Exhibit 10.2

CREDIT AGREEMENT

dated as of March 31, 2006

among

HAWAIIAN ELECTRIC COMPANY, INC.,

as Borrower

The Lenders Party Hereto

and

BANK OF HAWAII,

as Co-Syndication Agent

and

FIRST HAWAIIAN BANK,

as Co-Syndication Agent

and

WELLS FARGO BANK, N.A.,

as Co-Documentation Agent

and

U.S. BANK NATIONAL ASSOCIATION,

as Co-Documentation Agent

and

UNION BANK OF CALIFORNIA, N.A.,

as Co-Documentation Agent

and

THE BANK OF NEW YORK,

as Administrative Agent

 

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BNY CAPITAL MARKETS, INC.,

as Sole Lead Arranger and Book Runner

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TABLE OF CONTENTS

 

ARTICLE 1. DEFINITIONS

   1

Section 1.01

  

Defined Terms

   1

Section 1.02

  

Terms Generally

   15

Section 1.03

  

Accounting Terms; GAAP

   16

ARTICLE 2. THE CREDITS

   16

Section 2.01

  

Commitments

   16

Section 2.02

  

Revolving Loans and Borrowings

   16

Section 2.03

  

Requests for Borrowings

   17

Section 2.04

  

Funding of Borrowings

   18

Section 2.05

  

Termination, Reduction and Increase of Commitments

   18

Section 2.06

  

Repayment of Loans; Evidence of Debt

   20

Section 2.07

  

Prepayment of Revolving Loans

   21

Section 2.08

  

Payments Generally; Pro Rata Treatment; Sharing of Setoffs

   22

ARTICLE 3. INTEREST, FEES, YIELD PROTECTION, ETC.

   23

Section 3.01

  

Interest

   23

Section 3.02

  

Interest Elections

   24

Section 3.03

  

Fees

   25

Section 3.04

  

Alternate Rate of Interest

   26

Section 3.05

  

Increased Costs; Illegality

   27

Section 3.06

  

Break Funding Payments

   28

Section 3.07

  

Taxes

   29

Section 3.08

  

Mitigation Obligations; Replacement of Lenders

   31

ARTICLE 4. REPRESENTATIONS AND WARRANTIES

   32

Section 4.01

  

Organization; Powers

   32

Section 4.02

  

Authorization; Enforceability

   32

Section 4.03

  

Governmental Approvals; No Conflicts

   32

Section 4.04

  

Financial Condition; No Material Adverse Effect

   33

Section 4.05

  

Properties

   33

Section 4.06

  

Litigation and Environmental Matters

   33

Section 4.07

  

Compliance with Laws and Agreements

   34

Section 4.08

  

Regulated Entities

   34

Section 4.09

  

Taxes

   34

Section 4.10

  

ERISA

   34

Section 4.11

  

Disclosure

   35

Section 4.12

  

Subsidiaries

   35

Section 4.13

  

Federal Reserve Regulations

   35

Section 4.14

  

Rankings

   35

Section 4.15

  

Solvency

   35

ARTICLE 5. CONDITIONS

   35

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Section 5.01

  

Effective Date

   35

Section 5.02

  

Each Credit Event

   37

ARTICLE 6. AFFIRMATIVE COVENANTS

   37

Section 6.01

  

Financial Statements and Other Information

   37

Section 6.02

  

Notices of Material Events

   39

Section 6.03

  

Existence; Conduct of Business

   39

Section 6.04

  

Payment of Obligations

   39

Section 6.05

  

Maintenance of Properties; Insurance

   40

Section 6.06

  

Books and Records; Inspection Rights

   40

Section 6.07

  

Compliance with Laws

   40

Section 6.08

  

Use of Proceeds

   40

Section 6.09

  

Further Assurances

   40

ARTICLE 7. NEGATIVE COVENANTS

   41

Section 7.01

  

Liens

   41

Section 7.02

  

Sale of Assets; Consolidation; Merger; Sale and Leaseback

   43

Section 7.03

  

Restrictive Agreements

   44

Section 7.04

  

Transactions with Affiliates

   44

Section 7.05

  

Consolidated Capitalization Ratio

   44

Section 7.06

  

Guaranties

   44

ARTICLE 8. EVENTS OF DEFAULT

   45

ARTICLE 9. THE ADMINISTRATIVE AGENT

   47

Section 9.01

  

Appointment

   47

Section 9.02

  

Individual Capacity

   47

Section 9.03

  

Exculpatory Provisions

   48

Section 9.04

  

Reliance by Administrative Agent

   48

Section 9.05

  

Performance of Duties

   49

Section 9.06

  

Resignation; Successors

   49

Section 9.07

  

Non-Reliance by Credit Parties

   49

Section 9.08

  

Agents

   50

ARTICLE 10. MISCELLANEOUS

   50

Section 10.01

  

Notices

   50

Section 10.02

  

Waivers; Amendments

   51

Section 10.03

  

Expenses; Indemnity; Damage Waiver

   52

Section 10.04

  

Successors and Assigns

   53

Section 10.05

  

Survival

   57

Section 10.06

  

Counterparts; Integration; Effectiveness

   57

Section 10.07

  

Severability

   58

Section 10.08

  

Right of Setoff

   58

Section 10.09

  

Governing Law; Jurisdiction; Consent to Service of Process

   58

Section 10.10

  

WAIVER OF JURY TRIAL

   59

Section 10.11

  

Headings

   59

 

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Section 10.12

  

Confidentiality

   59

Section 10.13

  

Interest Rate Limitation

   60

Section 10.14

  

No Third Parties Benefited

   60

Section 10.15

  

USA Patriot Act Notice

   61

Section 10.16

  

Termination of Credit Facilities

   61

SCHEDULES:

 

Schedule 1.01

  

Consolidated Capitalization

Schedule 1.01

  

Consolidated Funded Debt

Schedule 1.01

  

Consolidated Subsidiary Funded Debt

Schedule 2.01

  

Commitments

Schedule 4.12

  

Subsidiaries

Schedule 7.01

  

Existing Liens

Schedule 7.03

  

Existing Restrictions

EXHIBITS:

  

Exhibit A

  

Form of Assignment and Acceptance

Exhibit B

  

Form of Opinion of Borrower’s Counsel

Exhibit C

  

Form of Note

Exhibit D

  

Form of Borrowing Request

Exhibit E

  

Form of Increase Request

Exhibit F

  

Form of Interest Election Request

 

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CREDIT AGREEMENT, dated as of March 31, 2006 (this “Agreement”), among HAWAIIAN
ELECTRIC COMPANY, INC., as Borrower, the LENDERS party hereto and THE BANK OF
NEW YORK, as Administrative Agent.

The parties hereto agree as follows:

ARTICLE 1. DEFINITIONS

Section 1.01 Defined Terms

As used in this Agreement, the following terms have the meanings specified
below:

“ABR”, when used in reference to any Revolving Loan or Borrowing, refers to
whether such Revolving Loan, or the Revolving Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Alternate Base
Rate.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means BNY, in its capacity as administrative agent for
the Lenders hereunder.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Aggregate Credit Exposure” means, at any time, the sum at such time of the
outstanding principal balance of the Loans of all Lenders.

“Aggregate Revolving Commitments” means, at any time, the sum at such time of
the Revolving Commitments of all Lenders. The initial amount of the Aggregate
Revolving Commitments is $175,000,000.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day, and (b) the sum of Federal Funds
Rate in effect on such day plus 1/2 of 1% per annum. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Rate, respectively.

“Applicable Margin” means with respect to: (a) any Eurodollar Borrowings and any
Letters of Credit, at all times during which the applicable Pricing Level set
forth below is in

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effect, the percentage set forth below under the heading “Eurodollar Margin” and
adjacent to such Pricing Level, and (b) with respect to the commitment fee
payable under Section 3.03(a), at all times during which the applicable Pricing
Level set forth below is in effect, the percentage set forth below under the
heading “Commitment Fee Rate” and adjacent to such Pricing Level, in each case,
subject to the provisos set forth below:

 

Pricing Levels

        Commitment
Fee Rate     Eurodollar
Margin  

I

   (A-/A3)       0.070 %   0.300 %

II

   (BBB+/Baa1)       0.080 %   0.400 %

III

   (BBB/Baa2)       0.100 %   0.500 %

IV

   (BBB-/Baa3)       0.125 %   0.600 %

V

   (<BB+/Ba1)       0.200 %   0.875 %

provided that if the ratings established or deemed to have been established by
S&P and Moody’s for the Borrower’s commercial paper shall be changed (other than
as a result of a change in the rating system of S&P or Moody’s), such change
shall be effective as of the date on which it is first announced by the
applicable rating agency. If the applicable Senior Debt Ratings by S&P and
Moody’s are split-rated (i) by one rating category, the Pricing Level shall be
determined by the higher of the two (e.g., a Senior Debt Rating of BBB-/Baa2
results in Pricing Level III) and (ii) by more than one rating category, the
Pricing Level shall be determined by the level one below the higher rating by
either S&P or Moody’s (e.g., a Senior Debt Rating of BBB-/Baa1 results in
Pricing Level III and a Senior Debt Rating of BBB+/Baa3 results in Pricing
Level III). Each change in the Applicable Margin shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of S&P or Moody’s shall change, or if either such rating agency shall
cease to be in the business of rating corporate debt obligations, the Borrower
and the Lenders shall negotiate in good faith to amend this definition to
reflect such changed rating system or the unavailability of ratings from such
rating agency and, pending the effectiveness of any such amendment, the
Applicable Margin shall be determined by reference to the rating most recently
in effect prior to such change or cessation.

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment. If the Commitments
have terminated or expired, the Applicable Percentages shall be determined based
upon the Commitments most recently in effect, giving effect to any assignments.

“Approved Fund” means with respect to any Lender that is a fund that invests in
bank loans, any other fund that invests in bank loans and is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section

 

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10.04), and accepted by the Administrative Agent, substantially in the form of
Exhibit A or any other form approved by the Administrative Agent.

“Availability Period” means the period from and including the Effective Date to
(but excluding) the Commitment Termination Date.

“BNY” means The Bank of New York.

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

“Borrower” means Hawaiian Electric Company, Inc., a Hawaii corporation.

“Borrowing” means Revolving Loans of the same Type made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03 in substantially the form annexed hereto as Exhibit
D.

“Business Day” shall mean any day other than a Saturday, Sunday or a day when
banks are authorized by law to close in New York, New York, or, when used with
reference to a Eurodollar Loan, in London, England.

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP,
provided however, no power purchase agreement with an independent power producer
shall constitute a Capital Lease Obligation.

“Change in Control” means the Borrower is not a wholly-owned subsidiary of HEI.

“Change in Law” means the occurrence after the date of this Agreement of (a) the
adoption of any law, rule or regulation, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority, or (c) the making of any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority requiring compliance
by any Credit Party (or, for purposes of Section 3.05(b), by any lending office
of such Credit Party or by such Credit Party’s holding company, if any).

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Commitments” means the Revolving Commitments.

 

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“Commitment Percentage” means, as to any Lender in respect of such Lender’s
Commitment and its obligations with respect to Revolving Loans, the percentage
equal to such Lender’s Revolving Commitment divided by the total of all Lenders’
Revolving Commitments (or, if no Commitments then exist, the percentage equal to
such Lender’s Revolving Commitment on the last day upon which Commitments did
exist divided by the total of all Lenders’ Revolving Commitments on such day).

“Commitment Termination Date” shall mean the earliest of (a) March 29, 2007,
subject to automatic extension to the date, and upon the satisfaction of the
conditions, set forth in Section 2.05(a), (b) the date on which the Commitments
are terminated in whole pursuant to Section 2.05 or (c) the date the Commitments
are terminated in whole pursuant to Article 8.

“Common Stock Equity” means, at any date of determination with respect to the
Borrower on a non-consolidated basis, the sum of (a) common stock, (b) premium
and/or expenses and additional paid-in capital on common stock and preferred
stock, and (c) retained earnings excluding Accumulated Other Comprehensive
Income or Loss (AOCI) as defined in Statement of Financial Accounting Standards
Nos. 87, 130, 133 and 149, as such standards now exist and as they may hereafter
be amended but subject to Section 1.03 except with respect to matters affecting
AOCI.

“Consolidated Capitalization” means, at any date of determination with respect
to the Borrower and its Subsidiaries on a consolidated basis, the sum of
(a) Consolidated Funded Debt, (b) preferred stock of the Borrower and its
Subsidiaries and (c) Consolidated Common Stock Equity. The Borrower’s
Consolidated Capitalization as of December 31, 2005 is annexed hereto as
Schedule 1.01 (Consolidated Capitalization); for the avoidance of doubt, such
Schedule is attached hereto for illustrative purposes only and is not intended
to be a calculation of Consolidated Capitalization on or for any subsequent date
of determination.

“Consolidated Capitalization Ratio” means, at any date of determination, the
ratio of (a) Consolidated Common Stock Equity to (b) Consolidated
Capitalization.

“Consolidated Common Stock Equity” means, at any date of determination with
respect to the Borrower and its Subsidiaries on a consolidated basis, the sum of
(a) common stock, (b) premium and/or expenses and additional paid-in capital on
common stock and preferred stock, and (c) retained earnings excluding
Accumulated Other Comprehensive Income or Loss (AOCI) as defined in Statement of
Financial Accounting Standards Nos. 87, 130, 133 and 149, as such standards now
exist and as they may hereafter be amended but subject to Section 1.03 except
with respect to matters affecting AOCI.

“Consolidated Funded Debt” means, at any date of determination, with respect to
the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) net
long-term debt, defined as the portion of outstanding bonds, debentures and
similar debt obligations (including Capital Lease Obligations, Purchase Money
Indebtedness and indebtedness under this Agreement), net of funds on deposit
with trustees and unamortized discounts in respect of such bonds, debentures and
obligations, that is due one year or more from the date of the relevant balance
sheet on which such debt is included, (b) long-term debt due within one year,
defined as

 

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the portion of outstanding bonds and debentures and similar debt obligations
(including Capital Lease Obligations, Purchase Money Indebtedness and
indebtedness under this Agreement) that is due within one year from the date of
the relevant balance sheet on which such long-term debt is included and
(c) short-term borrowings, including Purchase Money Indebtedness, as included on
and defined in the relevant balance sheet; provided, however, no debt of
independent power producers included on a balance sheet of the Borrower by
reason of the application of Financial Accounting Standards Board Interpretation
No. 46 (revised December 2003) shall constitute Consolidated Funded Debt. A
schedule of Consolidated Funded Debt as of December 31, 2005 is annexed hereto
as Schedule 1.01 (Consolidated Funded Debt); for the avoidance of doubt, such
Schedule is attached hereto for illustrative purposes only and is not intended
to be a calculation of Funded Debt on or for any subsequent date of
determination.

“Consolidated Subsidiary Funded Debt” means, at any date of determination, with
respect to any Subsidiary of the Borrower on a consolidated basis, the sum of
(a) net long-term debt, defined as the portion of outstanding bonds, debentures
and similar debt obligations (including Capital Lease Obligations, Purchase
Money Indebtedness and indebtedness under this Agreement), net of funds on
deposit with trustees and unamortized discounts in respect of such bonds,
debentures and obligations, that is due one year or more from the date of the
relevant balance sheet on which such debt is included, (b) long-term debt due
within one year, defined as the portion of outstanding bonds and debentures and
similar debt obligations (including Capital Lease Obligations, Purchase Money
Indebtedness and indebtedness under this Agreement) that is due within one year
from the date of the relevant balance sheet on which such long-term debt is
included and (c) short-term borrowings, including Purchase Money Indebtedness,
as included on and defined in the relevant balance sheet; provided, however, no
debt of independent power producers included on a balance sheet of the Borrower
by reason of the application of Financial Accounting Standards Board
Interpretation No. 46 (revised December 2003) shall constitute Consolidated
Funded Debt. A schedule of Consolidated Subsidiary Funded Debt as of
December 31, 2005 is annexed hereto as Schedule 1.01 (Consolidated Subsidiary
Funded Debt); for the avoidance of doubt, such Schedule is attached hereto for
illustrative purposes only and is not intended to be a calculation of
Consolidated Subsidiary Funded Debt on or for any subsequent date of
determination.

“Consolidated Subsidiary Capitalization” means, at any date of determination
with respect to any Subsidiary of the Borrower on a consolidated basis, the sum
of (a) Consolidated Subsidiary Funded Debt, (b) preferred stock and
(c) Consolidated Subsidiary Common Stock Equity.

“Consolidated Subsidiary Funded Debt to Capitalization Ratio” means, at any date
of determination with respect to any Subsidiary of the Borrower, the ratio of
(a) Consolidated Subsidiary Funded Debt to (b) Consolidated Subsidiary
Capitalization.

“Consolidated Subsidiary Common Stock Equity” means, at any date of
determination with respect to any Subsidiary of the Borrower on a consolidated
basis, the sum of (a) common stock, (b) premium and/or expenses and additional
paid-in capital on common stock and preferred stock, and (c) retained earnings
excluding Accumulated Other Comprehensive Income or Loss (AOCI) as defined in
Statement of Financial Accounting Standards Nos. 87, 130,

 

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133 and 149, as such standards now exist and as they may hereafter be amended
but subject to Section 1.03 except with respect to matters affecting AOCI.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
terms “Controlling” and “Controlled” have meanings correlative thereto.

“Credit Exposure” means, with respect to any Lender as of any date, the sum as
of such date of the outstanding principal balance of such Lender’s Loans.

“Credit Parties” means the Administrative Agent and the Lenders.

“Current SEC Reports” means (a) the Annual Report of the Borrower to the SEC on
Form 10K for the fiscal year ended December 31, 2005 and (b) any current reports
of the Borrower on Form 8K filed prior to the Effective Date.

“Default” means any event or condition which constitutes an Event of Default or
that upon notice, lapse of time or both would, unless cured or waived, become an
Event of Default.

“Disclosed Matters” means the matters (a) disclosed in the current and periodic
reports filed by the Borrower from time to time with the SEC pursuant to the
requirements of the Securities and Exchange Act of 1934 and the rules and
regulations promulgated thereunder, or (b) disclosed by the Borrower to the
Lenders, through the Administrative Agent, in writing.

“dollars” or “$” refers to lawful money of the United States of America.

“Effective Date” means the date on which the conditions specified in
Section 5.01 are satisfied (or waived in accordance with Section 10.02).

“Eligible Assignee” means (a) a Credit Party; (b) an Affiliate of a Credit
Party; (c) an Approved Fund; and (d) any other Person (other than an individual)
approved by (i) the Administrative Agent, and (ii) unless a Default has occurred
under Article 8(a), Article 8(h) or Article 8(i), and is continuing, the
Borrower (each such approval not to be unreasonably withheld or delayed);
provided, however, that neither the Borrower nor any Subsidiary or Affiliate of
the Borrower shall qualify as an Eligible Assignee under this definition.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release into the environment of any Hazardous
Material or to health and safety matters concerning Hazardous Materials.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of

 

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the Borrower or any Subsidiary directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment, or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

“Equity Interest” shall mean (a) shares of capital stock and any other equity
security that confers on a person or entity the right to receive a share of the
profits and losses of, or distribution of assets of, the issuing company and
(b) all warrants, options or other rights to acquire any Equity Interest
described in clause (a) of this definition.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower or any Subsidiary, is treated with the Borrower
as a single employer under Section 414(b) or (c) of the Code or, solely for
purposes of Section 302 of ERISA and Section 412 of the Code, is treated with
the Borrower as a single employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of any liability
under Title IV of ERISA with respect to the termination of any Plan; (e) the
receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any ERISA Affiliate of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by
the Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

“Eurodollar”, when used in reference to any Revolving Loan or Borrowing, refers
to whether such Revolving Loan, or the Revolving Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Article 8.

“Excluded Taxes” means, with respect to any Credit Party or any other recipient
of any payment to be made by or on account of any obligation of the Borrower
under any Loan

 

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Document, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America, or by the jurisdiction under the laws of
which such recipient is organized or in which its principal office is located
or, in the case of any Credit Party, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which the Borrower is
located, and (c) in the case of a Foreign Lender (other than an assignee
pursuant to a request by the Borrower under Section 3.08(b)), any withholding
tax that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement (or designates a new lending
office) or is attributable to such Foreign Lender’s failure to comply with
Section 3.07(e), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 3.07(a).

“Federal Funds Rate” means, for any day, the rate per annum (rounded, if
necessary, to the next greater 1/100 of 1%) equal to the rate per annum
published by the Federal Reserve Bank of New York on such day, provided that if
such day is not a Business Day, the Federal Funds Rate for such day shall be
such rate published by the Federal Reserve Bank on the next preceding Business
Day.

“Financial Officer” means the financial vice president, treasurer, controller or
any assistant treasurer of the Borrower.

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

“GAAP” means generally accepted accounting principles in the United States of
America.

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government, including
the Hawaii Public Utilities Commission, the SEC and the Federal Energy
Regulatory Commission.

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect,

(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof,

 

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(b) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment
thereof,

(c) to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or

(d) as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation, provided that the term
“Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business.

The term “Guaranteed” has a meaning correlative thereto.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

“HEI” means Hawaiian Electric Industries, Inc., a Hawaii Corporation.

“HELCO” means Hawaii Electric Light Company, Inc., a Hawaii corporation.

“Increase Request” means a request by the Borrower for an increase of the total
Commitments in accordance with Section 2.05(d).

“Indebtedness” of any Person means, without duplication,

(a) all obligations of such Person for borrowed money,

(b) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments,

(c) all obligations of such Person upon which interest charges are customarily
paid,

(d) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person,

(e) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business),

 

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(f) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed,

(g) all Guarantees by such Person of Indebtedness of others,

(h) all Capital Lease Obligations of such Person,

(i) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit and letters of guaranty, and

(j) all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances.

The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitee” has the meaning assigned to such term in Section 10.03(b).

“Information” has the meaning assigned to such term in Section 10.12.

“Insolvent” means, with reference to any Person, (a) such Person’s debts are
greater than all of such Person’s property, at a fair valuation (as determined
in the good faith judgment of such Person), exclusive of (i) property
transferred, concealed, or removed with intent to hinder, delay, or defraud such
Person’s creditors, and (ii) property that may be exempted from property of the
estate under Section 522 of the Bankruptcy Code, or (b) such Person is generally
not paying its debts as they become due or is unable to pay its debts as they
become due.

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 3.02 and substantially in the
form annexed hereto as Exhibit F.

“Interest Payment Date” means (a) with respect to any ABR Loan, the first
Business Day of each April, July, October and January, and (b) with respect to
any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Revolving Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period.

 

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“Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending two weeks thereafter or on
the numerically corresponding day in the calendar month that is one, two, three
or six months thereafter, as the Borrower may elect, provided that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day, unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to Section 2.05(d) or pursuant to an
Assignment and Acceptance, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Acceptance.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Dow Jones Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service), as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate offered to leading banks for
dollar deposits with a maturity comparable to such Interest Period. In the event
that such rate does not appear on Page 3750 of the Dow Jones Telerate screen (or
otherwise on such screen), the “LIBO Rate” shall be determined by reference to
such other comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent or in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 a.m. New York City time, two Business
Days prior to the beginning of such Interest Period in the interbank eurodollar
market where the eurodollar and foreign currency and exchange operations are
then being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount comparable to the amount
of the Eurodollar Borrowing.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset,
and (c) in the case of securities, any purchase option, call or similar right of
a third party with respect to such securities.

“Loan Documents” means this Agreement, the Notes, and, if applicable, any
Hedging Agreement between the Borrower and any Lender.

“Margin Stock” has the meaning assigned to such term in Regulation U.

 

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“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, property or condition, (financial or otherwise) of the Borrower and
its Subsidiaries, taken as a whole, or (b) the validity or enforceability of any
of the Loan Documents or the rights and remedies of the Administrative Agent and
the Lenders thereunder.

“Material Indebtedness” means all Indebtedness of the Borrower and any
Significant Subsidiary (other than Indebtedness under the Loan Documents) or
obligations in respect of one or more Hedging Agreements in an aggregate
principal amount exceeding $50,000,000. For purposes of determining Material
Indebtedness, the “principal amount” of the obligations of the Borrower and any
Significant Subsidiary in respect of any Hedging Agreement at any time shall be
the maximum aggregate amount (giving effect to any netting agreements) that the
Borrower would be required to pay if such Hedging Agreement were terminated at
such time.

“MECO” means Maui Electric Company, Limited, a Hawaii corporation.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

“Notes” means, with respect to each Lender, a promissory note evidencing such
Lender’s Revolving Loans payable to the order of such Lender (or, if required by
such Lender, to such Lender and its registered assigns) substantially in the
form of Exhibit C.

“Other Taxes” means any and all current or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, the Loan Documents.

“Participant” has the meaning assigned to such term in Section 10.04(g).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower, any Subsidiary or
any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5)
of ERISA.

“Pricing Level I” means at any time the Borrower’s Senior Debt Rating is (a) A-
or higher by S&P or (b) A3 or higher by Moody’s.

 

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“Pricing Level II” means at any time the Borrower’s Senior Debt Rating is
(a) BBB+ or higher by S&P or (b) Baa1 or higher by Moody’s, and Pricing Level I
is not applicable.

“Pricing Level III” means at any time the Borrower’s Senior Debt Rating is
(a) BBB or higher by S&P or (b) Baa2 or higher by Moody’s, and Pricing Levels I
and II are not applicable.

“Pricing Level IV” means at any time the Borrower’s Senior Debt Rating is
(a) BBB- or higher by S&P or (b) Baa3 or higher by Moody’s, and Pricing Levels
I, II and III are not applicable.

“Pricing Level V” means at any time the Borrower’s Senior Debt Rating is
(a) less than or equal to BB+ by S&P or (b) less than or equal to Ba1 by
Moody’s.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by BNY as its prime rate in effect at its principal office in New York
City; each change in the Prime Rate shall be effective from and including the
date such change is publicly announced as being effective. The Prime Rate is not
intended to be lowest rate of interest charged by BNY in connection with
extensions of credit to borrowers.

“PUC” means the Public Utilities Commission of the State of Hawaii.

“Purchase Money Indebtedness” means Indebtedness of the Borrower that is
incurred to finance part or all of (but not more than) the purchase price of a
tangible asset; provided that (a) the Borrower did not at any time prior to such
purchase have any interest in such asset other than a security interest or an
interest as lessee under an operating lease and (b) such Indebtedness is
incurred within 90 days after such purchase.

“Register” has the meaning assigned to such term in Section 10.04(e).

“Regulation T” means Regulation T of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.

“Regulation U” means Regulation U of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.

“Regulation X” means Regulation X of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, and employees of such Person
and such Person’s Affiliates.

“Required Lenders” means, at any time (a) prior to the Commitment Termination
Date, Lenders having Commitments greater than 50% of the total Commitments and
(b) on or after the Commitment Termination Date, Lenders having Revolving
Exposure greater than or equal to 50% of the Aggregate Credit Exposure (or, if
there are no Revolving Loans then outstanding,

 

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Lenders having Commitments greater than or equal to 50% of the total of all
Commitments immediately prior to the termination of the Commitments).

“Restricted Payment” means, with respect to any Person, (a) any dividend or
other distribution (whether in cash, securities or other property) by such
entity with respect to any Equity Interests of such entity, (b) any payment
(whether cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interest, and
(c) any payment of principal, interest or premium or any purchase, redemption,
retirement, acquisition or defeasance with respect to any subordinated debt.

“Revolving Commitment” means, with respect to each Lender, the commitment of
such Lender during the Availability Period to make Revolving Loans hereunder,
expressed as an amount representing the maximum aggregate amount of such
Lender’s Revolving Credit Exposure hereunder, as such commitment may be reduced
or increased from time to time pursuant to Section 2.05 or pursuant to
assignments by or to such Lender pursuant to Section 10.04. The initial amount
of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment
and Acceptance pursuant to which such Lender shall have assumed its Commitment,
as applicable.

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
aggregate outstanding principal amount of such Lender’s Revolving Loans at such
time.

“Revolving Loans” means the revolving loans referred to in Section 2.01 and made
pursuant to Section 2.03.

“SEC” means the United States Securities and Exchange Commission.

“SEC Reports” means the reports filed by the Borrower with the SEC pursuant to
the Securities Exchange Act of 1934, as amended.

“Senior Debt Ratings” means the Borrower’s senior unsecured debt ratings from
either S&P and Moody’s.

“S&P” means Standard & Poor’s Ratings Group, Inc.

“Significant Subsidiary” shall mean each of MECO, HELCO and any other Subsidiary
having 15% or more of the total assets or 15% or more of the total operating
income of the Borrower on a consolidated basis.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency

 

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funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

“Subsidiary” means any subsidiary of the Borrower and any subsidiary of a
Subsidiary of the Borrower.

“Subsidiary Indebtedness” has the meaning assigned to such term in Section 7.06.

“Taxes” means any and all current or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

“Transactions” means (a) the execution, delivery and performance by the Borrower
of each Loan Document to which it is a party, (b) the borrowing of the Revolving
Loans, and (c) the use of the proceeds of the Revolving Loans.

“Type”, when used in reference to any Revolving Loan or Borrowing, refers to
whether the rate of interest on such Revolving Loan, or on the Revolving Loans
comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate
or the Alternate Base Rate.

“Utilization Fee” has the meaning assigned to such term in Section 3.03(b).

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

Section 1.02 Terms Generally

The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires otherwise,
(a) any definition of or reference to any agreement, instrument or other

 

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document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, restated, supplemented or otherwise
modified (subject to any restrictions on such amendments, restatements,
supplements or modifications set forth herein), (b) any reference herein to any
Person shall be construed to include such Person’s successors and assigns,
(c) the words “herein”, “hereof” and “hereunder”, and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement, (e) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights, and (f) any reference herein to any
law, rule, regulation or treaty shall, unless otherwise specified, refer to such
law, rule, regulation, or treaty as amended, restated, supplemented or otherwise
modified from time to time.

Section 1.03 Accounting Terms; GAAP

Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time, provided that, if the Borrower notifies the Administrative Agent
that the Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith. Unless the context otherwise requires, any reference to a fiscal
period shall refer to the relevant fiscal period of the Borrower.

ARTICLE 2. THE CREDITS

Section 2.01 Commitments

Subject to the terms and conditions set forth herein, each Lender agrees to make
Revolving Loans to the Borrower from time to time during the Availability Period
in an aggregate principal amount that will not result in such Lender’s Revolving
Credit Exposure exceeding such Lender’s Commitment. Within the foregoing limits
and subject to the terms and conditions set forth herein, the Borrower may
borrow, prepay and reborrow Revolving Loans.

Section 2.02 Revolving Loans and Borrowings

(a) Each Revolving Loan shall be made as part of a Borrowing consisting of
Revolving Loans made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender to make any Revolving Loan required to be
made by it shall not relieve any other Lender of its obligations hereunder,
provided that the Commitments of the Lenders are

 

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several, and no Lender shall be responsible for any other Lender’s failure to
make Revolving Loans as required.

(b) Subject to Section 3.04, each Borrowing shall be comprised entirely of
Revolving Loans which are ABR Loans or Eurodollar Loans, as the Borrower may
request in accordance herewith (including Section 3.02). Each Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Revolving Loan, provided that any exercise
of such option shall not affect the obligation of the Borrower to repay such
Revolving Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any Eurodollar Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $1,000,000. At the time that each ABR Borrowing is
made, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $1,000,000, provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments. Borrowings of more than one Type may be
outstanding at the same time, provided that there shall not at any time be more
than a total of fifteen Eurodollar Borrowings outstanding.

(d) Notwithstanding any other provision of this Agreement, the Borrower shall
not be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the
Commitment Termination Date.

Section 2.03 Requests for Borrowings

To request a Borrowing, the Borrower shall notify the Administrative Agent of
such request by telephone (a) in the case of a Eurodollar Borrowing, not later
than 3:00 p.m., New York City time, three Business Days before the date of the
proposed Borrowing, or (b) in the case of an ABR Borrowing, not later than 2:00
p.m., New York City time on the date of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or facsimile transmission to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the President or a Financial Officer of the Borrower. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:

(i) the aggregate amount of the requested Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and

 

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(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.04.

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Revolving Loan to be made as part of the requested
Borrowing.

Section 2.04 Funding of Borrowings

(a) Each Lender shall make each Revolving Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 3:00
p.m., New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. Subject to
Section 5.02, the Administrative Agent will make such Revolving Loans available
to the Borrower by promptly crediting or otherwise transferring the amounts so
received, in like funds, to an account of the Borrower designated by the
Borrower in the applicable Borrowing Request.

(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent by 3:00 p.m. New York
City time for a Eurodollar Borrowing or by 6:00 p.m. New York City time for an
ABR Borrowing on the applicable day, then the Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation, or (ii) in the
case of the Borrower, the interest rate that would be otherwise applicable to
such Borrowing. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender’s Revolving Loan included in such
Borrowing.

Section 2.05 Termination, Reduction and Increase of Commitments

(a) Unless previously terminated, the Revolving Commitments shall terminate on
the Commitment Termination Date, provided however, upon delivery to the
Administrative Agent of a copy of an order or approval issued by the PUC,
certified by a Financial Officer of the Borrower to be true and complete, which
is final and not subject to review or appeal, that authorizes the Borrower to
enter into credit agreements, including this Agreement, for a period in excess
of 364 days, the date set forth in clause (a) of the definition of Commitment
Termination

 

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Date shall be automatically extended to the latest date permitted by such order
or approval but in no event no later than the date which is the fifth
anniversary of the Effective Date.

(b) The Borrower may at any time terminate, or from time to time reduce, the
Commitments, provided that (i) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the
Revolving Loans in accordance with Section 2.07, the Aggregate Credit Exposure
would exceed the Aggregate Revolving Commitments, and (ii) each such reduction
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $5,000,000.

(c) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable. Any termination or reduction of the
Commitments hereunder shall be permanent. Each reduction of the Commitments
hereunder shall be made ratably among the Lenders in accordance with their
respective Commitments.

(d) Provided that immediately before and after giving effect thereto, no Default
shall or would exist, the Borrower may at any time and from time to time, on or
before the forty eighth (48th) month anniversary of the Effective Date, at its
sole cost and expense, request any one or more of the Lenders to increase (such
decision to be within the sole and absolute discretion of such Lender) its
Revolving Commitment, or any other Eligible Assignee reasonably satisfactory to
the Administrative Agent and the Borrower to provide a new Revolving Commitment,
by submitting an Increase Request in the form of Exhibit E (an “Increase
Request”), duly executed by the Borrower and each such Lender or Eligible
Assignee, as the case may be. If such Increase Request is in all respects
reasonably satisfactory to the Administrative Agent, the Administrative Agent
shall execute such Increase Request and deliver a copy thereof to the Borrower
and each such Lender or Eligible Assignee, as the case may be. Upon execution
and delivery of such Increase Request, (i) in the case of each such Lender, such
Lender’s Revolving Commitment shall be increased to the amount set forth in such
Increase Request, (ii) in the case of each such Eligible Assignee, such Eligible
Assignee shall become a party hereto and shall for all purposes of the Loan
Documents be deemed a “Lender” with a Revolving Commitment in the amount set
forth in such Increase Request, and (iii) the Borrower shall contemporaneously
therewith execute and deliver to the Administrative Agent a Note or Notes for
each such Eligible Assignee providing a new Revolving Commitment and for such
existing Lender increasing its Revolving Commitment provided, however, that:

(i) immediately after giving effect thereto, the Aggregate Revolving Commitments
shall not have been increased pursuant to this subsection (d) to an amount
greater than $225,000,000;

(ii) each such increase shall be in an amount not less than $5,000,000 or such
amount plus an integral multiple of $1,000,000;

 

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(iii) the Revolving Commitments shall not be increased on more than two
occasions;

(iv) if Loans shall be outstanding immediately after giving effect to such
increase, the Lenders shall, upon the acceptance of the Increase Request by, and
at the direction of, the Administrative Agent, make appropriate adjustments
among themselves so that the amount of the Loans outstanding to the Borrower
from any of the Lenders under this Agreement are allocated among the Lenders
according to their Commitment Percentages after giving effect to the increase in
the Aggregate Revolving Commitments;

(v) each such Eligible Assignee shall have delivered to the Administrative Agent
and the Borrower an Administrative Questionnaire and all forms, if any, that are
required to be delivered by such Eligible Assignee pursuant to Section 3.07(e);
and

(vi) the Administrative Agent shall have received (1) a copy of an order or
approval issued by the PUC, certified by a Financial Officer of the Borrower to
be true and complete, which is final and not subject to review or appeal, that
authorizes the Borrower to obtain any increase in the Commitments requested by
the Borrower and (2) a certificate of a Financial Officer of the Borrower
attaching thereto resolutions of the Board of Directors of the Borrower
authorizing any increase of the Commitments requested by the Borrower.

Section 2.06 Repayment of Loans; Evidence of Debt

(a) The Borrower hereby unconditionally promises to pay to the Administrative
Agent for the account of each Lender the then unpaid principal amount of each
Revolving Loan on the Commitment Termination Date.

(b) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the debt of the Borrower to such Lender resulting from
each Revolving Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

(c) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Revolving Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder, and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to paragraph (b) or
(c) of this Section shall, to the extent not inconsistent with any entries made
in any Note, be prima facie evidence of the existence and amounts of the
obligations recorded therein, provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Revolving
Loans in accordance with the terms of this Agreement.

 

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(e) The Revolving Loans of each Lender and interest thereon shall at all times
(including after assignment pursuant to Section 10.04) be evidenced by one or
more Notes payable to the order of such Lender (or, if such Note is a registered
note, to such Lender and its registered assigns).

Section 2.07 Prepayment of Revolving Loans

(a) The Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, subject to the requirements of this
Section.

(b) In the event of any partial reduction or termination of the Commitments,
then (i) at or prior to the date of such reduction or termination, the
Administrative Agent shall notify the Borrower and the Lenders of the sum of the
Revolving Credit Exposures after giving effect thereto, and (ii) if such sum
would exceed the total Commitments after giving effect to such reduction or
termination, then the Borrower shall, on the date of such reduction or
termination, prepay Revolving Borrowings in an amount sufficient to eliminate
such excess.

(c) Mandatory Prepayments.

(i) Simultaneously with each reduction or termination of the Aggregate Revolving
Commitment, the Borrower shall prepay the Revolving Loans, by an amount equal to
the excess, if any, of the Aggregate Credit Exposure minus the Aggregate
Revolving Commitments after giving effect to such reduction or termination.

(ii) Simultaneously with each reduction or termination of the Revolving
Commitments, the Borrower shall prepay the Revolving Loans by an amount equal to
the lesser of (1) the aggregate outstanding principal balance of the Revolving
Loans, or (2) the excess of the aggregate outstanding principal balance of the
Revolving Loans over the Aggregate Revolving Commitments as so reduced or
terminated.

(d) Simultaneously with each prepayment of a Revolving Loan, the Borrower shall
prepay all accrued interest on the amount prepaid through the date of
prepayment.

(e) The Borrower shall notify the Administrative Agent by telephone (confirmed
by facsimile transmission) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 2:00 p.m., New York City
time, three Business Days before the date of prepayment, or (ii) in the case of
prepayment of an ABR Borrowing, not later than 2:00 p.m., New York City time, on
the Business Day of the prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid. Promptly following receipt of any such notice
relating to a prepayment of a Borrowing, the Administrative Agent shall advise
the Lenders of the contents thereof. Each partial prepayment of any Borrowing
under Sections 2.05(b) and 2.07(a) shall, when added to the amount of each
concurrent reduction of the Commitments and prepayment of Borrowings under such
Sections, be in an integral multiple of $1,000,000 and not less than $1,000,000.
Each prepayment of a Borrowing shall be applied ratably to the Revolving

 

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Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 3.01.

Section 2.08 Payments Generally; Pro Rata Treatment; Sharing of Setoffs

(a) The Borrower shall make each payment required to be made by it hereunder or
under any other Loan Document (whether of principal, interest or fees, or of
amounts payable under Section 3.05, 3.06, 3.07 or 10.03, or otherwise) prior to
3:00 p.m., New York City time, on the date when due, in immediately available
funds, without setoff or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its office at One Wall Street, New York, New York, or such other office as to
which the Administrative Agent may notify the other parties hereto, except that
payments pursuant to Sections 3.05, 3.06, 3.07 and 10.03 shall be made directly
to the Persons entitled thereto. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. In the event the
Administrative Agent has not in fact made available to each Lender its share of
the applicable payment within one Business Day of the receipt thereof, then the
Administrative Agent agrees to pay to the applicable Lender forthwith on demand
its share of such payment with interest thereon for each day, from and including
the second Business Day after such payment was received by the Administrative
Agent but excluding the date of payment by the Administrative Agent, at the
greater of the Federal Funds Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation. If
any payment hereunder shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be made in dollars.

(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal of Revolving Loans,
interest, fees and commissions then due hereunder, such funds shall be applied
(i) first, towards payment of interest, fees and commissions then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest, fees and commissions then due to such parties, and (ii) second,
towards payment of principal of Revolving Loans then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal
of Revolving Loans then due to such parties.

(c) If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of, or interest on, any of
its Revolving Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of, and accrued interest
on, their respective Revolving Loans,

 

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provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Revolving Loans to any assignee or participant, other than to the
Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of
this paragraph shall apply). The Borrower consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.

(d) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the applicable Credit Parties hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to such Credit Parties the amount due. In such
event, if the Borrower has not in fact made such payment, then each such Credit
Party severally agrees to repay to the Administrative Agent forthwith on demand
the amount so distributed to such Credit Party with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.

(e) If any Credit Party shall fail to make any payment required to be made by it
pursuant to Section 2.04(b), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Credit
Party to satisfy such Credit Party’s obligations under such Section until all
such unsatisfied obligations are fully paid.

ARTICLE 3. INTEREST, FEES, YIELD PROTECTION, ETC.

Section 3.01 Interest

(a) ABR Loans shall bear interest at the Alternate Base Rate.

(b) Eurodollar Borrowings shall bear interest at the Adjusted LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Margin.

(c) Notwithstanding the foregoing, if any principal of and interest on any
Revolving Loan or any fee or other amount payable by the Borrower hereunder is
not paid when due and after the expiration of any applicable grace period, then
all such amounts shall bear interest, after as well as before judgment, at a
rate per annum equal to (i) in the case of principal of any Revolving Loan, 2%
plus the rate otherwise applicable to such Revolving Loan as

 

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provided in the preceding paragraphs of this Section, or (ii) in the case of any
other amount, 2% plus the Alternate Base Rate.

(d) Accrued interest on each Revolving Loan shall be payable in arrears on each
Interest Payment Date for such Revolving Loan, provided that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Revolving Loan, accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment (other than a prepayment of an ABR Loan before
the end of the Availability Period), and (iii) in the event of any conversion of
any Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Revolving Loan shall be payable on the effective date
of such conversion.

(e) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day) in the period in question. The applicable Alternate Base
Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative
Agent in accordance with the provisions of this Agreement, and such
determination shall be conclusive absent clearly demonstrable error.

Section 3.02 Interest Elections

(a) Any Borrowing on the Effective Date shall be of ABR Loans. Thereafter, each
Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the Borrower
may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Revolving Loans comprising such Borrowing, and the Revolving Loans comprising
each such portion shall be considered a separate Borrowing.

(b) To make an election pursuant to this Section, the Borrower shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the Borrower were requesting a
Borrowing of the Type resulting from such election to be made on the effective
date of such election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or facsimile
transmission to the Administrative Agent of a written Interest Election Request
in a form approved by the Administrative Agent and signed by the Borrower.

(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:

 

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(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) of this
paragraph shall be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

(e) If the Borrower fails to deliver a timely Interest Election Request prior to
the end of the Interest Period applicable thereto, then, unless such Borrowing
is repaid as provided herein, at the end of such Interest Period, such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing, (i) no outstanding
Borrowing may be converted to or continued beyond the current Interest Period as
a Eurodollar Borrowing, and (ii) unless repaid, each Eurodollar Borrowing shall
be converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.

Section 3.03 Fees

(a) The Borrower agrees to pay to the Administrative Agent for the account of
each Lender, a commitment fee, which shall accrue at a rate per annum equal to
the Applicable Margin on the daily amount of the unused Commitment of such
Lender during the period from and including the date on which this Agreement
shall have become effective in accordance with Section 10.06 to but excluding
the date on which such Commitment terminates. Accrued commitment fees shall be
payable in arrears on the first Business Day of April, July, October and January
of each year, each date on which the Commitments are permanently reduced and on
the date on which the Commitments terminate, commencing on the first such date
to occur after the date hereof.

 

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(b) The Borrower agrees to pay to the Administrative Agent for the account of
each Lender, a utilization fee for any day on which the outstanding principal
amount of the Revolving Loans shall be equal to or greater than 50% of the total
Commitments equal to 0.10% per annum on the aggregate amount of each Lender’s
outstanding Revolving Loans on such day (the “Utilization Fee”). Accrued
utilization fees, if any, shall be payable in arrears on the first Business Day
of April, July, October and January, on any date prior to the Commitment
Termination Date on which a Lender’s Commitment terminates, and on the
Commitment Termination Date; provided, that any Utilization Fee accruing after
the Commitment Termination Date shall be payable on demand.

(c) The Borrower agrees to pay to the Administrative Agent, for its own account,
and, to each Lender for its own account, fees and other amounts payable in the
amounts and at the times separately agreed upon between the Borrower and the
Administrative Agent and the Lenders.

(d) All commitment fees and utilization fees shall be computed on the basis of a
year of 365 or 366 days, as applicable, and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day)
during the period in question.

(e) The Borrower agrees to pay to each Credit Party, for its own account, fees
and other amounts payable in the amounts and at the times separately agreed upon
between the Borrower and such Credit Party.

(f) All fees and other amounts payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent for distribution, in
the case of commitment fees and utilization fees, to the Lenders. Fees and other
amounts paid shall not be refundable under any circumstances other than clearly
demonstrable error.

Section 3.04 Alternate Rate of Interest

If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive
absent clearly demonstrable error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or

(b) the Administrative Agent is advised by any Lender that the Adjusted LIBO
Rate or the LIBO Rate, as applicable, for such Interest Period will not
adequately and fairly reflect the cost to such Lender of making or maintaining
its Revolving Loan included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or facsimile transmission as promptly as practicable
thereafter and, until the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist,
(i) any Interest Election Request that requests the conversion of any Borrowing
to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be
ineffective,

 

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and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing. Notwithstanding the foregoing, if
the Borrower shall have submitted a Borrowing Request with respect to a
Eurodollar Borrowing and the Administrative Agent shall have notified the
Borrower in accordance with the preceding sentence that such Borrowing will be
made as an ABR Borrowing, the Borrower shall have the right, prior to the time
by which it would have had to submit a Borrowing Request for an ABR Borrowing to
be made on the same date, to withdraw such Borrowing Request.

Section 3.05 Increased Costs; Illegality

(a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Credit Party (except any such reserve requirement reflected in
the Adjusted LIBO Rate); or

(ii) impose on any Credit Party or the London interbank market any other
condition affecting this Agreement, any Eurodollar Loans made by such Credit
Party or any participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Credit Party of making or maintaining any Eurodollar Loan hereunder (or of
maintaining its obligation to make any such Revolving Loan) or to reduce the
amount of any sum received or receivable by such Credit Party hereunder (whether
of principal, interest or otherwise), then the Borrower will, upon request by
any Credit Party, pay to such Credit Party such additional amount or amounts as
will compensate such Credit Party for such additional costs incurred or
reduction suffered.

(b) If any Credit Party determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Credit Party’s capital or on the capital of such Credit Party’s holding company,
if any, as a consequence of this Agreement or the Revolving Loans made by such
Credit Party to a level below that which such Credit Party or such Credit
Party’s holding company could have achieved but for such Change in Law (taking
into consideration such Credit Party’s policies and the policies of such Credit
Party’s holding company with respect to capital adequacy), then from time to
time the Borrower will pay to such Credit Party such additional amount or
amounts as will compensate such Credit Party or such Credit Party’s holding
company for any such reduction suffered.

(c) A certificate of a Credit Party setting forth the amount or amounts
necessary to compensate such Credit Party or its holding company, as applicable,
as specified in paragraph (a) or (b) of this Section including reasonably
detailed supporting information shall be delivered to the Borrower and shall be
binding on the Borrower absent clearly demonstrable error. The Borrower shall
pay such Credit Party the amount shown as due on any such certificate within 30
days after receipt thereof unless the Borrower is asserting in good faith that
there is clearly demonstrable error in such certificate.

 

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(d) Failure or delay on the part of any Credit Party to demand compensation
pursuant to this Section shall not constitute a waiver of such Credit Party’s
right to demand such compensation; provided that the Borrower shall not be
required to compensate a Credit Party pursuant to this Section for any increased
costs or reductions incurred more than 180 days prior to the date that such
Credit Party notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Credit Party’s intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 180 day period
referred to above shall be extended to include the period of retroactive effect
thereof but not to exceed a period of 365 days.

(e) Notwithstanding any other provision of this Agreement, if, after the date of
this Agreement, any Change in Law shall make it unlawful for any Lender to make
or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Administrative Agent:

(i) such Lender may declare that Eurodollar Loans will not thereafter (for the
duration of such unlawfulness) be made by such Lender hereunder (or be continued
for additional Interest Periods and ABR Loans will not thereafter (for such
duration) be converted into Eurodollar Loans), whereupon any request for a
Eurodollar Borrowing or to convert an ABR Borrowing to a Eurodollar Borrowing or
to continue a Eurodollar Borrowing, as applicable, for an additional Interest
Period shall, as to such Lender only, be deemed a request for an ABR Loan (or a
request to continue an ABR Loan as such for an additional Interest Period or to
convert a Eurodollar Loan into an ABR Loan, as applicable), unless such
declaration shall be subsequently withdrawn; and

(ii) such Lender may require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans, as of the effective date of such notice as
provided in the last sentence of this paragraph.

In the event any Lender shall exercise its rights under (i) or (ii) of this
paragraph, all payments and prepayments of principal that would otherwise have
been applied to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be applied
to repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans, as applicable. For purposes of this
paragraph, a notice to the Borrower by any Lender shall be effective as to each
Eurodollar Loan made by such Lender, if lawful, on the last day of the Interest
Period currently applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt by the Borrower.

Section 3.06 Break Funding Payments

In the event of (a) the payment or prepayment (voluntary or otherwise) of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto, or (c) the failure to borrow, convert,
continue or

 

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prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto then, in any such event, the Borrower shall compensate each
Lender for the loss, cost and expense attributable to such event. In the case of
a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest that would have accrued on the principal amount of such
Revolving Loan had such event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Revolving Loan, for the period from the date of
such event to the last day of the then current Interest Period therefor (or, in
the case of a failure to borrow, convert or continue, for the period that would
have been the Interest Period for such Revolving Loan), over (ii) the amount of
interest that would accrue on such principal amount for such period at the
interest rate that such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be binding on the Borrower
absent clearly demonstrable error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof unless
there is clearly demonstrable error in any such certificate.

Section 3.07 Taxes

(a) Any and all payments by or on account of any obligation of the Borrower
hereunder and under any other Loan Document shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes, provided that, if
the Borrower is required by applicable law to deduct any Indemnified Taxes or
Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that, after making all required deductions (including deductions
applicable to additional sums payable under this Section), the applicable Credit
Party receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

(b) In addition (but without duplication) the Borrower shall pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify each Credit Party, within 30 days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by such Credit Party on or with respect to any payment by or on account of
any obligation of the Borrower under the Loan Documents (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and, unless caused by the gross negligence or willful
misconduct of such Credit Party, any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Credit Party, or by the Administrative
Agent on its own behalf or on behalf of a Credit Party, including, if available,
reasonably detailed supporting information, shall be delivered to and be binding
on the Borrower absent clearly demonstrable error. If any Credit Party receives
a refund in respect of any Indemnified Taxes or Other Taxes for which such
Credit Party has

 

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received payment from the Borrower hereunder, it shall promptly notify the
Borrower of such refund and shall promptly upon receipt repay such refund to the
Borrower, net of all out-of-pocket expenses of such Credit Party and without
interest (other than interest paid by the relevant Governmental Authority, if
applicable); provided that the Borrower, upon the request of such Credit Party,
agrees to return such refund (plus penalties, interest or other charges) to such
Credit Party in the event such Credit Party is required to repay such refund.
Nothing contained in this Section shall prohibit the Borrower from contesting or
seeking a refund of any Indemnified Taxes and Other Taxes after payment thereof
has been made in accordance with this Section.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

(e) Each Credit Party organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Agreement in the case of each initial Credit Party and on the date of the
Assignment and Acceptance pursuant to which it becomes a Credit Party in the
case of each other Credit Party, and from time to time thereafter as reasonably
requested in writing by the Borrower (but only so long thereafter as such Credit
Party remains lawfully able to do so), provide each of the Administrative Agent
and the Borrower with two original Internal Revenue Service Forms W-8BEN or
W-8ECI or (in the case of a Credit Party that has certified in writing to the
Administrative Agent that it is not (i) a “bank” as defined in
Section 881(c)(3)(A) of the Internal Revenue Code), (ii) a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue
Code) of the Borrower or (iii) a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Internal Revenue Code),
Internal Revenue Service Form W-8BEN, as appropriate, or any successor or other
form prescribed by the Internal Revenue Service, certifying that such Credit
Party is exempt from or entitled to a reduced rate of United States withholding
tax on payments pursuant to this Agreement or the Notes or any other Loan
Document or, in the case of a Credit Party that has certified that it is not a
“bank” as described above, certifying that such Credit Party is a foreign
corporation, partnership, estate or trust. If the forms provided by a Credit
Party at the time such Credit Party first becomes a party to this Agreement
indicate a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be considered excluded from Taxes unless and
until such Credit Party provides the appropriate forms certifying that a lesser
rate applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such forms; provided,
however, that if, at the effective date of the Assignment and Acceptance
pursuant to which a Credit Party becomes a party to this Agreement, the Credit
Party assignor was entitled to payments under subsection (a) of this
Section 3.07 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Credit Party assignee on such date.

 

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(f) For any period with respect to which a Credit Party has failed to provide
the Borrower with the appropriate form, certificate or other document described
in subsection (e) above or if the Borrower is unable to determine the tax
payable or to provide information required by the Internal Revenue Service on
Form W-8BEN, W-8ECI or any successor form as a result of a Lender withholding
confidential information under Section 3.07(e) (other than if such failure is
due to a change in law, or in the interpretation or application thereof,
occurring after the date on which a form, certificate or other document
originally was required to be provided or if such form, certificate or other
document otherwise is not required under subsection (e) above), such Credit
Party shall not be entitled to indemnification under subsection (a) or (c) of
this Section 3.07 with respect to Indemnified Taxes imposed by the United States
by reason of such failure; provided, however, that should a Credit Party become
subject to Indemnified Taxes because of its failure to deliver a form,
certificate or other document required hereunder, the Borrower shall take such
steps as such Credit Party shall reasonably request to assist such Credit Party
to recover such Indemnified Taxes.

Section 3.08 Mitigation Obligations; Replacement of Lenders

(a) If any Lender requests compensation under Section 3.05, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.07, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Revolving Loans (or any participation therein) hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to
Section 3.05 or 3.07, as applicable, in the future, and (ii) would not subject
such Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

(b) If any Lender requests compensation under Section 3.05, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.07, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign, and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04), all its interests, rights and obligations under this Agreement
to an Eligible Assignee that shall assume such obligations; provided that
(i) the Borrower shall have received the prior written consent of the
Administrative Agent, which consent shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 3.05 or payments required
to be made pursuant to Section 3.07, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by

 

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such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.

ARTICLE 4. REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Credit Parties that:

Section 4.01 Organization; Powers

The Borrower and each of its Subsidiaries is a duly and validly organized and
existing corporation in good standing under the law of its state of
organization, formation or charter and is in good standing and duly licensed or
qualified to transact business in each other state where failure to so qualify
would have a Material Adverse Effect. The Borrower has full corporate power to
execute, deliver and perform this Agreement and the Notes and to borrow
hereunder. The Borrower’s execution and performance of this Agreement and the
Notes, and each borrowing hereunder have been duly authorized by all necessary
corporate action and do not and, as of the time of each borrowing will not,
violate any provision of law or of its articles of incorporation or bylaws, or
result in the breach of or constitute a default under or require any consent
under any indenture or other agreement or instrument to which the Borrower is a
party or by which the Borrower or its property is bound or affected.

Section 4.02 Authorization; Enforceability

Each Loan Document has been duly executed and delivered by the Borrower and
constitutes a legal, valid and binding obligation of the Borrower, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

Section 4.03 Governmental Approvals; No Conflicts

All consents or approvals of any state or federal agency or authority, if any,
required in order to permit the Borrower to enter into this Agreement and to
borrow hereunder, have been obtained and remain in full force and effect and the
Transactions (a) do not require any other consent or approval of, registration
or filing with, or any other action by, any Governmental Authority, except such
as have been obtained or made and are in full force and effect and except for
the approval expected to be sought by the Borrower which is described in
Section 2.05(a), (b) will not violate any applicable law or regulation or the
charter, by-laws or other organizational documents of the Borrower or any of the
Subsidiaries or any order, rule or regulation of any Governmental Authority,
(c) will not violate or result in a default under any indenture, agreement or
other instrument binding upon the Borrower or any of its Subsidiaries or its
assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any of its Subsidiaries, and (d) will not result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.

 

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Section 4.04 Financial Condition; No Material Adverse Effect

(a) The Borrower has furnished the Administrative Agent and the Lenders with
copies of the consolidated balance sheets of the Borrower and its Subsidiaries
as of the last day of the fiscal year ended December 31, 2005, and the related
consolidated statements of income, retained earnings and cash flows (or changes
in financial position, as the case may be) for such fiscal year, which
consolidated financial statements for fiscal year ended December 31, 2005 have
been audited by KPMG LLP, independent registered public accountants. Such
financial statements present fairly, in all material respects, the financial
position of the Borrower and its Subsidiaries as of the respective dates of such
balance sheets and results of their operations and cash flows (or changes in
financial position) for the periods covered by such statements of income,
retained earnings and cash flows (or changes in financial position), in
accordance with GAAP.

(b) Except as set forth in the Current SEC Reports, since December 31, 2005,
there has been no change or development that has had or would reasonably be
expected to have a Material Adverse Effect.

Section 4.05 Properties

(a) Each of the Borrower and its Significant Subsidiaries has good title to, or
valid leasehold interests in, all its real and personal property material to its
business, except for minor defects in title that do not interfere in any
material respect with its ability to conduct its business as currently conducted
or to utilize such properties for their intended purposes.

(b) Each of the Borrower and its Significant Subsidiaries owns, or is entitled
to use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and, to the knowledge of the Borrower, the
use thereof by the Borrower and its Significant Subsidiaries does not infringe
upon the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

Section 4.06 Litigation and Environmental Matters

(a) Except as heretofore disclosed to the Administrative Agent and the Lenders
in the financial statements and accompanying notes referenced in Section 4.04(a)
or in the Current SEC Reports, there are no suits or proceedings pending, or to
the knowledge of the Borrower threatened, against or affecting the Borrower or
any of its Significant Subsidiaries which have had or could reasonably be
expected to have a Material Adverse Effect.

(b) Since the date of this Agreement, except for the Disclosed Matters and
except with respect to any other matters that, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect, neither
the Borrower nor any of its Significant Subsidiaries (i) have failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental

 

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Law, (ii) have become subject to any Environmental Liability, or (iii) have
received notice of any claim with respect to any Environmental Liability.

(c) Since the date of this Agreement, except for the Disclosed Matters, there
has been no change in the status of the Disclosed Matters that, individually or
in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect.

Section 4.07 Compliance with Laws and Agreements

The Borrower and each of its Significant Subsidiaries is in compliance in all
material respects with all laws, regulations and order of any Governmental
Authority applicable to it or its property and all indentures and agreements
applicable to the Borrower or its Significant Subsidiaries, except (a) as
disclosed in the Disclosed Matters and (b) where the failure to do so would not
reasonably be expected to have a Material Adverse Effect.

Section 4.08 Regulated Entities

The Borrower is not an “investment company” nor is it “controlled” by an
“investment company”, in each case within the meaning of the Investment Company
Act of 1940, as amended.

Section 4.09 Taxes

The Borrower has and each of its Significant Subsidiaries has timely filed (or
validly extended) or cause to be filed (or validly extended) all tax returns and
reports required to have been filed and has paid or caused to be paid all taxes
required to have been paid by it, except (a) taxes that are being contested in
good faith by appropriate proceedings and for which the Borrower has set aside
on its books, to the extent required by GAAP, adequate reserves or (b) to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

Section 4.10 ERISA

No ERISA Event has occurred that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed by more than 25% of the amount of such accumulated benefit obligations
the fair market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than 25% of the amount of such
accumulated benefit obligations the fair market value of the assets of all such
underfunded Plans. (For purposes of this Section 4.10, underfunded shall mean
the excess of accumulated benefit obligations, as defined in Statement of
Financial Accounting Standards No. 87, over the fair market value of Plan
assets.)

 

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Section 4.11 Disclosure

To the best knowledge of the Borrower, the financial statements referred to in
Section 4.04(a) do not, nor does this Agreement, nor any written statement
furnished by the Borrower to the Administrative Agent or the Lenders in
connection with this Agreement, when taken as a whole, contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein or herein not misleading in light of the
circumstances under which it was made. There is no fact known to the Borrower as
of the date hereof which has had or would reasonably be expected to have a
Material Adverse Effect which has not been disclosed herein or in the Current
SEC Reports.

Section 4.12 Subsidiaries

Schedule 4.12 sets forth the name of, and the ownership interest of the Borrower
in, each Subsidiary, as of the Effective Date.

Section 4.13 Federal Reserve Regulations

(a) After the application of the proceeds of any Revolving Loan, not more than
25% of the value of the assets of the Borrower will consist of or be represented
by Margin Stock.

(b) No part of the proceeds of any Revolving Loan will be used, whether directly
or indirectly, and whether immediately, incidentally or ultimately, to purchase,
acquire or carry any Margin Stock or for any purpose that entails a violation
of, or that is inconsistent with, the provisions of the regulations of the
Board, including Regulation T, U or X.

Section 4.14 Rankings

The obligations of the Borrower to the Lenders under this Agreement and the
other Loan Documents will rank senior to, or pari passu with, other unsecured
Indebtedness of the Borrower.

Section 4.15 Solvency

Immediately after the consummation of the Transactions and after the incurrence
of any Borrowing, the Borrower and its Subsidiaries taken as a whole are not and
will not be Insolvent.

ARTICLE 5. CONDITIONS

Section 5.01 Effective Date

The obligations of the Lenders to make Revolving Loans hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 10.02):

(a) The Administrative Agent (or its counsel) shall have received from each
party hereto either (i) a counterpart of this Agreement signed on behalf of such
party, or (ii)

 

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written evidence satisfactory to the Administrative Agent (which may include
facsimile transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.

(b) The Administrative Agent shall have received a Note for each Lender signed
on behalf of the Borrower (which may include facsimile transmission of a signed
signature page of such Note followed immediately by the delivery of the original
counterpart thereof).

(c) The Administrative Agent shall have received a favorable written opinion
(addressed to the Credit Parties and dated the Effective Date) from Goodsill
Anderson Quinn & Stifel LLP substantially in the form of Exhibit B, and covering
such other matters relating to the Borrower, the Loan Documents or the
Transactions as the Required Lenders shall reasonably request. The Borrower
hereby requests such counsel to deliver such opinion.

(d) The Administrative Agent shall have received such documents and certificates
as the Administrative Agent or its counsel may reasonably request relating to
the organization, existence and good standing of the Borrower, the authorization
of the Transactions and any other legal matters relating to the Loan Documents
or the Transactions, all in form and substance satisfactory to the
Administrative Agent and its counsel.

(e) The Administrative Agent shall have received one or more officer’s
certificates, satisfactory to the Administrative Agent certifying that the
performance by the Borrower of its obligations under each Loan Document shall
not (1) violate in any material respect any applicable law, statute, rule or
regulation or (2) conflict in any material respect with, or result in a default
or event of default under, any material agreement of the Borrower, (3) except as
set forth in the Current SEC Reports, no litigation or administrative
proceeding, or regulatory development is pending against the Borrower or any
Significant Subsidiary that has had or could be reasonably expected to have a
Material Adverse Effect, (4) the insurance required under Section 6.05 is in
effect, and (5) no event or circumstance has occurred since December 31, 2005
that has had or could be reasonably expected to have a Material Adverse Effect.

(f) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the President, a Vice President or a Financial
Officer of the Borrower, confirming compliance, as of the Effective Date, with
the conditions set forth in Section 5.02.

(g) The Administrative Agent shall have received (i) all financial statements
and information referred to in Section 4.04(a) and (ii) annual projections
through 2010, which shall be satisfactory in form and substance to the
Administrative Agent.

(h) The Administrative Agent shall have received all fees and other amounts due
and payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder.

 

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(i) The Administrative Agent shall have received such other documents,
certificates and information as it may reasonably request.

The Administrative Agent shall notify the Borrower and the Credit Parties of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Revolving Loans hereunder
shall not become effective unless each of the foregoing conditions is satisfied
(or waived pursuant to Section 10.02) at or prior to 5:00 p.m., New York City
time, on May 31, 2006 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).

Section 5.02 Each Credit Event

The obligation of each Lender to make a Revolving Loan on the occasion of any
Borrowing is subject to the satisfaction of the following conditions:

(a) The representations and warranties of the Borrower set forth in Article 4 of
this Agreement (other than the representations and warranties in Sections
4.04(b) and 4.06 of this Agreement) shall be true and correct in all material
respects on and as of the date of such Borrowing, except to the extent such
representations and warranties relate to any earlier date in which case the
accuracy of such representations and warranties will be determined as of such
earlier date.

(b) At the time of and immediately after giving effect to such Borrowing, no
Default shall have occurred and be continuing.

(c) The Administrative Agent shall have received such other documentation and
assurances as shall be reasonably required by it in connection with such
Borrowing.

Each request for a Revolving Loan shall be deemed to constitute a representation
and warranty by the Borrower on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.

ARTICLE 6. AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and
interest on all Loans and all fees and other amounts payable under the Loan
Documents shall have been paid in full, the Borrower covenants and agrees with
the Lenders that:

Section 6.01 Financial Statements and Other Information

The Borrower will furnish to the Administrative Agent sufficient copies for each
Lender of the following (it being agreed that the obligation of the Borrower to
furnish the financial statements referred to in paragraphs (a) and (b) below may
be satisfied by the delivery of annual and quarterly reports of the Borrower to
the SEC on Forms 10-K and 10-Q containing such statements):

 

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(a) within 120 days after the end of each fiscal year of the Borrower, its
audited consolidated balance sheet and related statements of operations, cash
flows and retained earnings as of the end of and for such year, setting forth in
each case in comparative form the figures for the previous fiscal year, all
reported on by KPMG LLP or other independent registered public accountants of
recognized national standing (without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;

(b) within 60 days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower, its consolidated balance sheet and related
statements of operations, cash flows and retained earnings as of the end of and
for such fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the corresponding period
or periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by one of its President or a Financial
Officer as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;

(c) concurrently with any delivery of financial statements under clause (a) or
(b) above, a certificate of the President or of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a Default
has occurred, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Sections 7.05 and 7.06, and
(iii) unless included in Disclosed Matters, stating whether any material change
in GAAP or in the application thereof has occurred since the date of the audited
financial statements referred to in Section 4.04 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate;

(d) promptly after the same become publicly available, and as the Administrative
Agent or any Lender may reasonably request, copies of all periodic and other
reports, proxy statements and other materials filed under the Securities and
Exchange Act of 1934 or any successor statute by the Borrower, or any Subsidiary
with the SEC, or any Governmental Authority succeeding to any or all of the
functions of the SEC, or with any national securities exchange, or distributed
by the Borrower to its shareholders generally, as the case may be, as the
Administrative Agent or any Lender may reasonably request;

(e) promptly after the same becomes publicly available, notice of any change in
the Borrower’s Senior Debt Ratings, which notice may be satisfied if the
information is included in the Disclosed Matters; and

(f) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may reasonably request.

 

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Section 6.02 Notices of Material Events

The Borrower will furnish to the Administrative Agent and each Lender prompt
written notice of the following (provided, however, that the obligation of the
Borrower to provide such notice shall be deemed satisfied if the same is
promptly included in the Disclosed Matters):

(a) the occurrence of any Default;

(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting the Borrower or
any Significant Subsidiary (other than actions, suits or proceedings in the
ordinary course of business or before the Public Utilities Commission or tax
audits) that, if adversely determined, could reasonably be expected to result in
a Material Adverse Effect;

(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, would reasonably be expected to result in
liability of the Borrower and its Significant Subsidiaries in an aggregate
amount exceeding 25% of the accumulated benefit obligations on a consolidated
basis under all Plans.

(d) any other material event that is required to be disclosed on Form 8K to the
SEC.

At the request of the Administrative Agent, a Financial Officer or other
executive officer of the Borrower will provide a statement setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

Section 6.03 Existence; Conduct of Business

The Borrower will do or cause to be done, and will not permit any of its
Significant Subsidiaries to fail to do or cause to be done, all things
reasonably necessary to preserve, renew and keep in full force and effect its
legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business, provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 7.02 or any merger or consolidation of a Significant Subsidiary into
Borrower or another Significant Subsidiary of Borrower or the transfer of assets
by any Significant Subsidiary to Borrower or another Significant Subsidiary of
Borrower followed by the liquidation of dissolution of such Significant
Subsidiary.

Section 6.04 Payment of Obligations

The Borrower will pay, and will cause each of its Significant Subsidiaries to
pay, its obligations, including Tax liabilities, that, if not paid, would
reasonably be expected to result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Significant Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, and (c) the failure to
make payment pending such contest would not reasonably be expected to result in
a Material Adverse Effect.

 

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Section 6.05 Maintenance of Properties; Insurance

(a) The Borrower will keep and maintain, and will cause each of its Significant
Subsidiaries to keep and maintain, all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted,
provided, however, that nothing shall prevent the Borrower or its Significant
Subsidiary, as appropriate, from discontinuing the operation or maintenance of
any property if such discontinuance is, in the judgment of the Borrower or the
Significant Subsidiary, desirable in the conduct of the business of the Borrower
or the Significant Subsidiary.

(b) The Borrower and its Significant Subsidiaries will maintain, or cause to be
maintained, with reputable insurance companies, so long as such insurance is
available on commercially reasonable terms, insurance in such amounts and
against such risks Borrower and its Significant Subsidiaries have customarily
maintained.

Section 6.06 Books and Records; Inspection Rights.

The Borrower will maintain and cause each of its Subsidiaries to maintain,
accurate and proper accounting records and books in accordance with GAAP, and
provide the Administrative Agent and the Lenders, subject to the provisions of
Section 10.12, with access to such books and accounting records at the request
of the Administrative Agent and the Lenders made for a legitimate business
purpose during the Borrower’s normal business hours and to discuss its affairs,
finances and condition with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested.

Section 6.07 Compliance with Laws.

The Borrower will comply, and will cause each of its Significant Subsidiaries to
comply, in all material respects, and will cause each of its Significant
Subsidiaries to comply in all material respects, with all applicable laws,
rules, regulations and orders of any Governmental Authority, a breach of which
would reasonably be expected to have a Material Adverse Effect, except where
contested in good faith and by proper proceedings.

Section 6.08 Use of Proceeds

The Borrower will use the proceeds of the Revolving Loans only for lawful
purposes of the Borrower and its Subsidiaries not inconsistent with or limited
by the terms hereof. No part of the proceeds of any Revolving Loan will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase, acquire or carry any Margin Stock or for any purpose
that entails a violation of any of the regulations of the Board, including
Regulations T, U and X.

Section 6.09 Further Assurances

The Borrower will and will cause each Subsidiary to execute any and all further
documents, agreements and instruments, and take all such further actions, that
may be required

 

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under any applicable law, or which the Administrative Agent or the Required
Lenders may reasonably request, to effectuate the transactions contemplated by
the Loan Documents.

ARTICLE 7. NEGATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and
interest on all Loans and all fees and other amounts (other than contingent
liability obligations) payable under the Loan Documents shall have been paid in
full, or unless the Required Lenders otherwise consent in writing, the Borrower
covenants and agrees with the Lenders that:

Section 7.01 Liens.

The Borrower will not, and will not permit any Significant Subsidiary to, incur,
create, assume or permit to exist any Lien on the capital stock of or other
ownership interests in any Significant Subsidiary or any Lien on all or
substantially all of its other assets, now or hereafter owned, without
effectively providing concurrently therewith to equally and ratably secure the
obligations of Borrower under this Agreement except:

(a) Liens securing the payment of Indebtedness of the Borrower or any
Significant Subsidiary to a state, territory or possession of the United States
or any political subdivision thereof issued in a transaction in which such
state, territory, possession or political subdivision issued obligations the
interest on which is excludable from gross income by the holders thereof
pursuant to the provisions of Section 103 of the Code (or similar provisions),
as in effect at the time of the issuance of such obligations, and Indebtedness
to a bank issuing a letter of credit to support any such obligations to the
extent the Borrower or any Significant Subsidiary is required to reimburse such
bank for drawings under such letter of credit with respect to the principal of
or interest on such obligations;

(b) deposits under workmen’s compensation, unemployment insurance and social
security laws, or to secure the performance of bids, tenders, contracts (other
than for the repayment of borrowed money), leases, statutory obligations, surety
or appeal bonds, or indemnity, performance or other similar bonds, in the
ordinary course of business;

(c) Liens imposed by law, such as carriers’, warehousemen’s or mechanics’ liens,
incurred in good faith in the ordinary course of business and securing
obligations that are not yet due or that are being contested in good faith by
appropriate proceedings, and Liens arising out of judgments or awards not
exceeding $50,000,000 in the aggregate with respect to which appeals are being
prosecuted, execution pending such appeals having been effectively stayed;

(d) the right reserved to, or vested in, any municipality or public authority by
the terms of any right, power, franchise, grant, license, or permit, or by any
provision of law, to purchase or recapture or designate a purchaser of any
property;

(e) any Lien securing a tax, assessment or other governmental charge or levy or
the claim of a materialman, mechanic, carrier, warehouseman or landlord for
labor, materials, supplies or rentals incurred in the ordinary course of
business, but only if payment thereof shall not at the time be required to be
made in accordance with Section 6.04;

 

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(f) any Lien existing on (i) any property or asset at the time such property or
asset is acquired by the Borrower or any Significant Subsidiary (including
acquisition by merger or consolidation), but only if and so long as (1) such
Lien was not created in contemplation of such property or asset being acquired,
(2) such Lien is and will remain confined to the property or asset subject to it
at the time such property or asset is acquired and to improvements thereafter
erected on or attached to such property or asset or any property or asset
acquired in substitution or replacement thereof, (3) such Lien secures only the
obligation secured thereby at the time such property or asset is acquired and
(4) the obligation secured by such Lien is not in default;

(g) any Lien in existence on the Effective Date to the extent set forth on
Schedule 7.01, but only, in the case of each such Lien, to the extent it secures
an obligation outstanding on the Effective Date to the extent set forth on such
Schedule;

(h) any Lien securing Purchase Money Indebtedness, or to secure payment of all
or any part of the cost of construction of improvements as they are incurred or
within 270 days thereafter, but only if, in the case of each such Lien, (i) such
Lien shall at all times be confined solely to the property or asset the purchase
price of which was financed through the incurrence of the Purchase Money
Indebtedness secured by such Lien and to improvements thereafter erected on or
attached to such property or asset or any property or asset acquired in
substitution or replacement thereof and (ii) such Lien attached to such property
or asset within 270 days of the acquisition or improvement of such property or
asset;

(i) easements, reservations, rights-of-way, restrictions, survey exceptions and
other similar encumbrances as to real property which customarily exist on
properties of corporations engaged in similar activities and similarly situated
and which do not materially interfere with the conduct of the business of the
Borrower or any Significant Subsidiary conducted at the property subject
thereto;

(j) licenses, leases and subleases of property owned or leased by the Borrower
or any Significant Subsidiary not interfering with the ordinary conduct of the
business of the Borrower and the Significant Subsidiaries;

(k) Liens securing obligations, neither assumed by the Borrower or any
Significant Subsidiary nor on account of which the Borrower or any Significant
Subsidiary customarily pays interest, upon real estate or under which the
Borrower or any Significant Subsidiary has a right-of-way, easement, franchise
or other servitude or of which the Borrower or any Significant Subsidiary is the
lessee of the whole thereof or any interest therein for the purpose of locating
transmission and distribution lines and related support structures, pipe lines,
substations, measuring stations, tanks, pumping or delivery equipment or similar
equipment;

(l) Liens arising by virtue of any statutory or common law provision relating to
banker’s liens, rights of setoff or similar rights as to deposit accounts or
other funds maintained with a depository institution;

(m) any Lien constituting a renewal, extension or replacement of a Lien
permitted under clauses (f), (g) or (h) of this Section 7.01, but only if (i) at
the time such Lien is

 

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granted and immediately after giving effect thereto, no Default or Event of
Default would exist, (ii) such Lien is limited to all or a part of the property
or asset that was subject to the Lien so renewed, extended or replaced and to
improvements thereafter erected on or attached to such property or asset or any
property or asset acquired in substitution or replacement thereof, (iii) the
principal amount of the obligations secured by such Lien does not exceed the
principal amount of the obligations secured by the Lien so renewed, extended or
replaced and (iv) the obligations secured by such Lien bear interest at a rate
per annum not exceeding the rate borne by the obligations secured by the Lien so
renewed, extended or replaced except for any increase that is commercially
reasonable at the time of such increase; or

(n) Liens securing Indebtedness of the Borrower or any Significant Subsidiary in
an aggregate principal amount not to exceed, at the time of incurrence, 15% of
its Consolidated Capitalization.

(o) any Lien on any capital stock of any corporation which is registered in the
name of Borrower or otherwise owned by or held for the benefit of the Borrower
(other than, in either case, the capital stock of any Significant Subsidiary)
which may constitute “margin” stock as such term is defined in Section 2.07.2(i)
of Title 12 of the Code of Federal Regulations or any successor provision; or

(p) any Lien on property arising in connection with any defeasance, covenant
defeasance or in substance defeasance of any Indebtedness pursuant to an express
contractual provision with respect thereto or GAAP.

Section 7.02 Sale of Assets; Consolidation; Merger; Sale and Leaseback.

The Borrower will not and will not permit any Significant Subsidiary to,

(a) sell, lease, transfer or otherwise dispose of all or substantially all of
its properties and assets to any Person;

(b) consolidate with or merge into any other corporation (other than a merger of
a Subsidiary into, or a consolidation of a Subsidiary with, the Borrower or
another Subsidiary), or acquire all or substantially all the properties and
assets of any Person unless:

(i) in the case of a merger or consolidation with the Borrower, the Borrower is
the surviving corporation, and

(ii) after giving effect to any merger or consolidation or acquisition the
Borrower remains in compliance with Section 7.05 and no other covenant or
provision of this Agreement is violated and the Borrower’s representations and
warranties in Article 4 continue to be true immediately thereafter as if then
made;

(iii) no Default or Event of Default exists or result therefrom; and

 

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(iv) the Administrative Agent shall have received prior to the consummation of
any such merger, consolidation or acquisition, a certificate executed by a
Financial Officer as to each of the matters described in clause (i)-(iii); or

(c) sell, assign, transfer, or otherwise dispose of the common stock of or other
ownership interests ordinarily entitled to vote in the election of directors of
any Significant Subsidiary;

Section 7.03 Restrictive Agreements.

The Borrower will not, and will not permit any Significant Subsidiary to, enter
into, incur, permit to exist, directly or indirectly any agreement or
arrangement that prohibits, restricts or imposes any condition upon the ability
of any Significant Subsidiary to (a) make any Restricted Payments or to repay
any indebtedness owed to the Borrower, (b) make loans or advances to the
Borrower or (c) transfer any of its property or assets to the Borrower, provided
that the foregoing shall not apply (i) to restrictions and conditions imposed by
law or regulation or by any regulatory agency, body or authority including under
agreements with regulatory agencies, bodies, or authorities (ii) to this
Agreement, (iii) to restrictions and conditions existing on the Effective Date
identified on Schedule 7.03 hereto (but shall apply to any amendment or
modification expanding the scope of any such restriction or condition) or
(iv) to restrictions and conditions that are entered into, incurred or permitted
to exist following the date hereof that are not materially more expansive in
scope than the restrictions and conditions referred to in this Section 7.03.

Section 7.04 Transactions with Affiliates

Except as specifically permitted by this Agreement, the Borrower will not, and
will not permit any of its Subsidiaries to, sell, transfer, lease or otherwise
dispose (including pursuant to a merger) any property or assets to, or purchase,
lease or otherwise acquire (including pursuant to a merger) any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except at prices and on terms and conditions not materially less
favorable to the Borrower or such Subsidiary than could be obtained on an arms
length basis from unrelated third parties, provided that this Section shall not
apply to any transaction that is otherwise permitted under Article 7.

Section 7.05 Consolidated Capitalization Ratio.

The Borrower will not permit its Consolidated Capitalization Ratio to be less
than 0.35 to 1.00 as of the end of any fiscal quarter or fiscal year end.

Section 7.06 Guaranties

The Borrower will not and will not permit any of its Significant Subsidiaries
to, incur, create or assume any Guarantee of Indebtedness of any of the
Borrower’s direct or indirect electric utility Subsidiaries (“Subsidiary
Indebtedness”) if after the incurrence of such Subsidiary Indebtedness the
Consolidated Subsidiary Funded Debt to Capitalization Ratio of such Significant
Subsidiary would exceed 0.65:1.00.

 

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ARTICLE 8. EVENTS OF DEFAULT

If any of the following events (“Events of Default”) shall occur:

(a) the Borrower shall fail to pay any principal of any Revolving Loan when and
as the same shall become due and payable, whether at the due date thereof or at
a date fixed for prepayment thereof or otherwise, and such failure shall
continue unremedied for a period of two Business Days;

(b) the Borrower shall fail to pay any interest on any Revolving Loan or any
fee, commission or any other amount (other than an amount referred to in clause
(a) of this Article) payable under any Loan Document, when and as the same shall
become due and payable, and such failure shall continue unremedied for a period
of five Business Days;

(c) any representation or warranty made or deemed made by or on behalf of the
Borrower in or in connection with this Agreement or any amendment or
modification hereof or thereof or any waiver hereunder or thereunder, or in any
report, certificate, financial statement or other document furnished pursuant to
or in connection with any Loan Document or any amendment or modification hereof
or thereof or any waiver hereunder or thereunder, shall prove to have been
incorrect in any material respect (except as to representations or warranties
which are by their terms qualified by materiality, which must not be incorrect)
when made or deemed made;

(d) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Sections 6.03 (with respect to the Borrower’s existence),
6.08, 7.02, 7.03, 7.05, or 7.06;

(e) (i) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 6.02 and such failure shall continue unremedied
for a period of 10 days after a Financial Officer of the Borrower shall have
obtained knowledge thereof;

(ii) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in any Loan Document to which it is a party (other than
those specified in clause (a), (b), (d) or (e)(i) of this Article), and such
failure shall continue unremedied for a period of 30 days after a Financial
Officer of the Borrower shall have obtained knowledge thereof;

(f) the Borrower, both MECO and HELCO, or any other Significant Subsidiary shall
fail to make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same shall
become due and payable and after the expiration of any applicable grace period;

(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled

 

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maturity, provided, that no Event of Default shall occur under this paragraph
(g) as a result of (i) any notice of voluntary prepayment delivered by the
Borrower or Significant Subsidiary with respect to any Indebtedness, (ii) any
voluntary sale of assets by the Borrower or Significant Subsidiary as a result
of which any Indebtedness secured by such assets is required to be prepaid or
(iii) the exercise of any contractual right to cause the prepayment of such
Material Indebtedness (other than the exercise of a remedy for an event of
default under the applicable contract or agreement);

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower, both MECO and HELCO, or any other Significant
Subsidiary or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower, both
MECO and HELCO, or any other Significant Subsidiary or for a substantial part of
its assets, and, in any such case, such proceeding or petition shall continue
undismissed or unstayed for 60 days or an order or decree approving or ordering
any of the foregoing shall be entered and continues unstayed for 30 days;

(i) the Borrower, both MECO and HELCO or any other Significant Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of this
Article, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower, both
MECO and HELCO or any other Significant Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors, or (vi) take any action for the purpose of effecting any
of the foregoing;

(j) the Borrower, both MECO and HELCO, or any other Significant Subsidiary shall
become unable, admit in writing its inability or fail generally to pay its debts
as they become due;

(k) one or more judgments for the payment of money in an aggregate amount in
excess of $50,000,000 (net of any amount covered by insurance) shall be rendered
against the Borrower or any Significant Subsidiary or any combination thereof
and the same is not appealed, satisfied, vacated, suspended, discharged or
stayed pending appeal within 60 days after entry of such judgment or is not
satisfied or discharged within 30 days after the expiration of any such stay;

(l) an ERISA Event shall have occurred that, when taken together with all other
ERISA Events that have occurred, would reasonably be expected to result in
liability of the Borrower and its Significant Subsidiaries in an aggregate
amount exceeding 25% of the accumulated benefit obligations under all Plans;

 

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(m) this Agreement or any other material Loan Document shall cease, for any
reason, to be valid and binding and enforceable against the Borrower in any
material respect, or the Borrower shall so assert in writing or shall disavow
any of its obligations thereunder; or

(n) any Significant Subsidiary shall fail to pay its Tax liabilities, that, if
not paid, would reasonably be expected to result in a Material Adverse Effect
before the same shall become delinquent or in default and such failure shall
continue for more than 30 days, except where (i) the validity or amount thereof
is being contested and such failure shall continue in good faith by appropriate
proceedings, (ii) such Significant Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP, and (iii) the
failure to make payment pending such contest would not reasonably be expected to
result in a Material Adverse Effect; or

(o) a Change in Control shall occur;

then, and in every such event (other than an event described in clause (i) or
(j) of this Article), and at any time thereafter during the continuance of such
event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Borrower, take either or both of the following actions,
at the same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Revolving Loans
then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Revolving Loans so declared
to be due and payable, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued under the Loan Documents, shall become
due and payable immediately, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; and in case
of any event described in clause (i) or (j) of this Article, the Commitments
shall automatically terminate and the principal of the Revolving Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued under the Loan Documents, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.

ARTICLE 9. THE ADMINISTRATIVE AGENT

Section 9.01 Appointment

Each Credit Party hereby irrevocably appoints the Administrative Agent as its
agent and authorizes the Administrative Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Administrative Agent by the
terms hereof, together with such actions and powers as are reasonably incidental
thereto.

Section 9.02 Individual Capacity

The Person serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from,

 

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lend money to and generally engage in any kind of business with the Borrower or
any Subsidiary or other Affiliate thereof as if it were not the Administrative
Agent hereunder.

Section 9.03 Exculpatory Provisions

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Loan Documents that the Administrative
Agent is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Credit Parties as shall be necessary under the
circumstances as provided in Section 10.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Borrower, or any of the Subsidiaries that is communicated to or obtained by the
Person serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Credit Parties as shall be necessary under the
circumstances as provided in Section 10.02) or in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Borrower or a Credit Party (and,
promptly after its receipt of any such notice, it shall give each Credit Party
and the Borrower notice thereof), and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document,
(ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or therein, (iv) the validity, enforceability,
effectiveness or genuineness hereof or thereof or any other agreement,
instrument or other document, or (v) the satisfaction of any condition set forth
in Article 5 or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.

Section 9.04 Reliance by Administrative Agent

The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

 

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Section 9.05 Performance of Duties

The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent, provided that no such delegation shall serve as a release
of the Administrative Agent or waiver by the Borrower of any rights hereunder.
The Administrative Agent and any such sub-agent may perform any and all its
duties and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of the Administrative Agent and
any such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.

Section 9.06 Resignation; Successors

Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Credit Parties and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent shall, in consultation with the Borrower, on
behalf of the Credit Parties, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent’s resignation hereunder, the provisions of this Article and
Section 10.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.

Section 9.07 Non-Reliance by Credit Parties

Each Credit Party acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Credit Party and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Credit Party also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Credit Party and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon any Loan
Document, any related agreement or any document furnished hereunder or
thereunder.

 

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Section 9.08 Agents

None of the banks or other Persons identified on the cover page of this
Agreement or in the preamble to this Agreement as a “co-syndication agent”,
“co-documentation agent”, “lead arranger”, “co-arranger”, or “book manager”
shall have any right, power, obligation, liability, responsibility or duty to
any Person under this Agreement, any of the other Loan Documents or otherwise,
other than BNY in its capacity as Administrative Agent and each Lender in its
capacity as a Lender. Without limiting the foregoing, none of such banks or
other Persons so identified shall have or be deemed to have any fiduciary
relationship with any other such bank or other Person but such banks or other
Persons shall have the benefit of the provisions of Section 9.02.

ARTICLE 10. MISCELLANEOUS

Section 10.01 Notices

Except in the case of notices and other communications expressly permitted to be
given by telephone, all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile transmission, as
follows:

(a) if to the Borrower:

  Hawaiian Electric Company, Inc.

  900 Richards Street – (if by hand delivery or overnight courier)

  Honolulu, Hawaii 96813

  P.O. Box 2750 (if by mail)

  Honolulu, Hawaii 96840-0001

  Attention: Tayne Sekimura

                     Financial Vice President

  Telephone No.: (808) 543-7840

  Facsimile No.: (808) 203-1180

(b) if to the Administrative Agent:

  The Bank of New York

  One Wall Street, 18-N

  New York, New York 10286

  Attention: Felix Liwag

  Telephone No.: (212) 635-4693

  Facsimile No.: (212) 635-6365

 

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  with a copy to:

  The Bank of New York

  One Wall Street

  New York, New York 10286

  Attention: Jesus Williams

                     Vice President, Energy Division

  Telephone No.: (212) 635-7609

  Facsimile No.: (212) 635-7923

(c) if to any other Credit Party, to it at its address (or facsimile number) set
forth in its Administrative Questionnaire.

Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

Section 10.02 Waivers; Amendments

(a) No failure or delay by any Credit Party in exercising any right or power
under any Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Credit Parties under the Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a
Revolving Loan shall not be construed as a waiver of any Default, regardless of
whether any Credit Party may have had notice or knowledge of such Default at the
time.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders, provided that no
such agreement shall:

(i) increase the Commitment of any Lender without the written consent of such
Lender,

(ii) reduce the principal amount of any Revolving Loan or reduce the rate of
interest thereon (other than the imposition of additional interest under
Section 3.01(c)), or reduce any fees or other amounts payable under the Loan
Documents, without the written consent of each Lender affected thereby,

 

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(iii) postpone the scheduled date of payment of the principal amount of any
Revolving Loan, or any interest thereon, or any fees or other amounts payable
under the Loan Documents, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Credit Party affected thereby,

(iv) change any provision hereof in a manner that would alter the pro rata
sharing of payments required by any Loan Document, without the written consent
of each Credit Party, or

(v) change any of the provisions of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender,

and provided, further, that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent hereunder without the
prior written consent of the Administrative Agent.

Section 10.03 Expenses; Indemnity; Damage Waiver

(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent and BNY Capital Markets, Inc., the sole Lead Arranger,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement or any amendments, modifications or waivers of the provisions of any
Loan Document (whether or not the transactions contemplated hereby or thereby
shall be consummated), and (ii) all reasonable out-of-pocket expenses incurred
by any Credit Party, including the reasonable fees, charges and disbursements of
a single counsel for the Administrative Agent and a single counsel for the other
Credit Parties, in connection with the enforcement or protection of its rights
in connection with the Loan Documents, including its rights under this Section,
or in connection with and during any workout, restructuring or negotiations in
respect of the Revolving Loans and the Letters of Credit.

(b) The Borrower shall indemnify each Credit Party and each Related Party
thereof (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the reasonable fees, charges and disbursements of
any counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of any Loan Document or any agreement or instrument contemplated hereby
or thereby, the performance by the parties to the Loan Documents of their
respective obligations hereunder and thereunder or the consummation of the
Transactions or any other transactions contemplated hereby or thereby, (ii) any
Revolving Loan or the use of the proceeds thereof, (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by the Borrower or any of the Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of the Subsidiaries, or
(iv) any actual or

 

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prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (A) are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
(B) arise out of a claim brought by the Borrower against an Indemnitee for a
breach which is finally determined by a final and nonapealable judgment to have
constituted a bad faith breach of such Indemnitee’s obligations under this
Agreement.

(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to the Administrative Agent under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as applicable, was incurred by or asserted against
the Administrative Agent in its capacity as such.

(d) To the extent permitted by applicable law, each party hereto agrees that it
will not assert, and hereby waives, any claim against any Indemnitee or the
Borrower, as the case may be, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, any Loan Document or any
agreement, instrument or other document contemplated hereby or thereby, the
Transactions or any Revolving Loan or the use of the proceeds thereof.

(e) All amounts due under this Section shall be payable promptly, but in any
event no later than 10 days, after written demand therefor.

Section 10.04 Successors and Assigns

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Credit Party (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Related Parties of each
Credit Party) any legal or equitable right, remedy or claim under or by reason
of any Loan Document.

(b) Each Lender may, and, so long as no Default shall have occurred and be
continuing, if demanded by the Borrower pursuant to 3.08(b) upon at least five
Business Days’ notice to such Lender and the Administrative Agent will, assign
to one or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement and the other Loan Documents (including, without
limitation, all or a portion of its Commitment or Commitments, the Loans owing
to it and the Note held by it); provided, however, that (i) each such assignment

 

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shall be of a uniform, and not a varying, percentage of all rights and
obligations under and in respect of any or all facilities (determined as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent or, if “Trade Date” is specified in the Assignment
and Acceptance, as of the Trade Date), (ii) except in the case of an assignment
to a Person that, immediately prior to such assignment, was a Lender, an
Affiliate of any Lender or an Approved Fund of any Lender or an assignment of
all of a Lender’s rights and obligations under this Agreement, the aggregate
amount of the Commitments being assigned to such Eligible Assignee pursuant to
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 (or such
lesser amount as shall be approved by the Administrative Agent and the Borrower,
unless a Default has occurred under Section 8(a), Section 8(h) or Section 8(i)
or unless an Event of Default has occurred and is continuing), (iii) each
partial assignment shall be made as an assignment of a proportionate part of all
of the assigning Lender’s rights and obligations under this Agreement with
respect to the Loans or the Commitment assigned, (iv) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender,
an Affiliate of any Lender or an Approved Fund of any Lender, such assignment
shall be approved by the Administrative Agent and, the Borrower, so long as
(A) no Default has occurred under Section 8(a), Section 8(h) or Section 8(i) and
no Event of Default has occurred and is continuing at the time of effectiveness
of such assignment, or (B) the Administrative Agent shall not have determined
that such assignment is necessary to achieve a successful syndication of the
facilities (in each case such approvals not to be unreasonably withheld or
delayed), (v) each such assignment shall be to an Eligible Assignee, (vi) any
assignment of a Revolving Commitment must be approved by the Administrative
Agent unless the person that is proposed is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee), (vii) each
such assignment made as a result of a demand by the Borrower pursuant to this
Section 10.04(b) shall be arranged by the Borrower after consultation with the
Administrative Agent and shall be either an assignment of all of the rights and
obligations of the assigning Lender under this Agreement or an assignment of a
portion of such rights and obligations made concurrently with another such
assignment or other such assignments that together cover all of the rights and
obligations of the assigning Lender under this Agreement, (viii) no Lender shall
be obligated to make any such assignment as a result of a demand by the Borrower
pursuant to this Section 10.04(b) unless and until such Lender shall have
received one or more payments from the Borrower or one or more Eligible
Assignees in an aggregate amount at least equal to the aggregate outstanding
principal amount of the Borrowing owing to such Lender, together with accrued
interest thereon to the date of payment of such principal amount and all other
amounts payable to such Lender under this Agreement, (ix) no such assignments
shall be permitted without the consent of the Administrative Agent until the
Administrative Agent shall have notified the Credit Parties that syndication of
the Commitments hereunder has been completed and (x) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note subject to such assignment and (except in the case of any such
assignment by a Lender to an Affiliate or Approved Fund of such Lender) a
processing and recordation fee of $3,500; provided, however, that for each such
assignment made as a result of a demand by the Borrower pursuant to this
Section 10.04(b), the Borrower shall pay to the Administrative Agent the
applicable processing and recordation fee.

 

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(c) Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance, (i) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (ii) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Sections 3.05, 3.07 and 10.03
to the extent any claim thereunder relates to an event arising prior to such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of the remaining portion
of an assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).

(d) By executing and delivering an Assignment and Acceptance, each Credit Party
assignor thereunder and each assignee thereunder confirm to and agree with each
other and the other parties thereto and hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Credit Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
(ii) such assigning Credit Party makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under any
Loan Document or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.04 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
Administrative Agent, such assigning Credit Party or any other Credit Party and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes each Administrative Agent
to take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to Administrative Agent by
the terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Lender.

(e) The Administrative Agent shall maintain at its address referred to in
Section 10.01 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Credit Parties and the Commitment under each facility of, and principal amount
of the Loans owing under each facility to, each Credit Party from time to time
(the “Register”). The entries in the Register shall be conclusive and binding
for all purposes, absent clearly demonstrable error, and the Borrower, the
Administrative Agent and the Credit Parties may treat each Person whose name is
recorded in the Register as a Credit Party hereunder for all purposes of this
Agreement; provided, however, in

 

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the case of an assignment to an Affiliate of the assigning Lender, such
assignment shall be effective between such Lender and its Affiliate immediately
without compliance with the conditions for assignment under this Section 10.04,
but shall not be effective with respect to any other party hereto, and each
other party hereto shall be entitled to deal solely with such assigning Lender
under any such assignment, in each case until the conditions for assignment
under this Section 10.04 have been satisfied. The Register shall be available
for inspection by the Borrower or the Administrative Agent or any Credit Party
at any reasonable time and from time to time upon reasonable prior notice.

(f) Upon its receipt of an Assignment and Acceptance executed by an assigning
Credit Party and an assignee, together with any Note or Notes subject to such
assignment, the Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of Exhibit A hereto,
(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower and
each other Administrative Agent. In the case of any assignment by a Lender,
within five Business Days after its receipt of such notice, Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for
the surrendered Note a new Note to the order of such Eligible Assignee in an
amount equal to the Commitment assumed by it under each facility pursuant to
such Assignment and Acceptance and, if any assigning Lender has retained a
Commitment hereunder under such facility, a new Note to the order of such
assigning Lender in an amount equal to the Commitment retained by it hereunder.
Such new Note shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit C hereto.

(g) Each Credit Party may sell participations to one or more Persons (other than
the Borrower or any of its Affiliates) (each, a “Participant”) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Loans owing to it and the
Note (if any) held by it); provided, however, that (i) such Credit Party’s
obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Credit Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Credit Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Credit Parties shall continue to deal solely and directly with such Credit
Party in connection with such Credit Party’s rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by the Borrower therefrom, except to the extent
that such amendment, waiver or consent would reduce the principal of, or
interest on, the Borrowings or Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, postpone
any date fixed for any payment of principal of, or interest on, the Borrowings
or Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation. The Borrower agrees that each participant
shall be entitled to the benefits of Sections 3.05, 3.06, 3.07 and 10.03 to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law, each
participant also shall be entitled to the benefits of Section 10.08 as though it
were a Lender,

 

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provided such participant agrees to be subject to Section 2.08(c) as though it
were a Lender. A participant shall not be entitled to receive any greater
payment under Sections 3.05 and 3.07 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such participant,
unless the sale of the participation to such participant is made with the
Borrower’s prior written consent.

(h) Any Credit Party may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 10.04, disclose to
the assignee or participant or proposed assignee or participant any information
relating to the Borrower furnished to such Credit Party by or on behalf of the
Borrower; provided, however, that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree in writing to
preserve the confidentiality of any confidential Information received by it from
such Credit Party in accordance with Section 10.12 to the same extent as if it
were a Credit Party.

(i) Notwithstanding anything to the contrary contained herein, any Lender may at
any time pledge or assign a security interest in all or any portion of its
rights under the Loan Documents to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a security
interest, provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations under the Loan Documents or
substitute any such pledgee or assignee for such Lender as a party hereto.

Section 10.05 Survival

All covenants, agreements, representations and warranties made by the Borrower
herein and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of any Loan Document and the making of any
Revolving Loans, regardless of any investigation made by any such other party or
on its behalf and notwithstanding that any Credit Party may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Revolving Loan or any
fee or any other amount payable under the Loan Documents is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 3.05, 3.06, 3.07 and 10.03 and Article 9 shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Revolving Loans and the
termination of the Commitments or the termination of this Agreement or any
provision hereof.

Section 10.06 Counterparts; Integration; Effectiveness

This Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all
of which, when taken together, shall constitute a single contract. This
Agreement and any separate letter agreements with respect to fees payable to any
Credit Party constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and

 

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understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 5.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.

Section 10.07 Severability

In the event any one or more of the provisions contained in this Agreement is
held to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

Section 10.08 Right of Setoff

If an Event of Default shall have occurred and be continuing, each of the
Lenders and their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by applicable law, to setoff
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by it to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by it, irrespective of whether or not it shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each of
the Lenders and their respective Affiliates under this Section are in addition
to other rights and remedies (including other rights of setoff) that it may
have.

Section 10.09 Governing Law; Jurisdiction; Consent to Service of Process

(a) This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York without regard to principles of conflict of laws.

(b) The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that, to the extent permitted by applicable law, all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by applicable law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner

 

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provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent or any other Credit Party may otherwise have to bring any
action or proceeding relating to this Agreement or the other Loan Documents
against the Borrower, or any of its property, in the courts of any jurisdiction.

(c) The Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 10.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

Section 10.10 WAIVER OF JURY TRIAL

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 10.11 Headings

Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.

Section 10.12 Confidentiality

Each of the Credit Parties agrees to maintain the confidentiality of the
Information (as defined below) and not to use Information in violation of law,
except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed

 

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to keep such Information confidential), (b) to the extent required by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, provided that each such Person
agrees to maintain the confidentiality of such information on the terms set
forth in this Section, (g) with the consent of the Borrower or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section or, (ii) becomes available to any Credit Party on a
nonconfidential basis from a source other than the Borrower and without breach
of this Agreement; provided, however, that, unless prohibited by applicable law,
a Credit Party will provide prior notice to the Borrower of the Credit Party’s
intention to disclose Information pursuant to clause (c) above or to disclose
Information pursuant to clause (e) above in connection with any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder.
For the purposes of this Section, “Information” means all information received
from the Borrower relating to the Borrower or its business, including, without
limitation, information received from Borrower pursuant to Section 6.01(f), 6.02
and 6.06 of this Agreement, other than any such information that is available to
any Credit Party on a nonconfidential basis prior to disclosure by the Borrower.
Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

Section 10.13 Interest Rate Limitation

Notwithstanding anything herein to the contrary, if at any time the interest
rate applicable to any Revolving Loan, together with all fees, charges and other
amounts that are treated as interest on such Revolving Loan under applicable law
(collectively the “charges”), shall exceed the maximum lawful rate (the “maximum
rate”) that may be contracted for, charged, taken, received or reserved by the
Lender holding such Revolving Loan in accordance with applicable law, the rate
of interest payable in respect of such Revolving Loan hereunder, together with
all of the charges payable in respect thereof, shall be limited to the maximum
rate and, to the extent lawful, the interest and the charges that would have
been payable in respect of such Revolving Loan but were not payable as a result
of the operation of this Section shall be cumulated, and the interest and the
charges payable to such Lender in respect of other Revolving Loans or periods
shall be increased (but not above the maximum rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Rate to
the date of repayment, shall have been received by such Lender.

Section 10.14 No Third Parties Benefited

This Agreement is made and entered into for the sole protection and legal
benefit of the Borrower, the Administrative Agent and the Lenders, and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect

 

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cause of action or claim in connection with, this Agreement or any of the other
Loan Documents. Neither the Administrative Agent nor any Lender shall have any
obligation to any Person not a party to this Agreement or other Loan Documents.

Section 10.15 USA Patriot Act Notice

Each of the Administrative Agent and each Lender hereby notifies the Borrower
that, pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow the Administrative Agent and such Lender to identify the
Borrower in accordance with the Patriot Act.

Section 10.16 Termination of Credit Facilities

(a) The Borrower and each Lender that is party to any bilateral credit
agreement, loan agreement, line of credit or similar credit facility agrees that
each such credit agreement, loan agreement, line of credit or similar credit
facility shall irrevocably terminate on the Effective Date.

(b) The Borrower agrees to pay to the applicable Lender (i) on the Effective
Date all principal and interest which is then outstanding under any credit
facility described in clause (a) and (ii) promptly after receiving an invoice
therefor, any unpaid fees due under any credit facility described in clause (a).

[Signature Pages to Follow]

 

- 61 -

--------------------------------------------------------------------------------

HECO

CREDIT AGREEMENT

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

HAWAIIAN ELECTRIC COMPANY, INC. By:   /s/ T. Michael May  

T. Michael May

President and Chief Executive Office

 

By:   /s/ Tayne S.Y. Sekimura  

Tayne S.Y. Sekimura

Financial Vice President

--------------------------------------------------------------------------------

HECO

CREDIT AGREEMENT

 

THE BANK OF NEW YORK,

as Administrative Agent and as a Lender

By:   /s/ Jesus Williams   Name: Jesus Williams   Title:   Vice President

--------------------------------------------------------------------------------

HECO

CREDIT AGREEMENT

 

BANK OF HAWAII, as Co-Syndication Agent and as a Lender By:   /s/ Luke Yeh  
Name: Luke Yeh   Title:   Vice President

--------------------------------------------------------------------------------

HECO

CREDIT AGREEMENT

 

FIRST HAWAIIAN BANK, as Co-Syndication Agent and as a Lender By:   /s/ Kenneth
C. S. Pai   Name: Kenneth C. S. Pai   Title:   Senior Vice President

--------------------------------------------------------------------------------

HECO

CREDIT AGREEMENT

 

UNION BANK OF CALIFORNIA, N.A., as Co-Documentation Agent and as a Lender By:  
/s/ Robert J. Olson   Name: Robert J. Olson   Title:   Senior Vice President

--------------------------------------------------------------------------------

HECO

CREDIT AGREEMENT

 

WELLS FARGO BANK, N.A., as Co-Documentation Agent and as a Lender

By:   /s/ Jeff A. Bailard   Name: Jeff A. Bailard   Title:   Vice President

--------------------------------------------------------------------------------

HECO

CREDIT AGREEMENT

 

U.S. BANK NATIONAL ASSOCIATION,

as Co-Documentation Agent and as a Lender

By:   /s/ Janice T. Thede   Name: Janice T. Thede   Title:   Vice President

--------------------------------------------------------------------------------

HECO

CREDIT AGREEMENT

 

LEHMAN BROTHERS BANK, FSB By:   /s/ Janine M. Shugan   Name: Janine M. Shugan  
Title:   Authorized Signatory

--------------------------------------------------------------------------------

HECO

CREDIT AGREEMENT

 

WILLIAM STREET COMMITMENT CORPORATION (Recourse only to assets of William Street
Commitment Corporation) By:   /s/ Mark Walton   Name: Mark Walton   Title:
  Assistant Vice President

--------------------------------------------------------------------------------

SCHEDULE 1.01

HAWAIIAN ELECTRIC COMPANY, INC.

CONSOLIDATED CAPITALIZATION

CONSOLIDATED FUNDED DEBT

CONSOLIDATED SUBSIDIARY FUNDED DEBT

AS OF DECEMBER 31, 2005

 

      HECO     HELCO     MECO     RHI     Eliminations     CONSOLIDATED  
($thousands)                                     

ST borrowings from non-affiliates

   136,165     —       —       —         136,165  

ST borrow between HECO, HELCO, MECO, RHI

   5,250     49,700     —       —       (54,950 )   —    

ST borrowings from HEI

   —       —       —       —         —    

Capital lease obligations, including current portion

   —       —       —       —         —    

Purchase money indebtedness

   —       —       —       —         —    

Borrowings under Syndicated Credit Agreement

   —       —       —       —         —    

Revenue bonds, including current portion

   451,580     121,600     144,720     —         717,900  

Less funds on deposit with trustees

   —       —       —       —         —    

Less unamortized discount

   (1,994 )   (591 )   (868 )   —         (3,453 )

Other long-term debt - unsecured (QUIDS), including current portion

   31,546     10,000     10,000     —       —       51,546                     
                 

Funded debt

   622,547     180,709     153,852     —       (54,950 )   902,158  (2)         
                                   (3)     (3)     (3)    

Preferred stock

   22,293     7,000     5,000     —       —       34,293                       
               

Common stock

   85,387     21,773     15,826     481     (38,080 )   85,387  

Premium and/or expense on common & preferred stock

   299,186     78,871     79,095     —       (157,966 )   299,186  

Retained earnings

   654,686     88,763     99,269     (363 )   (187,669 )   654,686  

Common stock equity

   1,039,259     189,407     194,190     118     (383,715 )   1,039,259         
                             

Capitalization (a)

   1,684,099     377,116     353,042     118     (438,665 )   1,975,710  (1)   
                                 

 

Notes:

 

(1) Consolidated Capitalization

 

(2) Consolidated Funded Debt

 

(3) Consolidated Subsidiary Funded Debt, individually

 

(a) Excludes AOCI Income(Loss)

--------------------------------------------------------------------------------

Schedule 2.01

(HECO Credit Agreement)

 

Lender

   Commitment

The Bank of New York

   $ 31,818,181.81

Bank of Hawaii

   $ 28,636,363.64

First Hawaiian Bank

   $ 28,636,363.64

Union Bank of California, N.A.

   $ 22,272,727.27

Wells Fargo Bank, N.A.

   $ 22,272,727.27

U.S. Bank National Association

   $ 22,272,727.27

Lehman Brothers Bank, FSB

   $ 9,545,454.55

William Street Commitment Corporation

   $ 9,545,454.55       

Total

   $ 175,000,000.00       

--------------------------------------------------------------------------------

LOGO [g1015710157_img02.jpg]

 

SCHEDULE 4.12

SUBSIDIARIES

Corporate Organizational Structure of HECO

as of March 31, 2006

HECO

HELCO

(100%)1

MECO

(100%)1

RHI

(100%)1

TRUST III

(100%)2

Legend

HECO - Hawaiian Electric Company, Inc.

HELCO - Hawaii Electric Light Company, Inc.

MECO- Maui ElaclricCompany, Limited

RHI - Renewable Hawaii, Inc.

Trust III - HECO Capital Trust lll

1Common Stock Ownership %

2Common Securities Ownership %

--------------------------------------------------------------------------------

SCHEDULE 7.01

EXISTING LIENS

None other than Liens falling within one or more of the categories of Liens
identified in the various subsections of Section 7.01

--------------------------------------------------------------------------------

SCHEDULE 7.03

EXISTING RESTRICTIONS

Pursuant to Section 7.03 of the Credit Agreement, the following restrictions and
conditions exist on April 3, 2006:

 

  1. Hawaiian Electric Company, Inc. (“HECO”), Maui Electric Company, Ltd.
(“MECO”) and Hawaii Electric Light Company, Inc. (“HELCO”) are subject to
restrictive covenants in connection with the offer and sale in March 2004 of
Cumulative Quarterly Income Preferred Securities, as disclosed in the
Registration Statements on Form S-3, Regis. Nos. 333-111073, 333-111073-01,
333-111073-02 and 333-111073-03 filed with the Securities and Exchange
Commission, which descriptions are incorporated herein by reference.

HECO, MECO and HELCO are subject to restrictive covenants in connection with
their cumulative preferred stock financings to the effect that, until dividends
have been paid or declared or set apart for payment on all shares of
the respective company’s cumulative preferred stock, 1) no distributions on the
respective company’s common stock or any future class of stock except cumulative
preferred stock shall be made and 2) the respective company shall not purchase
or otherwise acquire any of the respective company’s common stock or any future
class of stock except cumulative preferred stock. In the event of liquidation,
dissolution, receivership, bankruptcy, disincorporation or winding up of the
affairs of the respective company, cumulative preferred stockholders are
entitled to the par value and accrued and unpaid dividends, before any
distribution is made to holders of the respective company’s common stock or any
future class of stock except cumulative preferred stock.

 

  2. HECO, MECO and HELCO are subject to restrictive covenants in connection
with their special purpose revenue bonds which contain provisions to the effect
that HECO, MECO and HELCO shall not dissolve or otherwise dispose of all or
substantially all its assets, and will not consolidate with or merge into
another entity or permit other entities to consolidate with or merge into it,
unless certain specific requirements are met.

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

Assignment and Acceptance Agreement (as the same may be amended, supplemented or
otherwise modified from time to time, this “Assignment and Acceptance
Agreement”), dated as of                     , 200_ by and between [NAME OF
ASSIGNOR], a Lender under the Credit Agreement referred to below (the
“Assignor”), and [NAME OF ASSIGNEE] (the “Assignee”).

R E C I T A L S

A. Reference is made to the Credit Agreement, dated as of March __, 2006, among
Hawaiian Electric Company, Inc., a Hawaii corporation (the “Borrower”), the
Lenders party thereto and The Bank of New York, as Administrative Agent (as the
same may be amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”). Capitalized terms used herein which are not otherwise
defined herein shall have the respective meanings ascribed thereto in the Credit
Agreement.

B. Pursuant to the Credit Agreement and subject to the limitations set forth
therein the Credit Parties agreed to make the Loans under the terms and
conditions therein set forth.

C. The amount of the Assignor’s Revolving Commitment (without giving effect to
the assignment effected hereby or to other assignments thereof which have not
yet become effective) is specified in Item 1 of Schedule 1 hereto. The
outstanding principal amount of the Assignor’s Revolving Loans without giving
effect to the assignment effected hereby or to other assignments thereof which
have not yet become effective, is specified in Item 2 of Schedule 1 hereto.

D. The Assignor wishes to sell and assign to the Assignee, and the Assignee
wishes to purchase and assume from the Assignor, (i) the portion of the
Assignor’s rights and obligations under the Loan Documents, including its
Revolving Commitment specified in Item 3 of Schedule 1 hereto (the “Assigned
Commitment”), [and] (ii) the portion of the Assignor’s Revolving Loans specified
in Item 4 of Schedule 1 hereto (the “Assigned Loans”).

The parties agree as follows:

 

  1. Assignment

Subject to the terms and conditions set forth herein and in the Credit
Agreement, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, without recourse, on
the date hereof, (i) all right, title and interest of the Assignor in and to the
Assigned Loans, and (ii) all obligations of the Assignor under the Loan
Documents with respect to the Assigned Commitment. As full consideration for the
sale of the Assigned Loans, the Assignee shall pay to the Assignor on the date
hereof an amount equal to the principal amount of the Assigned Loans or such
other amount as shall be agreed upon by the Assignor and the Assignee (the
“Purchase Price”), and the [Assignor/Assignee] shall pay the fee payable to the
Administrative Agent pursuant to Section 10.04(b) of the Credit Agreement.

--------------------------------------------------------------------------------

  2. Representations and Warranties

(a) Each of the Assignor and the Assignee represents and warrants to the other
that (i) it has full power and legal right to execute and deliver this
Assignment and Acceptance Agreement and to perform the provisions of this
Assignment and Acceptance Agreement; (ii) the execution, delivery and
performance of this Assignment and Acceptance Agreement have been authorized by
all action, corporate or otherwise, and do not violate any provisions of its
organizational documents or any contractual obligations or requirement of law
binding on it; and (iii) this Assignment and Acceptance Agreement constitutes
its legal, valid and binding obligation, enforceable against it in accordance
with its terms. The Assignor further represents that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor.

(b) The Assignee represents and warrants to the Assignor (i) it is an
“accredited investor” within the meaning of Regulation D of the Securities and
Exchange Commission, as amended, and (ii) it has, independently and without
reliance upon the Assignor, and based on such documents and information as it
has deemed appropriate, made its own evaluation of, and investigation into, the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries and made its own decision
to enter into this Assignment and Acceptance Agreement.

 

  3. Effect of Assignment.

(a) Upon the effective date hereof, (i) the Administrative Agent shall record
the assignment contemplated hereby, (ii) the Assignee, unless already a Lender,
shall become a Lender, with all the rights and obligations as a Lender under the
Credit Agreement, and (iii) the Assignor, to the extent of the assignment
provided for herein, shall be released from its obligations under the Loan
Documents, with respect to the Assigned Loans and Assigned Commitment.

(b) The Assignee hereby appoints and authorizes the Administrative Agent to take
such action, on and after the date hereof, as agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to such
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto.

(c) From and after the effective date hereof, the Credit Parties and the Loan
Parties shall make all payments in respect of the interest assigned hereby
(including payments of principal, interest, fees and other amounts) to the
Assignee. The Assignor and the Assignee shall make all appropriate adjustments
directly between themselves with respect to amounts under the Loan Documents
which accrued prior to the date hereof and which were paid thereafter.

 

  4. Method of Payment

All payments to be made either to the Assignor or the Assignee by the other
hereunder shall be made by wire transfer in immediately available funds to the
account designated by the Assignor or the Assignee, as the case may be.

 

2

--------------------------------------------------------------------------------

  5. Notices

All notices, requests and demands to or upon the Assignee in connection with
this Assignment and Acceptance Agreement and the Loan Documents are to be sent
or delivered to the place set forth adjacent to its name on the signature
page(s) hereof.

 

  6. Miscellaneous

(a) For purposes of this Assignment and Acceptance Agreement, all calculations
and determinations with respect to the Assigned Loans, the Assigned Commitment
and all other similar calculations and determinations, shall be made and shall
be deemed to be made as of the commencement of business on the date of such
calculation or determination, as the case may be.

(b) Section headings have been inserted herein for convenience only and shall
not be construed to be a part hereof.

(c) This Assignment and Acceptance Agreement embodies the entire agreement and
understanding between the Assignor and the Assignee with respect to the subject
matter hereof and supersedes all other prior arrangements and understandings
between the Assignor and the Assignee with respect to the subject matter hereof.

(d) This Assignment and Acceptance Agreement may be executed in any number of
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same agreement. It shall not be necessary in
making proof of this Assignment and Acceptance Agreement to produce or account
for more than one counterpart signed by the party to be charged.

(e) Every provision of this Assignment and Acceptance Agreement is intended to
be severable, and if any term or provision hereof shall be invalid, illegal or
unenforceable for any reason, the validity, legality and enforceability of the
remaining provisions hereof shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction.

(f) This Assignment and Acceptance Agreement shall be binding upon and inure to
the benefit of the Assignor and the Assignee and their respective successors and
permitted assigns, except that neither party may assign or transfer any of its
rights or obligations hereunder (i) without the prior written consent of the
other party, and (ii) in contravention of the Credit Agreement.

(g) This Assignment and Acceptance Agreement and the rights and obligations of
the parties hereunder shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.

(h) This Assignment and Acceptance Agreement shall become effective on the date
it has been executed by the Assignor, the Assignee, the Administrative Agent
and, unless an Event of Default has occurred and is continuing, the Borrower.

[Signature Pages To Follow]

 

3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.

 

   

[NAME OF ASSIGNOR], as Assignor

     

By:

          

Name:

          

Title:

    

Address for notices:

   

[NAME OF ASSIGNEE], as Assignee

      

By:

           

Name:

           

Title:

    

Attention:

          

Telephone: (            )             -            

Facsimile: (            )             -            

[Consented to and]1 Accepted this      day:

of                             ,         

 

THE BANK OF NEW YORK, as Administrative Agent

By:

    

Name:

     Title:     

--------------------------------------------------------------------------------

1 Delete if consent is not required by Section 10.04(b) of the Credit Agreement.

 

[Assignment and Acceptance Agreement]

--------------------------------------------------------------------------------

[Consented to this              day:

of                     ,             ]2

 

HAWAIIAN ELECTRIC COMPANY, INC.

By:

    

Name:

     Title:     

By:

    

Name:

     Title:     

--------------------------------------------------------------------------------

2 Delete if consent is not required by Section 10.04(b) of the Credit Agreement.

 

[Assignment and Acceptance Agreement]

--------------------------------------------------------------------------------

SCHEDULE 1

TO

ASSIGNMENT AND ACCEPTANCE AGREEMENT,

dated as of                     , 200_,

between [NAME OF ASSIGNOR], as Assignor

and

[NAME OF ASSIGNEE], as Assignee,

relating to the

Credit Agreement, dated as of March __, 2006,

by and among

Hawaiian Electric Company, Inc.,

the Lenders party thereto

and

The Bank of New York, as Administrative Agent

 

Item 1. Amount of Assignor’s Aggregate Commitment*:

 

(a)    Revolving Commitment    $ _______

 

Item 2. Outstanding principal balance/amount of the Assignor’s Loans*:

 

(a)    Revolving Loans consisting of:      

ABR Borrowing

   $ _______   

Eurodollar Borrowing

   $ _______

 

Item 3. Amount of Revolving Commitment being assigned:

 

(a)    Revolving Commitment    $_______

 

Item 4. Outstanding principal balance/amount of the Revolving Loans being
assigned:

 

(a)   Revolving Loans consisting of:      ABR Borrowing    $_______   Eurodollar
Borrowing    $_______

--------------------------------------------------------------------------------

* Without giving effect to the assignment contemplated hereby or to other
assignments which have not yet become effective.

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF OPINION LETTER

[GOODSILL ANDERSON QUINN & STIFEL LLP LETTERHEAD]

April __, 2006

 

The Bank of New York, as Administrative Agent,
and the Lenders referred to in the
Credit Agreement (as defined below)

  

One Wall Street

New York, New York 10286

  

 

  Re: Hawaiian Electric Company, Inc.

Ladies and Gentlemen:

We have acted as counsel to Hawaiian Electric Company, Inc., a Hawaii
corporation (the “Borrower”), and have represented Borrower in connection with
the Credit Agreement dated as of March 31, 2006 (the “Credit Agreement”) among
the Borrower, the lenders party thereto, Bank of Hawaii and First Hawaiian Bank,
as Co-Syndication Agents, Wells Fargo Bank, N.A., U. S. Bank National
Association, and Union Bank of California, N.A., as Co-Documentation Agents, and
The Bank of New York, as Administrative Agent (the “Administrative Agent”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings given such terms in the Credit Agreement. This opinion is
rendered to you pursuant to Section 5.01(c) of the Credit Agreement.

In connection with this opinion, we have examined originals or copies of the
following documents:

(i) the Credit Agreement;

(ii) the Notes;

(iii) the Amended Articles of Incorporation, as amended (the “Borrower’s
Charter”) of the Borrower, as filed with the Director of Commerce and Consumer
Affairs for the State of Hawaii;

(iv) the By-Laws of the Borrower (the “Borrower’s By-Laws”; and, together with
the Borrower’s Charter, the “Governing Documents”); and

(v) the Certificate of the Secretary of the Borrower, as of the date hereof (the
“Secretary’s Certificate”), as to certain actions taken by the Board of
Directors of the Borrower

--------------------------------------------------------------------------------

on March 14, 2006 and March 27, 2006, as to the titles, incumbency, and specimen
signatures of certain officers of the Borrower and attaching a Certificate of
Good Standing issued by the Director of the Department of Commerce and Consumer
Affairs of the State of Hawaii.

The documents specified in subparagraphs (i) and (ii) above are referred to
herein, collectively, as the “Loan Documents.” In rendering this opinion, we
have obtained such certificates and other information from public and government
officials and from officers and employees of the Borrower, and have also
examined such documents and corporate and other records as we have considered
necessary or appropriate for the purposes of this opinion.

Based on the foregoing and subject to the other qualifications, assumptions and
limitations stated herein and as limited thereby, and after examination of such
matters of law as we have deemed relevant, we are of the opinion that:

1. The Borrower has been duly incorporated under the laws of the Kingdom of
Hawaii and is validly existing as a corporation in good standing under the laws
of the State of Hawaii. To our knowledge, the Borrower does not itself conduct
any business or own or lease any property in any jurisdiction outside the State
of Hawaii that would require it to qualify to do business as a foreign
corporation and where the failure to be so qualified would reasonably be
expected to result in a material adverse effect on the consolidated financial
position of the Borrower.

2. The Borrower has the corporate power and authority to carry on its business
as now conducted.

3. The execution and delivery by the Borrower of the Loan Documents, and the
performance by the Borrower of its obligations under the Loan Documents, are
within the Borrower’s corporate powers and have been duly authorized by all
requisite corporate action on the part of the Borrower. The Borrower has duly
executed and delivered each of the Loan Documents.

4. Each of the Loan Documents constitutes a valid and binding agreement of the
Borrower, enforceable against the Borrower in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting
creditors’ rights, by general equitable principles (regardless of whether
considered in a proceeding in equity or at law), and by an implied covenant of
reasonableness, good faith and fair dealing.

5. To our knowledge, the execution and delivery by the Borrower of each of the
Loan Documents and the consummation of the transactions contemplated thereby and
compliance by the Borrower with the provisions thereof (i) will not conflict
with or result in a breach or default (or give rise to any right of termination,
cancellation or acceleration) under any of the provisions of the Borrower’s
Governing Documents or any other material agreement binding upon the Borrower of
which we have knowledge, except for such conflict, breach or default as to which
requisite waivers or consents have been obtained, (ii) will not violate any law,
statute, rule or regulation known to us, or any judgment, order, writ,
injunction or decree of

--------------------------------------------------------------------------------

any court or other tribunal, applicable to the Borrower or any of its properties
or assets, and (iii) will not result in the creation or imposition of any Lien
on any asset of the Borrower (except as provided in Section 7.01 of the Credit
Agreement). No consent or approval by, or any notification of or filing with,
any court, public body or authority is required to be obtained or effected by
the Borrower in connection with the execution, delivery and performance by the
Borrower of its obligations under each of the Loan Documents or the consummation
by the Borrower of the transactions contemplated thereby, except for the
requisite approval of the Public Utilities Commission of the State of Hawaii
referred to in Section 2.05 of the Credit Agreement in order to extend the term
of the Credit Agreement to more than 364 days.

6. To our knowledge, there is no action, suit or proceeding pending against, the
Borrower or any of its assets before any court or arbitrator or any governmental
body, agency or official, which, in the event of an adverse decision, which
could reasonably be expected to have a material adverse effect on the
consolidated financial position of the Borrower, except for any actions, suits
or proceedings referred to in the Current SEC Reports, or which in any manner
draws into question the validity of the Loan Documents.

7. The Borrower is not an “investment company” nor is it controlled by an
“investment company”, in each case within the meaning of the Investment Company
Act of 1940, as amended.

The foregoing opinions are subject to the following qualifications:

(a) We are members of the Bar of the State of Hawaii and we do not hold
ourselves out as experts on the laws of any jurisdiction other than the State of
Hawaii and the federal laws of the United States. This opinion is limited in all
respects to matters governed by the laws of the State of Hawaii and the federal
laws of the United States of America. We express no opinion concerning
compliance with the laws or regulations of any other jurisdiction or
jurisdictions, or as to the validity, meaning or effect of any act or document
under the laws of any other jurisdiction or jurisdictions. Our opinion with
regard to the validity, binding nature and enforceability of each of the Loan
Documents is based upon the assumptions that the laws of the State of New York
govern the Loan Documents and that the laws of the State of Hawaii are the same
in all relevant respects as the laws of the State of New York, and we give no
opinion with respect to the enforceability of the Loan Documents to the extent
that the laws of the State of New York differ from the laws of the State of
Hawaii.

(b) We have relied as to matters of fact upon representations and warranties of
the Borrower in the Loan Documents and upon certificates and representations of
officers and employees of the Borrower and upon certificates of public and
government officials as to matters set forth therein. Our opinion in paragraph 1
as to the good standing of the Borrower is based solely on the Certificate of
Good Standing of the Borrower attached to the Secretary’s Certificate.

(c) We have assumed the genuineness of all signatures (other than the signatures
of the officers of the Borrower), the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies (and the authenticity of the originals
of such documents), the accuracy and completeness

--------------------------------------------------------------------------------

of all corporate records (which includes stock ownership records) made available
to us by Borrower and the capacity of each party executing a document (other
than Borrower) to so execute such document.

(d) Our opinion is subject to the qualification that enforcement of any waiver
and release or limitation of liability provisions in any of the Loan Documents
may be limited to the extent such provisions are contrary to public policy or
principles of equity under Hawaii jurisprudence, but such policy and equitable
limitations do not, in our opinion, render the Loan Documents invalid as a whole
or preclude the judicial enforcement of the obligation of the Borrower to repay
the principal, together with interest thereon (to the extent not deemed a
penalty) as provided in the Loan Documents.

(e) The remedies of specific performance, injunction and other forms of
equitable relief may not be available as to the provisions contained in any of
the Loan Documents to the extent they are subject to equitable defenses and the
discretion of the court before which the proceedings therefor may be brought.

(f) We express no opinion as to the validity, binding effect or enforceability
of any provision of any of the Loan Documents (i) which requires further
agreement by the parties or expressly or impliedly permits any party to take
discretionary action which is arbitrary, unreasonable or capricious, or would
violate any implied covenant of good faith or would be commercially
unreasonable, whether or not such action is permitted according to the specific
terms of any of the Loan Documents, or (ii) regarding remedies available to any
party for violations or breaches which are determined by a court to be
nonmaterial or without substantial adverse effect upon the ability of the
obligor to perform its material obligations thereunder.

(g) Our opinion is subject to the qualification that any requirement in any of
the Loan Documents specifying that provisions thereof may only be waived in
writing may not be binding or enforceable to the extent that a non-executory
oral agreement has been created modifying any provision in the Loan Documents or
an implied agreement by trade practice or course of conduct has been created
allowing a waiver.

(h) We express no opinion as to the validity, binding effect or enforceability
of provisions specifying certain remedies or that rights or remedies are not
exclusive, that every right or remedy is cumulative and may be exercised in
addition to any other right or remedy, and/or that the election of a particular
remedy does not preclude recourse to one or more others.

(i) Our opinion is subject to (i) limitations on the legality, validity, binding
effect or enforceability of provisions which a court may find unconscionable,
and (ii) limitations on the legality, validity, binding effect or enforceability
of agreements to indemnify, defend or hold harmless when the event giving rise
to the obligations thereunder are caused, in whole or in part, by the actions,
omissions, or negligence of the indemnitee thereunder or when the enforcement of
any such agreements is against public policy.

(j) Whenever an opinion expressed herein is qualified by the phrase “to our
knowledge,” “known to us,” or “nothing has come to our attention” or other
phrase of similar

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import, such phrase is intended to mean the actual knowledge of information by
the lawyers in our firm who have been principally involved in drafting the Loan
Documents, but does not include other information that might be revealed if
there were to be undertaken a canvass of all lawyers in our firm, a general
search of all files or any other type of independent investigation. With respect
to the opinions expressed in paragraph 6 of this letter, our opinion is limited
to litigation and proceedings pending against Borrower with respect to which our
firm has been consulted and has devoted substantive attention.

This opinion is based on the laws and regulations as in effect on the date
hereof and facts as we understand them as of the date hereof. We are not
assuming any obligation, and do not undertake, to revise, update or supplement
this opinion after the date hereof notwithstanding any change in applicable law
or regulation or interpretation thereof, any amendment, supplement, modification
or rescission of any document examined or relied on in connection herewith, or
any change in the facts, after the date hereof.

This opinion is rendered in connection with the transactions contemplated by the
Credit Agreement solely for your benefit and is not to be relied upon, quoted,
circulated, used or otherwise referred to for any other purpose, nor may it be
relied upon by any other person, without our prior written consent, except that
you may furnish this opinion to any regulatory authority or as otherwise
required by law.

Very truly yours,

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EXHIBIT C

FORM OF NOTE

 

$_______________

   New York, New York    March __, 2006

For value received, the undersigned, HAWAIIAN ELECTRIC COMPANY, INC., a Hawaii
corporation (the “Borrower”), hereby promises to pay to the order of
                     (the “Lender”), at the office of the Administrative Agent
(hereinafter defined) located at One Wall Street, New York, New York 10286 or at
such other place as the Administrative Agent may designate in writing from time
to time, the principal sum of                      DOLLARS ($            ) or,
if less, the outstanding principal balance of all Revolving Loans made by the
Lender to the Borrower pursuant to the Credit Agreement (hereinafter defined),
in lawful money of the United States of America and in immediately available
funds, on the date(s) and in the manner provided in the Credit Agreement. The
Borrower also promises to pay interest on the unpaid principal balance hereof
for the period such balance is outstanding, and all other amounts due under this
Note, at said office of the Administrative Agent, in like money, at the rates of
interest as provided in the Credit Agreement, on the date(s) and in the manner
provided in the Credit Agreement.

The date and amount of each type of Revolving Loan made by the Lender to the
Borrower under the Credit Agreement, and each payment of principal thereof,
shall be recorded by the Lender on its books and endorsed by the Lender on
Schedule I attached hereto or any continuation thereof; and in the absence of
manifest error, such schedule shall constitute prima facie evidence thereof. No
failure on the part of the Lender to make, or mistake by the Lender in making,
any notation as provided in this paragraph shall in any way affect any Revolving
Loan or the rights or obligations of the Lender or the Borrower with respect
thereto.

This Note evidences the Revolving Loan(s) made by the Lender and referred to in
the Credit Agreement dated as of the date of this Note (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”) by
and among the Borrower, the Lenders from time to time party thereto and The Bank
of New York, as Administrative Agent (the “Administrative Agent”) and is subject
to and shall be construed in accordance with the provisions of the Credit
Agreement and is entitled to the benefits and security set forth in the Loan
Documents. All capitalized terms not defined herein shall have the meanings
given to them in the Credit Agreement.

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The Borrower shall be entitled to borrow, repay, prepay in whole or in part and
reborrow the Revolving Loan(s) hereunder pursuant to the terms and conditions of
the Credit Agreement.

The Borrower promises to pay, on demand, interest at the default rate pursuant
to Section 3.01(c) of the Credit Agreement, from the expiration of any
applicable grace period, on any overdue principal and, to the extent permitted
by applicable law, overdue interest. The Credit Agreement also provides for the
acceleration of the maturity of principal upon the occurrence of certain Events
of Default and for prepayments on the terms and conditions specified in the
Credit Agreement.

The Borrower waives diligence, presentment, demand, notice of dishonor, protest
and any other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note, except to the extent that notice is
specifically required under the Credit Agreement. The nonexercise by the holder
of this Note of any of its rights hereunder in any particular instance shall not
constitute a waiver thereof in that or any subsequent instance.

This Note shall be governed by, and interpreted and construed in accordance
with, the laws of the State of New York.

THE BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO, UNDER OR IN CONNECTION WITH THIS NOTE
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). THE BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY CREDIT PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH CREDIT
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER.

[signature page follows]

 

- 2 -

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IN WITNESS WHEREOF, the Borrower has duly executed this Note the day and year
first above written.

 

HAWAIIAN ELECTRIC COMPANY, INC. By:            

Name:

      

Title:

     By:            

Name:

      

Title:

    

 

[Signature Page to _______ Note]

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SCHEDULE I TO NOTE

 

DATE

   AMOUNT OF
REVOLVING
LOAN    TYPE OF
REVOLVING
LOAN
(EURODOLLAR
OR ALTERNATE
BASE RATE)    INTEREST
RATE    INTEREST
PERIOD    AMOUNT
PAID    NOTATION
MADE BY

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EXHIBIT D

FORM OF BORROWING REQUEST

                        , 200_

VIA HAND DELIVERY OR FACSIMILE

The Bank of New York, as Administrative Agent

One Wall Street, 18-N

New York, New York 10286

Attention: Felix Liwag

Copy to:

The Bank of New York, as Administrative Agent

One Wall Street

New York, New York 10286

Attention: Jesus Williams

Vice President, Energy Divisions

Ladies and Gentlemen:

Reference is made to the Credit Agreement, dated March __, 2006 (as the same may
be amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Hawaiian Electric Company, Inc., a Hawaii corporation
(the “Borrower”), the Lenders from time to time party thereto and The Bank of
New York, as administrative agent (the “Administrative Agent”). Capitalized
terms used herein which are not defined herein are used as defined in the Credit
Agreement.

(i) Pursuant to Section 2.03 of the Credit Agreement, the Borrower hereby gives
notice of its intention to borrow Revolving Loans in an aggregate principal
amount of $                     on                     , 200_ (a Business Day),
which borrowing shall consist of the following Borrowings:

 

Type of Borrowing

(Eurodollar or ABR
Borrowing)

   Amount    Initial Interest
Period for
Eurodollar
Borrowings    $___________    ¨ 2-weeks / __
months

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(ii) The location and account to which funds are to be disbursed is the
following:

Hawaiian Electric Company, Inc.

Account #                 

________________

________________

________________

(iii) The Borrower hereby certifies that on the date hereof and on the Borrowing
Date set forth above, and immediately after giving effect to the Borrowings
requested hereby, no Default has or shall have occurred and be continuing.

(iv) The Borrower hereby certifies that on the date hereof and on the Borrowing
Date set forth above the representations and warranties contained in the Credit
Agreement (other than the representations and warranties in Sections 4.04(b) and
4.06 of the Credit Agreement) shall be true and correct in all material
respects, in each case with the same effect as though such representations and
warranties had been made on the date hereof (except to the extent such
representations and warranties specifically relate to an earlier date, in which
case the accuracy of such representations and warranties shall be determined as
of such earlier date).

[remainder of page intentionally left blank]

 

- 2 -

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IN WITNESS WHEREOF, the Borrower has duly executed this Borrowing Request as of
the date and year first written above.

 

Very truly yours,

 

HAWAIIAN ELECTRIC COMPANY, INC.

By:            

Name:

      

Title:

     By:            

Name:

      

Title:

    

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EXHIBIT E

FORM OF INCREASE REQUEST

INCREASE REQUEST, dated and effective as of                     , 200_, to the
Credit Agreement, dated and effective as of March __, 2006, by and among
Hawaiian Electric Company, Inc. (the “Borrower”), the Lenders party thereto and
The Bank of New York, as Administrative Agent (as the same may be further
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”). Capitalized terms used herein that are defined in the Credit
Agreement shall have the meanings therein defined.

[1. Pursuant to Section 2.05(d) of the Credit Agreement, the Borrower hereby
proposes to increase (the “Revolving Increase”) the Aggregate Revolving
Commitment from $                 to $                .

2. Each of the following Lenders has been invited by the Borrower, and is ready,
willing and able to increase its Revolving Commitment as follows:

 

Name of Lender

   Commitment
Amount (after
giving effect to
the Revolving
Increase)    $ __________

3. Each of the following proposed institutions (each, a “Proposed Institution,
and collectively, “Proposed Institutions”) has been invited by the Borrower, and
is ready, willing and able to become a “Lender” and assume a Revolving
Commitment under the Credit Agreement as follows:

 

Name of Proposed Institution

   Commitment
Amount    $ __________

4. The proposed effective date for the Revolving Increase is
                    , 200_.]

5. The Borrower hereby represents and warrants to the Administrative Agent, each
undersigned Lender and each such Proposed Institution that immediately before
and after giving effect to the Increase no Default shall or would exist and
immediately after giving effect thereto, the sum of all Revolving Increases made
pursuant to Section 2.05(d) shall not exceed $50,000,000 in the aggregate.

6. Pursuant to Section 2.05(d) of the Credit Agreement, by execution and
delivery of this Supplement, together with the satisfaction of all of the other
requirements set forth in Section 2.05, each undersigned Lender and Proposed
Institution shall have, on

--------------------------------------------------------------------------------

and as of the effective date of the Revolving Increase, a Revolving Commitment
equal to the amount set forth above next to its name and in the event it is a
Proposed Institution, shall be, and shall be deemed to be, a “Lender” under, and
as such term is defined in, the Credit Agreement.

[remainder of page intentionally left blank]

 

- 2 -

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IN WITNESS WHEREOF, the parties hereto have caused this Increase Request to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.

 

HAWAIIAN ELECTRIC COMPANY, INC.

By:            

Name:

      

Title:

     By:            

Name:

      

Title:

    

                                                                               
  ,

as Lender

By:            

Name:

      

Title:

     [Proposed Institution] By:            

Name:

      

Title:

    

 

Agreed and Consented to:

 

THE BANK OF NEW YORK,

as Administrative Agent

By:            

Name:

      

Title:

    

 

-3-

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EXHIBIT F

FORM OF INTEREST ELECTION REQUEST

                        , 200__

VIA HAND DELIVERY OR FACSIMILE

The Bank of New York, as Administrative Agent

One Wall Street, 18-N

New York, New York 10286

Attention: Felix Liwag

Copy to:

The Bank of New York, as Administrative Agent

One Wall Street

New York, New York 10286

Attention: Jesus Williams

Vice President, Energy Divisions

Ladies and Gentlemen:

Reference is made to the Credit Agreement, dated March __, 2006 (as the same may
be amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among Hawaiian Electric Company, Inc., a Hawaii
corporation (the “Borrower”), the Lenders from time to time party thereto and
The Bank of New York, as Issuing Bank and Administrative Agent (the
“Administrative Agent”). Capitalized terms used herein which are not defined
herein are used as defined in the Credit Agreement.

Pursuant to Section 3.02 of the Credit Agreement, the Borrower hereby gives
notice of its request to convert and/or continue Borrowings as set forth below:

(a) [effective on             , 200_, to continue $             in principal
amount of presently outstanding Eurodollar Borrowings having an Interest Period
that expires on                     , 200_ to new Eurodollar Borrowings that
have an Interest Period of 2 weeks/     months;]

(b) [effective on             , 200_, to convert $             in principal
amount of presently outstanding Eurodollar Borrowings having an Interest Period
that expires on                     , 200_, to new ABR Borrowings;]

--------------------------------------------------------------------------------

(c) [effective on             , 200_, to convert $             in principal
amount of presently outstanding ABR Borrowings to new Eurodollar Borrowings
having an Interest Period of 2 weeks/     months.]

[remainder of page intentionally left blank]

 

- 2 -

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IN WITNESS WHEREOF, the Borrower has duly executed this Interest Election
Request as of the date and year first written above.

 

HAWAIIAN ELECTRIC COMPANY, INC. By:            

Name:

      

Title:

     By:            

Name:

      

Title:

    

 

[Signature page to Interest Election Request]