Trustee shall not be
deemed to be the owner or holder of (i) any security which it holds as
collateral security (as trustee or otherwise) for any obligation which is not in
default as defined in clause (B) above, or (ii) any security which it holds as
collateral security under this Indenture, irrespective of any Default hereunder,
or (iii) any security which it holds as agent for collection, or as custodian,
escrow agent or depositary, or in any similar representative capacity.
54
(d) For the purposes of this Section 7.08:
(1) The term "underwriter" when used with reference to the Company
shall mean every person, who, within one year prior to the time as of which
the determination is made, has purchased from the Company with a view to,
or has offered or sold for the Company in connection with, the distribution
of any security of the Company, or has participated or has had a direct or
indirect participation in any such undertaking, or has participated or has
had a participation in the direct or indirect underwriting of any such
undertaking, but such term shall not include a person whose interest was
limited to a commission from an underwriter or dealer not in excess of the
usual and customary distributors' or sellers' commission.
(2) The term "director" shall mean any member of the board of
directors of a corporation or any individual performing similar functions
with respect to any organization whether incorporated or unincorporated.
(3) The term "person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" shall mean any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of the affairs of
a person.
(5) The term "Company" shall mean any obligor upon the Debentures.
(6) The term "executive officer" shall mean the chairman of the
board of directors, president, every vice president, every assistant vice
president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated.
55
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section (each of whom
is referred to as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
person.
(2) A specified percentage of a class of securities of a person
means such percentage of the aggregate amount of securities of the class
outstanding.
(3) The term "amount", when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares and the number of units if relating to
any other kind of security.
(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced
by such other class of securities is not in default as to principal or
interest or otherwise;
(iii) securities pledged by the issuer thereof as security for
an obligation of the issuer not in default as to principal or interest
or otherwise; and
(iv) securities held in escrow if placed in escrow by the
issuer thereof, provided, however, that any voting securities of an
issuer shall be deemed outstanding if any person other than the issuer
is entitled to exercise the voting rights thereof.
56
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, however, that, in
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes; and provided, further, that, in
the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not they are
issued under a single indenture.
(f) Except in the case of a default in the payment of the principal of
(or premium, if any) or interest on any Debentures issued under this Indenture,
or in the payment of any sinking or analogous fund installment, the Trustee
shall not be required to resign as provided by this Section 7.08 if such Trustee
shall have sustained the burden of proving, on application to the Commission and
after opportunity for hearing thereon, that (i) the default under the Indenture
may be cured or waived during a reasonable period and under the procedures
described in such application and (ii) a stay of the Trustee's duty to resign
will not be inconsistent with the interests of Debentureholders. The filing of
such an application shall automatically stay the performance of the duty to
resign until the Commission orders otherwise.
Any resignation of the Trustee shall become effective only upon the
appointment of a successor trustee and such successor's acceptance of such an
appointment.
SECTION 7.09. Requirements for Eligibility.
----------------------------
There shall at all times be a Trustee with respect to the Debentures
issued hereunder which shall at all times be a corporation organized and doing
business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or other
person permitted to act as trustee by the Commission, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000.00, and subject to supervision or examination by Federal,
State, Territorial, or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The Company may not,
57
nor may any person directly or indirectly controlling, controlled by, or under
common control with the Company, serve as Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.
SECTION 7.10. Resignation and Removal.
-----------------------
(a) The Trustee or any successor hereafter appointed, may at any time
resign with respect to the Debentures of one or more series by giving written
notice thereof to the Company and by transmitting notice of resignation by mail,
first class postage prepaid, to the Debentureholders of such series, as their
names and addresses appear upon the Debenture Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
with respect to Debentures of such series by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted appointment
within 30 days after the mailing of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee with respect to Debentures of such series, or any
Debentureholder of that series who has been a bona fide holder of a Debenture or
Debentures for at least six months may, subject to the provisions of Section
6.08, on behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may thereupon
after such notice, if any, as it may deem proper and prescribe, appointment a
successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.08 after written request therefor by the
Company or by any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder; or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the
58
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, the Company may remove
the Trustee with respect to all Debentures and appoint a successor trustee
by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the Trustee
so removed and one copy to the successor trustee, or, subject to the
provisions of Section 6.08, unless the Trustee's duty to resign is stated
as provided herein, any Debentureholder who has been a bona fide holder of
a Debenture or Debentures for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures of any series at the time Outstanding may at any time remove the
Trustee with respect to such series and appoint a successor trustee with respect
to the Debentures of such series by delivering to the Trustee so removed, to the
successor so appointed and to the Company the evidence provided for in Section
8.01 of the action in that regard to be taken by the Debentureholders.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures of a series pursuant to any of
the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Debentures of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Debentures of any particular series.
SECTION 7.11. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor trustee with
respect to all Debentures, every such successor trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the
59
request of the Company or the successor trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor trustee all the rights, powers, and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor trustee
all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor trustee with
respect to the Debentures of one or more (but not all) series, the Company, the
retiring Trustee and each successor trustee with respect to the Debentures of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Debentures of that
or those series to which the appointment of such successor trustee relates, (2)
shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Debentures of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust, that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee and that no Trustee shall be responsible for any act or
failure to act on the part of any other Trustee hereunder; and upon the
execution and delivery of such supplemental indenture the resignation or removal
of the retiring Trustee shall become effective to the extent provided therein,
such retiring Trustee shall with respect to the Debentures of that or those
series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, and each such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debentures of that or those series
to which the appointment of such successor trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor trustee, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Debentures of
60
that or those series to which the appointment of such successor trustee
relates.
(c) Upon request of any such successor trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor trustee all such rights, power and trusts referred
to in subsections (a) or (b) of this Section, as the case may be.
(d) No successor trustee shall accept its appointment unless at the
time of such acceptance such successor trustee shall be qualified and eligible
under this Article.
(e) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first class postage prepaid, to the Debentureholders,
as their names and addresses appear upon the Debenture Register. If the Company
fails to transmit such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
SECTION 7.12. Successor to Trustee by Merger, Consolidation or
Succession to Business.
------------------------------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be qualified under the provisions of Section 7.08 and eligible
under the provisions of Section 7.09, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. In case any Debentures shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debentures so authenticated with the same
effect as if such successor Trustee had itself authenticated such Debentures.
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SECTION 7.13. Preferential Collection of Claims
Against Issuer.
---------------------------------
(a) Subject to the provisions of subsection (b) of this Section, if
the Trustee shall be or shall become a creditor, directly or indirectly, secured
or unsecured, of the Company within three months prior to a default, as defined
in subsection (b) of this Section, or subsequent to such a default, then, unless
and until such default shall be cured, the Trustee shall set apart and hold in a
special account for the benefit of the Trustee individually, the holders of the
Debentures and the holders of other indenture securities (as defined in
subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three months' period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
subsection (a)(2) of this Section, or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three
months' period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any person (other than the Company) who is liable thereon, and
(ii) the proceeds of the bona fide sale of any such claim by the Trustee to a
third person, and (iii) distributions made in cash, securities, or other
property in respect of claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Code or applicable State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the beginning
of such three months' period;
62
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for any
such claim, if such claim was created after the beginning of such three months'
period and such property was received as security therefor simultaneously with
the creation thereof, and if the Trustee shall sustain the burden of proving
that at the time such property was so received the Trustee had no reasonable
cause to believe that a default, as defined in subsection (c) of this Section,
would occur within three months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C) above, against the release of any property held as security for such claim
as provided in such paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
For the purposes of paragraphs (B), (C) and (D) above, property
substituted after the beginning of such three months' period for property held
as security at the time of such substitution shall, to the extent of the fair
value of the property released, have the same status as the property released,
and, to the extent that any claim referred to in any of such paragraphs is
created in renewal of or in substitution for or for the purpose of repaying or
refunding any pre-existing claim of the Trustee as such creditor, such claim
shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Debentureholders and the holders of other indenture
securities in such manner that the Trustee, the Debentureholders and the holders
of other indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Company in
bankruptcy or receivership or proceedings for reorganization pursuant to the
Federal Bankruptcy Code or applicable State law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee anything
on account of the receipt by it from the Company of the funds and property in
such special account and before crediting to the respective claims of the
Trustee, the Debentureholders and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other than
from such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends"
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shall include any distribution with respect to such claim, in bankruptcy or
receivership or proceedings for reorganization pursuant to the Federal
Bankruptcy Code or applicable State law, whether such distribution is made in
cash, securities, or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in which
such bankruptcy, receivership or proceedings for reorganization is pending shall
have jurisdiction (i) to apportion between the Trustee, the Debentureholders and
the holders of other indenture securities, in accordance with the provisions of
this paragraph, the funds and property held in such special account and the
proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to
give to the provisions of this paragraph due consideration in determining the
fairness of the distributions to be made to the Trustee, the Debentureholders
and the holders of other indenture securities with respect to their respective
claims, in which event it shall not be necessary to liquidate or to appraise the
value of any securities or other property held in such special account or as
security for any such claim, or to make a specific allocation of such
distributions as between the secured and unsecured portions of such claims, or
otherwise to apply the provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such three months' period shall be subject to the provisions of this subsection
(a) as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three months' period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim which would have
given rise to the obligation to account, if such Trustee had continued as
trustee, occurred after the beginning of such three months' period; and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
In any case commenced under the Bankruptcy Act of July 1, 1898, or any
amendment thereto enacted prior to November 6, 1978, all references to periods
of three months in subsection (a) of this Section shall be deemed to be
references to periods of four months.
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(b) There shall be excluded from the operation of subsection (a) of
this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien, if any, of
this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and of the circumstances
surrounding the making thereof is given to the Debentureholders at the time
and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, subscription agent, fiscal agent or depositary, or
other similar capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in subsection (c) of
this Section.
(c) As used in this Section:
(1) The term "default" shall mean any failure to make payment in
full of the principal of (or premium, if any) or interest upon any of the
Debenture or upon the other indenture securities when and as such principal
(or premium, if any) or interest becomes due and payable.
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(2) The term "other indenture securities" shall mean securities upon
which the Company is an obligor (as defined in the Trust Indenture Act)
outstanding under any other indenture (A) under which the Trustee is also
trustee, (B) which contains provisions substantially similar to the
provisions of subsection (a) of this Section, and (C) under which a default
exists at the time of the apportionment of the funds and property held in
said special account.
(3) The term "cash transaction" shall mean any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" shall mean any draft, xxxx of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, xxxx of exchange, acceptance or obligation.
(5) The term "Company" shall mean any obligor upon any of the
Debentures.
ARTICLE EIGHT
Concerning the Debentureholders
SECTION 8.01. Evidence of Action by Debentureholders.
--------------------------------------
Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the Debentures
of a particular series may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action) the fact that at the time of taking any such action the holders of
such majority or specified percentage of that series have joined therein may be
evidenced by any instrument or any number of instruments of similar tenor
executed by such holders of Debentures of that series in person or by agent or
proxy appointed in writing.
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If the Company shall solicit from the Debentureholders of any series
any request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officer's
Certificate, fix in advance a record date for such series for the determination
of Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of Outstanding Debentures of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Outstanding Debentures of that series
shall be computed as of the record date; provided that no such authorization,
agreement or consent by such Debentureholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
In the event a Debenture is held by a Hawaiian Electric Industries
Capital Trust or the Partnership, and the approval or consent of said Trust or
Partnership as a holder of the Debenture is required under any provision of this
Indenture, or any action is to be taken by said Trust or Partnership as a holder
of a Debenture under any provision of this Indenture, the approval or consent
of, or action by, said Trust or the Partnership will be subject to any approval
and other requirements of the applicable Trust Agreement or the Agreement of
Limited Partnership, as the case may be.
SECTION 8.02. Proof of Execution of Instruments and of Holding
of Debentures.
------------------------------------------------
Subject to the provisions of Section 7.01, proof of the execution of
any instrument by a Debentureholder or the Debentureholder's agent or proxy and
proof of the holding by any person of any of the Debentures shall be sufficient
if made in the following manner:
(a) The fact and date of the execution by any such person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Debentures shall be proved by the Debenture
Register of such Debentures or by a certificate of the Debenture Registrar
thereof.
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(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.03. Persons Deemed Owners of Debentures.
-----------------------------------
Prior to the due presentment for registration of transfer of any
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the person in whose name such Debenture shall be
registered upon the books of the Company as the absolute owner of such Debenture
(whether or not such Debenture shall be overdue and notwithstanding any notice
of ownership or writing thereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal of, premium, if any, and (subject to Section 2.03) interest on such
Debenture and for all other purposes; and neither the Company nor the Trustee
nor any paying agent nor any Debenture Registrar shall be affected by any notice
to the contrary.
SECTION 8.04. Debentures Owned by Company or Controlled or
Controlling Companies Disregarded for Certain
Purposes.
--------------------------------------------
In determining whether the holders of the requisite aggregate
principal amount of Debentures of a particular series have concurred in any
direction, consent or waiver under this Indenture, Debentures of that series
which are owned by the Company or any other obligor on the Debentures of that
series or by any Subsidiary of the Company or of such other obligor on the
Debentures of that series shall be disregarded and deemed not to be Outstanding
for the purpose of any such determination, except that for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Debentures of such series which the Trustee
actually knows are so owned shall be so disregarded. Debentures so owned which
have been pledged in good faith may be regarded as Outstanding for the purposes
of this Section, if the pledgee shall establish to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Debentures and that
the pledgee is not a Person directly or indirectly controlling or controlled by
or under direct or indirect common control with or an Affiliate of the Company
or any such other obligor. In case of a dispute as to such right, any decision
by the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
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SECTION 8.05. Instruments Executed by Debentureholders Bind
Future Holders.
---------------------------------------------
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Debentures of a
particular series specified in this Indenture in connection with such action,
any holder of a Debenture of that series which is shown by the evidence to be
included in the Debentures the holders of which have consented to such action
may, by filing written notice with the Trustee, and upon proof of holding as
provided in Section 8.02, revoke such action so far as concerns such Debenture.
Except as aforesaid any such action taken by the holder of any Debenture shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Debenture, and of any Debenture issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Debenture. Any action
taken by the holders of the majority or percentage in aggregate principal amount
of the Debentures of a particular series specified in this Indenture in
connection with such action shall be conclusively binding upon the Company, the
Trustee and the holders of all the Debentures of that series.
ARTICLE NINE
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of
Debentureholders.
------------------------------------------
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as then in effect), without the consent of the Debentureholders,
for one or more of the following purposes:
(a) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the Company
contained herein or otherwise established with respect to the Debentures; or
(b) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the holders of the
Debentures of all or any series as the Board of Directors and the Trustee shall
consider
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to be for the protection of the holders of Debentures of all or any series, and
to make the occurrence, or the occurrence and continuance, of a Default in any
of such additional covenants, restrictions, conditions or provisions a Default
or an Event of Default with respect to such series permitting the enforcement of
all or any of the several remedies provided in this Indenture as herein set
forth; provided, however, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may provide for
a particular period of grace after Default (which period may be shorter or
longer than that allowed in the case of other Defaults) or may provide for an
immediate enforcement upon such Default or may limit the remedies available to
the Trustee upon such Default or may limit the right of the holders of a
majority in aggregate principal amount of the Debentures of such series to waive
such Default; or
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture as shall not be inconsistent with the provisions of
this Indenture and shall not adversely affect the interests of the holders of
the Debentures of any series; or
(d) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Debenture Outstanding of any series created prior to the execution
of such supplemental indenture which is entitled to the benefit of such
provision.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the holders of any of the Debentures at the time Outstanding, notwithstanding
any of the provisions of Section 9.02.
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SECTION 9.02. Modification of Indenture With Consent of
Debentureholders.
-----------------------------------------
With the consent (evidenced as provided in Section 8.01) of the
holders of not less than a majority in aggregate principal amount of the
Debentures of each series affected at the time Outstanding, the Company, when
authorized by a Board Resolution, and the Trustee may from time to time and at
any time enter into an indenture or indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as then in effect) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures of such
series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the holders of each Debenture then
Outstanding and affected thereby, (i) extend the fixed maturity of any
Debentures of any series, or reduce the principal amount thereof (including in
the case of a discounted Debenture the amount payable thereon in the event of
acceleration or the amount provable in bankruptcy) or any premium thereon, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
amount payable upon the redemption thereof, or make the principal of or interest
or premium, if any, on the Debentures payable in any coin or currency other than
that provided in the Debentures, or impair or affect the right of any
Debentureholder to institute suit for the payment thereof or the right of
prepayment, if any, at the option of the Debentureholder, (ii) reduce the
aforesaid percentage of Debentures, the holders of which are required to consent
to any such modification, or (iii) otherwise adversely affect the interest of
the holders of any series of Debentures.
Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Debentureholders required
to consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders of
any series affected thereby under this Section to approve the particular form of
any proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
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Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Debentureholders of all series affected thereby as their names and addresses
appear upon the Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture pursuant to the
provisions of this Article or Section 10.01, this Indenture shall, with respect
to such series, be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Debentures of the series affected thereby shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 9.04. Debentures May Bear Notation of Changes by
Supplemental Indentures.
------------------------------------------
Debentures of any series, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, may bear a
notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Debentures of that series so modified as to conform, in the
opinion of the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Debentures of
that series then Outstanding.
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SECTION 9.05. Opinion of Counsel.
------------------
The Trustee, subject to the provisions of Section 7.01, may receive an
Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article is authorized or permitted by, and conforms
to, the terms of this Article and that it is proper for the Trustee under the
provisions of this Article to join in the execution thereof.
ARTICLE TEN
Consolidation, Merger, Sale or Conveyance
SECTION 10.01. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person unless:
(a) either the Company shall be the continuing corporation, or the
corporation (if other than the Company) formed by such consolidation or into
which the Company is merged or to which the properties and assets of the Company
substantially as an entity are transferred shall be a corporation organized and
existing under the laws of the United States of America or any State thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, all the obligations of the Company under the Debentures and this
Indenture; and
(b) immediately after giving effect to such transaction no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing.
SECTION 10.02. Successor Corporation Substituted.
---------------------------------
The successor corporation formed by such consolidation or into which
the Company is merged or to which such transfer is made shall succeed to and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein, and thereafter the predecessor corporation shall be
relieved of all obligations and covenants under the Indenture and the Debentures
and, in the event of such conveyance or transfer, any such predecessor
corporation may be dissolved and liquidated.
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SECTION 10.03. Opinion of Counsel.
------------------
The Trustee, subject to the provisions of Section 7.01, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or other disposition, and any such assumption, comply
with the provisions of this Article.
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Defeasance; Unclaimed Moneys
SECTION 11.01. Satisfaction and Discharge of Indenture.
---------------------------------------
(a) If at any time (1) the Company shall have paid or caused to be
paid the principal of and interest on all the Debentures of any series
Outstanding hereunder (other than Debentures of such series which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.05) as and when the same shall have become due and payable, or (2) the
Company shall have delivered to the Trustee for cancellation all Debentures of
any series theretofore authenticated (other than any Debentures of such series
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.05) or (3) (i) all the Debentures of
series not theretofore delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and (ii) the
Company shall have irrevocably deposited or caused to be deposited with the
Trustee or any Defeasance Agent as trust funds the entire amount in cash (other
than moneys repaid by the Trustee or any paying agent to the Company in
accordance with Section 11.04) or Governmental Obligations, maturing as to
principal and interest at such times and in such amounts as will insure the
availability of cash, or a combination thereof, sufficient in the opinion of a
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (A) the principal of,
premium on, if any, and interest on all Debentures of such series on each date
that such principal or interest is due and payable and (B) any mandatory sinking
fund payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture and the Debentures of such series;
and if, in any such case, the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture shall cease to
be of further effect (except as to (i) rights of registration of transfer and
exchange of
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Debentures of such series and the Company's right of optional redemption, if
any, (ii) substitution of mutilated, defaced, destroyed, lost or stolen
Debentures, (iii) rights of holders of Debentures to receive payments of
principal thereof and interest thereon, upon the original stated due dates
therefor (but not upon acceleration), and remaining rights of the
Debentureholders to receive mandatory sinking fund payments, if any, (iv) the
rights, obligations, duties and immunities of the Trustee hereunder, (v) the
rights of the holders of Debentures of such series as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them, and (vi) the obligations of the Company under Section 4.02) and the
Trustee, on demand of the Company accompanied by an Officer's Certificate and an
Opinion of Counsel and at the cost and expense of the Company, shall execute
proper instruments acknowledging such satisfaction of and discharging this
Indenture; provided, that the rights of holders of the Debentures to receive
amounts in respect of principal of and interest on the Debentures held by them
shall not be delayed longer than required by then-applicable mandatory rules or
policies of any securities exchange upon which the Debentures are listed. The
Company agrees to reimburse the Trustee or any Defeasance Agent for any costs or
expenses thereafter reasonably and properly incurred and to compensate the
Trustee or any Defeasance Agent for any services thereafter reasonably and
properly rendered by the Trustee or any Defeasance Agent, respectively, in
connection with this Indenture or the Debentures of such series.
(b) The following provisions shall apply to the Debentures of each
series unless specifically otherwise provided in or pursuant to a Board
Resolution or indenture supplemental hereto provided pursuant to Section 2.01.
In addition to discharge of the Indenture pursuant to subsection (a) of this
Section, the Company shall be deemed to have paid and discharged the entire
indebtedness on all the Debentures of a series on the date of the deposit
referred to in subsection (b)(1) below, and the provisions of this Indenture
with respect to the Debentures of such series shall no longer be in effect
(except as to (i) rights of registration of transfer and exchange of Debentures
of such series and the Company's right of optional redemption, if any, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Debentures, (iii)
rights of holders of Debentures to receive payments of principal thereof and
interest thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the holders of Debentures to receive
mandatory sinking fund payments, if any, (iv) the rights, obligations, duties
and immunities of the Trustee hereunder, (v) the rights of the holders of
Debentures as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them and (vi) the obligations of the
Company under
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Section 4.02) and the Trustee, at the expense of the Company, shall at the
Company's request, execute proper instruments acknowledging the same, if
(1) with reference to this provision the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee or any
Defeasance Agent as trust funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the holders of the Debentures
of such series (i) cash in an amount, or (ii) Governmental Obligations
maturing as to principal and interest at such times and in such amounts as
will insure the availability of cash or (iii) a combination thereof,
sufficient, in the opinion of a recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay (A) the principal of and premium on, if any, and interest
on all Debentures of such series on each date that such principal or
interest is due and payable and (B) any mandatory sinking fund payments on
the dates on which such payments are due and payable in accordance with the
terms of the Indenture and the Debentures of such series;
(2) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the
Company is a party or by which it is bound;
(3) the Company has delivered to the Trustee and any Defeasance
Agent an Opinion of Counsel to the effect that (x) the Company has received
a ruling to that effect from the Internal Revenue Service or there has been
published by the Internal Revenue Service a ruling pertaining to a
comparable form of transaction (and such ruling shall accompany such
Opinion of Counsel) or (y) since the date hereof, there has been a change
in the applicable Federal income tax law, in either case to the effect
that, and such opinion shall confirm that, the holders of the Debentures of
such series will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to Federal income tax on the same amount and in the same manner and
at the same times, as would have been the case if such deposit, defeasance
and discharge had not occurred;
(4) the Company has delivered to the Trustee and any Defeasance
Agent an Officer's Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for relating to the defeasance
contemplated by this provision have been complied with;
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(5) no event or condition shall exist that, pursuant to the
provisions of Section 14.02 or 14.03, would prevent the Company from making
payments of the principal of or interest on the Debentures of such series
on the date of such deposit or at any time during the period ending on the
91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period);
(6) if the Debentures of such series are listed on any registered
national securities exchange under the Securities Exchange Act of 1934, as
amended, the Company shall have delivered to the Trustee and any Defeasance
Agent an Opinion of Counsel to the effect that said Debentures will not be
delisted from such national securities exchange as a result of such
deposit, defeasance and discharge; and
(7) no Default or Event of Default with respect to the Debentures of
such series shall have occurred and be continuing on the date of such
deposit and no Event of Default under Section 6.01(a)(4) or Section
6.01(a)(5) shall have occurred and be continuing on the 91st day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
(c) The Company shall be released from its obligations under Sections
6.09 and 10.01 with respect to the Debentures of any series, Outstanding on and
after the date the conditions set forth below are satisfied (hereinafter,
"covenant defeasance"). For this purpose, such covenant defeasance means that,
with respect to the Outstanding Debentures of any series, the Company may omit
to comply with and shall have no liability in respect of any term, condition or
limitation set forth in such Section, whether directly or indirectly by reason
of any reference elsewhere herein to such Section or by reason of any reference
in such Section to any other provision herein or in any other document and such
omission to comply shall not constitute an Event of Default under Section 6.01,
but the remainder of this Indenture and such Debentures shall be unaffected
thereby. The following shall be the conditions to application of this
subsection (C) of this Section 11.01:
(1) with reference to this provision the Company has irrevocably
deposited or caused to be deposited with the Trustee or any Defeasance
Agent as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated solely to,
the benefit of the holders of the Debentures of such series and coupons
appertaining thereto, (i) cash in an
77
amount, or (ii) Governmental Obligations maturing as to principal and
interest at such times and in such amounts as will insure the availability
of cash, or (iii) a combination thereof, sufficient, in the opinion of a
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (A) the principal
of, and premium on, if any, and interest on all Debentures of such series
and (B) any mandatory sinking fund payments on the day on which such
payments are due and payable in accordance with the terms of the Indenture
and the Debentures of such series;
(2) such deposit will not result in a breach or violation of, or
constitute a default under, any other agreement or instrument to which the
Company is a party or by which it is bound;
(3) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the holders of the Debentures of such series
will not recognize income, gain or loss for Federal income tax purposes as
a result of such covenant defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such covenant defeasance had not occurred;
(4) the Company shall have delivered to the Trustee and any
Defeasance Agent an Officer's Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relating to the covenant
defeasance contemplated by this provision have been complied with;
(5) no event or condition shall exist that, pursuant to the
provisions of Section 14.02 or 14.03, would prevent the Company from making
payments of the principal of or interest on the Debentures of such series
on the date of such deposit or at any time during the period ending on the
91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period);
(6) if the Debentures of such series are listed on any registered
national securities exchange under the Securities Exchange Act of 1934, as
amended, the Company shall have delivered to the Trustee and any Defeasance
Agent an Opinion of Counsel to the effect that said Debentures will not be
delisted from such national securities exchange as a result of such
covenant defeasance;
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(7) no Default or Event of Default with respect to the Debentures
shall have occurred and be continuing on the date of such deposit and no
Event of Default under Section 6.01(a)(4) or Section 6.01(a)(5) shall have
occurred and be continuing on the 91st day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until the expiration of such period); and
(8) such covenant defeasance shall not cause the Trustee to have a
conflicting interest as defined in Section 7.08 and for purposes of the
Trust Indenture Act of 1939 with respect to any securities of the Company.
SECTION 11.02. Application by Trustee of Funds Deposited for
Payment of Debentures.
---------------------------------------------
Subject to Section 11.04, all moneys deposited with the Trustee (or
other trustee) pursuant to Section 11.01 shall be held in trust and applied by
it to the payment, either directly or through any paying agent (including the
Company acting as its own paying agent), to the holders of the particular
Debentures of such series for the payment or redemption of which such moneys
have been deposited with the Trustee, of all sums due and to become due thereon
for principal and interest; but such money need not be segregated from other
funds except to the extent required by law.
SECTION 11.03. Application by Trustee of Funds Deposited for
Payment of Debentures.
---------------------------------------------
In connection with the satisfaction and discharge of this Indenture
with respect to Debentures of any series, all moneys then held by any paying
agent under the provisions of this Indenture with respect to such series of
Debentures shall, upon demand of the Company, be repaid to it or paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys.
SECTION 11.04. Repayment of Moneys Held by Paying Agent.
----------------------------------------
Any moneys deposited with or paid to the Trustee or any paying agent
for the payment of the principal of or interest on any Security of any series
and not applied but remaining unclaimed for two years after the date upon which
such principal or interest shall have become due and payable, shall, upon the
written request of the Company and unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be
repaid to the Company by the Trustee for such series or such paying agent, and
the holder of the Debentures of such series shall, unless otherwise required by
mandatory provisions of applicable
79
escheat or abandoned or unclaimed property laws, thereafter look only to the
Company for any payment which such holder may be entitled to collect, and all
liability of the Trustee or any paying agent with respect to such moneys shall
thereupon cease; provided, however, that the Trustee or such paying agent,
before being required to make any such repayment with respect to moneys
deposited with it for any payment series, shall at the expense of the Company,
mail by first-class mail to holders of such Debentures at their addresses as
they shall appear on the Debenture Register, notice, that such moneys remain and
that, after a date specified therein, which shall not be less than thirty days
from the date of such mailing or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 11.05. Repayment of Moneys Held by Trustee.
-----------------------------------
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Governmental Obligations
deposited pursuant to Section 11.01 or the principal or interest received in
respect of such obligations.
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors
SECTION 12.01. Immunity From Individual Liability.
----------------------------------
No recourse under or upon any obligations, covenant or agreement of
this Indenture, or of any Debenture, or for any claim based thereon or otherwise
in respect thereof, shall be had against any incorporator, stockholder, officer
or director, past, present or future as such, of the Company or of any
predecessor or successor corporation, either directly or through the Company or
any such predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of
any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and
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all such rights and claims against, every such incorporator, stockholder,
officer or director as such, because the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom,
are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issuance of such
Debentures.
ARTICLE THIRTEEN
Miscellaneous Provisions
SECTION 13.01. Successors and Assigns.
----------------------
All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 13.02. Acts of Board, Committee or Officer of Successor
Company.
------------------------------------------------
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.
SECTION 13.03. Surrender of Powers of Company.
------------------------------
The Company by instrument in writing executed by authority of two-
thirds of its Board of Directors and delivered to the Trustee may surrender any
of the powers reserved to the Company and thereupon such power so surrendered
shall terminate both as to the Company and as to any successor corporation.
SECTION 13.04. Required Notices or Demands Served by Mail.
------------------------------------------
Except as otherwise expressly provided herein any notice or demand
which by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Debentures to or on the Company may
be given or served by being deposited first class postage prepaid in a post-
office letter box addressed (until another address is filed in writing by the
Company with the Trustee), as follows: Hawaiian Electric Industries, Inc., 000
Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000, Attention: Treasurer. Any notice,
election, request or demand by the Company or any
81
Debentureholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at the
Corporate Trust Office of the Trustee.
SECTION 13.05. Governing Law.
-------------
This Indenture and each Debenture shall be deemed to be a contract
made under the laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the internal laws of said State.
SECTION 13.06. Officer's Certificates and Opinions of Counsel.
----------------------------------------------
(a) Upon any application or demand by the Company to the Trustee to
take any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officer's Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture (other than the certificate provided pursuant to Section
5.03(e) of this Indenture) shall include (1) a statement that the person making
such certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 13.07. Payments Due on Saturdays, Sundays or Holidays.
----------------------------------------------
Except as provided pursuant to Section 2.01 in or pursuant to a Board
Resolution, or established in one or more indentures supplemental to the
Indenture, in any case where the date of maturity of interest or principal of
any Debenture or the date of redemption of any Debenture shall not be a business
82
day then payment of interest or principal (and premium, if any) may be made on
the next succeeding business day with the same force and effect as if made on
the nominal date of maturity or redemption, and no interest shall accrue for the
period after such nominal date.
SECTION 13.08. Provisions Required by Trust Indenture Act.
------------------------------------------
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.09. Indenture May be Executed in Counterparts.
-----------------------------------------
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
SECTION 13.10. Severability of Indenture Provisions.
------------------------------------
In case any one or more of the provisions contained in this Indenture
or in the Debentures of any series shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Debentures, but this Indenture and such Debentures shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 13.11. Assignment by Company to Subsidiary.
-----------------------------------
The Company will have the right at all times to assign any of its
rights or obligations under this Indenture to a direct or indirect wholly owned
Subsidiary of the Company; provided that, in the event of any such assignment,
the Company will remain jointly and severally liable for all such obligations.
Subject to the foregoing, this Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns.
This Indenture may not otherwise be assigned by the parties hereto.
SECTION 13.12. Holders of Trust Preferred Securities as Third
Party Beneficiaries of This Indenture.
----------------------------------------------
The Company hereby acknowledges that, to the extent specifically set
forth herein, prior to a Security Exchange with respect to the Debentures of any
series held as trust
83
assets of a Hawaiian Electric Industries Capital Trust, or during such time as
the Debentures of any series are held by the Partnership, the holders of the
Trust Preferred Securities of such Hawaiian Electric Industries Capital Trust
and the holders of the Partnership Preferred Securities, if any, shall expressly
be third party beneficiaries of this Indenture. The Company further
acknowledges that, prior to a Security Exchange with respect to Debentures of
any series held as trust assets of a Hawaiian Electric Industries Capital Trust,
and with respect to any Debentures of any series held by the Partnership, if the
Property Trustee of such Hawaiian Electric Industries Capital Trust or the
Partnership, if any, fails to enforce its rights under this Indenture as the
holder of the Debentures, any holder of the Trust Preferred Securities of such
Hawaiian Electric Industries Capital Trust or of Partnership Preferred
Securities may, after a period of 30 days has elapsed from such holder's written
request to such Property Trustee or the Partnership, as the case may be, to
enforce such rights, institute legal proceedings directly against the Company to
enforce such Property Trustee's or the Partnership's rights under this Indenture
without first instituting any legal proceedings against such Property Trustee or
the Partnership or any other person or entity.
ARTICLE FOURTEEN
Subordination of Debentures
SECTION 14.01. Agreement to Subordinate.
------------------------
The Company, for itself, its successors and assigns, covenants and
agrees, and each holder of a Debenture, by its acceptance thereof, likewise
covenants and agrees, that the payment of the principal of, and premium, if any,
and interest on, each and all of the Debentures is hereby expressly
subordinated, to the extent and in the manner hereinafter in this Article
Fourteen set forth, in right of payment to the prior payment in full of all
Senior Indebtedness.
SECTION 14.02. Rights of Senior Indebtedness in the Event of
Insolvency, Etc., of the Company.
---------------------------------------------
(a) In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to the Company or to its creditors, as such, or
to its property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of the Company,
84
whether or not involving insolvency or bankruptcy, and in the event of any
execution sale, then the holders of Senior Indebtedness shall be entitled to
receive payment in full of principal thereof and interest due thereon (including
without limitation, except to the extent, if any, prohibited by mandatory
provisions of law, post-petition interest in any such proceedings) in money of
all Senior Indebtedness before the holders of Debentures are entitled to receive
any payment on account of the principal of or interest on the indebtedness
evidenced by the Debentures, and to that end the holders of Senior Indebtedness
shall be entitled to receive for application in payment thereof any payment or
distribution of any kind or character, whether in cash or property or
securities, which may be payable or deliverable in connection with any such
proceedings or sale in respect of the principal of or interest on the Debentures
other than securities of the Company as reorganized or readjusted or securities
of the Company or any other corporation provided for by a plan of reorganization
or readjustment the payment of which is subordinate, at least to the extent
provided in this Article Fourteen with respect to the Debentures, to the payment
of all indebtedness of the nature of Senior Indebtedness, provided that the
rights of the holders of the Senior Indebtedness are not altered by such
reorganization or readjustment.
(b) In the event and during the continuation of any default in
payment of any Senior Indebtedness or if any event of default, as therein
defined, shall exist under any Senior Indebtedness or any agreement pursuant to
which any Senior Indebtedness is issued, no payment of the principal of, premium
if any, or interest on the Debentures shall be made and the Company covenants
that it will, upon ascertaining any such default or event of default, provide
written notice to the Trustee of such default or event of default.
(c) In the event that the Debentures of any series are declared due
and payable before their expressed maturity because of the occurrence of an
Event of Default (under circumstances when the provisions of subsection (a) of
this Section 14.02 shall not be applicable), the holders of all Senior
Indebtedness shall be entitled to receive payment in full in money of such
Senior Indebtedness before such holders of Debentures are entitled to receive
any payment on account of the principal of or interest on the Debentures.
(d) No holder of Senior Indebtedness shall be prejudiced in its right
to enforce subordination of the Debentures by any act or failure to act on the
part of the Company.
85
SECTION 14.03. Payment Over of Proceeds Received on Debentures.
-----------------------------------------------
In the event that, notwithstanding the provisions of Section 14.02,
any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than securities of the Company as
reorganized or readjusted or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Article Fourteen with
respect to the Debentures, to the payment of all indebtedness of the nature of
Senior Indebtedness, provided that the rights of the holders of the Senior
Indebtedness are not altered by such reorganization or readjustment) shall be
received by the holders or by the Trustee for their benefit in connection with
any proceedings or sale referred to in subsection (a) of Section 14.02 before
all Senior Indebtedness is paid in full in money, such payment or distribution
shall be held in trust for the benefit of and paid over to the holders of such
Senior Indebtedness or their representative or representatives or to the trustee
or trustees under any indenture under which any instruments evidencing any of
such Senior Indebtedness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Indebtedness held or
represented by each, for application to the payment of all Senior Indebtedness
remaining unpaid until all such Senior Indebtedness shall have been paid in full
in money, after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness.
From and after the payment in full in money of all Senior
Indebtedness, the holders of Debentures (together with the holders of any other
indebtedness of the Company which is subordinate in right of payment to the
payment in full of all Senior Indebtedness, which is not subordinate in right of
payment to the Debentures and which by its terms grants such right of
subrogation to the holder thereof) shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of assets or
securities of the Company applicable to the Senior Indebtedness until the
Debentures shall be paid in full, and, for the purposes of such subrogation, no
such payments or distributions to the holders of Senior Indebtedness of assets
or securities, which otherwise would have been payable or distributable to
holders of Debentures, shall, as between the Company, its creditors other than
the holders of Senior Indebtedness, and the holders, be deemed to be a payment
by the Company to or on account of the Senior Indebtedness, it being understood
that the provisions of this Article Fourteen are and are intended solely for the
86
purpose of defining the relative rights of the holders, on the one hand, and the
holders of the Senior Indebtedness, on the other hand, and nothing contained in
this Article Fourteen or elsewhere in this Indenture or in the Debentures is
intended to or shall impair as between the Company, its creditors other than the
holders of Senior Indebtedness, and the holders, the obligation of the Company,
which is unconditional and absolute, to pay to the holders the principal of and
interest on the Debentures as and when the same shall become due and payable in
accordance with their terms, or to affect the relative rights of the holders and
creditors of the Company other than the holders of the Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or the holder of any
Debenture from exercising all remedies otherwise permitted by applicable law
upon Default under this Indenture subject to the rights of the holders of Senior
Indebtedness, under Section 14.02, to receive cash, property or securities of
the Company otherwise payable or deliverable to the holders of the Debentures.
Upon any distribution or payment in connection with any proceedings or
sale referred to in subsection (a) of Section 14.02, the Trustee, subject as
between the Trustee and the holders to the provisions of Sections 7.01 and 7.02
hereof, shall be entitled to rely upon a certificate of the liquidating trustee
or agent or other person making any distribution or payment to the Trustee for
the purpose of ascertaining the holders of Senior Indebtedness entitled to
participate in such payment or distribution, the amount of such Senior
Indebtedness or the amount payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Fourteen. In the event that the Trustee determines, in good faith, that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Section 14.03, the Trustee may request such person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such person, as to the extent to which such person is
entitled to participate in such payment or distribution, and as to other facts
pertinent to the rights of such person under this Section 14.03, and if such
evidence is not furnished, the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.
The Trustee, however, shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness, and shall not be liable to any such holders
if it shall in good faith pay over or distribute to holders of Debentures or the
Company or any other person moneys or assets to which any holders of
87
Senior Indebtedness shall be entitled by virtue of Article Fourteen of this
Indenture or otherwise. With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article and no implied
covenants or obligations with respect to holders of Senior Indebtedness shall be
read into this Indenture against the Trustee.
SECTION 14.04. Payments to Debentureholders.
----------------------------
Nothing contained in this Article Fourteen or elsewhere in this
Indenture, or in any of the Debentures, shall prevent at any time, (a) the
Company from making payments at any time of principal of or interest on the
Debentures, except under the conditions described in Section 14.02 or during the
pendency of any proceedings or sale therein referred to, provided, however, that
payments of principal of or interest on the Debentures shall only be made by the
Company within three business days of the due dates for such payments or (b) the
application by the Trustee of any moneys deposited with it hereunder to the
payment of or on account of the principal of or interest on the Debentures, if
at the time of such deposit the Trustee did not have written notice in
accordance with Section 14.06 of any event prohibiting the making of such
deposit by the Company or if in the event of redemption, the Trustee did not
have such written notice prior to the time that the notice of redemption
pursuant to Section 3.02 was given (which notice of redemption shall in no event
be given more than 60 days prior to the date fixed for redemption).
SECTION 14.05. Holders of Debentures Authorize Trustee to
Effectuate Subordination of Debentures.
------------------------------------------
Each Debentureholder by its acceptance of a Debenture authorizes and
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination as provided in this
Article Fourteen and appoints the Trustee as attorney-in-fact for any and all
such purposes, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise) tending towards liquidation of the business and assets of the
Company, the immediate filing of a claim for the unpaid balance of such
Debentureholder's Debentures in the form required in said proceedings and cause
said claim to be approved.
88
SECTION 14.06. Notice to Trustee.
-----------------
Notwithstanding the provisions of this Article Fourteen or any other
provisions of this Indenture, the Trustee shall not be charged with the
knowledge of the existence of any facts which would prohibit the making of any
payment of moneys to the Trustee, unless and until the Trustee shall have
received written notice thereof from the Company or from the holder or the
representative of any class of Senior Indebtedness; provided, however, that if
at least two business days prior to the date upon which by the terms hereof any
such monies may become payable for any purpose (including, without limitation,
the payment of either the cash amount payable at maturity or interest on any
Debenture) the Trustee shall not have received with respect to such monies the
notice provided for in this Section 14.06, then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary, which may be
received by it on or after such two business days prior to such date.
SECTION 14.07. Trustees May Hold Senior Indebtedness.
-------------------------------------
The Trustee shall be entitled to all the rights set forth in this
Article Fourteen with respect to any Senior Indebtedness which may at any time
be held by it, to the same extent as any other holder of Senior Indebtedness.
SECTION 14.08. Not Applicable to Trustee's Compensation and
Reimbursement.
--------------------------------------------
Nothing in this Article Fourteen shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.06.
SECTION 14.09. Applicability of Article Fourteen to Paying
Agents.
-------------------------------------------
In case at any time any paying agent other than the Trustee shall be
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article Fourteen shall in such case (unless the context shall
otherwise require) be construed as extending to and including such paying agent
within its meaning as fully for all intents and purposes as if such paying agent
were named in this Article Fourteen in place of the Trustee.
89
The Bank of New York, as Trustee, hereby accepts the trust in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
HAWAIIAN ELECTRIC INDUSTRIES INC.
By /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx
Financial Vice President and
Chief Financial Officer
By /s/ Xxxxxxxxx X. Xxx
--------------------------------
Xxxxxxxxx X. Xxx
Treasurer
THE BANK OF NEW YORK,
as Trustee
By /s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
Title: Assistant Vice President
90
