EXHIBIT 4(c)
Amended and Restated
Trust Agreement for HECO Capital Trust II
among
HAWAIIAN ELECTRIC COMPANY, INC.
(as Depositor)
THE BANK OF NEW YORK
(as Property Trustee)
THE BANK OF NEW YORK (DELAWARE)
(as Delaware Trustee)
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
and
THE SEVERAL HOLDERS AS DEFINED HEREIN
Dated as of
December 1, 1998
HECO Capital Trust II
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939
Trust Indenture Trust Agreement
Act Section Section
------------------ ------------------
(S) 310(a)(1) 7.07
(a)(2) 7.07
(a)(3) 7.09
(a)(4) 2.07(a)(ii)
(b) 7.08
(S) 311(a) 7.13
(b) 7.13
(S) 312(a) 5.07
(b) 5.07
(c) 5.07
(S) 313(a) 7.14
(b) 7.14
(c) 7.14
(d) 7.14
(S) 314(a) 7.15
(b) Not Applicable
(c)(1) 7.16, 7.17
(c)(2) 7.16, 7.17
(c)(3) Not Applicable
(d) Not Applicable
(e) 7.17
(S) 315(a) 7.01(a), 7.03(a)
(b) 7.02, 10.08
(c) 7.01(a)
(d) 7.01, 7.03
(e) Not Applicable
(S) 316(a) Not Applicable
(a)(1)(A) Not Applicable
(a)(1)(B) Not Applicable
(a)(2) Not Applicable
(b) Not Applicable
(c) Not Applicable
(S) 317(a)(1) Not Applicable
(a)(2) Not Applicable
(b) 5.09
[B(S) 318(a) 10.10
__________________
Note: This reconciliation and tie sheet shall not, for any purpose, be
deemed to be a part of the Trust Agreement.
AMENDED AND RESTATED TRUST AGREEMENT of HECO Capital Trust I (the "Trust"),
dated as of December 1, 1998, among (i) Hawaiian Electric Company, Inc., a
Hawaii corporation (the "Depositor" or "HECO"), (ii) The Bank of New York, a New
York banking corporation, as trustee (the "Property Trustee"), (iii) The Bank of
New York (Delaware), a Delaware banking corporation, as Delaware trustee (the
"Delaware Trustee"), (iv) T. ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
individuals whose address is c/o Hawaiian Electric Company, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Administrative Trustees") (the Property
Trustee, the Delaware Trustee and the Administrative Trustee are referred to
collectively as the "Trustees"), and (v) the several Holders (as defined
herein).
WITNESSETH:
WHEREAS, the Depositor and the Trustees have heretofore duly declared and
established a business trust pursuant to the Delaware Business Trust Act by
entering into a Trust Agreement, dated as of October 7, 1998 (the "Original
Trust Agreement"), and by executing and filing with the Secretary of State of
the State of Delaware a Certificate of Trust on October 15, 1998, a copy of
which is attached hereto as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance and sale by the Trust of the Trust Common
Securities (as defined herein) by the Trust to the Depositor, (ii) the issuance
and sale by the Trust of the Trust Preferred Securities (as defined herein) by
the Trust pursuant to the Underwriting Agreement (as defined herein) and (iii)
the acquisition by the Trust from the Depositor and the Subsidiaries of the
Debentures (as defined herein).
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders (as defined herein) hereby amends and
restates the Original Trust Agreement in its entirety and agrees as follows:
1
ARTICLE 1. DEFINED TERMS
SECTION 1.01. Definitions.
(a) For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(1) each capitalized term or phrase defined in this Article 1 has the
meaning assigned to it in this Article 1 and includes the plural as well as
the singular;
(2) each of the other terms used herein that is defined in the Trust
Indenture Act, either directly or by reference therein, has the meaning
assigned to it therein;
(3) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Trust Agreement; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
(b) As used herein:
"Act" has the meaning specified in Section 6.08.
---
"Administrative Trustees" means the individuals identified as the
-----------------------
"Administrative Trustees" in the preamble to this Trust Agreement, solely
in their respective capacities as Administrative Trustees of the Trust
created and continued hereunder and not their individual capacities, or
such Administrative Trustees' successors in interest in such capacity, or
any successor administrative trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
2
"Bankruptcy Event" means, with respect to any Person, the occurrence
----------------
of any of the following events:
(A) Such Person, pursuant to or within the meaning of any
Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief against
it in an involuntary case or proceeding;
(iii) consents to the appointment of a Custodian (as defined
herein) of it or for all or substantially all of its property,
and such Custodian is not discharged within 60 days;
(iv) makes a general assignment for the benefit of its
creditors; or
(v) admits in writing its inability to pay its debts
generally as they become due; or
(B) A court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(i) is for relief against such Person in an involuntary case
or proceeding;
(ii) appoints a Custodian of such Person for all or
substantially all of its properties; or
(iii) orders the liquidation of such Person;
and in each case the order or decree remains unstayed and in effect
for 60 days.
"Bankruptcy Laws" means Title 11 of the United States Code, or similar
---------------
federal or state law for the relief of debtors. "Custodian" means any
receiver, trustee, assignee, liquidator, sequestrator, custodian or similar
official under any Bankruptcy Law.
"Board Resolution" means (i) a copy of a resolution certified by the
----------------
Secretary or an Assistant Secretary of the Depositor to have been duly
adopted by the Depositor's Board of Directors or a committee established
thereby and to be in full force and effect on the date of such
certification or (ii) a certificate signed by the
3
authorized officer or officers of the Depositor to whom the Depositor's
Board of Directors or a committee established thereby has delegated its
authority, and in each case, delivered to the Trustees.
"Book-Entry Trust Preferred Securities Certificates" means
--------------------------------------------------
certificates representing Trust Preferred Securities issued in global,
fully registered form with a Depository as described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, or (b)
------------
a day on which banking institutions in the City of New York are authorized
or required by law or executive order to remain closed or (c) a day on
which the principal corporate trust office of the Property Trustee or
Debenture Trustee is closed for business.
"Certificate Depository Agreement" means the agreement among the
--------------------------------
Trust, the Property Trustee and The Depository Trust Company, as the
initial Depository, dated as of the Closing Date, relating to the Book-
Entry Trust Preferred Securities Certificates, substantially in the form
attached hereto as Exhibit B, as the same may be amended and supplemented
from time to time.
"Closing Date" means the time and date of delivery of Book-Entry Trust
------------
Preferred Securities Certificates and payment therefor pursuant to the
Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Commission" means the Securities and Exchange Commission, as from
----------
time to time constituted, created under the Securities Exchange Act of
1934, as amended, or, if at any time after the execution of this Trust
Agreement such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.
"Companies" means HECO, MECO and HELCO, collectively.
---------
"Corporate Trust Office" means the principal corporate trust office of
----------------------
the Property Trustee located in the State of New York which at the date
hereof is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Trustee Administration.
"Creditor" has the meaning specified in Section 2.03.
--------
4
"Debenture Event of Default" means an "Event of Default" as defined in
--------------------------
the applicable Indenture.
"Debenture Exchange" means the issuance of HECO Debentures by the
------------------
Company in exchange for Subsidiary Debentures held by the Trust pursuant to
Section 2.05(b).
"Debenture Redemption Date" means "Redemption Date" as defined in the
-------------------------
applicable Indenture or the Debentures.
"Debenture Trustee" means The Bank of New York, a New York banking
-----------------
corporation, in its capacity as trustee under the Indentures, or any
successor thereto appointed in accordance with the terms and provisions of
the applicable Indenture.
"Debentures" means, collectively, the HECO Debentures, the MECO
----------
Debentures and the HELCO Debentures.
"Definitive Trust Preferred Securities Certificates" means
--------------------------------------------------
certificates representing Trust Preferred Securities issued in
certificated, fully registered form as described in Section 5.12.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
---------------------------
Delaware Code, 12 Del. C. (S) 3801, et seq., as it may be amended from time
to time.
"Delaware Trustee" means the entity identified as the "Delaware
----------------
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust created and continued hereunder (and not in
its individual capacity) or its successor in interest in such capacity, or
any successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
---------
Agreement.
"Depository" means an organization registered as a "clearing agency"
----------
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder. The Depository Trust
Company, New York, New York, will be the initial Depository.
"Depository Participant" means a broker, lender, bank or other
----------------------
financial institution or other Person for whom from time to time the
Depository effects book-entry transfers and pledges of interests in
securities deposited with the Depository.
5
"Distributable Debentures" means, collectively, HECO Debentures and,
------------------------
on and after the Debenture Exchange, Substituted HECO Debentures to be
distributed to Holders of the Trust Securities pursuant to Section 8.04(a).
"Distribution Date" has the meaning specified in Section 4.01(a).
-----------------
"Distributions" means amounts payable in respect of the Trust
-------------
Securities as provided in Section 4.01.
"Event of Default" means with respect to the Trust Preferred
----------------
Securities (whatever the reason for such Debenture Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body), (i) the
occurrence of a Debenture Event of Default, (ii) default by the Property
Trustee in the payment of any Distribution when it becomes due and payable,
and continuation of such default for a period of 30 days, (iii) default by
the Property Trustee in the payment of any Redemption Price of any Trust
Preferred Security or Common Security when it becomes due and payable, (iv)
default in the performance, or breach, in any material respect, of any
covenant or warranty of the Trustees herein (other than a covenant or
warranty a default in the performance of which or the breach of which is
dealt with in clause (ii) or (iii) above), and continuation of such default
or breach for a period of 60 days after there has been given, by registered
or certified mail, to the defaulting Trustee or Trustees by the Holders of
at least 25% in Liquidation Preference of the Outstanding Trust Preferred
Securities, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" under this Trust Agreement, or (v) the occurrence of a Bankruptcy
Event with respect to the Property Trustee and the failure by HECO to
appoint a successor Property Trustee within 60 days thereof.
"Expiration Date" has the meaning specified in Section 8.01.
---------------
"Extension Period" means the period or periods in which pursuant to
----------------
the applicable Indenture payments of interest on the related Debentures are
deferred by any of the Companies electing to extend the interest payment
periods thereof for a period (including any extensions thereof) not
exceeding 20 consecutive quarters with respect to each such deferral
period.
6
"HECO Debentures" mean the 7.30% Junior Subordinated Deferrable
---------------
Interest Debentures, Series 1998 of the Depositor issued pursuant to the
HECO Junior Indenture.
"HECO Junior Indenture" means the Junior Indenture, dated as of
---------------------
December 1, 1998, between the Depositor and the Debenture Trustee, as
trustee thereunder, as amended or supplemented from time to time.
"HELCO" means Hawaii Electric Light Company, Inc.
-----
"HELCO Debentures" means the 7.30% Junior Subordinated Deferrable
----------------
Interest Debentures, Series 1998 of HELCO issued pursuant to the HELCO
Junior Indenture.
"HELCO Junior Indenture" means the Junior Indenture, dated as of
----------------------
December 1, 1998, between HELCO and the Debenture Trustee, as trustee
thereunder, as amended or supplemented from time to time.
"Holder" or "Securityholder" means a Person in whose name a Trust
--------------------------
Security or Securities is registered in the Securities Register; any such
Person is a beneficial owner within the meaning of the Delaware Business
Trust Act.
"Indemnified Person" means any of the Trustees, Affiliates of any
------------------
Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee, or any employee or
agent of the Trust or its Affiliates.
"Indentures" means, collectively, the HECO Junior Indenture, the MECO
----------
Junior Indenture and the HELCO Junior Indenture and "Indenture" means any
one of the Indentures.
"Investment Company Event" means the receipt by the Trust or HECO of
------------------------
an Opinion of Counsel, rendered by a law firm having a recognized federal
securities practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change (including a prospective change) in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act
Law"), there is more than an insubstantial risk that the Trust is or will
be considered an "investment company" that is required to be registered
under the 1940 Act, which Change in 1940 Act law becomes effective on or
after the date of original issuance of the Trust Preferred Securities.
7
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
----
trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever.
"Like Amount" means (i) with respect to a redemption of Trust
-----------
Securities, Trust Securities having an aggregate Liquidation Preference
equal to the aggregate principal amount of Debentures to be
contemporaneously redeemed in accordance with the Indentures and the
proceeds of which will be used to pay the Redemption Price of such Trust
Securities and (ii) with respect to a distribution of Distributable
Debentures to Holders of Trust Securities in connection with the
dissolution and liquidation of the Trust, Distributable Debentures having
an aggregate principal amount equal to the aggregate Liquidation Preference
of the Trust Securities of the Holder to whom such Distributable Debentures
are distributed.
"Liquidation Date" means the date on which Distributable Debentures
----------------
are to be distributed to Holders of Trust Securities in connection with a
dissolution and liquidation of the Trust pursuant to Section 8.04(a).
"Liquidation Distribution" has the meaning specified in Section
------------------------
8.04(d).
"Liquidation Preference" means the stated liquidation preference of
----------------------
$25 per Trust Security.
"Majority in Liquidation Preference" means, with respect to the Trust
----------------------------------
Securities, or either class thereof, as the context may require, except as
provided in the terms of the Trust Preferred Securities or by the Trust
Indenture Act, Holders of Outstanding Trust Securities voting together as a
single class or Holders of Outstanding Trust Preferred Securities voting
separately as a class, who are the record owners of more than 50% of the
aggregate Liquidation Preference (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined)
of all Outstanding Trust Securities or all Outstanding Trust Preferred
Securities, as the case may be.
"MECO" means Maui Electric Company, Limited.
----
"MECO Debentures" means the ____% Junior Subordinated Deferrable
---------------
Interest Debentures, Series 1998 of MECO issued pursuant to the MECO Junior
Indenture.
8
"MECO Junior Indenture" means the Junior Indenture, dated as of
---------------------
December 1, 1998, between MECO and the Debenture Trustee, as trustee
thereunder, as amended or supplemented from time to time.
"Maturity Date of the Debentures" means December 15, 2028, as such
date may be shortened or extended in accordance with the provisions of the
Indentures.
"1940 Act" means the Investment Company Act of 1940, as amended.
--------
"Officer's Certificate" means a certificate signed by any one of the
---------------------
Chairman, the President, any Vice President, the Treasurer, any Assistant
Treasurer or the Secretary of the Depositor.
"Opinion of Counsel" means a written opinion of counsel, who may be
------------------
counsel for the Trust, the Property Trustee or the Depositor or an
Affiliate of the Depositor, but not an employee of any thereof, and who
shall be acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals
------------------------
to this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means, as
-----------
of the date of determination, all Trust Securities theretofore issued under
this Trust Agreement, except:
(A) Trust Securities theretofore cancelled by the Administrative
Trustees or delivered to the Administrative Trustees for cancellation;
(B) Trust Securities for whose redemption money in the necessary
amount has been theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Trust Securities; provided that,
--------
if such Trust Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Trust Agreement;
(C) Trust Securities which have been paid or in exchange for or
in lieu of which other Trust Securities have been executed and
delivered pursuant to Section 5.05, other than any such Trust
Securities in respect of which there shall have been presented to the
Property Trustee proof satisfactory to it that such Trust Securities
are held by a bona fide purchaser; and
9
(D) as provided in Section 8.04(c);
provided, however, that in determining whether the Holders of the
-------- -------
requisite Liquidation Preference of the Outstanding Trust Preferred
Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Trust Preferred Securities owned by
the Depositor, any Trustee or any Affiliate of the Depositor or any
Trustee shall be disregarded and deemed not to be Outstanding, except
that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent
or waiver, only Trust Preferred Securities that such Trustee actually
knows to be so owned shall be so disregarded and (b) the foregoing shall
not apply at any time when all of the Outstanding Trust Preferred
Securities are owned by the Depositor, one or more of the Trustees and/or
any such Affiliate. Trust Preferred Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Property Trustee and the
Administrative Trustees the pledgee's right so to act with respect to
such Trust Preferred Securities and that the pledgee is not the Depositor
or any Affiliate of the Depositor.
"Paying Agent" means initially the Property Trustee and any co-
------------
paying agent appointed pursuant to Section 5.09.
"Payment Account" means a segregated non-interest-bearing corporate
---------------
trust account maintained by the Property Trustee in its trust department
for the benefit of the Securityholders in which all amounts paid to the
Property Trustee in respect of the Debentures or the Trust Guarantee will
be held and from which the Property Trustee or such other Paying Agent
shall make payments to the Securityholders in accordance with Article 4.
"Person" means any individual, corporation, partnership, limited
------
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Property Trustee" means the commercial bank or trust company
----------------
identified as the "Property Trustee" in the preamble to this Trust
Agreement solely in its capacity as Property Trustee of the Trust
heretofore created and continued hereunder (and not in its individual
capacity), or
10
its successor in interest in such capacity, or any successor property
trustee appointed as herein provided.
"PUC" means the Public Utilities Commission of the State of Hawaii.
---
"Redemption Date" means, with respect to any Trust Security to be
---------------
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the Maturity
--------
Date of the Debentures shall be a Redemption Date for a Like Amount of
Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
----------------
Liquidation Preference of such Trust Security, plus accumulated and unpaid
Distributions thereon to the Redemption Date.
"Securities Register" and "Securities Registrar" have the respective
------------------- --------------------
meanings specified in Section 5.04.
"Securityholder" or "Holder" means a Person in whose name a Trust
-------------- ------
Security or Securities is registered in the Securities Register; any such
Person is a beneficial owner within the meaning of the Delaware Business
Trust Act.
"Special Event" means a Tax Event or an Investment Company Event.
-------------
"Subsidiaries" means, collectively, MECO and HELCO.
------------
"Subsidiary Debentures" means, collectively, the MECO Debentures and
---------------------
the HELCO Debentures.
"Subsidiary Guarantees" means the Depositor's full and unconditional
---------------------
guarantees of the obligations of MECO and HELCO as set forth in Article 11
of the MECO Junior Indenture and the HELCO Junior Indenture, respectively.
"Substituted HECO Debentures" means 7.30% Junior Subordinated
---------------------------
Deferrable Interest Debentures, Series 1998 of the Depositor issuable
pursuant to the HECO Junior Indenture in any Debenture Exchange, in an
aggregate principal amount of up to $20,000,000, and being in all respects
identical to the HECO Debentures issued on the Closing Date, except that
such Substituted HECO Debentures will bear interest from the date of
original issuance thereof pursuant to the HECO Junior Indenture.
"Successor Securities" has the meaning specified in Section 9.01.
--------------------
11
"Tax Action" means (a) any amendment to or change (including any
----------
announced prospective change) in the laws (or any regulations thereunder)
of the United States, or of any State or the District of Columbia, or of
any political subdivision or taxing authority thereof or therein, (b) any
judicial decision interpreting, applying or clarifying such laws or
regulations or (c) any administrative pronouncement or action that
represents an official position (including a clarification of an official
position) of the governmental authority or regulatory body making such
administrative pronouncement or taking such action, in each such case that
occurs on or after the date of original issuance of the Trust Preferred
Securities.
"Tax Event" means the receipt by HECO or the Trust of an opinion of
---------
counsel, rendered by a law firm having a recognized federal and state tax
and securities practice, to the effect that, as a result of a Tax Action,
there is more than an insubstantial risk that (i) the Trust is, or will be
within 90 days of the date thereof, subject to United States federal income
tax with respect to income received or accrued on the Debentures, (ii)
interest payable by any of the Companies on its respective Debentures is
not, or within 90 days of the date thereof will not be, deductible by such
Company, in whole or in part, for United States federal income tax
purposes, or (iii) the Trust is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Trust" means the Delaware business trust created and continued hereby
-----
and identified in the preamble to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
---------------
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for
all purposes of this Trust Agreement and any such modification, amendment
or supplement, the provisions of the Trust Indenture Act that are deemed to
be a part of and govern this Trust Agreement and any such modification,
amendment or supplement, respectively.
"Trust Common Security" means a 7.30% Trust Common Security
---------------------
(Liquidation Preference $25 per Trust Common Security) issued by the Trust
representing an undivided beneficial interest in the assets of the Trust
having a Liquidation Preference of $25 and having the rights provided
therefor in this Trust Agreement, including the
12
right to receive Distributions and a Liquidation Distribution as provided
herein.
"Trust Common Securities Certificate" means a certificate evidencing
-----------------------------------
ownership of Trust Common Securities, substantially in the form attached
hereto as Exhibit C.
"Trust Guarantee" means the Trust Guarantee Agreement executed and
---------------
delivered by the Depositor to The Bank of New York, a New York banking
corporation, as trustee thereunder, contemporaneously with the execution
and delivery of this Trust Agreement, for the benefit of the Holders of the
Trust Preferred Securities, as amended from time to time.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
-------------------
force at the date as of which this Trust Agreement was executed; provided,
--------
however, that in the event the Trust Indenture Act of 1939 is amended after
-------
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Preferred Security" means a 7.30% Cumulative Quarterly Income
------------------------
Preferred Security, Series 1998 (Liquidation Preference $25 per Trust
Preferred Security) issued by the Trust representing an undivided preferred
beneficial interest in the assets of the Trust and having rights provided
therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Trust Preferred Securities Beneficial Owner" means a Person who is
-------------------------------------------
the beneficial owner of a book-entry interest, as reflected in the books of
the Depository or on the books of a Person maintaining an account with the
Depository (directly as a Depository Participant or as an indirect
participant or otherwise, in each case in accordance with the rules of the
Depository).
"Trust Preferred Securities Certificate" means a certificate
--------------------------------------
evidencing ownership of Trust Preferred Securities, substantially in the
form attached hereto as Exhibit D.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit
--------------
in, or owing to, the Payment Account and (iii) all proceeds and rights in
respect of the foregoing and any other property and assets for the time
being held
13
or deemed to be held by the Property Trustee pursuant to the terms of this
Trust Agreement.
"Trust Security" means any one of the Trust Common Securities or the
--------------
Trust Preferred Securities.
"Trust Securities Certificate" means any one of the Trust Common
----------------------------
Securities Certificates or the Trust Preferred Securities Certificates.
"25% in Liquidation Preference" means with respect to the Trust
-----------------------------
Securities, or either class thereof, as the context may require, except as
provided in the terms of the Trust Preferred Securities or by the Trust
Indenture Act, Holders of Outstanding Trust Securities voting together as a
single class or Holders of Outstanding Trust Preferred Securities voting
separately as a class, who are the record owners of 25% of the aggregate
Liquidation Preference (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined)
of all Outstanding Trust Securities or all Outstanding Trust Preferred
Securities, as the case may be.
"Underwriting Agreement" means the Underwriting Agreement, dated
----------------------
December 9, 1998, among the Trust, the Depositor and the Underwriters named
therein.
ARTICLE 2. CONTINUATION OF THE TRUST
SECTION 2.01. Name.
The Trust created and continued hereby shall be known as "HECO Capital
Trust II" as such name may be modified from time to time by the Administrative
Trustees following written notice to the Holders of Trust Securities and the
other Trustees, in which name the Trustees may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of the Trust
and ▇▇▇ and be sued.
SECTION 2.02. Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Department, or such other address in the State of Delaware as the Delaware
Trustee may designate by written notice to the Property Trustee, Securityholders
and the Depositor. The principal place of
14
business of the Trust is ▇/▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Trustee
Administration.
SECTION 2.03. Initial Contribution of Trust Property; Expenses of the Trust.
(a) The Property Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $25, which
constituted the initial Trust Property.
(b) The Depositor shall be responsible for and shall pay for all
obligations (other than with respect to the Trust Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance and sale of the Trust
Preferred Securities, the fees and expenses (including reasonable counsel fees
and expenses) of the Trustees as provided in Section 7.06, the costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
Paying Agent(s), Securities Registrar, duplication, travel and telephone and
other telecommunications expenses and costs and expenses incurred in connection
with the disposition of Trust assets).
(c) The Depositor will pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
(d) The Depositor's obligations under this Section 2.03 shall be for the
benefit of, and shall be enforceable by, the Property Trustee and any Person to
whom any such obligations, costs, expenses and taxes are owed (a "Creditor")
whether or not such Creditor has received notice hereof. The Property Trustee
and any such Creditor may enforce the Depositor's obligations under this Section
2.03 directly against the Depositor and the Depositor irrevocably waives any
right or remedy to require that the Property Trustee or any such Creditor take
any action against the Trust or any other Person before proceeding against the
Depositor. The Depositor agrees to execute such additional agreements as may be
necessary or desirable in order to give full effect to the provisions of this
Section 2.03.
(e) The Depositor shall make no claim upon the Trust Property for the
payment of such expenses.
15
SECTION 2.04. Issuance of the Trust Securities.
The Depositor, on behalf of the Trust, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, not less than two Administrative Trustees, on behalf of
the Trust, shall execute in accordance with Section 5.02 and cause the Property
Trustee to authenticate and deliver to the Underwriters named in the
Underwriting Agreement a Book-Entry Trust Preferred Securities Certificate,
registered in the name of the nominee of the Depository, representing 2,000,000
Trust Preferred Securities having an aggregate Liquidation Preference of
$50,000,000, against payment by the Underwriters and receipt by the Property
Trustee of the aggregate purchase price of such Trust Preferred Securities of
$50,000,000. Contemporaneously therewith, not less than two Administrative
Trustees, on behalf of the Trust, shall execute in accordance with Section 5.02
and deliver to the Depositor a Trust Common Securities Certificate, registered
in the name of the Depositor, representing 61,856 Trust Common Securities having
an aggregate Liquidation Preference of $1,546,400, against payment by the
Depositor and receipt by the Property Trustee of the purchase price of such
Trust Common Securities of $1,546,400.
SECTION 2.05. Purchase and Exchange of Debentures.
(a) Contemporaneously with the execution and delivery of this Trust
Agreement, the Administrative Trustees, on behalf of the Trust, shall purchase
$31,546,400 aggregate principal amount of HECO Debentures from HECO, $10,000,000
aggregate principal amount of MECO Debentures from MECO and $10,000,000
aggregate principal amount of HELCO Debentures from HELCO, all of which
Debentures shall be registered in the name of the Property Trustee on behalf of
the Trust, and in satisfaction of the purchase price for such Debentures, shall
cause the Property Trustee, on behalf of the Trust, to deliver the sums of
$31,546,400, $10,000,000 and $10,000,000 to the Depositor, MECO and HELCO,
respectively, or an aggregate of $51,546,400, representing the proceeds of the
Trust Securities.
(b) Upon the occurrence of an Early Dissolution Event specified in Section
8.02(a), 8.02(b) or 8.02(d), provided that any necessary federal or state
regulatory authorizations or approvals have been obtained (including any
necessary approval of the PUC), and prior to the distribution to each
Securityholder of a Like Amount of Distributable Debentures and to the
liquidation of the Trust, the Depositor shall, no later than five Business Days
after the later of the date of such occurrence and the satisfaction of such
conditions, issue Substituted HECO Debentures pursuant to the HECO Junior
Indenture in an aggregate principal amount equal to the
16
aggregate principal amount of the Subsidiary Debentures then held by the Trust
and registered in such names and denominations as the Property Trustee shall
request in writing no later than the close of business on the second Business
Day prior to the date of such issuance. Contemporaneously with the issuance of
such Substituted HECO Debentures, the Trust shall deliver, or cause to be
delivered, the certificates for such Subsidiary Debentures, accompanied by such
instruments of transfer as may be requested by the Depositor, to the Depositor
in exchange for such Substituted HECO Debentures and the Depositor shall
deliver, or cause to be delivered, such Substituted HECO Debentures in exchange
for such Subsidiary Debentures, accompanied by (x) an Officer's Certificate to
the effect that all conditions precedent to such Exchange and the issuance of
the Substituted HECO Debentures in this Trust Agreement have been satisfied (and
attaching any approvals referred to in the prior sentence) and (y) an Opinion of
Counsel to the effect that the Substituted HECO Debentures have been duly
authorized by the Depositor and, upon execution and authentication in accordance
with the provisions of the HECO Indenture and delivery to and payment for by the
Trust on the date of such opinion, will be entitled to the benefits of the HECO
Indenture and will be valid and binding obligations of the Depositor,
enforceable against the Depositor in accordance with their respective terms,
subject to bankruptcy, insolvency, reorganization, receivership, moratorium and
other similar laws affecting creditors' rights generally, and general principles
of equity.
SECTION 2.06. Declaration of Trust.
The exclusive purposes and functions of the Trust are (i) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Debentures,
(ii) to maintain the status of the Trust as a grantor trust for United States
federal income tax purposes, and (iii) except as otherwise limited herein, to
engage in only those other activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust,
to have all the rights, powers and duties to the extent set forth herein, and
the Trustees hereby accept such appointment. The Property Trustee hereby
declares that it will hold the Trust Property in trust upon and subject to the
conditions set forth herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein. The Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Property Trustee or the Administrative Trustees set forth herein. The Delaware
Trustee shall be one of the Trustees of the Trust for
17
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Delaware Business Trust Act.
SECTION 2.07. Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section 2.07 and Article VII, and in accordance with the
following provisions (1) and (2), the Trustees shall have the authority to enter
into all transactions and agreements determined by the Trustees to be
appropriate in exercising the authority, express or implied, otherwise granted
to the Trustees under this Trust Agreement, and to perform all acts in
furtherance thereof, including without limitation, the following:
(1) As among the Trustees, the Administrative Trustees shall have the
power and authority to act on behalf of the Trust with respect to the
following matters:
(A) issuing and selling the Trust Securities in accordance with
this Trust Agreement, and executing and delivering (after
countersignature of the Trust Preferred Securities by the Property
Trustee) Trust Securities Certificates representing the Trust
Securities; provided, however, that the Trust may issue no more than
one series of Trust Preferred Securities and no more than one series
of Trust Common Securities, and, provided further, that there shall be
no interests in the Trust other than the Trust Securities, and the
issuance of Trust Securities shall be limited to a one-time,
simultaneous issuance of both Trust Preferred Securities and Trust
Common Securities on the Closing Date;
(B) causing the Trust to enter into, and executing, delivering
and performing on behalf of the Trust, the Expense Agreement, the
Certificate Depository Agreement and such other agreements as may be
necessary or desirable in connection with the purposes and function of
the Trust, including the appointment of a successor Depository;
(C) assisting in registering the Trust Preferred Securities under
the Securities Act of 1933, as amended, and under state securities or
blue sky laws, and qualifying this Trust Agreement as a trust
indenture under the Trust Indenture Act;
18
(D) assisting in the listing of the Trust Preferred Securities
upon such securities exchange or exchanges as the Depositor shall
determine and the registration of the Trust Preferred Securities under
the Securities Exchange Act of 1934, as amended, and the preparation
and filing of all periodic and other reports and other documents
pursuant to the foregoing;
(E) acquiring the Debentures with the proceeds of the sale of the
Trust Securities and causing the Property Trustee to deliver payment
of the purchase price therefor; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to
be held of record in the name of the Property Trustee for the benefit
of the Holders of the Trust Securities;
(F) bringing or defending, paying, collecting, compromising,
arbitrating, resorting to legal action, or otherwise adjusting claims
or demands of or against the Trust unless the Property Trustee has the
exclusive power to so act;
(G) employing or otherwise engaging employees and agents (who may
be designated as officers with titles) and managers, contractors,
advisors, and consultants and paying reasonable compensation for such
services;
(H) causing the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(I) giving the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Administrative Trustee;
(J) incurring expenses that are necessary or incidental to carry
out any of the purposes of the Trust;
(K) appointing a Person to act as Securities Registrar in
accordance with this Trust Agreement for the Trust Securities;
(L) taking all actions that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under
the laws of the State of Delaware and of each other
19
jurisdiction in which such existence is necessary to protect the
limited liability of the Holders of the Trust Preferred Securities or
to enable the Trust to effect the purposes for which the Trust was
created;
(M) to the extent provided in this Trust Agreement, winding up
the affairs of the Trust and dissolving the Trust and preparing,
executing and filing the certificate of cancellation with the
Secretary of State of the State of Delaware;
(N) establishing a record date with respect to all actions to be
taken hereunder that require a record date be established, including
and with respect to, for the purposes of Section 316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and
exchanges;
(O) sending notices (other than notices of default) or assisting
the Property Trustee in sending notices and other information
regarding the Trust Securities and the Debentures to Securityholders
in accordance with this Trust Agreement;
(P) qualifying the Trust to do business in any jurisdiction as
may be necessary or desirable; provided, that no such qualification
may be made in any jurisdiction if the effect of such qualification
may be to diminish the limited liability of the Holders of Trust
Preferred Securities as provided by this Trust Agreement and the
Delaware Business Trust Act;
(Q) registering transfers of the Trust Securities in accordance
with this Trust Agreement if the Property Trustee is not the
Securities Registrar; and
(R) executing all documents or instruments, performing all duties
and powers and taking any actions incidental to the foregoing as the
Administrative Trustees may from time to time determine are necessary
or advisable pursuant to the terms of the Trust Securities or to give
effect to the terms of this Trust Agreement for the benefit of the
Securityholders (without consideration of the effect of any such
action on any particular Securityholder).
20
(2) As among the Trustees, the Property Trustee shall have the power,
duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) establishing and maintaining the Payment Account and
appointing Paying Agents (subject to Section 5.09);
(B) receiving payment of the purchase price of the Trust
Securities;
(C) delivering payment of the purchase price of the Debentures to
HECO, MECO and HELCO, as applicable, and receiving and holding the
Debentures in its name for the benefit of the Trust;
(D) collecting interest, principal and any other payments on the
Debentures and depositing them in the Payment Account;
(E) making Distributions and other payments to the
Securityholders in respect of the Trust Securities, so long as the
Property Trustee is acting as Paying Agent, whether solely or with any
co-paying agent;
(F) exercising all of the rights, powers and privileges of a
holder under each Indenture and, if any Event of Default has occurred
and is continuing, for the benefit of the Holders of the Trust
Securities, in its discretion protecting and enforcing its rights as
holder of the Debentures subject to the rights of the Holders pursuant
to the terms of this Trust Agreement;
(G) sending notices of defaults, redemptions, Extension Periods,
dissolutions, liquidations and other information regarding the Trust
Securities and the Debentures to the Securityholders in accordance
with this Trust Agreement;
(H) distributing the Trust Property in accordance with the terms
of this Trust Agreement;
(I) taking any ministerial action incidental to the foregoing as
the Property Trustee may from time to time determine is necessary or
advisable to give effect to the terms of this Trust Agreement and
protect and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any such
action on any particular Securityholder); and
21
(J) registering transfers and exchanges of the Trust
Preferred Securities in accordance with this Trust Agreement (but
only if at such time the Property Trustee shall be the Securities
Registrar).
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees acting on behalf of the Trust shall not (i)
acquire any assets or investments (other than the Debentures), reinvest the
proceeds derived from investments, possess any power or otherwise act in such a
way as to vary the Trust Property or engage in any activities not authorized by
this Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge,
set-off or otherwise dispose of any of the Trust Property or interests therein,
including to Securityholders, except as expressly provided herein, (iii) take
any action that would cause the Trust to fail or cease to qualify as a grantor
trust for United States federal income tax purposes, (iv) incur any indebtedness
for borrowed money or issue any other debt, (v) issue any securities or other
evidences of beneficial ownership of, or beneficial interests in, the Trust
other than the Trust Securities, or (vi) take or consent to any action that
would result in the placement of a Lien on any of the Trust Property. The
Administrative Trustees shall defend all claims and demands of all Persons at
any time claiming any Lien on any of the Trust Property adverse to the interest
of the Trust or the Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Trust Preferred
Securities, the Depositor shall have the right and responsibility to assist the
Trust with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the date
of this Trust Agreement are hereby ratified and confirmed in all respects):
(1) preparing for filing with the Commission and executing on behalf
of the Trust a registration statement on Form S-3 in relation to the Trust
Preferred Securities, the Trust Guarantee and certain related obligations,
including any amendments thereto;
(2) determining the States in which to take appropriate action to
qualify or register for sale all or part of the Trust Preferred Securities
and doing any and all such acts, other than actions which must be taken by
or on behalf of the Trust, and advising the Trustees of actions they must
take on behalf of the Trust, and
22
preparing for execution and filing any documents to be executed and filed
by the Trust or on behalf of the Trust, as the Depositor deems necessary or
advisable in order to comply with the applicable laws of any such States;
(3) preparing for filing and executing on behalf of the Trust an
application to the New York Stock Exchange or any other national stock
exchange or The Nasdaq National Market for listing upon notice of issuance
of any Trust Preferred Securities;
(4) preparing for filing with the Commission and executing on behalf
of the Trust a registration statement on Form 8-A relating to the
registration of the Trust Preferred Securities and the Trust Guarantee
under Section 12(b) of the Securities Exchange Act of 1934, as amended,
including any amendments thereto;
(5) negotiating the terms of, and executing and delivering on behalf
of the Trust, the Underwriting Agreement providing for the sale of the
Trust Preferred Securities and such other agreements as may be necessary or
desirable in connection with the consummation thereof;
(6) using reasonable efforts to obtain any necessary federal or state
authorizations or approvals, including any approval of the PUC, in
connection with a Debenture Exchange; and
(7) executing all documents or instruments, or performing all duties
and powers, and doing all things for or on behalf of the Trust in all
matters necessary or incidental to the foregoing.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees and the Depositor are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that (i) the Trust will not be deemed to
be an "investment company" required to be registered under the 1940 Act, or
classified as an association taxable as a corporation, a partnership or other
than as a grantor trust for United States federal income tax purposes and (ii)
the Debentures will be treated as indebtedness of the respective Companies for
United States federal income tax purposes. In this connection, the
Administrative Trustees and each of the Companies are authorized to take any
action, not inconsistent with applicable law, the certificate of trust filed
with the Secretary of State of the State of Delaware with respect to the Trust
(as amended or restated from time to time, the "Certificate of Trust"), or this
Trust Agreement, that the Administrative Trustees and the
23
Companies determine in their discretion to be necessary or desirable for such
purposes.
SECTION 2.08. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.09. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Securityholders in accordance with
this Trust Agreement.
ARTICLE 3. PAYMENT ACCOUNT
SECTION 3.01. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. All monies and other property deposited or held from time
to time in the Payment Account shall be held by the Property Trustee for the
exclusive benefit of the Securityholders and for distributions as provided
herein, including (and subject to) any priority of payments provided for herein.
The Property Trustee shall have exclusive control of the Payment Account for the
purpose of making deposits in and withdrawals from the Payment Account in
accordance with this Trust Agreement; provided that any Paying Agent shall have
the right of withdrawal with respect to the Payment Account solely for the
purpose of making the payments contemplated under Article 4.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Debentures and any amounts paid to the
Property Trustee pursuant to the Trust Guarantee. Amounts held in the Payment
Account shall not be invested by the Property Trustee pending distribution
thereof.
ARTICLE 4. DISTRIBUTIONS; REDEMPTION
SECTION 4.01. Distributions.
(a) Distributions on the Trust Securities shall be cumulative, and will
accumulate whether or not there are funds of the Trust available for the payment
of Distributions.
24
Distributions shall accumulate from December 15, 1998 and, except during an
Extension Period for the Debentures pursuant to the applicable Indenture, shall
be payable quarterly in arrears on March 31, June 30, September 30 and December
31 of each year, commencing on March 31, 1999. In the event that any date on
which Distributions are otherwise payable on the Trust Securities is not a
Business Day, then payment of such Distributions shall be made on the next
succeeding day that is a Business Day (and without any additional Distributions
or other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, payment of such Distributions shall
be made on the immediately preceding Business Day (without any reduction in
Distributions in respect of such early payment), in each case with the same
force and effect as if made on the date such payment was originally payable
(each date on which Distributions are payable in accordance with this Section
4.01(a) is referred to as a "Distribution Date").
(b) Within two Business Days after receipt by the Property Trustee of
notice of an Extension Period pursuant to Section 4.01 of any Indenture, the
Property Trustee shall give notice thereof to the Securityholders in the manner
and to the extent provided in Section 10.07.
(c) The Trust Securities represent undivided beneficial interests in the
Trust Property, and, subject to Sections 4.03 and 4.06 hereof, all Distributions
will be made pro rata on each of the Trust Securities. Distributions on the
Trust Securities shall be payable at a rate of 7.30% per annum of the
Liquidation Preference of the Trust Securities. The amount of Distributions
payable for any full quarterly period shall be computed on the basis of a 360-
day year of twelve 30-day months, except for any period shorter than a full
calendar month, in which case the amount shall be computed on the basis of the
actual number of days elapsed in such period. During an Extension Period for the
Debentures, the rate per annum at which Distributions on the Trust Securities
accumulate shall be increased by an amount such that the aggregate amount of
Distributions that accumulate on all Trust Securities during any such Extension
Period is equal to the aggregate amount of interest (including interest payable
on unpaid interest at the rate per annum set forth above, compounded quarterly)
that accrues during any such Extension Period on the Debentures.
(d) Distributions on the Trust Securities shall be made from the Payment
Account by the Property Trustee or any Paying Agent and shall be payable on each
Distribution Date only to the extent that the Trust has funds then available in
the Payment Account for the payment of such Distributions.
25
(e) Distributions on the Trust Securities on each Distribution Date shall
be payable to the Holders thereof as they appear on the Securities Register for
the Trust Securities on the relevant record date, which, as long as the Trust
Preferred Securities are in book-entry-only form, shall be one Business Day
prior to such Distribution Date; provided, however, that in the event that the
-------- -------
Trust Preferred Securities are not in book-entry-only form, the relevant record
date shall be the day that is 15 days prior to the relevant Distribution Date,
whether or not a Business Day.
(f) If Distributions are not paid when scheduled, such accumulated
Distributions shall be paid to the Holders of record of Trust Securities as they
appear on the books and records of the Trust on the record date as determined
under Section 4.01(e) above with respect to the actual payment date for such
accumulated Distributions.
SECTION 4.02. Redemption.
(a) On each Debenture Redemption Date and the Maturity Date of the
Debentures, the Property Trustee will be required to redeem a Like Amount of
Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by first-
class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior
to the Redemption Date to each Holder of Trust Securities to be redeemed, at
such Holder's address appearing in the Securities Register. All notices of
redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the CUSIP number;
(4) the place or places where Trust Securities Certificates are to be
surrendered for payment of the Redemption Price;
(5) that on the Redemption Date the Redemption Price will become
payable upon each such Trust Security to be redeemed and that Distributions
thereon will cease to accumulate on and after such date; and
(6) if less than all of the Outstanding Trust Securities are to be
redeemed, the identification and total Liquidation Preference of the
particular Trust Securities to be redeemed.
26
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption or repayment on the Maturity Date of the Debentures. Redemptions of
the Trust Securities shall be made and the Redemption Price shall be payable on
each Redemption Date only to the extent that the Trust has funds then available
in the Payment Account for the payment of such Redemption Price.
(d) If the Trust, by action of the Property Trustee, gives a notice of
redemption in respect of any Trust Preferred Securities, then, by 12:00 noon,
New York time, on the Redemption Date, subject to Section 4.02(c), the Property
Trustee will, so long as the Trust Preferred Securities are in book-entry-only
form, deposit irrevocably with the Depository funds sufficient to pay the
applicable Redemption Price and will give the Depository irrevocable
instructions and authority to pay the applicable Redemption Price to the Holders
thereof. If the Trust Preferred Securities are not in book-entry-only form,
then, on the Redemption Date, subject to Section 4.02(c), the Property Trustee
will irrevocably deposit with the Paying Agent funds sufficient to pay the
Redemption Price for the Trust Preferred Securities being redeemed on such date
and will give the Paying Agent irrevocable instructions and authority to pay the
Redemption Price to the Holders of such Trust Preferred Securities upon
surrender of their Trust Preferred Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Securities Register for the Trust
Securities on the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds irrevocably deposited as
required, then upon the date of such deposit, all rights of Securityholders
holding Trust Securities so called for redemption will cease, except the right
of such Securityholders to receive the Redemption Price, but without interest on
such Redemption Price, and such Trust Securities will cease to be Outstanding.
In the event that any Redemption Date is not a Business Day, then payment of the
Redemption Price payable on such Redemption Date will be made on the next
succeeding day which is a Business Day (and without any additional Distributions
or other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment will be made on the
immediately preceding Business Day (without any reduction in Distributions in
respect of such early payment), in each case with the same force and effect as
if made on such Redemption Date. In the event that payment of the Redemption
Price in respect of any Trust Securities called for redemption is improperly
withheld or refused, and not paid either by the
27
Trust or by the Depositor pursuant to the Trust Guarantee, Distributions on such
Trust Securities will continue to accumulate, at the then applicable rate, from
the Redemption Date originally established by the Trust for such Trust
Securities to the date such Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be made
to the Holders thereof as they appear on the Securities Register for the Trust
Securities on the relevant record date, which as long as the Trust Preferred
Securities are in book-entry-only form, shall be one Business Day prior to the
Redemption Date; provided, however, that in the event that the Trust Securities
are not in book-entry-only form, the relevant record date shall be the date that
is 15 days prior to the Redemption Date.
(f) If less than all the Outstanding Trust Securities are to be redeemed on
a Redemption Date, then the aggregate Liquidation Preference of Trust Securities
to be redeemed shall be allocated on a pro rata basis (based on Liquidation
Preference) among the Trust Common Securities and the Trust Preferred
Securities. The particular Trust Preferred Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Property
Trustee from the Outstanding Trust Preferred Securities not previously called
for redemption, by lot or by such method as the Property Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to $25 or an integral multiple of $25 in excess thereof) of the
Liquidation Preference of Trust Preferred Securities of a denomination larger
than $25; provided that, in respect of Trust Preferred Securities registered in
the name of and held of record by the Depository or its nominee (or any
successor Depository or its nominee), the distribution of the proceeds of such
redemption will be made in accordance with the procedures applied by such
Depository or nominee. The Trust may not redeem fewer than all of the
Outstanding Trust Preferred Securities unless all accumulated and unpaid
Distributions have been paid on all Trust Preferred Securities for all quarterly
distribution periods terminating on or prior to the Redemption Date. The
Property Trustee shall promptly notify the Securities Registrar in writing of
the Trust Preferred Securities selected for redemption and, in the case of any
Trust Preferred Securities selected for partial redemption, the Liquidation
Preference thereof to be redeemed. If fewer than all of the Trust Securities
represented by a Trust Securities Certificate are redeemed, not less than two
Administrative Trustees shall execute for the Holder a new Trust Securities
28
Certificate representing the unredeemed Trust Securities. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Trust Preferred Securities shall relate, in the
case of any Trust Preferred Securities redeemed or to be redeemed only in part,
to the portion of the Liquidation Preference of Trust Preferred Securities which
has been or is to be redeemed.
SECTION 4.03. Subordination of Trust Common Securities.
(a) Payment of Distributions on, and the Redemption Price of, the Trust
Securities, as applicable, shall be made pro rata based on the Liquidation
Preference of the Trust Securities; provided, however, that if on any
-------- -------
Distribution Date or Redemption Date, a Debenture Event of Default shall have
occurred and be continuing, no payment of any Distribution on, or Redemption
Price of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Trust Common Securities, shall
be made unless payment in full in cash of all accumulated and unpaid
Distributions on all Outstanding Trust Preferred Securities for all distribution
periods terminating on or prior thereto, or in the case of payment of the
Redemption Price, the full amount of such Redemption Price on all Outstanding
Trust Preferred Securities then being redeemed, shall have been made or provided
for, and all funds immediately available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, the Redemption
Price of, Trust Preferred Securities then due and payable.
(b) In the case of any Event of Default under this Trust Agreement
resulting from a Debenture Event of Default, the Holder of Trust Common
Securities will be deemed to have waived any right to act with respect to any
such Event of Default until the effect of such Event of Default has been cured,
waived or otherwise eliminated. Until any such Event of Default has been so
cured, waived or otherwise eliminated, the Property Trustee shall act solely for
the benefit of the Holders of the Trust Preferred Securities and not the Holder
of the Trust Common Securities, and only the Holders of the Trust Preferred
Securities will have the right to direct the Property Trustee to act for their
benefit.
SECTION 4.04. Payment Procedures.
Payments of Distributions pursuant to Section 4.01 in respect of the Trust
Preferred Securities shall be made by check mailed by the Paying Agent to the
address of the Holder thereof as such address shall appear on the Securities
Register or, if the Trust Preferred Securities are held by a Depository or its
nominee, such Distributions shall be made to the
29
Depository by wire transfer in immediately available funds. Payment of the
Redemption Price of or Liquidation Distribution on the Trust Preferred
Securities shall be made in immediately available funds upon surrender of the
Trust Preferred Securities Certificates representing such Trust Preferred
Securities at the Corporate Trust Office of the Property Trustee or, if the
Trust Preferred Securities are held by a Depository or its nominee, such
Redemption Price or Liquidation Distribution shall be made to the Depository by
wire transfer in immediately available funds. Payments of Distributions pursuant
to Section 4.01 in respect of the Trust Common Securities, and payment of the
Redemption Price of or Liquidation Payment on the Trust Common Securities, shall
be made in such manner as shall be mutually agreed between the Property Trustee
and the Holder of the Trust Common Securities.
SECTION 4.05. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all Federal, State and local tax and information
returns and reports required to be filed by or in respect of the Trust. In this
regard, the Administrative Trustees shall (i) prepare and file (or cause to be
prepared or filed) the appropriate Internal Revenue Service Form required to be
filed in respect of the Trust in each taxable year of the Trust and (ii) prepare
and furnish (or cause to be prepared and furnished) to each Securityholder the
related Internal Revenue Service Form 1099 OID, or any successor form or the
information required to be provided on such form. The Administrative Trustees
shall provide the Depositor and the Property Trustee with a copy of all such
returns, reports and schedules promptly after such filing or furnishing. The
Trustees shall comply with United States Federal withholding and backup
withholding tax laws and information reporting requirements with respect to any
payments to Securityholders under the Trust Securities.
SECTION 4.06. Payments under Indentures.
Any amount payable hereunder to any Holder of Trust Preferred Securities
shall be reduced by the amount of any corresponding payment such Holder has
directly received pursuant to Section 6.07 of the Indentures or pursuant to the
Trust Guarantee or the Subsidiary Guarantees. Notwithstanding the provisions
hereunder to the contrary, Securityholders acknowledge that any Holder of Trust
Preferred Securities that receives payment under Section 6.07 of the Indentures
may receive amounts greater than the amount such Holder may be entitled to
receive pursuant to the other provisions of this Trust Agreement.
30
SECTION 4.07. Payments of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums (as defined in the
HECO Indenture), the Property Trustee at the direction of an Administrative
Trustee or the Depositor shall promptly pay any taxes, duties or governmental
charges of whatsoever nature (other than withholding taxes) imposed on the Trust
by the United States or any other taxing authority.
ARTICLE 5. TRUST SECURITIES CERTIFICATES
SECTION 5.01. Initial Ownership.
Upon the creation of the Trust and the contribution by the Depositor
pursuant to Section 2.03 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are Outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
SECTION 5.02. The Trust Securities Certificates.
The Trust Securities Certificates shall be issued in denominations of $25
Liquidation Preference and integral multiples thereof. Trust Preferred
Securities Certificates representing fractional interests shall not be issued.
Trust Common Securities Certificates shall be executed on behalf of the Trust by
manual signatures of not less than two Administrative Trustees. Trust Preferred
Securities Certificates shall be executed on behalf of the Trust by manual or
facsimile signatures of not less than two Administrative Trustees and shall be
authenticated by the countersignature of the Property Trustee. Trust Securities
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefits of
this Trust Agreement, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.04.
SECTION 5.03. Execution and Delivery of Trust Securities
Certificates.
On the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate
31
Liquidation Preference as provided in Section 2.04, to be executed on behalf of
the Trust as provided in Section 5.02 and delivered in accordance with the
provisions of Section 2.04.
SECTION 5.04. Registration of Transfer and Exchange of Trust Preferred
Securities Certificates.
(a) A registrar appointed by the Administrative Trustees (the "Securities
Registrar") shall keep or cause to be kept, at the office or agency maintained
pursuant to Section 5.08, a register (the "Securities Register") in which,
subject to such reasonable regulations as it may prescribe, the Securities
Registrar shall provide for the registration of Trust Securities Certificates
(subject to Section 5.10 in the case of the Trust Common Securities
Certificates) and registration of transfers and exchanges of Trust Preferred
Securities Certificates as herein provided. The Property Trustee shall be the
initial Securities Registrar; any successor Securities Registrar shall be
appointed by the Administrative Trustees.
(b) Upon surrender for registration of transfer of any Trust Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.08, not less than two Administrative Trustees shall execute and deliver, in
the name of the designated transferee or transferees, one or more new Trust
Preferred Securities Certificates representing the same number of Trust
Preferred Securities dated the date of execution by the Administrative Trustees.
At the option of a Holder, Trust Preferred Securities Certificates may be
exchanged for other Trust Preferred Securities Certificates upon surrender of
the Trust Preferred Securities Certificates to be exchanged at the office or
agency maintained pursuant to Section 5.08. The Securities Registrar shall not
be required to register or cause to be registered the transfer of any Trust
Preferred Securities after such Trust Preferred Securities have been called for
redemption, during the period from 15 days before mailing of notice of
redemption and ending on such notice date or after the Liquidation Date.
(c) Trust Preferred Securities presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Administrative Trustees and the Securities Registrar
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Trust Preferred Securities Certificate surrendered for
registration of transfer or exchange shall be cancelled and subsequently
disposed of by the Property Trustee in accordance with its customary practice.
(d) No service charge shall be made for any registration of transfer or
exchange of Trust Preferred Securities, but the
32
Securities Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Trust Preferred Securities.
SECTION 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (i) any mutilated Trust Securities Certificate shall be surrendered to
the Securities Registrar, or if the Securities Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate, and (ii) there shall be delivered to the Securities Registrar and
the Administrative Trustees such security or indemnity as may be required by
them to hold the Securities Registrar, the Trustees and the Trust harmless, then
in the absence of notice that such Trust Securities Certificate shall have been
acquired by a bona fide purchaser, not less than two of the Administrative
Trustees, on behalf of the Trust shall execute and make available for delivery,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Trust Securities Certificate, a new Trust Securities Certificate of like tenor.
In connection with the issuance of any new Trust Securities Certificate under
this Section 5.05, the Administrative Trustees or the Securities Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Trust
Securities Certificate issued pursuant to this Section 5.05 shall constitute
conclusive evidence of an undivided beneficial interest in the assets of the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Trust Securities Certificate shall be found at any time.
SECTION 5.06. Persons Deemed Securityholders.
Prior to due presentation of a Trust Security Certificate for registration
of transfer, the Administrative Trustees or the Securities Registrar shall treat
the Person in whose name any Trust Securities Certificate shall be registered in
the Securities Register as the owner and Holder of such Trust Securities
Certificate for the purpose of receiving Distributions and for all other
purposes whatsoever, and neither the Trustees nor the Securities Registrar shall
be bound by any notice to the contrary.
SECTION 5.07. Access to List of Securityholders' Names and Addresses.
In the event that the Property Trustee is no longer the Securities
Registrar, the Administrative Trustees or the Depositor shall furnish or cause
to be furnished (i) to the
33
Property Trustee, quarterly not later than 10 days prior to a Distribution Date,
and (ii) to the Property Trustee, promptly after receipt by the Administrative
Trustees or the Depositor of a request therefor from the Property Trustee in
order to enable the Paying Agent to pay Distributions in accordance with Section
4.01 hereof, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Securityholders as of the most recent
record date, in each case to the extent such information is in the possession or
control of the Administrative Trustees or the Depositor and is not identical to
a previously supplied list or has not otherwise been received by the Property
Trustee. The rights of Securityholders to communicate with other Securityholders
with respect to their rights under this Trust Agreement or under the Trust
Securities, and the corresponding rights of the Property Trustee shall be as
provided in the Trust Indenture Act. Each Holder, by receiving and holding a
Trust Securities Certificate, shall be deemed to have agreed not to hold the
Depositor or the Trustees accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.
SECTION 5.08. Maintenance of Office or Agency.
The Property Trustee shall maintain in New York, New York, an office or
offices or agency or agencies where Trust Preferred Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trustees in respect of the Trust Securities Certificates
may be served. The Property Trustee shall give prompt written notice to the
Depositor and to the Securityholders of any change in the location of the
Securities Register or any such office or agency, which shall initially be at
the Corporate Trust Office of the Property Trustee.
SECTION 5.09. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making Distributions. The Administrative Trustees may revoke such power and
remove the Paying Agent, provided that such revocation and removal with respect
to the sole Paying Agent shall not become effective until the appointment of a
successor. The Paying Agent shall initially be the Property Trustee and any
co-paying agent chosen by the Property Trustee and approved by the
Administrative Trustees and the Depositor. Any Person acting as Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written
34
notice to the Administrative Trustees and the Depositor, and, if applicable, the
Property Trustee, provided that such resignation with respect to the sole Paying
Agent shall not become effective until the appointment of a successor. In the
event that the Property Trustee shall no longer be the Paying Agent or a
successor Paying Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor that is acceptable to the
Property Trustee (in the case of any other Paying Agent) and the Depositor to
act as Paying Agent (which shall be a bank or trust company and have a combined
capital and surplus of at least $50,000,000). The Administrative Trustees shall
cause such successor Paying Agent or any additional Paying Agent approved by
the Administrative Trustees to execute and deliver to the Trustees an instrument
in which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The Paying Agent shall
return all of such sums remaining unclaimed to the Property Trustee and upon
removal of a Paying Agent such Paying Agent shall also return such sums in its
possession to the Property Trustee. The provisions of Sections 7.01, 7.03 and
7.06 shall apply to the Property Trustee also in its role as Paying Agent, for
so long as the Property Trustee shall act as Paying Agent and, to the extent
applicable, to any other Paying Agent appointed hereunder. Any reference in this
Trust Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
SECTION 5.10. No Transfer of Trust Common Securities by Depositor.
To the fullest extent permitted by law, any attempted transfer of the Trust
Common Securities shall be void, except for transfers permitted by Article 5 of
the HECO Junior Indenture. The Administrative Trustees shall cause each
Trust Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE EXTENT PROVIDED IN
THE TRUST AGREEMENT (AS DEFINED BELOW)". By execution of this Trust
Agreement, the Depositor agrees to the foregoing restrictions.
SECTION 5.11. Book-Entry Trust Preferred Securities Certificates; Trust Common
Securities Certificate.
(a) A single Trust Common Securities Certificate representing the Trust
Common Securities shall be issued to the Depositor in the form of a definitive
Trust Common Securities Certificate.
35
(b) The Trust Preferred Securities, upon original issuance on the Closing
Date, will not be engraved but will be issued in the form of one printed or
typewritten Book-Entry Trust Preferred Securities Certificate, to be delivered
to The Depository Trust Company, the initial Depository, by, or on behalf of,
the Trust. Such Book-Entry Trust Preferred Securities Certificate shall
initially be registered on the Securities Register in the name of Cede & Co.,
the nominee of the initial Depository. No Trust Preferred Securities Beneficial
Owner will receive a Definitive Trust Preferred Securities Certificate
representing such Trust Preferred Securities Beneficial Owner's interest in such
Book-Entry Trust Preferred Securities Certificate, except as provided in Section
5.12. Unless and until Definitive Trust Preferred Securities Certificates have
been issued to the Trust Preferred Securities Beneficial Owners pursuant to
Section 5.12:
(1) the provisions of this Section 5.11(b) shall be in full force and
effect;
(2) the Trust and the Trustees shall be entitled to deal with the
Depository for all purposes of this Trust Agreement (including the payment of
Distributions on the Trust Preferred Securities and receiving approvals, votes
or consents hereunder) as the sole Holder of the Trust Preferred Securities and
shall have no obligation to the Trust Preferred Securities Beneficial Owners;
(3) to the extent that the provisions of this Section 5.11(b) conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 5.11(b) shall control; and
(4) the rights of the Trust Preferred Securities Beneficial Owners
shall be exercised only through the Depository and shall be limited to those
established by law and agreements between such Trust Preferred Securities
Beneficial Owners and the Depository and/or the Depository Participants and
pursuant to the Certificate Depository Agreement the Depository shall receive
and transmit payments of Distributions to such Depository Participants. The
Depository will make book-entry transfers among the Depository Participants;
provided, that solely for the purposes of determining whether the Holders of the
requisite amount of Trust Preferred Securities have voted on any matter provided
for in this Trust Agreement, so long as Definitive Trust Preferred Securities
Certificates have not been issued, the Trustees may conclusively rely on, and
shall be fully protected in relying on, any written instrument (including a
proxy) delivered to the Trustees by the Depository setting forth the Trust
Preferred Securities Beneficial Owners' votes or assigning the right to
36
vote on any matter to any other Person either in whole or in part.
SECTION 5.12. Definitive Trust Preferred Securities Certificates.
If (i) the Depositor advises the Trustees in writing that the Depository is
no longer willing or able to properly discharge its responsibilities with
respect to the Trust Preferred Securities Certificates or the Depository is no
longer registered or in good standing under the Securities Exchange Act of 1934,
as amended, or other applicable statute or regulation, and the Depositor is
unable to locate a qualified successor within 90 days, (ii) the Depositor at its
option advises the Trustees in writing that it elects to dissolve the book-entry
system through the Depository or (iii) an Event of Default occurs and is
continuing and the Holders of a Majority in Liquidation Preference of Trust
Preferred Securities determine to discontinue the system of book-entry transfers
through the Depository by so notifying the Property Trustee, then the
Administrative Trustees shall issue Definitive Trust Preferred Securities
Certificates. Upon surrender to the Administrative Trustees of the Book-Entry
Trust Preferred Securities Certificates by the Depository, accompanied by
registration instructions, the Administrative Trustees shall execute and deliver
the Definitive Trust Preferred Securities Certificates pursuant to this Trust
Agreement in accordance with the instructions of the Depository. Neither the
Securities Registrar nor the Trustees shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. The Definitive Trust Preferred Securities
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Administrative Trustees, as
evidenced by the execution thereof by not less than two Administrative Trustees.
SECTION 5.13. Rights of Securityholders.
The Securityholders shall not have any right or title to the Trust Property
other than the undivided beneficial interest in the assets of the Trust
conferred by their Trust Securities and they shall have no right to call for any
partition or division of property, profits or rights of the Trust except as
described below. The Trust Securities shall be personal property giving only the
rights specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or similar rights and when issued and
delivered to Securityholders against payment of the purchase price therefor will
be fully paid and nonassessable interests in the
37
Trust. The Holders of the Trust Securities, in their capacities as such, shall
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
ARTICLE 6. ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.01. Limitations on Voting Rights.
(a) Except as provided herein, in the Trust Guarantee and in the Indentures
and as otherwise required by law, no Holder of Trust Securities shall have any
right to vote or in any manner otherwise control the administration, operation
and management of the Trust or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Trust Securities
Certificates, be construed so as to constitute the Securityholders from time to
time as partners or members of an association.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee or executing any
trust or power conferred on the Property Trustee with respect to the Debentures,
(ii) waive any past default which may be waived under Section 6.04 of the
Indentures, (iii) exercise any right to rescind or annul a declaration that the
principal of the Debentures is due and payable or (iv) consent to any amendment,
modification or termination of any of the Indentures, where such consent shall
be required, without, in each case, obtaining the prior consent of the Holders
of at least a Majority in Liquidation Preference of the Outstanding Trust
Preferred Securities; provided, however, that where such consent under the
-------- -------
applicable Indenture would require the consent of each holder of Debentures
issued thereunder affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of Outstanding
Trust Preferred Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of Trust Preferred Securities,
except by a subsequent vote of the Holders of Trust Preferred Securities. The
Property Trustee shall notify all Holders of the Trust Preferred Securities of
any notice received from the Debenture Trustee as a result of the Trust being
the holder of the Debentures. In addition to obtaining the consent of the
Holders of the Trust Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion
of Counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation or partnership for
38
United States federal income tax purposes on account of such action and will
continue to be classified as a grantor trust for United States federal income
tax purposes.
(c) Subject to Section 10.02(c) hereof, if any proposed amendment to the
Trust Agreement provides for, or the Trustees otherwise propose to effect, (i)
any action that would adversely affect in any material respect the powers,
preferences or special rights of the Trust Preferred Securities, whether by way
of amendment to this Trust Agreement or otherwise, or (ii) the dissolution or
liquidation of the Trust, other than pursuant to the terms of this Trust
Agreement, then the Holders of Outstanding Trust Preferred Securities will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of the Holders of at least a
Majority in Liquidation Preference of the Outstanding Trust Preferred
Securities.
SECTION 6.02. Notice of Meetings.
Notice of all meetings of the Trust Preferred Security Holders, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.07 to each Trust Security Holder of record, at his/her
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
SECTION 6.03. Meetings of Trust Preferred Security Holders.
(a) No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Holders of at least 25% in
Liquidation Preference of the Outstanding Trust Preferred Securities and the
Administrative Trustees or the Property Trustee may, at any time in their
discretion, call a meeting of Trust Preferred Security Holders to vote on any
matters as to which the Trust Preferred Security Holders are entitled to vote.
(b) Holders of at least a Majority in Liquidation Preference of the
Outstanding Trust Preferred Securities, present in person or by proxy, shall
constitute a quorum at any meeting of Securityholders.
(c) If a quorum is present at a meeting, an affirmative vote of the Holders
of at least a Majority in Liquidation Preference of the Outstanding Trust
Preferred Securities
39
present, either in person or by proxy, at such meeting shall constitute the
action of the Securityholders, unless this Trust Agreement requires a greater
number of affirmative votes.
SECTION 6.04. Voting Rights.
A Securityholder shall be entitled to one vote for each Trust Security in
respect of any matter as to which such Securityholder is entitled to vote.
SECTION 6.05. Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of the Property Trustee, proxies may be solicited in
the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When Trust
Securities are held jointly by several Persons, any one of them may vote at any
meeting in person or by proxy in respect of such Trust Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust Securities. A
proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.
SECTION 6.06. Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be taken
without prior notice and a meeting if Holders of the proportion of the
Outstanding Trust Preferred Securities required to approve such action shall
consent to the action in writing. Prompt notice of the taking of any action by
written consent shall be provided to the Holders who did not consent to the
taking of such action.
SECTION 6.07. Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or who are entitled to vote by written
consent, or for the purpose of any other action, the Administrative Trustees may
from time to time fix as a record date for the determination of the identity of
the Securityholders for such purposes, (i) in the case of a meeting, a date not
more than 90 days prior to the date of the meeting of
40
Securityholders, or (ii) in the case of a written consent, a date that shall not
precede the date upon which the action fixing the record date is adopted by the
Administrative Trustees and which date shall not be more than 10 days after the
date upon which the action fixing the record date is adopted by the
Administrative Trustees.
SECTION 6.08. Acts of Securityholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Securityholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders in
person or by an agent duly appointed in writing; and, except as otherwise
expressly provided herein, such action shall become effective when such
instrument or instruments are delivered to the Administrative Trustees. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 7.02) conclusive, if
made in the manner provided in this Section 6.08.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him/her the execution thereof. Where such execution
is by a signer acting in a capacity other than his/her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his/her
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems sufficient.
(c) The ownership of Trust Preferred Securities shall be proved by the
Securities Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
41
(e) Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Preference of such Trust
Security or by one or more duly appointed agents, each of which may do so
pursuant to such appointment with regard to all or any part of such Liquidation
Preference.
(f) If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article 6, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
SECTION 6.09. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE 7. THE TRUSTEES
SECTION 7.01. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as provided by
this Trust Agreement and, in the case of the Property Trustee, also by the Trust
Indenture Act. The Property Trustee, other than during the occurrence and
continuance of an Event of Default, undertakes to perform only such duties as
are specifically set forth in this Trust Agreement and, upon an Event of
Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his/her own affairs. The Trustees shall
have all the privileges, rights and immunities provided by the Delaware Business
Trust Act. Notwithstanding the foregoing, no provision of this Trust Agreement
shall require the Trustees to expend or risk their own funds or otherwise incur
any financial liability in the performance of any of their duties hereunder, or
in the exercise of any of their rights or powers, if they shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Trust Agreement relating to the
conduct or affecting the liability of or affording protection to the Trustees
shall be subject to the
42
provisions of this Section 7.01. No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any employee
or agent of the Trust or its Affiliates for any loss, damage or claim incurred
by reason of any act or omission performed or omitted by such Indemnified Person
in good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Trust Agreement or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's gross negligence (but, in the case of the Property
Trustee, nothing in this Trust Agreement shall be construed to release the
Property Trustee from liability for its own negligent action or its own
negligent failure to act) or willful misconduct with respect to such acts or
omissions. To the extent that, at law or in equity, the Administrative Trustees
have duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to the Securityholders, the Administrative Trustees shall not be liable
to the Trust or to any Securityholder for the Administrative Trustees's good
faith reliance on the provisions of this Trust Agreement. The provisions of this
Trust Agreement, to the extent that they restrict the duties and liabilities of
the Administrative Trustees otherwise existing at law or in equity, are agreed
by the Depositor and the Securityholders to replace such other duties and
liabilities of the Administrative Trustees.
(b) All payments made by the Property Trustee or any other Paying Agent in
respect of the Trust Securities shall be made only from the income and proceeds
from the Trust Property. Each Securityholder, by its acceptance of a Trust
Security, agrees that (i) it will look solely to the income and proceeds from
the Trust Property to the extent available for distribution to it as herein
provided and (ii) the Trustees are not personally liable to it for any amount
distributable in respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 7.01(b) does not limit the
liability of the Trustees expressly set forth elsewhere in this Trust Agreement
or, in the case of the Property Trustee, in the Trust Indenture Act.
SECTION 7.02. Notice of Defaults; Direct Action by Securityholders.
Within 90 days after the occurrence of any Event of Default actually known
to the Property Trustee, the Property Trustee shall transmit, in the manner and
to the extent provided in Section 10.07, notice of such Event of Default to the
Securityholders, the Administrative Trustees and the Depositor, unless such
Event of Default shall have been cured
43
or waived. If the Property Trustee has failed to enforce its rights under this
Trust Agreement or the Indentures, any Securityholder may to the fullest extent
permitted by law and subject to the terms of this Trust Agreement and the
Indentures institute a legal proceeding directly against any Person to enforce
the Property Trustee's rights under this Trust Agreement or the applicable
Indenture with respect to Debentures having a principal amount equal to the
aggregate Liquidation Preference of the Trust Preferred Securities of such
Securityholder without first instituting a legal proceeding against the Property
Trustee or any other Person. To the extent that any action under the applicable
Indenture is entitled to be taken by the holders of at least a specified
percentage of the principal amount of the outstanding Debentures, Holders of at
least the same percentage of the Liquidation Preference of the Outstanding Trust
Preferred Securities may, to the fullest extent permitted by law, also take
such action in the name of the Trust if such action has not been taken by the
Property Trustee. Notwithstanding the foregoing, if a Debenture Event of Default
(i) relating to the Depositor's failure to pay the principal of or interest on
the HECO Debentures has occurred and is continuing thereby resulting in an Event
of Default hereunder, then each Holder of Trust Preferred Securities may
institute a legal proceeding directly against the Depositor for enforcement of
payment to such Holder of interest on or principal of the HECO Debentures equal
to the aggregate Liquidation Preference of the Trust Preferred Securities of
such Holder, as provided in Section 6.07 of the HECO Junior Indenture and (ii)
relating to the failure by MECO or HELCO, as the case may be, to pay the
principal of or interest on the MECO Debentures or HELCO Debentures, as the case
may be (and the related failure of HECO to perform its obligations as guarantor
under the MECO Indenture or the HELCO Indenture, as the case may be), has
occurred and is continuing thereby resulting in an Event of Default hereunder,
then each Holder of the Trust Preferred Securities may institute a legal
proceeding directly against MECO or HELCO, as the case may be, and against HECO
as guarantor, for enforcement of payment to such Holder of the interest on or
principal of the MECO Debentures or the HELCO Debentures, as the case may be,
equal to the aggregate Liquidation Preference of the Trust Preferred Securities
of such Holder, as provided in Section 6.07 and Article 11 of each of the MECO
Indenture or the HELCO Indenture, as the case may be.
SECTION 7.03. Certain Rights of Property Trustee.
Subject to the provisions of Section 7.01:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any
44
resolution, Opinion of Counsel, certificate, written representation of a Holder
or transferee, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) if, other than during the occurrence and continuance of an Event of
Default, (i) in performing its duties under this Trust Agreement, the Property
Trustee is required to decide between alternative courses of action or (ii) in
construing any of the provisions in this Trust Agreement, the Property Trustee
finds the same ambiguous or inconsistent with any other provisions contained
herein or (iii) the Property Trustee is unsure of the application of any
provision of this Trust Agreement, then, except as to any matter as to which the
Trust Preferred Security Holders are entitled to vote under the terms of this
Trust Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken. The Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if the
-------- -------
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than five Business Days), it may, but shall be under no duty to,
take or refrain from taking such action not inconsistent with this Trust
Agreement as it shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee shall have no liability
except for its own negligent action, its own negligent failure to act or its own
willful misconduct;
(c) the Property Trustee may consult with counsel or other experts of its
selection and the advice or opinion of such counsel or other experts with
respect to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(d) the Property Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses
45
and liabilities which might be incurred by it in compliance with such request or
direction;
(e) the Property Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper
or document, but the Property Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit; and
(f) the Property Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through its agents or
attorneys and the Property Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder.
SECTION 7.04. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Company or the Subsidiaries of the proceeds of
the Debentures.
SECTION 7.05. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 7.08 and 7.13 and, except as provided in the
definition of the term "Outstanding" in Article 1, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 7.06. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to the Trustees from time to time such compensation as shall
have been agreed in writing with the Depositor for all services rendered by them
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable
46
expenses, disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
own grossly negligent action, its own grossly negligent failure to act or its
own willful misconduct (or, in the case of the Property Trustee, any such
expense, disbursement or advance as may be attributable to its own negligent
action, its own negligent failure to act or its own willful misconduct); and
(c) to the fullest extent permitted by applicable law, to indemnify and
hold harmless each Indemnified Person from and against any loss, damage or claim
incurred by such Indemnified Person by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by the Trust Agreement, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions. To the fullest extent
permitted by applicable law, the Trust shall advance, from time to time,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by the Trust of an
undertaking by or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled to be
indemnified for the underlying cause of action as authorized by this Trust
Agreement. No Trustee may claim any Lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 7.06. The provisions of this
Section 7.06 shall survive the termination of this Trust Agreement.
(d) When the Property Trustee incurs expenses or renders services in
connection with a Debenture Event of Default relating to certain bankruptcy
events, 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.
SECTION 7.07. Certain Trustees Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder. The Property
Trustee shall be a Person that is
47
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be two or more Administrative Trustees
hereunder. Each Administrative Trustee shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee. The Delaware Trustee
shall either be (i) a natural person who is at least 21 years of age and a
resident of the State of Delaware or (ii) a legal entity with its principal
place of business in the State of Delaware and that otherwise meets the
requirements of applicable Delaware law that shall act through one or more
persons authorized to bind such entity.
SECTION 7.08. Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.
SECTION 7.09. Co-Trustees and Separate Trustee.
(a) Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Administrative
Trustees shall have the power (i) to appoint, and upon the written request of
the Administrative Trustees the Depositor shall for such purpose join with the
Administrative Trustees in the execution, delivery, and performance of all
instruments and agreements necessary or proper to appoint, one or more Persons
approved by the Property Trustee either to act as co-trustee, jointly with the
Property Trustee, of all or any part of such Trust
48
Property, or to the extent required by law to act as separate trustee of any
such Trust Property, in either case with such powers as may be provided in the
instrument of appointment, and (ii) to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section 7.09(a). If the
Depositor does not join in such appointment within 15 days after the receipt by
it of a request so to do, or in case a Debenture Event of Default has occurred
and is continuing, the Property Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall either be (i) a natural person who is at least 21 years of age and
a resident of the United States or (ii) a legal entity with its principal place
of business in the United States that shall act through one or more persons
authorized to bind such entity.
(b) Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and delivered
by the Depositor.
(c) Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to each of the following
terms:
(1) The Trust Securities shall be executed and delivered and all
rights, powers, duties, and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be
exercised solely by such Trustees and not by such co-trustee or separate
trustee.
(2) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such co-
trustee or separate trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the extent that
under any law of any jurisdiction in which any particular act is to be
performed, the Property Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee.
49
(3) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept
the resignation of or remove any co-trustee or separate trustee appointed
under this Section 7.09, and, in case a Debenture Event of Default has
occurred and is continuing, the Property Trustee shall have power to accept
the resignation of, or remove, any such co-trustee or separate trustee
without the concurrence of the Depositor. Upon the written request of the
Property Trustee, the Depositor shall join with the Property Trustee in the
execution, delivery, and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section 7.09.
(4) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee, or any
other trustee hereunder.
(5) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(6) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 7.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of any Trustee and no appointment of a
successor Trustee pursuant to this Article 7 shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 7.11.
(b) Subject to the immediately preceding paragraph, any Trustee may resign
at any time with respect to the Trust Securities by giving written notice
thereof to the Securityholders.
(c) Unless an Event of Default shall have occurred and be continuing, any
Trustee may be removed at any time by Act of the Holder of the Trust Common
Securities. If an Event of Default shall have occurred and be continuing, the
Property Trustee or the Delaware Trustee, or both of them, may be removed at
such time only by Act of the Holders of at least a Majority in Liquidation
Preference of the Outstanding Trust Preferred Securities, delivered to such
Trustee (in its
50
individual capacity and on behalf of the Trust). The Administrative Trustees may
only be removed by the Holder of Trust Common Securities at any time.
(d) If the instrument of acceptance by the successor Trustee required by
Section 7.11 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation or removal, the Trustee may petition,
at the expense of the Depositor, any court of competent jurisdiction for the
appointment of a successor Trustee.
(e) If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Event of Default shall have occurred and be continuing,
the Holder of Trust Common Securities, by Act of the Holder of Trust Common
Securities delivered to the retiring Trustee, shall promptly appoint a successor
Trustee or Trustees and the Trust and the retiring Trustee shall comply with the
applicable requirements of Section 7.11. If the Property Trustee or the
Delaware Trustee shall resign, be removed or become incapable of continuing to
act as the Property Trustee or the Delaware Trustee, as the case may be, at a
time when an Event of Default has occurred and is continuing, the Holders of
Trust Preferred Securities, by Act of the Securityholders of at least a Majority
in Liquidation Preference of the Outstanding Trust Preferred Securities
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees, and such successor Trustee shall comply with the applicable
requirements of Section 7.11. If any Administrative Trustee shall resign, be
removed or become incapable of acting as an Administrative Trustee at a time
when an Event of Default shall have occurred and be continuing, the Holder of
Trust Common Securities shall appoint a successor Administrative Trustee. If no
successor Trustee shall have been so appointed by the Holder of Trust Common
Securities or the Holders of Trust Preferred Securities and accepted appointment
in the manner required by Section 7.11, any Securityholder who has been a
Securityholder of Trust Securities for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.07 and shall give notice to
the Depositor. Each notice shall include the name of the successor Trustee and
the address of its Corporate Trust Office if it is the Property Trustee.
51
(g) Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or Delaware Trustee who is a
natural person dies or becomes, in the opinion of the Depositor, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by (i) the unanimous act of the remaining Administrative Trustees if
there are at least two of them or (ii) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirements
for an Administrative Trustee or for the Delaware Trustee, as the case may be,
set forth in Section 7.07).
SECTION 7.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee, the
retiring Trustee and each successor Trustee shall execute and deliver to the
Trust and the retiring Trustee an amendment hereto wherein each successor
Trustee shall accept such appointment and which (i) 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 and (ii) shall add to or change any of the provisions of this
Trust Agreement 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 amendment shall constitute such
Trustees as co-trustees of the same trust and 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 upon the execution
and delivery of such amendment the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein 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
and the Trust; but, on request of the Trust or any successor Trustee, such
retiring Trustee shall, upon payment of its charges, duly assign, transfer and
deliver to such successor Trustee all Trust Property, all proceeds thereof and
money held by such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Trust shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.
(c) 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.
52
SECTION 7.12. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which any of the Trustees that is not a natural person may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Trustee
shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of such Trustee, shall be the successor of such Trustee
hereunder, provided such Person shall be otherwise qualified and eligible under
this Article 7, without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
SECTION 7.13. Preferential Collection of Claims Against Depositor or Trust.
If and when the Property Trustee or the Delaware Trustee shall be or become
a creditor (whether directly or indirectly, secured or unsecured) of the
Depositor or the Trust (or any other obligor upon the Debentures or the Trust
Securities), including under the terms of Section 7.05 hereof, the Property
Trustee or the Delaware Trustee, as the case may be, shall be subject to and
shall take all actions necessary in order to comply with the provisions of the
Trust Indenture Act regarding the collection of claims against the Depositor or
Trust (or any such other obligor).
SECTION 7.14. Reports by Property Trustee.
(a) The Property Trustee shall transmit to Holders such reports concerning
the Property Trustee and its actions under this Trust Agreement as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. If required by Section 313(a) of the Trust Indenture
Act, the Property Trustee shall, within 60 days after each May 31 following the
date of this Trust Agreement deliver to Holders a brief report, dated as of such
May 31, which complies with the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with each stock exchange upon which
any Trust Preferred Securities are then listed, with the Commission and with the
Trust. The Trust will promptly notify the Property Trustee when any Trust
Preferred Securities are listed on any stock exchange.
SECTION 7.15. Reports to the Property Trustee.
The Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents,
53
reports and information as required by Section 314 of the Trust Indenture Act
(if any) and the compliance certificate required by Section 314(a) of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act. Delivery of such reports, information and
documents to the Property Trustee is for informational purposes only and the
Property Trustee's receipt of such shall not constitute constructive notice of
any information contained therein, including the Depositor's or the Trust's
compliance with any of its covenants hereunder (as to which the Property Trustee
is entitled to rely exclusively on Officer's Certificates).
SECTION 7.16. Evidence of Compliance with Conditions Precedent.
The Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee evidence of compliance with the conditions
precedent, if any, provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act.
SECTION 7.17. Statements Required in Officer's Certificate and Opinion of
Counsel.
Each Officer's Certificate and Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Trust Agreement
shall include:
(a) a statement that each Person making such Officer's Certificate
or Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officer's Certificate or Opinion of Counsel are based;
(c) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to enable
such Person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement that, in the opinion of such Person, such covenant
or condition has been complied with; provided, however, that with respect
to matters of fact not involving any legal conclusion, an Opinion of
Counsel may rely on an Officer's Certificate or certificates of public
officials.
54
SECTION 7.18. Number of Administrative Trustees.
(a) The initial number of Administrative Trustees shall be three, provided
that the Holder of all of the Trust Common Securities by written instrument may,
subject to the requirements of Section 7.07(b), increase and/or decrease the
number of Administrative Trustees.
(b) If an Administrative Trustee ceases to hold office for any reason and
the number of Administrative Trustees is not reduced pursuant to Section
7.18(a), or if the number of Administrative Trustees is increased pursuant to
Section 7.18(a), a vacancy shall occur. The vacancy shall be filled with an
Administrative Trustee appointed in accordance with Section 7.10.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence
or incapacity to perform the duties of an Administrative Trustee shall not
operate to annul, dissolve or terminate the Trust. Whenever a vacancy shall
occur, until such vacancy is filled by the appointment of an Administrative
Trustee in accordance with Section 7.10, the Administrative Trustee in office,
regardless of their number (and notwithstanding any other provision of this
Trust Agreement), shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Trust Agreement.
SECTION 7.19. Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any natural person over the age of 21 his/her power
for the purpose of executing any documents contemplated in Section 2.07(a),
including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing.
(b) The Administrative Trustees shall have power to delegate from time to
time to such of their number, if there is more than one Administrative Trustee,
or to the Depositor the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Administrative
Trustees or otherwise as the Administrative Trustees may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.
SECTION 7.20. Voting.
Except as otherwise provided in this Trust Agreement, the consent or vote
of the Administrative Trustees shall be approved by not less than a majority of
the Administrative Trustees.
55
ARTICLE 8. DISSOLUTION AND LIQUIDATION
SECTION 8.01. Dissolution Upon Expiration Date.
Unless earlier dissolved, the Trust shall automatically dissolve on
December 31, 2050 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 8.04.
SECTION 8.02. Early Dissolution.
The earliest to occur of any of the following events is an "Early
Dissolution Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) upon the occurrence and during the continuation of a Special
Event, the delivery or written direction to the Property Trustee by the
Depositor (which direction is wholly optional and within the discretion of
the Depositor) to dissolve the Trust and cause the distribution of a Like
Amount of Distributable Debentures to the Securityholders in exchange for
the Trust Preferred Securities in accordance with Section 8.04;
(c) the redemption of all of the Trust Securities; and
(d) an order for dissolution or liquidation of the Trust shall have
been entered by a court of competent jurisdiction.
SECTION 8.03. Termination of Obligations.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (i) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 8.04, or upon the
redemption of all of the Trust Securities pursuant to Section 4.02, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (ii) the payment of any expenses owed by the Trust; and (iii) the
discharge of all administrative duties of the Administrative Trustees, including
the performance of any tax reporting obligations with respect to the Trust or
the Securityholders.
56
SECTION 8.04. Dissolution and Liquidation.
(a) If an Early Dissolution Event specified in clause (a), (b) or (d) of
Section 8.02 occurs or upon the Expiration Date, the Trust shall be liquidated
by the Administrative Trustees and the Property Trustee as expeditiously as
they determine to be possible by distributing, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, to each Securityholder
a Like Amount of Distributable Debentures, subject to Sections 2.05(b) and
8.04(d). Notice of liquidation shall be given by the Property Trustee by first-
class mail, postage prepaid, mailed not later than 30 nor more than 60 days
prior to the Liquidation Date to each Holder of Trust Securities at such
Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(1) state the Liquidation Date;
(2) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent the right to receive a Like Amount of Distributable Debentures,
as the case may be; and
(3) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for certificates
evidencing Distributable Debentures, or, if Section 8.04(d) applies,
receive a Liquidation Distribution, as the Administrative Trustees or the
Property Trustee shall deem appropriate.
(b) In order to effect the liquidation of the Trust and distribution of the
Distributable Debentures to Securityholders, the Property Trustee shall
establish a record date for such distribution (which shall be one Business Day
prior to the Liquidation Date; provided, however, that in the event that the
Trust Preferred Securities are not in book-entry-only form, such record date
shall be the date that is 15 days prior to the Liquidation Date) and either
itself acting as exchange agent or through the appointment of a separate
exchange agent, shall establish such procedures as it shall deem appropriate to
effect the distribution of such Debentures in exchange for the Outstanding Trust
Securities Certificates.
(c) Except where Section 8.02(c) or 8.02(d) applies, on or after the
Liquidation Date (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of the Distributable
Debentures will be issued to Holders of Trust Securities Certificates, upon
surrender of such certificates to the Administrative Trustees or their agent for
exchange, (iii) the Depositor shall use its
57
best efforts to have the Distributable Debentures listed on the New York Stock
Exchange or such other exchange as the Trust Preferred Securities are then
listed and shall take any reasonable action necessary to effect the distribution
of such Distributable Debentures, (iv) any Trust Securities Certificates not so
surrendered for exchange will be deemed to represent a Like Amount of
Distributable Debentures, accruing interest at the rate provided for in the
Distributable Debentures from the last Distribution Date on which a Distribution
was made on such Trust Certificates until such certificates are so surrendered
(and until such certificates are so surrendered, no payments or interest or
principal will be made to Holders of Trust Securities Certificates with respect
to such Distributable Debentures) and (v) all rights of Securityholders holding
Trust Securities will cease, except the right of such Securityholders to receive
Distributable Debentures upon surrender of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this Section
8.04, whether because of the occurrence of a Bankruptcy Event in respect of the
Depositor, an order for termination entered by a court of competent jurisdiction
or otherwise, distribution of the Distributable Debentures in the manner
provided herein is determined by the Property Trustee not to be practicable, the
Trust Property shall be liquidated, and the Trust shall be terminated, by the
Property Trustee in such manner as the Property Trustee determines. In such
event, on the date of the dissolution of the Trust, Securityholders will be
entitled to receive out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to $25 per Trust Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If, upon any such termination, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Trust on the Trust Securities shall be paid on a pro rata basis (based
upon Liquidation Preferences). The Holder of the Trust Common Securities will be
entitled to receive Liquidation Distributions upon any such termination pro rata
(determined as aforesaid) with Holders of Trust Preferred Securities, except
that, if a Debenture Event of Default has occurred and is continuing, the Trust
Preferred Securities shall have a priority over the Trust Common Securities, and
no Liquidation Distribution will be paid to the Holders of the Trust Common
Securities unless and until receipt by all Holders of the Trust Preferred
Securities of the entire Liquidation Distribution payable in respect thereof.
58
ARTICLE 9. MERGERS, ETC.
SECTION 9.01. Mergers, Consolidations, Conversions, Amalgamations or
Replacements of the Trust.
The Trust may not merge with or into, consolidate, convert, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any Person, except as described
below or as described in this Article 9. The Trust may, at the request of the
Depositor, with the consent of the Administrative Trustees and without the
consent of the Holders of the Trust Preferred Securities, merge with or into,
consolidate, convert, amalgamate, be replaced by or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to a
trust organized as such under the laws of any state; provided, that (i) such
successor entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Trust Preferred Securities or (b) substitutes for the
Trust Preferred Securities other securities having substantially the same terms
as the Trust Preferred Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Trust Preferred Securities rank with
respect to the payment of Distributions and payments upon liquidation,
redemption and otherwise, (ii) the Depositor expressly appoints a trustee of
such successor entity possessing the same powers and duties as the Property
Trustee as the holder of the Debentures, (iii) the Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or other organization on which the
Trust Preferred Securities are then listed, if any, (iv) such merger,
consolidation, conversion, amalgamation, replacement, conveyance, transfer or
lease does not cause the Trust Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Trust Preferred Securities
(including any Successor Securities) in any material respect, (vi) such
successor entity has a purpose substantially similar to that of the Trust, (vii)
prior to such merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease, the Depositor has received an Opinion of Counsel
to the effect that (a) such merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Trust Preferred Securities
(including any Successor Securities) in any material respect, and (b) following
such merger, consolidation, conversion, amalgamation, replacement, conveyance
transfer or lease, neither the Trust nor such successor entity will be required
to register as an investment
59
company under the 1940 Act and (viii) the Depositor or any permitted successor
or assignee owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Trust Guarantee and this Trust
Agreement. Notwithstanding the foregoing, the Trust shall not, except with the
consent of all Holders of the Trust Preferred Securities, merge with or into,
consolidate, convert, amalgamate, be replaced by or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to, any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, conversion, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Trust or the
successor entity to be classified as other than a grantor trust for United
States federal income tax purposes.
ARTICLE 10. MISCELLANEOUS PROVISIONS
SECTION 10.01. Limitation of Rights of Securityholders.
The death, incapacity, dissolution, termination, liquidation or bankruptcy
of any Person having an interest, beneficial or otherwise, in Trust Securities
shall not operate to annul, dissolve or terminate the Trust or this Trust
Agreement, nor entitle the legal representatives or heirs of such Person or any
Securityholder for such Person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
SECTION 10.02. Amendment.
(a) This Trust Agreement may be amended from time to time by the
Administrative Trustees and the Depositor, without the consent of any
Securityholders, (i) to cure any ambiguity, to correct or supplement any
provisions in this Trust Agreement that may be inconsistent with any other
provision, or to include any other provisions with respect to matters or
questions arising under this Trust Agreement that shall not be inconsistent with
the other provisions of this Trust Agreement, or (ii) to modify, eliminate or
add to any provisions of this Trust Agreement to such extent as shall be
necessary to ensure that the Trust will be classified for United States federal
income tax purposes as a grantor trust at all times that any Trust Preferred
Securities and Trust Common Securities are Outstanding, to ensure that the
Debentures will be treated as indebtedness of the Companies or to ensure that
the Trust will not be required to register as an investment company under the
1940 Act; provided, however, that in the case of clause (i) above, such action
shall not
60
adversely affect in any respect the interests of any Holder of Trust Preferred
Securities or Trust Common Securities. Any amendments of this Trust Agreement
pursuant to this Section 10.02(a) shall become effective when notice thereof is
given to the Securityholders.
(b) Except as provided in Section 10.02(a) and 10.02(c) hereof, any
provision of this Trust Agreement may be amended by the Trustees and the
Depositor with the consent of Holders of at least a Majority in Liquidation
Preference of the Outstanding Trust Preferred Securities.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder, this Trust
Agreement may not be amended to (i) change the amount, timing or currency of any
Distribution or Liquidation Distribution on the Trust Securities or otherwise
adversely affect the method of payment of any Distribution or Liquidation
Distribution required to be made in respect of the Trust Securities as of a
specified date; (ii) change the redemption provisions of the Trust Securities;
(iii) restrict the right of a Securityholder to institute suit for the
enforcement of any such payment contemplated in (i) or (ii) above on or after
the related payment date; (iv) modify the first sentence of Section 2.06 hereof;
(v) authorize or issue any beneficial interest in the Trust other than as
contemplated by this Trust Agreement as of the date hereof; (vi) change the
conditions precedent for the Depositor to elect to dissolve the Trust and
distribute the Distributable Debentures to Holders of Trust Preferred Securities
as set forth in Section 8.02; or (vii) affect the limited liability of any
Holder of Trust Preferred Securities, and, notwithstanding any other provision
herein, without the unanimous consent of the Securityholders, paragraphs (b) and
(c) of this Section 10.02 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
amendment to this Trust Agreement shall be made without receipt by the Trust of
an Opinion of Counsel experienced in such matters to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendments will not affect the Trust's status as a grantor trust for
United States federal income tax purposes or its exemption from regulation as an
"investment company" under the 1940 Act.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust
61
Agreement is made, the Administrative Trustees shall promptly provide to the
Depositor a copy of such amendment.
(g) In executing any amendment to the Trust Agreement, the Property Trustee
shall be entitled to receive, and (subject to Section 7.01) shall be fully
protected in relying upon, an Officer's Certificate and Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this
Trust Agreement. Except as contemplated by Section 7.11, any Trustee may, but
shall not be obligated to, enter into any amendment to this Trust Agreement
which affects the Trustee's own rights, duties or immunities under this Trust
Agreement or otherwise.
SECTION 10.03. Severability.
In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 10.04. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.
SECTION 10.05. Successors and Assigns.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Trust or successor Trustee or both, including any
successor by operation of law. Except in connection with a consolidation,
merger, conversion or sale involving the Depositor that is permitted under
Article 5 of the HECO Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
SECTION 10.06. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.07. Reports, Notices and Demands.
(a) Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or
62
permitted to be given or served to or upon any Securityholder or the Depositor
may be given or served in writing by deposit thereof, first-class postage
prepaid in the United States mail, hand delivery or facsimile transmission, in
each case, addressed, (i) in the case of a Holder of a Trust Preferred Security,
to such Holder of a Trust Preferred Security as such Securityholder's name and
address may appear on the Securities Register; and (ii) in the case of the
Holder of a Common Security or the Depositor, to Hawaiian Electric Company,
Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer,
facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇. Such notice, demand or other communication to or
upon a Securityholder shall be deemed to have been sufficiently given or made,
for all purposes, upon hand delivery, mailing or transmission.
(b) Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the Trust) as follows:
(i) with respect to the Property Trustee to The Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Trustee
Administration; (ii) with respect to the Delaware Trustee, to The Bank of New
York (Delaware), ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Department; and (iii) with respect to the
Administrative Trustees, to the address above for notices to the Depositor,
marked "Attention: Administrative Trustees of HECO Capital Trust II c/o
Treasurer." Such notice, demand or other communication to or upon the Trust or
the Property Trustee shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Trust or the Property Trustee.
SECTION 10.08. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been dissolved in accordance with Article 8, they shall not file, or join in the
filing of, a petition against the Trust under any Bankruptcy Laws or otherwise
join in the commencement of any proceeding against the Trust under any
Bankruptcy Law. In the event the Depositor or any of the Trustees takes action
in violation of this Section 10.08, the Property Trustee agrees, for the benefit
of Securityholders, that at the expense of the Depositor, it shall file an
answer with the bankruptcy court or otherwise properly contest the filing of
such petition by the Depositor or any of the Trustees, as applicable, against
the Trust or the commencement of such action and raise the defense that the
Depositor has agreed in writing not to take such action and should be stopped
and precluded therefrom and such other
63
defenses, if any, as counsel for the Property Trustee or the Trust may assert.
The provisions of this Section 10.08 shall survive the dissolution of this Trust
Agreement.
SECTION 10.09. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so modified
or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 10.10. Acceptance of Terms of Trust Agreement, Guarantees and
Indentures.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE TRUST
GUARANTEE, THE INDENTURES AND THE SUBSIDIARY GUARANTEES, AND SHALL CONSTITUTE
THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS
AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE
AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
IN WITNESS WHEREOF, the parties have caused this Trust Agreement to be duly
executed, all as of the day and year first
64
above written.
HAWAIIAN ELECTRIC COMPANY, INC., as Depositor
By: /s/ ▇▇▇▇ ▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇
Financial Vice President
and Treasurer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Assistant Treasurer
THE BANK OF NEW YORK, as Property Trustee
By: /s/ ▇.▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ W.N. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
T. ▇▇▇▇▇▇▇ ▇▇▇,
as Administrative Trustee
/s/ T. ▇▇▇▇▇▇▇ ▇▇▇
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇,
as Administrative Trustee
/s/ ▇▇▇▇ ▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
as Administrative Trustee
/s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
------------------------------------------
65