HEI
EXHIBIT 10.2


 


EXECUTION COPY


 





 


CREDIT AGREEMENT


 


dated as of May 7, 2010


 


among


 


HAWAIIAN ELECTRIC
INDUSTRIES, INC.,

as Borrower


 


The Lenders Party Hereto


 


and


 


BANK OF HAWAII,

as Co-Syndication Agent


 


and


 


U.S. BANK NATIONAL
ASSOCIATION,

as Co-Syndication Agent


 


and


 


WELLS FARGO BANK, NATIONAL
ASSOCIATION,

as Co-Syndication Agent


 


and


 


BANK OF AMERICA, N.A.,

as Co-Documentation Agent


 


and


 


UNION BANK, N.A.,

as Co-Documentation Agent


 


and


 


JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and Issuing Bank


 










 


J.P. MORGAN SECURITIES INC.,

as Sole Lead Arranger and Sole Book Runner


 

















 


TABLE
OF CONTENTS


 


	
  ARTICLE 1.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Defined
  Terms

  	
  1

  
	
  Section 1.02

  	
  Terms
  Generally

  	
  17

  
	
  Section 1.03

  	
  Accounting
  Terms; GAAP

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2.

  	
  THE
  CREDITS

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Commitments

  	
  17

  
	
  Section 2.02

  	
  Revolving
  Loans and Borrowings

  	
  18

  
	
  Section 2.03

  	
  Requests
  for Borrowings

  	
  18

  
	
  Section 2.04

  	
  Funding
  of Borrowings

  	
  19

  
	
  Section 2.05

  	
  Termination,
  Reduction and Increase of Commitments

  	
  19

  
	
  Section 2.06

  	
  Repayment
  of Revolving Loans; Evidence of Debt

  	
  21

  
	
  Section 2.07

  	
  Prepayment
  of Revolving Loans

  	
  22

  
	
  Section 2.08

  	
  Payments
  Generally; Pro Rata Treatment; Sharing of Setoffs

  	
  23

  
	
  Section 2.09

  	
  Letter
  of Credit Sub-Facility

  	
  24

  
	
  Section 2.10

  	
  Letter
  of Credit Participation and Funding Commitments

  	
  25

  
	
  Section 2.11

  	
  Absolute
  Obligation With Respect to Letter of Credit Payments; Cash Collateral;
  Replacement of Issuing Bank

  	
  26

  
	
  Section 2.12

  	
  Defaulting
  Lenders

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3.

  	
  INTEREST,
  FEES, YIELD PROTECTION, ETC.

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Interest

  	
  29

  
	
  Section 3.02

  	
  Interest
  Elections

  	
  29

  
	
  Section 3.03

  	
  Fees

  	
  30

  
	
  Section 3.04

  	
  Alternate
  Rate of Interest

  	
  31

  
	
  Section 3.05

  	
  Increased
  Costs; Illegality

  	
  32

  
	
  Section 3.06

  	
  Break
  Funding Payments

  	
  33

  
	
  Section 3.07

  	
  Taxes

  	
  34

  
	
  Section 3.08

  	
  Mitigation
  Obligations; Replacement of Lenders

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Organization;
  Powers

  	
  36

  
	
  Section 4.02

  	
  Authorization;
  Enforceability

  	
  37

  
	
  Section 4.03

  	
  Governmental
  Approvals; No Conflicts

  	
  37

  
	
  Section 4.04

  	
  Financial
  Condition; No Material Adverse Effect

  	
  37

  
	
  Section 4.05

  	
  Properties

  	
  37

  
	
  Section 4.06

  	
  Litigation
  and Environmental Matters

  	
  38

  
	
  Section 4.07

  	
  Compliance
  with Laws and Agreements

  	
  38

  
	
  Section 4.08

  	
  Regulated
  Entities

  	
  38

  
	
  Section 4.09

  	
  Taxes

  	
  38

  
	
  Section 4.10

  	
  ERISA

  	
  38

  
	
  Section 4.11

  	
  Disclosure

  	
  39

  
	
  Section 4.12

  	
  Subsidiaries

  	
  39

  
	
  Section 4.13

  	
  Federal
  Reserve Regulations

  	
  39

  
	
  Section 4.14

  	
  Rankings

  	
  39

  
	
  Section 4.15

  	
  Solvency

  	
  39

  



 


i

















 


	
  ARTICLE 5.

  	
  CONDITIONS

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Effective
  Date

  	
  40

  
	
  Section 5.02

  	
  Each
  Credit Event

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6.

  	
  AFFIRMATIVE
  COVENANTS

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Financial
  Statements and Other Information

  	
  41

  
	
  Section 6.02

  	
  Notices
  of Material Events

  	
  42

  
	
  Section 6.03

  	
  Existence;
  Conduct of Business

  	
  43

  
	
  Section 6.04

  	
  Payment
  of Obligations

  	
  43

  
	
  Section 6.05

  	
  Maintenance
  of Properties; Insurance

  	
  43

  
	
  Section 6.06

  	
  Books
  and Records; Inspection Rights

  	
  44

  
	
  Section 6.07

  	
  Compliance
  with Laws

  	
  44

  
	
  Section 6.08

  	
  Use of
  Proceeds

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7.

  	
  NEGATIVE
  COVENANTS

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Liens

  	
  44

  
	
  Section 7.02

  	
  Sale
  of Assets; Consolidation; Merger; Sale and Leaseback

  	
  46

  
	
  Section 7.03

  	
  Restrictive
  Agreements

  	
  47

  
	
  Section 7.04

  	
  Transactions
  with Affiliates

  	
  48

  
	
  Section 7.05

  	
  Capitalization
  Ratio

  	
  48

  
	
  Section 7.06

  	
  Consolidated
  Net Worth

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8.

  	
  EVENTS
  OF DEFAULT

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9.

  	
  THE
  ADMINISTRATIVE AGENT

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Appointment

  	
  51

  
	
  Section 9.02

  	
  Individual
  Capacity

  	
  51

  
	
  Section 9.03

  	
  Exculpatory
  Provisions

  	
  51

  
	
  Section 9.04

  	
  Reliance
  by Administrative Agent

  	
  51

  
	
  Section 9.05

  	
  Performance
  of Duties

  	
  52

  
	
  Section 9.06

  	
  Resignation;
  Successors

  	
  52

  
	
  Section 9.07

  	
  Non-Reliance
  by Credit Parties

  	
  52

  
	
  Section 9.08

  	
  Agents

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10.

  	
  MISCELLANEOUS

  	
  53

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Notices

  	
  53

  
	
  Section 10.02

  	
  Waivers;
  Amendments

  	
  54

  
	
  Section 10.03

  	
  Expenses;
  Indemnity; Damage Waiver

  	
  55

  
	
  Section 10.04

  	
  Successors
  and Assigns

  	
  56

  
	
  Section 10.05

  	
  Survival

  	
  59

  
	
  Section 10.06

  	
  Counterparts;
  Integration; Effectiveness

  	
  60

  
	
  Section 10.07

  	
  Severability

  	
  60

  
	
  Section 10.08

  	
  Right
  of Setoff

  	
  60

  
	
  Section 10.09

  	
  Governing
  Law; Jurisdiction; Consent to Service of Process

  	
  60

  
	
  Section 10.10

  	
  WAIVER
  OF JURY TRIAL

  	
  61

  
	
  Section 10.11

  	
  Headings

  	
  61

  
	
  Section 10.12

  	
  Confidentiality

  	
  61

  



 


ii

















 


	
  Section 10.13

  	
  Interest
  Rate Limitation

  	
  62

  
	
  Section 10.14

  	
  No
  Third Parties Benefited

  	
  62

  
	
  Section 10.15

  	
  USA
  PATRIOT Act Notice

  	
  62

  
	
  Section 10.16

  	
  No
  Fiduciary Duty

  	
  63

  



 


	
  SCHEDULES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.01

  	
  Capitalization

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.01

  	
  Consolidated Funded
  Debt

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.01

  	
  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-1

  	
  Form of Opinion of
  Jenner & Block LLP

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit B-2

  	
  Form of Opinion of
  Chet A. Richardson, Esq., Senior Vice President, General Counsel, and
  Chief Administrative Officer of the Borrower

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit C

  	
  Form of Note

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit D

  	
  Form of Borrowing
  Request

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit E

  	
  Form of Letter of Credit
  Request

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit F

  	
  Form of Increase
  Request

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit G

  	
  Form of Interest Election Request

  	
   

  



 


iii
















 


CREDIT AGREEMENT, dated as of May 7, 2010 (this “Agreement”), among HAWAIIAN ELECTRIC
INDUSTRIES, INC., as Borrower, the Lenders party hereto and JPMORGAN CHASE
BANK, N.A., as Administrative Agent and Issuing Bank.


 


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
Loan” or “ABR Borrowing”,
when used in reference to any Revolving Loan or Borrowing, refers to such
Revolving Loan, or the Revolving Loans comprising such Borrowing, 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 JPMCB, in its capacity as administrative agent for
the Lenders hereunder, or any successor thereto in such capacity.


 


“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 (a) the
outstanding principal balance of the Revolving Loans of all Lenders and (b) the
Aggregate Letter of Credit Exposure.


 


“Aggregate
Letter of Credit Commitments” means, at any time, the sum at
such time of the Letter of Credit Commitments of all Lenders.


 


“Aggregate
Letter of Credit Exposure” means, at any time, the sum at such
time of the Letter of Credit Exposure of all of the 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
$125,000,000.


 


“Alternate
Base Rate” means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the sum of
Federal Funds Rate in effect on such day plus 1/2 of 1% per annum and (c) the Adjusted
LIBO Rate for a one month Interest Period on such day (or if such day is not a
Business Day, the immediately preceding Business Day) plus 1% per annum, provided
that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be
based on the rate appearing on Reuters Screen LIBOR01 Page (or on any
successor or substitute page of such page) at approximately 11:00 a.m.
London time on such day.  Any change
in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Rate or the 


 


1

















 


Adjusted
LIBO Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Rate or the Adjusted LIBO 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 effect, the percentage set forth below
under the heading “Eurodollar Margin” and adjacent to such Pricing Level, (b) any
ABR Borrowings, at all times during which the applicable Pricing Level set
forth below is in effect, the percentage set forth below under the heading “ABR
Margin” and adjacent to such Pricing Level and (c) 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
  Level

  	
   

  	
  Issuer Ratings

  (S&P/Moody’s)

  	
   

  	
  Commitment

  Fee Rate

  	
   

  	
  Eurodollar

  Margin

  	
   

  	
  ABR

  Margin

  	
   

  
	
  I

  	
   

  	
  (A-/A3) or higher

  	
   

  	
  0.25

  	
  %

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  
	
  II

  	
   

  	
  (BBB+/Baa1)

  	
   

  	
  0.30

  	
  %

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  
	
  III

  	
   

  	
  (BBB/Baa2)

  	
   

  	
  0.40

  	
  %

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  
	
  IV

  	
   

  	
  (BBB-/Baa3)

  	
   

  	
  0.45

  	
  %

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  
	
  V

  	
   

  	
  (BB+/Ba1) or lower

  	
   

  	
  0.50

  	
  %

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  



 


If the
applicable Issuer 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., an Issuer 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., an Issuer Rating of BBB-/Baa1 results in Pricing Level
III and an Issuer 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 Administrative Agent (in consultation with 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 Commitments; provided that,
in the case of Section 2.12 when a Defaulting Lender shall exist, “Applicable
Percentage” shall mean the percentage of the total Commitments (disregarding
any Defaulting Lender’s Commitments) represented by such Lender’s
Commitments.  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
and to any Lender’s status as a Defaulting Lender at the time of such
determination.


 


“Approved
Fund” means, with respect to any Lender, any Person (other than
a natural person) that is (or will be) engaged in making, purchasing holding or
otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business that is administered or managed by (a) such
Lender or (b) an Affiliate of such Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.


 


2

















 


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


 


“Bankruptcy
Code” means the United States Bankruptcy Code of 1978, as
amended.


 


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


 


“Borrower”
means Hawaiian Electric Industries, 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” means any day other than a Saturday, Sunday or a day when
banks are authorized by law to close in New York, New York or Honolulu, Hawaii
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 or a power producer which is not an Affiliate of the
Borrower shall constitute a Capital Lease Obligation.


 


“Capitalization”
means, at any date of determination with respect to the Borrower on a
non-consolidated basis, the sum of (a) Funded Debt, (b) preferred
stock and (c) Common Stock Equity. 
The Borrower’s Capitalization as of December 31, 2009 is annexed
hereto as Schedule 1.01 (Capitalization); for the avoidance of
doubt, such Schedule is attached hereto for illustrative purposes only and
is not intended to be a calculation of Capitalization on or for any subsequent
date of determination.


 


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


 


“Change
in Control” means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of
the SEC thereunder as in effect on the Effective Date) of shares representing
more than 50% of the aggregate ordinary voting power represented by the issued
and outstanding capital stock of the Borrower; and (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of
the Borrower by Persons who were neither (i) nominated by the board of
directors of the Borrower, nor (ii) appointed by directors so nominated.


 


3

















 


“Change
in Law” means the occurrence after the Effective Date 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 and the Letter of Credit Commitments.


 


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


 


“Commitment
Termination Date” means the earliest of (a) May 7,
2013, (b) the date on which the Commitments are terminated in whole
pursuant to Section 2.05 and (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 on common stock and preferred stock, (c) additional
paid-in capital, and (d) retained earnings, excluding Accumulated Other
Comprehensive Income or Loss (AOCI) as defined by GAAP, as such definitions now
exist and as they may hereafter be amended but subject to Section 1.03
except with respect to matters affecting AOCI, and excluding adjustments made
directly to stockholders’ equity as a result of any future issued accounting
standards, adopted by the Borrower, that will require adjustments directly to
stockholders’ equity.


 


“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.


 


“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 on common stock and
preferred stock, (c) additional paid-in capital, and(d) retained
earnings, excluding Accumulated Other Comprehensive Income or Loss (AOCI) as
defined by GAAP, as such definitions now exist and as they may hereafter be
amended but subject to Section 1.03 except with respect to matters
affecting AOCI, and excluding 
adjustments made directly to stockholders’ equity as a result of any
future issued accounting standards, adopted by the Borrower, that will require
adjustments directly to stockholders’ equity.


 


“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 or the 


 


4

















 


HECO
Credit Agreement), net of cash collateral or other 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) net long-term debt (as so
defined) 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 or the HECO
Credit 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 Indebtedness of
independent power producers, or other power producers which are not Affiliates
of the Borrower, included on a balance sheet of the Borrower by reason of the
application of Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) 810 (formerly referred to as FASB Interpretation No. 46
(revised December 2003)) shall constitute Consolidated Funded Debt. A
schedule of Consolidated Funded Debt as of December 31, 2009 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 Consolidated Funded
Debt on or for any subsequent date of determination.


 


“Consolidated
Net Worth” means, as of the date of any determination thereof,
the sum of the Consolidated Common Stock Equity and preferred stock of the
Borrower and its Subsidiaries.


 


“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 (a) the outstanding principal balance of such
Lender’s Revolving Loans, plus (b) such Lender’s Letter of Credit
Exposure.


 


“Credit
Parties” means the Administrative Agent, the Issuing Bank 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, 2009 and (b) any
current reports of the Borrower to the SEC 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.


 


“Defaulting
Lender” means any Lender, as reasonably determined by the
Administrative Agent, that has (a) failed to fund any portion of its
Revolving Loans or participations in Letters of Credit within three (3) Business
Days of the date required to be funded by it hereunder unless such failure to
fund is based on such Lender’s good faith determination that the conditions
precedent to such funding under this Agreement have not been satisfied or
waived and such Lender has notified the Administrative Agent in writing of such
determination, (b) notified the Borrower, the Administrative Agent, the
Issuing Bank or any other Lender in writing that it does not intend to comply
with any of its funding obligations under this Agreement or has made a public
statement to the effect that it does not intend to comply with its funding
obligations under this Agreement or under other agreements in which it commits
to extend credit, (c) failed, within three (3) Business Days after
request by the Administrative Agent, to confirm that it will comply with the
terms of this Agreement relating to its obligations to fund prospective
Revolving Loans and participations in then outstanding Letters of Credit
(provided that any such Lender shall cease 


 


5

















 


to
be a Defaulting Lender under this clause (c) upon receipt of such
confirmation by the Administrative Agent), (d) otherwise failed to pay
over to the Administrative Agent or any other Lender any other amount required
to be paid by it hereunder within three (3) Business Days of the date when
due, unless the subject of a good faith dispute, or (e) (i) has been adjudicated as, or determined by any
Governmental Authority having regulatory authority over such Person or its
assets to be,  insolvent or has a parent company that has been adjudicated as, or determined by any
Governmental Authority having regulatory authority over such Person or its
assets to be, insolvent or (ii) become the subject of a bankruptcy
or insolvency proceeding, or has had a receiver, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or custodian, appointed for
it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment or has a
parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or custodian appointed for it, or
has taken any action in furtherance of, or indicating its consent to, approval
of or acquiescence in any such proceeding or appointment; provided,
that a Lender shall not become a Defaulting Lender solely as the result of (x) the
acquisition or maintenance of an ownership interest in such Lender or a Person
controlling such Lender or (y) the exercise of control over a Lender or a
Person controlling such Lender, in each case, by a Governmental Authority or an
instrumentality thereof.


 


“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 Exchange Act of 1934 and the rules and
regulations promulgated thereunder, or (b) disclosed by the Borrower to
the Lenders (either directly or indirectly 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 financial
institution approved by (i) the Administrative Agent, (ii) the
Issuing Bank and (iii) unless a Default has occurred under Article 8(a),
Article 8(i) or Article 8(j), 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 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, 


 


6

















 


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
failure with respect to any Plan to pay the “minimum required contribution” (as
defined in Section 430 of the Code or Section 303 of ERISA), unless
waived; (c) 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; (d) 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; (e) 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 (f) 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
Loan” or “Eurodollar Borrowing”,
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.  For the avoidance of doubt, a
Revolving Loan that bears interest at a rate determined pursuant to clause (c) of
the definition of Alternate Base Rate shall, for all purposes of this
Agreement, be deemed to be an ABR Loan and not a Eurodollar Loan.


 


“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 Document, (a) income,
franchise or other 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
Credit Party or other recipient is organized or in which its principal office
is located or 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, (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 


 


7

















 


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) and
(d) any taxes imposed as a result of a Foreign Lender’s failure to satisfy
the reporting requirements as set forth in Sections 1471 and 1472 of the Code
(or regulation or administrative guidance promulgated thereunder).


 


“Existing
Credit Agreement” means that certain Credit Agreement, dated as
of March 31, 2006 (as amended, modified, or supplemented and as in effect
on the Effective Date), between 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 Mellon (formerly known as The
Bank of New York), as administrative agent and issuing bank thereunder.


 


“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; and provided, further, that if such rate ceases to be so
published, the Federal Funds Rate for any day that is a Business day shall be
the weighted average of the quotations for the day of such transactions
received by the Administrative Agent from three federal funds brokers of
recognized standing selected by it.


 


“Financial
Officer” means the senior financial vice president, the
principal accounting officer, the treasurer or the controller 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.


 


“Funded
Debt” means, at any date of determination with respect to the
Borrower on a non-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 cash collateral or other 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) net long-term
debt (as so defined) 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 Indebtedness of
independent power producers, or other power producers which are not Affiliates
of the Borrower, 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 Funded Debt. A schedule of Funded
Debt as of December 31, 2009 is annexed hereto as Schedule 1.01
(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.


 


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


 


8

















 


“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,


 


(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 amount of any Guarantee
of any guarantor shall be deemed to be the lower of (a) an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee is made and (b) the maximum amount for which such guarantor
may be liable pursuant to the terms of the instrument embodying such Guarantee,
unless such primary obligation and the maximum amount for which such guarantor
may be liable are not stated or determinable, in which case the amount of such
Guarantee shall be such guarantor’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.  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.


 


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


 


“HECO
Cash Manager” means, to the extent having received a legally
valid delegation of authority from the Borrower with respect to borrowings and
investments to be made by the Borrower and its Subsidiaries, the Cash
Management Administrator of HECO, the Treasury Analyst of HECO, or the
Securities Administrator of HECO, or any other person having received such
authority; it being understood and agreed that (i) such person need not be
a Financial Officer or an employee of the Borrower, and (ii) the
Administrative Agent shall be entitled to rely on telephonic notice received
from the HECO Cash Manager for all purposes of Sections 2.03, 2.07(e) and
3.02(b).


 


9
















 


“HECO
Credit Agreement” means the Credit Agreement, dated the date
hereof, among HECO, the lenders party thereto, and JPMCB, as Administrative
Agent, as amended, modified, supplemented, replaced or refinanced from time to
time.


 


“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.


 


“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 accounts payable incurred in
the ordinary course of business),


 


(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.  Indebtedness of the Borrower or any
Subsidiary shall not include deposit liabilities, securities sold pursuant to
agreements to repurchase or advances from the Federal Home Loan Bank.


 


“Indemnified
Taxes” means Taxes other than (i) Excluded Taxes or (ii) Other
Taxes.


 


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


 


10

















 


“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 G.


 


“Interest
Payment Date” means (a) with respect to the accrued
interest on any ABR Loan, the first Business Day of each January, April, July and
October and the Commitment Termination Date, and (b) with respect to
the accrued interest on 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 and the Commitment Termination Date.


 


“Interest
Period” means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending (x) two weeks
thereafter or (y) 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 selected pursuant to
clause (y) above 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.


 


“Issuer
Ratings” means the Borrower’s corporate issuer ratings from
either S&P or Moody’s.


 


“Issuing
Bank” means JPMCB in its capacity as issuer of the Letters of
Credit, or any successor thereto in such capacity as provided in Section 2.1(c).


 


“JPMCB”
means JPMorgan Chase Bank, N.A., a national banking association.


 


“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.


 


“Letter
of Credit” has the meaning assigned to such term in Section 2.09.


 


11

















 


“Letter
of Credit Commitment” means the commitment of the Issuing Bank
to issue Letters of Credit having an aggregate outstanding face amount up to
$50,000,000 and the commitment of each Lender to participate in the Letter of
Credit Exposure as set forth in Section 2.10 in the maximum amount set
forth in Schedule 2.01 under the heading “Letter of Credit
Commitment” or in an Assignment and Acceptance Agreement or other documents
pursuant to which it became a Lender, as such amount may be reduced from time
to time in accordance herewith.


 


“Letter
of Credit Exposure” means, at any time, (a) in respect of
all the Lenders, the sum at such time, without duplication, of (i) the
aggregate undrawn face amount of the outstanding Letters of Credit, (ii) the
aggregate amount of unpaid drafts drawn on all Letters of Credit, and (iii) the
aggregate unpaid Reimbursement Obligations (after giving effect to any
Revolving Loans made on such date to pay any such Reimbursement Obligations),
and (b) in respect of any Lender, an amount equal to such Lender’s
Commitment Percentage multiplied by the amount determined under clause (i) of
this definition.


 


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


 


“Letter
of Credit Request” means, a request by the Borrower for the
issuance of a Letter of Credit in the form of Exhibit E.


 


“LIBO
Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Reuters Screen LIBOR01 Page (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 Reuters Screen LIBOR01 Page (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 of the Administrative Agent 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, the Reimbursement
Agreements and, if applicable, any Hedging Agreement between the Borrower and
any Lender.


 


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


 


“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, 


 


12

















 


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 (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 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.


 


“Material
Subsidiary Indebtedness” means all Indebtedness of any
Significant Subsidiaries or obligations of any Significant Subsidiary in
respect of one or more Hedging Agreements in an aggregate principal amount
exceeding $50,000,000.  For purposes of
determining Material Subsidiary Indebtedness, the “principal amount” of the
obligations of 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 such Significant Subsidiary would be required to pay if
such Hedging Agreement were terminated at such time.


 


“Material
Subsidiary Indebtedness Event” means;


 


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


 


(b)           any event or condition occurs that results in any Material
Subsidiary 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 Subsidiary Indebtedness or any
trustee or agent on its or their behalf to cause any Material Subsidiary
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity, provided,
that no Material Subsidiary Indebtedness Event shall be deemed to have occurred
under this definition as a result of (i) any notice of voluntary
prepayment delivered by any Significant Subsidiary with respect to any
Indebtedness, (ii) any voluntary sale of assets by any 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 Subsidiary Indebtedness (other than the
exercise of a remedy for an event of default under the applicable contract or
agreement).


 


“Moody’s”
means Moody’s Investors Service, Inc., or its successors


 


“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, other than Excluded
Taxes.


 


13

















 


“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.


 


“Permitted
Investments” means, at any time, investments as allowed in
accordance with the HEI and HECO Cash Management Investment Guidelines dated March 1,
1991, as amended on December 21, 1993, in each case as disclosed to the
Administrative Agent prior to the Effective Date and as the same may be amended
from time to time with the written consent of the Administrative Agent, such
consent not to be unreasonably delayed or withheld.


 


“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 Issuer Rating is (a) A-
or higher by S&P or (b) A3 or higher by Moody’s.


 


“Pricing
Level II” means at any time the Borrower’s Issuer 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 Issuer 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 Issuer 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 Issuer 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 JPMCB 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 JPMCB in connection with extensions of credit to
borrowers.


 


“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 an
option to purchase, a security interest, or an interest as lessee under an
operating lease and (b) such Indebtedness is incurred at the time of, or
within 90 days after, such purchase.


 


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


 


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


 


14

















 


“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.


 


“Reimbursement
Agreement” has the meaning assigned to such term in Section 2.09(b).


 


“Reimbursement
Obligation” means the obligation of the Borrower to reimburse
the Issuing Bank for amounts drawn under a Letter of Credit.


 


“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 Credit Exposure greater than or equal to 50% of the Aggregate Credit
Exposure (or, if there are no Revolving Loans then outstanding and no Letter of
Credit Exposure, 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
Person, (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 of such Person.


 


“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 Article 2.


 


“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.


 


15

















 


“S&P”
means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.,
or its successors.


 


“Significant
Subsidiary” means each of HECO, American Savings Bank, F.S.B.,
American Savings Holdings, Inc. and any other Subsidiary having 15% or
more of the total assets, or 15% or more of the total operating income, of the
Borrower and its Subsidiaries on a consolidated basis, in either case as the
consolidated total assets and consolidated total operating income of the
Borrower and its Subsidiaries are reflected in the most recent annual or
quarterly report filed by the Borrower with the SEC.


 


“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).  Such reserve
percentages shall include those imposed pursuant to Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency 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 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.


 


“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.  For the avoidance
of doubt, a Revolving Loan that bears interest at a rate determined pursuant to
clause (c) of the definition of Alternate Base Rate shall, for all
purposes of this Agreement, be deemed to be an ABR Loan and not a Eurodollar
Loan.


 


16

















 


“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 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. 
Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made, without
giving effect to any election under Accounting Standards Codification 825-10-25
(previously referred to as Statement of Financial Accounting Standards 159) (or
any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any Indebtedness or other
liabilities of the Borrower or any Subsidiary at “fair value”, as defined
therein.


 


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.


 


17

















 


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 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 (and any ABR Loan, the interest on which is determined pursuant
to clause (c) of the definition of Alternate Base Rate) 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 Eurodollar 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, which may be given by the
President of the Borrower, a Financial Officer or the HECO Cash Manager, (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 (except as
otherwise provided in Section 3.04) 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 of the Borrower or a Financial Officer.  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;


 


18

















 


(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


 


(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 the
proceeds of 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 such 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 was made available by the
Administrative Agent 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 per annum 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.  Such
payment by the Borrower shall be without prejudice to its rights against each
Lender who fails to fund its share of any Borrowing.


 


Section 2.05                             Termination,
Reduction and Increase of Commitments


 


(a)           Unless previously terminated, the
Revolving Commitments and the Letter of Credit Commitments shall terminate on
the Commitment Termination 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 and/or any concurrent cash collateralization of the
Letter of Credit Exposure, the 


 


19

















 


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 two 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; provided, that a notice of
termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied.  Any
termination or reduction of the Commitments hereunder shall be permanent but
without prejudice to the rights of the Borrower under paragraph (d) below.  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 and be continuing, the Borrower may at any time and from time to
time, on or before the Commitment Termination Date referred to in clause (a) of
the definition thereof, 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 and Letter of Credit Commitment, and/or
any other Eligible Assignee reasonably satisfactory to the Administrative Agent
and the Borrower, to provide a new Revolving Commitment and a new Letter of
Credit Commitment, by submitting an Increase Request in the form of Exhibit F
(an “Increase Request”),
duly executed by the Borrower and each such Lender or Eligible Assignee, as the
case may be.  Thereupon, 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 the sum of (x) $150,000,000 plus (y) the amount of the Revolving
Commitment of each Lender that becomes a Defaulting Lender;


 


(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;


 


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


 


20
















 


(iv)          the Administrative Agent shall have
received documents (including, without limitation, one or more opinions of
counsel) consistent with those delivered on the Effective Date as to the
corporate power and authority of the Borrower to borrow hereunder after giving
effect to such increase;


 


(v)           if Revolving 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 Revolving 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 (it being understood and agreed that any reallocation
made pursuant to this clause (v) shall require the Borrower to make
payment pursuant to Section 3.06 with respect to any affected Eurodollar
Loans); and


 


(vi)          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).


 


Section 2.06                             Repayment
of Revolving 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 Indebtedness 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, if applicable, 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
except for clearly demonstrated error; 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.


 


(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).


 


21

















 


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 Aggregate 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, and/or cash
collateralize the Letter of Credit Exposure, in an amount sufficient to
eliminate such excess.


 


(c)           Mandatory Prepayments.


 


(i)            The Borrower shall immediately
prepay the Revolving Loans, by an amount equal to the excess, if any, of the
aggregate outstanding principal balance of the Revolving Loans over the
Aggregate Revolving Commitments.


 


(ii)           Simultaneously with each reduction or
termination of the Revolving Commitments, (1) in the event that the
Aggregate Letter of Credit Commitments shall exceed the Aggregate Revolving
Commitments as so reduced or terminated, the Aggregate Letter of Credit
Commitments shall be automatically reduced, and/or the Letter of Credit
Exposure shall be cash collateralized, by an amount equal to such excess, and (2) the
Borrower shall prepay the Revolving Loans by an amount equal to the excess, if
any, 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, if and to the extent required by Section 3.01(d),
prepay all accrued interest on the amount prepaid through the date of
prepayment.


 


(e)           The Borrower shall notify the Administrative Agent
by telephone, which may be given by the President of the Borrower, a Financial
Officer or the HECO Cash Manager (confirmed by facsimile transmission executed
by the President of the Borrower or a Financial Officer) of any prepayment
under Section 2.07(a) (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; provided, that if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments contemplated by Section 2.05(c),
then such notice of prepayment may also be conditional and may be revoked if such
notice of termination is revoked in accordance with Section 2.05(c).  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 Section 2.07(a) shall,
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 Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued
interest if and to the extent required by Section 3.01.


 


22

















 


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 10
South Dearborn Street, Chicago, Illinois, 60603, or such other office as to
which the Administrative Agent may notify the other parties hereto, except that
payments pursuant to Sections 3.03(b) (with respect to the fronting fee
and other amounts payable to the Issuing Bank), 3.03(c), 3.05, 3.06, 3.07,
3.08, 10.03 and 10.04 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 per annum 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 of accrued 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,
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.  The Borrower consents to
the foregoing and agrees, to the extent it may effectively 


 


23

















 


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 per annum 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.


 


Section 2.09                             Letter
of Credit Sub-Facility


 


(a)           Subject to the terms and conditions of this
Agreement, the Issuing Bank agrees, in reliance on the agreement of the other
Lenders set forth in Section 2.10, to issue standby letters of credit (the
“Letters of Credit”;
each, individually, a “Letter of
Credit”) during the Availability Period for the account of the
Borrower, provided that immediately after the issuance of each Letter of Credit
(i) the Letter of Credit Exposure of each Lender (whether or not the
conditions for drawing under any Letter of Credit have or may be satisfied)
would not exceed its Letter of Credit Commitment and (ii) the Aggregate
Credit Exposure would not exceed the Aggregate Revolving Commitment. Each
Letter of Credit issued pursuant to this Section shall have an expiration
date which shall be not later than the earlier of (i) twelve months after
the date of issuance thereof and (ii) five Business Days before the
Commitment Termination Date referred to in clause (a) of the definition
thereof, provided that any Letter of Credit with a twelve-month tenor may
provide for the periodic and/or successive renewals or extensions thereof for
additional twelve-month periods not expiring after the date referred to in
clause (ii) above.  No Letter of
Credit shall be issued if the Administrative Agent, or the Required Lenders by
notice to the Administrative Agent no later than 1:00 p.m. New York City
time one Business Day prior to the requested date of issuance of such Letter of
Credit, shall have determined that any condition set forth in Section 5.01
or 5.02 has not been satisfied.


 


(b)           Each Letter of Credit shall be issued for the
account of the Borrower in support of an obligation of the Borrower or a
Subsidiary in favor of a beneficiary who has requested the issuance of such
Letter of Credit as a condition to a transaction entered into in connection
with the Borrower’s or such Subsidiary’s ordinary course of business.  The Borrower shall give the Administrative
Agent a Letter of Credit Request for the issuance of each Letter of Credit by
2:00 p.m. New York City time, two Business Days prior to the requested
date of issuance.  If requested by the
Issuing Bank, each Letter of Credit Request shall be accompanied by the Issuing
Bank’s


 


24

















 


standard application and
agreement for standby letters of credit (each, a “Reimbursement Agreement”) executed by the President
of the Borrower or a Financial Officer, and shall specify (i) the
beneficiary of such Letter of Credit and the obligations of the Borrower or
such Subsidiary in respect of which such Letter of Credit is to be issued, (ii) the
Borrower’s proposal as to the conditions under which a drawing may be made
under such Letter of Credit and the documentation to be required in respect
thereof, (iii) the maximum amount to be available under such Letter of
Credit, and (iv) the requested dates of issuance and expiration. Upon
receipt of such Letter of Credit Request from the Borrower, the Administrative
Agent shall promptly notify the Issuing Bank and each other Lender
thereof.  Each Letter of Credit shall be
in form and substance reasonably satisfactory to the Issuing Bank, with such
provisions with respect to the conditions under which a drawing may be made
thereunder and the documentation required in respect of such drawing as the
Issuing Bank shall reasonably require. 
Each Letter of Credit shall be used solely for the purposes described
therein.  The Issuing Bank shall, on the
proposed date of issuance and subject to the terms and conditions of the
Reimbursement Agreement, if any, and to the other terms and conditions of this
Agreement, issue the requested Letter of Credit.


 


(c)           Each payment by the Issuing Bank of a draft drawn
under a Letter of Credit shall give rise to an obligation on the part of the
Borrower to reimburse the Issuing Bank by 3:00 P.M. New York City time two
Business Days after the date of such payment together with interest on the
amount of such payment from the date such payment was made by the Issuing Bank.


 


Section 2.10                             Letter
of Credit Participation and Funding Commitments


 


(a)           Each Lender hereby unconditionally, irrevocably and
severally (and not jointly) for itself only and without any notice to or the
taking of any action by such Lender, takes an undivided participating interest
in the obligations of the Issuing Bank under and in connection with each Letter
of Credit in an amount equal to such Lender’s Commitment Percentage of the
amount of such Letter of Credit.  Each
Lender shall be liable to the Issuing Bank for its Commitment Percentage of the
unreimbursed amount of any draft drawn and honored under each Letter of
Credit.  Each Lender shall also be liable
for an amount equal to the product of its Commitment Percentage and any amounts
paid by the Borrower that are subsequently rescinded or avoided, or must
otherwise be restored or returned.  Such
liabilities shall be unconditional and without regard to the occurrence of any
Default or Event of Default or the compliance by the Borrower with any of its
obligations under the Loan Documents.


 


(b)           The Issuing Bank will promptly notify the Administrative
Agent, and the Administrative Agent will promptly notify the Borrower and each
Lender (which notice shall be promptly confirmed in writing) of the date and
the amount of any draft presented under any Letter of Credit with respect to
which full reimbursement of payment is not made by the Borrower as provided in Section 2.09(c),
and forthwith upon receipt of such notice, such Lender (other than the Issuing
Bank in its capacity as a Lender) shall make available to the Administrative
Agent for the account of the Issuing Bank its Commitment Percentage of the
amount of such unreimbursed draft at the office of the Administrative Agent
specified in Section 10.01, in lawful money of the United States and in
immediately available funds, before 4:00 p.m., New York City time, on the
day such notice was given by the Administrative Agent, if the relevant notice
was given by the Administrative Agent at or prior to 1:00 p.m., New York
City time, on such day, and before 12:00 noon, New York City time, on the next
Business Day, if the relevant notice was given by the Administrative Agent
after 1:00 p.m., New York City time, on such day.  The Administrative Agent shall distribute the
payments made by each Lender (other than the Issuing Bank in its capacity as a
Lender) pursuant to the immediately preceding sentence to the Issuing Bank
promptly upon receipt thereof in like funds as received.  In the event the Administrative Agent


 


25

















 


has not in fact made available
to the Issuing Bank such payment within one Business Day of the receipt
thereof, then the Administrative Agent agrees to pay to the Issuing Bank
forthwith on demand 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. Each Lender shall indemnify and hold harmless the Administrative
Agent and the Issuing Bank from and against any and all losses, liabilities
(including liabilities for penalties), actions, suits, judgments, demands,
costs and expenses (including, without limitation, reasonable attorneys’ fees
and expenses of counsel to the Issuing Bank as the issuer of the relevant
Letter of Credit) resulting from any failure on the part of such Lender to
provide, or from any delay in providing, the Administrative Agent with such
Lender’s Commitment Percentage of the amount of any payment made by the Issuing
Bank under a Letter of Credit in accordance with this subsection (b) (except
in respect of losses, liabilities or other obligations suffered by the Issuing
Bank resulting from the gross negligence or willful misconduct of the Issuing
Bank). If a Lender does not make available to the Administrative Agent when due
such Lender’s Commitment Percentage of any unreimbursed payment made by the
Issuing Bank under a Letter of Credit (other than payments made by the Issuing
Bank by reason of its gross negligence or willful misconduct), such Lender
shall be required to pay interest to the Administrative Agent for the account
of the Issuing Bank on such Lender’s Commitment Percentage of such payment at a
rate of interest per annum equal to the Federal Funds Rate for the first three
days after the due date of such payment until the date such payment is received
by the Administrative Agent and the Federal Funds Rate plus 2%
thereafter.


 


(c)           Whenever the Administrative Agent is reimbursed by
the Borrower, for the account of the Issuing Bank, for any payment under a
Letter of Credit and such payment relates to an amount previously paid by a
Lender in respect of its Commitment Percentage of the amount of such payment
under such Letter of Credit, the Administrative Agent (or the Issuing Bank, to
the extent that the Administrative Agent has paid the same to the Issuing Bank)
will pay over such payment to such Lender before 4:00 p.m., New York City
time, on the day such payment from the Borrower is received, if such payment is
received at or prior to 2:00 p.m., New York City time, on such day, or
before 12:00 noon, New York City time, on the next succeeding Business Day, if
such payment from the Borrower is received after 2:00 p.m., New York City
time, on such day.


 


Section 2.11                             Absolute
Obligation With Respect to Letter of Credit Payments; Cash Collateral;
Replacement of Issuing Bank


 


(a)           The Borrower’s obligation to reimburse the
Administrative Agent for the account of the Issuing Bank in respect of a Letter
of Credit for each payment under or in respect of such Letter of Credit shall
be absolute and unconditional under any and all circumstances and irrespective
of any set-off, counterclaim or defense to payment which the Borrower may have
or have had against the beneficiary of such Letter of Credit, the
Administrative Agent, the Issuing Bank, as issuer of such Letter of Credit, any
Lender or any other Person, including, without limitation, (i) any defense
based on the failure of any drawing to conform to the terms of such Letter of
Credit, (ii) any drawing document proving to be forged, fraudulent or
invalid in any respect, (iii) the legality, validity, regularity or
enforceability of such Letter of Credit or this Agreement, (iv) any
payment by the Issuing Bank under a Letter of Credit against presentment of a
draft or other document that does not comply with the terms of such Letter of
Credit or (v) any other event or circumstance that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower’s obligations hereunder; 


 


26

















 


provided, that, with respect to
any Letter of Credit, the foregoing shall not relieve the Issuing Bank of any
liability it may have to the Borrower for any actual damages sustained by the
Borrower arising from a wrongful payment under such Letter of Credit made as a
result of the Issuing Bank’s gross negligence or willful misconduct.


 


(b)           If any Event of Default shall occur and be
continuing, the Borrower shall within one Business Day from the time it
receives a demand therefor from the Administrative Agent pursuant to Article 8,
deposit in an account with the Administrative Agent, for the benefit of the
Lenders, an amount in cash equal to one hundred percent (100%) of the Aggregate
Letter of Credit Exposure as of such date. 
Such deposit shall be held by the Administrative Agent as collateral for
the payment and performance of the Reimbursement Obligations.  The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account.  The Administrative Agent shall
invest such deposits in Permitted Investments and interest or profits on such
investments shall accumulate in such account. 
The moneys in such account shall (i) automatically be applied by
the Administrative Agent to reimburse the Issuing Bank for Reimbursement Obligations,
and (ii) be held for the satisfaction of the Reimbursement Obligations of
the Borrower.


 


(c)           The Issuing Bank may be replaced at any time by
written agreement among the Borrower, the Administrative Agent, the replaced
Issuing Bank and the successor Issuing Bank, it being understood and agreed
that such parties shall not unreasonably delay or withhold their consent to any
such agreement.  The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank.  At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of
the replaced Issuing Bank pursuant to Section 3.03(b).  From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term “Issuing
Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require.  After the replacement of an
Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of
Credit.


 


Section 2.12                             Defaulting
Lenders


 


Notwithstanding any provision
of this Agreement to the contrary, if any Lender becomes a Defaulting Lender,
then the following provisions shall apply for so long as such Lender is a
Defaulting Lender:


 


(a)           fees shall
cease to accrue on the unfunded portion of the Commitment of such Defaulting
Lender pursuant to Section 3.03(a);


 


(b)           the Commitments
and Credit Exposure of such Defaulting Lender shall not be included in
determining whether all Lenders or the Required Lenders have taken or may take
any action hereunder (including any consent to any amendment, modification or
waiver pursuant to Section 10.02); provided that (i) any
waiver, amendment or modification requiring the consent of all Lenders or each
affected Lender which affects such Defaulting Lender differently than other
affected Lenders shall require the consent of such Defaulting Lender and (ii) any
amendment or modification that increases, or extends the maturity of, such
Defaulting Lender’s Commitment or reduces the principal amount of, or rate of
interest on, any Revolving Loan made by such Defaulting Lender, shall require
the consent of such Defaulting Lender;


 


27

















 


(c)           if any
Letter of Credit Exposure exists at the time a Lender becomes a Defaulting
Lender then:


 


(i)            all or any part of such Letter of Credit Exposure
shall be reallocated among the non-Defaulting Lenders in accordance with their
respective Applicable Percentages  but
only to the extent (x) the sum of all non-Defaulting Lenders’ Credit
Exposures plus such Defaulting Lender’s Letter of Credit Exposure does not
exceed the total of all non-Defaulting Lenders’ Commitments and (y) the
conditions set forth in Section 5.02 are satisfied at such time;


 


(ii)           if the reallocation described in clause (i) above
cannot, or can only partially, be effected, the Borrower shall within two (2) Business
Days following notice by the Administrative Agent cash collateralize such
Defaulting Lender’s Letter of Credit Exposure (after giving effect to any
partial reallocation pursuant to clause (i) above) in accordance with the
procedures set forth in Section 2.11(b) for so long as such Letter of
Credit Exposure is outstanding;


 


(iii)          if the Borrower cash collateralizes any portion
of such Defaulting Lender’s Letter of Credit Exposure pursuant to this Section 2.12(c),
the Borrower shall not be required to pay any fees to such Defaulting Lender
pursuant to Section 3.03(b) with respect to such Defaulting Lender’s
Letter of Credit Exposure during the period such Defaulting Lender’s Letter of
Credit Exposure is cash collateralized;


 


(iv)          if the Letter of Credit Exposure of the
non-Defaulting Lenders is reallocated pursuant to this Section 2.12(c),
then the fees payable to the Lenders pursuant to Sections 3.03(a) and 3.03(b) shall
be adjusted in accordance with such non-Defaulting Lenders’ Applicable
Percentages; or


 


(v)           if any Defaulting Lender’s Letter of Credit
Exposure is neither cash collateralized nor reallocated pursuant to this Section 2.12(c),
then, without prejudice to any rights or remedies of the Issuing Bank or any
Lender hereunder, all letter of credit fees payable under Section 3.03(b) with
respect to such Defaulting Lender’s Letter of Credit Exposure shall be payable
to the Issuing Bank until such Letter of Credit Exposure is cash collateralized
and/or reallocated; and


 


(d)           if and so long as any Lender is a Defaulting Lender, the Issuing Bank shall not
be required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure will be 100% covered by the Commitments of
the non-Defaulting Lenders and/or cash collateral will be provided by the
Borrower in accordance with Section 2.12(c), and participating interests
in any such newly issued or increased Letter of Credit shall be allocated among
non-Defaulting Lenders in a manner consistent with Section 2.12(c)(i) (and
Defaulting Lenders shall not participate therein).


 


In the event that the Administrative Agent, the
Borrower and the Issuing Bank each agrees that a Defaulting Lender has
adequately remedied all matters that caused such Lender to be a Defaulting
Lender, then the Letter of Credit Exposure of the Lenders shall be readjusted
to reflect the inclusion of such Lender’s Commitments and on such date such
Lender shall purchase at par such of the Revolving Loans of the other Lenders
as the Administrative Agent shall determine may be necessary in order for such
Lender to hold such Revolving Loans in accordance with its Applicable
Percentage, and all cash collateral and accrued interest thereon held by
the Administrative Agent or the Issuing Bank shall be returned to the Borrower
forthwith.


 


28
















 


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


 


Section 3.01                             Interest


 


(a)           ABR Loans and unpaid Reimbursement Obligations
shall bear interest at the Alternate Base Rate plus the Applicable
Margin.


 


(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 Reimbursement Obligation 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 or Reimbursement Obligation, 2%
plus the rate otherwise applicable to such Revolving Loan or Reimbursement
Obligation as 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 (subject to the
provisions of Section 2.12) 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,
which may be made by the President of the


 


29

















 


Borrower, a Financial Officer
or by the HECO Cash Manager, 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, except as otherwise provided in Section 3.04,
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 President of the
Borrower or a Financial Officer.


 


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


 


(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 average daily amount of
the unused Revolving 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
Revolving Commitment terminates.  Accrued
commitment fees shall be payable in arrears on the first Business Day of 


 


30

















 


January, April, July and October of
each year and on the Commitment Termination Date, commencing on the first such
date to occur after the date hereof.


 


(b)           The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a fee (the “Letter of Credit Fee”) with respect to each Letter of
Credit, payable quarterly in arrears during the period from and including the
date of issuance thereof to and including the expiration or cancellation date
thereof (a) on the first Business Day of each January, April, July and
October of each year, (b) upon such expiration or cancellation date
and (c) on the Commitment Termination Date, at a rate per annum equal to
the Applicable Margin on Eurodollar Borrowings on the average daily amount of
the Letter of Credit Exposure (excluding any portion thereof attributable to
unreimbursed Reimbursement Obligations). 
The Borrower also agrees to
pay to the Issuing Bank for its own account a fronting fee, which shall accrue
at the rate of 0.125% per annum on the average daily amount of the Letter of
Credit Exposure (excluding any portion thereof attributable to unreimbursed
Reimbursement Obligations) attributable to Letters of Credit issued by the
Issuing Bank during the period from and including the Effective Date to but
excluding the later of the date of termination of the Commitments and the date
on which there ceases to be any Letter of Credit Exposure, payable quarterly in
arrears on the first Business Day of January, April, July and October of
each year, as well as the Issuing Bank’s standard fees and commissions with
respect to the issuance, amendment, cancellation, negotiation, transfer,
presentment, renewal or extension of any Letter of Credit or processing of
drawings thereunder.  The Letter
of Credit Fee and the fronting fees described above shall be calculated for the
actual number of days elapsed (including the first day but excluding the last
day) during the period in question on the basis of a year of 365 or 366 days,
as applicable.


 


(c)           The Borrower agrees to pay to the Administrative
Agent, 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.


 


(d)           All commitment 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)           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, 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 the Required
Lenders 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 Lenders
of making or maintaining their Revolving Loans 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


 


31

















 


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,
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 such 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.


 


(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 90
days prior to


 


32

















 


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 90 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 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 reasonably 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


 


33

















 


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 15 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 out-of-pocket 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
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 and
each Credit Party shall take such steps as the Borrower shall reasonably
request to assist the Borrower in contesting or seeking a refund of any
Indemnified Taxes or Other Taxes.  This Section shall
not be construed to require any Credit Party to make available its Tax returns
(or any other information relating to its Taxes which it deems confidential) to
either the Borrower or any other Person.


 


(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


 


34

















 


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, or receiving payments hereunder, 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 Code), (ii) a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of
the Code) of the Borrower or (iii) a controlled foreign corporation
related to the Borrower (within the meaning of Section 864(d)(4) of
the 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. 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 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 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.


 


(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 or other form or document required to establish an exemption
from or reduction in withholding 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 but only to the extent such
Credit Party does not remain lawfully able to do so), 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


 


35

















 


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 becomes a Defaulting Lender, or if any Lender has failed to
consent to a proposed amendment, waiver, discharge or termination that under Section 10.02
requires the consent of all the Lenders and with respect to which the Required
Lenders shall have granted their consent, then the Borrower may, at its sole
expense and effort, upon notice to such Lender, the Issuing Bank 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 and each other
Loan Document to an Eligible Assignee that shall assume such obligations; provided
that (i) the Borrower shall have received the prior written consents of
the Issuing Bank and the Administrative Agent, which consents shall not
unreasonably be delayed or withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Revolving 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), (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 and (iv) in
the case of any such assignment resulting from the failure to provide a
consent, the assignee shall have given such consent and, as a result of such
assignment and any contemporaneous assignments and consents, the applicable
amendment, waiver, discharge or termination can be effected.  A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
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 Significant
Subsidiaries (other than American Savings Bank, F.S.B.) is duly and validly
organized and existing in good standing under the law of its jurisdiction of
organization, formation or charter (it being understood that HECO was
originally organized under the laws of the Kingdom of Hawaii) and is in good standing
and duly licensed or qualified to transact business in each other jurisdiction
where failure to so qualify would have a Material Adverse Effect.  American Savings Bank, F.S.B. is chartered
under the laws of the United States of America to transact the business of a
federal savings bank and its charter is in full force and effect.  The Borrower has full 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 


 


36

















 


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 material agreement or material
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 (or, at the time
executed by the Borrower, will have been) duly executed and delivered by the
Borrower and constitutes (or at such time will constitute) 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, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
the Borrower or any of its Significant Subsidiaries or any order, rule or
regulation of any Governmental Authority, (c) will not violate or result
in a default under any indenture, material agreement or other material
instrument binding upon the Borrower or any of its Significant 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 Significant Subsidiaries, and (d) will
not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Significant Subsidiaries.


 


Section 4.04                             Financial
Condition; No Material Adverse Effect


 


(a)           The Current SEC Reports include (in clause (a) of
the definition thereof) the consolidated balance sheets of the Borrower and its
Subsidiaries as of the last day of the fiscal year ended December 31,
2009, 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,
2009 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)           As of the Effective Date, except as set forth in
the Current SEC Reports, since December 31, 2009, 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 license or 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.


 


37

















 


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


 


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 material agreements binding upon 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 timely filed (or validly
extended) or cause to be filed (or validly extended) all material 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 would 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, would reasonably be expected to result in a
Material Adverse Effect.


 


38
















 


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 pursuant to or in connection with this Agreement (including the April 6,
2010 “Lenders’ Presentation” prepared in connection with the confidential
information memorandum for the primary market syndication of this Agreement,
other than the Section contained therein and entitled “Transaction
Overview”), 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; provided, that the foregoing is hereby qualified to the
extent of any projections or other “forward-looking statements”, which include
statements that are predictive in nature, depend upon or refer to future events
or conditions, and usually include words such as “expects,” “anticipates,” “intends,”
“plans,” “believes,” “predicts,” “estimates” or similar expressions; and provided,
further, that any statements concerning future financial performance,
ongoing business strategies or prospects or possible future actions are also
forward-looking statements; it being expressly understood and agreed that (i) forward-looking
statements are based on current expectations and projections about future
events and are subject to risks, uncertainties and the accuracy of assumptions
concerning the Borrower and its Subsidiaries or Affiliates, the performance of
the industries in which they do business and economic and market factors, among
other things, and (ii) such forward-looking statements are not guarantees
of future performance.  As of the
Effective Date, there is no fact known to the Borrower 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, 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 or the issuance of any Letter of Credit, the
Borrower and its Subsidiaries taken as a whole are not and will not be
Insolvent.


 


39

















 


ARTICLE 5.         CONDITIONS


 


Section 5.01                             Effective
Date


 


The obligations of the Lenders to make Revolving Loans and of the
Issuing Bank to issue Letters of Credit 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 (it being understood and agreed that any
of the following instruments, agreements, certificates, opinions, or other
documents may be delivered or furnished by delivering or furnishing a facsimile
transmission or other electronic image thereof followed by the delivery of an
original or an originally executed counterpart thereof):


 


(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) written evidence satisfactory to the Administrative Agent
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.


 


(c)           The
Administrative Agent shall have received a favorable written opinion (addressed
to the Credit Parties and dated the Effective Date) from (i) Jenner &
Block LLP substantially in the form of Exhibit B-1 and (ii) Chet
A. Richardson, Esq., Senior Vice President, General Counsel, and Chief
Administrative Officer of the Borrower, substantially in the form of Exhibit B-2,
in each case covering such other matters relating to the Borrower, the Loan
Documents or the Transactions as the Administrative Agent shall reasonably
request.  The Borrower hereby requests
such counsels to deliver such opinions.


 


(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 reasonably satisfactory to the Administrative Agent and its
counsel.


 


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


 


(f)            The Administrative
Agent shall have received payment of all fees required to be paid, and all
reasonably incurred and duly documented expenses which are otherwise required
to be reimbursed, in each case for which invoices with appropriate supporting
documentation have been presented at least two (2) Business Days prior to
the Effective Date.


 


(g)           The Administrative
Agent shall have received evidence reasonably satisfactory to it that all
material governmental and third party approvals necessary or, in the discretion
of the Administrative Agent, advisable in connection with the Transactions
shall have been obtained and be in full force and effect (it being understood
and agreed that, as related to the increase of the Revolving Commitment
contemplated by Section 2.05(d), the foregoing approvals may not have been
applied for, and/or may not have been received, on or as of the Effective
Date).


 


(h)           The
Administrative Agent shall have
received evidence satisfactory to it that the commitments of the lenders under
the Existing Credit Agreement have been terminated on, but subject to the
occurrence of, the Effective Date, and that any and all Indebtedness for
borrowed 


 


40

















 


money
of the Borrower thereunder shall have been fully repaid on, but subject to the
occurrence of, the Effective Date (it being understood and agreed that such
Indebtedness may be so repaid on the Effective Date, in whole or in part, with
the proceeds of the initial Revolving Loans), and that any and all liens
granted to the lenders under the Existing Credit Agreement have been terminated
and released.


 


The Administrative Agent shall notify the Borrower and the Credit
Parties of the Effective Date, and such notice shall be conclusive and binding.


 


Section 5.02                             Each
Credit Event


 


The obligation of each Lender to make a Revolving Loan on the occasion
of any Borrowing and of the Issuing Bank to issue any Letter of Credit 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 or issuance of such Letter of Credit,
except to the extent such representations and warranties relate to any earlier
date, in which case such representations and warranties shall have been true
and correct in all material respects on and as of such earlier date.


 


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


 


(c)           No Material
Subsidiary Indebtedness Event shall have occurred and be continuing.


 


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


 


ARTICLE 6.         AFFIRMATIVE COVENANTS


 


Until the Commitments have expired or been terminated and the principal
of and interest on all Revolving Loans and all Reimbursement Obligations and
all fees and other amounts (other than contingent liability obligations)
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, reports, information and
documents referred to below (other than the certificate referred to in clause (c) below)
may be satisfied by the Borrower’s delivery to, or filing such statements,
reports, information and documents with, the SEC via the EDGAR filing system
(or any successor system thereto)):


 


(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 PricewaterhouseCoopers 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 


 


41

















 


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 the President of the Borrower 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 of the Borrower or of a Financial Officer (i) certifying
as to whether a Default has occurred and is continuing and, if a Default has
occurred and is continuing, 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) stating whether any material change in GAAP or in the
application thereof has occurred since the later to occur of (x) the date
of the audited financial statements referred to in Section 4.04 and (y) the
date of the last certificate furnished pursuant to this Section 6.01(c),
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 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
Issuer 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, provided that the
Borrower shall not be required to furnish information relating to American
Savings Bank, F.S.B. if such disclosure may, in the Borrower’s reasonable
judgment, compromise or adversely affect American Savings Bank, F.S.B.’s
competitive position in relation to the Administrative Agent and the Lenders.


 


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;


 


42

















 


(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 would
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 projected benefit obligations on a consolidated basis
under all Plans.


 


(d)           any other
material event that is required to be disclosed by the Borrower 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 cause each of its
Significant Subsidiaries 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 the Borrower or
another Significant Subsidiary of the Borrower or the transfer of assets by any
Significant Subsidiary to the Borrower or another Significant Subsidiary of the
Borrower followed by the liquidation of dissolution of such Significant
Subsidiary.


 


Section 6.04                             Payment
of Obligations


 


The Borrower will pay its obligations, including 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, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) if required by GAAP, the Borrower 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.


 


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 a Significant Subsidiary, as
appropriate, from discontinuing the operation or maintenance of any property if
such discontinuance is, in the judgment of the Borrower or such Significant
Subsidiary, desirable in the conduct of the business of the Borrower or such
Significant Subsidiary.


 


(b)           The Borrower
will maintain, or cause to be maintained, and will cause each of its
Significant Subsidiaries to maintain, or cause to be maintained, with reputable
insurance companies, so long as such insurance is available on commercially
reasonable terms (including appropriate deductibles, self-insurance, exclusions
and limitations), insurance in such amounts 


 


43

















 


and against such risks as the 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 Significant
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 related to the Transactions during the
Borrower’s normal business hours and to discuss its affairs, finances and
condition with its Financial Officers, all at such reasonable times and as
often as reasonably requested; provided, however, that the Borrower shall not
be required to disclose to the Administrative Agent, the Issuing Bank, or any
Lender information relating to American Savings Bank, F.S.B. if such disclosure
may, in the Borrower’s reasonable judgment, compromise or adversely affect
American Savings Bank, F.S.B.’s competitive position in relation to the
Administrative Agent, the Issuing Bank, or any Lender.


 


Section 6.07                             Compliance
with Laws


 


The Borrower will comply, 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, if applicable, 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, including, without limitation, commercial paper
back-up.  No part of the proceeds of any
Revolving Loan will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, for any purpose that entails a
violation of any of the regulations of the Board, including Regulations T,
U and X.


 


ARTICLE 7.         NEGATIVE COVENANTS


 


Until the Commitments have expired or been terminated and the principal
of and interest on all Revolving Loans and all Reimbursement Obligations 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 incur, create, assume or permit to exist any Lien
on the capital stock of or other ownership interests in Hawaiian Electric
Company, Inc., American Savings Bank, F.S.B. or any other Significant
Subsidiary or any Lien on any 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 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


 


44

















 


Section 103 of the Code (or similar provisions), as in effect at
the time of the issuance of such obligations, and Indebtedness to the issuer of
a letter of credit or a letter of guaranty to support any such obligations to
the extent the Borrower or any Subsidiary is required to reimburse such issuer
for drawings under such letter of credit or letter of guaranty 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;


 


(f)            any Lien
existing on (i) any property or asset at the time such property or asset
is acquired by the Borrower (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 and (3) such Lien secures only the obligation secured
thereby at the time such property or asset is acquired;


 


(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, and
extensions, renewals and refinancings of such obligations that do not increase
the outstanding principal amount thereof (other than for accrued interest and
transactional fees and expenses of such extension, renewal, or refinancing);


 


(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 


 


45

















 


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 or contractual 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
clause (f), (g) or (h) of this Section 7.01, but only if (i) at
the time such Lien is granted and immediately after giving effect thereto, no
Default or Event of Default would exist and be continuing, (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, together with
reasonable out-of-pocket expenses and accrued interest with respect to the
obligations 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, in the reasonable opinion of the Borrower, is
commercially reasonable at the time of such increase;


 


(n)           Liens securing
Indebtedness or other obligations of the Borrower or any Significant
Subsidiary; provided, that at the time any such Indebtedness or other
monetary obligation is incurred (and after giving effect to the concurrent
repayment of any Indebtedness or other monetary obligations with the proceeds
thereof),  the aggregate principal amount
of all Indebtedness and other monetary obligations then secured pursuant to
this clause (n) does not exceed 15% of Consolidated Net Worth;


 


(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; 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,


 


46

















 


(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 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 is in
pro forma compliance with Sections 7.05 and 7.06; and


 


(iii)          no
Default or Event of Default exists or results therefrom and is continuing; and


 


(iv)          the
aggregate consideration paid in connection with any such acquisition (including
the aggregate amount of all indebtedness assumed) shall not exceed an amount
equal to 25% of the Consolidated Capitalization of the Borrower and its
Subsidiaries immediately prior to such acquisition); and


 


(v)           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)-(iv);


 


(c)           enter into
any arrangement, directly or indirectly, with any Person whereby the Borrower
shall sell or transfer and lease back any portion of its property, real,
personal or mixed, and used and useful in its business, whether now owned or
hereafter acquired, which constitutes a material portion of the total property
of the Borrower; or


 


(d)           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, other than directors’ qualifying shares.


 


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 to restrictions and
conditions (i) imposed by law or regulation or by any regulatory agency,
body or authority including under agreements with regulatory agencies, bodies,
or authorities (ii) contained in or otherwise permitted by this Agreement
or the HECO Credit Agreement, (iii) existing on the Effective Date
identified on Schedule 7.03 hereto and amendments and modifications
thereto, so long as such amendments or modifications do not materially expand
the scope of any such restriction or condition, or (iv) 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.


 


47
















 


Section 7.04                             Transactions
with Affiliates


 


Except as specifically permitted by this Agreement, the Borrower will
not sell, transfer, lease or otherwise dispose of (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 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 this Article 7.


 


Section 7.05                             Capitalization
Ratio


 


The Borrower will not permit its Capitalization Ratio to exceed 0.50 to
1.00 as of the end of any fiscal quarter or fiscal year end.


 


Section 7.06                             Consolidated
Net Worth


 


The Borrower will not permit its Consolidated Net Worth to be less than
$975,000,000 as of the end of any fiscal quarter or fiscal year end.


 


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 or Reimbursement
Obligation 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;


 


(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 pursuant to 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 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 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 


 


48

















 


unremedied for a period of 30 days after the Borrower shall have
received notice thereof from the Administrative Agent;


 


(f)            the Borrower
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 then enables or permits 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 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 with
respect to any Indebtedness, (ii) any voluntary sale of assets by the
Borrower 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)           any event or
condition occurs that results in any Material Subsidiary Indebtedness becoming
due prior to its scheduled maturity or that requires the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity, provided,
that no Event of Default shall occur under this paragraph (h) as a
result of (i) any notice of voluntary prepayment delivered by any
Significant Subsidiary with respect to any Indebtedness, (ii) any
voluntary sale of assets by any Significant Subsidiary as a result of which any
Material Subsidiary 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 Subsidiary Indebtedness (other than the exercise of
a remedy for an event of default under the applicable contract or agreement);


 


(i)            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 or any 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 or any 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;


 


(j)            the Borrower
or any 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 (i) of this Article, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any 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;


 


(k)           the Borrower
or any Significant Subsidiary shall become unable, admit in writing its inability
or fail generally to pay its debts as they become due;


 


49

















 


(l)            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;


 


(m)          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 projected benefit obligations under all Plans;


 


(n)           this
Agreement or any other material Loan Document shall cease, for any reason
(other than as a result of an act or omission by a Credit Party), 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;


 


(o)           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 in good faith and, if applicable, 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;


 


(p)           American
Savings Bank, F.S.B. shall fail to (a) be deemed “well capitalized” as
defined by the Office of Thrift Supervision and Federal Deposit Insurance
Corporation, or any successor, (b) have at all times a leverage ratio of
not less than 5%, (c) have at all times a Tier-1 risked based capital
ratio of not less than 6% or (d) have at all times a total risk-based
capital ratio of not less than 10%; or


 


(q)           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 with respect to the Borrower), and at any time
thereafter during the continuance of such event, the Administrative Agent shall
(at the request of the Required Lenders) or 
may (with the consent of the Required Lenders), in each case 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, (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 (iii) demand cash collateralization of the Letter of Credit Exposure;
and in case of any event described in clause (i) or (j) of this Article with
respect to the Borrower, 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.


 


50

















 


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, 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, or its
counsel.


 


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 


 


51

















 


consult with legal counsel (who
may be internal or external 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.


 


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.


 


Section 9.08          Agents


 


None of the 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 other Person under
this Agreement, any of the other Loan Documents or otherwise, other than JPMCB
in its capacity as Administrative Agent, JPMCB in its capacity as Issuing Bank,
and each Lender in its capacity as a Lender. 
Without limiting the foregoing, none of such Persons so identified shall
have or be deemed 


 


52

















 


to have any fiduciary
relationship with any other Person but such 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 Industries, Inc.


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


Honolulu,
Hawaii 96813


 


P.O. Box
730 (if by mail)

Honolulu, Hawaii 96808-0730


Attention:  Mr. James A. Ajello, Senior Financial
VP, Treasurer & Chief Financial Officer


Telephone No.: 808-543-7750


Facsimile No.:  808-203-1184


 


(b)                                 if
to the Administrative Agent:


 


JPMorgan Chase Bank, N.A.


10 South Dearborn, Floor 7th


IL1-0010

Chicago, IL 60603-2003


Attention:  Hiral Patel


Telephone No.: 312-732-6221


Facsimile No.:  312-385-7096


 


with a copy to:


 


JPMorgan Chase Bank, N.A.


1999 Avenue Of The Stars, Floor 27


CA2-1274

Los Angeles, CA 90067-6022


Attention:  Jeff Bailard


Telephone No.: 310-860-7256


Facsimile No.:  310-860-7110


 


(c)                                  if
to the Issuing Bank:


 


JPMorgan Chase Bank, N.A.


Global Trade Services


300 South
Riverside Plaza

Chicago, IL 60606-0236


 


53

















 


Attention:  Standby LC Unit

Email: GTS.Client.Services@JPMChase.com


Telephone No.: 312-954-1941


Facsimile No.:  312-233-2266


 


(d)           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 Reimbursement Obligations, 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
directly affected thereby,


 


(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 directly 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


 


54

















 


(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 (A) the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent and (B) the Issuing Bank hereunder without the prior
written consent of the Issuing Bank.


 


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 J.P. Morgan Securities Inc., the sole Lead Arranger, including the
reasonable and duly documented fees, charges and disbursements of counsel for
the Administrative Agent, in connection with the syndication and distribution
(including, without limitation, via the internet or through a service such as
Intralinks) 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
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
(or a breach in bad faith by such Indemnitee of its express obligations under
any Loan Document) such Indemnitee, (B) arise out of a claim brought by
the Borrower against an Indemnitee for a breach which is finally determined by
a final and nonappealable judgment to have constituted a bad faith breach of
such Indemnitee’s obligations under this Agreement or (C) relate to Taxes,
except as provided in Section 3.07.


 


(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 


 


55

















 


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 30 days, after written demand therefor, accompanied by proper
supporting documentation, and without prejudice to the Borrower’s right to
contest the amount or the validity of any claim for payment.


 


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, the Issuing Bank and the Administrative Agent
will, assign to one or more Eligible Assignees all or a portion of such Lender’s
rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of its Commitments, the
Revolving Loans (including, for the purposes of this Section 10.04(b),
participations in Letters of Credit) owing to it and the Note held by it); provided,
however, that (i) each such assignment 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, unless a Default
has occurred and is continuing under Section 8(a), Section 8(i) or
Section 8(j) or unless an Event of Default has occurred and is
continuing, the Borrower), (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 Revolving Loans or the
Commitments assigned,


 


56

















 


(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, so long
as no Default has occurred and is continuing under Section 8(a), Section 8(i) or
Section 8(j) and no Event of Default has occurred and is continuing
at the time of effectiveness of such assignment, by the Borrower (such approval
not to be unreasonably withheld or delayed), (v) each such assignment
shall be to an Eligible Assignee, (vi) each assignment must be approved
(such approvals not to be unreasonably withheld or delayed) by the
Administrative Agent and the Issuing Bank 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, and (ix) 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 Section 3.08, the Borrower or such assignee shall pay to the
Administrative Agent the applicable processing and recordation fee.


 


(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 or the Issuing Bank, as
the case may be, hereunder and (ii) the Lender or the Issuing Bank 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 or the Issuing Bank’s rights and obligations under this Agreement,
such Lender or the Issuing Bank 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


 


57

















 


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 or the Issuing Bank, as the case may
be.


 


(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 their Commitments under each facility of, and principal amount of the
Revolving 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 other 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 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
other 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.  In the case of any assignment
by a Lender, within five Business Days after its receipt of such notice, the
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.


 


58
















 


(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
Revolving Loans (including such Lender’s participations in Reimbursement
Obligations) 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, provided such
participant agrees to be subject to Section 2.08(c) and Section 10.12
as though it were a Lender.  A
participant shall not be entitled to receive any greater payment under Section 3.05
or 3.07 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such participant.


 


(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


 


59

















 


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 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 the Administrative
Agent or Issuing Bank constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  This Agreement shall become effective on the
Effective Date, 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 or other electronic imaging 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


 


60

















 


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 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 to keep such Information confidential), (b) to
the extent required by any regulatory authority, (c) to the extent
required by applicable laws or regulations


 


61

















 


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 such 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 such 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 the Borrower
or any of its Related Parties, 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, the Issuing Bank 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
cause of action or claim in connection with, this Agreement or any of the other
Loan Documents.  Neither the
Administrative Agent nor the Issuing Bank 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 


 


62

















 


will allow the Administrative
Agent and such Lender to identify the Borrower in accordance with the Patriot
Act.


 


Section 10.16       No Fiduciary Duty


 


The
Administrative Agent, each Lender and their Affiliates (collectively, solely
for purposes of this paragraph, the “Lender Parties”), may have economic
interests that conflict with those of the Borrower, its stockholders and/or its
affiliates.  The Borrower agrees that nothing in the Loan Documents or
otherwise will be deemed to create an advisory, fiduciary or agency relationship
or fiduciary or other implied duty between any Lender Party, on the one hand,
and the Borrower, its stockholders or its affiliates, on the other.  The
Borrower acknowledges and agrees that (i) the transactions contemplated by
the Loan Documents (including the exercise of rights and remedies hereunder and
thereunder) are arm’s-length commercial transactions between the Lender
Parties, on the one hand, and the Borrower, on the other, and (ii) in
connection therewith and with the process leading thereto, (x) no Lender
Party has assumed an advisory or fiduciary responsibility in favor of the
Borrower, its stockholders or its affiliates with respect to the transactions
contemplated hereby (or the exercise of rights or remedies with respect
thereto) or the process leading thereto (irrespective of whether any Lender
Party has advised, is currently advising or will advise the Borrower, its
stockholders or its Affiliates on other matters) or any other obligation to the
Borrower except the obligations expressly set forth in the Loan Documents and (y) each
Lender Party is acting solely as principal and not as the agent or fiduciary of
the Borrower, its management, stockholders, creditors or any other
Person.  The Borrower acknowledges and agrees that the Borrower has
consulted its own legal and financial advisors to the extent it deemed
appropriate and that it is responsible for making its own independent judgment
with respect to such transactions and the process leading thereto.  The
Borrower agrees that it will not claim that any Lender Party has rendered
advisory services of any nature or respect, or owes a fiduciary or similar duty
to the Borrower, in connection with such transaction or the process leading
thereto.


 


[Signature Pages to
Follow]


 


63

















 


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 INDUSTRIES, INC.,

  
	
   

  	
  as the Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A. Ajello

  
	
   

  	
  Name:  James A. Ajello

  
	
   

  	
  Title:  Senior Financial Vice
  President, Treasurer

  
	
   

  	
  And Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Kostecki

  
	
   

  	
  Name:  David M. Kostecki

  
	
   

  	
  Title:  Vice President-Finance,
  Controller and Chief

  
	
   

  	
  Accounting Officer

  



 


Signature Page to Credit Agreement


Hawaiian Electric Industries, Inc


 
















 


	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
  as Administrative Agent, as Issuing Bank and as a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ling Li

  
	
   

  	
  Name: Ling Li

  
	
   

  	
  Title: Vice President

  



 


Signature Page to Credit Agreement


Hawaiian Electric Industries, Inc.


 

















 


	
   

  	
  BANK OF HAWAII,

  
	
   

  	
  as Co-Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anna Hu

  
	
   

  	
  Name:  Anna Hu

  
	
   

  	
  Title:  Vice President

  



 


Signature Page to Credit Agreement


Hawaiian Electric Industries, Inc.


 

















 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as Co-Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Holland H. Williams

  
	
   

  	
  Name:  Holland H. Williams

  
	
   

  	
  Title:  AVP-Portfolio Manager

  



 


Signature Page to Credit Agreement


Hawaiian Electric Industries, Inc.


 

















 


	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION,

  
	
   

  	
  as Co-Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Yann Blindert

  
	
   

  	
  Name:  Yann Bindert

  
	
   

  	
  Title:  Vice President

  



 


Signature Page to Credit Agreement


Hawaiian Electric Industries, Inc.


 

















 


	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Co-Documentation Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gordon H. Gray

  
	
   

  	
  Name:  Gordon H. Gray

  
	
   

  	
  Title:  Senior Vice President

  



 


Signature Page to Credit Agreement


Hawaiian Electric Industries, Inc.


 

















 


	
   

  	
  UNION BANK, N.A.,

  
	
   

  	
  as Co-Documentation Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Olson

  
	
   

  	
  Name:  Robert Olson

  
	
   

  	
  Title:  Senior Vice President

  



 


Signature Page to Credit Agreement


Hawaiian Electric Industries, Inc.


 

















 


	
   

  	
  THE BANK OF NEW YORK MELLON,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Rogers

  
	
   

  	
  Name:  Mark W. Rogers

  
	
   

  	
  Title:  Vice President

  



 


Signature Page to Credit Agreement


Hawaiian Electric Industries, Inc.


 

















 


	
   

  	
  GOLDMAN SACHS BANK USA,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Walton

  
	
   

  	
  Name:  Mark Walton

  
	
   

  	
  Title:  Authorized Signatory

  



 


Signature Page to Credit Agreement


Hawaiian Electric Industries, Inc.


 

















 


SCHEDULE 1.01 

Hawaiian Electric Industries, Inc. 

Funded Debt and Capitalization 
 (in thousands)


 


Hawaiian Electric Industries, Inc.


 


Funded Debt and Capitalization


 


(in thousands)


 


	
  December 31,
  2009

  	
   

  	
  Unconsolidated

  	
   

  	
  Consolidated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Funded Debt:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Notes payable to subsidiaries

  	
   

  	
  $

  	
  6,205

  	
   

  	
  $

  	
  —

  	
   

  
	
  Short-term borrowings-other than bank

  	
   

  	
  41,989

  	
   

  	
  41,989

  	
   

  
	
  Long-term debt, net-other than bank

  	
   

  	
  307,000

  	
   

  	
  1,364,815

  	
   

  
	
  Total Funded Debt *

  	
   

  	
  $

  	
  355,194

  	
   

  	
  $

  	
  1,406,804

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Capitalization:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Funded Debt

  	
   

  	
  $

  	
  355,194

  	
   

  	
  $

  	
  1,406,804

  	
   

  
	
  Noncontrolling interest: Cumulative
  preferred stock of subsidiaries-not subject to mandatory redemption

  	
   

  	
  —

  	
   

  	
  34,293

  	
   

  
	
  Common stock equity **

  	
   

  	
  1,449,370

  	
   

  	
  1,449,370

  	
   

  
	
  Total capitalization

  	
   

  	
  $

  	
  1,804,564

  	
   

  	
  $

  	
  2,890,467

  	
   

  



 






*              Excludes deposit
liabilities, securities sold under agreements to repurchase and advances from
Federal Home Loan Bank of Seattle.


 


**           Excludes accumulated
other comprehensive loss of $7,722.


 

















 


Schedule 2.01


 


(HEI Credit Agreement)


 


	
  Lender

  	
   

  	
  Revolving

  Commitment

  	
   

  	
  Letter of

  Credit

  Commitment

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  $

  	
  22,916,666.67

  	
   

  	
  $

  	
  9,166,666.67

  	
   

  
	
  Bank of Hawaii

  	
   

  	
  $

  	
  16,666,666.67

  	
   

  	
  $

  	
  6,666,666.67

  	
   

  
	
  U.S. Bank National Association

  	
   

  	
  $

  	
  16,666,666.67

  	
   

  	
  $

  	
  6,666,666.67

  	
   

  
	
  Wells Fargo Bank, National Association

  	
   

  	
  $

  	
  16,666,666.67

  	
   

  	
  $

  	
  6,666,666.67

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  16,666,666.66

  	
   

  	
  $

  	
  6,666,666.66

  	
   

  
	
  Union Bank, N.A.

  	
   

  	
  $

  	
  16,666,666.66

  	
   

  	
  $

  	
  6,666,666.66

  	
   

  
	
  The Bank of New York Mellon

  	
   

  	
  $

  	
  12,500,000.00

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  
	
  Goldman Sachs Bank USA

  	
   

  	
  $

  	
  6,250,000.00

  	
   

  	
  $

  	
  2,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  125,000,000.00

  	
   

  	
  $

  	
  50,000,000.00

  	
   

  



 
















 


SCHEDULE 4.12

SUBSIDIARIES
 Corporate Organizational Structure of Active
Subsidiaries of HEI Holding Company


 


 





 
















 


SCHEDULE 7.01


 


EXISTING LIENS


 


	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Jurisdiction

  	
   

  	
  UCC File

  Number

  	
   

  	
  UCC File

  Date

  	
   

  	
  Collateral

  Description*

  
	
  Hawaiian
  Electric Industries, Inc. (as lessee)

  	
   

  	
  Hitachi
  Credit America Corp., as assignee of Computer Sales International, Inc.
  (as lessor)

  	
   

  	
  Hawaii

  	
   

  	
  95-002260

  	
   

  	
  01/06/1995

  	
   

  	
  EQ LE, SU, RP, PR

  
	
  Hawaiian
  Electric Industries, Inc. (as lessee)

  	
   

  	
  Hitachi
  Credit America Corp., as assignee of Computer Sales International, Inc.
  (as lessor)

  	
   

  	
  Hawaii

  	
   

  	
  95-002261

  	
   

  	
  01/06/1995

  	
   

  	
  EQ LE, SU, RP, PR

  
	
  Hawaiian
  Electric Industries, Inc.

  	
   

  	
  IBM
  Corporation

  	
   

  	
  Hawaii

  	
   

  	
  96-100049

  	
   

  	
  07/15/1996

  	
   

  	
  EQ
  , RP, PR

  
	
  Hawaiian
  Electric Industries, Inc. (as lessee)

  	
   

  	
  First
  Bank of Highland Park, as assignee of Computer Sales International, Inc.
  (as lessor)

  	
   

  	
  Hawaii

  	
   

  	
  96-101686

  	
   

  	
  07/17/1996

  	
   

  	
  EQ LE, SU, RP, PR

  
	
  Hawaiian
  Electric Industries, Inc.

  	
   

  	
  IBM
  Corporation

  	
   

  	
  Hawaii

  	
   

  	
  97-064633

  	
   

  	
  05/19/1997

  	
   

  	
  EQ,
  RP, PR

  
	
  Hawaiian
  Electric Industries, Inc.

  	
   

  	
  IBM
  Corporation

  	
   

  	
  Hawaii

  	
   

  	
  97-120791

  	
   

  	
  09/09/1997

  	
   

  	
  EQ,
  RP, PR

  
	
  Hawaiian
  Electric Industries, Inc. (as lessee)

  	
   

  	
  Hitachi
  Credit America Corp., as assignee of Computer Sales International, Inc.
  (as lessor)

  	
   

  	
  Hawaii

  	
   

  	
  97-127302

  	
   

  	
  09/22/1997

  	
   

  	
  EQ LE, SU, RP, PR

  
	
  Hawaiian
  Electric Industries, Inc.

  	
   

  	
  IBM
  Corporation

  	
   

  	
  Hawaii

  	
   

  	
  98-044239

  	
   

  	
  04/01/1998

  	
   

  	
  EQ,
  RP, PR

  



 






*
EQ=Equipment; LE=Leases; SU=Substitutions; RP=Replacements; PR=Proceeds


 





















 


SCHEDULE 7.03


 


HAWAIIAN ELECTRIC INDUSTRIES, INC.


 


EXISTING RESTRICTIONS


 


Pursuant
to Section 7.03 of the Credit Agreement, the following restrictions and
conditions exist on May 7, 2010:


 


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.


 


2.              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.


 


3.              HECO is subject
to restrictive covenants in connection with its cumulative preferred stock
financings to the effect that, as long as any shares of the respective
series of cumulative preferred stock are outstanding HECO shall
not effect the merger or consolidation of HECO, or sell, lease or exchange
all or substantially all of the property and assets of HECO without first
obtaining the consent in writing of the holders of at least 75% of each of
the respective outstanding series of cumulative preferred stock,
provided that said consent shall not be required to make a mortgage, pledge,
assignment or transfer of all or any part of its assets as security for any
obligation or liability of any kind or nature.


 


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 20     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 May 7, 2010, among Hawaiian
Electric Industries, Inc., a Hawaii corporation (the “Borrower”),
the Lenders party thereto and JPMorgan Chase Bank, N.A., as Issuing Bank and
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 Revolving Loans and participate in the Letter of
Credit sub-facility under the terms and conditions therein set forth.


 


C.                                    The amount of
the Assignor’s Revolving Commitment and Letter of Credit 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 and
Letter of Credit Commitment specified in Item 3 of Schedule 1 hereto
(collectively, 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 rights and 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] [The
[Assignor/Assignee] shall pay the fee payable to the Administrative Agent
pursuant to Section 10.04(b) of the Credit Agreement].


 


A-1





















 


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 SEC, 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 Borrower 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.


 


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.


 


A-2





















 


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 without regard to principles of conflict of laws.


 


(h)  This Assignment and
Acceptance Agreement shall become effective on the date it has been executed by
the Assignor, the Assignee, the Administrative Agent, if a Revolving Commitment
is being assigned, the Issuing Bank and, unless a Default under Section 8(a),
8(i), or 8(j) of the Credit Agreement, or an Event of Default, has
occurred and is continuing, the Borrower.


 


[Signature Pages To
Follow]


 


A-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 Accepted this      day:

  	
   

  	
   

  
	
  of
                    ,

  	
   

  	
   

  



 


 


	
  JPMORGAN
  CHASE BANK, N.A., as

  
	
  Administrative
  Agent [and Issuing Bank](1)

  
	
  By:

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
				



 


[Assignment and Acceptance
Agreement]


 






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


 


A-4

















 


	
  [Consented to and](2) Accepted this
       day:

  
	
  of
                    ,

  
	
   

  
	
   

  
	
  HAWAIIAN
  ELECTRIC INDUSTRIES, INC.

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
				



 


 


	
  By:

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
				



 


[Assignment and Acceptance
Agreement]


 






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


 


A-5

















 


SCHEDULE 1


 


TO


 


ASSIGNMENT AND ACCEPTANCE AGREEMENT,

dated as of
                 ,
20    ,

between [NAME OF ASSIGNOR], as Assignor

and

[NAME OF ASSIGNEE], as Assignee,

relating to the

Credit Agreement, dated as of May 7, 2010,

by and among

Hawaiian Electric Industries, Inc.,

the Lenders party thereto

and

JPMorgan Chase Bank, N.A., as Administrative Agent and Issuing Bank


 


	
  Item 1.

  	
  Amount
  of Assignor’s Aggregate Commitment*:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Revolving
  Commitment

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Letter
  of Credit Commitment

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Item 2.

  	
  Outstanding
  principal balance/amount of the Assignor’s Revolving Loans*:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Revolving
  Loans consisting of:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ABR
  Borrowing

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
  Eurodollar
  Borrowing

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Item 3.

  	
  Amount
  of Revolving Commitment and/or Letter of Credit Commitment being assigned:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Revolving
  Commitment

  	
   

  	
  $

  	
   

  
	
   

  	
  (b)

  	
  Letter
  of Credit 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.


 


A-6
















 


EXHIBIT B-1



FORM OF OPINION LETTER OF JENNER & BLOCK LLP


 


ATTACHED


 


May 7, 2010


 


JPMorgan Chase Bank, N.A.,
as Administrative Agent,

and the Lenders referred to in the

Credit Agreement (as defined below)

10 South Dearborn Street

Chicago, IL 60603


 


 


Re:  Hawaiian Electric Industries, Inc.


 


Ladies and Gentlemen:


 


We
have acted as counsel to Hawaiian Electric Industries, Inc., a Hawaii
corporation (the “Borrower”), in connection
with the Credit Agreement dated as of May 7, 2010 (the “Credit Agreement”), among the
Borrower, the lenders party thereto (collectively, the “Lenders”
and each, a “Lender”), the agents party
thereto, and JPMorgan Chase Bank, N.A., a national banking
association, 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)(i) 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 Restated
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 Amended and
Restated By-Laws of the Borrower (the “Borrower’s By-Laws”;
and, together with the Borrower’s Charter, collectively, the “Governing Documents”);


 


(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 December 14,
2009, as to the titles, incumbency, and specimen signatures of certain officers
of the Borrower; and


 


(vi)                              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.


 


B-1-1

















 


In
our examination of the documents referred to in this opinion letter, we have
assumed the genuineness of all signatures, the legal capacity and competency of
all natural persons, the authenticity of all documents submitted to us as
originals or copies, the conformity to original documents of all documents
submitted to us as certified or photostatic copies, and the authenticity of the
originals of such copies.  As to any
facts relevant to the opinions expressed below, we have, without independent
investigation, relied upon certificates, statements and representations of the
Borrower and of its directors, officers and other representatives, including
the Support Certificate attached hereto as Annex C.


 


In
rendering the opinions set forth in this opinion letter, we have, with your
consent, relied only upon the examination of documents described above and have
made no independent verification or investigation of the factual matters set
forth therein.


 


Based
on the foregoing and subject to the other qualifications, assumptions,
exclusions, and other 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.                                      Each Loan
Document is a valid and binding obligation of the Borrower and is enforceable
against the Borrower in accordance with its terms.


 


2.                                      The execution
and delivery by the Borrower of the Loan Documents and the performance of its
obligations under each Loan Document will not (a) constitute a violation
by the Borrower of any applicable provision of existing statutory law or
governmental regulation covered by this opinion letter, or (b) violate any
order, writ, injunction, judgment, determination, award or decree of any court
applicable to the Borrower of which we are aware, which in our experience,
without having made any special investigations as to the applicability of any
specific law, rule or regulation, are normally applicable to transactions
of the type contemplated by the Loan Documents.


 


3.                                      The Borrower is
presently not required to obtain any consent, approval, authorization or order
of, or make any filing with, any United States federal or State of New York court
or governmental or regulatory agency in order to obtain the right to execute
and deliver the Loan Documents, to borrow money under the Credit Agreement, and
to perform its obligations under the Loan Documents except, in each case, for
actions or filings required in connection with the ordinary course conduct by
the Borrower of its business and ownership or operation by the Borrower of its
assets.


 


4.                                      The Borrower is
not an “investment company” within the meaning of the Investment Company Act of
1940, as amended.


 


Our
opinions are subject to the assumptions and qualifications set forth in Annex
A to this opinion letter and do not cover or otherwise address any law or
legal issue which is identified in Annex B to this opinion letter.  Our advice on every legal issue addressed in
this opinion letter is based exclusively on the laws of the State of New York
and such federal law of the United States which, in our experience, are
normally applicable to general business entities not engaged in regulated business
activities and to transactions of the type contemplated in the Loan Documents.


 


We
have not undertaken any research for purposes of determining whether the
Borrower or any of the transactions which may occur in connection with the Loan
Documents is subject to any law or other governmental requirement other than to
those laws and requirements which in our experience would generally be
recognized as applicable in the absence of research by lawyers in New York, and
none of our opinions covers any such law or other requirement.  We have relied, without any independent
verification upon: (i) factual information contained in certificates
obtained from governmental authorities; (ii) factual information
represented to be true in the Loan Documents; (iii) factual information
provided to us by the 


 


B-1-2

















 


Borrower, including Annex
C; and (iv) factual information we have obtained from such other
sources as we have deemed reasonable. 
Except as expressly set forth herein, we have not undertaken any
independent investigation to determine the existence or absence of such facts
and no inference as to our knowledge concerning such facts should be drawn from
the fact that such representation has been undertaken by us.


 


Our
advice on each legal issue addressed in this opinion letter represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction upon whose law our opinion on that issue is
based.  The manner in which any
particular issue would be treated in any actual court case would depend in part
on facts and circumstances particular to the case, and this opinion letter is
not intended to guarantee the outcome of any legal dispute which may arise in
the future.


 


This
opinion letter speaks as of the time of its delivery on the date it bears. We
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which we did not have actual knowledge at
that time, by reason of any change subsequent to that time in any law covered
by any of our opinions, or for any other reason.


 


You
may rely upon this opinion letter only for the purpose served by the provision
in the Credit Agreement cited in the initial paragraph of this opinion letter
in response to which it has been delivered. 
Without our written consent: (i) no Person other than you (and your
permitted assignees under the Credit Agreement) may rely on this opinion letter
for any purpose; (ii) this opinion letter may not be cited or quoted in
any financial statement, prospectus, private placement memorandum or other
similar document; (iii) this opinion letter may not be cited or quoted in
any other document or communication which might encourage reliance upon this
opinion letter by any Person or for any purpose excluded by the restrictions in
this paragraph; and (iv) copies of this opinion letter may not be
furnished to anyone for purposes of encouraging such reliance.


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Jenner & Block
  LLP

  



 


B-1-3

















 


ANNEX A


 


For
purposes of this opinion letter, we have relied, without investigation, upon
each of the following assumptions:


 


1.                                      each document
submitted to us for review is accurate and complete, each such document that is
an original is authentic, each such document that is a copy conforms to an
authentic original and all signatures on each such document are genuine;


 


2.                                      (a) you
are existing and in good standing in your jurisdiction of organization or
formation, (b) you have the requisite power (including, without
limitation, under the laws of your jurisdiction of organization or formation)
to execute, deliver and perform your obligations under each of the Loan
Documents to which you are a party, (c) each of the Loan Documents to
which you are a party has been duly authorized by all necessary action on your
part and has been duly executed and delivered by you, (d) you have
satisfied those legal requirements that are applicable to you to the extent
necessary to make the Loan Documents to which you are a party enforceable
against you, and (e) each of the Loan Documents to which you are a party
constitute valid and binding obligations of yours and are enforceable against
you in accordance with their terms (subject to the qualifications, exclusions
and other limitations similar to those applicable to this opinion letter);


 


3.                                      each of the
Loan Documents has been duly authorized, executed and delivered by each of the
parties thereto; the Borrower is duly organized under the laws of the Kingdom
of Hawaii and is validly existing under the laws of the State of Hawaii and the
Borrower has full power, authority and legal right (including, without
limitation, any legal right dependent upon there being no necessary
governmental approvals or filings and no conflict with laws, governing
documents or contracts) to make and perform its obligations under the Loan
Documents;


 


4.                                      each
certificate obtained from a governmental authority relied on by us is accurate,
complete and authentic and all relevant official public records to which each
such certificate relates are accurate and complete;


 


5.                                      each person who
has taken any action relevant to any of our opinions in the capacity of
director or officer of any Person was duly elected or appointed to that
director or officer position of such Person and held that position when such
action was taken; and


 


6.                                      the
constitutionality or validity of a relevant statute, rule, regulation or agency
action is not in issue.


 


We
understand that you are separately receiving an opinion from the Borrower’s
legal department with respect to certain of the foregoing assumptions, and we
are advised that such opinion contains qualifications.  Our opinion herein stated is based on the
assumptions specified in this Annex A and in this opinion letter and we
express no opinion as to the effect on the opinions herein stated of the
qualifications contained in such other opinion.


 


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
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 or
reviewing 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.


 


Each
of our opinions in this opinion letter is subject to:


 


B-1-4

















 


1.                                      the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws, including (a) the Bankruptcy Code of 1978, as amended
(including matters of turn-over, automatic stay, avoiding powers, fraudulent
transfer, preference, discharge, conversion of a non-recourse obligation into a
recourse claim, limitations on ipso facto and anti-assignment clauses and the
coverage of pre-petition security agreements applicable to property acquired
after a petition is filed); (b) all other Federal and state bankruptcy,
insolvency, reorganization, receivership, moratorium, arrangement and
assignment for the benefit of creditors laws that affect the rights of
creditors generally or that have reference to or affect only creditors of
specific types of debtors; (c) state fraudulent transfer and conveyance
laws; and (d) judicially developed doctrines in this area, such as
substantive consolidation of entities, recharacterization and equitable
subordination;


 


2.                                      the effect of
general principles of equity, whether applied by a court of law or equity,
including principles (a) governing the availability of specific
performance, injunctive relief or other equitable remedies, which generally place
the award of such remedies, subject to certain guidelines, in the discretion of
the court to which application for such relief is made; (b) affording
equitable defenses (e.g., waiver, laches and estoppel) against a party seeking
enforcement; (c) requiring good faith and fair dealing in the performance
and enforcement of a contract by the party seeking its enforcement; (d) requiring
reasonableness in the performance and enforcement of an agreement by the party
seeking enforcement of the contract; (e) requiring consideration of the
materiality of (i) a breach and (ii) the consequences of the breach
to the party seeking enforcement; (f) requiring consideration of the
impracticability or impossibility of performance at the time of attempted
enforcement; and (g) affording defenses based upon the unconscionability
of the enforcing party’s conduct after the parties have entered into the
contract;


 


3.                                      the
qualification that provisions of any Loan Document stating that such Loan
Document may only be amended or waived in writing may not be enforceable to the
extent that an oral agreement or an implied agreement by trade practice, custom
or course of conduct or dealing has been created modifying any such Loan
Document;


 


4.                                      the
qualification that we express no opinion as to the effect on the opinions
expressed herein of (i) the compliance or non-compliance of any party to
any of the Loan Documents with any state, Federal or other laws or regulations
applicable to it, or (ii) the legal or regulatory status or the nature of
the business of any party;


 


5.                                      the
qualification that we express no opinion as to the title to any asset or the
validity, perfection or priority of any security interest;


 


6.                                      the
qualification that 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;


 


7.                                      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;


 


B-1-5

















 


8.                                      the
qualification as to the validity, binding effect or enforceability of
provisions in the Loan Documents 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; and


 


9.                                      the effect of rules of
law that:  (a) limit or affect the
enforcement of provisions of a contract that purport to waive, or to require
waiver of, the obligations of good faith, fair dealing, diligence and
reasonableness; (b) provide that forum selection clauses in contracts are
not necessarily binding on the court(s) in the forum selected; (c) limit
the availability of a remedy under certain circumstances where another remedy
has been elected; (d) provide a time limitation after which a remedy may
not be enforced; (e) limit the right of a creditor to use force or cause a
breach of the peace in enforcing rights; (f) relate to the sale or
disposition of collateral or the requirements of a commercially reasonable
sale; (g) limit the enforceability of provisions releasing, exculpating or
exempting a party from, or requiring indemnification of a party for, liability
for its own action or inaction, to the extent the action or inaction involves
negligence, recklessness, willful misconduct, unlawful conduct, violation of
public policy or litigation against another party determined adversely to such
party; (h) may, where less than all of a contract may be unenforceable,
limit the enforceability of the balance of the contract to circumstances in
which the unenforceable portion is not an essential part of the agreed
exchange; (i) govern and afford judicial discretion regarding the
determination of damages and entitlement to attorneys’ fees and other costs;
and (j) may permit a party that has materially failed to render or offer
performance required by the contract to cure that failure unless (x) permitting
a cure would unreasonably hinder the aggrieved party from making substitute
arrangements for performance, or (y) it was important in the circumstances
to the aggrieved party that performance occur by the date stated in the
contract.


 


None
of the opinions in this opinion letter covers or otherwise addresses any of the
following types of provisions which may be contained in the Loan Documents:


 


1.                                      choice-of-law
provisions;


 


2.                                      waivers of (a) legal
or equitable defenses, (b) rights to damages, (c) rights to counter
claim or set off,  (d) statutes of
limitations, (e) rights to notice, (f) the benefits of statutory,
regulatory, or constitutional rights, unless and to the extent the statute,
regulation, or constitution explicitly allows waiver, (g) broadly or
vaguely stated rights, and (h) other benefits to the extent they cannot be
waived under applicable law;


 


3.                                      provisions
providing for forfeitures or the recovery of amounts deemed to constitute penalties,
or for liquidated damages, acceleration of future amounts due (other than
principal) without appropriate discount to present value, late charges,
prepayment charges, interest upon interest, and increased interest rates upon
default;


 


4.                                      time-is-of-the-essence
clauses and other provisions that provide a time limitation after which a
remedy may not be enforced;


 


5.                                      agreements to
submit to the jurisdiction of any particular court or other governmental
authority (either as to personal jurisdiction and subject matter jurisdiction);
provisions restricting access to courts; waiver of the right to jury trial;
waiver of service of process requirements which would otherwise be applicable;
and provisions otherwise purporting to affect the jurisdiction and venue of
courts;


 


6.                                      provisions
purporting to limit rights of third parties who have not consented thereto or
purporting to grant rights to third parties;


 


B-1-6

















 


7.                                      provisions or
agreements regarding proxies, shareholders agreements, shareholder voting
rights, voting trusts, and the like;


 


8.                                      confidentiality
and non-competition agreements;


 


9.                                      provisions
requiring the Borrower to perform its obligations under, or to cause any other
Person to perform its obligations under, or stating that any action will be
taken as provided in or in accordance with, any agreement or other document
that is not a Loan Document;


 


10.                               provisions
purporting to prohibit, restrict or condition the assignment of rights under
any Loan Document to the extent such prohibition, restriction or condition is
governed by the Uniform Commercial Code;


 


11.                               provisions
purporting to amend or modify an agreement without strictly complying with
applicable provisions of such agreement; and


 


12.                               provisions, if
any, which are contrary to the public policy of any jurisdiction.


 


*     *    
*     *


 


B-1-7

















 


ANNEX B


 


 


Our
opinions in this opinion letter do not cover or otherwise address any of the
following laws, regulations or other governmental requirements or legal issues:


 


1.                                      Federal
securities laws and regulations (other than with respect to the Investment
Company Act of 1940, as amended, for purposes of our opinion paragraph numbered
4 above);


 


2.                                      state “Blue Sky”
laws and regulations, and laws and regulations relating to commodity (and
other) futures and indices and other similar instruments;


 


3.                                      Federal Reserve
Board margin regulations;


 


4.                                      pension and
employee benefit laws and regulations (e.g., ERISA);


 


5.                                      Federal and
state laws and regulations concerning filing and notice requirements;


 


6.                                      compliance with
fiduciary duty requirements;


 


7.                                      the statutes
and ordinances, the administrative decisions and the rules and regulations
and judicial decisions of counties, towns, municipalities and special political
subdivisions (whether created or enabled through legislative action at the
Federal, state, regional or local level) and judicial decisions;


 


8.                                      any laws,
rules, regulations or administrative decisions that might be implicated by
reason of the banking or public utilities business or other specifically
regulated activities of the Borrower or any other entity, including but not
limited to the statutes and regulations, the administrative decisions and the rules and
regulations of state or federal public utilities commissions, state or federal
public service commissions, any similar state or federal agency with
jurisdiction over the provision of gas, electricity, water, common carrier or
telecommunications services by the Borrower or any similar federal agency
(including, without limitation, the Federal Energy Regulatory Commission) or
any state or federal agency with jurisdiction over the provision of banking or
insurance services;


 


9.                                      fraudulent
transfer and fraudulent conveyance laws;


 


10.                               Federal and
state antitrust and unfair competition laws and regulations;  environmental laws and regulations; land use
and subdivision laws and regulations; tax laws and regulations; racketeering
laws and regulations (e.g., RICO); health and safety laws and regulations
(e.g., OSHA); labor laws and regulations;


 


11.                               Federal patent,
trademark and copyright, state trademark, and other Federal and state
intellectual property laws and regulations;


 


12.                               Federal and
state laws, regulations and policies concerning (i) national and local
emergency, (ii) possible judicial deference to acts of sovereign states,
and (iii) criminal and civil forfeiture laws;


 


13.                               other Federal
and state statutes of general application to the extent they provide for
criminal prosecution (e.g., mail fraud and wire fraud statutes);


 


B-1-8

















 


14.                               any laws,
regulations, directives and executive orders that prohibit or limit the
enforceability of obligations based on attributes of the party seeking
enforcement (e.g., the Trading with the Enemy Act and the International
Emergency Economic Powers Act); and


 


15.                               the effect of
any law, regulation or order which hereafter becomes effective.


 


*     *   
*     *


 


B-1-9

















 


ANNEX C


 


HEI SUPPORT CERTIFICATE


 


May 7, 2010


 


The undersigned, on behalf
of Hawaiian Electric Industries, Inc., a Hawaii corporation (the “Borrower”), hereby certifies to
Jenner & Block LLP, as of the date hereof, that:


 


1.                                      Introduction.  Jenner & Block LLP has acted as
counsel to the Borrower in connection with the Credit Agreement dated as of May 7,
2010 (the “Credit Agreement”), among the
Borrower, the lenders party thereto, the agents party thereto, and JPMorgan Chase
Bank, N.A., a national banking association, as administrative agent
(the “Administrative Agent”).  Section 5.01(c)(i) of the Credit
Agreement provides that as a condition precedent to the Credit Agreement being
effective, Jenner & Block LLP will deliver an opinion letter to the
Agent.  The term “Jenner
Opinion” whenever it is used in this certificate means the
opinion letter which Jenner & Block LLP will actually deliver at the
closing in response to such condition precedent.  Each term which is defined or given a special
meaning in the Jenner Opinion has the same meaning whenever it is used in this
certificate.


 


2.                                      Purpose.  The Borrower has provided this certificate in
order to provide Jenner & Block LLP with factual information needed by
Jenner & Block LLP in order to issue the Jenner Opinion.  The Borrower has made inquires and
investigations reasonably calculated to assure that the information provided in
this certificate is accurate and complete, including (i) inquiries of
appropriate personnel responsible for legal matters, financial matters and
compliance with governmental requirements and (ii) identification and
review of relevant documents.  The
Borrower understands that Jenner & Block LLP will not check, audit or
otherwise attempt to verify the information in this certificate.  The Borrower intends and agrees that Jenner &
Block LLP may rely upon this certificate and all information provided in this
certificate.


 


3.                                      Secretary’s
Certificate.  The
information set forth in the certificate of the Secretary of the Borrower,
dated as of the date hereof (the “Secretary’s Certificate”)
(attached hereto), as to certain actions taken by the Board of Directors of the
Borrower on December 14, 2009, as to the titles, incumbency, and specimen
signatures of certain officers of the Borrower and other documentation attached
thereto (as further described below), is and has been accurate and complete at
all times since prior to the adoption of the resolutions authorizing the
transactions specified in the Loan Documents.


 


4.                                      Charter.  The copy of the Borrower’s articles of
incorporation (herein called the Borrower’s “Charter”),
in the version certified by the responsible Hawaii governmental office (and
attached to the applicable Secretary’s Certificate) is accurate and complete
and represents the terms of the Borrower’s Charter as constituted at all times
since the date of the latest amendment thereto indicated in that certificate.


 


5.                                      Bylaws.  The copy of the Borrower’s bylaws (herein
called the Borrower’s “Bylaws”) (attached
to the Secretary’s Certificate), is accurate and complete and represents the
terms of the Borrower’s Bylaws as constituted at all times since prior to the
adoption of the initial resolution authorizing the transactions specified in
the Loan Documents.


 


B-1-10

















 


6.                                      Good Standing.  It is the Borrower’s practice to make on a
timely basis all filings and tax payments it is required to make under the
statute under which it is organized.  The
Borrower has not received any notice from any Governmental Authority that any
such filing or tax payment which it has not made is delinquent or due or that
it is not in good standing in its state of formation.  The Borrower has no reason to believe that it
is not in existence or good standing in its state of formation.


 


7.                                      Authorizing
Resolutions.


 


(a)                                 The resolutions
adopted by the Board of Directors of the Borrower, and attached to the
Secretary’s Certificate, are a complete and accurate copy of resolutions.  The Board of Directors of the Borrower voted
in favor of the resolution.  Each such
resolution has not been amended or rescinded and remains in full force and
effect on the date hereof.


 


(b)                                 No resolution
has been previously adopted by the Board of Directors of the Borrower, any
Committee of any such Board or the equity holders of the Borrower restricting
the Borrower’s ability to execute, deliver or perform its obligations under the
Loan Documents to which it is a party or impose any higher vote requirement
than indicated by its Charter or Bylaws.


 


8.                                      Authorized
Officers.  Each
individual who has executed the Loan Documents or other documents delivered at
closing on behalf of the Borrower was validly appointed to the officership
position or other position with the Borrower indicated in connection with such
execution and held that office at the time of such person’s execution and
delivery of the Loan Documents and/or other documents.


 


9.                                      No Required
Governmental Approvals.  The
Borrower does not engage in any banking, insurance, common carrier,
broadcasting or gas or electric utility or other regulated activities to a
degree which requires it to obtain approval from any governmental authority,
other than approvals which have been properly obtained, as a condition to executing
or delivering the Loan Documents to which it is a party or to performing any of
its obligations under the Loan Documents to which it is a party.  The Borrower is not aware of any filing
required to be made or any governmental permit or authorization required to be
obtained in connection with the delivery or execution of the Loan Documents to
which it is a party or the performance of its obligations under the Loan
Documents to which it is a party which has not been made or obtained on or
prior to the date hereof.


 


10.                               Intentions Regarding Creditors.  The Borrower does not have any intent
(actual or otherwise) in connection with the transactions contemplated by the
Loan Documents or otherwise to hinder, delay or defraud any present or future
creditor.  In addition, the Borrower (a) is
not “insolvent” (within the meaning of Section 101(32) of the Bankruptcy
Code of 1978, as amended, or within the meaning of generally accepted
accounting principles) nor will it be rendered “insolvent” as a result of such
transactions, (b) is not engaged nor will it be engaged, nor does it
expect to engage in the reasonably foreseeable future in any business or
transaction with unreasonably small capital, or (c) does not intend to
incur, nor does it expect or believe that it will incur, debts that would be
beyond its ability to pay as such debts mature.


 


11.                               Court Orders.  There are no Court Orders binding on the
Borrower which contain any provisions which might be breached or otherwise
violated by the Borrower’s execution or delivery of the Loan Documents to which
it is a party or by the Borrower’s performance of any of its agreements in the
Loan Documents to which it is a party or which may require the Borrower to
obtain any 


 


B-1-11

















 


consent in connection with
such execution, delivery or performance. 
For purposes of this certificate, the term “Court Order” means any
order, writ, injunction, judgment, determination, award or decree of any court
or governmental instrumentality that names the Borrower and is directed to it
or its property.


 


12.                               No Default.  There is no event or circumstance which might
constitute a default in the payment of (or in the performance of any obligation
applicable to) any indebtedness or material contract or a default under any law
or governmental regulation or court decree or order, in any case which default
could have a material adverse effect on the business, property, assets or
financial condition of the Borrower or which might impair the ability of the
Borrower to perform any of its obligations under the Loan Documents to which it
is a party or related document or instrument, or the ability of the Borrower to
perform any of its obligations to any material third party.


 


13.                               No Omissions.  The Borrower does not know of any other fact
or development which indicates that any advice given in the Jenner Opinion is
inaccurate or misleading.


 


14.                               Investment
Company Act of 1940.  The
Borrower (a) is not and does not hold itself out as being engaged
primarily, nor does it propose to engage primarily, in the business of
investing, reinvesting or trading in securities, (b) has not and is not
engaged in, and does not propose to engage in, the business of issuing
face-amount certificates of the installment type and has no such certificate
outstanding and (c) does not own or propose to acquire investment
securities having a value exceeding 40% of the value of the total assets of the
Borrower (exclusive of government securities and cash items) on  an unconsolidated basis.  For the purposes of this paragraph 14, the
following terms shall have the following meanings:


 


“control” means the power to
exercise a controlling influence over the management or policies of a company
(as such term is hereinafter defined), unless such power is solely the result
of an official position with such company. 
Any person who owns beneficially, either directly or through one or more
controlled companies, more than 25 per centum of the voting securities (as such
term is hereinafter defined) of a company shall be presumed to control such
company.  Any person who does not so own
more than 25 per centum of the voting securities of any company shall be
presumed not to control such company. 
Any such presumption may be rebutted by evidence, but except as
otherwise provided in the Investment Company Act of 1940, shall continue until
a determination to the contrary made by the Securities and Exchange Commission
by order either on its own motion or on application by an interested person.


 


“employees’ securities
company” means any investment company or similar issuer all of the outstanding
securities of which (other than short-term paper) are beneficially owned (A) by
the employees or persons on retainer of a single employer or of two or more
employers each of which is an affiliated company of the other, (B) by
former employees of such employer or employers, (C) by members of the
immediate family of such employees, persons on retainer or former employees, (D) by
any two or more of the foregoing classes of persons, or (E) by such
employer or employers together with any one or more of the foregoing classes of
persons.


 


“face-amount certificate of
the installment type” means any certificate, investment contract, or other
security that represents an obligation on the part of its issuer to pay a
stated or determinable sum or sums at a fixed or determinable date or dates
more than twenty-four months after the date of issuance, in consideration of
the payment of periodic installments of a stated or determinable amount.


 


B-1-12

















 


“government security” means
any security issued or guaranteed as to principal or interest by the United
States, or by a person controlled or supervised by and acting as an
instrumentality of the Government of the United States pursuant to authority
granted by the Congress of the United States; or any certificate of deposit for
any of the foregoing.


 


“investment securities”
includes all securities except (A) government securities, (B) securities
issued by employees’ securities companies, and (C) securities issued by
majority-owned subsidiaries (as such term is hereinafter defined) of the owner
which (i) are not engaged and do not propose to be engaged in any of the
activities contemplated by the first sentence of paragraph 14 of this Support
Certificate, and (ii) are not relying on the exception from the definition
of investment company in paragraph (1) or (7) of subsection (c) of
the Investment Company Act of 1940.


 


“majority-owned subsidiary”
of a person means a company 50% or more of the outstanding voting securities of
which are owned by such person, or by a company which, within the meaning of
this paragraph, is a majority-owned subsidiary of such person.


 


“person” means any natural
person or a company.  “Company” means a
corporation, partnership, association, joint-stock company, trust, fund, or any
organized group of persons whether incorporated or not; or any receiver,
trustee in a case under Title 11 of the United States Code or similar official
or any liquidating agent for any of the foregoing, in his capacity as such.


 


“security” means any note,
stock, treasury stock, security future, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any profit-sharing agreement,
collateral-trust certificate, reorganization certificate or subscription,
transferable share, investment contract, voting-trust certificate, certificate
of deposit for a security, fractional undivided interest in oil, gas, or other
mineral rights, any put, call, straddle, option, or privilege on any security
(including a certificate of deposit) or on any group or index of securities
(including any interest therein or based on the value thereof), or any put,
call, straddle, option, or privilege entered into on a national securities
exchange relating to foreign currency, or, in general, any interest or
instrument commonly known as a “security,” or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing.


 


“value” means (i) with
respect to securities owned at the end of the last preceding fiscal quarter for
which market quotations are readily available, the market value at the end of
such quarter; (ii) with respect to other securities and assets owned at
the end of the last preceding fiscal quarter, fair value at the end of such
quarter, as determined in good faith by the board of directors; and (iii) with
respect to securities and other assets acquired after the end of the last
preceding fiscal quarter, the cost thereof. 
Notwithstanding the fact that market quotations for securities issued by
controlled (see definition of control above) companies are available, the board
of directors may in good faith determine the value of such securities:  Provided, that the value so determined is not
in excess of the higher of market value or asset value of such securities in
the case of a majority-owned subsidiaries, and is not in excess of market value
in the case of other controlled companies.


 


“voting security” means any
security presently entitling the owner or holder thereof to vote for the
election of directors of a company (or their equivalent, e.g., general partner
of a limited partnership or manager of a limited liability company).


 


B-1-13

















 


IN
WITNESS WHEREOF, the undersigned has executed this certificate as of the date
first written above.


 


 


	
   

  	
   

  	
  HAWAIIAN ELECTRIC
  INDUSTRIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						



 


B-1-14
















 


EXHIBIT
B-2


 


FORM OF
OPINION LETTER OF CHET A. RICHARDSON, ESQ., SENIOR VICE PRESIDENT, GENERAL
COUNSEL, AND CHIEF ADMINISTRATIVE OFFICER OF THE BORROWER


 


May 7, 2010

JPMorgan Chase Bank, N.A., as Administrative Agent,

and the Lenders referred to in the

Credit Agreement (as defined below)

10 South Dearborn Street

Chicago, IL 60603


 


Re:  Hawaiian Electric Industries, Inc.


 


Ladies and Gentlemen:


 


I am the Senior Vice
President, General Counsel, and Chief Administrative Officer of Hawaiian
Electric Industries, Inc., a Hawaii corporation (the “Borrower”),
and, as such, I have acted as its counsel in connection with the Credit
Agreement dated as of May 7, 2010 (the “Credit Agreement”), among
the Borrower, the lenders party thereto (collectively, the “Lenders” and
each, a “Lender”), the agents party thereto, and JPMorgan Chase Bank,
N.A., a national banking association, 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)(ii) of the
Credit Agreement.


 


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


 


(i)  the Credit
Agreement;


 


(ii)  the Notes;


 


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


 


(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 December 14, 2009, as to the titles, incumbency, and specimen
signatures of certain officers of the Borrower; and


 


(vi) 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, I 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 I have considered necessary or appropriate for the
purposes of this opinion.


 


B-2-1

















 


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
I have deemed relevant, I am 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 my 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.             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 indenture or other material agreement or other material
instrument binding upon the Borrower, 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, 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 which in my experience, without
having made any special investigations as to the applicability of any specific
law, rule or regulation, are normally applicable to transactions of the
type contemplated by the Loan Documents, and (iii) will not result in the
creation or imposition of any Lien on any asset of the Borrower. 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.


 


6.             To
my 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, would 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.


 


B-2-2

















 


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)          I am a member of the Bar of the State
of Hawaii and I do not hold myself out as an expert 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. I
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.
My 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 I 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)          I 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. My 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)          I have assumed the genuineness of all
signatures (other than the signatures of the officers of the Borrower), the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me 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 me by Borrower and the capacity of each party
executing a document (other than Borrower) to so execute such document.


 


(d)          My 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 my
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)           I 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.


 


B-2-3

















 


(g)          My 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)          I 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)           My 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 my knowledge,” “known to me,” or “nothing has
come to my attention” or other phrase of similar import, such phrase is
intended to mean the actual knowledge of information by the lawyers in my law
department 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 the Borrower’s law department, a
general search of all files or any other type of independent investigation.


 


This opinion is based on
the laws and regulations as in effect on the date hereof and facts as I
understand them as of the date hereof. I am 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.


 


You may rely upon this
opinion only for the purpose served by the provision in the Credit Agreement
cited in the initial paragraph of this opinion letter in response to which it
has been delivered.  Without my written
consent: (i) no Person other than you (and your permitted assignees under
the Credit Agreement) may rely on this opinion letter for any purpose; (ii) this
opinion letter may not be cited or quoted in any financial statement,
prospectus, private placement memorandum or other similar document; (iii) this
opinion letter may not be cited or quoted in any other document or
communication which might encourage reliance upon this opinion letter by any
Person or for any purpose excluded by the restrictions in this paragraph; and (iv) copies
of this opinion letter may not be furnished to anyone for purposes of
encouraging such reliance.


 


 


Very truly yours,


 


B-2-4

















 


EXHIBIT C


 


FORM OF
NOTE


 


$                                New
York, New York


 


May 7, 2010


 


For value received, the
undersigned, HAWAIIAN ELECTRIC INDUSTRIES, INC., a Hawaii corporation (the “Borrower”), hereby promises to pay
to the order of [NAME OF LENDER] (the “Lender”),
at the office of the Administrative Agent (hereinafter defined) located at 10
South Dearborn Street, Chicago, Illinois 60603 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 clearly demonstrated
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 May 7, 2010 (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
JPMorgan Chase Bank, N.A., as Issuing Bank and 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.


 


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.


 


C-1

















 


This Note shall be
governed by, and interpreted and construed in accordance with, the laws of the
State of New York without regard to principles of conflict of laws.


 


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]


 


C-2

















 


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


 


	
   

  	
  HAWAIIAN ELECTRIC INDUSTRIES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


[Signature Page to
Note]


 


C-3

















 


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

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


C-1

















 


EXHIBIT D


 


FORM OF
BORROWING REQUEST


 


                             ,
20    


 


VIA HAND DELIVERY, FACSIMILE OR
ELECTRONIC DELIVERY


 


JPMorgan Chase Bank,
N.A., as Administrative Agent

10 South Dearborn, Floor 7th


IL1-0010

Chicago, IL 60603-2003


Attention:  Hiral Patel


Facsimile No.:  312-385-7096


 


Copy to:


 


JPMorgan Chase Bank,
N.A., as Administrative Agent


1999 Avenue Of The Stars,
Floor 27


CA2-1274

Los Angeles, CA 90067-6022


Attention:  Jeff Bailard


Facsimile No.:  310-860-7110


 


Ladies and Gentlemen:


 


Reference is made to the
Credit Agreement, dated as of May 7, 2010 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Hawaiian Electric Industries, Inc., a
Hawaii corporation (the “Borrower”),
the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., 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.


 


(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
          ,
20       (a Business Day), which Borrowing shall
consist of the following Borrowings:


 


	
  Type
  of Borrowing (Eurodollar or ABR Borrowing)

  	
   

  	
  Amount

  	
   

  	
  Initial Interest Period for

  Eurodollar Borrowing

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
   

  	
  2-weeks
  /     month[s]

  	
   

  
							



 


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


 


Hawaiian Electric
Industries, Inc.


Account #


 


 


 


D-1

















 


(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 as follows, that on the date hereof and on the Borrowing Date
set forth above:  (A) 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) are 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 such
representations and warranties were true and correct in all material respects
on and as of such earlier date) and (B) no Material Subsidiary
Indebtedness Event has or shall have occurred and be continuing.


 


[remainder
of page intentionally left blank]


 


D-2

















 


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 INDUSTRIES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


D-3
















 


EXHIBIT E


 


FORM OF
LETTER OF CREDIT REQUEST


 


                   ,
20   


 


VIA HAND DELIVERY, FACSIMILE OR
ELECTRONIC DELIVERY


 


JPMorgan Chase Bank,
N.A., as Issuing Bank

Global Trade Services


300 South Riverside Plaza

Chicago, IL 60606-0236


Attention:  Standby LC Unit

Email: GTS.Client.Services@JPMChase.com


Facsimile
No.:  312-233-2266


 


JPMorgan Chase Bank,
N.A., as Administrative Agent

10 South Dearborn, Floor 7th


IL1-0010

Chicago, IL 60603-2003


Attention:  Hiral Patel


Facsimile No.:  312-385-7096


 


Ladies and Gentlemen:


 


Reference is made to the
Credit Agreement, dated as of May 7, 2010 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among
Hawaiian Electric Industries, Inc., a Hawaii corporation (the “Borrower”), the Lenders from time to
time party thereto and JPMorgan Chase Bank, N.A., 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.


 


1.  Pursuant to Section 2.09 of the Credit
Agreement, the Borrower hereby requests that the Issuing Bank issue the Letter
of Credit on           ,
20     (the “Issuance Date”),
in accordance with the information annexed hereto (attached additional sheets
if necessary).


 


2.  The Borrower hereby certifies that on the
date hereof and on the Issuance Date set forth above, and immediately after
giving effect to the issuance of the Letter(s) of Credit requested hereby
no Default has or shall have occurred and be continuing.


 


3.  The Borrower hereby certifies as follows,
that on the date hereof and on the Issuance Date set forth above:  (A) 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) are
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 such representations and warranties were true
and correct in all material respects on and as of such earlier date) and (B) no
Material Subsidiary Indebtedness Event has or shall have occurred and be
continuing.


 


[remainder
of page intentionally left blank]


 


E-1

















 


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


 


	
   

  	
  Very truly yours,

  
	
   

  	
  HAWAIIAN ELECTRIC INDUSTRIES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


E-2

















 


LETTER OF
CREDIT INFORMATION


 


	
  1.

  	
  Name of Beneficiary:

  
	
   

  	
   

  
	
  2.

  	
  Address of Beneficiary
  to which Letter of Credit will be sent:

  
	
   

  	
   

  
	
   

  	
   

  
	
  3.

  	
  Obligations in respect
  of which the Letter of Credit is to be issued:

  
	
   

  	
   

  
	
   

  	
   

  
	
  4.

  	
  Conditions under which
  a drawing may be made (specify any documentation required to be delivered
  with any drawing request):

  
	
   

  	
   

  
	
   

  	
   

  
	
  5.

  	
  Maximum amount to be
  available under such Letter of Credit:
  $                  .

  
	
   

  	
   

  
	
  6.

  	
  Requested date of
  issuance:
                ,
  20      .

  
	
   

  	
   

  
	
  7.

  	
  Requested date of
  expiration:
              ,
  20      .

  



 

















 


EXHIBIT F


 


FORM OF
INCREASE REQUEST


 


INCREASE REQUEST, dated
and effective as of
              ,
20      , to the Credit Agreement, dated as of May 7,
2010, by and among Hawaiian Electric Industries, Inc., a Hawaii
corporation (the “Borrower”), the Lenders party
thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and Issuing Bank
(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 financial
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           ,
20      .]


 


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 be
continuing and immediately after giving effect thereto, the Aggregate Revolving
Commitments shall not have been increased pursuant to Section 2.05(d) to
an amount which is greater than the sum of (x) $150,000,000 plus (y) the
amount of the Revolving Commitment of each Lender that becomes a Defaulting
Lender.


 


6.  Pursuant to Section 2.05(d) of the
Credit Agreement, by execution and delivery of this Increase Request, 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.


 


F-1

















 


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 INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
  as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Proposed Institution]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


 


Agreed and Consented to:


 


JPMORGAN CHASE
BANK, N.A.,

as Administrative Agent and Issuing Bank


 


	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  



 


F-2

















 


EXHIBIT G


 


FORM OF
INTEREST ELECTION REQUEST


 


[          ],
20[      ]


 


VIA HAND DELIVERY, FACSIMILE OR
ELECTRONIC DELIVERY


 


JPMorgan Chase Bank, N.A.,
as Administrative Agent

10 South Dearborn, Floor 7th


IL1-0010

Chicago, IL 60603-2003


Attention:  Hiral Patel


Facsimile No.:  312-385-7096


 


Copy to:


 


JPMorgan Chase Bank,
N.A., as Administrative Agent


1999 Avenue Of The Stars,
Floor 27


CA2-1274

Los Angeles, CA 90067-6022


Attention:  Jeff Bailard


Facsimile No.:  310-860-7110


 


Ladies and Gentlemen:


 


Reference is made to the
Credit Agreement, dated as of May 7, 2010 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among
Hawaiian Electric Industries, Inc., a Hawaii corporation (the “Borrower”), the Lenders from time to
time party thereto and JPMorgan Chase Bank, N.A., 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           ,
20      , to continue
$                  
in principal amount of presently outstanding Eurodollar Borrowings having an
Interest Period that expires on
          ,
20       to new Eurodollar Borrowings that have
an Interest Period of 2 weeks/
            
month[s];]


 


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


 


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


 


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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 INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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[Signature page to
Notice of Conversion]


 


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