EXHIBIT 4(g)
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TRUST GUARANTEE AGREEMENT
BETWEEN
HAWAIIAN ELECTRIC COMPANY, INC.
(AS GUARANTOR)
AND
THE BANK OF NEW YORK
(AS TRUST GUARANTEE TRUSTEE)
DATED AS OF
MARCH 1, 1997
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TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS AND INTERPRETATION
SECTION 1.01. Definitions and Interpretation................. 2
ARTICLE 2. TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application............... 5
SECTION 2.02. List of Holders................................ 6
SECTION 2.03. Reports by the Trust Guarantee Trustee......... 6
SECTION 2.04. Periodic Reports to Trust Guarantee Trustee.... 6
SECTION 2.05. Evidence of Compliance with Conditions
Precedent...................................... 7
SECTION 2.06. Events of Default; Waiver...................... 7
SECTION 2.07. Event of Default; Notice....................... 7
ARTICLE 3. POWERS, DUTIES AND RIGHTS OF THE TRUST
GUARANTEE TRUSTEE
SECTION 3.01. Powers and Duties of the Trust Guarantee
Trustee........................................ 8
SECTION 3.02. Certain Rights of Trust Guarantee Trustee...... 10
SECTION 3.03. Not Responsible for Recitals or Issuance of
the Trust Guarantee............................ 12
SECTION 3.04. Compensation and Reimbursement................. 12
ARTICLE 4. TRUST GUARANTEE TRUSTEE
SECTION 4.01. Trust Guarantee Trustee; Eligibility........... 13
SECTION 4.02. Appointment, Removal and Resignation of the
Trust Guarantee Trustee........................ 14
ARTICLE 5. GUARANTEE
SECTION 5.01. Guarantee...................................... 14
SECTION 5.02. Waiver of Notice and Demand.................... 15
SECTION 5.03. Obligations Not Affected....................... 15
SECTION 5.04. Rights of Holders.............................. 16
SECTION 5.05. Guarantee of Payment........................... 16
SECTION 5.06. Subrogation.................................... 16
SECTION 5.07. Independent Obligations........................ 17
ARTICLE 6. SUBORDINATION AND RANKING
SECTION 6.01. Subordination.................................. 17
SECTION 6.02. Pari Passu Guarantees.......................... 17
ARTICLE 7. TERMINATION
SECTION 7.01. Termination................................... 17
ARTICLE 8. INDEMNIFICATION
SECTION 8.01. Indemnification................................ 18
ARTICLE 9. MISCELLANEOUS
SECTION 9.01. Successors and Assigns......................... 18
SECTION 9.02. Amendments..................................... 19
SECTION 9.03. Notices........................................ 19
SECTION 9.04. Benefit........................................ 20
SECTION 9.05. Governing Law.................................. 20
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
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310(a)............................................... 4.01(a)
310(b)............................................... 4.01(c)
310(c)............................................... Inapplicable
311(a)............................................... 2.02(b)
311(b)............................................... 2.02(b)
311(c)............................................... Inapplicable
312(a)............................................... 2.02(a)
312(b)............................................... 2.02(b)
313.................................................. 2.03
314(a)............................................... 2.04
314(b)............................................... Inapplicable
314(c)............................................... 2.05
314(d)............................................... Inapplicable
314(e)............................................... 1.01, 2.05, 3.02
314(f)............................................... 2.01, 3.02
315(a)............................................... 3.01(d)
315(b)............................................... 2.07
315(c)............................................... 3.01
315(d)............................................... 3.01(d)
316(a)............................................... 1.01, 2.06, 5.04
316(b)............................................... 5.03
316(c)............................................... 8.02
317(a)............................................... Inapplicable
317(b)............................................... Inapplicable
318(a)............................................... 2.01(b)
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* This Cross-Reference Table does not constitute part of the Trust Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
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TRUST GUARANTEE AGREEMENT
This TRUST GUARANTEE AGREEMENT (this "Trust Guarantee"), dated as of March
1, 1997, is executed and delivered by Hawaiian Electric Company, Inc., a Hawaii
corporation (the "Guarantor or "HECO"), to The Bank of New York, a New York
banking corporation, as trustee (the "Trust Guarantee Trustee"), for the benefit
of the Holders (as defined herein) from time to time of the Trust Preferred
Securities (as defined herein) of HECO Capital Trust I, a Delaware statutory
business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement for the Trust
(the "Trust Agreement"), dated as of March 1, 1997 among the Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Trust, the Trust is issuing
2,000,000 _______% Cumulative Quarterly Income Trust Preferred Securities,
Series 1997 (liquidation preference $25 per preferred security) (the "Trust
Preferred Securities") representing preferred undivided beneficial interests in
the assets of the Trust and having the terms set forth in the Trust Agreement;
WHEREAS, the Trust Preferred Securities will be issued by the Trust and the
proceeds thereof, together with the proceeds from the sale by the Trust of its
Common Securities, will be used to purchase the Debentures (as defined in the
Trust Agreement) which will be deposited with The Bank of New York, as Property
Trustee under the Trust Agreement, as Trust Property (as defined in the Trust
Agreement); and
WHEREAS, as incentive for the Holders to purchase Trust Preferred
Securities, the Guarantor desires 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 Trust
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Trust Guarantee for the
benefit of the Holders from time to time of the Trust Preferred Securities.
ARTICLE 1. DEFINITIONS AND INTERPRETATION
SECTION 1.01. Definitions and Interpretation.
(a) In this Trust Guarantee, unless the context otherwise requires:
(1) capitalized terms used in this Trust Guarantee but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.01;
(2) capitalized terms used in this Trust Guarantee but not otherwise
defined herein shall have the respective meanings assigned to such terms in
the Trust Agreement as in effect on the date hereof;
(3) a term defined anywhere in this Trust Guarantee has the same
meaning throughout;
(4) all references to "this Trust Guarantee" are to this Trust
Guarantee Agreement as modified, supplemented or amended from time to time;
(5) all references in this Trust Guarantee to Articles and Sections
are to Articles and Sections of this Trust Guarantee unless otherwise
specified;
(6) a term defined in the Trust Indenture Act has the same meaning
when used in this Trust Guarantee unless otherwise defined in this Trust
Guarantee or unless the context otherwise requires;
(7) a reference to the singular includes the plural and vice versa;
and
(8) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
(b) As used herein:
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
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"Common Securities" means the common securities representing
common undivided beneficial interests in the assets of the Trust and
having the rights provided therefor in the Trust Agreement.
"Covered Person" means any Holder or beneficial owner of Trust
Preferred Securities.
"Extension Period" has the meaning specified in Section 1.01 of each
of the Indentures.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Trust Guarantee; provided that,
except with respect to a default resulting from a failure to pay any
Guarantee Payment, the Guarantor shall have received written notice of
default and shall not have cured such default within 60 days after receipt
of such notice.
"Guarantee Payments" means the following payments, without
duplication, with respect to the Trust Preferred Securities, to the extent
not paid or made by or on behalf of the Trust: (i) any accumulated and
unpaid Distributions required to be paid on the Trust Preferred Securities,
to the extent the Trust shall have funds on hand available therefor at such
time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price"), with
respect to the Trust Preferred Securities called for redemption by the
Trust, to the extent the Trust shall have funds on hand available therefor
at such time, and (iii) upon a voluntary or involuntary termination,
winding-up or liquidation of the Trust, unless Distributable HECO
Debentures are distributed to the Holders, the lesser of (aa) the aggregate
of the liquidation preference of $25 per Preferred Security plus
accumulated and unpaid Distributions on the Trust Preferred Securities to
the date of payment, to the extent the Trust shall have funds on hand
available therefor at such time and (bb) the amount of assets of the Trust
remaining available for distribution to Holders (in either case, the
"Liquidation Distribution").
"Holder" means a Person in whose name a Trust Preferred Security is
registered in the Securities Register; provided, however, that in
determining whether the holders of the requisite percentage of Trust
Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor, the Trust Guarantee
Trustee or any Affiliate of the Guarantor or the Trust Guarantee Trustee.
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"Indemnified Person" means the Trust Guarantee Trustee, any
Affiliate of the Trust Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Trust Guarantee Trustee.
"Indentures" means (i) the Junior Indenture dated as of March 1, 1997,
between HECO and The Bank of New York, as trustee thereunder (the "HECO
Indenture"), (ii) the Junior Indenture dated as of March 1, 1997 among Maui
Electric Company, Limited ("MECO"), a Hawaii corporation, HECO (as
guarantor of the obligations of MECO thereunder) and The Bank of New York,
as trustee thereunder (the "MECO Indenture"), and (iii) the Junior
Indenture dated as of March 1, 1997 among Hawaii Electric Light Company,
Inc. ("HELCO"), a Hawaii corporation, HECO (as guarantor of the obligations
of HELCO thereunder) and The Bank of New York, as trustee thereunder (the
"HELCO Indenture"), in each case as amended and supplemented; and
"Indenture" means any of the Indentures.
"List of Holders" has the meaning specified in Section 2.02(a).
"Majority in Liquidation Preference of the Trust Preferred Securities"
means, except as provided by the Trust Indenture Act, a vote by the
Holders, of more than 50% of the aggregate liquidation preference of all
then outstanding Trust Preferred Securities (excluding any Trust Preferred
Securities held by the Guarantor, the Trust Guarantee Trustee or any
Affiliate of the Guarantor or the Trust Guarantee Trustee).
"Officer's Certificate" means a certificate signed by the Chairman,
the President, any Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Guarantor.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust Guarantee Trustee or the Guarantor or an Affiliate of
the Guarantor, or an employee of any thereof, who shall be acceptable to
the Trust Guarantee Trustee.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
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"Responsible Officer" means, with respect to the Trust Guarantee
Trustee, any Vice President, any Assistant Vice President, any trust
officer or assistant trust officer or any other officer of the
corporate trust department 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.
"Securities Register" has the meaning set forth in Section 5.04 of the
Trust Agreement.
"Senior Indebtedness" means Senior Indebtedness as defined in the HECO
Indenture.
"Successor Trust Guarantee Trustee" means a successor Trust Guarantee
Trustee possessing the qualifications to act as Trust Guarantee Trustee
under Section 4.01.
"Trust Guarantee Trustee" means The Bank of New York, until a
Successor Trust Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Trust Guarantee and thereafter
means each such Successor Trust Guarantee Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided,
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however, that in the event the Trust Indenture Act of 1939 is amended after
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such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939, as so amended.
ARTICLE 2. TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application.
(a) This Trust Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Guarantee and shall, to
the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Trust Guarantee limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
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SECTION 2.02. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the Trust
Guarantee Trustee (i) semiannually, on or before January 15 and July 15 of each
year, a list, in such form as the Trust Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of a
date not more than 15 days prior to the delivery thereof, and (ii) at such other
times as the Trust Guarantee Trustee may request in writing, within 30 days
after the receipt by the Guarantor of any such request, a List of Holders as of
a date not more than 15 days prior to the time such list is furnished, in each
case to the extent such information is in the possession or control of the
Guarantor and is not identical to a previously supplied List of Holders or has
not otherwise been received by the Trust Guarantee Trustee in its capacity as
such. The Trust Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Trust Guarantee Trustee shall comply with its obligations under
Sections 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Trust Guarantee Trustee.
Within 60 days after May 31 of each year, the Trust Guarantee Trustee shall
provide to the Holders 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 Trust Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Trust Guarantee Trustee.
The Guarantor shall provide to the Trust Guarantee Trustee, the Securities
and Exchange Commission and the Holders such documents, reports and information,
if any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form and
manner and at the times required by Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Trust Guarantee
Trustee is for informational purposes only and the Trust Guarantee Trustee's
receipt thereof shall not constitute constructive notice of any information
contained therein, including the Guarantor's compliance with any of its
covenants hereunder (as to which the Trust Guarantee Trustee is entitled to rely
exclusively on Officer's Certificates).
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SECTION 2.05. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Trust Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this Trust
Guarantee that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Each Officer's Certificate and Opinion of Counsel
delivered with respect to compliance with a condition or covenant provided for
in this Trust Guarantee shall include:
(a) a statement that the officer or attorney signing the Officer's
Certificate or Opinion of Counsel has read the covenant or condition and
the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer or attorney in rendering the
Officer's Certificate or Opinion of Counsel and upon which the statements
contained therein are based;
(c) a statement that such officer or attorney has made such
examination or investigation as, in such officer's or attorney's opinion,
is necessary to enable such officer or attorney 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 such officer or
attorney, such condition or covenant has been complied with.
SECTION 2.06. Events of Default; Waiver.
The Holders of a Majority in Liquidation Preference of the Trust Preferred
Securities may, by vote, on behalf of the holders of Debentures, 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 Trust Guarantee, but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent therefrom.
SECTION 2.07. Event of Default; Notice.
(a) The Trust Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notices of all Events of Default known to the Trust Guarantee Trustee,
unless such defaults have been cured before
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the giving of such notice, provided, that, except in the case of a default in
the payment of a Guarantee Payment, the Trust Guarantee Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trust Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.
(b) The Trust Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless a Responsible Officer of the Trust Guarantee Trustee
shall have received written notice of such Event of Default.
ARTICLE 3. POWERS, DUTIES AND RIGHTS OF THE TRUST GUARANTEE TRUSTEE
SECTION 3.01. Powers and Duties of the Trust Guarantee Trustee.
(a) This Trust Guarantee shall be held by the Trust Guarantee Trustee for
the benefit of the Holders, and the Trust Guarantee Trustee shall not transfer
this Trust Guarantee to any Person except a Holder exercising his or her rights
pursuant to Section 5.04 or to a Successor Trust Guarantee Trustee on acceptance
by such Successor Trust Guarantee Trustee of its appointment to act as Successor
Trust Guarantee Trustee. The right, title and interest of the Trust Guarantee
Trustee shall automatically vest in any Successor Trust Guarantee Trustee upon
acceptance by such Successor Trust Guarantee Trustee of its appointment
hereunder 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 Trust Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Trust Guarantee Trustee has occurred and is continuing, the Trust Guarantee
Trustee shall enforce this Trust Guarantee for the benefit of the Holders.
(c) The Trust Guarantee Trustee, during the period before the occurrence of
any Event of Default and during the period after the curing of all Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Trust Guarantee, and no implied covenants
shall be read into this Trust Guarantee against the Trust Guarantee Trustee. In
case an Event of Default has occurred and is continuing (and has not been cured
or waived pursuant to Section 2.06), the Trust Guarantee Trustee shall exercise
such of the rights and powers vested in it by this
8
Trust Guarantee, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use in the conduct of his or her
own affairs.
(d) No provision of this Trust Guarantee shall be construed to relieve the
Trust Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(1) during the period prior to the occurrence of any Event of Default
and during the period after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Trust Guarantee Trustee
shall be determined solely by the express provisions of this Trust
Guarantee, and the Trust Guarantee Trustee shall not be liable except
for the performance of such duties and obligations as are specifically
set forth in this Trust Guarantee; and
(B) in the absence of bad faith on the part of the Trust
Guarantee Trustee, the Trust 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
Trust Guarantee Trustee and conforming to the requirements of this
Trust Guarantee; but in the case of any such certificates or opinions
that by any provision hereof or of the Trust Indenture Act are
specifically required to be furnished to the Trust Guarantee Trustee,
the Trust Guarantee Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Trust Guarantee or the Trust Indenture Act;
(2) the Trust Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Trust Guarantee
Trustee, unless it shall be proved that the Trust Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
(3) the Trust 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 a Majority in Liquidation Preference
of the Trust Preferred Securities relating to the time, method and place
of conducting any proceeding for any remedy
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available to the Trust Guarantee Trustee, or exercising any trust or
power conferred upon the Trust Guarantee Trustee under this Trust
Guarantee; and
(4) no provision of this Trust Guarantee shall require the Trust
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 Trust 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
Trust Guarantee or reasonable indemnity against such risk or liability is
not reasonably assured to it.
SECTION 3.02. Certain Rights of Trust Guarantee Trustee.
(a) Subject to the provisions of Section 3.01:
(1) The Trust Guarantee Trustee may 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.
(2) Any direction or act of the Guarantor contemplated by this Trust
Guarantee shall be sufficiently evidenced by an Officer's Certificate
unless otherwise prescribed herein.
(3) Whenever, in the administration of this Trust Guarantee, the Trust
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Trust Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officer's Certificate which, upon receipt of such
request from the Trust Guarantee Trustee, shall be promptly delivered by
the Guarantor.
(4) The Trust Guarantee Trustee may consult with legal counsel of its
selection, and the advice or Opinion of Counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in
good faith and in accordance with such advice or opinion. Such legal
counsel may be legal counsel to the Guarantor or any of its Affiliates and
may be one of
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its employees. The Trust Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Trust
Guarantee from any court of competent jurisdiction.
(5) The Trust Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Guarantee
at the request or direction of any Holder, unless such Holder shall have
provided to the Trust Guarantee Trustee such reasonable indemnity as would
satisfy a reasonable person in the position of the Trust Guarantee Trustee
against the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction; provided that nothing contained in this Section 3.02(a)(5) shall
be taken to relieve the Trust Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Trust Guarantee.
(6) The Trust 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, note, other evidence of
indebtedness or other paper or document, but the Trust Guarantee Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(7) The Trust Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, and the Trust Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by it hereunder.
(8) Whenever in the administration of this Trust Guarantee the Trust
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Trust Guarantee Trustee (i) may request instructions from
the Holders, (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 acting in accordance with such instructions.
(9) The Trust Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or reregistration thereof).
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(10) Any action taken by the Trust Guarantee Trustee or its agents
hereunder shall bind the Holders, and the signature of the Trust 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 Trust Guarantee Trustee to so act or as to its compliance
with any of the terms and provisions of this Trust Guarantee, both of
which shall be conclusively evidenced by the Trust Guarantee Trustee or its
agent taking such action.
(11) The Trust 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 Trust Guarantee.
(b) No provision of this Trust Guarantee shall be deemed to impose any duty
or obligation on the Trust 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 Trust 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 Trust Guarantee
Trustee shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.03. Not Responsible for Recitals or Issuance of the Trust Guarantee.
The recitals contained in this Trust Guarantee shall be taken as the
statements of the Guarantor, and the Trust Guarantee Trustee does not assume any
responsibility for their correctness. The Trust Guarantee Trustee makes no
representation as to the validity or sufficiency of this Trust Guarantee.
SECTION 3.04. Compensation and Reimbursement.
The Guarantor covenants and agrees to pay to the Trust Guarantee Trustee
from time to time, and the Trust Guarantee Trustee shall be entitled to, such
compensation as the Guarantor and the Trust Guarantee Trustee shall from time to
time agree (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trust Guarantee
Trustee, and the Guarantor will pay or reimburse the Trust Guarantee Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trust Guarantee Trustee in accordance with any of
the
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provisions of this Trust Guarantee (including the reasonable compensation and
the expenses and disbursements of its counsel and of all persons not regularly
in its employ) except any such expense, disbursement or advance as may arise
from its willful misconduct, negligence or bad faith.
ARTICLE 4. TRUST GUARANTEE TRUSTEE
SECTION 4.01. Trust Guarantee Trustee; Eligibility.
(a) Until such time as this Trust Guarantee shall be terminated in
accordance with the provisions of Section 7.01, there shall at all times be a
Trust Guarantee Trustee which shall:
(1) not be an Affiliate of the Guarantor; and
(2) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least fifty
million U.S. dollars ($50,000,000), and shall be a corporation meeting the
requirements of Section 310(a) of the Trust Indenture Act. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority, then,
for the purposes of this Section and to the extent permitted by the Trust
Indenture Act, 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 Trust Guarantee Trustee shall cease to be eligible
to so act under Section 4.01(a), the Trust Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.02(c).
(c) If the Trust Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Trust Guarantee Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act. In determining whether
the Trust Guarantee Trustee has a "conflicting interest" within the meaning of
Section 310(b)(1) of the Trust Indenture Act, the provisions contained in the
proviso to Section 310(b)(1) of the Trust Indenture Act and the Trust Guarantee
Trustee's Statement of Eligibility on Form T-1 shall be deemed incorporated
herein.
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SECTION 4.02. Appointment, Removal and Resignation of the Trust Guarantee
Trustee.
(a) Subject to Section 4.02(b), the Trust Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Trust Guarantee Trustee shall not be removed until a Successor
Trust Guarantee Trustee has accepted such appointment and assumed the applicable
obligations hereunder by written instrument executed by such Successor Trust
Guarantee Trustee and delivered to the Guarantor.
(c) The Trust Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Trust Guarantee Trustee and delivered to the Guarantor, which resignation shall
not take effect until a Successor Trust Guarantee Trustee has been appointed and
has accepted such appointment by instrument in writing executed by such
Successor Trust Guarantee Trustee and delivered to the Guarantor and the
resigning Trust Guarantee Trustee.
(d) If no Successor Trust Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning Trust
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Trust Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Trust Guarantee Trustee.
(e) No Trust Guarantee Trustee shall be liable for the acts or omission to
act of any Successor Trust Guarantee Trustee.
ARTICLE 5. GUARANTEE
SECTION 5.01. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders of the outstanding Trust Preferred Securities the Guarantee Payments
(without duplication of amounts theretofore paid by or on behalf of the Trust
pursuant to the Trust Agreement), as and when due, regardless of any defense,
right of set-off or counterclaim which the Trust 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 Trust to pay such amounts to the Holders.
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SECTION 5.02. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Trust 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 Trust Guarantee
Trustee, the Trust or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.03. Obligations Not Affected.
(a) The obligations, covenants, agreements and duties of the Guarantor
under this Trust Guarantee shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(1) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Trust Preferred Securities to
be performed or observed by the Trust;
(2) the extension of time for the payment by the Trust of all or any
portion of the Distributions (other than an extension of time for payment
of Distributions that results from an Extension Period on the Debentures as
permitted in the applicable Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Trust
Preferred Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Trust
Preferred Securities;
(3) 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 Trust
Preferred Securities, or any action on the part of the Trust granting
indulgence or extension of any kind;
(4) the voluntary or involuntary liquidation, termination, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Trust
or any of the assets of the Trust;
(5) any invalidity of, or defect or deficiency in, the Trust Preferred
Securities;
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(6) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(7) to the extent permitted by law, 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 5.03 that the
obligations of the Guarantor hereunder shall be absolute and unconditional
under any and all circumstances.
(b) There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Trust Guarantee will
be deposited with the Trust Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Trust Guarantee Trustee has the right to enforce this Trust
Guarantee on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Preference of the Trust Preferred Securities have the right to
direct the time, method and place of conducting of any proceeding for any remedy
available to the Trust Guarantee Trustee in respect of this Trust Guarantee or
exercising any trust or power conferred upon the Trust Guarantee Trustee under
this Trust Guarantee; and (iv) any Holder may institute a legal proceeding
directly against the Guarantor to enforce the Trust Guarantee Trustee's rights
under this Trust Guarantee, without first instituting a legal proceeding against
the Trust, the Trust Guarantee Trustee or any other Person or entity. The
Guarantor waives any right or remedy to require that any action be brought first
against the Trust, the Trust Guarantee Trustee or any other Person or entity
before proceeding directly against the Guarantor.
SECTION 5.05. Guarantee of Payment.
This Trust Guarantee creates a guarantee of payment and not of collection.
This Trust Guarantee will not be discharged except by payment of the Guarantee
Payments in full (without duplication of amounts theretofore paid by or on
behalf of the Trust pursuant to the Trust Agreement) or upon distribution of the
HECO Distributable Debentures to Holders as provided in the Trust Agreement.
SECTION 5.06. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Trust in respect of any amounts paid to the Holders by the Guarantor
under this Trust Guarantee and shall have the right to waive payment by the
Trust pursuant to
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Section 5.01; 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
Trust Guarantee, if, at the time of any such payment, any amounts are due and
unpaid under this Trust 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 5.07. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Trust with respect to the Trust 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 Trust Guarantee
notwithstanding the occurrence of any event referred to in subsections (1)
through (7), inclusive, of Section 5.03.
ARTICLE 6. SUBORDINATION AND RANKING
SECTION 6.01. Subordination.
This Trust Guarantee shall constitute an unsecured obligation of the
Guarantor and shall rank subordinate and junior in right of payment to all
Senior Indebtedness of the Guarantor.
SECTION 6.02. Pari Passu Guarantees.
This Trust Guarantee shall rank pari passu with any similar trust guarantee
agreements issued by the Guarantor on behalf of the holders of securities
similar to the Trust Preferred Securities issued by any similar trusts in the
future.
ARTICLE 7. TERMINATION
SECTION 7.01. Termination.
This Trust Guarantee shall terminate and be of no further force and effect
upon (i) full payment of the Redemption Price for all Trust Preferred
Securities, (ii) the distribution of the HECO Distributable Debentures to the
Holders or (iii) full payment of the amounts payable in accordance with the
Trust Agreement upon liquidation of the Trust. Notwithstanding the foregoing,
this
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Trust Guarantee will continue to be effective or will be reinstated, as the case
may be, if at any time any Holder must restore payment of any sums paid with
respect to Trust Preferred Securities or this Trust Guarantee.
ARTICLE 8. INDEMNIFICATION
SECTION 8.01. 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 willful misconduct, 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
obligation to indemnify as set forth in this Section 8.01 shall survive the
termination of this Trust Guarantee or the earlier resignation or removal of the
Trust Guarantee Trustee. The Trust Guarantee Trustee will not claim or exact
any lien or charge on any Guarantee Payments as a result of any amount due to it
under this Trust Guarantee.
ARTICLE 9. MISCELLANEOUS
SECTION 9.01. Successors and Assigns.
All guarantees and agreements contained in this Trust Guarantee shall bind
the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Trust Preferred
Securities then outstanding. The Guarantor may not consolidate with or merge
with or into, or sell, convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety (either in one transaction or a series
of transactions) to, any Person unless permitted under Article 5 of the HECO
Indenture. In connection with a consolidation, merger or sale involving the
Guarantor that is permitted under Article 5 of the HECO Indenture, the Person
formed by or surviving such consolidation or merger or to which such sale,
conveyance, transfer or lease shall have been made, if other than the Guarantor,
shall expressly assume all of the obligations of the Guarantor hereunder and
under the Trust Agreement.
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SECTION 9.02. Amendments.
Except with respect to any changes which do not adversely affect the rights
of the Holders in any material respect (in which case no consent of the Holders
will be required), this Trust Guarantee may only be amended with the prior
approval of the Holders of a Majority in Liquidation Preference of the Trust
Preferred Securities. The provisions of Article 6 of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
SECTION 9.03. Notices.
(a) Any notice, request or other communication required or permitted to be
given hereunder shall be in writing and delivered, telecopied or mailed by first
class mail, postage prepaid, as follows:
(1) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Trust, the Trust
Guarantee Trustee and the Holders:
Hawaiian Electric Company, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Facsimile No: (808) 543-7966
Attention: Treasurer
(2) if given to the Trust, in care of the Property Trustee at the
address set forth below or such other address as the Trust may give notice
of to the Guarantor, the Trust Guarantee Trustee and the Holders:
HECO Capital Trust I
c/o The Bank of New York
101 Barclay Street, 21st Floor
New York, New York 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
with a copy to:
Hawaiian Electric Company, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Facsimile No.: (808) 543-7966
Attention: Treasurer
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(3) if given to the Trust Guarantee Trustee, to the address set forth
below or such other address as the Trust Guarantee Trustee may give notice
of to the Guarantor, the Trust and the Holders:
The Bank of New York
101 Barclay Street, 21st Floor
New York, New York 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
with a copy to:
Hawaiian Electric Company, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Facsimile No.: (808) 543-7966
Attention: Treasurer
(4) if given to any Holder, at the address set forth in the Securities
Register.
(b) All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.04. Benefit.
This Trust Guarantee is solely for the benefit of the Holders and is not
separately transferable from the Trust Preferred Securities.
SECTION 9.05. Governing Law.
THIS TRUST GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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THIS TRUST GUARANTEE is executed as of the day and year first above
written.
HAWAIIAN ELECTRIC COMPANY, INC.,
as Guarantor
By: _____________________________
Name:
Title:
By: _____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trust Guarantee Trustee
By: _____________________________
Name:
Title:
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