Exhibit 1
---------
$300,000,000
HAWAIIAN ELECTRIC INDUSTRIES, INC.
Medium-Term Notes, Series D
DISTRIBUTION AGREEMENT
----------------------
_______________ ____, 2002
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
4 World Financial Center
▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇/▇▇/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Hawaiian Electric Industries, Inc., a Hawaii corporation (the
"Company"), proposes to issue and sell from time to time its Medium-Term Notes,
Series D (the "Securities") in an aggregate amount of up to $300,000,000 and
confirms its agreement with each of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, ▇▇▇▇▇▇▇, Sachs & Co., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
1
LLC and U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. (individually, an "Agent" and,
collectively, together with any others who are subsequently appointed as agents
pursuant to Section 2(d) hereof, the "Agents") with respect to such issuance and
sale as set forth in this Agreement.
Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Securities directly on its own
behalf as provided in Section 2(b) hereof and to appoint additional Agents as
provided in Section 2(d) hereof, the Company hereby agrees that Securities shall
be sold exclusively to or through the Agents. This Agreement provides for both
the sale of Securities by the Company to the Agents as principal for resale to
investors and other purchasers and for the sale of Securities by the Company
directly to investors (as may from time to time be agreed to by the Company and
the Agents), in which case the Agents shall act as agents of the Company in
soliciting offers for the purchase of Securities, subject to the Company's right
to solicit, sell and accept offers to purchase Securities directly on its own
behalf as provided in Section 2(b) hereof. The Agents shall not have any
obligation to purchase Securities from the Company as principal. Any such
purchase of Securities as principal shall be made in accordance with Section
2(a) hereof.
The Securities shall be issued under an indenture, dated as of October
15, 1988, between the Company and Citibank, N.A., as trustee (the "Trustee"), as
previously supplemented, and as to be further supplemented by a Third
Supplemental Indenture dated as of ___________ ____, 2002 (such indenture, as so
supplemented, being hereinafter referred to as the "Indenture"). The Securities
shall have the maturity dates (between nine months and thirty years from date of
issue), interest rates, if any, redemption and repayment provisions and other
terms as set forth in the Prospectus referred to below as it may be amended or
supplemented from time to time. The Securities shall be issued, and the terms
and rights thereof established, from time to time by the Company in accordance
with the Indenture.
1. The Company represents and warrants to, and agrees with, each Agent
that as of the date hereof, as of the date of each acceptance by the Company of
an offer for the purchase of Securities (whether to such Agent as principal or
through such Agent as agent), as of the date of each delivery of Securities
(whether to such Agent as principal or through such Agent as agent) (the date of
each such delivery to such Agent as principal is referred to herein as a "Time
of Delivery"), and as of any time that the Registration Statement (as
hereinafter defined) or the Prospectus (as hereinafter defined) shall be amended
or supplemented (each of the times referenced above is referred to herein as a
"Representation Date"), except as may be disclosed in the Prospectus (including
any documents incorporated by reference therein and any supplements thereto) or
otherwise in writing by the Company to the Agents on or before a Representation
Date:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3
(Registration No. 333-[ ]), which registration statement, as amended, has
been declared effective by the Commission for the registration of
$300,000,000 aggregate principal amount of Securities under the Securities
Act of 1933, as amended (the "Act"), and the offering thereof from time to
time pursuant to Rule 415 promulgated by the Commission under the Act. Such
registration statement and the prospectus constituting a part of such
registration statement, and any pricing supplement relating to a particular
issuance of the Securities
2
(each, a "Pricing Supplement"), including all documents incorporated or
deemed to be incorporated therein by reference pursuant to Item 12 of Form
S-3 under the Act, in each case, as from time to time amended or
supplemented, are referred to herein as the "Registration Statement" and
the "Prospectus," respectively, except that if any revised prospectus is
provided to the Agents by the Company for use in connection with the
offering of the Securities that is not required to be filed by the Company
pursuant to Rule 424(b) promulgated by the Commission under the Act, the
term "Prospectus" shall refer to such revised prospectus from and after the
time it is first provided to an Agent for such use. As used in this
Agreement, the terms "amendment" or "supplement" when applied to the
Registration Statement or the Prospectus shall be deemed to include the
filing by the Company with the Commission of any document under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the
date hereof that is or is deemed to be incorporated therein by reference.
(b) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, at the time
they were or hereafter are filed with the Commission under the Exchange
Act, conformed and will conform in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of such documents contained or
will contain at such time an untrue statement of a material fact or omitted
or will omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(c) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission. The Registration
Statement, as of the Effective Date, conformed or will conform in all
material respects to the requirements of the Act and the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission promulgated thereunder and, as of the
Effective Date, does not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
Prospectus, as of its original issue date, as of the date of any filing of
a Pricing Supplement thereto pursuant to Rule 424(b) promulgated by the
Commission under the Act and as of the date of any other amendment or
supplement thereto (each, an "Issue Date"), conforms or will conform in all
material respects to the requirements of the Act and the Trust Indenture
Act and the rules and regulations of the Commission promulgated thereunder
and, as of such respective dates, does not and will not contain an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this representation
-------- -------
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Company by any Agent expressly for use in the Prospectus (it being
agreed that, for purposes of this subsection (c) and Section 7 hereof, the
only information so furnished by any Agent as of the date hereof consists
of the sixth, seventh and eighth paragraphs under "Plan of Distribution"
therein). As used herein, with respect to the Registration Statement, the
term "Effective Date" means, as of a specified time, the later of (i) the
date that the Registration Statement or the most recent post-effective
3
amendment thereto was or is declared effective by the Commission under the
Act and (ii) the date that the Company's Annual Report on Form 10-K for its
most recently completed fiscal year is filed with the Commission under the
Exchange Act.
(d) Otherwise than as set forth in or contemplated by the
Registration Statement and the Prospectus, neither the Company nor any
Subsidiaries (as hereinafter defined) has sustained since the date of the
most recent audited financial statements incorporated by reference in the
Registration Statement and the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, which loss or interference would have a material
adverse effect on the consolidated financial condition or consolidated
results of operations of the Company and Subsidiaries taken as a whole;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change in
the capital stock of the Company or any Significant Subsidiary (as
hereinafter defined) (except for (i) issuances of capital stock of the
Company pursuant to dividend reinvestment, stock purchase, stock option,
director or employee benefit plans, (ii) issuances of capital stock by
Hawaiian Electric Company, Inc. ("HECO") or its subsidiaries that have been
approved by the Public Utilities Commission of the State of Hawaii or by
any other Significant Subsidiary as disclosed in writing to the Agents and
(iii) redemptions by HECO, Hawaii Electric Light Company, Inc. ("HELCO")
and Maui Electric Company, Limited ("MECO") of their respective preferred
stock in accordance with the terms thereof), or any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the general affairs, management, consolidated financial
position, or consolidated results of operations of the Company and the
Subsidiaries taken as a whole, otherwise than as set forth in or
contemplated by the Registration Statement and the Prospectus.
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Hawaii, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement and the
Prospectus; the Company does not itself conduct any business or own or
lease any property in any jurisdiction outside the State of Hawaii that
would require it to qualify to do business as a foreign corporation and
where the failure to be so qualified would subject the Company to any
material liability or disability. Each Significant Subsidiary of the
Company, other than American Savings Bank, F.S.B. ("ASB"), has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. As used in this
Agreement, the term "Subsidiary" means each corporation, at least a
majority of the outstanding voting stock of which is owned by the Company,
by one or more Subsidiaries or by the Company and one or more Subsidiaries.
Except for the Significant Subsidiaries and ASB Realty Corporation, no
Subsidiary constitutes a "significant subsidiary" within the meaning of
Rule 1-02(w) of Regulation S-X. Except as described in the Registration
Statement and the Prospectus, there is no development relating to, or in
connection with, the business of any Subsidiary (other than a Significant
Subsidiary) that would reasonably be expected to have a material adverse
effect on the consolidated financial
4
condition or consolidated results of operations of the Company and the
Subsidiaries taken as a whole.
(f) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and, other than
awards of restricted stock under the Company's 1987 Stock Option and
Incentive Plan (the "Stock Option Plan") that have not yet vested, are
fully paid and non-assessable; none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company; all of the issued
shares of capital stock of each Significant Subsidiary have been duly and
validly authorized and issued and are fully paid and non-assessable; and
all of such shares, other than shares of common stock of ASB Realty
Corporation and other than shares of preferred stock (including the
outstanding preferred stock of HECO and its subsidiaries) are owned
directly or indirectly by the Company, free and clear of any liens,
encumbrances or security interests, except as described in the Registration
Statement and the Prospectus.
(g) The Indenture has been duly authorized, executed and
delivered by the Company and qualified under the Trust Indenture Act and
constitutes a valid and binding instrument of the Company enforceable
against the Company in accordance with its terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of creditors' rights and by general equitable
principles (regardless of whether considered in a proceeding in equity or
at law); the Securities have been duly authorized by the Company for
issuance, offer and sale pursuant to this Agreement and, when duly
executed, authenticated, issued and delivered pursuant to the provisions of
this Agreement and the Indenture against payment of the consideration
therefor, the Securities will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance
with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights and by general equitable principles
(regardless of whether considered in a proceeding in equity or at law); the
Securities and the Indenture will conform in all material respects to all
statements relating thereto contained in the Registration Statement and the
Prospectus; and the Securities will be entitled to the benefits provided by
the Indenture.
(h) The issuance and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the Indenture,
this Agreement, and the consummation of the transactions contemplated
herein and therein do not and will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, or result in the imposition of a lien or security interest under,
any material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any Significant Subsidiary
is a party or by which the Company or any Significant Subsidiary is bound
or to which any of the property or assets used in the conduct of the
business of the Company or any Significant Subsidiary is subject, nor will
such action result in any violation of the provisions of the articles of
incorporation or the by-laws of the Company or any Significant Subsidiary
or any statute or any order, rule or regulation of any court or
governmental agency or body having
5
jurisdiction over the Company or any Significant Subsidiary or any of their
properties; and no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture or in connection with the
issuance and sale of the Securities hereunder, except such as have been, or
will have been prior to the Commencement Date (as defined in Section 3
hereof), obtained under the Act, the Trust Indenture Act or otherwise and
such consents, approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or blue sky laws,
as the case may be.
(i) Other than as set forth in or contemplated by the
Registration Statement and the Prospectus, there are no legal or
governmental proceedings pending or, to the knowledge of the Company,
threatened to which the Company or any Subsidiary is a party or to which
any property of the Company or any Subsidiary is the subject that is
reasonably expected to have a material adverse effect on the consolidated
financial condition or consolidated results of operations of the Company
and the Subsidiaries taken as a whole.
(j) Immediately after any sale of Securities by the Company
hereunder, the aggregate amount of Securities that has been issued and sold
by the Company hereunder will not exceed the aggregate principal amount of
Securities registered under the Registration Statement (in this regard, the
Company acknowledges and agrees that the Agents shall have no
responsibility for maintaining records with respect to the aggregate
principal amount of Securities sold, or of otherwise monitoring the
availability of Securities for sale, under the Registration Statement).
(k) ASB has been duly formed and is validly existing as a federal
savings bank duly chartered and in good standing under the laws of the
United States; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there have not been
any increases in total non-accruing loans or the provision for loan losses
of ASB and its subsidiaries, which increase or increases, individually or
in the aggregate, would have a material adverse effect on the consolidated
financial condition or consolidated results of operations of the Company
and the Subsidiaries taken as a whole.
(l) The Company and each of HECO, HELCO, MECO, and (to the extent
they are Subsidiaries of the Company at any time relevant hereunder), HEI
Diversified Inc. and ASB (each, a "Significant Subsidiary") and their
respective subsidiaries have all requisite power and authority, and possess
all necessary authorizations, approvals, orders, licenses, franchises,
certificates and permits of and from, and to the extent required by law are
duly registered with, all governmental and regulatory officials,
commissions, departments and bodies in, and are in compliance with all
applicable laws, rules and regulations of or under, each jurisdiction in
which any of them owns properties or assets or conducts any business as
described in the Registration Statement and the Prospectus, where the
failure to possess such authorization, approval, order, license, franchise,
certificate or permit, or where the failure so to register or so to comply,
would have a material adverse effect on the consolidated financial
condition or consolidated results of
6
operations of the Company and the Subsidiaries taken as a whole; each such
authorization, approval, order, license, franchise, certificate and permit
is valid and in full force and effect, and there is no proceeding pending
or, to the Company's knowledge, threatened that may lead to the revocation,
termination, suspension or non-renewal of any such authorization, approval,
order, license, franchise, certificate or permit; the Company and the
Significant Subsidiaries have taken appropriate action to maintain in
effect or renew each such authorization, approval, order, license,
franchise, certificate or permit; the Company and the Significant
Subsidiaries own, or possess adequate rights to use, all patents,
trademarks, service marks and rights necessary for or material to the
conduct of their respective business as described in the Registration
Statement and the Prospectus; and the Company and the Significant
Subsidiaries possess adequate easements, rights-of-way and other rights to
use of land not owned by the Company and the Significant Subsidiaries, with
such exceptions and defects as are described in the Registration Statement
and the Prospectus or as do not materially interfere with the use made of
such land by the Company and the Significant Subsidiaries or as do not have
a material adverse effect on the consolidated financial condition or
consolidated results of operations of the Company and the Subsidiaries
taken as a whole.
(m) The Company and HECO are holding companies within the meaning
of the Public Utility Holding Company Act of 1935, as amended; however, by
virtue of having filed an appropriate application under the provisions of
Section 3(a) of such Act, the Company and HECO are exempt from all of the
provisions of such Act, except Section 9(a)(2) thereof, and will remain so
exempt, subject to future timely filing of annual exemption statements and
such filings as are required by Section 33 of such Act with respect to
interests of the Company or any of the Subsidiaries in any foreign utility
company, unless and except insofar as the Commission finds such exemption
detrimental to the public interest or the interest of investors or
consumers.
(n) Neither the Company nor HEI Investments, Inc. ("HEIII") is an
"investment company", nor is either, nor upon issuance of the Securities
will either become, "controlled" by an "investment company", in each case
within the meaning of the Investment Company Act of 1940, as amended (the
"1940 Act").
(o) This Agreement has been duly authorized, executed and
delivered by the Company.
(p) The accountants who have audited the consolidated financial
statements of the Company and the Subsidiaries that are incorporated by
reference in the Registration Statement and the Prospectus are independent
certified public accountants as required by the Act and the rules and
regulations of the Commission promulgated thereunder.
(q) The Medium-Term Note Program under which the Securities are
issued (the "Program") is rated Baa2 by ▇▇▇▇▇'▇ Investors Service, Inc.,
BBB by Standard & Poor's Ratings Service or such other rating as to which
the Company has most recently notified the Agents pursuant to Section 4(a)
hereof.
7
Any certificate signed by any officer of the Company and delivered to
one or more Agents or to counsel for the Agents in connection with an offering
of Securities to one or more Agents as principal or through an Agent as agent
shall be deemed a representation and warranty by the Company to such Agent or
Agents as to the matters covered thereby on the date of such certificate.
2. (a) If agreed to by an Agent and the Company, Securities shall be
purchased by such Agent as principal. Such purchases shall be made in accordance
with terms agreed upon by such Agent and the Company (which terms, unless
otherwise agreed to, shall, to the extent applicable, include those terms
specified in Annex I hereto and be agreed upon orally, with written confirmation
prepared by such Agent and delivered to the Company). Any Agent's commitment to
purchase Securities as principal shall be deemed to have been made on the basis
of the representations and warranties of the Company herein contained and shall
be subject to the terms and conditions herein set forth. Unless the context
otherwise requires, references herein to "this Agreement" shall include the
applicable agreement of one or more Agents to purchase Notes from the Company as
principal. Each purchase of Securities by an Agent as principal, unless
otherwise agreed, shall be at a discount from the principal amount of each such
Security equivalent to the applicable commission set forth in Schedule A hereto.
The Agents may engage the services of any broker or dealer in connection with
the resale of the Securities purchased as principal and may allow all or any
portion of the discount received from the Company in connection with such
purchases to such brokers and dealers. At the time of each purchase of
Securities from the Company by one or more Agents as principal, such Agent or
Agents shall specify the requirements for the Stand-Off Agreement (as defined in
Section 4(f) hereof), officer's certificate, opinions of counsel and comfort
letter pursuant to Sections 4(f), 6(b), 6(c), 6(d) and 6(g) hereof.
If the Company and two or more Agents enter into an agreement pursuant to which
such Agents agree to purchase Securities from the Company as principal,
severally and not jointly as set forth in such agreement, and one or more of
such Agents fails at the Time of Delivery to purchase the Securities that it or
they are obligated to purchase (the "Defaulted Securities"), then the
nondefaulting Agents shall have the right, within 24 hours thereafter, to make
arrangements for one of them or one or more other Agents or underwriters to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; provided, however,
that if such arrangements have not been completed within such 24-hour period,
then:
(i) if the aggregate principal amount of Defaulted Securities does
not exceed 10% of the aggregate principal amount of Securities to be so
purchased by all of such Agents at the Time of Delivery, the nondefaulting
Agents shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective initial
underwriting obligations bear to the underwriting obligations of all
nondefaulting Agents; or
(ii) if the aggregate principal amount of Defaulted Securities exceeds
10% of the aggregate principal amount of Securities to be so purchased by
all of such Agents at the Time of Delivery, such agreement shall terminate
without liability on the part of any nondefaulting Agent.
8
No action taken pursuant to this paragraph shall relieve any defaulting Agent
from liability in respect of its default pursuant to this Section 2(a). In the
event of any such default pursuant to this Section 2(a) that does not result in
a termination of such agreement, each of the nondefaulting Agents and the
Company shall have the right to postpone the Time of Delivery for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or the Prospectus or in any other documents or arrangements.
(b) On the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, when agreed
by the Company and an Agent, such Agent, as agent of the Company, upon receipt
of instructions from the Company, shall use its reasonable efforts to solicit
offers for the purchase of Securities upon the terms set forth in the
Prospectus. Unless otherwise agreed upon by the Company and an Agent, all
Securities sold through such Agent as agent shall be sold at 100% of their
principal amount. The Company reserves the right to sell, and may solicit and
accept offers to purchase, the Securities directly on its own behalf, and, in
the case of any such sale not resulting from a solicitation made by any Agent,
no commission shall be payable with respect to such sale.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities. As soon as practicable, but
in any event not later than one business day in New York City, after receipt of
notice from the Company, the Agents shall suspend solicitation of offers for the
purchase of Securities from the Company until such time as the Company has
advised the Agents that such solicitation may be resumed.
Each Agent, in soliciting offers for the purchase of Securities from
the Company as agent and in performing the other obligations of an Agent
hereunder, is acting solely as agent for the Company and not as principal. Such
Agent will communicate to the Company, orally, each offer for the purchase of
Securities solicited by it on an agency basis other than those offers rejected
by such Agent. Such Agent shall have the right, in its discretion reasonably
exercised, to reject any offer for the purchase of Securities, in whole or in
part, and any such rejection shall not be deemed a breach of its agreement
contained herein. The Company may accept or reject any offer for the purchase of
Securities, in whole or in part. Each Agent shall make reasonable efforts to
assist the Company in obtaining performance by each purchaser whose offer to
purchase Securities from the Company was solicited by it on an agency basis and
has been accepted by the Company, but such Agent shall not have any liability to
the Company in the event such purchase is not consummated for any reason. If the
Company defaults on its obligation to deliver Securities to a purchaser whose
offer has been solicited by such Agent on an agency basis and accepted by the
Company, the Company shall (i) hold each Agent harmless against any loss, claim
or damage arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would otherwise be entitled absent such default.
The Company agrees to pay each Agent a commission (which may be in the
form of a discount), at the time of settlement of any sale of a Security by the
Company as a result of a solicitation made by such Agent, in an amount equal to
the applicable percentage of the principal amount of such Security sold as set
forth in Schedule A hereto.
9
(c) The purchase price, interest rate or formula, maturity date and
other terms of the Securities (as applicable) specified in Annex I hereto shall
be agreed upon by the Company and such Agent and set forth in the applicable
Pricing Supplement to be prepared in connection with each sale of Securities.
Except as may be otherwise provided in the applicable Pricing Supplement, the
Securities shall be issued in denominations of $1,000 or any larger amount that
is an integral multiple of $1,000.
Procedural details relating to the issue and delivery of Securities,
the solicitation of offers for the purchase of Securities and the payment in
each case therefor shall be as set forth in the Administrative Procedures
attached hereto as Annex II as they may be amended from time to time by written
agreement between the Agents and the Company (the "Administrative Procedures").
Each Agent and the Company agree to perform their respective duties and
obligations specifically provided to be performed by them in the Administrative
Procedures. The Company will furnish to the Trustee a copy of the Administrative
Procedures as from time to time in effect.
(d) The Company may appoint additional agents in connection with the
offering and sale of the Securities from time to time or in connection with a
single offering and sale of the Securities, whether as agent or principal,
provided that, in any such case, the Company gives the Agents at least five (5)
days' prior notice of such appointment and any such additional agent enters into
an agreement with the Company making such additional agent an Agent under this
Agreement with respect to such offering and sale of the Securities from time to
time or solely for the purpose of such single offering and sale of the
Securities, as the case may be.
3. The documents required to be delivered pursuant to Section 6 hereof
on the Commencement Date shall be delivered to the Agents at the offices of
Pillsbury Winthrop LLP, in New York, New York at 10:00 a.m., New York time, or
at such other place or time as the parties agree, on the date of this Agreement,
which date and time of such delivery may be postponed by agreement between the
Agents and the Company but in no event shall be later than the day prior to the
date of any agreement by the Agents to purchase Securities, as principal, or on
which solicitation of offers for the purchase of Securities is commenced by the
Agents, as agents (such time and date being referred to herein as the
"Commencement Date").
4. The Company covenants and agrees with each Agent as follows:
(a)(i) To make no amendment or supplement to the Registration
Statement or the Prospectus after the date of an agreement by an Agent to
purchase Securities as principal and prior to the related Time of Delivery
that is reasonably disapproved by any Agent so purchasing as principal
promptly after reasonable notice thereof; (ii) to prepare, with respect to
any Securities to be sold through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Securities in a form
previously approved by such Agent and to file such Pricing Supplement
pursuant to Rule 424(b) promulgated by the Commission under the Act within
the time period required thereby; (iii) to make no amendment or supplement
to the Registration Statement or the Prospectus (other than any Pricing
Supplement and any document filed under the Exchange Act (provided that the
Company furnishes such documents to the Agents at or before the time they
are filed with
10
the Commission and, in the case of Current Reports on Form 8-K, the Company
notifies the Agents (or Agents' counsel) a reasonable time in advance of
filing such documents with the Commission)) at any time prior to having
afforded each Agent a reasonable opportunity to review and comment thereon;
(iv) to file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required under the Act or under the blue sky or
securities laws of any jurisdiction in connection with the offering or sale
of the Securities, and during such same period to advise such Agent,
promptly after the Company receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or has become
effective or any supplement to the Prospectus or any amended Prospectus
(other than any Pricing Supplement that relates to Securities not purchased
through or by such Agent) has been filed with the Commission, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of the Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, of any request by the Commission for the amendment or
supplement of the Registration Statement or the Prospectus or for
additional information or of any change in the rating assigned by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(s)(2) promulgated under
the Act, to the Program or any debt securities (including the Securities)
of the Company, or the public announcement by any such nationally
recognized statistical rating organization that it has under surveillance
or review, with possible negative implications, its rating of the Program
or any such debt securities, or the withdrawal by any such nationally
recognized statistical rating organization of its rating of the Program or
any such debt securities; and (v) in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
such prospectus or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as such Agent may
reasonably request to cooperate with such Agent in the qualification of the
Securities for offering and sale under the blue sky or securities laws of
such jurisdictions within the United States of America and its territories
as such Agent may request and to use its best efforts to comply with such
laws so as to permit the continuance of sales and dealings therein for as
long as may be necessary to complete the distribution or sale of the
Securities; provided, however, that in connection therewith the Company
-------- -------
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement
and each amendment thereto, and with copies of the Prospectus and each
amendment or supplement thereto other than any Pricing Supplement (except
as provided in the Administrative Procedures), in the form in which it is
filed with the Commission pursuant to the Act or Rule 424(b) promulgated by
the Commission under the Act, both in such quantities as such Agent may
reasonably request from time to time; and, if the delivery of a prospectus
is required under the Act or under the blue sky or securities laws of any
jurisdiction at any time in connection with the offering or sale of the
Securities (including
11
Securities purchased from the Company by such Agent as principal) and if at
such time any event has occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it is necessary during such same period to amend or supplement
the Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify such Agent and request
such Agent, in its capacity as agent of the Company, to suspend
solicitations of offers to purchase Securities from the Company (and, if so
notified, such Agent shall cease such solicitations as soon as practicable,
but in any event not later than one business day later); and if the Company
decides to amend or supplement the Registration Statement or the Prospectus
as then amended or supplemented, to advise such Agent promptly by telephone
(with confirmation in writing) and to prepare and cause to be filed
promptly with the Commission an amendment or supplement to the Registration
Statement or the Prospectus as then amended or supplemented that will
correct such statement or omission or effect such compliance; provided,
--------
however, that if during such same period such Agent continues to own
-------
Securities purchased from the Company by such Agent as principal or such
Agent is otherwise required to deliver a prospectus in respect of
transactions in the Securities, the Company shall promptly prepare and file
with the Commission such an amendment or supplement;
(d) To make generally available to holders of the Securities as
soon as practicable, but in any event not later than eighteen months after
the effective date of the registration statement (as defined in Rule 158(c)
promulgated by the Commission under the Act), an earning statement of the
Company and the Subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations of the Commission
promulgated thereunder (including, the option of the Company to file
periodic reports in order to make generally available such earning
statement, to the extent that it is required to file such reports under
Section 13 or Section 15(d) of the Exchange Act, pursuant to Rule 158
promulgated by the Commission under the Act);
(e) So long as any Securities are outstanding, to furnish to such
Agent (in paper or electronic format) copies of all publicly available
reports or other communications (financial or other) furnished generally to
stockholders and filed with the Commission pursuant to the Exchange Act,
and deliver to such Agent (i) promptly after they are available, copies of
any publicly available reports and financial statements furnished to or
filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed; and (ii) such additional
publicly available information concerning the business and financial
condition of the Company as such Agent may from time to time reasonably
request (such financial statements to be on a consolidated basis to the
extent the accounts of the Company and its Subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission);
(f) That, if specified by an Agent in connection with a purchase
as principal, from the date of any agreement by such Agent to purchase
Securities as
12
principal and continuing to and including the earlier of (i) the
termination of the trading restrictions for the Securities purchased
thereunder, as notified to the Company by such Agent and (ii) the related
Time of Delivery, not to offer, sell, contract to sell or otherwise dispose
of any debt securities of the Company that mature more than 9 months after
such Time of Delivery and are substantially similar to the Securities,
without the prior written consent of such Agent (each, a "Stand-Off
Agreement");
(g) That each acceptance by the Company of an offer for the
purchase of Securities and each delivery of Securities (including in each
case any purchase by such Agent as principal) shall be deemed to be (i) an
affirmation to such Agent that the representations and warranties of the
Company contained in or made pursuant to this Agreement are true and
correct as of the date of such acceptance or of such delivery, as the case
may be, as though made at and as of each such date, except as may be
disclosed in the Prospectus (including any documents incorporated by
reference therein and any supplements thereto) or otherwise in writing by
the Company to the Agents on or before said date of acceptance or date of
delivery, as the case may be, and (ii) an undertaking that the Company will
advise such Agent if any of such representations and warranties will not be
true and correct as of the settlement date for the Securities relating to
such acceptance or as of the date of such delivery relating to such sale,
as the case may be, as though made at and as of each such date (except that
such representations and warranties shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented
relating to such Securities);
(h) That reasonably in advance of each time that any of the
Registration Statement or the Prospectus is amended or supplemented (other
than by a Pricing Supplement or, unless reasonably requested by the Agents
within 30 days of the filing thereof with the Commission, a Current Report
on Form 8-K), including by means of an Annual Report on Form 10-K or a
Quarterly Report on Form 10-Q filed with the Commission under the Exchange
Act and incorporated or deemed to be incorporated by reference into the
Prospectus, except in either case during periods in which the Company has
suspended solicitation of offers pursuant to Section 2(b) hereof (it being
understood that the Company may not resume such solicitation until this
provision is complied with) or except as an Agent otherwise elects, and
each time the Company sells Securities to such Agent as principal pursuant
to an agreement to purchase Securities as principal and such agreement
specifies the delivery of an opinion or opinions by Pillsbury Winthrop LLP
(or other counsel selected by the Agents), counsel to the Agents, as a
condition to the purchase of Securities pursuant to such agreement, the
Company shall as soon as practicable thereafter furnish to such counsel
such papers and information as they may reasonably request to enable them
to furnish to such Agent the opinion or opinions referred to in Section
6(b) hereof;
(i) That each time the Registration Statement or the Prospectus
is amended or supplemented (other than by a Pricing Supplement or, unless
reasonably requested by the Agents within 30 days of the filing thereof
with the Commission, a Current Report on Form 8-K), including by means of
an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q filed with
the Commission under the Exchange Act and incorporated or deemed to be
incorporated by reference into the Prospectus, except in
13
either case during periods in which the Company has suspended solicitation
of offers pursuant to Section 2(b) hereof (it being understood that the
Company may not resume such solicitation until this provision is complied
with) or except as an Agent otherwise elects, and each time the Company
sells Securities to such Agent as principal pursuant to an agreement to
purchase Securities as principal and such agreement specifies the delivery
of an opinion under this Section 4(i) as a condition to the purchase of
Securities pursuant to such agreement, the Company shall as soon as
practicable thereafter furnish or cause to be furnished forthwith to such
Agent a written opinion of Goodsill ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP (or other
counsel satisfactory to the Agents), counsel for the Company, dated the
date of such amendment, supplement, incorporation or Time of Delivery
relating to such sale, as the case may be, in form reasonably satisfactory
to such Agent, to the effect that such Agent may rely on the opinion of
such counsel referred to in Section 6(c) hereof that was last furnished to
such Agent to the same extent as though it were dated the date of such
letter authorizing reliance (except that the statements in such last
opinion shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in lieu of such
opinion, an opinion of the same tenor as the opinion of such counsel
referred to in Section 6(c) hereof but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date;
(j) That each time the Registration Statement or the Prospectus
is amended or supplemented, including by means of an Annual Report on Form
10-K, a Quarterly Report on Form 10-Q or a Current Report on Form 8-K filed
with the Commission under the Exchange Act and incorporated or deemed to be
incorporated by reference into the Prospectus, in any case to set forth
financial information included in or derived from the Company's
consolidated financial statements or accounting records, except in either
case during periods in which the Company has suspended solicitation of
offers pursuant to Section 2(b) hereof (it being understood that the
Company may not resume such solicitation until this provision is complied
with) or except as an Agent otherwise elects (or, in the case of a Current
Report on Form 8-K, if the Agent reasonably requests within 30 days of the
filing thereof), and each time the Company sells Securities to such Agent
as principal pursuant to an agreement to purchase Securities as principal
and such agreement specifies the delivery of a letter under this Section
4(j) as a condition to the purchase of Securities pursuant to such
agreement, the Company shall as soon as practicable thereafter cause the
independent certified public accountants who have audited the financial
statements of the Company and the Subsidiaries included or incorporated by
reference in the Registration Statement forthwith to furnish to such Agent
a letter, dated the date of such amendment, supplement, incorporation or
Time of Delivery relating to such sale, as the case may be, in form
reasonably satisfactory to such Agent, of the same tenor as the letter
referred to in Section 6(d) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented to the
date of such letter, with such changes as may be necessary to reflect
changes in the financial statements and other information derived from the
accounting records of the Company, to the extent such financial statements
and other information are available as of a date not more than five
business days prior to the date of such letter; provided, however, that,
-------- -------
with respect to any financial information or other matter, such letter may
reconfirm as true and correct at such date as though made at and as of such
date, rather
14
than repeat, statements with respect to such financial information or other
matters made in the letter referred to in Section 6(d) hereof that was last
furnished to such Agent;
(k) That each time the Registration Statement or the Prospectus
is amended or supplemented (other than by a Pricing Supplement or, unless
reasonably requested by the Agents within 30 days of the filing thereof
with the Commission, a Current Report on Form 8-K), including by means of
an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q filed with
the Commission under the Exchange Act and incorporated or deemed to be
incorporated by reference into the Prospectus, except in either case during
periods in which the Company has suspended solicitation of offers pursuant
to Section 2(b) hereof (it being understood that the Company may not resume
such solicitation until this provision is complied with) or except as an
Agent otherwise elects, and each time the Company sells Securities to such
Agent as principal and the applicable agreement to purchase Securities as
principal specifies the delivery of a certificate under this Section 4(k)
as a condition to the purchase of Securities pursuant to such agreement,
the Company shall as soon as practicable thereafter furnish or cause to be
furnished forthwith to such Agent a certificate, dated the date of such
supplement, amendment, incorporation or Time of Delivery relating to such
sale, as the case may be, in such form and executed by such officers of the
Company as is reasonably satisfactory to such Agent, to the effect that the
statements contained in the certificate referred to in Section 6(g) hereof
that was last furnished to such Agent are true and correct at such date as
though made at and as of such date (except that such statements shall be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date) or, in lieu of such certificate,
certificates of the same tenor as the certificates referred to in said
Section 6(g) but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date; and
(l) To offer to any person who has agreed to purchase Securities
as the result of an offer to purchase solicited by such Agent the right to
refuse to purchase and pay for such Securities if, on the related
settlement date fixed pursuant to the Administrative Procedures, any
condition set forth in Section 6(a), 6(e) or 6(f) hereof has not been
satisfied (it being understood that the judgment of such person with
respect to the impracticability or inadvisability of such purchase of
Securities shall be substituted, for purposes of this Section 4(l), for the
respective judgments referred to therein of an Agent with respect to
certain matters referred to in such Sections 6(a), 6(e) and 6(f), and that
such Agent shall have no duty or obligation whatsoever to exercise the
judgment permitted under such Sections 6(a), 6(e) and 6(f) on behalf of any
such person).
5. The Company covenants and agrees with each Agent that the Company
shall pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
preparation, printing and filing of the Registration Statement, the Prospectus
and any Pricing Supplements and all other amendments and supplements thereto and
the mailing and delivering of copies thereof to such Agent; (ii) the reasonable
fees, disbursements and expenses of counsel for the Agents in connection with
the establishment of the Program, any opinions to be rendered by such counsel
hereunder and ongoing services in connection with the transactions contemplated
hereunder including advice and services in connection with purchases by the
Agents or any Agent pursuant to Section 2(a)
15
hereof; (iii) the cost of printing, preparing by word processor or reproducing
this Agreement, any other agreement to purchase Securities as principal, the
Indenture, any blue sky survey and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iv) all expenses (not
to exceed an aggregate of $3,500 for all sales hereunder) in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 4(b) hereof, including the fees and disbursements of
counsel for the Agents in connection with such qualification and in connection
with the blue sky survey; (v) any fees charged by securities rating services for
rating the Securities; (vi) any filing fees incident to any required review by
the National Association of Securities Dealers, Inc. of the terms of the sale of
the Securities; (vii) the cost of preparing the Securities; (viii) the fees and
expenses of any Trustee and any agent of a Trustee and any transfer or paying
agent of the Company and the fees and disbursements of counsel for any Trustee
or such agent in connection with the Indenture and the Securities; (ix) any
advertising expenses connected with the solicitation of offers to purchase and
the sale of Securities so long as such advertising expenses have been approved
in advance by the Company; (x) the Agents' reasonable out-of-pocket expenses
incurred in connection with the transactions contemplated hereunder; (xi) the
cost of providing any CUSIP or other identification numbers for the Securities;
(xii) the fees and expenses of any depositary and any nominees thereof in
connection with the Securities; and (xiii) all other costs and expenses incident
to the performance of the Company's obligations hereunder that are not otherwise
specifically provided for in this Section. Except as provided in this Section 5
and in Sections 7 and 2(b) hereof, each Agent shall pay all other expenses it
incurs.
6. The obligation of any Agent, as agent of the Company, at any time
(each, a "Solicitation Time") to solicit offers to purchase Securities and the
obligation of any Agent to purchase Securities as principal, pursuant to any
agreement, shall in each case be subject, in such Agent's discretion, to the
condition that all representations and warranties and other statements of the
Company herein are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the Prospectus
as amended and supplemented (including the Pricing Supplement) with respect
to such Securities shall have been filed with the Commission pursuant to
Rule 424(b) promulgated by the Commission under the Act within the
applicable time period prescribed for such filing by the rules and
regulations promulgated by the Commission under the Act and in accordance
with Section 4(a) hereof; (ii) no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
(iii) all requests for additional information on the part of the Commission
shall have been complied with to the reasonable satisfaction of such Agent;
(b) Pillsbury Winthrop LLP, counsel to the Agents, or other
counsel selected by the Agents and reasonably satisfactory to the Company,
shall have furnished
16
to such Agent (i) such opinion or opinions, dated the Commencement Date,
with respect to this Agreement, the validity of the Indenture and the
Securities, the Registration Statement, the Prospectus as amended or
supplemented, and other related matters as such Agent may reasonably
request, and (ii) if and to the extent requested by such Agent, with
respect to each applicable date referred to in Section 4(h) hereof that is
on or prior to such Solicitation Time or Time of Delivery, as the case may
be, but excluding dates in periods in which the Company has suspended
solicitation of offers pursuant to Section 2(b) hereof, an opinion or
opinions, dated such applicable date, to the effect that such Agent may
rely on the opinion or opinions that were last furnished to such Agent
pursuant to this Section 6(b) to the same extent as though it or they were
dated the date of such letter authorizing reliance (except that the
statements in such last opinion or opinions shall be deemed to relate to
the Registration Statement and the Prospectus as amended and supplemented
to such date) or, in any case, in lieu of such an opinion or opinions, an
opinion or opinions of the same tenor as the opinion or opinions referred
to in clause (i) but modified to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date; and in each case
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Goodsill ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for the
Company, or other counsel selected by the Company and reasonably
satisfactory to the Agents, shall have furnished to such Agent their
written opinions, dated the Commencement Date and each applicable date
referred to in Section 4(i) hereof that is on or prior to such Solicitation
Time or Time of Delivery, as the case may be, but excluding dates in
periods in which the Company has suspended solicitation of offers pursuant
to Section 2(b) hereof, in form and substance satisfactory to such Agent,
to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Hawaii, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus as amended or
supplemented;
(ii) the Company has an authorized equity capitalization as
set forth in the Prospectus as amended or supplemented and all of the
issued and outstanding shares of capital stock of the Company have
been duly and validly authorized and issued and, other than awards of
restricted stock under the Stock Option Plan that have not yet vested,
are fully paid and non-assessable;
(iii) to such counsel's knowledge, the Company does not
itself conduct any business or own or lease any property in any
jurisdiction outside the State of Hawaii that would require it to
qualify to do business as a foreign corporation and where the failure
to be so qualified would subject the Company to any material liability
or disability;
(iv) each Significant Subsidiary, other than ASB, has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation; ASB has
been duly formed and is
17
duly chartered as a federal savings bank under the laws of the United
States; all of the issued and outstanding shares of capital stock of
each Significant Subsidiary have been duly and validly authorized and
issued and are fully paid and non-assessable; and, to such counsel's
knowledge, all of such shares, other than shares of preferred stock of
HECO and its subsidiaries and shares of the common stock of ASB Realty
Corporation, are owned directly or indirectly by the Company, free and
clear of any perfected encumbrance or security interest or any other
encumbrance, claim or equity, and with such exceptions as are
described in the Prospectus as amended or supplemented or as are
otherwise disclosed to the Agents;
(v) the Company and HECO are holding companies within the
meaning of the Public Utility Holding Company Act of 1935, as amended;
however, by virtue of having filed an appropriate application under
the provisions of Section 3(a) of such Act, the Company and HECO are
exempt from all of the provisions of such Act except Section 9(a)(2)
thereof, and will remain so exempt, subject to the future timely
filings of annual exemption statements and such filings as are
required by Section 33 of such Act with respect to interests of the
Company or the Subsidiaries in any foreign utility company, unless and
except insofar as the Commission finds such exemption detrimental to
the public interest or the interest of investors or consumers;
(vi) except as indicated in the Prospectus as amended or
supplemented, to such counsel's knowledge, (a) neither the Company nor
any Significant Subsidiary is engaged in, or threatened with, any
litigation, and (b) there are no proceedings, or any proceedings
threatened, with respect to the Company or any Significant Subsidiary
or their property, that, in the case of either clause (a) or (b)
above, such counsel (or other counsel as to litigation or proceedings
that are not principally handled by their firm) has concluded is
reasonably expected to have a material adverse effect on the Company
and the Subsidiaries taken as a whole (it being understood that, for
purposes of this paragraph, "material" shall mean having a financial
effect on the Company in excess of $15,000,000);
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the Securities have been duly authorized by the
Company for issuance, offer and sale pursuant to the provisions of
this Agreement and, when duly executed, authenticated, issued and
delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor, will
constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting
enforcement of mortgagees' and other creditors' rights, by general
equitable principles (regardless of whether considered in a proceeding
in equity or at law) and by an implied covenant of reasonableness,
18
good faith and fair dealing and will be entitled to the benefits
provided by the Indenture; and the Indenture and the Securities
conform in all material respects to the descriptions thereof in the
Prospectus as amended or supplemented;
(ix) the Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution
and delivery by the Trustee, constitutes a valid and legally binding
instrument of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other
similar laws affecting enforcement of creditors' rights, by general
equitable principles (regardless of whether considered in a proceeding
in equity or at law) and by an implied covenant of reasonableness,
good faith and fair dealing; and the Indenture has been duly qualified
under the Trust Indenture Act;
(x) the issuance and sale of the Securities, the
compliance by the Company with all of the provisions of the
Securities, the Indenture, this Agreement and the consummation of the
transactions contemplated herein and therein will not conflict with or
result in a breach of any of the terms or provisions of, or constitute
a default under, any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which the Company or any Significant Subsidiary is a party or by which
the Company or any Significant Subsidiary is bound or to which any of
the material property or assets of the Company or any Significant
Subsidiary is subject, nor will such action result in any violation of
the provisions of the charter or the by-laws of the Company or any
statute, order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over the Company or
any Significant Subsidiary or any of their properties, except that
such counsel need not express an opinion with respect to compliance
with state securities or blue sky laws in connection with the
solicitation by the Agents of offers for the purchase of Securities
from the Company, with any resulting purchases of Securities and with
any purchases of Securities by an Agent as principal, as the case may
be, in each case in the manner contemplated hereby;
(xi) no consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body is required for the solicitation of offers to purchase
Securities, the issuance and sale of the Securities or the
consummation by the Company of the other transactions contemplated by
this Agreement or the Indenture, except such as have been obtained or
made under the Act and the Trust Indenture Act or otherwise and such
consent, approvals, authorizations, registrations, or qualifications
as may be required under state securities or blue sky laws in
connection with the solicitation by the Agents of offers for the
purchase of Securities from the Company, with any resulting purchases
of Securities and with any purchases of Securities by an Agent as
principal, as the case may be, in each case in the manner contemplated
hereby;
19
(xii) neither the Company nor HEIII is an "investment
company", nor is either "controlled" by an "investment company", in
each case within the meaning of the 1940 Act;
(xiii) the documents incorporated by reference in the
Prospectus as amended or supplemented, when they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act, and the rules and regulations of the
Commission promulgated thereunder; and nothing has come to the
attention of such counsel that causes them to believe that any of such
documents, when they were so filed, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when the documents were so filed, not
misleading; and
(xiv) the Registration Statement, as of the Effective Date,
and the Prospectus, as of its Issue Date, complied and comply as to
form in all material respects with the requirements of the Act and the
Trust Indenture Act and the rules and regulations of the Commission
promulgated thereunder; to such counsel's knowledge, the Registration
Statement has been declared, and as of the date of such opinion is,
effective under the Act and no proceedings for a stop order with
respect thereto are threatened or pending under Section 8 of the Act;
nothing has come to the attention of such counsel that causes them to
believe that the Registration Statement, as of the Effective Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that, as of its Issue Date and
as of the date of such opinion, the Prospectus (as most recently
amended and supplemented), contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and they do not know of any contracts or
other documents of a character required to be filed as an exhibit to
the Registration Statement or required to be incorporated by reference
into the Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus as amended
or supplemented that are not filed or incorporated by reference or
described as required.
In rendering such opinion, (A) such counsel may state that it is
expressing an opinion only as to the federal laws of the United States, the
laws of the State of Hawaii and the laws of the State of New York, (B) such
counsel may rely, as to matters involving the application of the laws of
the State of New York, upon the opinion or opinions of counsel for the
Agents, (C) such counsel may rely, as to matters of good standing and valid
existence and as to matters of fact, upon certificates of government
officials (provided that copies of such certificates will be furnished to
counsel for the Agents), (D) such counsel may rely, as to matters of fact,
upon certificates and representations of officers and employees of the
Company (provided that copies of such certificates will be furnished to
counsel for the Agents upon its reasonable request), (E) such counsel may
rely, with respect to matters involving litigation or proceedings not
principally handled by such counsel's firm, upon
20
opinions and information upon which such counsel has been permitted to rely
by other counsel representing the Company in such litigation or proceedings
(provided that copies of such opinions are delivered to counsel for the
Agents, other than opinions of counsel who do not consent to such delivery
if, in such case, the Company makes such counsel reasonably available to
discuss such litigation or proceedings with counsel for the Agents), (F)
such counsel may state that it has not been requested to, and does not,
express any opinion with respect to the financial statements and notes
thereto and the schedules and other financial data and information included
or incorporated by reference in the Registration Statement and the
Prospectus, (G) such counsel may state, with respect to the matters set
forth in paragraphs (xiii) and (xiv) above, that they have not
independently verified and assume no responsibility for the accuracy,
completeness or fairness of the statements in the Registration Statement or
the Prospectus or in any document incorporated by reference therein, except
insofar as such statements relate to such counsel or as set forth in
paragraph (viii) above, (H) such counsel may state that, whenever such
opinion is qualified by the phrases "known to such counsel," "to our
knowledge" or "nothing has come to our attention," or other phrases of
similar import, such phrases are intended to mean the actual knowledge of
information by the lawyers in such counsel's firm who have been principally
involved in drafting the Prospectus and supervising the issuance, sale and
delivery of the Securities and preparing the pertinent documents and the
lawyers having significant responsibility for the client relationship with
the Company and general transaction representation, but does not include
other information that might be revealed if there were to be undertaken a
canvass of all lawyers in such counsel's firm, a general search of all
files or any other type of independent investigation (other than, with
respect to the matters set forth in paragraph (vi) above, such review of
internal litigation files or inquiries of other counsel as such counsel
deems necessary), and (I) such counsel may include therein such other
customary qualifications reasonably acceptable to the Agents and counsel
for the Agents;
(d) Not later than 10:00 A.M., New York City time, on the
Commencement Date, and not later than 10:00 A.M., New York City time, on
each applicable date referred to in Section 4(j) hereof that is on or prior
to such Solicitation Time or Time of Delivery, as the case may be, but
excluding dates in periods during which the Company has suspended
solicitation of offers pursuant to Section 2(b) hereof, the independent
certified public accountants who have audited the financial statements of
the Company and the Subsidiaries included or incorporated by reference in
the Registration Statement shall have furnished to such Agent a letter,
dated the Commencement Date or such applicable date, as the case may be, in
form and substance satisfactory to such Agent, to the effect set forth in
Annex III hereto;
(e) (i) Neither the Company nor any Subsidiary shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus as amended or supplemented any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented and (ii) since the respective dates
as of which information is given in the Prospectus as amended or
supplemented or since the date of any agreement of any Agent to purchase
Securities as principal there shall not have been
21
any change in the capital stock of the Company or any Subsidiary (except
for (i) issuances of capital stock of the Company pursuant to dividend
reinvestment, stock purchase, stock option, director or employee benefit
plans, (ii) issuances of capital stock by HECO or its subsidiaries that
have been approved by the Public Utilities Commission of the State of
Hawaii or by any other Significant Subsidiary disclosed in writing to the
Agents and (iii) redemptions by HECO, HELCO and MECO of their respective
preferred stock in accordance with the terms thereof), or any change, or
any development involving a prospective change, in or affecting the general
affairs, management, consolidated financial position or consolidated
results of operations of the Company and the Subsidiaries taken as a whole,
the effect of which, in any such case described in clause (i) or (ii), is
in the judgment of such Agent so material and adverse as to make it
impracticable or inadvisable to proceed with the solicitation by such Agent
of offers for the purchase of Securities from the Company or the purchase
by such Agent of such Securities from the Company as principal, as the case
may be;
(f) There shall not have occurred (and be continuing in the case
of occurrences under clause (i) and (ii) below) any of the following: (i)
if trading in any securities of the Company has been suspended or
materially limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or
by such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States; (ii) a general moratorium on
commercial banking activities in New York or Hawaii declared by either
federal or New York or Hawaii State authorities; (iii) after an Agent has
agreed to purchase Securities from the Company as principal, any material
adverse change in the financial markets in the United States or in the
international financial markets, any outbreak or escalation of hostilities
or other calamity or crisis involving the United States or the declaration
by the United States of a national emergency or war or any change or
development involving a prospective change in national or international
political, financial or economic conditions, if the effect of any such
event specified in this clause (iii) in the judgment of such Agent makes it
impracticable or inadvisable to proceed with the purchase of such
Securities from the Company as principal; or (iv) after an Agent has agreed
to purchase Securities from the Company as principal, any downgrading in
the rating accorded the Program or the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) promulgated under
the Act, or any public announcement by any such organization that it has
under surveillance or review, with possible negative implications, its
rating of the Program or any of the Company's debt securities; and
(g) The Company shall have furnished or caused to be furnished
to such Agent certificates of officers of the Company dated the
Commencement Date and each applicable date referred to in Section 4(k)
hereof that is on or prior to such Solicitation Time or Time of Delivery,
as the case may be, but excluding dates in periods during which the Company
has suspended solicitation of offers pursuant to Section 2(b)
22
hereof, in such form and executed by such officers of the Company as are
reasonably satisfactory to such Agent, as to the accuracy of the
representations and warranties of the Company herein at and as of the
Commencement Date or such applicable date, as the case may be, as to the
performance by the Company of all of its obligations hereunder to be
performed at or prior to the Commencement Date or such applicable date, as
the case may be, as to the matters set forth in subsection (a) of this
Section 6, and as to such other matters as such Agent may reasonably
request.
7. (a) The Company shall indemnify and hold harmless each Agent and
each person, if any, who controls each Agent within the meaning of Section 15 of
the Act and Section 20 of the Exchange Act against any losses, claims, damages
or liabilities, joint or several, to which such Agent or such person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and to the
extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, provided that
(subject to Section 7(d) hereof) any such settlement is effected with the
written consent of the Company, and shall reimburse such Agent or such person
for any legal or other expenses reasonably incurred by it in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
-------- -------
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein; and provided, further, that the Company shall not be
-------- -------
required to reimburse any Agent or such person for fees and expenses of counsel
other than one counsel for all Agents and one counsel for all Agents in each
jurisdiction in which proceedings are or are threatened to be brought or of
which matters of law are or may be at issue, unless and to the extent that there
are actual or potential conflicts of interest between or among Agents or
defenses available to one or more Agents that are not available to other Agents;
and provided, further, that the indemnification contained in this Section 7(a)
-------- -------
with respect to the Prospectus shall not inure to the benefit of any Agent (or
to the benefit of any person controlling such Agent) on account of any such
loss, claim, damage, liability or expense arising from the sale of the
Securities, or arrangement thereof, by such Agent to any person if the Company
has established that a copy of the most recent Prospectus (excluding documents
incorporated by reference) has not been delivered or sent to such person within
the time required by the Act and the rules and regulations of the Commission
promulgated thereunder, provided that the Company has delivered such Prospectus
to such Agent in requisite quantity on a timely basis to permit such delivery or
sending.
(b) Each Agent shall indemnify and hold harmless the Company, each
of the directors and each of the officers of the Company who signed the
Registration Statement, and each
23
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which the Company, such directors, such
officers or such persons may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and to the extent of the aggregate amount paid in settlement of any litigation,
or any investigation or proceeding by any governmental agency or body, commenced
or threatened, or of any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, provided that
(subject to Section 7(d) hereof) any such settlement is effected with the
written consent of such Agent, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein; and shall reimburse the Company, such directors, such
officers or such persons for any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under Section 7(a)
or (b) hereof of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under Section 7(a) or (b) hereof, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability that it may have to
any indemnified party unless and only to the extent that such indemnifying party
is prejudiced by such omission nor relieve it from any liability that it may
have to any indemnified party otherwise than under Section 7(a) or (b) hereof.
In case any such action is brought against any indemnified party and such
indemnified party notifies the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under Section 7(a) or (b) hereof for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 7 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf
24
of any indemnified party.
(d) If at any time an indemnified party has requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 7(a) or Section 7(b) hereof, as the case may be,
effected without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party has received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party has not reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each Agent on the
other from the offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under Section
7(c) above and such indemnifying party was prejudiced by such omission, then
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
each Agent on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and each Agent on the other
shall be deemed to be in the same proportion as the total net proceeds from the
sale of Securities (before deducting expenses) received by the Company bear to
the total commissions or discounts received by such Agent in respect thereof.
The relative fault shall be determined by reference to, among other things,
whether the untrue statement of a material fact or the omission or alleged
omission to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading relates to information
supplied by the Company on the one hand or by any Agent on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and each Agent agree
that it would not be just and equitable if contribution pursuant to this Section
7(e) were determined by per capita allocation (even if all Agents were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to above in this
Section 7(e). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this Section 7(e) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(e), an Agent shall not be required to contribute
any amount in excess of the amount by which the total public offering price at
which the Securities purchased by or through it were sold exceeds the amount of
any damages that such Agent has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged
25
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations of each
of the Agents under this Section 7(e) to contribute are several in proportion to
the respective purchases made by or through it to which such loss, claim, damage
or liability (or action in respect thereof) relates and are not joint. The
obligations of the Company and the Agents under this Section 7 shall be in
addition to any liability that the Company and the Agents may otherwise have.
For purposes of this Section 7(e), each person, if any, who controls an Agent
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
shall have the same rights to contribution as such agent, and each director of
the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company.
8. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and the Company set forth in or
made pursuant to this Agreement shall remain in full force and effect regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Agent or any controlling person of any Agent or the Company, or
any officer or director or any controlling person of the Company, and shall
survive each delivery of and payment for any of the Securities.
9. The provisions of the Agreement relating to the solicitation of
offers for the purchase of Securities from the Company may be suspended or
terminated at any time by the Company as to any Agent or by any Agent as to such
Agent upon the giving of written notice of such suspension or termination to
such Agent or the Company, as the case may be. In the event of such suspension
or termination with respect to any Agent, (a) this Agreement shall remain in
full force and effect with respect to any Agent as to which such suspension or
termination has not occurred, (b) this Agreement shall remain in full force and
effect with respect to the rights and obligations of any party that have
previously accrued or that relate to Securities that have already been issued or
agreed to be issued or are the subject of a pending offer at the time of such
suspension or termination and (c) in any event, this Agreement shall remain in
full force and effect insofar as the third and fourth paragraphs of Section
2(b), Section 4(d), Section 4(e), Section 5, Section 7 and Section 8 hereof are
concerned.
10. Except as otherwise specifically provided herein or in the
Administrative Procedures, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated shall be sufficient
in all respects when delivered or sent by facsimile transmission or registered
mail to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, World Financial
Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (212)
449-2234, Attention: MTN Product Management, and if to ▇▇▇▇▇▇▇, Sachs & Co.
shall be sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
Credit Department; [Add contact information for other Agents] and if to the
Company shall be sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Treasurer.
26
11. This Agreement shall be binding upon, and inure solely to the
benefit of, each Agent and the Company, and to the extent provided in Section 7
and Section 8 hereof, the officers and directors of the Company and any person
who controls any Agent or the Company, and their respective personal
representatives, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities through or from any Agent hereunder shall be deemed a successor or
assign by reason of such purchase.
12. Time shall be of the essence of this Agreement. As used herein,
except as otherwise noted the term "business day" shall mean any day when the
office of the Commission in Washington, D.C. is normally open for business.
13. This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York.
14. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be an original, but
all of such respective counterparts shall together constitute one and the same
instrument.
27
If the foregoing is in accordance with the Agents' understanding,
please sign and return to the Company all counterparts hereof, whereupon this
letter and the acceptance by each of you thereof shall constitute a binding
agreement between the Company and each of you in accordance with its terms.
Very truly yours,
HAWAIIAN ELECTRIC INDUSTRIES, INC.
By: _______________________________
Title:
By: _______________________________
Title:
Accepted in New York, New York,
as of the date hereof:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: ___________________________
Title:
_______________________________
(▇▇▇▇▇▇▇, SACHS & CO.)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
By: ___________________________
Title:
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
By: ___________________________
Title:
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
By: ___________________________
Title:
29
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company shall
pay the applicable Agent, on a discount basis, a commission for the sale of each
Security equal to the principal amount of such Security multiplied by the
appropriate percentage set forth below:
================================================================================
MATURITY RANGES PERCENT OF PRINCIPAL AMOUNT
================================================================================
From 9 months to less than 1 year .125%
--------------------------------------------------------------------------------
From 1 year to less than 18 months .150
--------------------------------------------------------------------------------
From 18 months to less than 2 years .200
--------------------------------------------------------------------------------
From 2 years to less than 3 years .250
--------------------------------------------------------------------------------
From 3 years to less than 4 years .350
--------------------------------------------------------------------------------
From 4 years to less than 5 years .450
--------------------------------------------------------------------------------
From 5 years to less than 6 years .500
--------------------------------------------------------------------------------
From 6 years to less than 7 years .550
--------------------------------------------------------------------------------
From 7 years to less than 10 years .600
--------------------------------------------------------------------------------
From 10 years to less than 15 years .625
--------------------------------------------------------------------------------
From 15 years to less than 20 years .700
--------------------------------------------------------------------------------
From 20 years to 30 years .750
================================================================================
30
ANNEX I
The following terms, to the extent applicable, shall be agreed to by the
applicable Agent and the Company in connection with each sale of Securities:
Name of Agent: _____________________
Acting as principal
Acting as agent for the Company
Principal Amount: $______________________
Price to Public: ___% of the principal amount, plus accrued interest, if
any, from ______
Commission (or Discount): ___% of the principal amount
Purchase Price: ____%, plus accrued interest, if any, from _________
Interest Rate:
If Fixed Rate Note:
Interest Rate:
Interest Payment Date(s):
If Floating Rate Note:
Base Rate:
If LIBOR:
LIBOR Reuters Page:
LIBOR Telerate Page:
Initial Interest Rate:
Spread or Spread Multiplier, if any:
Initial Interest Reset Date:
Interest Reset Date(s):
Interest Payment Date(s):
Interest Determination Date(s):
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Reset Period:
Interest Payment Period:
Calculation Agent:
If Discount Note, terms:
If Redeemable:
Redemption Commencement Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
If Repayable:
Optional Repayment Date(s):
Repayment Provisions, if any:
31
Original Issue Date:
Stated Maturity Date:
Settlement Date and Time:
Additional Terms:
Also, in connection with the purchase of Securities by one or more Agents
as principal, agreement as to whether the following will be required:
Officer's Certificate pursuant to Section 6(g) of the Distribution
Agreement.
Legal Opinions pursuant to Sections 6(b) and (c) of the Distribution
Agreement.
Comfort Letter pursuant to Section 6(d) of the Distribution Agreement.
Stand-Off Agreement pursuant to Section 4(f) of the Distribution Agreement.
32
ANNEX II
HAWAIIAN ELECTRIC INDUSTRIES, INC.
ADMINISTRATIVE PROCEDURES
for Fixed Rate and Floating Rate Medium-Term Notes, Series D
Due From Nine Months to 30 Years From Date of Issue
(Dated as of ____________ ____, 2002)
Medium-Term Notes, Series D Due From Nine Months to 30 Years From Date of
Issue (the "Notes") are to be offered on a continuous basis by Hawaiian Electric
Industries, Inc., a Hawaii corporation (the "Company"), to or through ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇, Sachs & Co., ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated, U.S. Bancorp ▇▇▇▇▇
▇▇▇▇▇▇▇ Inc. and any other agent or agents appointed by the Company from time to
time (each, an "Agent" and, collectively, the "Agents"), pursuant to a
Distribution Agreement, dated ____________ ____, 2002 (the "Distribution
Agreement"), by and among the Company and the Agents. The Distribution Agreement
provides both for the sale of Notes by the Company to one or more of the Agents
as principal for resale to investors and other purchasers and for the sale of
Notes by the Company directly to investors (as may from time to time be agreed
to by the Company and the related Agent or Agents), in which case each such
Agent will act as an agent of the Company in soliciting purchases of Notes.
If agreed upon by the related Agent or Agents and the Company, Notes shall
be purchased by such Agent or Agents as principal. Such purchases will be made
in accordance with terms agreed upon by the related Agent or Agents and the
Company (which terms, unless otherwise agreed to, shall, to the extent
applicable, include those terms specified in Annex I to the Distribution
Agreement, and be agreed upon orally, with written confirmation prepared by such
Agent or Agents and mailed or sent by facsimile transmission to the Company). If
agreed upon by any Agent or Agents and the Company, the Agent or Agents, acting
solely as agent or agents for the Company, and not as principal, will use
reasonable efforts to solicit offers to purchase the Notes. Only those
provisions in these Administrative Procedures that are applicable to the
particular role to be performed by the related Agent or Agents shall apply to
the offer and sale of the relevant Notes.
The Notes will be issued under an Indenture, dated as of October 15, 1998,
as amended, supplemented or modified from time to time, including by a Third
Supplemental Indenture thereto dated as of ____________ ____, 2002 relating to
the Notes (collectively, the "Indenture"), between the Company and Citibank,
N.A., as trustee (the "Trustee"). The Company has filed a Registration Statement
(as defined in the Distribution Agreement) with the Securities and Exchange
Commission (the "Commission") registering the Notes. A pricing supplement to the
Prospectus (as defined in the Distribution Agreement) setting forth the purchase
price, interest rate or formula, maturity date and other terms of any Notes (as
applicable) is herein referred to as a "Pricing Supplement."
The Notes will either be issued (a) in book-entry form (each, a "Book-Entry
Note") and
1
represented by one or more fully registered Notes without coupons (each, a
"Global Note") delivered to the Trustee, as agent for The Depository Trust
Company, New York, New York ("DTC"), and recorded in the book-entry system
maintained by DTC, or (b) in certificated form (each, a "Certificated Note")
delivered to the investor or other purchaser thereof or a person designated by
such investor or other purchaser. Except in the limited circumstances described
in the Prospectus or a Pricing Supplement, owners of beneficial interests in
Book-Entry Notes will not be entitled to physical delivery of Certificated Notes
equal in principal amount to their respective beneficial interests.
General procedures relating to the issuance of all Notes are set forth in
Part I hereof. Book-Entry Notes will be issued in accordance with the procedures
set forth in Part II hereof and Certificated Notes will be issued in accordance
with the procedures set forth in Part III hereof. Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed thereto in the
Prospectus, the Indenture or the Notes, as the case may be.
PART I: PROCEDURES OF GENERAL APPLICABILITY
Date of Issuance/Authentication: Each Note will be dated as of the date of
its authentication by the Trustee. Each
Note shall also bear an original issue
date (the "Original Issue Date"). The
Original Issue Date shall remain the same
for all Notes subsequently issued upon
transfer, exchange or substitution of an
original Note regardless of their dates
of authentication.
Maturities: Each Note will mature on a date selected
by the purchaser and agreed to by the
Company that is not less than nine months
nor more than thirty years from its
Original Issue Date (the "Stated Maturity
Date").
Currency/Denominations: Unless otherwise provided in the
applicable Pricing Supplement, Notes will
be denominated in, and payments of
principal, premium, if any, and interest,
if any, in respect thereof will be made
in, U.S. dollars and the Notes will be
issued in denominations of $1,000 and
integral multiples thereof.
Registration: The Notes will be issued only in fully
registered form.
Base Rates Applicable to
Floating Rate Notes: Unless otherwise provided in the
applicable
2
Pricing Supplement, Floating Rate Notes
will bear interest at a rate or rates
determined by reference to the CD Rate,
the Commercial Paper Rate, the Federal
Funds Rate, LIBOR, the Prime Rate, the
Treasury Rate, or such other interest
rate basis or formula as may be set forth
in the applicable Pricing Supplement, or
by reference to two or more such rates,
as adjusted by the Spread and/or Spread
Multiplier, if any, applicable to such
Floating Rate Notes.
Redemption/Repayment: The Notes will be subject to redemption
by the Company on and after their
respective Redemption Commencement Dates,
if any. Redemption Commencement Dates, if
any, will be fixed at the time of sale
and set forth in the applicable Pricing
Supplement and in the applicable Note. If
no Redemption Commencement Dates are
indicated with respect to a Note, such
Note will not be redeemable at the option
of the Company prior to its Stated
Maturity Date.
The Notes will be subject to repayment at
the option of the Holders thereof in
accordance with the terms of the Notes on
their respective Optional Repayment
Dates, if any. Optional Repayment Dates,
if any, will be fixed at the time of sale
and set forth in the applicable Pricing
Supplement and in the applicable Note. If
no Optional Repayment Dates are indicated
with respect to a Note, such Note will
not be repayable at the option of the
Holder prior to its Stated Maturity Date.
Calculation of Interest: In the case of Fixed Rate Notes, interest
(including payments for partial periods)
will be calculated and paid on the basis
of a 360-day year of twelve 30-day
months.
The interest rate on each Floating Rate
Note will be calculated by reference to
the specified Base Rate or Rates plus or
minus the
3
applicable Spread, if any, and/or
multiplied by the applicable Spread
Multiplier, if any.
Unless otherwise provided in the
applicable Pricing Supplement, accrued
interest on each Floating Rate Note will
be calculated by multiplying its
principal amount by an accrued interest
factor. Such accrued interest factor is
computed by adding the interest factors
calculated for each day in the period for
which accrued interest is being
calculated. Unless otherwise provided in
the applicable Pricing Supplement, the
interest factor for each such day is
computed by dividing the interest rate
applicable to such day by 360 if the CD
Rate, Commercial Paper Rate, Federal
Funds Rate, LIBOR or Prime Rate is an
applicable Base Rate, or by the actual
number of days in the year if the
Treasury Rate is an applicable Base Rate.
The interest factor for Floating Rate
Notes for which the interest rate is
calculated with reference to two or more
Base Rates will be calculated in each
period in the same manner as if only the
lowest, highest or average of the
applicable Base Rates applied as
specified in the applicable Pricing
Supplement.
Interest: General. Each Note will bear interest in
-------
accordance with its terms. Unless
otherwise provided in the applicable
Pricing Supplement, interest on each Note
will accrue from and including the
Original Issue Date of such Note for the
first interest period or from and
including the most recent Interest
Payment Date to which interest has been
paid or duly made available for payment
for all subsequent interest periods, to
but excluding the applicable Interest
Payment Date or the Stated Maturity Date,
Redemption Date or Optional Repayment
Date (each Stated Maturity Date,
Redemption Date or Optional Repayment
Date is referred to herein as a
"Maturity"). Interest on Notes will be
payable in arrears to the Holders of such
Notes as of the Regular
4
Record Date for each Interest Payment
Date and at Maturity to the Person to
whom the principal of such Notes is
payable.
If an Interest Payment Date or the
Maturity with respect to any Fixed Rate
Note falls on a day that is not a
Business Day, the required payment to be
made on such day need not be made on such
day, but may be made on the next
succeeding Business Day with the same
force and effect as if made on such day
and no interest shall accrue on such
payment for the period from and after
such day to the next succeeding Business
Day. If an Interest Payment Date (other
than at Maturity) with respect to any
Floating Rate Note would otherwise fall
on a day that is not a Business Day, such
Interest Payment Date will be postponed
to the next succeeding Business Day, and
interest shall continue to accrue, except
that in the case of a LIBOR Note, if such
next succeeding Business Day falls in the
next succeeding calendar month, such
Interest Payment Date will be the
immediately preceding Business Day. If
the Maturity of a Floating Rate Note
falls on a day that is not a Business
Day, the required payment need not be
made on such day, but may be made on the
next succeeding Business Day as if made
on the date such payment was due, and no
interest on such payment shall accrue for
the period from and after such Maturity
to the date of such payment on the next
succeeding Business Day.
Regular Record Dates. Unless otherwise
--------------------
specified in an applicable Pricing
Supplement, the Regular Record Date with
respect to any Interest Payment Date for
any Note shall be the date 15 calendar
days (whether or not a Business Day)
preceding such Interest Payment Date.
Interest Payment Dates. Interest payments
----------------------
will be made at Maturity (with respect to
the
5
principal then maturing) and on each
Interest Payment Date commencing with the
first Interest Payment Date following the
Original Issue Date; provided, however,
-------- -------
the first payment of interest on any Note
originally issued between a Regular
Record Date and an Interest Payment Date
will occur on the Interest Payment Date
following the next succeeding Regular
Record Date.
Fixed Rate Notes. Unless otherwise
----------------
provided in the applicable Pricing
Supplement, interest payments on Fixed
Rate Notes (other than Original Issue
Discount Notes) will be made semiannually
on February 10th and August 10th of each
year and at Maturity with respect to the
principal then maturing.
Floating Rate Notes. Interest payments on
-------------------
Floating Rate Notes will be made as
specified in the Floating Rate Note.
6
Acceptance and Rejection of Offers If agreed upon by any Agent and the Company, then
from Solicitations as Agents: such Agent acting solely as agent for the Company
and not as principal will solicit purchases of
the Notes. Each Agent will communicate to the
Company, orally or in writing, each reasonable
offer to purchase Notes solicited by such Agent
on an agency basis, other than those offers
rejected by such Agent. Each Agent has the right,
in its discretion reasonably exercised, to reject
any proposed purchase of Notes, as a whole or in
part, and any such rejection shall not be a
breach of such Agent's agreement contained in the
Distribution Agreement. The Company has the sole
right to accept or reject any proposed purchase
of Notes, in whole or in part, and any such
rejection shall not be a breach of the Company's
agreement contained in the Distribution
Agreement. Each Agent has agreed to make
reasonable efforts to assist the Company in
obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by
such Agent and accepted by the Company.
Preparation of Pricing Supplement: If any offer to purchase a Note is accepted by
the Company, the Company will promptly prepare a
Pricing Supplement reflecting the terms of such
Note. Information to be included in the Pricing
Supplement shall include:
1. the name of the Company;
2. the title of the Notes;
3. the date of the Pricing Supplement and the
date of the Prospectus to which the Pricing
Supplement relates;
4. the name of the Presenting Agent (as defined
below);
7
5. whether such Notes are being sold to the
Presenting Agent as principal or to an
investor or other purchaser through the
Presenting Agent acting as agent for the
Company;
6. with respect to Notes sold to the Presenting
Agent as principal, whether such Notes will
be resold by the Presenting Agent to
investors and other purchasers at (i) a fixed
public offering price of a specified
percentage of their principal amount or (ii)
at varying prices related to prevailing
market prices at the time of resale to be
determined by the Presenting Agent;
7. with respect to Notes sold to an investor or
other purchaser through the Presenting Agent
acting as agent for the Company, whether such
Notes will be sold at (i) 100% of their
principal amount or (ii) a specified
percentage of their principal amount;
8. the Presenting Agent's discount or
commission;
9. net proceeds to the Company;
10. the information with respect to the terms of
the Notes set forth below (whether or not the
applicable Note is a Book-Entry Note) under
"Procedures for Book-Entry Notes -Settlement
Procedures," items (ii), (iii), (vii), (viii)
and (ix); and
11. any other terms of the Notes material to
investors or other purchasers of the Notes
not otherwise specified in the Prospectus.
8
The Company shall use its reasonable best efforts
to send such Pricing Supplement by electronic
mail, telecopy or overnight express (for delivery
by the close of business on the applicable trade
date, but in no event later than noon, New York
City time, on the Business Day next following the
trade date) to the Agent that made or presented
the offer to purchase the applicable Note (the
"Presenting Agent") at the following address:
If to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated:
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Prospectus Operations/▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address:
▇▇▇▇▇▇▇▇@▇▇▇.▇▇.▇▇.▇▇▇
also, for record keeping purposes, please send
a copy to:
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
4 World Financial Center, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇, Sachs & Co.:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Add other agents]
9
in all cases with a copy to:
Pillsbury Winthrop LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address:
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will provide a
copy of such Pricing Supplement to each investor
or purchaser of the relevant Notes or its agent.
Pursuant to Rule 434 ("Rule 434") of the
Securities Act of 1933, as amended, the Pricing
Supplement may be delivered separately from the
Prospectus. Outdated Pricing Supplements (other
than those retained for files) will be destroyed.
Settlement: The receipt of immediately available funds by the
Company in payment for a Note and the
authentication and delivery of such Note shall,
with respect to such Note, constitute
"settlement." Offers accepted by the Company will
be settled in three Business Days, or at such
time as the purchaser, the applicable Agent and
the Company shall agree, pursuant to the
timetable for settlement set forth in Parts II
and III hereof under "Settlement Procedures" with
respect to Book-Entry Notes and Certificated
Notes, respectively (each such date fixed for
settlement is hereinafter referred to as a
"Settlement Date"). If procedures A and B of the
applicable Settlement Procedures with respect to
a particular offer are not completed on or before
the time set forth under the "Settlement
Procedures Timetable," such offer shall not be
settled until the Business Day following the
completion of Settlement Procedures A and B or
such later date as the purchaser and the Company
shall agree.
10
In the event of a purchase of Notes
by an Agent as principal,
appropriate settlement details will
be pursuant to the timetable for
settlement set forth in Parts II
and III hereof under "Settlement
Procedures" with respect to
Book-Entry Notes and Certificated
Notes, respectively, or otherwise
as agreed between the Agent and the
Company.
Procedure for Changing Rates or When a decision has been reached
Other Variable Terms: to change the interest rate or any
other variable term on any Notes
being sold by the Company, the
Company will promptly advise the
Agents by facsimile transmission
and such Agents will forthwith
suspend solicitation of offers to
purchase such Notes. The Agent or
Agents will telephone the Company
with recommendations as to the
changed interest rates or other
variable terms. At such time as the
Company advises the Agents of the
new interest rates or other
variable terms, such Agents may
resume solicitation of offers to
purchase such Notes. Until such
time only "indications of interest"
may be recorded. Immediately after
acceptance by the Company of an
offer to purchase Notes at a new
interest rate or new variable term,
the Company, the Presenting Agent
and the Trustee shall follow the
procedures set forth under the
"Settlement Procedures."
Suspension of Solicitation; Amendment or The Company may instruct the Agents
Supplement: to suspend solicitation of offers
to purchase Notes at any time. Each
Agent receiving such instructions
will forthwith suspend solicitation
of offers to purchase Notes from
the Company until such time as the
Company has advised the Agents that
solicitation of offers to purchase
may be resumed. If the Company
decides to amend or supplement the
Registration Statement (including
incorporating any documents by
reference therein) or the
Prospectus (other than to change
interest rates or other variable
terms with respect to the
11
offering of the Notes), it will
promptly advise each Agent and will
furnish each Agent and counsel to
the Agents with copies of the
proposed amendment or supplement
(including any document proposed to
be incorporated by reference
therein but excluding any Pricing
Supplements unless otherwise
provided herein). One copy of such
filed document, along with a copy
of the cover letter sent to the
Commission, will be delivered,
mailed, telecopied or e-mailed to
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated at Transaction
Management Group, 4 World Financial
Center, ▇▇/▇▇/ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Telecopy: (212)
449-2234, E-Mail Address:
▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇.▇▇▇ and to
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ [add
other Agents]. For record keeping
purposes, one copy of each such
amendment or supplement shall also
be delivered, mailed, telecopied or
e-mailed to Pillsbury Winthrop LLP,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Esq., Telecopy: (212)
858-1500, E-Mail Address:
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
In the event that at the time the
solicitation of offers to purchase
Notes from the Company is suspended
(other than to change interest
rates or other variable terms)
there are any offers to purchase
Notes that have been accepted by
the Company that have not been
settled, the Company will promptly
advise the Agents and the Trustee
whether such offers may be settled
and whether copies of the
Prospectus as theretofore amended
and/or supplemented as in effect at
the time of the suspension may be
delivered in connection with the
settlement of such offers. The
Company will have the sole
responsibility for such decision
and for any arrangements that may
be made in the event that the
Company determines that such offers
may not be settled or that copies
of such
12
Prospectus may not be so delivered.
Delivery of Prospectus and Applicable A copy of the most recent Prospectus
Pricing Supplement: and the applicable Pricing
Supplement, which pursuant to Rule
434 may be delivered separately from
the Prospectus, must accompany or
precede the earlier of (a) the
written confirmation of a sale sent
to an investor or other purchaser or
his agent and (b) the delivery of
Notes to an investor or other
purchaser or his agent.
Authenticity of Signatures: The Agents will have no obligation
or liability to the Company or the
Trustee in respect of the
authenticity of the signature of any
officer, employee or agent of the
Company or the Trustee on any Note.
Documents Incorporated by Reference: The Company shall supply the Agents
with an adequate supply of all
documents incorporated by reference
in the Registration Statement and
the Prospectus.
Business Day: "Business Day" means, unless
otherwise specified in the
applicable Pricing Supplement, any
day other than a Saturday or Sunday,
or any other day on which banks in
The City of New York (and, with
respect to LIBOR Notes, is also a
London Business Day), are generally
required or authorized by law or
executive order to close. "London
Business Day" means any day on which
dealings in deposits in U.S. dollars
are transacted in the London
interbank market.
PART II: PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of Book-Entry Notes for eligibility in
the book-entry system maintained by DTC, the Trustee will perform the custodial,
document control and administrative functions described below, in accordance
with its respective obligations under a Letter of Representations from the
Company and the Trustee to DTC, dated _____________ ____, 2002, and a
Medium-Term Note Certificate Agreement, dated June 11, 1993, between the Trustee
and DTC (the "Certificate Agreement"), and its obligations as a participant in
DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
13
Issuance: All Fixed Rate Notes issued as Book-
Entry Notes having the same Original
Issue Date, interest rate, Stated
Maturity Date and redemption and/or
repayment terms (collectively, the
"Fixed Rate Terms") will be
represented initially by a single
Global Note and all Floating Rate
Notes issued as Book-Entry Notes
having the same Original Issue Date,
Base Rate (which may be the
Commercial Paper Rate, the Treasury
Rate, LIBOR, the CD Rate, the
Federal Funds Rate, the Prime Rate
or any other rate set forth in the
applicable Pricing Supplement by the
Company), Initial Interest Rate,
Index Maturity, Spread or Spread
Multiplier, if any, Minimum Interest
Rate, if any, Maximum Interest Rate,
if any, Stated Maturity Date,
redemption and/or repayment terms,
if any, Initial Interest Reset Date,
Interest Reset Date(s) and Interest
Determination Date(s) (collectively,
the "Floating Rate Terms") will be
represented initially by a single
Global Note.
For other variable terms with
respect to the Fixed Rate Notes and
Floating Rate Notes, see the
Prospectus and the applicable
Pricing Supplement.
Identification: The Company has arranged with the
CUSIP Service Bureau of Standard &
Poor's (the "CUSIP Service Bureau")
for the reservation of one series of
CUSIP numbers, which series consists
of approximately 900 CUSIP numbers
which have been reserved for and
relating to Book-Entry Notes and the
Company has delivered to the Trustee
and DTC such list of such CUSIP
numbers. The Company will assign
CUSIP numbers to Book-Entry Notes as
described below under Settlement
Procedure B. DTC will notify the
CUSIP Service Bureau periodically of
the CUSIP numbers that the Company
has assigned to Book-Entry Notes.
The Trustee will notify the Company
at any
14
time when fewer than 100 of the reserved CUSIP
numbers remain unassigned to Book-Entry Notes,
and, if it deems necessary, the Company will
reserve additional CUSIP numbers for assignment
to Book-Entry Notes. Upon obtaining such
additional CUSIP numbers, the Company will
deliver a list of such additional numbers to the
Trustee and DTC.
Registration: Each Global Note will be registered in the name
of Cede & Co., as nominee for DTC, on the
register maintained by the Trustee under the
Indenture. The beneficial owner of a Book-Entry
Note (i.e., an owner of a --- beneficial interest
in a Global Note) (or one or more indirect
participants in DTC designated by such owner)
will designate one or more participants in DTC
(with respect to such Book-Entry Note, the
"Participants") to act as agent for such
beneficial owner in connection with the
book-entry system maintained by DTC, and DTC will
record in book-entry form, in accordance with
instructions provided by such Participants, a
credit balance with respect to such Book-Entry
Note in the account of such Participants. The
ownership interest of such beneficial owner in
such Book-Entry Note will be recorded through the
records of such Participants or through the
separate records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of beneficial interests in a Global
Note will be accomplished by book entries made by
DTC and, in turn, by Participants (and in certain
cases, one or more indirect participants in DTC)
acting on behalf of beneficial transferors and
transferees of such Global Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP
Service Bureau at any time a written notice
specifying (a) the CUSIP numbers of
15
two or more Global Notes outstanding on such date
that represent Book-Entry Notes having the same
Fixed Rate Terms or Floating Rate Terms, as the
case may be (but not the same Original Issue
Dates), and for which interest has been paid to
the same date; (b) a date, occurring at least 30
days after such written notice is delivered and
at least 30 days before the next Interest Payment
Date for the related Book-Entry Notes, on which
such Global Notes shall be exchanged for a single
replacement Global Note; and (c) a new CUSIP
number, obtained from the Company, to be assigned
to such replacement Global Note. Upon receipt of
such a notice, DTC will send to its Participants
(including the Trustee) a written notice to the
effect that such exchange will occur on such
date. Prior to the specified exchange date, the
Trustee will deliver to the CUSIP Service Bureau
written notice setting forth such exchange date
and the new CUSIP number and stating that, as of
such exchange date, the CUSIP numbers of the
Global Notes to be exchanged will no longer be
valid. On the specified exchange date, the
Trustee will exchange such Global Notes for a
single Global Note bearing the new CUSIP number
and the CUSIP numbers of the exchanged Global
Notes will, in accordance with CUSIP Service
Bureau procedures, be cancelled and not
immediately reassigned.
Denominations: Book-Entry Notes will be issued in denominations
of $1,000 and integral multiples in excess
thereof of $1,000 unless otherwise set forth in
the applicable Prospectus Supplement.
Payments of Principal, Premium, Payments of Interest Only. Promptly after
if any, and Interest: ----------------------------------
each Regular Record Date, the Trustee will
deliver to the Company and DTC a written notice
specifying by CUSIP number the amount of interest
to be paid on each Book-Entry Note on the
following Interest Payment
16
Date (other than an Interest Payment Date
coinciding with Maturity) and the total of such
amounts. DTC will confirm the amount payable on
each Book-Entry Note on such Interest Payment
Date by reference to the daily bond reports
published by Standard & Poor's. On such Interest
Payment Date, the Company will pay to the Trustee
in immediately available funds, and the Trustee
in turn will pay to DTC, such total amount of
interest due (other than at Maturity), at the
times and in the manner set forth below under
"Manner of Payment."
Notice of Interest Rates. Promptly after each
------------------------
Interest Determination Date for Floating Rate
Notes issued as Book-Entry Notes, the Calculation
Agent will notify each of ▇▇▇▇▇'▇ Investors
Service, Inc. and Standard & Poor's of the
interest rates determined as of such Interest
Determination Date.
Payments at Maturity. On or about the first
--------------------
Business Day of each month, the Trustee will
deliver to the Company and DTC a written list of
principal, interest and premium, if any, to be
paid on each Book-Entry Note maturing or
otherwise becoming due in the following month.
The Trustee, the Company and DTC will confirm the
amounts of such principal, premium and interest
payments with respect to a Book-Entry Note on or
about the fifth Business Day preceding the
Maturity of such Book-Entry Note. At such
Maturity, the Company will pay to the Trustee in
immediately available funds, and the Trustee in
turn will pay to DTC, the principal amount of
such Note, together with interest and premium, if
any, due at such Maturity, at the times and in
the manner set forth below under "Manner of
Payment." Promptly after payment to DTC of the
principal, interest and premium, if any, due at
the Maturity of such Book-Entry Note, the Trustee
will cancel the Global Note representing such
Book-Entry Note and deliver
17
it to the Company with an appropriate debit
advice. On the first Business Day of each month,
the Trustee will deliver to the Company a written
statement indicating the total principal amount
of outstanding Book-Entry Notes as of the
immediately preceding Business Day.
Manner of Payment. The total amount of any
-----------------
principal, premium, if any, and interest due on
Book-Entry Notes on any Interest Payment Date or
at Maturity shall be paid by the Company to the
Trustee in funds available for use by the Trustee
no later than noon, New York City time, on such
date. The Company will make such payment on such
Book-Entry Notes by instructing the Trustee to
withdraw funds from an account maintained by the
Company at the Trustee or by making such payment
to an account specified by the Trustee. The
Company will confirm such instructions in writing
to the Trustee. As soon as possible thereafter,
the Trustee will pay by separate wire transfer
(using Fedwire message entry instructions in a
form previously specified by DTC) to an account
at the Federal Reserve Bank of New York
previously specified by DTC, in funds available
for immediate use by DTC, each payment of
interest, principal and premium, if any, due on a
Book-Entry Note on such date. Thereafter on such
date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts
in funds available for immediate use to the
respective Participants in whose names such
Book-Entry Notes are recorded in the book-entry
system maintained by DTC. Neither the Company nor
the Trustee shall have any responsibility or
liability for the payment by DTC of the principal
of, premium, if any, or interest on, the
Book-Entry Notes to such Participants.
Withholding Taxes. The amount of any taxes
-----------------
required under applicable law to be withheld
18
from any interest payment on a Book-Entry Note
will be determined and withheld by the
Participant, indirect participant in DTC or other
Person responsible for forwarding payments and
materials directly to the beneficial owner of
such Book-Entry Note.
Settlement Procedures: Settlement Procedures with regard to each
Book-Entry Note sold by an Agent, as agent of the
Company, or purchased by an Agent, as principal,
will be as follows:
A. The Presenting Agent will advise the Company
by telephone, confirmed by facsimile, of the
following settlement information:
1. Taxpayer identification number of the
purchaser.
2. Principal amount.
3. Fixed Rate Notes:
(a) interest rate;
(b) interest payment dates; and
(c) whether such Fixed Rate Note is
being issued as a Discount Note
and, if so, the terms thereof.
Floating Rate Notes:
(a) base rate;
(b) initial interest rate;
(c) spread or spread multiplier, if any;
(d) interest rate reset dates;
(e) interest rate reset period;
(f) interest payment dates;
19
(g) interest payment period;
(h) index maturity;
(i) calculation agent;
(j) maximum interest rate, if any;
(k) minimum interest rate, if any;
(l) calculation date;
(m) interest determination dates; and
(n) whether such Floating Rate Note is
being issued as a Discount Note
and, if so, the terms thereof.
4. Price to public of such Book-Entry Note
(or whether such Note is being offered at
varying prices relating to prevailing
market prices at time of resale as
determined by the Presenting Agent).
5. Trade Date.
6. Settlement Date (Original Issue Date).
7. Stated Maturity Date.
8. Redemption provisions, if any, including:
Redemption Commencement Date, Initial
Redemption Percentage and Annual
Redemption Percentage Reduction.
9. Optional Repayment Date(s) and repayment
provisions, if any.
10. Net proceeds to the Company.
11. Presenting Agent's discount or commission
(determined in accordance with Schedule A
to the Distribution Agreement).
20
12. Name of Presenting Agent (and whether
such Note is being sold to the Presenting
Agent as principal or to an investor or
other purchaser through the Presenting
Agent acting as agent for the Company).
13. Such other information specified with
respect to such Note (whether by Addendum
or otherwise).
B. The Company will assign a CUSIP number to the
Global Note representing such Book-Entry Note
and then advise the Trustee by facsimile
transmission or other electronic transmission
of the above settlement information received
from the Presenting Agent, such CUSIP number
and the name of the Presenting Agent.
C. The Trustee will communicate to DTC and the
Presenting Agent through DTC's Participant
Terminal System, a pending deposit message
specifying the following settlement
information:
1. The information set forth in Settlement
Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of
the Trustee and the Presenting Agent.
3. Identification of the Global Note as a
Fixed Rate Note or Floating Rate Note.
4. Initial Interest Payment Date for such
Global Note, number of days by which such
date succeeds the related record date for
DTC purposes (or, in the case of Floating
Rate Notes which reset daily or weekly,
the date five calendar days preceding the
Interest Payment Date) and, if then
calculable, the
21
amount of interest payable on such Interest
Payment Date (which amount shall have been
confirmed by the Trustee).
5. CUSIP number of the Global Note representing
such Book-Entry Note.
6. Whether such Global Note represents any other
Book-Entry Notes.
7. The Company or the Trustee will advise
the Presenting Agent by telephone of the
CUSIP number of the Global Note
representing such Book-Entry Note.
DTC will arrange for each pending deposit message
described above to be transmitted to Standard &
Poor's, which will use the information in the
message to include certain terms of the related
Book-Entry Note in the appropriate daily bond
report published by Standard & Poor's.
D. The Company will complete and deliver to the
Trustee a Global Note representing such
Book-Entry Note in a form that has been
approved by authorized officers of the
Company pursuant to the Indenture, the Agents
and the Trustee.
E. The Trustee will authenticate the Global Note
representing such Book-Entry Note.
F. DTC will credit such Book-Entry Note to the
participant account of the Trustee maintained
by DTC.
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Book-Entry
Note to the Trustee's participant account and
credit such Book-Entry Note to the
participant account of the Presenting Agent
maintained by DTC
22
and (ii) to debit the settlement account of
the Presenting Agent and credit the
settlement account of the Trustee maintained
by DTC, in an amount equal to the price of
such Book-Entry Note less such Presenting
Agent's discount or commission. Any entry of
such a deliver order shall be deemed to
constitute a representation and warranty by
the Trustee to DTC that (i) the Global Note
representing such Book-Entry Note has been
issued and authenticated and (ii) the Trustee
is holding such Global Note pursuant to the
Certificate Agreement.
H. In the case of Book-Entry Notes sold through
the Presenting Agent, as agent, the
Presenting Agent will enter an SDFS deliver
order through DTC's Participant Terminal
System instructing DTC (i) to debit such
Book-Entry Note to the Presenting Agent's
participant account and credit such
Book-Entry Note to the participant account of
the Participants maintained by DTC and (ii)
to debit the settlement accounts of such
Participants and credit the settlement
account of the Presenting Agent maintained by
DTC in an amount equal to the initial public
offering price of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures G and H will be settled in
accordance with SDFS operating procedures in
effect on the Settlement Date.
J. Upon receipt of such funds, the Trustee will
credit to an account of the Company
maintained at the Trustee or pay to an
account otherwise specified by the Company
funds available for immediate use in the
amount transferred to the Trustee in
accordance with Settlement
23
Procedure G.
K. The Trustee will send a copy of the Global
Note by first class mail to the Company
together with a statement setting forth the
total principal amount of Notes of each
series that have been issued under the
Indenture (whether or not Outstanding) as of
the related Settlement Date, the principal
amount of Notes Outstanding as of the related
Settlement Date after giving effect to such
transaction and all other offers to purchase
Notes of which the Company has advised the
Trustee but that have not yet been settled.
L. In the case of Book-Entry Notes sold through
the Presenting Agent, as agent, the
Presenting Agent will confirm the purchase of
such Book-Entry Note to the investor or other
purchaser either by transmitting to the
Participant with respect to such Book-Entry
Note a confirmation order through DTC's
Participant Terminal System or by mailing a
written confirmation to such investor or
other purchaser.
Settlement Procedures Timetable: For offers to purchase Book-Entry Notes
accepted by the Company, Settlement
Procedures "A" through "L" set forth above
shall be completed as soon as possible
but not later than the respective times
(New York City time) set forth below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the trade
date or within one hour
following the trade
B 12:00 noon on the trade
date or within one hour
following the trade
C No later than the close
of
24
business on the trade date
D 3:00 p.m. on the Business
Day before the Settlement
Date
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement
Date
G-H No later than 2:00 p.m. on
Settlement Date
I 4:00 p.m. on Settlement Date
▇-▇ 5:00 p.m. on Settlement Date
If a sale is to be settled more than
one Business Day after the trade date,
Settlement Procedures A, B, and C may,
if necessary, be completed at any time
prior to the specified times on the
first Business Day after such trade
date. In connection with a sale that is
to be settled more than one Business
Day after the trade date, if the
Initial Interest Rate for a Floating
Rate Note is not known at the time that
Settlement Procedure A is completed,
Settlement Procedures B and C shall be
completed as soon as such rates have
been determined, but no later than noon
and 2:00 p.m., New York City time,
respectively, on the second Business
Day before the Settlement Date.
Settlement Procedure I is subject to
extension in accordance with any
extension of Fedwire closing deadlines
and in the other events specified in
the SDFS operating procedures in effect
on the Settlement Date.
If settlement of a Book-Entry Note is
rescheduled or cancelled, the Trustee
will deliver to DTC, through DTC's
Participant Terminal System, a
cancellation message to such effect by
no later than 5:00 p.m., New York City
time, on the Business Day immediately
preceding the scheduled Settlement
Date.
25
Failure to Settle: If the Trustee fails to enter an SDFS deliver
order with respect to a Book-Entry Note pursuant
to Settlement Procedure G, the Trustee may
deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable a
withdrawal message instructing DTC to debit such
Book-Entry Note to the participant account of the
Trustee maintained at DTC. DTC will process the
withdrawal message, provided that such
participant account contains a principal amount
of the Global Note representing such Book-Entry
Note that is at least equal to the principal
amount to be debited. If withdrawal messages are
processed with respect to all the Book-Entry
Notes represented by a Global Note, the Trustee
will ▇▇▇▇ such Global Note "cancelled", make
appropriate entries in its records and send such
cancelled Global Note to the Company. The CUSIP
number assigned to such Global Note shall, in
accordance with CUSIP Service Bureau procedures,
be cancelled and not immediately reassigned. If
withdrawal messages are processed with respect to
a portion of the Book-Entry Notes represented by
a Global Note, the Trustee will exchange such
Global Note for two Global Notes, one of which
shall represent the Book-Entry Notes for which
withdrawal messages are processed and shall be
cancelled immediately after issuance, and the
other of which shall represent the other
Book-Entry Notes previously represented by the
surrendered Global Note and shall bear the CUSIP
number of the surrendered Global Note. In the
case of any Book-Entry Note sold through the
Presenting Agent, as agent, if the purchase price
for any Book-Entry Note is not timely paid to the
Participants with respect to such Book-Entry Note
by the beneficial purchaser thereof (or a person,
including an indirect participant in DTC, acting
on behalf of such purchaser), such Participants
and, in turn, the related Presenting Agent may
enter SDFS
26
deliver orders through DTC's
Participant Terminal System reversing
the orders entered pursuant to
Settlement Procedures G and H,
respectively. Thereafter, the Trustee
will deliver the withdrawal message and
take the related actions described in
the preceding paragraph. If such
failure has occurred for any reason
other than default by the applicable
Presenting Agent to perform its
obligations hereunder or under the
Distribution Agreement, the Company
will reimburse such Presenting Agent on
an equitable basis for its loss of the
use of funds during the period when the
funds were credited to the account of
the Company.
Notwithstanding the foregoing, upon any
failure to settle with respect to a
Book-Entry Note, DTC may take any
actions in accordance with its SDFS
operating procedures then in effect. In
the event of a failure to settle with
respect to a Book-Entry Note that was
to have been represented by a Global
Note also representing other Book-Entry
Notes, the Trustee will provide, in
accordance with Settlement Procedures D
and E, for the authentication and
issuance of a Global Note representing
such remaining Book-Entry Notes and
will make appropriate entries in its
records.
PART III: PROCEDURES FOR CERTIFICATED NOTES
Denominations: Certificated Notes will be issued in
denominations of $1,000 and integral
multiples of $1,000 in excess thereof
unless otherwise indicated in the
applicable Pricing Supplement.
Payments of Principal, Premium, Upon presentment and delivery of the
if any, and Interest: Certificated Note, the Trustee upon
receipt of immediately available funds
from the Company will pay the principal
amount of each Certificated Note at
Maturity and premium, if any, and the
final installment of
27
interest in immediately available funds.
All interest payments on a Certificated
Note, other than interest due at
Maturity, will be made at the Corporate
Trust Office; provided, however, that
such payment of interest may be made, at
the option of the Company by check to
the address of the person entitled
thereto as such address shall appear in
the Security Register. Notwithstanding
the foregoing, holders of ten million
dollars or more in aggregate principal
amount of Certificated Notes having the
same Interest Payment Dates shall, at
the option of the Company, be entitled
to receive payments of interest (other
than at Maturity) by wire transfer of
immediately available funds if
appropriate wire transfer instructions
have been received in writing by the
Trustee not less than 15 days prior to
the applicable Interest Payment Date
(any such wire transfer instructions
received by the Trustee shall remain in
effect until revoked by such Holder).
The Trustee will provide monthly to the
Company a list of the principal,
premium, if any, and interest to be paid
on Certificated Notes maturing in the
next succeeding month. The Trustee will
be responsible for withholding taxes on
interest paid as required by applicable
law, but shall be relieved from any such
responsibility if it acts in good faith
and in reliance upon an opinion of
counsel.
Certificated Notes presented to the
Trustee at Maturity for payment will be
cancelled by the Trustee. All cancelled
Certificated Notes held by the Trustee
shall be destroyed, and the Trustee
shall furnish to the Company a
certificate with respect to such
destruction.
Settlement Procedures: Settlement Procedures with regard to
each Certificated Note purchased by an
Agent, as principal, or through an
Agent, as agent, shall be as follows:
A. The Presenting Agent will advise the
28
Company by telephone, confirmed by
facsimile, of the following
settlement information with regard
to each Certificated Note:
1. Exact name in which the
Certificated Note(s) is (are)
to be registered (the
"Registered Owner").
2. Exact address or addresses of
the Registered Owner for
delivery, notices and payments
of principal, premium, if any,
and interest.
3. Taxpayer identification number
of the Registered Owner.
4. Principal amount.
5. Authorized denomination.
6. Fixed Rate Notes:
(a) interest rate;
(b) interest payment dates;
and
(c) whether such Fixed Rate
Note is being issued as a
Discount Note and, if so,
the terms thereof.
Floating Rate Notes:
(a) base rate;
(b) initial interest rate;
(c) spread or spread
multiplier, if any;
(d) interest rate reset
dates;
(e) interest rate reset
period;
(f) interest payment dates;
(g) interest payment period;
29
(h) index maturity;
(i) calculation agent;
(j) maximum interest rate, if any;
(k) minimum interest rate, if any;
(l) calculation date;
(m) interest determination dates; and
(n) whether such Floating Rate Note is
being issued as a Discount Note
and, if so, the terms thereof.
7. Price to public of such Certificated
Note (or whether such Note is being
offered at varying prices relating to
prevailing market prices at time of
resale as determined by the Presenting
Agent).
8. Trade Date.
9. Settlement Date (Original Issue Date).
10. Stated Maturity Date.
11. Net proceeds to the Company.
12. Presenting Agent's discount or
commission (determined in accordance
with Schedule A to the Distribution
Agreement).
13. Redemption provisions, if any,
including: Redemption Commencement
Date, Initial Redemption Percentage and
Annual Redemption Percentage Reduction.
14. Optional Repayment Date(s) and
repayment provisions, if any.
15. Name of Presenting Agent (and
30
whether such Note is being sold
to the Presenting Agent as
principal or to an investor or
other purchaser through the
Presenting Agent acting as agent
for the Company).
16. Such other information specified
with respect to such Note
(whether by Addendum or
otherwise).
B. After receiving such settlement
information from the Presenting
Agent, the Company will advise the
Trustee of the above settlement
information by facsimile
transmission confirmed by telephone.
The Company will cause the Trustee
to issue, authenticate and deliver
the Certificated Notes.
C. The Trustee will complete the
preprinted 4-ply Certificated Note
packet containing the following
documents in forms approved by the
Company, the Presenting Agent and
the Trustee consistent with the
Indenture, and will make three
copies thereof (herein called "Stub
1," "Stub 2" and "Stub 3"):
1. Certificated Note with the
Presenting Agent's confirmation,
if traded on a principal basis,
or the Presenting Agent's
customer confirmation, if traded
on an agency basis.
2. Stub 1 - for Trustee.
3. Stub 2 - for Presenting Agent.
4. Stub 3 - for the Company.
D. With respect to each trade, the
Trustee will deliver the
Certificated Notes and Stub 2
thereof to the Presenting Agent at
the following applicable address: If
to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated to ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated,
Merrill
31
▇▇▇▇▇ Money Markets Clearance, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇/▇▇/ ▇▇▇▇▇ - ▇▇▇▇▇
Level, DTC New York Window, New
York, New York 10041, Attention:
▇▇▇▇ ▇▇▇▇, tel. no. (212)
▇▇▇-▇▇▇▇, fax no. (▇▇▇) ▇▇▇-▇▇▇▇,
and if to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. to
▇▇▇▇▇▇▇, Sachs & Co., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 6th Floor. The
Trustee will keep Stub 1. The
Presenting Agent will acknowledge
receipt of the Certificated Note
through a broker's receipt and
will keep Stub 2. Delivery of the
Certificated Note will be made
only against such acknowledgment
of receipt. Upon determination
that the Certificated Note has
been authorized, delivered and
completed as aforementioned, the
Presenting Agent will wire the net
proceeds of the Certificated Note
after deduction of its applicable
discount or commission to the
Company pursuant to standard wire
instructions given by the Company.
E. In the case of Certificated Notes
sold through the Presenting Agent,
as agent, the Presenting Agent
will deliver the Certificated Note
(with confirmations), as well as a
copy of the Prospectus and the
applicable Pricing Supplement or
Supplements received from the
Trustee to the purchaser against
payment in immediately available
funds.
F. The Trustee will send Stub 3 to
the Company.
Settlement Procedures Timetable: For offers to purchase Certificated
Notes accepted by the Company,
Settlement Procedures "A" through "F"
set forth above shall be completed as
soon as possible following the trade
but not later than the respective
times (New York City time) set forth
below:
32
Settlement
Procedure Time
--------- ----
A 11:00 a.m. on the trade
date or within one hour
following the trade
B 12:00 noon on the trade
date or within one hour
following the trade
C-D 2:15 p.m. on Settlement
Date
E 3:00 p.m. on Settlement
Date
F 5:00 p.m. on Settlement
Date
Failure to Settle: In the case of Certificated Notes sold
through the Presenting Agent, as agent, in
the event that a purchaser of a
Certificated Note from the Company either
fails to accept delivery of or make
payment for a Certificated Note on the
Settlement Date, the Presenting Agent will
forthwith notify the Trustee and the
Company by telephone, confirmed in
writing, and return such Certificated Note
and related stub to the Trustee.
The Trustee, upon receipt of the
Certificated Note and related stub from
the Presenting Agent, will immediately
advise the Company and the Company will
promptly arrange to credit the account of
the Presenting Agent in an amount of
immediately available funds equal to the
amount previously paid by such Presenting
Agent in settlement for such Certificated
Note. Such credits will be made on the
Settlement Date if possible, and in any
event not later than the Business Day
following the Settlement Date; provided
that the Company has received notice on
the same day. If such failure has occurred
for any reason other than failure by such
Presenting Agent to
33
perform its obligations hereunder or under
the Distribution Agreement, the Company
will reimburse such Presenting Agent on an
equitable basis for its loss of the use of
funds during the period when the funds
were credited to the account of the
Company. Immediately upon receipt of the
Certificated Note in respect of which the
failure occurred, the Trustee will cancel
and destroy the Certificated Note (and
related stubs), make appropriate entries
in its records to reflect the fact that
the Certificated Note was never issued,
and accordingly notify in writing the
Company.
34
ANNEX III
Accountants' Letter
-------------------
Pursuant to Section 4(j) and Section 6(d), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder.
(ii) In their opinion, the consolidated financial statements and financial
statement schedules audited by them and incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations thereunder.
(iii) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus, inquiries of officials of the
Company and its subsidiaries responsible for financial and accounting matters
and such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included or incorporated by reference in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements
of the Act and the Exchange Act as it applies to Form 10-Q and the related
published rules and regulations thereunder or that any material
modifications should be made for them to be in conformity with generally
accepted accounting principles;
(B) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
1
(C) as of the date of the latest available financial statements
of the Company and at a subsequent date not more than five business days
prior to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock under the
Company's Dividend Reinvestment and Stock Purchase Plan, Employee Stock
Ownership Plan, Retirement Savings Plan, Stock Option and Incentive Plans
or other similar plans, and the incurrence of capital stock issuance
expenses) of the Company or in the preferred stock or other securities of
the Company's subsidiaries, or any increase in the consolidated long-term
debt of the Company and its subsidiaries or any decreases in consolidated
net assets of the Company and its subsidiaries or other items specified by
the Agents, or any increases in any items specified by the Agents, in each
case as compared with the amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in each
case for changes, increases or decreases that the Prospectus discloses have
occurred or may occur or that are described in such letter; and
(D) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus ending
as of the date of the latest available financial statements of the Company
and at a subsequent date referred to in clause (C) there were any decreases
in consolidated revenues or operating profit or basic per share amounts of
consolidated net income of the Company or other items specified by the
Agents, or any increases in any items specified by the Agents, in each case
as compared with the comparable period of the preceding year and with any
other period of corresponding length specified by the Agents, except in
each case for increases or decreases that the Prospectus discloses have
occurred or may occur or that are described in such letter;
(v) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Agents that are derived from the general accounting
records of the Company and its subsidiaries, that appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the Agents or
in documents incorporated by reference in the Prospectus specified by the
Agents, and have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries and
have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Distribution Agreement as of the Commencement Date
referred to in Section 6(d) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein) as of
the date of the amendment, supplement, incorporation or the Time of Delivery
relating to an agreement to purchase Securities as principal requiring the
delivery of such letter under Section 4(j) thereof.
2