EXHIBIT 1
2,000,000 Preferred Securities
HECO CAPITAL TRUST II
7.30% Cumulative Quarterly Income Preferred Securities, Series 1998 ("QUIPS")
(Liquidation Preference $25 per QUIPS)
fully and unconditionally guaranteed, as set forth herein, by
HAWAIIAN ELECTRIC COMPANY, INC.
UNDERWRITING AGREEMENT
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December 9, 1998
Xxxxxxx, Xxxxx & Co.
PaineWebber Incorporated
As representatives of the several
Underwriters named in Schedule I hereto
c/x Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned, HECO Capital Trust II (the "Trust"), a statutory
business trust created under the Business Trust Act of the State of Delaware
(Title 12, Chapter 38 of the Delaware Code, 12 Del. C. Section 3801 et seq.)
(the "Delaware Act"), proposes to issue and sell to the several underwriters
named in Schedule I hereto (the "Underwriters," which term, when the context
permits, shall also include any underwriters substituted as hereinafter in
Section 11 hereof provided), for whom you are acting as representatives (in such
capacity, you shall hereinafter be referred to as the "Representatives"),
2,000,000 of its 7.30% Cumulative Quarterly Income Preferred Securities, Series
1998 (liquidation preference $25 per preferred security), representing preferred
undivided beneficial interests in the assets of the Trust (the "Trust Preferred
Securities"), as follows:
__________________________
(SM) QUIPS is a servicemark of Xxxxxxx, Xxxxx & Co.
SECTION 1. Purchase and Sale. (a) On the basis of the
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representations and warranties herein contained, and subject to the terms and
conditions herein set forth, the Trust shall issue and sell to each of the
Underwriters named in Schedule I hereto, and each Underwriter shall purchase
from the Trust at the time and place herein specified, severally and not
jointly, the number of Trust Preferred Securities set forth opposite the name of
such Underwriter in Schedule I hereto at a purchase price of $25.00 per
Preferred Security.
(b) Hawaiian Electric Company, Inc. ("HECO" and, together with the
Trust, the "Offerors"), a corporation incorporated under the laws of the Kingdom
of Hawaii, (i) agrees to issue to the Trust the HECO Debentures and the
Guarantees (each as defined herein) concurrently with the issue and sale of the
Trust Preferred Securities as contemplated herein and (ii) guarantees the timely
performance by each of the Trust and the Subsidiaries (as defined herein) of its
obligations under this Section 1. Maui Electric Company, Limited ("MECO"), a
corporation incorporated under the laws of the Territory of Hawaii, agrees to
issue to the Trust the MECO Debentures (as defined herein) concurrently with the
issue and sale of the Trust Preferred Securities as contemplated herein. Hawaii
Electric Light Company, Inc. ("HELCO" and, together with MECO, the
"Subsidiaries" and, together with HECO and MECO, the "Companies"), a corporation
incorporated under the laws of the Republic of Hawaii, agrees to issue to the
Trust the HELCO Debentures (as defined herein) concurrently with the issue and
sale of the Trust Preferred Securities as contemplated herein. The Trust agrees
to purchase Debentures (as defined herein) with the proceeds of the Trust
Securities (as defined herein) as contemplated herein.
(c) Because the proceeds of the sale of the Trust Preferred
Securities, together with the proceeds from the sale by the Trust to HECO of the
Common Securities (as defined herein), will be used to purchase the Debentures,
HECO hereby agrees to pay on the Closing Date (as defined herein) to Xxxxxxx,
Xxxxx & Co., for the accounts of the several Underwriters, as compensation for
their arranging the investment therein of such proceeds, an amount equal to
$.7875 per Preferred Security (or $1,575,000 in the aggregate).
SECTION 2. Description of Trust Preferred Securities. (a) The
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Trust Preferred Securities will be guaranteed, to the extent of funds held by
the Trust, by HECO with respect to distributions and payments upon liquidation,
redemption and otherwise (the "Trust Guarantee" and, together with the
Subsidiary Guarantees (as defined herein), the "Guarantees") pursuant to, and to
the extent set forth in, the Trust Guarantee Agreement dated as of December 1,
1998 between The Bank of New York, as trustee (the "Trust Guarantee Trustee"),
and HECO (the "Trust Guarantee Agreement"). Under an Expense Agreement among the
Companies and the Trust dated as of December 1, 1998 (the "Expense Agreement"),
the Companies will agree, for the benefit of each person or entity to whom the
Trust becomes indebted or liable (other than the holders of the Trust
Securities), to pay any indebtedness, expenses or liabilities of the Trust,
subject to certain exceptions therein.
(b) The proceeds from the sale of the Trust Preferred Securities will
be combined with the proceeds from the sale by the Trust to HECO of its common
securities representing undivided beneficial interests in the assets of the
Trust (the "Trust Common Securities" and, together with the Trust Preferred
Securities, the "Trust Securities") and will be used by the Trust
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to purchase (i) $31,546,400 principal amount of 7.30% Junior Subordinated
Deferrable Interest Debentures, Series 1998 issued by HECO (the "HECO
Debentures" and, together with the Substituted HECO Debentures (as defined
herein) and the Guarantees, the "HECO Securities"), (ii) $10,000,000 principal
amount of 7.30% Junior Subordinated Deferrable Interest Debentures, Series 1998
issued by MECO (the "MECO Debentures" and, together with the HELCO Debentures,
the "Subsidiary Debentures") and (iii) $10,000,000 principal amount of 7.30%
Junior Subordinated Deferrable Interest Debentures, Series 1998 issued by HELCO
(the "HELCO Debentures" and, together with the HECO Debentures and the MECO
Debentures, the "Debentures"). The Debentures will mature on December 15,2028;
provided, however, that, at the option of HECO pursuant to the HECO Indenture
(as defined herein), the date of maturity of the Debentures, and any Substituted
HECO Debentures, may be shortened to a date not earlier than December 15, 2003
or extended to a date not later than December 15, 2047. The Subsidiary
Debentures will be fully, irrevocably and unconditionally guaranteed by HECO on
a subordinated basis (the "Subsidiary Guarantees") as set forth in the
Subsidiary Indentures (as defined herein).
(c) The HECO Debentures will be issued pursuant to a Junior Indenture
dated as of December 1, 1998, between The Bank of New York, as trustee (the
"Debenture Trustee"), and HECO (the "HECO Indenture"). The MECO Debentures will
be issued pursuant to a Junior Indenture dated as of December 1, 1998, among the
Debenture Trustee, MECO and HECO (the "MECO Indenture" and, together with the
HELCO Indenture (as defined herein), the "Subsidiary Indentures"). The HELCO
Debentures will be issued pursuant to a Junior Indenture dated as of December 1,
1998, among the Debenture Trustee, HELCO and HECO (the "HELCO Indenture" and,
together with the HECO Indenture and the MECO Indenture, the "Indentures"). Upon
the occurrence of an Early Dissolution Event (as defined in the Trust Agreement
(as defined herein)) specified in Section 8.02(a), (b) or (d) of the Trust
Agreement, provided that any necessary approval of the Public Utilities
Commission of the State of Hawaii (the "PUC") shall have been obtained, HECO
will issue to the Trust, pursuant to and in accordance with the HECO Indenture
and in exchange for the Subsidiary Debentures then held by the Trust, additional
7.30% Junior Subordinated Deferrable Interest Debentures, Series 1998 in the
aggregate principal amount of such Subsidiary Debentures (the "Substituted HECO
Debentures" and, together with the HECO Debentures, on or after the distribution
thereof in accordance with the terms of the Trust Agreement, the "Distributable
HECO Debentures").
(d) The Trust Securities will be issued pursuant to an Amended and
Restated Trust Agreement of the Trust dated as of December 1, 1998 among HECO,
as depositor, the Administrative Trustees (as defined herein), The Bank of New
York, as property trustee (the "Property Trustee"), The Bank of New York
(Delaware), as Delaware trustee (the "Delaware Trustee"), and the holders, from
time to time, of undivided beneficial interests in the assets of the Trust (the
"Trust Agreement"). The Trust Preferred Securities and the HECO Securities are
referred to herein as the "Securities."
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SECTION 3. Representations and Warranties of the Companies and the
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Trust. Each of the Offerors jointly and severally, and each Subsidiary as to
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itself but as to neither the Offerors nor the other Subsidiary, represents and
warrants to the several Underwriters, and covenants and agrees with the several
Underwriters, that:
(a) HECO is duly organized and validly existing as a corporation in
good standing under the laws of Hawaii and has the necessary corporate power and
authority to conduct the business that it is described in the Prospectus (as
defined herein) as conducting, to own and operate the properties owned and
operated by it in such business, to issue the HECO Securities, to enter into and
perform its obligations under this Underwriting Agreement, the Trust Agreement,
the Indentures, the Trust Guarantee Agreement, the Expense Agreement and the
HECO Securities, to purchase, own and hold the Trust Common Securities issued by
the Trust and to consummate the transactions herein and therein contemplated;
the only subsidiaries of HECO are the Subsidiaries, HECO Capital Trust I and the
Trust; each of MECO and HELCO is duly organized and validly existing as a
corporation in good standing under the laws of Hawaii and has the necessary
corporate power and authority to conduct the business that it is described in
the Prospectus as conducting, to own and operate the properties owned and
operated by it in such business, to issue the Subsidiary Debentures issued by
such Subsidiary, to enter into and perform its obligations under the Subsidiary
Indenture to which it is a party, the Expense Agreement and such Subsidiary
Debentures and to consummate the transactions herein and therein contemplated;
all of the issued and outstanding shares of common stock of the Subsidiaries
have been duly and validly issued and are fully-paid and non-assessable and are
directly owned by HECO, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; and none of such common stock was
issued in violation of preemptive or similar rights of any securityholder of the
Subsidiaries.
(b) The Trust has been duly created and is validly existing as a
business trust in good standing under the Delaware Act, has the power and
authority to own its property, to conduct its business as described in the
Prospectus, to issue and sell the Trust Securities, to enter into and perform
its obligations under this Underwriting Agreement and the Trust Securities and
to consummate the transactions herein contemplated; the Trust has no
subsidiaries and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Trust; the Trust has conducted and will conduct no
business other than the transactions contemplated by this Underwriting Agreement
and described in the Prospectus; the Trust is not a party to or otherwise bound
by any agreement other than those described in the Prospectus, and is not a
party to any action, suit or proceeding of any nature; the Trust is not an
association taxable as a corporation for United States federal income tax
purposes; and the Trust is and will be treated as a consolidated subsidiary of
HECO pursuant to generally accepted accounting principles.
(c) The Offerors and the Subsidiaries have filed with the Securities
and Exchange Commission (the "Commission") a registration statement on Form S-3
(File Nos. 333-65881, 000-00000-00, 000-00000-00 and 333-65881-03) and a
Preliminary Prospectus (as defined
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herein) for the registration of the Securities under the Securities Act of 1933,
as amended (the "Securities Act"), and such registration statement, as amended,
has become effective under the Securities Act. The Offerors and the
Subsidiaries qualify for use of Form S-3 for the registration of the Securities.
Such registration statement, as amended at the time it (or the most recent post-
effective amendment thereto) became effective under the Securities Act,
including the information deemed to be part thereof pursuant to Rule 430A(b)
under the Securities Act, is hereinafter referred to as the "Registration
Statement." The prospectus constituting a part of the Registration Statement,
including the documents incorporated or deemed to be incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities Act, in the form
transmitted for filing to the Commission pursuant to Rule 424(b)(1) or (b)(4)
under the Securities Act and as it may thereafter be amended or supplemented
pursuant to Section 6(d) hereof, is hereinafter referred to as the "Prospectus"
(except that if any revised prospectus shall be provided to the Underwriters by
the Offerors for use in connection with the offering of the Securities that
differs from the Prospectus transmitted for filing to the Commission pursuant to
Rule 424(b) under the Securities Act, the term "Prospectus" shall refer to such
revised prospectus from and after the time it is first provided to the
Underwriters for such use). For purposes hereof, "Preliminary Prospectus" shall
mean any preliminary prospectus included in the Registration Statement prior to
the time the Registration Statement became effective or that was transmitted for
filing to the Commission pursuant to Rule 424(a) under the Securities Act if
prior to the time the Registration Statement became effective or pursuant to
Rule 424(b) under the Securities Act if after the time the Registration
Statement became effective. All references in this Underwriting Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document that is or is deemed to
be incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act after the date hereof and prior to the completion of the
distribution of the Trust Preferred Securities.
(d) After the date hereof and during the time specified in Section
6(d) hereof, neither the Offerors nor the Subsidiaries will file any amendment
to the Registration Statement or amendment or supplement to the Prospectus,
without prior notice to the Underwriters and to Winthrop, Xxxxxxx, Xxxxxx &
Xxxxxxx, counsel for the Underwriters ("Counsel for the Underwriters"), or any
such amendment or supplement to which Counsel for the Underwriters shall
reasonably object on legal grounds in writing.
(e) The Registration Statement, at the time it became effective under
the Securities Act, the Indentures, the Trust Agreement and the Trust Guarantee
Agreement, at such time, and any Preliminary Prospectus, when delivered to the
Underwriters for their use in marketing the Trust Preferred Securities, fully
complied, and the Prospectus, when delivered to the Underwriters for their use
in making confirmations of sales of the Trust Preferred Securities and at the
Closing Date, as it may then be amended or supplemented, will fully comply, in
all material respects with the applicable provisions of the Securities Act and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and in
each case the rules and regulations of the Commission thereunder or pursuant to
such rules and regulations did or will be deemed to comply therewith. The
documents incorporated or deemed to be incorporated by reference in the
Prospectus pursuant to Item 12 of Form S-3, on the date filed with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), fully complied and will fully comply in all material respects
with the applicable provisions of the Exchange Act and the rules and regulations
of the Commission thereunder or pursuant to such rules and regulations did or
will be deemed to comply therewith. On the date the Registration Statement was
declared effective by the Commission under the Securities Act, the Registration
Statement did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
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At the time that any Preliminary Prospectus was delivered to the Underwriters
for their use in marketing the Trust Preferred Securities, such Preliminary
Prospectus did not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. At the
time the Prospectus is delivered to the Underwriters for their use in making
confirmations of sales of the Trust Preferred Securities and at the Closing
Date, the Prospectus, as it may then be amended or supplemented, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. The documents
incorporated or deemed to be incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3, on the date filed with the Commission pursuant
to the Exchange Act, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing representations and warranties in this
Section 3(e) shall not apply to statements or omissions from the Registration
Statement or the Prospectus (i) made in reliance upon and in conformity with
written information furnished to the Offerors by any Underwriter through
Xxxxxxx, Xxxxx & Co. expressly for use therein which, for purposes of this
Underwriting Agreement, shall be deemed to consist of the second paragraph under
the table set forth under "Underwriting" in the Prospectus, the first two
sentences of the fifth paragraph under the table set forth under "Underwriting"
in the Prospectus and the sixth, seventh and eighth paragraphs under the table
set forth under "Underwriting" in the Prospectus (collectively, the "Underwriter
Information") and (ii) with respect to the statements of eligibility on Form T-1
filed as exhibits to the Registration Statement.
(f) The consolidated financial statements of the Companies
incorporated by reference in the Prospectus present fairly in all material
respects the financial position of the Companies as of the dates indicated and
the results of their operations for the periods specified; and such consolidated
financial statements have been prepared in conformity with generally accepted
accounting principles consistently applied in all material respects with respect
to the periods involved, except as may be noted therein and, in the case of
unaudited financial statements, subject to year-end and audit adjustments.
(g) The Trust Common Securities have been duly authorized by the
Trust Agreement and, when issued and delivered by the Trust to HECO against
payment therefor as described in the Registration Statement and the Prospectus,
will constitute validly issued undivided beneficial interests in the assets of
the Trust and will be entitled to the benefits of the Trust Agreement; the
issuance of the Trust Common Securities is not subject to preemptive or other
similar rights; at the Closing Date, all of the Trust Common Securities will be
directly owned by HECO free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity other than the lien of the indenture
securing HECO's first mortgage bonds; and the Trust Common Securities will
conform in all material respects to the description thereof contained in the
Prospectus.
(h) This Underwriting Agreement has been duly authorized, executed
and delivered by each of the Companies and the Trust.
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(i) The Trust Agreement has been duly qualified under the Trust
Indenture Act, has been duly authorized by HECO and, at the Closing Date, will
have been duly executed and delivered by HECO and each of the Administrative
Trustees and, assuming due authorization, execution and delivery of the Trust
Agreement by the Property Trustee and the Delaware Trustee, will constitute a
valid and binding instrument of HECO and the Administrative Trustees,
enforceable against HECO and the Administrative Trustees in accordance with its
terms, except as limited by applicable bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization or other similar laws affecting
creditors' rights and by general equitable principles (whether considered in a
proceeding in equity or at law); and the Trust Agreement will conform in all
material respects to the description thereof in the Prospectus.
(j) The Trust Guarantee Agreement has been duly qualified under the
Trust Indenture Act, has been duly authorized by HECO and, at the Closing Date,
will have been duly executed and delivered by HECO and, assuming due
authorization, execution and delivery of the Trust Guarantee Agreement by the
Trust Guarantee Trustee, will constitute a valid and binding instrument of HECO,
enforceable against HECO in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
other similar laws affecting creditors' rights and by general equitable
principles (whether considered in a proceeding in equity or at law); and the
Trust Guarantee and the Trust Guarantee Agreement will conform in all material
respects to the descriptions thereof contained in the Prospectus.
(k) The Trust Preferred Securities have been duly authorized by the
Trust Agreement and, on the Closing Date, will have been duly executed by more
than one Administrative Trustee and, when issued and delivered against payment
therefor in accordance with the provisions of this Underwriting Agreement and
the Trust Agreement, will constitute validly issued and (subject to the terms of
the Trust Agreement) fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will be entitled to the benefits of the
Trust Agreement; the issuance of the Trust Preferred Securities is not subject
to preemptive or other similar rights; holders of Trust Preferred Securities
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware; and the Trust Preferred Securities
will conform in all material respects to the description thereof contained in
the Prospectus.
(l) Each of the Indentures has been duly qualified under the Trust
Indenture Act, has been duly authorized by HECO (as guarantor with respect to
the MECO Indenture and the HELCO Indenture) and, at the Closing Date, will have
been duly executed and delivered by HECO and, assuming due authorization,
execution and delivery of the Indentures by the Debenture Trustee, will
constitute a valid and binding instrument of HECO, enforceable against HECO in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights and by general equitable principles (whether
considered in a proceeding in equity or at law); and the HECO Indenture and the
Subsidiary Guarantees will conform in all material respects to the description
thereof contained in the Prospectus.
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(m) The Subsidiary Indenture to which each Subsidiary is a party has
been duly authorized by such Subsidiary and, at the Closing Date, will have been
duly executed and delivered by such Subsidiary and, assuming due authorization,
execution and delivery of such Subsidiary Indenture by the Debenture Trustee,
will constitute a valid and binding instrument of such Subsidiary, enforceable
against such Subsidiary in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
other similar laws affecting creditors' rights and by general equitable
principles (whether considered in a proceeding in equity or at law); and the
Subsidiary Indentures will conform in all material respects to the description
thereof contained in the Prospectus.
(n) The HECO Debentures have been duly authorized and, on the Closing
Date, will have been duly executed by HECO and, when authenticated in the manner
provided for in the HECO Indenture and delivered against payment therefor by the
Trust as described in the Prospectus, will constitute valid and binding
obligations of HECO, enforceable against HECO in accordance with their terms,
except as limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting creditors' rights and by general
equitable principles (whether considered in a proceeding in equity or at law),
and will be entitled to the benefits of such Indenture; and the HECO Debentures
will conform in all material respects to the description thereof contained in
the Prospectus.
(o) The Substituted HECO Debentures have been duly authorized by HECO
and, if and when approved by the PUC and then executed and authenticated in the
manner provided for in the HECO Indenture and delivered in exchange for the
Subsidiary Debentures as described in the Prospectus, will constitute valid and
binding obligations of HECO, enforceable against HECO in accordance with their
terms, except as limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting creditors' rights and
by general equitable principles (whether considered in a proceeding in equity or
at law), and will be entitled to the benefits of the HECO Indenture; and the
Substituted HECO Debentures will conform in all material respects to the
description thereof contained in the Prospectus.
(p) The Subsidiary Debentures issued by each Subsidiary have been
duly authorized and, on the Closing Date, will have been duly executed by such
Subsidiary and, when authenticated in the manner provided for in the applicable
Subsidiary Indenture and delivered against payment therefor by the Trust as
described in the Prospectus, will constitute valid and binding obligations of
such Subsidiary, enforceable against such Subsidiary in accordance with their
terms, except as limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting creditors' rights and
by general equitable principles (whether considered in a proceeding in equity or
at law), and will be entitled to the benefits of such Subsidiary Indenture; and
the Subsidiary Debentures will conform in all material respects to the
description thereof contained in the Prospectus.
(q) The Expense Agreement has been duly authorized by each Company
and, at the Closing Date, will have been duly executed and delivered by each
Company and will constitute a valid and binding instrument of each Company,
enforceable against such Company in accordance with its terms, except as limited
by applicable bankruptcy, insolvency, fraudulent
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conveyance, reorganization or other similar laws affecting creditors' rights and
by general equitable principles (whether considered in a proceeding in equity or
at law); and the Expense Agreement will conform in all material respects to the
description thereof contained in the Prospectus.
(r) X. Xxxxxxx Xxx, Xxxx X. Xxxx and Xxxxx Xxx Xxxxxx, who are
administrative trustees (the "Administrative Trustees") under the Trust
Agreement, are officers of HECO and have been duly authorized by HECO to execute
and deliver the Trust Agreement.
(s) The Trust is not, and as a result of the offering and sale of the
Trust Preferred Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(t) The Trust is not in violation of its Certificate of Trust filed
in the office of the Secretary of State of the State of Delaware on October 15,
1998 (the "Trust Certificate") or the Trust Agreement; the execution and
delivery by the Companies and the Trust of, and the performance by the Companies
and the Trust of their respective obligations under, this Underwriting
Agreement, the Securities, the Subsidiary Debentures, the Indentures, the Trust
Agreement, the Trust Guarantee Agreement, the Expense Agreement and the other
agreements and instruments contemplated hereby and thereby to which they are a
party do not and will not conflict with any existing law, court or
administrative regulation, decree or order to which any of the Companies or the
Trust is subject or result in a breach of or a default under any agreement,
indenture, mortgage, lease, deed or trust or other instrument to which it is a
party or by which it or its property is bound.
(u) Neither any Company nor the Trust will take or omit to take any
action the taking or omission of which will in any way cause or result in the
proceeds from the sale of the Trust Preferred Securities to be applied in a
manner other than as provided in the Trust Agreement, the Indentures, the Trust
Guarantee Agreement, the Expense Agreement and this Underwriting Agreement and
as described in the Prospectus.
(v) Except as set forth or contemplated in the Prospectus, as it may
then be amended or supplemented, each of the Companies possesses adequate
franchises, licenses, permits, and other rights to conduct its respective
businesses and operations as now conducted, without any known conflicts with the
rights of others, where the failure to possess such franchise, license, permit
or other right, or where such conflict, would have a material adverse effect on
the consolidated financial position, stockholder's equity or results of
operations of the Companies taken as a whole.
(w) To the knowledge of each of the Companies and the Trust, there is
no action, suit, proceeding or formal investigation at law or in equity or
before or by any governmental, regulatory or administrative agency pending or
threatened against the Companies or the Trust that would have a material adverse
effect on (i) the transactions contemplated by the Trust Agreement, the
Indentures, the Trust Guarantee Agreement, the Expense Agreement, this
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Underwriting Agreement or any agreement or instrument to which any of the
Companies or the Trust is a party and that are used or contemplated for use in
the consummation of the transactions contemplated hereby or thereby or (ii) the
validity or enforceability of the Securities, the Subsidiary Debentures, the
Trust Agreement, the Indentures, the Trust Guarantee Agreement, the Expense
Agreement or this Underwriting Agreement.
(x) The PUC has issued an order approving the issuance of the HECO
Securities (but not the Substituted HECO Debentures) by HECO and of the
Subsidiary Debentures by the Subsidiaries on terms not inconsistent with those
set forth in this Underwriting Agreement and described in the Prospectus and
such order is in full force and effect; and no approval of any other
governmental agency or public body is necessary in connection with the issuance
of the HECO Securities by HECO or the Subsidiary Debentures by the Subsidiaries,
other than such approvals, authorizations, registrations or qualifications as
may be required from the PUC with respect to the issuance by HECO of the
Substituted HECO Debentures, under blue sky or other state securities
laws or as have been obtained pursuant to the Securities Act, the Exchange Act
and the Trust Indenture Act.
(y) HECO is a holding company within the meaning of the Public
Utility Holding Company Act of 1935, as amended (the "Holding Company Act");
however, by virtue of having filed appropriate applications under Section
3(a)(2) of the Holding Company Act, HECO is exempt from all provisions
thereunder other than Section 9(a)(2) thereof, and will remain so exempt,
subject to future timely filings of annual exemption statements and such filings
as are required by Section 33 of the Holding Company Act with respect to
interests of HECO or any of its affiliates in any foreign utility company,
unless and except insofar as the Commission shall find such exemption
detrimental to the public interest or the interest of investors or consumers.
SECTION 4. Offering. The Offerors are advised by the
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Representatives that the Underwriters propose to make a public offering of the
Trust Preferred Securities as soon after the date hereof as in their judgment
the Underwriters deem advisable. The Offerors are further advised by the
Representatives that the Trust Preferred Securities will be offered to the
public at the initial public offering price specified in the Prospectus.
SECTION 5. Time and Place of Closing; Certificates. Delivery of a
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certificate representing the Trust Preferred Securities and payment of the
purchase price therefor by wire transfer of immediately available funds shall be
made through the facilities of The Depository Trust Company, New York, New York
("DTC"), pursuant to such arrangements and instructions as shall be agreed upon
by the Offerors and the Representatives at 10:00 A.M. (Eastern time) on
December 15, 1998, or at such other time on the same or such other day as shall
be agreed upon by the Offerors and the Representatives, or as may be established
in accordance with Section 11 hereof. The time and date of such delivery and
payment are herein called the "Closing Date."
A certificate representing the Trust Preferred Securities shall be in
definitive form and registered in the name of Cede & Co., DTC's nominee. For
purposes of this Underwriting Agreement, "business day" means any day on which
the New York Stock Exchange, Inc. (the "NYSE") is open for bidding.
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On the Closing Date, HECO will pay, or cause to be paid, the
compensation payable at such time to the Underwriters pursuant to Section 1(c)
hereof by wire transfer in immediately available funds to an account designated
by Xxxxxxx, Xxxxx & Co., for the accounts of the several Underwriters.
SECTION 6. Covenants of the Companies and the Trust. Each of the
----------------------------------------
Offerors jointly and severally, and each Subsidiary as to itself but as to
neither the Offerors nor the other Subsidiary, covenants and agrees with the
several Underwriters that:
(a) Not later than the Closing Date, XXXX will deliver to the
Representatives a copy of the Registration Statement in the form that it (or the
most recent post-effective amendments thereto) became effective under the
Securities Act or a conformed copy thereof, certified by an officer of HECO to
be in such form.
(b) The Offerors will deliver to the Underwriters as many copies of
the Prospectus (and any amendments or supplements thereto) as the Underwriters
may reasonably request.
(c) The Offerors will cause the Prospectus to be transmitted for
filing to the Commission pursuant to and in compliance with Rule 424(b) under
the Securities Act and will advise the Representatives promptly of the issuance
of any stop order under the Securities Act with respect to the Registration
Statement or the institution of any proceedings therefor of which any of the
Companies or the Trust has received notice. Each of the Companies and
the Trust will use reasonable efforts to prevent the issuance of any such stop
order and to secure the prompt removal thereof if issued.
(d) During such period of time as the Underwriters are required by law
to deliver a prospectus relating to any of the Securities, if any event relating
to or affecting the Companies or the Trust, or of which the Companies or the
Trust are advised by the Representatives in writing, occurs that in the opinion
of the Representatives and XXXX should be set forth in a supplement or amendment
to the Prospectus in order to make the Prospectus not misleading in the light of
the circumstances when it is delivered to a purchaser of any of the Securities,
or if it is necessary in the opinion of the Representatives and HECO at any such
time to amend the Registration Statement or amend or supplement the Prospectus
in order to comply with the requirements of the Securities Act, the Exchange Act
or the Trust Indenture Act or, in each case, the rules and regulations of the
Commission thereunder, the Trust and the Companies will amend or supplement the
Prospectus so that, as amended or supplemented, it will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading or amend the Registration
Statement or amend or supplement the Prospectus so that, as amended or
supplemented, the Registration Statement or the Prospectus will comply with such
requirements.
(e) HECO will, on behalf of the Trust, make generally available to
the Trust's security holders, as soon as practicable, an earning statement
(which need not be audited) covering a period of at least twelve months
beginning after the "effective date of the registration statement" within the
meaning of Rule 158 under the Securities Act, which earning statement
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shall be in such form, and be made generally available to security holders in
such a manner, as to meet the requirements of the last paragraph of Section
11(a) of, and Rule 158 under, the Securities Act.
(f) The Companies and the Trust will furnish such proper information
as may be lawfully required, and will otherwise cooperate with the Underwriters,
to qualify the Trust Preferred Securities and, if applicable, the Distributable
HECO Debentures for offer and sale under the state securities or blue sky laws
of such jurisdictions as the Representatives may reasonably designate, provided
that neither the Companies nor the Trust shall be required to qualify as a
foreign corporation or dealer in securities or to file any general consents to
service of process under the laws of any jurisdiction.
(g) HECO will, except as herein provided, pay all fees, expenses and
taxes incident to the performance of each Company's and the Trust's obligations
under this Underwriting Agreement, including, but not limited to, (i) the
preparation and filing of the Registration Statement and any post-effective
amendment thereto, (ii) the printing, issuance and delivery of the certificate
representing the Trust Preferred Securities to the Underwriters, (iii) the
qualification of the Trust Preferred Securities and, if applicable, the
Distributable HECO Debentures under the state securities or blue sky laws of
various jurisdictions in accordance with the provisions of Section 6(f) hereof,
including the reasonable fees and disbursements of Counsel for the Underwriters
in connection therewith and with the preparation of any blue sky survey (and any
supplement thereto) relating to any of the Securities up to a maximum of
$15,000, (iv) the printing and delivery to the Underwriters of reasonable
quantities of copies of the Registration Statement, any blue sky survey (and any
supplement thereto) relating to any of the Securities, any Preliminary
Prospectus and the Prospectus and any amendment or supplement thereto, (v) the
ratings of the Trust Preferred Securities and, if applicable, the Distributable
HECO Debentures by one or more nationally recognized statistical rating
agencies, (vi) the listing of the Trust Preferred Securities on the NYSE and, if
applicable, the Distributable HECO Debentures on the NYSE, or such other
exchange or other organization, and the registration thereof under the Exchange
Act in accordance with Section 6(i) hereof and (vii) all other costs and
expenses incident to the performance of its obligations hereunder that are not
otherwise specifically provided for in this Section 6(g). If this Underwriting
Agreement shall be terminated in accordance with the provisions of Section 7
(other than paragraph (l) thereof) or 8 hereof, the Companies and the Trust will
reimburse the Underwriters for all out-of-pocket expenses, including fees and
disbursements of Counsel for the Underwriters, reasonably incurred by the
Underwriters in contemplation of the performance of this Underwriting Agreement.
Neither the Companies nor the Trust shall in any event be liable to the
Underwriters for damages on account of loss of anticipated profits.
(h) Neither any of the Companies nor the Trust will offer, sell,
contract to sell or otherwise dispose of any beneficial interests in the assets
of the Trust, or any preferred securities or any other securities of the Trust
or the Companies that are substantially similar to the Trust Preferred
Securities, including any guarantee of such securities, or any securities
convertible into or exchangeable for or that represent the right to receive
securities, preferred securities or any such substantially similar securities of
either the Companies or the Trust, except for the Securities, without the prior
written consent of Xxxxxxx, Xxxxx & Co. until the earlier to occur of (i) 30
days after the Closing Date and (ii) the date
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of the termination of the trading restrictions on the Trust Preferred
Securities, as determined by the Underwriters.
(i) The Trust and the Companies will use their best efforts to cause
the Trust Preferred Securities to be duly authorized for listing on the NYSE,
subject to notice of issuance, and to be registered under the Exchange Act; and,
upon any distribution of the Distributable HECO Debentures to holders of the
Trust Preferred Securities, HECO will use its best efforts to have the
Distributable HECO Debentures listed on the NYSE, or such other exchange or
other organization on which the Trust Preferred Securities are then listed, and
to have the Distributable HECO Debentures registered under the Exchange Act.
SECTION 7. Conditions of Underwriters' Obligations. The obligations
---------------------------------------
of the several Underwriters to purchase and pay for the Trust Preferred
Securities shall be subject to the accuracy on the date hereof and on the
Closing Date of the representations and warranties made herein on the part of
the Companies and the Trust and of any certificates furnished by the Companies
and the Trust on the Closing Date and to the following conditions:
(a) The Prospectus shall have been transmitted for filing to the
Commission in the manner and within the time period required by Rule 424(b)
under the Securities Act.
(b) No stop order suspending the effectiveness of the Registration
Statement shall be in effect at or prior to the Closing Date; no proceedings for
such purpose shall be pending before, or, to the knowledge of the Companies, the
Trust or the Underwriters, threatened by, the Commission on the Closing Date.
(c) At the Closing Date, the Representatives shall have received an
opinion of Xxxxxxxx Xxxxxxxx Xxxxx & Xxxxxx, counsel for the Companies and the
Trust, dated the Closing Date, to the effect that:
(i) HECO has been duly incorporated under the laws of the Kingdom
of Hawaii, is validly existing as a corporation in good standing under the
laws of the State of Hawaii and has the corporate power and authority to
carry on the business stated in the Prospectus as being conducted by it;
and all shares of its issued and outstanding common stock have been duly
and validly issued and are fully paid and non-assessable;
(ii) MECO and HELCO are corporations duly incorporated under the
laws of the Territory of Hawaii and the Republic of Hawaii, respectively,
and are validly existing and in good standing under the laws of the State
of Hawaii and have the corporate power and authority to carry on the
business as stated in the Prospectus as being conducted by them; and all of
the issued and outstanding shares of common stock of the Subsidiaries have
been duly and validly issued and are fully-paid and non-assessable;
(iii) other than litigation and proceedings referred to in the
Prospectus, to the best of such counsel's knowledge, (A) the Companies are
not engaged in, or threatened with, any litigation and (B) there are no
governmental proceedings, or any governmental proceedings threatened, with
respect to any of the Companies or their property, that, in
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the case of either clause (A) or (B) above, such counsel (or other counsel
who have permitted such counsel to rely on their opinions or reports as to
litigation or proceedings that are not being principally handled by such
counsel) has concluded is reasonably expected to have a material adverse
effect on the Companies taken as a whole;
(iv) HECO is the record holder of all outstanding common stock of
the Subsidiaries, free and clear of any perfected encumbrance or security
interest;
(v) the PUC has issued an order approving the issuance of the HECO
Securities (but not the Substituted HECO Debentures) by HECO and of the
Subsidiary Debentures by the Subsidiaries on terms not inconsistent with
those set forth in this Underwriting Agreement and described in the
Prospectus and, to the best of such counsel's knowledge, such order remains
in full force and effect on the date of such opinion; and no approval of
any other governmental agency or public body is required in connection with
the issuance of the HECO Securities by HECO or the Subsidiary Debentures by
the Subsidiaries, other than such approvals, authorizations, registrations
or qualifications as may be required from the PUC with respect to the
issuance by HECO of the Substituted HECO Debentures, under blue sky or
other state or foreign securities laws (as to which such counsel has not
been requested to and does not express any opinion) or as have been
obtained under the Securities Act, the Exchange Act or the Trust Indenture
Act;
(vi) HECO is a holding company within the meaning of the Holding
Company Act; however, by virtue of having filed appropriate applications
under Section 3(a)(2) of the Holding Company Act, HECO is exempt from all
provisions thereunder other than Section 9(a)(2) thereof, and will remain
so exempt, subject to future timely filings of annual exemption statements
and such filings as are required by Section 33 of the Holding Company Act
with respect to interests of HECO or any of its affiliates in any foreign
utility company, unless and except insofar as the Commission shall find
such exemption detrimental to the public interest or the interest of
investors or consumers;
(vii) the Trust is not, and as a result of the offering and sale of
the Trust Preferred Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" or an
entity "controlled" by an "investment company" within the meaning of the
Investment Company Act;
(viii) the Registration Statement, at the time it was declared
effective by the Commission under the Securities Act, and the Prospectus,
at the time it was transmitted for filing to the Commission pursuant to
Rule 424(b) under the Securities Act, complied as to form in all material
respects with the Securities Act and the Trust Indenture Act and in each
case the rules and regulations of the Commission thereunder; each document
incorporated by reference in the Prospectus as originally filed pursuant to
the Exchange Act complied as to form when so filed in all material respects
with the Exchange Act and the rules and regulations of the Commission
thereunder; and, to the best of such counsel's knowledge, the Registration
Statement has become, and on the Closing Date is, effective under the
Securities Act and no proceedings for a stop order with respect thereto are
threatened or pending under Section 8 of the Securities Act;
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(ix) nothing has come to the attention of such counsel to cause them
to believe that the Registration Statement, at the time it was declared
effective by the Commission under the Securities Act, contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, at the time it was transmitted for
filing to the Commission pursuant to Rule 424(b) under the Securities Act
or on the Closing Date, included or includes any untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading;
(x) the statements summarizing the provisions of the Securities and
the Subsidiary Debentures (other than any such statements describing DTC's
book-entry system), the Indentures, the Trust Agreement, the Guarantees and
the Trust Guarantee Agreement and the Expense Agreement, and the statements
under "Hawaiian Electric Company, Inc. and Subsidiaries" relating to the
Companies and involving matters of law or legal conclusions, contained in
the Prospectus are accurate summaries of such documents and matters in all
material respects;
(xi) this Underwriting Agreement has been duly authorized by all
necessary corporate action of and duly executed and delivered by XXXX, on
behalf of itself and as depositor under the Trust Agreement, and the
Subsidiaries; and the Trust Preferred Securities have been duly executed
and delivered by more than one Administrative Trustee;
(xii) the Trust Agreement has been duly authorized by all necessary
corporate action of HECO and xxxx executed and delivered by XXXX and the
Administrative Trustees and, to such counsel's knowledge, has been duly
qualified under the Trust Indenture Act;
(xiii) the Trust Guarantee Agreement has been duly authorized by
all necessary corporate action of and duly executed and delivered by HECO
and constitutes a valid and binding instrument of HECO, enforceable against
HECO in accordance with its terms and, to such counsel's knowledge, has
been duly qualified under the Trust Indenture Act;
(xiv) each of the Indentures has been duly authorized by all
necessary corporate action of and duly executed and delivered by XXXX (as
guarantor with respect to the MECO Indenture and the HELCO Indenture) and
constitutes a valid and binding instrument of HECO, enforceable against
HECO in accordance with its terms and, to such counsel's knowledge, has
been duly qualified under the Trust Indenture Act;
(xv) the Subsidiary Indenture to which each Subsidiary is a party
has been duly authorized by all necessary corporate action of and duly
executed and delivered by such Subsidiary and constitutes a valid and
binding instrument of such Subsidiary, enforceable against such Subsidiary
in accordance with its terms;
(xvi) the HECO Debentures have been duly authorized by all necessary
corporate action of and duly executed by XXXX and, when authenticated in
the manner
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provided for in the HECO Indenture and delivered against payment therefor
by the Trust as described in the Prospectus, will constitute valid and
binding obligations of HECO, enforceable against HECO in accordance with
their terms, and will be entitled to the benefits of such Indenture;
(xvii) the Substituted HECO Debentures have been duly authorized by
all necessary corporate action of HECO and, if and when approved for
issuance by the PUC and then executed and authenticated in the manner
provided for in the HECO Indenture and delivered in exchange for the
Subsidiary Debentures as described in the Prospectus, will constitute valid
and binding obligations of HECO, enforceable against HECO in accordance
with their terms, and will be entitled to the benefits of the HECO
Indenture;
(xviii) the Subsidiary Debentures issued by each Subsidiary have
been duly authorized by all necessary corporate action of and duly executed
by such Subsidiary and, when authenticated in the manner provided for in
the applicable Indenture and delivered against payment therefor by the
Trust as described in the Prospectus, will constitute valid and binding
obligations of such Subsidiary, enforceable against such Subsidiary in
accordance with their terms, and will be entitled to the benefits of the
applicable Subsidiary Indenture;
(xix) the Expense Agreement has been duly authorized by all
necessary corporate action of and duly executed and delivered by each
Company and constitutes a valid and binding instrument of each Company,
enforceable against such Company in accordance with its terms;
(xx) the execution and delivery by each of the Companies and the
Trust of this Underwriting Agreement, the Securities, the Subsidiary
Debentures, the Indentures, the Trust Agreement, the Trust Guarantee
Agreement and the Expense Agreement to which it is a party did not, and the
consummation by such Company or the Trust of the transactions contemplated
hereby and thereby to be performed by it and the fulfillment of the terms
hereof and thereof will not result in a breach of any of the terms or
provisions of, or constitute a default under, any material indenture,
mortgage, deed of trust or other agreement or instrument to which such
Company or the Trust is a party and of which such counsel has knowledge, or
the Amended Articles of Incorporation, as amended, or By-Laws of such
Company or contravene or conflict with any order, rule or regulation known
to such counsel as applicable to such Company or the Trust of any court or
of any federal or state regulatory body or administrative agency or other
governmental body having jurisdiction over such Company or the Trust or any
of its properties, or any statute or constitutional provision of the State
of Hawaii applicable to such Company or the Trust, except that such counsel
need not express an opinion with respect to state securities or blue sky
laws; and
(xxi) those portions of the Registration Statement and the
Prospectus that are stated therein to have been made on such counsel's
authority (including such counsel's opinion set forth under "Certain
Federal Income Tax Consequences" in the Prospectus) have been reviewed by
such counsel and, as to matters of law and legal conclusions, are, subject
to the qualifications set forth therein, correct.
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In rendering such opinion, (A) such counsel may state that it is expressing an
opinion only as to the federal laws of the United States, the laws of the State
of Hawaii and, subject to clause (B) below, the laws of the State of New York,
(B) such counsel may rely, as to matters involving the application of laws of
the State of New York, upon the opinion of Counsel for the Underwriters rendered
pursuant to Section 7(e) hereof, (C) such counsel may rely, as to matters of
good standing and valid existence and as to matters of fact, upon certificates
of government officials (provided that copies of such certificates will be
furnished upon request to Counsel for the Underwriters), (D) such counsel may
rely, as to matters of fact, upon certificates and representations of officers
and employees of the Companies (provided that copies of such certificates will
be furnished to Counsel for the Underwriters), (E) such counsel may rely, with
respect to matters involving litigation or proceedings not principally handled
by such counsel's firm, upon opinions and information upon which such counsel
has been permitted to rely by other counsel representing the Companies in such
litigation or proceedings (provided that copies of such opinions will be
furnished upon request to Counsel for the Underwriters), (F) for purposes of the
opinion expressed in paragraph (iii) above, "material" shall mean $15,000,000,
(G) such counsel may state that it has not been requested to, and does not,
express any opinion with respect to the financial statements and notes thereto
and the schedules and other financial and statistical data and information
included or incorporated by reference in the Registration Statement and the
Prospectus or with respect to the statements of eligibility on Form T-1 filed as
exhibits to the Registration Statement, (H) such counsel may state, with respect
to the matters set forth in paragraph (ix) above, that they have not
independently verified and assume no responsibility for the accuracy,
completeness or fairness of the statements in the Prospectus or in any document
incorporated by reference therein, except insofar as such statements relate to
such counsel or as set forth in paragraphs (x) and (xxi) above, (I) such
counsel may limit the matters set forth in paragraphs (xiii) through (xix) above
by the application of applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting creditors' rights and of general
equitable principles (whether considered in a proceeding in equity or at law)
and, if applicable, by the effect of applicable public policy on the
enforceability of provisions relating to contribution or indemnification, (J)
such counsel may state that, whenever such opinion is qualified by the phrases
"known to such counsel," "to the best of our knowledge," "to our knowledge" or
"nothing has come to our attention," or other phrases of similar import, such
phrases are intended to mean the actual knowledge of information by the lawyers
in such counsel's firm who have been principally involved in drafting the
Prospectus and supervising the issuance, sale and delivery of the Trust
Preferred Securities and preparing the pertinent documents and the lawyers
having supervisory responsibility for the client relationship with the Companies
and general transaction representation, but does not include other information
that might be revealed if there were to be undertaken a canvass of all lawyers
in such counsel's firm, a general search of all files or any other type of
independent investigation (other than, with respect to the matters set forth in
paragraph (iii) above, such review of internal litigation files or inquiries of
other counsel as such counsel deems necessary) and (K) such counsel may include
therein such other customary qualifications reasonably acceptable to the
Representatives and Counsel for the Underwriters. References to the Registration
Statement and the Prospectus in this Section 7(c) shall include any amendments
or supplements thereto at the Closing Date.
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(d) At the Closing Date, the Representatives shall have received an
opinion of Xxxxxxxx, Xxxxxx & Xxxxxx, P.A., special Delaware counsel for HECO
and the Trust, dated the Closing Date, to the effect that:
(i) the Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act; and all filings
required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been
made;
(ii) under the Trust Agreement and the Business Trust Act, the
Trust has the trust power and authority (A) to own property and to conduct
its business, all as described in the Prospectus, (B) to issue and sell the
Trust Securities in accordance with the Trust Agreement, and as described
in the Prospectus, and to perform its other obligations under the Trust
Agreement, this Underwriting Agreement and the Trust Securities, (C) to
execute and deliver this Underwriting Agreement and (D) to consummate the
transactions contemplated by this Underwriting Agreement;
(iii) assuming that the Trust Agreement has been duly authorized,
executed and delivered by the parties thereto, the Trust Agreement
constitutes a valid and binding obligation of each of HECO and the
Administrative Trustees, and is enforceable against HECO and the
Administrative Trustees, in accordance with its terms, except as limited by
bankruptcy, insolvency, moratorium, receivership, reorganization,
liquidation, fraudulent conveyance or transfer and other similar laws
relating to or affecting creditors' rights generally, principles of equity,
including applicable law relating to fiduciary duties (whether considered
in a proceeding in equity or at law), and the effect of applicable public
policy on the enforceability of provisions relating to contribution or
indemnification;
(iv) the Trust Common Securities have been duly authorized by the
Trust Agreement and are validly issued undivided beneficial interests in
the assets of the Trust;
(v) the Trust Preferred Securities have been duly authorized by
the Trust Agreement and are duly and validly issued and, subject to the
qualifications set forth in paragraph (vi) below, fully paid and non-
assessable undivided beneficial interests in the assets of the Trust;
(vi) the holders of the Trust Preferred Securities, as beneficial
owners of the Trust, will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware (in
this regard, such counsel may note that the holders of the Trust Preferred
Securities may be obligated, pursuant to the Trust Agreement, to provide
(A) indemnity or security in connection with and pay taxes or governmental
charges arising from transfers or exchanges of certificates for Trust
Preferred Securities and the issuance of replacement certificates for Trust
Preferred Securities and (B) security or indemnity in connection with
requests of or directions to the Property Trustee to exercise its rights
and powers under the Trust Agreement);
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(vii) under the Trust Agreement and the Business Trust Act, the
issuance of the Trust Securities is not subject to preemptive rights;
(viii) the issuance and sale by the Trust of the Trust Securities,
the execution, delivery and performance by the Trust of this Underwriting
Agreement, and the consummation of the transactions contemplated by this
Underwriting Agreement, do not violate (A) the Trust Certificate or the
Trust Agreement or (B) any applicable Delaware law, rule or regulation; and
(ix) under the Trust Agreement and the Business Trust Act, the
issuance and sale by the Trust of the Trust Securities and the execution
and delivery by the Trust of this Underwriting Agreement, and the
performance by the Trust of its obligations hereunder, have been duly
authorized by all necessary trust action on the part of the Trust, and,
upon the due execution and delivery of this Underwriting Agreement by XXXX
as depositor under the Trust Agreement and the certificates for the Trust
Preferred Securities by more than one Administrative Trustee on behalf of
the Trust, and the countersignature of the Trust Preferred Securities by an
authorized officer of the Property Trustee in accordance with the Trust
Agreement, this Underwriting Agreement and the Trust Preferred Securities
will have been duly executed and delivered by the Trust.
In rendering such opinion, (A) such counsel may rely, as to matters of good
standing and valid existence and as to matters of fact, upon certificates of
government officials (provided that copies of such certificates will be
furnished upon request to Counsel for the Underwriters), (B) such counsel may
rely, as to matters of fact, upon certificates and representations of the Trust
(provided that copies of such certificates will be furnished upon request to
Counsel for the Underwriters), (C) such counsel may state that it is expressing
an opinion only as to the laws of the State of Delaware and (D) such counsel may
include therein such other customary qualifications reasonably acceptable to the
Representatives and Counsel for the Underwriters. References to the Prospectus
in this Section 7(d) shall include any amendments or supplements thereto at the
Closing Date.
(e) At the Closing Date, the Representatives shall have received an
opinion of Counsel for the Underwriters, dated the Closing Date, with respect to
certain matters relating to the execution and delivery by each of the Companies
of this Underwriting Agreement, the description of the Securities, the validity
of the Indentures, the HECO Securities and the Subsidiary Debentures, the
Registration Statement and the Prospectus, as amended or supplemented to the
Closing Date, and such other related matters as the Representatives may
reasonably request.
(f) On the date hereof, the Representatives shall have received a
letter from KPMG Peat Marwick LLP, independent certified public accountants of
the Companies (the "Accountants"), dated the date hereof, to the effect that:
(i) The Accountants are independent certified public accountants
with respect to the Companies within the meaning of the Securities Act and
the applicable rules and regulations of the Commission thereunder;
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(ii) In the opinion of the Accountants, the financial statements
and any supplementary financial information and schedules examined by them
and included or incorporated by reference in the Prospectus comply as to
form in all material respects with the applicable accounting requirements
of the Securities Act or the Exchange Act, as applicable, and the related
rules and regulations of the Commission thereunder; and, if applicable, the
Accountants have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the consolidated
interim financial statements, pro forma financial information or condensed
financial statements derived from consolidated audited financial statements
of the Companies for the periods specified in such letter, as indicated in
their reports thereon, copies of which have been furnished to the
Representatives;
(iii) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Companies, inspection of the minute books of
the Companies since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, inquiries of
officials of the Companies responsible for financial and accounting matters
and such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused the Accountants to believe
that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
of HECO included or incorporated by reference in HECO's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, the Exchange Act as it
applies to Form 10-Q and the related rules and regulations of the
Commission thereunder or any material modifications should be made to
such unaudited financial statements for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were
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derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Prospectus;
(C) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the rules and
regulations of the Commission thereunder or the pro forma adjustments
have not been properly applied to the historical amounts in the
compilation of those statements;
(D) at the date of the latest available financial statements of
HECO and as of a specified date not more than five business days prior
to the date of such letter, there have been any changes in the
consolidated capital stock or any increase in the consolidated long-
term debt of the Companies or any decreases in consolidated net assets
or other items specified by the Representatives, or any increases in
any items specified by the Representatives, in each case as compared
with the amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for
changes, increases or decreases that the Prospectus discloses have
occurred or may occur or that are described in such letter; or
(E) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the date of the latest available financial statements of HECO and to
the specified date referred to in paragraph (D) above there were any
decreases in consolidated revenues or the total amount of consolidated
net income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for increases or decreases that
the Prospectus discloses have occurred or may occur or that are
described in such letter; and
(v) In addition to the examination referred to in their report or
reports included or incorporated by reference in the Prospectus and the
limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (iv) above, the Accountants
have carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information specified
by the Representatives that are derived from the general accounting records
of the Companies and that appear in the Prospectus (excluding documents
incorporated by reference) or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives or in
documents incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Companies and have
found them to be in agreement.
-21-
References to the Registration Statement and the Prospectus in this Section 7(f)
shall include any amendments or supplements thereto at the Closing Date.
(g) At the Closing Date, the Representatives shall have received a
certificate of each Company, dated the Closing Date and signed by the Chairman
of the Board of Directors, the President, the Financial Vice President and
Treasurer, any other Vice President or an Assistant Treasurer of such Company,
(i) as to the accuracy of the representations and warranties of such Company
contained herein, (ii) as to the performance and compliance by such Company with
all agreements and conditions in this Underwriting Agreement to be performed or
complied with by such Company at or prior to the Closing Date, (iii) as to the
matters set forth in Sections 7(a), 7(b) and 7(m)(i) hereof and (iv) to the
effect that, since the respective dates as of which information is given in the
Prospectus, there has not been any change in the capital stock or long term debt
of such Company or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial position,
stockholder's equity or results of operations of such Company, otherwise than as
set forth or contemplated in the Prospectus.
(h) At the Closing Date, the Representatives shall have received a
certificate, dated the Closing Date and signed by an authorized representative
of the Trust, as to (i) the accuracy of the representations and warranties of
the Trust contained herein and (ii) the performance and compliance by the Trust
with all agreements and conditions in this Underwriting Agreement to be
performed or complied with by the Trust at or prior to the Closing Date.
(i) At the Closing Date, the Representatives shall have received (i)
duly executed counterparts of the Trust Agreement, the Trust Guarantee
Agreement, the Expense Agreement and the Indentures and (ii) specimens of the
Debentures and of certificates for the Trust Common Securities.
(j) At the Closing Date, the Representatives shall have received from
the Accountants a letter, dated the Closing Date, confirming, as of a date not
more than three business days prior to the Closing Date, the statements
contained in the letter delivered pursuant to Section 7(f) hereof.
(k) At the Closing Date, no Special Event (as defined in the Trust
Agreement) shall have occurred and be continuing.
(l) On or after the date hereof, there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the NYSE; (ii) a suspension or material limitation in trading of
the Trust Preferred Securities or of any securities of HECO on the NYSE; (iii) a
general moratorium on commercial banking activities declared by either federal
authorities or authorities in the State of Hawaii or New York; (iv) the outbreak
or escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event in this clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Trust Preferred Securities on the terms and in the manner contemplated in
the Prospectus; or (v) the occurrence of any material adverse change in the
existing financial, political or economic conditions in the United States or
elsewhere that, in the judgment of the Representatives, would materially and
adversely affect the financial markets or the market for the Trust Preferred
Securities and other securities similar to the Trust Preferred Securities or the
Debentures.
-22-
(m) (i) None of the Companies shall have sustained since the date of
the latest audited financial statements included or incorporated by reference in
the Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus and (ii) since the date hereof, there
shall not have been any change in the capital stock or long-term debt of the
Companies or any change, or any development involving a prospective change, in
or affecting the general affairs, management, financial position, stockholder's
equity or results of operations of the Companies, the effect of which, in any
such case described in clause (i) or (ii) above, is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Trust
Preferred Securities on the terms and in the manner contemplated in the
Prospectus.
(n) On or after the date hereof, (i) no downgrading shall have
occurred in the rating accorded any of HECO's debt securities by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of HECO's debt
securities.
(o) On or prior to the Closing Date, the Representatives shall have
received from the Offerors evidence reasonably satisfactory to Xxxxxxx, Xxxxx &
Co. that Xxxxx'x Investors Service, Inc. and Standard & Poor's Ratings Service
have publicly assigned to the Trust Preferred Securities ratings of Baal and
BBB, respectively, which ratings shall be in full force and effect on the
Closing Date.
(p) On or prior to the Closing Date, (i) the Trust Preferred
Securities shall have been duly listed, subject to notice of issuance, on the
NYSE and (ii) the registration statement on Form 8-A relating to the Trust
Preferred Securities shall have become effective under the Exchange Act.
(q) All legal matters in connection with the issuance and sale of the
Trust Preferred Securities shall be satisfactory in form and substance to
Counsel for the Underwriters.
(r) The Companies and the Trust will furnish the Underwriters with
additional conformed copies of such opinions, certificates, letters and
documents as may be reasonably requested.
If any of the conditions specified in this Section 7 shall not have
been fulfilled, this Underwriting Agreement may be terminated by the
Underwriters upon notice thereof to the Offerors. Any such termination shall be
without liability of any party to any other party, except as otherwise provided
in Sections 6(g) and Section 10 hereof.
-23-
SECTION 8. Condition to the Obligations of the Offerors. The
--------------------------------------------
obligations of the Companies and the Trust hereunder shall be subject to the
condition that no stop order suspending the effectiveness of the Registration
Statement shall be in effect at or prior to the Closing Date, and no proceedings
for that purpose shall be pending before, or threatened by, the Commission on
the Closing Date. In case such condition shall not have been fulfilled, this
Underwriting Agreement may be terminated by the Offerors upon notice thereof to
the Representatives. Any such termination shall be without liability of any
party to any other party, except as otherwise provided in Sections 6(g) and 10
hereof.
SECTION 9. Indemnification and Contribution.
--------------------------------
(a) The Companies and the Trust jointly and severally will indemnify
and hold harmless each Underwriter, and each person, if any, who controls each
Underwriter within the meaning of Section 15 of the Securities Act, from and
against any and all losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, as
amended, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus or
in the Prospectus, as each may be amended or supplemented, or any omission or
alleged omission to state therein a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, and will reimburse such Underwriter for any legal or other
expenses reasonably incurred by each Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that neither any Company nor the Trust shall be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with the Underwriter Information; provided further, however, that neither the
Companies nor the Trust shall be required to reimburse any Underwriter or such
person for fees and expenses of counsel other than one counsel for all
Underwriters and one counsel for all Underwriters in each jurisdiction in which
proceedings are or are threatened to be brought or of which matters of law are
or may be at issue, unless and to the extent that there are actual or potential
conflicts of interest between or among Underwriters or defenses available to one
or more Underwriters that are not available to other Underwriters; provided
further, however, that the indemnification contained in this Section 9(a) with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) on
account of any such loss, claim, damage, liability or expense arising from the
sale of the Trust Preferred Securities by such Underwriter to any person if the
Companies and the Trust have established that a copy of the Prospectus was not
delivered or sent to such person within the time required by the Securities Act
and the rules and regulations thereunder, and the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact contained in
such Preliminary Prospectus was corrected in
-24-
the Prospectus, provided that the Offerors have delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending.
(b) Each Underwriter will indemnify and hold harmless the Companies
and the Trust, their respective directors and officers who signed the
Registration Statement and each person, if any, who controls any of the
Companies or the Trust within the meaning of Section 15 of the Securities Act
from and against any and all losses, claims, damages or liabilities to which the
Companies or the Trust may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, as
amended, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus or
in the Prospectus, as each may be amended or supplemented, or any omission or
alleged omission to state therein a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
any such loss, claim, damage or liability arises out of or is based upon any
such untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with the Underwriter Information, and will
reimburse the Companies and the Trust for any legal or other expenses reasonably
incurred by the Companies and the Trust in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under Section 9(a)
or 9(b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under Section 9(a) or 9(b), notify such indemnifying party in
writing of the commencement thereof; but the failure to so notify such
indemnifying party shall neither relieve such indemnifying party from any
liability that it may have to the indemnified party that failed to give such
notice unless and only to the extent that such indemnifying party has been
prejudiced by such failure nor relieve it from any liability that it may have to
such indemnified party otherwise than under this Section 9. In case any such
action is brought against any such indemnified party and it notifies such
indemnifying party of the commencement thereof, such indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of such indemnified party, be counsel to such
indemnifying party), and, after notice from such indemnifying party to such
indemnified party of its election to so assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party under Section
9(a) or 9(b) for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No such
indemnifying party shall, without the written consent of such indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not such
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of such indemnified party from
-25-
all liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in Section 9(a) or 9(b)
hereof is unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, claims, damages or liabilities (or actions in respect
thereof) described therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Companies and the Trust on the one hand and the Underwriters on the other from
the offering of the Trust Preferred Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if such indemnified party failed to give the notice required under
Section 9(c) hereof and such indemnifying party was prejudiced by such failure,
then each such indemnified party shall contribute to such amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Companies and the
Trust on the one hand and the Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Companies and
the Trust on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Trust bear to the total underwriting
commission received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Companies or the Trust on the one hand or
the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Companies, the Trust and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 9(d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or any other method of allocation that does not take
account of the equitable considerations referred to above in this Section 9(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this Section 9(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 9(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Trust Preferred
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph 9(d), each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as such Underwriter, and each person,
if any, who controls any of the Companies or the Trust within the meaning of
Section 15 of the Securities Act and each officer or director of such Company
-26-
or the Trust shall have the same rights to contribution as such Offeror, as the
case may be, subject in each case to Sections 9(a) and 9(b) hereof.
SECTION 10. Survival of Certain Representations and Obligations.
---------------------------------------------------
Any other provision of this Underwriting Agreement to the contrary
notwithstanding, (a) the indemnity and contribution agreements contained in
Section 9 hereof, and the representations and warranties and other agreements of
the Companies and the Trust contained herein, shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of any
Underwriter or by or on behalf of any of the Companies or the Trust or its
directors or officers, or any of the other persons referred to in Section 9
hereof and (ii) acceptance of and payment for the Trust Preferred Securities and
(b) the indemnity and contribution agreements contained in Section 9 hereof
shall remain operative and in full force and effect regardless of any
termination of this Underwriting Agreement.
SECTION 11. Default of Underwriters.
-----------------------
(a) If any Underwriter defaults in its obligation to purchase the
number of Trust Preferred Securities that it has agreed to purchase hereunder,
the non-defaulting Underwriters may in their discretion arrange for such non-
defaulting Underwriters or another party or other parties to purchase such
number of Trust Preferred Securities on the terms contained herein. If within
twenty-four hours after such default by any Underwriter such non-defaulting
Underwriters do not arrange for the purchase of such number of Trust Preferred
Securities, then the Offerors shall be entitled to a further period of twenty-
four hours within which to, but shall not be required to, procure another party
or other parties satisfactory to such non-defaulting Underwriters to purchase
such Securities on such terms. In the event that, within the respective periods
prescribed above, such non-defaulting Underwriters notify the Offerors that they
have so arranged for the purchase of such number of Trust Preferred Securities,
or the Offerors notify the Underwriters that they have so arranged for the
purchase of such number of Trust Preferred Securities, then such non-defaulting
Underwriters or the Offerors shall have the right to postpone the Closing Date,
for a period of not more than five business days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Companies and the
Trust agree to file promptly any amendments to the Registration Statement or the
Prospectus that in the opinion of such non-defaulting Underwriters may thereby
be made necessary.
(b) If, after giving effect to any arrangements for the purchase of
Trust Preferred Securities of a defaulting Underwriter or Underwriters by the
non-defaulting Underwriter or Underwriters and the Offerors as provided in
Section 11(a) hereof, the aggregate number of Trust Preferred Securities that
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Trust Preferred Securities to be purchased hereunder, then the Offerors
shall have the right to require each non-defaulting Underwriter to purchase the
number of Trust Preferred Securities that such Underwriter agreed to purchase
hereunder and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Trust Preferred Securities
that such Underwriter agreed to purchase hereunder) of the Trust Preferred
Securities of such defaulting Underwriter or Underwriters for which such
-27-
arrangements have not been made, but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Trust Preferred Securities of a defaulting Underwriter or Underwriters by
the non-defaulting Underwriter or Underwriters and the Offerors as provided in
Section 11(a) hereof, the aggregate number of Trust Preferred Securities that
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Trust Preferred Securities to be purchased hereunder, or if the Offerors do
not exercise the right provided in Section 11(b) hereof to require such non-
defaulting Underwriters to purchase Trust Preferred Securities of a defaulting
Underwriter or Underwriters, then this Underwriting Agreement shall thereupon
terminate, without liability on the part of any such non-defaulting Underwriter
or either of the Offerors, except for the indemnity agreements in Section 9
hereof, but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
SECTION 12. Miscellaneous. THE RIGHTS AND DUTIES OF THE PARTIES TO
-------------
THIS UNDERWRITING AGREEMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1401, BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This
Underwriting Agreement shall become effective when a fully executed copy thereof
is delivered to the Companies and the Trust and to the Representatives. This
Underwriting Agreement may be executed in any number of separate counterparts,
each of which, when so executed and delivered, shall be deemed to be an original
and all of which, taken together, shall constitute but one and the same
agreement. This Underwriting Agreement shall inure to the benefit of each of the
Companies and the Trust, the Underwriters and, with respect to the provisions of
Section 9 hereof, each director, officer and other person referred to in Section
9 hereof, and their respective successors. If any part of this Underwriting
Agreement for any reason is declared invalid, such declaration shall not affect
the validity of any remaining portion, which remaining portion shall remain in
full force and effect as if this Underwriting Agreement had been executed with
the invalid portion thereof eliminated. Nothing herein is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of any provision in this
Underwriting Agreement. The term "successor" as used in this Underwriting
Agreement shall not include any purchaser, as such purchaser, of any Trust
Preferred Securities from the Underwriters.
SECTION 13. Notices. All communications hereunder shall be in
-------
writing and, if to the Underwriters, shall be mailed or delivered to Xxxxxxx,
Xxxxx & Co. at the address set forth at the beginning of this Underwriting
Agreement (to the attention of its General Counsel) or, if to the Companies or
the Trust, shall be mailed or delivered to them c/o HECO, P.O. Box 2750,
Honolulu, Hawaii 96840-0001, Attention: Financial Vice President and Treasurer.
-28-
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts of this Underwriting Agreement, and upon
acceptance hereof by you, on behalf of each of the Underwriters, this
Underwriting Agreement and such acceptance hereof shall constitute a binding
agreement among each of the Underwriters, each of the Companies and the Trust.
It is understood that your acceptance of this Underwriting Agreement on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Companies and the Trust for examination upon request, but without warranty
on the part of the Representatives as to the authority of the signers thereof.
Very truly yours,
Hawaiian Electric Company, Inc.
By: /s/ Xxxx Xxxx
-------------------------------------------
Name: Xxxx X. Xxxx
Title: Financial Vice-President
and Treasurer
Maui Electric Company, Limited
By: /s/ Xxxx Xxxx
-------------------------------------------
Name: Xxxx X. Xxxx
Title: Financial Vice-President
and Treasurer
Hawaii Electric Light Company, Inc.
By: /s/ Xxxx Xxxx
-------------------------------------------
Name: Xxxx X. Xxxx
Title: Financial Vice-President
and Treasurer
HECO Capital Trust I
By: Hawaiian Electric Company, Inc.,
as Depositor
By: /s/ Xxxx Xxxx
-------------------------------------------
Name: Xxxx X. Xxxx
Title: Financial Vice-President
and Treasurer
Accepted as of the date first above written:
XXXXXXX, XXXXX & Co.
PAINEWEBBER INCORPORATED
As representatives of the other several
Underwriters named in Schedule I hereto
By: XXXXXXX, XXXXX & Co.
/s/ Xxxxxxx, Xxxxx & Co.
---------------------------
SCHEDULE I
----------
HECO Capital Trust II
7.30% Cumulative Quarterly Income Preferred Securities, Series 1998
Number of
Underwriter Trust Preferred Securities
----------- --------------------------
Xxxxxxx, Xxxxx & Co. 700,000
PaineWebber Incorporated 700,000
Advest, Inc. 20,000
Xxxxxx X. Xxxxx & Co. Incorporated 20,000
BT Xxxx. Xxxxx Incorporated 40,000
Xxxxxxx Xxxxxx & Co., Inc. 20,000
CIBC Xxxxxxxxxxx Corp. 40,000
Xxxxxxx, Xxxxxx & Co. 20,000
Xxxx Xxxxxxxx Xxxxxxx, a division of Xxxx Xxxxxxxx Incorporation 20,000
X.X. Xxxxxxx & Sons, Inc. 40,000
EVEREN Securities, Inc. 40,000
Xxxxxxxxxx & Co. Inc. 20,000
Fleet Securities Inc. 20,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated 20,000
McDonald Investments Inc., A Keycorp Company 20,000
XxXxxx, Xxxxx & Co., Inc. 20,000
Xxxxxx Xxxxxx & Company, Inc. 20,000
National Financial Services Corporation 20,000
Olde Discount Corporation 20,000
Xxxxx Xxxxxxx Inc. 20,000
Prudential Securities Incorporated 40,000
Xxxxxxx Xxxxx & Associates, Inc. 20,000
Sutro & Co. Incorporated 20,000
TD Securities (USA) Inc. 20,000
Xxxxxx Xxxxxxx Incorporated 20,000
Wedbush Xxxxxx Securities 20,000
Wheat First Securities, Inc. 20,000
---------
Total 2,000,000
=========
