Exhibit 4(p)
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PARTNERSHIP GUARANTEE AGREEMENT
HEI PREFERRED FUNDING, LP
DATED AS OF JANUARY [ ], 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.......................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application...................... 6
SECTION 2.2 Lists of Holders of Securities........................ 6
SECTION 2.3 Reports by the Partnership Guarantee Trustee.......... 7
SECTION 2.4 Periodic Reports to the Partnership Guarantee
Trustee............................................... 7
SECTION 2.5 Evidence of Compliance with Conditions Precedent...... 7
SECTION 2.6 Events of Default; Waiver............................. 7
SECTION 2.7 Event of Default; Notice.............................. 8
SECTION 2.8 Conflicting Interests................................. 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE
PARTNERSHIP GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Partnership Guarantee Trustee 8
SECTION 3.2 Certain Rights of the Partnership Guarantee Trustee... 11
SECTION 3.3 Not Responsible for Recitals or Issuance of the
Partnership Guarantee................................. 14
ARTICLE IV
THE PARTNERSHIP GUARANTEE TRUSTEE
SECTION 4.1 The Partnership Guarantee Trustee; Eligibility.......... 14
SECTION 4.2 Appointment, Removal and Resignation of Partnership
Guarantee Trustee....................................... 15
SECTION 4.3 Successor to the Partnership Guarantee Trustee by
Merger, Consolidation or Succession to Business......... 16
ARTICLE V
THE PARTNERSHIP GUARANTEE
SECTION 5.1 Guarantee............................................. 16
SECTION 5.2 Waiver of Notice and Demand........................... 17
SECTION 5.3 Obligations Not Affected.............................. 17
SECTION 5.4 Rights of Holders..................................... 18
SECTION 5.5 Guarantee of Payment.................................. 19
SECTION 5.6 Subrogation........................................... 19
SECTION 5.7 Independent Obligations............................... 19
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions............................ 19
SECTION 6.2 Ranking............................................... 20
ARTICLE VII
TERMINATION
SECTION 7.1 Termination........................................... 21
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
SECTION 8.1 Exculpation........................................... 22
SECTION 8.2 Indemnification....................................... 22
ARTICLE IX
COVENANTS OF THE GUARANTOR
SECTION 9.1 General Partner of the Partnership.................... 23
SECTION 9.2 Amendments............................................ 23
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Successors and Assigns................................ 23
SECTION 10.2 Merger of the Guarantor............................... 23
SECTION 10.3 Notices............................................... 24
SECTION 10.4 Gender................................................ 25
SECTION 10.5 Benefit............................................... 25
SECTION 10.6 Governing Law......................................... 26
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
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310(a) ........................................................ 4.1(a)
310(b) ........................................................ 4.1(c), 2.8
310(c) ........................................................ Inapplicable
311(a) ........................................................ 2.2(b)
311(b) ........................................................ 2.2(b)
311(c) ........................................................ Inapplicable
312(a) ........................................................ 2.2(a)
312(b) ........................................................ 2.2(b)
313 ........................................................ 2.3
314(a) ........................................................ 2.4
314(b) ........................................................ Inapplicable
314(c) ........................................................ 2.5
314(d) ........................................................ Inapplicable
314(e) ........................................................ 1.1, 2.5, 3.2
314(f) ........................................................ 2.1, 3.2
315(a) ........................................................ 3.1(d)
315(b) ........................................................ 2.7
315(c) ........................................................ 3.1
315(d) ........................................................ 3.1(d)
316(a) ........................................................ 1.1, 2.6, 5.4
316(b) ........................................................ 5.3
316(c) ........................................................ 9.2
317(a) ........................................................ Inapplicable
317(b) ........................................................ Inapplicable
318(a) ........................................................ 2.1(b)
318(b) ........................................................ 2.1
318(c) ........................................................ 2.1(a)
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* This Cross-Reference Table does not constitute part of this Partnership
Guarantee Agreement and shall not affect the interpretation of any of its
terms or provisions.
PARTNERSHIP GUARANTEE AGREEMENT
This PARTNERSHIP GUARANTEE AGREEMENT (this "Partnership Guarantee"),
dated as of February __, 1997, is executed and delivered by Hawaiian Electric
Industries, Inc., a Hawaii corporation (the "Company" or the "Guarantor"), and
The Bank of New York, a New York banking corporation, as trustee (the
"Partnership Guarantee Trustee"), for the benefit of the holders from time to
time of the Partnership Preferred Securities (as defined below).
WHEREAS, pursuant to an Amended and Restated Agreement of Limited
Partnership (the "Agreement of Limited Partnership"), dated as of the date
hereof, of HEI Preferred Funding, LP, a Delaware limited partnership (the
"Partnership"), the Partnership may issue a single series of limited partner
interests in the Partnership (the "Partnership Preferred Securities");
WHEREAS, pursuant to the Agreement of Limited Partnership, the
proceeds received by the Partnership from the issuance and sale of the
Partnership Preferred Securities will be invested by the Partnership in the
Affiliate Investment Instruments and Eligible Debt Securities (each as defined
in the Agreement of Limited Partnership); and
WHEREAS, the Guarantor, as incentive for the Holders (as defined
herein) to purchase Partnership Preferred Securities, desires hereby irrevocably
and unconditionally to agree, to the extent set forth herein, to pay to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Partnership Preferred Securities, which purchase the Guarantor hereby agrees
shall directly or indirectly provide material benefits to the Guarantor, the
Guarantor executes and delivers this Partnership Guarantee for the benefit of
the Holders.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Partnership Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Partnership Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) capitalized terms used in this Partnership Guarantee but not
otherwise defined herein shall have the meanings assigned to them in the
Agreement of Limited Partnership or the Trust Agreement, as the case may be;
(c) a term defined anywhere in this Partnership Guarantee has the same
meaning throughout;
(d) all references to "this Partnership Guarantee" are to this
Partnership Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Partnership Guarantee to Articles and
Sections are to Articles and Sections of this Partnership Guarantee, unless
otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Partnership Guarantee, unless otherwise defined in this
Partnership Guarantee or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" means, with respect to any specified Person, any other
Person that directly or indirectly controls or is controlled by, or is under
common control with, such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
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by contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Affiliate Investment Instrument" shall have the meaning set forth in
the Agreement of Limited Partnership.
"Comparable Equity Interest" shall mean any preferred security
hereafter issued by any finance subsidiary of which the Company is the parent
company and the principal purpose of which is to lend the proceeds of the sale
thereof to the Company or to eligible affiliates of the Company.
"Corporate Trust Office" means the principal trust office of the
Partnership Guarantee Trustee at which, at any particular time, its corporate
trust business shall be administered, which office at the date hereof is located
at 101 Barclay Street, 21st Floor, New York, New York 10286, Attention:
Corporate Trust Trustee Administration.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Partnership Guarantee.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Partnership Preferred
Securities, to the extent not paid or made by the Partnership: (i) any
accumulated and unpaid distributions that have theretofore been declared on the
Partnership Preferred Securities out of funds legally available therefor, (ii)
the redemption price, including all accumulated and unpaid Distributions to the
date of redemption (the "Redemption Price"), payable out of funds legally
available therefor, with respect to any Partnership Preferred Securities called
for redemption by the Partnership, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Partnership, the lesser of (a) the
aggregate of the liquidation preference and all accumulated and unpaid
distributions on the Partnership Preferred Securities to the date of payment and
(b) the amount of assets of the Partnership after satisfaction of all
liabilities remaining available for distribution to Holders in liquidation of
the Partnership (in either case, the "Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and records
of the Partnership, of any Partnership Preferred
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Securities; provided, however, that in determining whether the holders of the
requisite percentage of Partnership Preferred Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or
any entity owned more than 50% by the Guarantor, either directly or indirectly.
"Indemnified Person" means the Partnership Guarantee Trustee, any
Affiliate of the Partnership Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Partnership Guarantee Trustee.
"Investment Affiliate" means the Company or any corporation,
partnership, limited liability company or other entity (other than the
Partnership, the general partner of the Partnership or the Trust) that is
controlled by the Company and is not an investment company by reason of Section
3(a) or 3(b) of the 1940 Act.
"Investment Event of Default" means an event of default under any
Affiliate Investment Instrument that is a debt instrument or the breach by an
Investment Affiliate of its obligations under any Affiliate Investment
Instrument that is an equity instrument.
"Majority in liquidation preference of the Partnership Preferred
Securities" means, except as provided by the Trust Indenture Act, a vote by the
Holders of Partnership Preferred Securities, voting separately as a class, of
more than 50% of the aggregate liquidation preference (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all Partnership Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Partnership Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
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(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Partnership" means HEI Preferred Funding, L.P.
"Partnership Guarantee Trustee" means The Bank of New York, a New York
banking corporation, until a Successor Partnership Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Partnership Guarantee and thereafter means each such Successor Partnership
Guarantee Trustee.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the Partnership Guarantee
Trustee, any officer within the Corporate Trust Office of the Partnership
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, any assistant treasurer or other officer of the Trust
Guarantee Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Partnership Guarantee Trustee" means a successor
Partnership Guarantee Trustee possessing the qualifications to act as
Partnership Guarantee Trustee under Section 4.1.
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"Trust" means Hawaiian Electric Industries Capital Trust I, a Delaware
statutory business trust.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Partnership Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Partnership Guarantee
and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Partnership
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, the duties imposed by the Trust
Indenture Act shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Partnership Guarantee Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders of Partnership Preferred Securities. If the
Partnership Trustee is not the Registrar, the Guarantor shall furnish to the
Partnership Guarantee Trustee semi-annually on or before the last day of June
and December in each year, and at such other times as the Partnership Guarantee
Trustee may request in writing, a list, in such form and as of such date as the
Partnership Guarantee Trustee may reasonably require, containing all the
information in the possession or control of the Registrar, the Guarantor or any
of its Paying Agents other than the Partnership Guarantee Trustee as to the
names and addresses of Holders of Partnership Preferred Securities. If there
are unregistered securities outstanding, even if the Partnership Guarantee
Trustee is the Registrar, the Company shall furnish to the Partnership Guarantee
Trustee such a list containing such information with respect to Holders of such
unregistered securities only.
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(b) The Partnership Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Partnership Guarantee Trustee
Within 60 days after May 15 of each year, the Partnership Guarantee
Trustee shall provide to the Holders of the Partnership Preferred Securities
such reports as are required by Section 313 of the Trust Indenture Act, if any,
in the form and in the manner provided by Section 313 of the Trust Indenture
Act. The Partnership Guarantee Trustee shall also comply with the requirements
of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to the Partnership Guarantee Trustee
The Guarantor shall provide to the Partnership Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act. Delivery of such reports, information and documents to the
Partnership Guarantee Trustee is for informational purposes only and the
Partnership Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Partnership Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Partnership Guarantee that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion required
to be given by an officer pursuant to Section 314(c)(1) may be given in the form
of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Partnership
Preferred Securities may, by vote, on behalf of the Holders of all of the
Partnership Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Partnership Guarantee, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.
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SECTION 2.7 Event of Default; Notice
(a) The Partnership Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Partnership Preferred Securities, notices of all
Events of Default actually known to a Responsible Officer of the Partnership
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice; provided, however, that the Partnership Guarantee Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Partnership Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Partnership Preferred
Securities.
(b) The Partnership Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Partnership Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the
Partnership Guarantee Trustee charged with the administration of the Trust
Agreement shall have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Trust Agreement shall be deemed to be specifically described in
this Partnership Guarantee for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
THE PARTNERSHIP GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Partnership Guarantee Trustee
(a) This Partnership Guarantee shall be held by the Partnership
Guarantee Trustee for the benefit of the Holders of the Partnership Preferred
Securities, and the Partnership Guarantee Trustee shall not transfer this
Partnership Preferred Guarantee to any Person except a Holder of Partnership
Preferred Securities exercising his or her rights pursuant to Section 5.4(b) or
to a Successor Partnership Guarantee Trustee
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on acceptance by such Successor Partnership Guarantee Trustee of its appointment
to act as Successor Partnership Guarantee Trustee. The right, title and interest
of the Partnership Guarantee Trustee shall automatically vest in any Successor
Partnership Guarantee Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Partnership Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Partnership Guarantee Trustee has occurred and is continuing, the
Partnership Guarantee Trustee shall enforce this Partnership Guarantee for the
benefit of the Holders of the Partnership Preferred Securities.
(c) The Partnership Guarantee Trustee, during the period before the
occurrence of any Event of Default and during the period after the curing or
waiver of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Partnership
Guarantee, and no implied covenants shall be read into this Partnership
Guarantee against the Partnership Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
and is actually known to a Responsible Officer of the Partnership Guarantee
Trustee, the Partnership Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Partnership Guarantee, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Partnership Guarantee shall be construed to
relieve the Partnership Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) During the period prior to the occurrence of any Event of
Default and during the period after the curing or waiving of any Events of
Default that may occur:
(A) the duties and obligations of the Partnership Guarantee
Trustee shall be determined solely by the express provisions of this
Partnership Guarantee, and the Partnership Guarantee Trustee shall not
be liable except for the performance of
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such duties and obligations as are specifically set forth in this
Partnership Guarantee, and no implied covenants or obligations shall
be read into this Partnership Guarantee against the Partnership
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Partnership
Guarantee Trustee, the Partnership Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Partnership
Guarantee Trustee and conforming to the requirements of this
Partnership Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Partnership
Guarantee Trustee, the Partnership Guarantee Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Partnership
Guarantee;
(ii) The Partnership Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Partnership Guarantee Trustee, unless it shall be proved that the
Partnership Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) The Partnership Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Partnership Preferred
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Partnership
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Guarantee Trustee, or exercising any trust or power conferred upon the
Partnership Guarantee Trustee under this Partnership Guarantee; and
(iv) No provision of this Partnership Guarantee shall require the
Partnership Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the Partnership
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this Partnership Guarantee or indemnity, reasonably
satisfactory to the Partnership Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of the Partnership Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Partnership Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Partnership Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this Partnership
Guarantee, the Partnership Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Partnership Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor.
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(iv) The Partnership Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Partnership Guarantee Trustee may, at the expense of the
Sponsor, consult with counsel of its selection, and the advice or opinion
of such counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Partnership Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Partnership Guarantee from any court of
competent jurisdiction.
(vi) The Partnership Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Partnership
Guarantee at the request or direction of any Holder, unless such Holder
shall have provided to the Partnership Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Partnership Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Partnership Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Partnership Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Partnership Guarantee Trustee, upon the occurrence of an Event of Default,
of its obligation to exercise the rights and powers vested in it by this
Partnership Guarantee.
(vii) The Partnership Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture,
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note, other evidence of indebtedness or other paper or document, but the
Partnership Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(viii) The Partnership Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the
Partnership Guarantee Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care
by it hereunder.
(ix) Any action taken by the Partnership Guarantee Trustee or its
agents hereunder shall bind the Holders of the Partnership Preferred
Securities, and the signature of the Partnership Guarantee Trustee or its
agents alone shall be sufficient and effective to perform any such action.
No third party shall be required to inquire as to the authority of the
Partnership Guarantee Trustee to so act or as to its compliance with any of
the terms and provisions of this Partnership Guarantee, both of which shall
be conclusively evidenced by the Partnership Guarantee Trustee or its agent
taking such action.
(x) Whenever in the administration of this Partnership Guarantee the
Partnership Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Partnership Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the
Partnership Preferred Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively relying on or acting
in accordance with such instructions.
(xi) The Partnership Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Partnership Guarantee.
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(b) No provision of this Partnership Guarantee shall be deemed to impose
any duty or obligation on the Partnership Guarantee Trustee to perform any act
or acts or exercise any right, power, duty or obligation conferred or imposed on
it in any jurisdiction in which it shall be illegal, or in which the Partnership
Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
Partnership Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of the Partnership
Guarantee
The recitals contained in this Partnership Guarantee shall be taken as the
statements of the Guarantor, and the Partnership Guarantee Trustee does not
assume any responsibility for their correctness. The Partnership Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Partnership Guarantee.
ARTICLE IV
THE PARTNERSHIP GUARANTEE TRUSTEE
SECTION 4.1 The Partnership Guarantee Trustee; Eligibility
(a) There shall at all times be a Partnership Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the
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requirements of the supervising or examining authority referred to above,
then, for the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Partnership Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Partnership Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Partnership Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Partnership Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of the Partnership Guarantee
Trustee
(a) Subject to Section 4.2(b), the Partnership Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an
Event of Default.
(b) The Partnership Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Partnership Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Partnership Guarantee Trustee and delivered to the Guarantor.
(c) The Partnership Guarantee Trustee appointed to office shall hold office
until a Successor Partnership Guarantee Trustee shall have been appointed or
until its removal or resignation. The Partnership Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Partnership Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Partnership
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Partnership Guarantee Trustee
and delivered to the Guarantor and the resigning Partnership Guarantee Trustee.
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(d) If no Successor Partnership Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of removal or resignation, the Partnership Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Partnership Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Partnership Guarantee Trustee.
(e) No Partnership Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Partnership Guarantee Trustee.
(f) Upon termination of this Partnership Guarantee or removal or
resignation of the Partnership Guarantee Trustee pursuant to this Section 4.2,
and before the appointment of any Successor Partnership Guarantee Trustee the
Guarantor shall pay to the Partnership Guarantee Trustee all amounts to which it
is entitled to the date of such termination, removal or resignation.
SECTION 4.3 Successor to the Partnership Guarantee Trustee by Merger,
Consolidation or Succession to Business.
Any corporation into which the Partnership Guarantee Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Partnership Guarantee Trustee, shall be the successor of the Partnership
Guarantee Trustee hereunder, provided such corporation shall be qualified and
eligible under the provisions of Section 4.1(a), without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
ARTICLE V
THE PARTNERSHIP GUARANTEE
SECTION 5.1 Guarantee.
(a) The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments, as and when due (without duplication of
amounts theretofore paid by the Partnership), regardless of any defense, right
of setoff or counterclaim which the Partnership may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Partnership to pay such amounts to the Holders.
(b) To the extent the same has not been paid by the General Partner, the
Guarantor irrevocably and unconditionally agrees to pay in full, as and when
due, without duplication of any amounts actually paid by the General Partner,
all debts, obligations, liabilities or expenses which the General Partner is
responsible for pursuant to the Agreement of Limited Partnership, including,
without limitation, those debts, obligations, liabilities or expenses set forth
in Sections 9.1, 9.2 and 11.3 thereof.
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SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Partnership
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Partnership, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor under
this Partnership Guarantee shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Partnership of any express or implied
agreement, covenant, term or condition relating to the Partnership Preferred
Securities to be performed or observed by the Partnership;
(b) the extension of time for the payment by the Partnership of all or any
portion of the distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Partnership Preferred Securities or
the extension of time for the performance of any other obligation under, arising
out of, or in connection with, the Partnership Preferred Securities; provided
that nothing in this Partnership Guarantee shall affect or impair any valid
extension of time for payment of such sums;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Partnership Preferred
Securities, or any action on the part of the Partnership granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of
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debt of, or other similar proceedings affecting, the Partnership or any of the
assets of the Partnership;
(e) any invalidity of, or defect or deficiency in, the Partnership
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
The Guarantor expressly acknowledges that (i) this Partnership Guarantee
will be deposited with the General Partner to be held for the benefit of the
Holders; (ii) in the event of the appointment of a Special Representative to,
among other things, enforce this Partnership Guarantee, the Special
Representative may take possession of this Partnership Guarantee for such
purpose; (iii) if no Special Representative has been appointed, the General
Partner has the right to enforce this Partnership Guarantee on behalf of the
Holders; (iv) the Holders of not less than a Majority in liquidation preference
of the Partnership Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available in
respect of this Partnership Guarantee including the giving of directions to the
General Partner or the Special Representative, as the case may be; and (v) if
the General Partner or Special Representative fails to enforce this Partnership
Guarantee as above provided, any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Partnership
Guarantee, without first instituting a legal proceeding against the Partnership
or any other person or entity. Notwithstanding the foregoing, if the Guarantor
has failed to make a Guarantee Payment, a Holder may directly institute a
proceeding against the Guarantor to
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enforce such Guarantee Payment under this Partnership Guarantee.
SECTION 5.5 Guarantee of Payment
This Partnership Guarantee will constitute a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Partnership in respect of any amounts paid to the Holders by the
Guarantor under this Partnership Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Partnership Guarantee, if, at the time of any
such payment, any amounts are due and unpaid under this Partnership Guarantee.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Partnership with respect to the Partnership Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Partnership
Guarantee notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Partnership Preferred Securities remain outstanding, if (a)
for any distribution period, full distributions on a cumulative basis on any
Partnership
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Preferred Securities have not been paid or declared and set apart for payment
(b) an Investment Event of Default by any Investment Affiliate in respect of any
Affiliate Investment Instrument has occurred and is continuing and the Guarantor
has not performed its obligations with respect thereto under an applicable
Investment Guarantee or (c) the Guarantor shall be in default with respect to
its payment obligations under this Partnership Guarantee, the Trust Preferred
Securities Guarantee or the Trust Common Securities Guarantee then, during such
period (i) the Company shall not declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a liquidation payment
with respect to any of its capital stock (except for dividends or distributions
in shares of its common stock and exchanges or conversions of common stock of
one class for common stock of another class and other than (x) purchases or
acquisitions of shares of its Common Stock in connection with the satisfaction
by the Company of its obligations under any employee benefit plans or any other
contractual obligation of the Company (other than a contractual obligation
ranking pari passu with or junior to any Affiliate Investment Instrument), (y)
as a result of a reclassification of the Company's capital stock or the exchange
or conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or (z) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged), (ii) the Company shall not make any payment or cause any payment to
be made that would result in and shall take such action as shall be necessary to
prevent, the payment of dividends on, any distribution with respect to, any
redemption, purchase or other acquisition of, or any liquidation payment with
respect to, any Comparable Equity Interest, and (iii) the Company shall not make
any guarantee payments with respect to the foregoing (other than pursuant to
this Partnership Guarantee or any other guarantee by the Company with respect to
any Comparable Equity Interest).
SECTION 6.2 Ranking
This Partnership Guarantee will constitute an unsecured obligation of the
Guarantor and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Guarantor, including, without limitation, the fees,
charges, expenses and indemnities due to the Property Trustee or the
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Delaware Trustee in respect of the Trust Agreement, to the Trust Guarantee
Trustee in respect of the Trust Preferred Securities Guarantee, to the
Investment Guarantee Trustee in respect of the Investment Guarantee and to the
Partnership Guarantee Trustee in respect of this Partnership Guarantee, (ii)
pari passu with (A) the most senior preferred or preference stock now or
hereafter issued by the Guarantor, (B) each Investment Guarantee related to an
Affiliate Investment Instrument, (C) the Trust Preferred Securities Guarantee,
(D) any guarantee hereafter entered into by the Guarantor in respect of any
preferred security (similar to the Trust Preferred Securities or the Partnership
Preferred Securities) of the Guarantor or any Affiliate of the Guarantor, and
(E) any other obligation of the Guarantor expressly stated to rank pari passu
with this Partnership Guarantee or any of the foregoing, (iii) senior to the
Guarantor's common stock. Any similar guarantee given hereafter by the Company
with respect to Partnership Preferred Securities that is silent as to seniority
will rank pari passu with this Partnership Guarantee.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Partnership Guarantee shall terminate and be of no further force and
effect, as to the Partnership Preferred Securities, upon full payment of the
Redemption Price of all Partnership Preferred Securities, and will terminate
completely upon full payment of the amounts payable in accordance with the
Agreement of Limited Partnership upon liquidation of the Partnership. This
Partnership Guarantee will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must, in accordance with Delaware
Revised Uniform Limited Partnership Act, restore payment of any sums paid under
any Partnership Preferred Securities or this Partnership Guarantee.
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ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Partnership Guarantee
and in a manner that such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Partnership Guarantee or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions, reports
or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Partnership Preferred Securities might
properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense, including taxes (other than taxes based on the income of such
Indemnified Person), incurred without gross negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The
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obligation to indemnify as set forth in this Section 8.2 shall survive the
termination of this Partnership Guarantee or the earlier resignation or removal
of the Trust Guarantee Trustee.
ARTICLE IX
COVENANTS OF THE GUARANTOR
SECTION 9.1 Owner of Interest in the Partnership
For so long as the Partnership Preferred Securities remain outstanding, the
Guarantor hereby covenants and agrees that it will, directly or indirectly,
maintain 100% ownership of the General Partner's interest in the Partnership.
SECTION 9.2 Merger of the Guarantor
The Guarantor covenants that it will not merge or consolidate with any
other corporation or other entity or sell or convey all or substantially all of
its assets to any Person (other than such a sale or conveyance to a Subsidiary
or any successor thereto (such a sale or conveyance being called an "Asset Drop-
Down")), unless (i) either the Guarantor shall be the continuing corporation or
the successor corporation or other entity or the Person which acquires by sale
or conveyance substantially all the assets of the Guarantor shall expressly
assume the obligations of the Guarantor hereunder, according to their tenor, and
the due and punctual performance and observance of all of the covenants hereof
to be performed or observed by the Guarantor, by instrument in form satisfactory
to the General Partner, executed and delivered to the General Partner by such
corporation or other entity, and (ii) the Guarantor or such successor
corporation or other entity, as the case may be, shall not, immediately after
such merger or consolidation, or such sale or conveyance, be in default in the
performance of any such covenant or condition. In the event of any Asset Drop-
Down after the date hereof, any subsequent sale or conveyance of assets by a
Subsidiary to which assets were transferred in such Asset Drop-Down will be
deemed to be a sale or conveyance of assets by the Company for purposes of this
provision.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Successors and Assigns
All guarantees and agreements contained in this Partnership Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Partnership
Preferred Securities then outstanding.
SECTION 10.2 Amendments
Except with respect to any changes which do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Partnership Guarantee may only be amended with the prior
approval of the Holders of not less than a Majority in liquidation preference of
the Partnership Preferred Securities. The provisions of Section 14.3 of the
Agreement of Limited Partnership with respect to meetings of Holders of the
Partnership Preferred Securities apply to the giving of such approval.
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SECTION 10.3 Notices
All notices provided for in this Partnership Guarantee shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by first class mail, as follows:
(a) If given to the Partnership Guarantee Trustee, at the Partnership
Guarantee Trustee's mailing address set forth below:
The Bank of New York
101 Barclay Street, 21st Floor
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Telecopy: (212)815-5915
(b) If given to the Guarantor, at the Guarantor's mailing address set forth
below (or such other address as the Guarantor may give notice of to the Holders
of the Partnership Preferred Securities):
Hawaiian Electric Industries, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Attention: Treasurer
Telecopy: (808) 543-7966
(c) If given to any Holder of Partnership Preferred Securities, at the
address set forth on the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was
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given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 10.4 Gender
The masculine, feminine and neuter genders used herein shall include the
masculine, feminine and neuter genders.
SECTION 10.5 Benefit
This Partnership Guarantee is solely for the benefit of the Holders and is
not separately transferable from the Partnership Preferred Securities.
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SECTION 10.6 Governing Law
THIS PARTNERSHIP GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
THIS PARTNERSHIP GUARANTEE AGREEMENT is executed as of the day and year
first above written.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
THE BANK OF NEW YORK,
as Partnership Guarantee Trustee
By: _____________________________
Name:
Title:
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