Document:

Form of Hawaiian Electric Industries, Inc. Stock Option Agreement

 HEI Exhibit 10.7(b) 
  
 HAWAIIAN ELECTRIC INDUSTRIES, INC. 
 NON-QUALIFIED STOCK OPTION AGREEMENT 
 WITH DIVIDEND EQUIVALENTS 
  
 THIS AGREEMENT, dated effective as of Date, is made by and between
Hawaiian Electric Industries, Inc., a Hawaii corporation hereinafter referred to as the “Company,” and Name, an employee of the Company or of a Subsidiary of the Company, hereinafter referred to as the “Employee.”

  
 WHEREAS, the Company has heretofore adopted the 1987 Stock
Option and Incentive Plan of Hawaiian Electric Industries, Inc. (as amended and restated effective January 21, 2003) (hereinafter referred to as the “Plan”); 
  
 WHEREAS, the Compensation Committee of the Company’s Board of Directors (hereinafter referred to as the
“Committee”), appointed to administer the Plan, has determined that it would be to the advantage and best interest of the Company and its shareholders to grant to the Employee an option to acquire shares of the Common Stock of the Company
pursuant to the Plan as an inducement to the Employee to remain in the service of the Company or its Subsidiary and as a long-term incentive for sustained high levels of performance for the Company and its Subsidiaries; and 
  
 WHEREAS, the Committee has instructed the Company to issue said option, which
the Committee has determined should be a “Non-Qualified Stock Option” as authorized under the Plan, pursuant to the terms and conditions set forth herein; 
  
 NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows: 

 ARTICLE I 
 DEFINITIONS 
  
 Whenever
the following terms are used in this Agreement they shall have the meanings specified below unless the context clearly indicates to the contrary. 
  
 Section 1.1 - Average Fair Market Value 
  
 “Average Fair Market Value” means, as of any determination date, the average of the daily high and low sales
prices of the Common Stock on the 
  
 New York Stock Exchange as
quoted in the Composite Transactions published in the Western Edition of The Wall Street Journal for all trading days during the calendar month preceding the determination date. If the Common Stock is not admitted to trade on the New York Stock
Exchange, the Average Fair Market Value shall be determined by the Committee in such other reasonable manner as the Committee shall decide. 
  
 Section 1.2 - Board of Directors 
  

“Board of Directors” means the Board of Directors of the Company. 
  
 Section 1.3 - Cause 
  
 “Cause” means, with respect to the discharge by the Company of the Employee, (i) refusal to perform duties
assigned in accordance with the Employee’s employment agreement with the Company, if any, or assigned by any officer of the Company, or overt and willful disobedience of orders or directives issued to the Employee by the Company, and within the
scope of the Employee’s duties to the Company; (ii) commission of illegal acts in connection with the performance of duties on behalf of the Company; or (iii) material violation of the Company’s policies and procedures. 
  

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 Section 1.4 - Code 
  
 “Code” means the Internal Revenue Code of 1986, as amended.

  
 Section 1.5 - Committee

  
 “Committee” means the Compensation Committee of the
Board of Directors. The Committee will consist of two or more persons who are “disinterested persons” within the meaning of Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended, and “outside
directors” within the meaning of Section 162(m) of the Code. 
  
 Section 1.6 - Common Stock 
  
 “Common Stock” means the Common Stock of the Company. 
  
 Section 1.7 - Fair Market Value 
  

“Fair Market Value” means, as of any determination date, the average of the daily high and low sales prices of the Common Stock on the
composite tape for stocks listed on the New York Stock Exchange as quoted in the New York Stock Exchange Composite Transactions published in the Western Edition of The Wall Street Journal on the date as of which Fair Market Value is to be
determined, or if there is no trading of Common Stock on such date, the average of the daily high and low sales prices of the Common Stock as quoted in such Composite Transactions on the next preceding date on which there was trading in such shares,
or if the Common Stock is not admitted to trade on the New York Stock Exchange, the Fair Market Value shall be determined by the Committee in such other reasonable manner as the Committee shall decide. 
  
 Section 1.8 - Option 
  
 “Option” means the option to purchase shares of Common Stock
granted under this Agreement. 
  

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 Section 1.9 - Plan 
  
 “Plan” means the Company’s 1987 Stock Option and Incentive
Plan, as amended and restated effective January 21, 2003, and as may be further amended from time to time. 
  
 Section 1.10 - Subsidiary 
  
 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such
chain. 
  
 Section 1.11 - Termination
of Employment 
  
 “Termination of Employment” means
the time when the employee-employer relationship between the Employee and the Company or a Subsidiary is terminated for any reason, including but not limited to a termination by resignation, discharge, death or retirement, but excluding any
termination where there is a simultaneous reemployment by the Company or a Subsidiary. The Committee, in its sole discretion, shall determine the effect of all other matters and questions relating to Termination of Employment, including but not
limited to the question of whether a Termination of Employment resulted from a discharge for Cause, and all questions of whether particular leaves of absence constitute Terminations of Employment. 
  

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 ARTICLE II 
  
 GRANT OF OPTION 
  
 Section 2.1 - Grant of Option 
  
 In consideration of the Employee’s continued service to the Company or its Subsidiaries and for other good and valuable consideration, on the date
hereof the Company grants to the Employee the option to purchase any part or all of an aggregate of «Shares» shares of its Common Stock, subject to the vesting provisions and upon the terms and conditions set forth in this
Agreement. 
  
 Section 2.2 - Purchase
Price 
  
 The purchase price of the shares of Common Stock
covered by the Option shall be share price per share, without commission or other charge, which represents the Average Fair Market Value. 
  
 Section 2.3 - Consideration to the Company 
  
 In consideration of the granting of the Option by the Company the Employee agrees to render faithful and efficient services
to the Company or a Subsidiary, with such duties and responsibilities as the Company shall from time to time prescribe, from the date the Option is granted to the date of Termination of Employment. Nothing in this Agreement or in the Plan shall
confer upon the Employee any right to continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are hereby expressly reserved, to discharge the
Employee at any time for any reason whatsoever, with or without Cause. 
  
 Section 2.4 - Adjustments to the Option 
  
 The number of shares, purchase price and other terms and conditions of this option are subject to adjustment by the Committee in accordance with the Adjustment Provisions of the Plan, as in existence on the date of
this Agreement. Any such adjustment by the Committee shall be final and binding upon the Employee, the Company, and all other interested persons. 
  

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 ARTICLE III 
  
 PERIOD OF EXERCISABILITY 
  
 Section 3.1 - Commencement of Exercisability 
  
 (a) The Option shall vest and become exercisable in four (4) cumulative installments, as follows: 
  
 (i) The first installment shall consist of 25% of the shares covered by the
Option and shall vest and become exercisable on the first anniversary of the date the Option was granted. 
  
 (ii) The second installment shall consist of 25% of the shares covered by the Option and shall vest and become exercisable on the second anniversary of
the date the Option was granted. 
  
 (iii) The third installment
shall consist of 25% of the shares covered by the Option and shall vest and become exercisable on the third anniversary of the date the Option was granted. 
  
 (iv) The fourth installment shall consist of 25% of the shares covered by the Option and shall vest and become exercisable on the fourth anniversary of
the date the Option was granted. 
  
 (b) No portion of the Option
which is unexercisable under the terms of this Agreement at Termination of Employment shall thereafter become exercisable, unless the Committee, in its sole discretion, elects to accelerate the vesting of all or any portion of the unvested shares on
the date of termination. 
  
 Section 3.2 -
Duration of Exercisability 
  
 The installments provided
for in Section 3.1 are cumulative. Each such installment which becomes exercisable pursuant to Section 3.1 shall remain exercisable until it becomes unexercisable pursuant to Section 3.3. 
  

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 Section 3.3 - Expiration of Option 
  
 The Option shall expire and may not be exercised to any extent by anyone
after the first to occur of the following events: 
  
 (a) The
expiration of 10 years from the date the Option was granted; or 
  
 (b) The Employee’s Termination of Employment for Cause; or 
  
 (c) The expiration of one year from the date of the Employee’s Termination of Employment for any reason other than retirement, death, disability, or Cause; 
  
 (d) The expiration of three years from the date of the Employee’s
Termination of Employment as a result of the Employee’s retirement, death or disability. 
  
 Section 3.4 - Acceleration of Exercisability 
  
 (a) If the Employee’s Termination of Employment occurs as a result of retirement, then upon such retirement the Option
shall become exercisable as to all shares covered thereby, notwithstanding that the Option may not yet have become fully exercisable under Section 3.1(a). 
  
 (b) Notwithstanding the provisions of Section 3.1, in the event of a Change in Control of the Company the Option shall become fully vested and exercisable
as to all shares covered thereby. 
  
 (c) For purposes of this
Section 3.4, a “Change in Control” shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied: 
  
 (i) any Person is or becomes the beneficial owner (as defined in Rule 13d-3 under the Securities and Exchange Act of 1934,
as amended (the “Exchange Act”)), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or any of its affiliates)
representing more than 30% of the combined voting power of the Company’s then outstanding securities; or 
  

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 (ii) during any period of two (2) consecutive years (not including any period prior to the execution of
this Agreement), individuals who at the beginning of such period constitute the Board of Directors of the Company (the “Board”) and any new director (other than a director designated by a Person who has entered into an agreement with the
Company to effect a transaction described in clause (i), (iii), or (iv) of this Section 3.4(c) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or 
  
 (iii) there is consummated a merger or consolidation of the Company with
any other company, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its affiliates, at least 75% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no
Person acquires more than 50% of the combined voting power of the Company’s then outstanding securities, or 
  
 (iv) the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of
all or substantially all of the Company’s assets. 
  

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 (d) For purposes of this Section 3.4, “Person” shall have the meaning given in Section 3(a)(9)
of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; provided, however, a Person shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a Company owned, directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company. 
  
 ARTICLE IV 
  
 EXERCISE OF THE OPTION 

 
 Section 4.1 - Persons Eligible to Exercise

  
 During the lifetime of the Employee, only the Employee may
exercise the Option, or any portion thereof. After the death of the Employee any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable pursuant to Section 3.3, be exercised by the Employee’s personal
representative or by any person empowered to do so under the Employee’s will or under the then applicable laws of descent and distribution. 
  
 Section 4.2 - Partial Exercise 
  
 Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable pursuant to Section 3.3; provided, however, that each partial exercise shall be for not less than one thousand (1,000) shares (or minimum installment set forth in Section 3.1, if a smaller
number of shares) and shall be for whole shares only. 
  
 Section 4.3 - Manner of Exercise 
  
 The
Option, or any exercisable portion thereof, may be exercised solely by delivery to the Company of all of the following prior to the time when the Option or such portion becomes unexercisable pursuant to Section 3.3: 
  

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 (a) Notice in writing signed by the Employee or other person then entitled to exercise the Option or
portion, stating that the Option or portion is thereby exercised, such notice complying with all applicable rules established by the Committee; and 
  
 (b) Full payment for the shares with respect to which the Option or portion is exercised at the time of exercise in cash or its equivalent, including
shares of Common Stock, acceptable to the Company; and 
  
 (c) In
the event the Option or portion shall be exercised by any person or persons other than the Employee, appropriate proof of the right of such person or persons to exercise the Option. 
  
 Section 4.4 - Manner of Payment 
  
 The purchase price for the shares of Common Stock with respect to which the
Option (or portion thereof) is exercised may be paid in cash, by check, by assignment and delivery to the Company of shares of Common Stock, or by any combination of the foregoing equal in value to the exercise price. Any shares assigned and
delivered to the Company in payment or partial payment of the purchase price shall be valued at their Fair Market Value on the exercise date. In no event may any shares of Common Stock acquired by the Employee pursuant to the exercise of an Option
be assigned and delivered as payment of the purchase price of the Option. 
  
 Section 4.5 - Conditions to Issuance of Stock Certificates 
  
 The shares of Common Stock deliverable upon the exercise of the Option, or any part thereof, may be either previously authorized but unissued shares or
issued shares which have been reacquired by the Company. Such shares shall be fully paid and nonassessable. Unless waived by the Committee, in its sole discretion, the Company shall not be required to issue or deliver any certificate or certificates
for shares of Common Stock purchased upon exercise of the Option or part thereof prior to fulfillment of all of the following conditions: 
  
 (a) The admission of such shares to listing on all stock exchanges on which such class of stock is then listed; and 
  

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 (b) The completion of any registration or other qualification of such shares, or the completion of any
arrangements necessary or advisable to qualify for an exemption from any such registration or other requirements, under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental
regulatory body, which the Committee shall, in its sole discretion, deem necessary or advisable, including the completion of any reasonable action that the Committee may request the Employee to take in order to satisfy all such regulatory
requirements; and 
  
 (c) The obtaining of any approval or other
clearance from any state or federal governmental agency which the Committee shall, in its sole discretion, determine to be necessary or advisable; and 
  
 (d) The lapse of such reasonable period of time following the exercise of the Option as the Committee may from time to time establish for reasons of
administrative convenience; and 
  
 (e) The receipt by the Company
of full payment for such shares and the conclusion of any arrangements that may be required to satisfy the Company’s obligation to withhold taxes. 
  
 Section 4.6 - Rights as Shareholders 
  
 The holder of the Option shall not be, nor have any of the rights or privileges of, a shareholder of the Company in respect
of any shares purchasable upon exercise of any part of the Option unless and until certificates representing such shares shall have been issued by the Company to such holder. 
  
 Section 4.7 - Company Obligations 
  
 In the event the Company fails to fulfill its obligations under this
Agreement, the Company shall be liable to the Employee, his beneficiary or any other person entitled to exercise the Option under this Agreement, for any attorney’s fees and other legal costs related to enforcing such person’s rights under
this Agreement. 
  

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 ARTICLE V 
 DIVIDEND EQUIVALENTS 
  
 The Employee also shall be awarded, at no additional cost, “Dividend Equivalents” based on the dividends declared on record dates during (and only during) the vesting period specified in Section 3.1 hereof, or during any shorter
vesting period pursuant to section 3.4 hereof. Dividend equivalents shall be paid in the form of Common Stock and shall be paid only in the event and to the extent that the Employee exercises the Option. The number of Dividend Equivalent shares to
be paid to the Employee upon exercise of the Option shall be computed as follows: 
  
 (a) As of each dividend record date during the vesting period, the dividend which would be payable with respect to the sum of (i) the number of shares with respect to which the Option is then unexercised, and (ii) the
number of Dividend Equivalent shares calculated for all previous periods but not issued prior to the dividend record date shall be computed. The number of Dividend Equivalent shares to be accrued as of the dividend record date shall then be
determined by dividing the dividend which would be payable as of such record date on the number of shares determined by adding items (i) and (ii) of the preceding sentence by the Fair Market Value of the Common Stock as of such record date.

  
 (b) The total number of Dividend Equivalent shares potentially
available to the Employee upon any exercise of the Option shall be equal to the difference between (i) the total number of Dividend Equivalent shares earned by the Employee for all dividend record dates prior to the date of such exercise (as
determined pursuant to paragraph (a) above and (ii) the total number of Dividend Equivalent shares previously paid to the Employee in connection with any prior exercise(s) of the Option. 
  
 (c) The number of Dividend Equivalent shares to be paid to the Employee upon any exercise of the option shall be equal to
the total number of Dividend Equivalent shares potentially available to the Employee upon such exercise (as determined pursuant to paragraph (b) above) multiplied by a fraction, the numerator of which is the number of shares with respect to which
the Option is then being exercised and the denominator of which is the number of shares with respect to which the Option was unexercised immediately prior to said exercise. 
  

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 (d) Dividend Equivalents shall be paid only in the form of whole shares of Common Stock. No fractional
shares shall be issued upon payment of Dividend Equivalents, but a cash payment shall be made by the Company in lieu of fractional shares. 
  
 ARTICLE VI 
 MISCELLANEOUS 
  
 Section 6.1 - Administration 
  
 The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee in
good faith shall be final and binding upon the Employee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan
or the Option. 
  
 Section 6.2 -
Options Not Transferable 
  
 Neither the Option nor any
interest or right therein or part thereof shall be liable for the debts, contracts, or engagements of the Employee or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) and any attempted disposition
thereof shall be null and void and of no effect; provided, however, that this Section 6.2 shall not prevent transfers by will or by the applicable laws of descent and distribution. 
  
 Section 6.3 - Shares to be Reserved 
  
 The Company shall at all times during the term of the Option reserve and
keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement. 
  
 Section 6.4 - Fractional Shares 
  

Notwithstanding any other provision of this Agreement to the contrary, no fractional shares shall be issued upon exercise of the Option, but cash
payment shall be made by the Company in lieu of fractional shares. 
  

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 Section 6.5 - Withholding of Taxes 
  
 The Company may make such provisions as it deems appropriate to withhold any
taxes the Company or any Subsidiary may be required to withhold (including any amounts required to be withheld in order for the Company or any Subsidiary to obtain a tax deduction), or to require the Employee to take any action necessary to satisfy
any withholding obligations of the Company, in connection with the grant or exercise of the Option, or in connection with the sale or other disposition of shares acquired upon exercise of the Option, and the Employee agrees to be bound by the same.
The Employee may satisfy any such withholding tax obligation by: (a) tendering a cash payment; (b) authorizing the Company to withhold from the shares of Common Stock otherwise issuable to the Employee as a result of the exercise of the Option a
number of shares having a Fair Market Value, as of the date the withholding tax obligation arises, less than or equal to the amount of the withholding tax obligation; or (c) delivering to the Company already owned and unencumbered and unrestricted
shares of Common Stock having a Fair Market Value, as of the date the withholding tax obligation arises, less than or equal to the amount of the withholding tax obligation. 
  
 Section 6.6 - Notices 
  
 Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its
Secretary and any notice to be given to the Employee shall be addressed to him at the address given beneath his signature hereto. By a notice given pursuant to this Section 6.6, either party may hereafter designate a different address for notices to
be given to such party. Any notice which is required to be given to the Employee shall, if the Employee is then deceased, be given to the Employee’s personal representative if such representative has previously informed the Company of his
status and address by written notice under this Section 6.6. Any notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service. 
  

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 Section 6.7 - Entire Agreement; Relationship to the Plan 
  
 This Agreement and the Plan sets forth the sole entire agreement and
understanding between the parties as to the subject matter hereof, and merges with and supersedes all prior and contemporaneous discussions, agreements and understandings of every and any nature between them with respect to the subject matter
hereof. Except to the extent provided in Section 6.1, and except to the extent that provisions hereof are by their terms subject to any subsequent amendment of the Plan, this Agreement may not be changed or modified, except by agreement in writing,
signed by the party to be bound thereby. In the event of any conflict or inconsistency between this Agreement and the Plan as written on the date of this Agreement, the Plan shall govern. 
  
 Section 6.8 - Parties in Interest 
  
 All the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their respective successors in interest. 
  
 Section 6.9 - Severability 
  
 The provisions of this Agreement are severable, and if any one or more provisions shall be determined to be judicially unenforceable, in whole or in part,
the remaining provisions, and any partially unenforceable provisions, to the extent enforceable, shall nevertheless be binding and enforceable upon the parties hereto. 
  
 Section 6.10 - Headings 
  
 The headings in the Sections of this Agreement are provided for convenience only and shall not serve as a basis for
interpretation or construction of this Agreement. 
  
 Section 6.11 - Counterparts 
  
 This
Agreement may be executed simultaneously in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  

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 Section 6.12 - Governing Law 
  
 This Agreement and the rights of the parties hereunder shall be interpreted
in accordance with, and governed by, the laws of the State of Hawaii. 
  
 IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto effective as of the day and year first above written. 
  

			
	 HAWAIIAN ELECTRIC INDUSTRIES, INC.

		
	 By
	 	  

	 	 	 Chairman, HEI Compensation Committee

		
	 By
	 	  

	 	 	 Vice President – Administration &

	 	 	 Corporate Secretary

  

	
	  

	 Name

  
 Employee’s Social Security
Number: SSN 
  

 - 16 -Guarantee Agreement Black River Energy and HELCO (Jones)

 HECO Exhibit 10.7(e) 
  
 EXHIBIT A 
  
 GUARANTEE AGREEMENT 
  
 between 
  
 BLACK RIVER ENERGY, LLC 
  
 and 
  
 HAWAII ELECTRIC LIGHT COMPANY, INC. 
  
 THIS GUARANTEE AGREEMENT (“Guarantee”) is made this
     day of                  2004 by and between HAWAII ELECTRIC LIGHT COMPANY, INC., a Hawaii corporation (“HELCO”), with
principal offices in Hilo, Hawaii, and BLACK RIVER ENERGY, LLC, a Delaware limited liability company (“Guarantor”), with principal offices in Charlotte, North Carolina. 
  
 W I T N E S S E T H: 
  
 WHEREAS, HELCO is a regulated public utility engaged in the business of
generation, transmission and distribution of electric power to customers on the island of Hawaii, Hawaii; and 
  
 WHEREAS, Jones Capital, LLC, a Delaware limited liability company (“Jones Capital”), owns (i) 50% of the outstanding interests of Hamakua A,
LLC, a Delaware limited liability company (“Hamakua A”), which owns a 98% limited partner interest in Hamakua Energy Partners LP, a Hawaii limited liability partnership (“HEP”), and (ii) 100% of the outstanding capital stock of
Jones Hamakua, Inc, a Hawaii corporation (“Jones Hamakua”), which owns a 1% general partner interest in HEP; and 
  
 WHEREAS, HEP is party to that certain Power Purchase Agreement, dated as of October 22, 1997, by and between HEP and HELCO, as amended (the
“PPA”) ; and 
  
 WHEREAS, Jones Capital and Guarantor,
which is a wholly-owned subsidiary of Jones Capital, have entered into a purchase agreement pursuant to which Jones Capital and Jones Hamakua have agreed, through a series of transactions, to transfer all of their outstanding equity interests in
each of HEP and Hamakua A (the “Interests”) to Guarantor, and Jones Capital will thereafter sell all of its membership interest in Guarantor (the “Black River Interests”) to EIF Hamakua, LLC, a Delaware limited liability company
(“EIF Hamakua”); and 
  
 WHEREAS, J.A. Jones, Inc., a
Delaware corporation (“Jones”), the parent company of Jones Capital, has guaranteed HEP’s performance under the PPA pursuant to a Guarantee Agreement, dated October 22, 1997, by and between Jones and HELCO (the “Jones
Guarantee”); and 

 WHEREAS, under the PPA, HELCO has certain rights of first refusal, or similar preference rights of
purchase, that may be triggered or otherwise activated in the event that HEP should sell or transfer its interests in the Facility (the “HELCO Rights”). Although they do not believe that the transfer of the Interests to Guarantor and the
subsequent sale of the Black River Interests to EIF Hamakua will trigger the HELCO Rights or any requirement to obtain HELCO’s consent, Jones, Jones Capital, Jones Hamakua, HEP and EIF Hamakua would like to obtain HELCO’s acknowledgement
and consent to the transactions described herein; and 
  
 WHEREAS,
as part of the consideration to them for the sale of the Black River Interests to EIF Hamakua, Jones and Jones Capital would like to obtain from HELCO the termination of the Jones Guarantee and the release of Jones thereunder; and 
  
 WHEREAS, although HELCO does not necessarily concur with the conclusion that
the HELCO Rights will not be triggered by the transfer of the Interests to Guarantor and the subsequent sale of the Black River Interests to EIF Hamakua, HELCO is willing to waive the HELCO Rights with respect to such transfer and such sale, to
acknowledge and consent to such transfer and such sale, and to terminate the Jones Guarantee and release Jones thereunder, all on the terms and conditions set forth in that certain Consent and Agreement dated on or about the date hereof (the
“Consent and Agreement”); and 
  
 WHEREAS, among the
terms and conditions set forth in the Consent and Agreement is the requirement that Guarantor enter into this Guarantee with HELCO; and 
  
 WHEREAS, to induce HELCO to enter into the Consent and Agreement, Guarantor is willing to enter in this Guarantee with HELCO. 
  
 NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby represents, warrants, covenants and agrees with HELCO as follows: 
  
 1. Definitions. All capitalized terms used herein and not defined herein, and which are defined in, or by reference
in, the PPA, as the PPA may be amended from time to time in accordance with its terms, shall have the meanings specified in the PPA. The term “Letter of Credit” shall have the meaning specified in the Consent and Agreement. 
  
 2. Guarantee and Letter of Credit. 
  
 a. Subject to the limitations contained in Section 3,
Guarantor hereby guarantees to HELCO the due and punctual payment, as and when due, of fifty percent (50%) (the “Proportionate Share”) of all sums payable by HEP to HELCO as the result of the non-performance of obligations under the PPA or
other events or circumstances during the term of the PPA. This Guarantee is one of two Guarantees provided by Guarantor and TECO Energy, Inc. in accordance with 

  

 -2- 

 
Section 21.1 of the PPA each of which constitutes a several, not joint, obligation of Guarantor and TECO Energy, Inc., respectively, with respect to any sums
payable by HEP to HELCO under the PPA. In no event shall HELCO have recourse against Guarantor in excess of the lesser of its Proportionate Share of HEP’s payment obligations or the limits set forth in Section 3 below. 
  
 b. This Guarantee is a primary and original obligation of
Guarantor and is an absolute, unconditional, continuing and irrevocable guarantee and is in no way conditioned or contingent upon any attempt to collect payment from or proceed against HEP except as stated otherwise herein. This Guarantee shall
remain in full force and effect until the earlier to occur of the following events: (i) all of HEP’s obligations under the PPA including, without limitation, any obligations for breach thereof, have been fulfilled, (ii) this Guarantee has been
substituted for in accordance with Section 21.1 of the PPA or (iii) the termination of the PPA; provided that obligations arising prior to such termination date shall survive such termination. Any notice required to be given by HELCO to HEP under
the PPA shall also be given by HELCO to Guarantor at: 
  
 Black River Energy, LLC 
 6000 Fairview 
 Charlotte, N.C. 28287 
 Attention: Mr. William Garnett 
 Telephone: (704) 553-3243 
 Facsimile: (704)  553-3037 
  
 (or such other address as Guarantor may designate in writing to HELCO). Guarantor shall have the same opportunity to cure defaults by HEP under the PPA as
HEP shall have; provided, however, that no time period provided in the PPA for cure shall be extended or start anew by virtue of this sentence. 
  
 c. In the event that the PPA shall be terminated as a result of the rejection or disaffirmance thereof by any trustee, receiver or
liquidating agency of HEP or any of its properties, in any assignment for the benefit of creditors or any bankruptcy, insolvency, reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar proceeding,
Guarantor’s obligations hereunder shall continue to the same extent as if such PPA had not been so rejected or disaffirmed. Guarantor shall, and does hereby waive all rights and benefits which might relieve, in whole or in part, Guarantor from
the performance of its duties and obligations hereunder by reason of any such proceeding, and Guarantor agrees that it shall be liable for all sums and obligations guaranteed by this Guarantee without regard to any modification, limitation or
discharge of the liability of HEP that may result from any such proceeding. 
  

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 d. As a material obligation of Guarantor under this Guarantee, Guarantor shall, from the
date first written above through the thirtieth (30th) day following the period this Guarantee is to remain in full
force and effect pursuant to the second sentence of Section 2(b) hereof, maintain or cause to be maintained in full force and effect a Letter of Credit as required by the Consent and Agreement, and shall, no later than thirty (30) days prior to the
expiration of the term of any Letter of Credit then in effect, replace or cause to be replaced such Letter of Credit by delivery to HELCO of a newly issued Letter of Credit, and any failure to maintain such Letter of Credit in full force and effect
as aforesaid, including but not limited to any failure to replace a Letter of Credit no later than thirty (30) days prior to the expiration of the term thereof, shall constitute grounds for HELCO to draw the full amount of the Letter of Credit
regardless of whether or not HELCO would then be permitted to demand payment from Guarantor under this Guarantee. Any such amounts drawn on the Letter of Credit pursuant to the preceding sentence shall be (i) held by HELCO, as security for
Guarantor’s performance of its obligation to maintain the Letter of Credit as aforesaid, until such time as a new Letter of Credit is issued and delivered to HELCO, and (ii) upon the issuance and delivery of a new Letter of Credit as aforesaid,
paid to Guarantor or its designee without interest. 
  
 3.
Guarantee Limits. Guarantor’s obligations under Section 2(a) hereof in the aggregate shall be limited to the amounts shown below with respect to sums as payable by HEP to HELCO pursuant to the PPA as the result of events or circumstances
during the period shown opposite such amounts: 
  

				
	 Period

	  	Amount

	 From Phase 2 In-Service Date to End of Term
	  	$	1,500,000

  
 4. Generally.
Guarantor shall not be liable under Section 2 of this Guarantee to any extent greater than 50% of the liability it would have incurred if it had been the contracting party (in place of HEP) under the PPA, and all the representations and warranties
made by Guarantor in Section 5 hereof in respect of this Guarantee were true in respect of the PPA as well as the Guarantee and notwithstanding any bankruptcy or insolvency of the HEP. In addition, Guarantor shall have no obligation under Section
2(a) of this Guarantee for any claim for payment, performance or otherwise attributable to events or circumstances during the period prior to the Phase 2 In-Service Date, not asserted by HELCO in writing within one hundred eighty (180) days after
the Phase 2 In-Service Date. 
  
 5. Representations and
Warranties. Guarantor represents and warrants as follows: 
  

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 a. Guarantor has full power, authority and legal right to execute and deliver and perform
its obligations under this Guarantee. This Guarantee has been duly executed and delivered by Guarantor and constitutes a legal, valid and binding obligation of Guarantor, enforceable in accordance with its terms, except to the extent that such
enforcement may be limited by any bankruptcy, reorganization, insolvency, moratorium or similar laws affecting generally the enforcement of creditors’ rights from time to time in effect and general principles of equity. 
  
 b. No consent, authorization or approval of, or filing with,
any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, is or has been required in respect of Guarantor in connection with the execution, delivery or performance by
Guarantor of this Guarantee, or the compliance by Guarantor with any of the remedies and provisions hereof. 
  
 c. The execution and delivery of, and performance by Guarantor of its obligations under this Guarantee will not result in a violation of,
or be in conflict with, any provision of the articles of organization or the operating agreement of Guarantor, or result in a violation of, or be in conflict with, or constitute a default or any event which would, with notice or lapse of time, or
both, become a default under, any mortgage, indenture, contract, agreement or other instrument to which Guarantor is a party or by which it or its property is bound, or result in a violation of, or be in conflict with, or result in a breach of; any
term or provision of any judgment, order, decree or award of any court, arbitrator or governmental or public instrumentality binding upon Guarantor or its property, which individually or in the aggregate would materially adversely affect
Guarantor’s ability to perform its obligations under this Guarantee. 
  
 d. Guarantor is not in default, and no conditions exists which, with notice or lapse of time, or both, would constitute a default by Guarantor under any mortgage, loan agreement, deed or trust, indenture or other
agreement with respect thereto, evidence of indebtedness or other instrument of a material nature, to which it is party or by which it is bound, or in violation of, or in default under, any rule, regulation, order writ, judgment, injunction or
decree of any court, arbitrator or federal, state, municipal or other governmental authority, commission, board, bureau, agency, or instrumentality, domestic or foreign, which individually or in the aggregate would materially adversely affect
Guarantor’s ability to perform its obligations under this Guarantee. 
  
 e. There is no action, suit, proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body, pending against Guarantor, or of which Guarantor has otherwise received official
notice, or which to the knowledge of Guarantor is threatened against Guarantor, wherein an adverse 
  

 -5- 

 decision, ruling or finding would have a material adverse effect on the Guarantor’s financial
position or its ability to perform its obligations under this Guarantee. 
  
 f. All agreements, representations and warranties contained herein or made in writing by or on behalf of Guarantor in connection with the transaction contemplated hereby shall survive the execution and delivery of
this Guarantee. 
  
 6. Notice. Guarantor shall give written
notice to HELCO and HEP within ten (10) days after (i) the occurrence of any event or circumstance that results in any of the representations and warranties made by Guarantor in Section 5 ceasing to be accurate, or (ii) the occurrence, with respect
to Guarantor, of any of the events specified in paragraphs (10) or (l1) of Section 7.1A of the PPA as constituting an Event of Default upon the occurrence thereof with respect to HEP. Such notice shall describe, with reasonable particularity, the
event or circumstances that has caused such result and shall specify the effect thereof on all representations and warranties of Guarantor that are affected thereby. 
  
 7. Miscellaneous. 
  
 a. Severability. If any term or provision of this Guarantee or the application thereof to any person, entity or circumstance shall
to any extent be invalid or unenforceable, the remainder of this Guarantee, or the application of such term or provision to persons, entities or circumstances other than those as to which it is invalid or unenforceable, shall not be affected
thereby, and each term and provision of this Guarantee shall be valid and enforceable to the fullest extent permitted by law. 
  
 b. No Waiver. Except as specifically provided otherwise herein, the failure of either party to enforce at any time any of the
provisions of this Guarantee, or to require at anytime performance by the other party of any of the provisions thereof, shall in no way be construed to be a waiver of such provision, nor in any way to affect the validity of this Guarantee or any
part hereof, or the right of such party thereafter to enforce every such provision. 
  
 c. Modification. No modification or waiver of all or any part of this Guarantee shall be valid unless it is reduced to writing and
signed by both parties. 
  
 d. Governing Law
and Interpretation. Interpretation and performance of this Guarantee shall be in accordance with, and shall be controlled by, the laws of the State of Hawaii, other than the laws thereof that would require reference to the laws of any other
jurisdiction. 
  
 e. Counterparts. This
Guarantee may be executed in several counterparts and all such executed counterparts shall constitute one agreement, 
  

 -6- 

 binding on both parties thereto, notwithstanding that both parties may not be signatories to the original
or the same counterpart. 
  
 f. Successors and
Assigns. This Guarantee shall be binding upon Guarantor and its successors and assigns and all persons claiming under or through Guarantor or any such successor or assigns, and shall inure to the benefit of, and be enforceable by, HELCO.

  
 g. Consolidation. In the event that
HELCO brings an action to enforce this Guarantee during the pendency of any proceeding (arbitration or otherwise) between HELCO and HEP, Guarantor shall have the option to join such enforcement action with any such pending proceeding. Moreover,
Guarantor shall have the option to join any such proceeding first brought against Guarantor with any subsequent proceeding brought against HEP. In each of the cases described above, such joinder option shall extend until such time as a final
judgment is rendered in the relevant proceeding. 
  
 IN WITNESS
WHEREOF, HELCO and Guarantor have caused this Guarantee to be executed by their respective duly authorized officers as of the date first above written. 
  

							
	HELCO:	 	GUARANTOR:
		
	HAWAII ELECTRIC COMPANY, INC.	 	BLACK RIVER ENERGY, LLC
				
	By	 	 /s/ Richard A. von Gnechten

	 	By	 	 /s/ William A. Garnett

	Name:	 	Richard A. von Gnechten	 	Name:	 	William A. Garnett
	Its:	 	Financial Vice President	 	Its:	 	President
				
	By	 	 /s/ Lorie Ann Nagata

	 	By	 	 /s/ Terence L. Darby

	Name:	 	Lorie Ann Nagata	 	Name:	 	Terence L. Darby
	Its:	 	Treasurer	 	Its:	 	Chairman

  

 -7-

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