Document:

HECO Exhibit 10.3

 

EXECUTION COPY

 

 

CREDIT AGREEMENT

 

dated as of May 7, 2010

 

among

 

HAWAIIAN ELECTRIC COMPANY,
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

  	
  16

  
	
  Section 1.03

  	
  Accounting Terms; GAAP

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2.

  	
  THE CREDITS

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Commitments

  	
  17

  
	
  Section 2.02

  	
  Revolving Loans and Borrowings

  	
  17

  
	
  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

  	
  31

  
	
  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

  	
  36

  
	
   

  	
   

  	
   

  
	
  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

  	
  38

  
	
  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

  	
  39

  
	
  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

  	
  40

  

 

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

  	
  46

  
	
  Section 7.03

  	
  Restrictive Agreements

  	
  47

  
	
  Section 7.04

  	
  Transactions with Affiliates

  	
  47

  
	
  Section 7.05

  	
  Consolidated Capitalization Ratio

  	
  48

  
	
  Section 7.06

  	
  Guaranties

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8.

  	
  EVENTS OF DEFAULT

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9.

  	
  THE ADMINISTRATIVE AGENT

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Appointment

  	
  50

  
	
  Section 9.02

  	
  Individual Capacity

  	
  50

  
	
  Section 9.03

  	
  Exculpatory Provisions

  	
  50

  
	
  Section 9.04

  	
  Reliance by Administrative Agent

  	
  51

  
	
  Section 9.05

  	
  Performance of Duties

  	
  51

  
	
  Section 9.06

  	
  Resignation; Successors

  	
  51

  
	
  Section 9.07

  	
  Non-Reliance by Credit Parties

  	
  52

  
	
  Section 9.08

  	
  Agents

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10.

  	
  MISCELLANEOUS

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Notices

  	
  52

  
	
  Section 10.02

  	
  Waivers; Amendments

  	
  53

  
	
  Section 10.03

  	
  Expenses; Indemnity; Damage Waiver

  	
  54

  
	
  Section 10.04

  	
  Successors and Assigns

  	
  55

  
	
  Section 10.05

  	
  Survival

  	
  59

  
	
  Section 10.06

  	
  Counterparts; Integration; Effectiveness

  	
  59

  
	
  Section 10.07

  	
  Severability

  	
  59

  
	
  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

  	
  60

  
	
  Section 10.11

  	
  Headings

  	
  61

  
	
  Section 10.12

  	
  Confidentiality

  	
  61

  

 

ii

 

	
  Section 10.13

  	
  Interest Rate Limitation

  	
  61

  
	
  Section 10.14

  	
  No Third Parties Benefited

  	
  62

  
	
  Section 10.15

  	
  USA PATRIOT Act Notice

  	
  62

  
	
  Section 10.16

  	
  No Fiduciary Duty

  	
  62

  

 

SCHEDULES:

 

	
  Schedule 1.01

  	
  Consolidated Capitalization

  
	
   

  	
   

  
	
  Schedule 1.01

  	
  Consolidated Funded Debt

  
	
   

  	
   

  
	
  Schedule 1.01

  	
  Consolidated Subsidiary Funded Debt

  
	
   

  	
   

  
	
  Schedule 2.01

  	
  Commitments

  
	
   

  	
   

  
	
  Schedule 4.12

  	
  Subsidiaries

  
	
   

  	
   

  
	
  Schedule 7.01

  	
  Existing Liens

  
	
   

  	
   

  
	
  Schedule 7.03

  	
  Existing Restrictions

  
	
   

  	
   

  
	
  EXHIBITS:

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Assignment and Acceptance

  
	
   

  	
   

  
	
  Exhibit B-1

  	
  Form of Opinion of Jenner & Block LLP

  
	
   

  	
   

  
	
  Exhibit B-2

  	
  Form of Opinion of Susan A. Li, Vice President-General Counsel
  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
COMPANY, 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 $175,000,000.

 

“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 Company, Inc., a Hawaii corporation.

 

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

 

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

 

“Business Day” 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.

 

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

 

“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 

 

3

 

(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 6, 2011, subject to automatic extension
to the date, and upon the satisfaction of the conditions, set forth in Section 2.05(a),
(b) the date on which the Commitments are terminated in whole pursuant to Section 2.05
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.  The Borrower’s
Consolidated Capitalization as of December 31, 2009 is annexed hereto as Schedule 1.01
(Consolidated Capitalization); for the avoidance of doubt, such
Schedule is attached hereto for illustrative purposes only and is not
intended to be a calculation of Consolidated Capitalization on or for any
subsequent date of determination.

 

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

 

“Consolidated Common Stock Equity”
means, at any date of determination, with respect to the Borrower and its
Subsidiaries on a consolidated basis, the sum of (a) common stock, (b) premium
and/or expenses 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), 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 

 

4

 

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

 

“Consolidated Subsidiary Common Stock Equity”
means, at any date of determination with respect to any Subsidiary of the
Borrower on a consolidated basis, the sum of (a) common stock, (b) premium
and/or expenses 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 Subsidiary Funded Debt”
means, at any date of determination, with respect to any Subsidiary of the
Borrower on a consolidated basis, the sum of (a) net long-term debt,
defined as the portion of outstanding bonds, debentures and similar debt
obligations (including Capital Lease Obligations and Purchase Money
Indebtedness), net of funds on deposit with trustees and unamortized discounts
in respect of such bonds, debentures and obligations, that is due one year or
more from the date of the relevant balance sheet on which such debt is
included, (b) 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 and Purchase Money
Indebtedness) 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 Standard
Codification (ASC) 810 (formerly referred to as FASB Interpretation No. 46
(revised December 2003)), shall constitute Consolidated Subsidiary Funded
Debt. A schedule of Consolidated Subsidiary Funded Debt as of December 31,
2009 is annexed hereto as Schedule 1.01 (Consolidated Subsidiary
Funded Debt); for the avoidance of doubt, such Schedule is attached hereto
for illustrative purposes only and is not intended to be a calculation of
Consolidated Subsidiary Funded Debt on or for any subsequent date of
determination.

 

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

 

“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 

 

5

 

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 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 

 

6

 

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(h) or Article 8(i),
and is continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed); provided, however, that neither the Borrower nor any
Subsidiary or Affiliate of the Borrower shall qualify as an Eligible Assignee
under this definition.

 

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

 

“Environmental Liability”
means any liability, contingent or otherwise (including any liability for
damages, costs of environmental remediation, fines, penalties or indemnities),
of the Borrower or any Subsidiary directly or indirectly resulting from or
based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of
any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the environment,
or (e) any contract, agreement or other consensual arrangement pursuant to
which liability is assumed or imposed with respect to any of the foregoing.

 

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

 

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

 

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

 

“ERISA Event” means (a) any
“reportable event”, as defined in Section 4043 of ERISA or the regulations
issued thereunder with respect to a Plan (other than an event for which the
30-day notice period is waived); (b) the 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 

 

7

 

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 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 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.

 

8

 

“Financial Officer” means the
Senior Vice President and Chief Financial 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.

 

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

 

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

 

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

 

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

 

(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.

 

9

 

“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 the Borrower, the Treasury Analyst of the Borrower,
or the Securities Administrator of the Borrower, or any other person having
received such authority; it being understood and agreed that (i) such
person need not be a Financial Officer, 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).

 

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

 

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

 

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

 

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

 

“Indebtedness”
of any Person means, without duplication,

 

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

 

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

 

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

 

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

 

(e)           all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding 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 

 

10

 

entity, except to the extent
the terms of such Indebtedness provide that such Person is not liable therefor.

 

“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).

 

“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.

 

11

 

“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.

 

“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.

 

12

 

“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, taken as a whole, or (b) the validity
or enforceability of any of the Loan Documents or the rights and remedies of
the Administrative Agent and the Lenders thereunder.

 

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

 

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

 

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

 

“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 

 

13

 

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.

 

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

 

“Purchase Money
Indebtedness” means Indebtedness of the Borrower or any
Subsidiary 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 or such Subsidiary 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.

 

“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.

 

14

 

“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.

 

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

 

“Significant
Subsidiary” means each of MECO, HELCO and any other Subsidiary
having 15% or more of the total assets, or 15% or more of the total operating
income, of the Borrower 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 

 

15

 

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.

 

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

 

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

 

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

 

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

 

“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

 

16

 

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.  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) 

 

17

 

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;

 

(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.

 

18

 

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; provided  however,
upon delivery to the Administrative Agent of a copy of an order or approval
issued by the PUC, certified by a Financial Officer to be true and complete,
which is final and not subject to review or appeal, that authorizes the
Borrower to enter into credit agreements, including this Agreement, for a
period in excess of 364 days, the date set forth in clause (a) of the
definition of Commitment Termination Date shall be automatically extended to
the latest date permitted by such order or approval but in no event later than
the date which is the third anniversary of the Effective Date.

 

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

 

(c)           The Borrower shall
notify the Administrative Agent of any election to terminate or reduce the
Commitments under paragraph (b) of this Section at least two
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective 

 

19

 

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 (including after giving effect to any extension thereof
pursuant to Section 2.05(a)), 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) $250,000,000 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;

 

(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 

 

20

 

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);

 

(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);
and

 

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

 

Section 2.06          Repayment
of 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 or documentary 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) three
hundred sixty-four days 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, including any extension thereof contemplated by Section 2.05(a),
provided that any Letter of Credit with a three hundred sixty-four day tenor
may provide for the periodic and/or successive renewals or extensions thereof
for additional periods expiring prior to the earlier to occur of (x) three
hundred sixty-four days after the date of such renewal or extension and (y) 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 

 

24

 

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
standard application and agreement for standby or documentary letters of
credit, as applicable (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 

 

25

 

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 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 

 

26

 

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; 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 

 

27

 

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; 

 

(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 

 

28

 

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.

 

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 

 

29

 

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 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.

 

30

 

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 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

 

31

 

(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 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 

 

32

 

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 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 

 

33

 

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 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 

 

34

 

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 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 

 

35

 

Credit Party shall
reasonably request to assist such Credit Party to recover such Indemnified
Taxes.

 

Section 3.08          Mitigation
Obligations; Replacement of Lenders

 

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

 

(b)           If any Lender
requests compensation under Section 3.05, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for
the account of any Lender pursuant to Section 3.07, or if any Lender
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 is duly and validly organized
and existing in good standing under the laws of its jurisdiction of
organization, formation or charter (it being understood that the Borrower was
originally organized under the laws of the Kingdom of Hawaii) and is 

 

36

 

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.  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 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 and except for the approval expected to be sought by the Borrower which
is described in Section 2.05(a), (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
the Borrower or any of 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.

 

37

 

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.

 

(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 and each of its Significant Subsidiaries 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.

 

38

 

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.

 

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.

 

39

 

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.

 

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) Susan A. Li, Esq.,
Vice President-General Counsel 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 (i) the increase of 

 

40

 

the Revolving Commitment
contemplated by Section 2.05(d) and (ii) the extension of the
Commitment Termination Date contemplated by Section 2.05(a), 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 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.

 

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) and (b) of this
Section.

 

ARTICLE 6.         AFFIRMATIVE COVENANTS

 

Until
the Commitments have expired or been terminated and the principal of and
interest on all 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 

 

41

 

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 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, 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.

 

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, and will cause each of its Significant Subsidiaries to 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 or such Significant Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP, and (c) the
failure to make payment pending such contest would not reasonably be expected
to result in a Material Adverse Effect.

 

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 

 

43

 

appropriate deductibles,
self-insurance, exclusions and limitations), insurance in such amounts 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.

 

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, to provide liquidity back-up for
the issuance of commercial paper, capital expenditures, loans to Subsidiaries,
working capital and general corporate purposes of the Borrower, all to the
extent the Borrower is legally permitted to use such proceeds for such
purposes.  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, and will not permit any Significant Subsidiary to, incur,
create, assume or permit to exist any Lien on the capital stock of or other
ownership interests in any Significant Subsidiary or any Lien on all or
substantially all of its other assets, now or hereafter owned, without
effectively providing concurrently therewith to equally and ratably secure the
obligations of Borrower under this Agreement, except:

 

(a)           Liens securing the
payment of Indebtedness of the Borrower or any Subsidiary to a state, territory
or possession of the United States or any political subdivision thereof issued
in a transaction in which such state, territory, possession or political
subdivision issued obligations the interest on which is excludable from gross
income by the holders thereof pursuant to the 

 

44

 

provisions
of Section 103 of the Code (or similar provisions), as in effect at the
time of the issuance of such obligations, and Indebtedness to the issuer of a
letter of credit or letter of guaranty to support any such obligations to the
extent the Borrower or any Significant 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 or any Significant Subsidiary (including acquisition
by merger or consolidation), but only if and so long as (1) such Lien was
not created in contemplation of such property or asset being acquired, (2) such
Lien is and will remain confined to the property or asset subject to it at the
time such property or asset is acquired and to improvements thereafter erected
on or attached to such property or asset or any property or asset acquired in
substitution or replacement thereof 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 Capitalization;

 

(o)           any Lien on any
capital stock of any corporation which is registered in the name of Borrower or
otherwise owned by or held for the benefit of the Borrower (other than, in
either case, the capital stock of any Significant Subsidiary) which may
constitute Margin Stock; 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

 

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

 

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 Section 7.05;

 

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

 

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

 

(c)           sell, assign,
transfer, or otherwise dispose of the common stock of or other ownership
interests ordinarily entitled to vote in the election of directors of any
Significant Subsidiary, 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,
(iii) existing on the Effective Date identified on Schedule 7.03
hereto, and amendments and modifications thereto, so long as such amendments
and 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.

 

Section 7.04         Transactions
with Affiliates

 

Except
as specifically permitted by this Agreement, the Borrower will not, and will
not permit any of its Significant Subsidiaries to, 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 or such Significant Subsidiary than
could be obtained on an arms length basis from unrelated third parties,
provided that this Section shall not apply to any transaction that is
otherwise permitted under this Article 7.

 

47

 

Section 7.05         Consolidated
Capitalization Ratio

 

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

 

Section 7.06         Guaranties

 

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

 

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

 

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

 

48

 

(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
or Significant Subsidiary with respect to any Indebtedness, (ii) any
voluntary sale of assets by the Borrower or Significant Subsidiary as a result
of which any Indebtedness secured by such assets is required to be prepaid or (iii) the
exercise of any contractual right to cause the prepayment of such Material
Indebtedness (other than the exercise of a remedy for an event of default under
the applicable contract or agreement);

 

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

 

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

 

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

 

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

 

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

 

(m)          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;

 

49

 

(n)           any Significant
Subsidiary shall fail to pay its Tax liabilities, that, if not paid, would
reasonably be expected to result in a Material Adverse Effect before the same
shall become delinquent or in default and such failure shall continue for more
than 30 days, except where (i) the validity or amount thereof is being
contested 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; or

 

(o)           a Change in Control
shall occur;

 

then,
and in every such event (other than an event described in clause (h) or (i) 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 (h) or (i) 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.

 

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 

 

50

 

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
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

 

51

 

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 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 Company, Inc.

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

Honolulu, Hawaii 96813

 

P.O. Box 2750 (if by mail)

Honolulu, Hawaii 96840-0001

Attention:  Ms. Tayne S.Y. Sekimura

Senior Vice President and
Chief Financial Officer

Telephone No.: 808-543-7840

Facsimile No.:  808-203-1176

 

52

 

 

(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

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 

 

53

 

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

 

(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.

 

54

 

(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 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 

 

55

 

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(h) or
Section 8(i) 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, (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(h) or
Section 8(i) 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 

 

56

 

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 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;

 

57

 

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.

 

(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.

 

58

 

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

 

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

 

Section 10.05                      Survival

 

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

 

59

 

to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

 

Section 10.08                      Right of Setoff

 

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

 

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

 

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

 

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

 

60

 

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 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

 

61

 

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 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]

 

62

 

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

 

 

	
   

  	
  HAWAIIAN ELECTRIC COMPANY,
  INC.,

  
	
   

  	
  as the Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Tayne S. Y. Sekimura

  
	
   

  	
  Name: Tayne S. Y. Sekimura

  
	
   

  	
  Title: Senior Vice
  President and Chief Financial

  
	
   

  	
  Officer

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Lorie Ann Nagata

  
	
   

  	
  Name: Lorie Ann Nagata

  
	
   

  	
  Title: Treasurer

  

 

Signature Page to Credit
Agreement

Hawaiian Electric Company, 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 Company, 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 Company,
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 Company, 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 Company, 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 Company, 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 Company,
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 Company,
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 Company,
Inc.

 

 

SCHEDULE 1.01 

Hawaiian Electric Company, Inc. 

Consolidated Capitalization, Consolidated Funded Debt and

Consolidated Subsidiary Funded Debt

 

AS OF DECEMBER 31, 2009

 

	
  ($thousands)

  	
   

  	
  HECO

  	
   

  	
  HELCO

  	
   

  	
  MECO

  	
   

  	
  RHI

  	
   

  	
  UBC

  	
   

  	
  Eliminations

  	
   

  	
  CONSOLIDATED

  	
   

  
	
  ST
  borrowings from non-affiliates

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
   

  	
   

  	
  —

  	
   

  
	
  ST
  borrow between HECO, HELCO, MECO, RHI, UBC

  	
   

  	
  11,000

  	
   

  	
  20,100

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  (31,100

  	
  )

  	
  —

  	
   

  
	
  ST
  borrowings from HEI

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
   

  	
   

  	
  —

  	
   

  
	
  Capital
  lease obligations, including current portion

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
   

  	
   

  	
  —

  	
   

  
	
  Purchase
  money indebtedness

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
   

  	
   

  	
  —

  	
   

  
	
  Borrowings
  under Syndicated Credit Agreement

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
   

  	
   

  	
  —

  	
   

  
	
  Revenue
  bonds, including current portion

  	
   

  	
  641,580

  	
   

  	
  201,600

  	
   

  	
  164,720

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
   

  	
   

  	
  1,007,900

  	
   

  
	
  Less
  funds on deposit with trustees

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
   

  	
   

  	
  —

  	
   

  
	
  Less
  unamortized discount

  	
   

  	
  (926

  	
  )

  	
  (352

  	
  )

  	
  (353

  	
  )

  	
  —

  	
   

  	
  —

  	
   

  	
   

  	
   

  	
  (1,631

  	
  )

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

  	
   

  	
  31,546

  	
   

  	
  10,000

  	
   

  	
  10,000

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  51,546

  	
   

  
	
  Funded debt

  	
   

  	
  683,200

  	
   

  	
  231,348

  	
  (3)

  	
  174,367

  	
  (3)

  	
  —

  	
  (3)

  	
  —

  	
   

  	
  (31,100

  	
  )

  	
  1,057,815

  	
  (2)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Preferred
  stock

  	
   

  	
  22,293

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  22.293

  	
   

  
	
  Noncontrolling
  interest — cumulative preferred stock of subsidiaries

  	
   

  	
  —

  	
   

  	
  7,000

  	
   

  	
  5,000

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  12,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Common
  stock

  	
   

  	
  91,931

  	
   

  	
  22,086

  	
   

  	
  15,826

  	
   

  	
  781

  	
   

  	
  560

  	
   

  	
  (39,253

  	
  )

  	
  91,931

  	
   

  
	
  Premium
  and/or expense on common & preferred stock

  	
   

  	
  385,659

  	
   

  	
  81,955

  	
   

  	
  79,094

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  (161,049

  	
  )

  	
  385,659

  	
   

  
	
  Retained
  earnings

  	
   

  	
  827,036

  	
   

  	
  136,458

  	
   

  	
  126,165

  	
   

  	
  (687

  	
  )

  	
  (542

  	
  )

  	
  (261,394

  	
  )

  	
  827,036

  	
   

  
	
  Common stock equity

  	
   

  	
  1,304,626

  	
   

  	
  240,499

  	
   

  	
  221,085

  	
   

  	
  94

  	
   

  	
  18

  	
   

  	
  (461,696

  	
  )

  	
  1,304,626

  	
   

  
	
  Capitalization (a)

  	
   

  	
  2,010,119

  	
   

  	
  478,847

  	
   

  	
  400,452

  	
   

  	
  94

  	
   

  	
  18

  	
   

  	
  (492,796

  	
  )

  	
  2,396,734

  	
  (1)

  

 

Notes:

 

(1)                               Consolidated
Capitalization

 

(2)                               Consolidated
Funded Debt

 

(3)                               Consolidated
Subsidiary Funded Debt, individually

 

(a)                                Excludes
AOCI Income (Loss)

 

 

Schedule 2.01

 

(HECO Credit Agreement)

 

	
  Lender

  	
   

  	
  Revolving

  Commitment

  	
   

  	
  Letter of

  Credit

  Commitment

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  $

  	
  32,083,333.33

  	
   

  	
  $

  	
  9,166,666.68

  	
   

  
	
  Bank of Hawaii

  	
   

  	
  $

  	
  23,333,333.33

  	
   

  	
  $

  	
  6,666,666.66

  	
   

  
	
  U.S. Bank National Association

  	
   

  	
  $

  	
  23,333,333.33

  	
   

  	
  $

  	
  6,666,666.66

  	
   

  
	
  Wells Fargo Bank, National Association

  	
   

  	
  $

  	
  23,333,333.33

  	
   

  	
  $

  	
  6,666,666.66

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  23,333,333.34

  	
   

  	
  $

  	
  6,666,666.67

  	
   

  
	
  Union Bank, N.A.

  	
   

  	
  $

  	
  23,333,333.34

  	
   

  	
  $

  	
  6,666,666.67

  	
   

  
	
  The Bank of New York Mellon

  	
   

  	
  $

  	
  17,500,000.00

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  
	
  Goldman Sachs Bank USA

  	
   

  	
  $

  	
  8,750,000.00

  	
   

  	
  $

  	
  2,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  175,000,000.00

  	
   

  	
  $

  	
  50,000,000.00

  	
   

  

 

 

SCHEDULE 4.12

SUBSIDIARIES

 

Corporate
Organizational Structure of HECO

as of May 7, 2010

 

 

Legend

 

HECO
- Hawaiian Electric Company, Inc.

HELCO
- Hawaii Electric Light Company, Inc.

MECO
- Maui Electric Company, Limited

RHI
- Renewable Hawaii, Inc.

UBC
- Uluwehiokama Biofuels Corp.

Trust
III - HECO Capital Trust III

 

(1)Common
Stock Ownership %

(2)Common
Securities Ownership %

 

 

SCHEDULE 7.01

 

EXISTING LIENS

 

	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Jurisdiction

  	
   

  	
  UCC File

  Number

  	
   

  	
  UCC File

  Date

  	
   

  	
  Collateral

  Description*

  
	
  Hawaiian Electric
  Company, Inc. (as Defendant)

  	
   

  	
  Keahole Defense
  Coalition et al. (as Plaintiffs)

  	
   

  	
  Hawaii

  	
   

  	
  2000-026265*

  	
   

  	
  02/28/2000

  	
   

  	
  First Amended and
  Restated Order Regarding Plaintiffs’ Request for Attorneys’ Fees in the
  amount of $205,380

  
	
  Hawaiian Electric
  Company, Inc. (as Defendant)

  	
   

  	
  Keahole Defense
  Coalition et al. (as Plaintiffs)

  	
   

  	
  Hawaii

  	
   

  	
  2000-026266*

  	
   

  	
  02/28/2000

  	
   

  	
  First Amended and
  Restated Order Regarding Plaintiffs’ Request for Costs in the amount of
  $5,186.36

  
	
  Hawaiian Electric
  Company, Inc.

  	
   

  	
  Hannon Armstrong
  Federal Government Receivables Trust (as assignee of Hannon Armstrong DSM
  Funding LLC)

  	
   

  	
  Hawaii

  	
   

  	
  2005-094089

  	
   

  	
  05/11/2005

  	
   

  	
  All money due and to
  become due under a 2004 delivery order with a U.S. Navy ordering agency,
  including all proceeds

  
	
  Hawaii Electric Light
  Company, Inc.

  	
   

  	
  Keahole Defense
  Coalition et al. (as Plaintiffs)

  	
   

  	
  Hawaii

  	
   

  	
  2000-026265*

  	
   

  	
  02/28/2000

  	
   

  	
  First Amended and
  Restated Order Regarding Plaintiffs’ Request for Attorneys’ Fees in the
  amount of $205,380

  
	
  Hawaii Electric Light
  Company, Inc.

  	
   

  	
  Keahole Defense
  Coalition et al. (as Plaintiffs)

  	
   

  	
  Hawaii

  	
   

  	
  2000-026266*

  	
   

  	
  02/28/2000

  	
   

  	
  First Amended and
  Restated Order Regarding Plaintiffs’ Request for Costs in the amount of
  $5,186.36

  

 

 

	
  Hawaii Electric Light
  Company, Inc., a transmitting utility

  	
   

  	
  U.S. Bank National
  Association (as successor to Wachovia Bank, National Association, as Trustee
  (“Trustee”) (as assignee of Department of Budget and Finance, State of Hawaii
  (the “Department”)))

  	
   

  	
  Hawaii

  	
   

  	
  2005-009361

  	
   

  	
  01/14/2005

  	
   

  	
  Certain rights as
  provided in that certain Trust Indenture dated as of January 1, 2005 by
  and between the Department and the Trustee

  
	
  Hawaii Electric Light Company, Inc.,
  a transmitting utility

  	
   

  	
  Wells Fargo Bank,
  National Association (“Trustee”) (as assignee of Department of Budget and
  Finance, State of Hawaii (the “Department”))

  	
   

  	
  Hawaii

  	
   

  	
  2007-052663

  	
   

  	
  03/22/2007

  	
   

  	
  Certain rights as
  provided in that certain Trust Indenture dated as of March 1, 2007 by
  and between the Department and the Trustee

  
	
  Hawaii Electric Light
  Company, Inc., a transmitting utility

  	
   

  	
  The Bank of New York
  Mellon Trust Company, N.A. (“Trustee”)

  	
   

  	
  Hawaii

  	
   

  	
  2009-113982

  	
   

  	
  07/24/2009

  	
   

  	
  Certain rights as
  provided in that certain Trust Indenture dated as of July 1, 2009 by and
  between the Department of Budget and Finance of the State of Hawaii and the
  Trustee

  
	
  Maui Electric Company,
  Ltd., a transmitting utility

  	
   

  	
  U.S. Bank National
  Association (as successor to Wachovia Bank, National Association, as Trustee
  (“Trustee”) (as assignee of Department of Budget and Finance, State of Hawaii
  (the “Department”)))

  	
   

  	
  Hawaii

  	
   

  	
  2005-009362

  	
   

  	
  01/14/2005

  	
   

  	
  Certain rights as
  provided in that certain Trust Indenture dated as of January 1, 2005 by
  and between the Department and the Trustee

  

 

*  All obligations secured by this Lien have
been paid or performed in full, but the secured party has not yet released or
terminated the financing statement(s) relating thereto.  HECO is working with the secured party to
obtain the release and/or termination of such financing statement(s).

 

 

SCHEDULE 7.03

 

HAWAIIAN ELECTRIC COMPANY, 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, (a) no distributions on the respective company’s
common stock or any future class of stock except cumulative preferred stock
shall be made and (b) 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 of their shares
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, 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 Company, 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(h) or 8(i) 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 COMPANY, 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 Company, 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-1

 

EXHIBIT B-1

 

FORM OF OPINION LETTER OF JENNER & BLOCK LLP

 

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 Company, Inc.

 

Ladies
and Gentlemen:

 

We
have acted as counsel to Hawaiian Electric Company, 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 Amended
Articles of Incorporation, as amended (the “Borrower’s Charter”) of the Borrower, as
filed with the Director of Commerce and Consumer Affairs for the State of
Hawaii;

 

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

 

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 

 

B-1-1

 

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 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 

 

B-1-2

 

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 

 

B-1-4

 

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:

 

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;

 

B-1-5

 

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;

 

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); 

 

B-1-6

 

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;

 

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;

 

B-1-8

 

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);

 

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

 

HECO
SUPPORT CERTIFICATE

 

May 7, 2010

 

The
undersigned, on behalf of Hawaiian Electric Company, 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,
and other than the approval of the PUC contemplated by Section 2.05(a) of
the Credit Agreement and, as contemplated by the Credit Agreement, the Borrower
has neither sought nor received such approval as of the date of this
Certificate.  Subject to the foregoing,
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.

 

B-1-11

 

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 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 

 

B-1-12

 

of
issuance, in consideration of the payment of periodic installments of a stated
or determinable amount.

 

“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.

 

B-1-13

 

“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-1-14

 

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

 

 

	
   

  	
  HAWAIIAN ELECTRIC COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

B-1-15

 

EXHIBIT B-2

 

FORM OF OPINION LETTER OF SUSAN A. LI, ESQ., VICE
PRESIDENT-GENERAL

COUNSEL 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 Company, Inc.

 

Ladies
and Gentlemen:

 

I
am the Vice President-General Counsel of Hawaiian Electric Company, Inc.,
a Hawaii corporation (the “Borrower”), and, as such, I have acted as
in-house 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 (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 Amended Articles of Incorporation, as amended (the “Borrower’s Charter”)
of the Borrower, as filed with the Director of Commerce and Consumer Affairs
for the State of Hawaii;

 

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

 

(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, except
for the requisite approval of the Public Utilities Commission of the State of
Hawaii referred to in Section 2.05 of the Credit Agreement in order to
extend the term of the Credit Agreement to more than 364 days.

 

6.             To 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 

 

B-2-2

 

consolidated
financial position of the Borrower, except for any actions, suits or
proceedings referred to in the Current SEC Reports, or which in any manner
draws into question the validity of the Loan Documents.

 

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

 

The
foregoing opinions are subject to the following qualifications:

 

(a)           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 

 

B-2-3

 

are
determined by a court to be nonmaterial or without substantial adverse effect
upon the ability of the obligor to perform its material obligations thereunder.

 

(g)           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 COMPANY, 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 COMPANY, 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.

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 Company, 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 Company, 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:  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).

 

[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 COMPANY, 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 Company, 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:  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).

 

[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 COMPANY, 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 Company, 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) $250,000,000 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 COMPANY, 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

 

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

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 Company, 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].]

 

[remainder of page intentionally left blank]

 

G-1

 

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

 

	
   

  	
  HAWAIIAN
  ELECTRIC COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

[Signature page to Notice of Conversion]

 

G-2HECO Exhibit 10.4

 

SECOND
AMENDMENT TO

LOW
SULFUR FUEL OIL SUPPLY CONTRACT

BY
AND BETWEEN

BHP
PETROLEUM AMERICAS REFINING INC. (nka, TESORO HAWAII CORPORATION)

AND

HAWAIIAN
ELECTRIC COMPANY, INC.

 

This Second Amendment is
entered into as of May 5, 2010 between Tesoro Hawaii Corporation (f/k/a
BHP Petroleum Americas Refining Inc.), a Hawaii corporation (“SELLER”) and
Hawaiian Electric Company, Inc., a Hawaii corporation (“BUYER”).  This Second Amendment shall become effective
as provided in section 8 below.

 

WHEREAS, SELLER and BUYER
entered into that certain Low Sulfur Fuel Oil Supply Contract on November 14,
1997 (“Contract”), which was amended by that certain First Amendment to the
Contract, dated March 29, 2004 (“First Amendment”); and

 

WHEREAS, the First Amendment
changed the name of SELLER from BHP Petroleum Americas Refining Inc. to Tesoro
Hawaii Corporation, and extended the term of the Contract for an additional
ten-year period; and

 

WHEREAS, the parties
mutually desire to further amend the Contract and seek approval from the Public
Utilities Commission of the State of Hawaii for the same as provided herein;

 

NOW THEREFORE, the parties
agree as follows:

 

1.             Article I of the Contract (“Definitions”) is hereby
further amended by amending the definition of “Original Term” in its entirety
to read as follows:

 

22.  “Original Term” means the first term of this
Contract, which commenced January 1, 1998 and concludes April 30,
2013.

 

2.             Article III of the Contract (“Term”) is hereby
further amended in its entirety to read as follows:

 

The Original Term of this
Contract shall be from January 1, 1998 through April 30, 2013, and
shall continue for Additional Terms, unless BUYER or SELLER gives written
notice of termination at least one hundred twenty (120) Days prior to the
beginning of an Additional Term.

 

 

3.             Article V (“Quantity”), Section 5.1 (“Quantity”)
of the Contract, as amended by the First Amendment, is hereby replaced in its
entirety with the following:

 

TIER 1

 

During each Year that this
Contract is in effect, SELLER shall sell and Deliver to BUYER, and BUYER shall
purchase and receive from SELLER, Product at a reasonably uniform rate during
each Month.

 

Annual
Average Daily Rate in Physical Barrels Per Day:

 

	
   

  	
   

  	
  Tier
  1

  	
   

  
	
  Year

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  	
   

  
	
  2010

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
  2011

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
  2012

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
  2013

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  

 

Tier 1 volumes shall become
effective beginning ninety (90) days after the Effective Date of this Second
Amendment (as defined in section 8 below). 
Until then, the minimum and maximum annual average daily rates as set
forth in the Contract, as amended by the First Amendment, shall continue to
apply.

 

The minimum annual volume of
Product to be sold and Delivered by SELLER and Nominated, purchased and
received by BUYER under this Contract during each of Years 2010 and through April 2013
is the number of barrels in the following table.  The maximum annual volume of Product to be
sold and Delivered by SELLER and Nominated, purchased and received by BUYER
under this Contract during each of Years 2010-through April 2013 is listed
in the following table.

 

	
   

  	
   

  	
  Tier
  1

  	
   

  
	
  Year

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  	
   

  
	
  2010

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  2011

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
  2012

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
  2013

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  

 

**Annual Volumes for Tier 1,
2010 are determined by the following formulas:

·                  Minimum = 

# days in 2010 prior to (Effective Date plus 90 days) x
[      ] Barrels Per Day + # of days during
(Effective Date plus 90 days) through December 31, 2010 x
[      ] Barrels Per Day

 

2

 

·                  Maximum = 

# days in 2010 prior to (Effective Date plus 90 days) x
[      ] Barrels Per Day + # of days during
(Effective Date plus 90 days) through December 31, 2010 x
[      ] Barrels Per Day.

 

The minimum and maximum Tier
1 annual volumes of Product to be sold and Delivered by SELLER and to be
Nominated, purchased and received by BUYER during each Year of any Additional
Term shall be determined by multiplying the Days of that Year by the Tier 1
annual average daily rate indicated for 2013, unless otherwise mutually agreed.

 

Except as otherwise
expressly provided herein, during each of the Years 2010 and 2011, the Tier 1
Minimum and Maximum volumes sold, Delivered, purchased and received during each
Month shall be determined by multiplying the Days of that Month by
[      ] barrels per Day and
[      ] barrels per Day, respectively; during
the Year 2012, the Tier 1 Minimum and Maximum volumes sold, Delivered,
purchased and received during each Month shall be determined by multiplying the
Days of that Month by [      ] barrels per Day
and [      ] barrels per Day, respectively, and
during the Year 2013, the Tier 1 Minimum and Maximum volumes sold, Delivered,
purchased and received during each Month shall be determined by multiplying the
Days of that Month by [      ] barrels per Day
and [      ] barrels per Day, respectively.

 

TIER 2

 

Volumes in excess of the
Maximum Monthly Tier 1 Daily Rate, up to the maximum amounts stated below, are
referred to herein as “Tier 2” volumes. 
BUYER may request that SELLER provide Tier 2 volumes of Product within a
range as shown in the following table unless mutually agreed otherwise.  SELLER agrees to make reasonable commercial
efforts to supply BUYER with Tier 2 volumes of Product.

 

BUYER may request from
SELLER any additional volumes over the maximum volumes listed under Tier
2.  SELLER will promptly make reasonable
commercial efforts to supply additional LSFO volumes above the maximum Tier 2
volumes listed below.  Price for volumes
in excess of Tier 2 maximum volumes will be according to Article VI (“Price”),
Section 6.1 (“Determination of 
Product Price”) for Tier 2 Pricing.

 

3

 

Physical
Barrels Per Nomination:

 

	
   

  	
   

  	
  Tier
  2

  	
   

  
	
  Year

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  	
   

  
	
  2010

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
  2011

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
  2012

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
  2013

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  

 

*** = number of days in
Month x Tier 1 maximum volume for appropriate year.

 

Subject to availability,
SELLER may sell and Deliver and BUYER may purchase and receive Tier 2 volumes
as mutually agreed with the price determined in accordance with Article VI
(“Price”), Section 6.1 (“Determination of Product Price”) of the Contract.

 

4.             Article VI (“Price”), Section 6.1 (“Determination
of Product Price”) of the Contract, as amended by the First Amendment, is
hereby replaced in its entirety with the following:

 

A.            Tier 1 Pricing.  The price in USD per barrel of Product
Delivered to meet the Nominated commitment of a Month within the range defined
by “Tier 1 Minimum” and “Tier 1 Maximum” in Article V (“Quantity”), Section 5.1
(“Quantity”) shall be determined Monthly according to the following price
formula:

 

P1 =
[      ]

 

P1 =
[      ]

 

[      ]

 

[      ]

 

4

 

[      ]

 

[      ]

 

[      ]

 

[      ]

 

[      ]

 

[      ]

 

[      ]

 

[      ]

 

[      ]

 

[      ]

 

5

 

[      ]

 

[      ]

 

Exhibit B (“Illustrative
Schedule of Prices for Tier 1”) is hereby replaced in its entirety by Exhibit B-1
attached hereto, which is an illustrative application of Tier 1 pricing.  In the event of any conflict between Exhibit B-1
and the text of this Second Amendment, the text of this Second Amendment shall
prevail and control.

 

B.                                     Tier 2 Pricing.  The price in USD per barrel of Product
Delivered for Tier 2 volumes shall be determined according to the following
price formula:

 

P2 =  [      ]

 

P2 = Product price in USD
per barrel for the Delivery of Tier 2 Volumes.

 

[      ]

 

[      ]

 

6

 

5.             Article VII (“Delivery”), Section 7.1 (“Notification
and Product Delivery”) of the Contract, as amended by the First Amendment, is
hereby replaced in its entirety with the following:

 

A.            Tier 1 Nomination.  Subject to the “Tier 1” minimum and maximum
amounts specified in Section 5.1, BUYER will provide SELLER written notice
of the Nominated rate of Delivery for each Month sixty (60) Days prior to the
first Day of said Month.

 

No later than ten (10) Days
prior to the beginning of each Month, SELLER shall provide BUYER a proposed
schedule of Pipeline Deliveries and Marine Deliveries (“Delivery Schedule”) to
be made by SELLER for the following two Months. 
The proposed Delivery Schedule shall specify the type of Delivery,
Pipeline Delivery or Marine Delivery, approximate quantity, the approximate
date and a characterization of the approximate viscosity, either low (100 - 200
SSU at 210 DF), medium (201 - 350 SSU at 210 DF), or high (350 - 450 SSU at 210
DF), for each individual Delivery.  BUYER
shall notify SELLER of its acceptance or rejection of the proposed Delivery
Schedule within three (3) business days of its receipt, such notice to
include the cause or reasons for BUYER’s rejection.  BUYER may reject the proposed Delivery
Schedule because the proposed date or volume of an individual Delivery is
inconsistent with the limits on Product Delivery ratability specified in this Article VII.  If BUYER rejects the proposed Delivery
Schedule because the necessary space in BUYER’s storage tanks at BUYER’s BPTF
is unavailable or as a result of some other similar operational consideration,
BUYER shall make reasonable efforts to rearrange other schedules to provide
SELLER a satisfactory alternate Delivery date or alternate Delivery volume.  In this and all such similar efforts, SELLER
and BUYER shall make reasonable efforts to coordinate their individual Pipeline
Deliveries and Marine Deliveries into and out of BUYER’s BPTF to minimize
operational difficulties and costs.

 

SELLER shall notify BUYER of
a change in the proposed Delivery Schedule due to any of the following causes with
respect to any Delivery when it shall become known to SELLER:

 

a)             A change in the previously advised volume of a Pipeline
Delivery, if such change is in excess of 10,000 barrels or a change in the
previously advised volume of-a Marine Delivery, if such change is in excess of
20,000 barrels.

 

b)            A change in the date of a Delivery, if such change is
more than 2 Days earlier or later than the previously advised date; or

 

c)             A change in the previously advised viscosity
characterization of a Delivery.

 

B.            Tier 2 Nomination.  Subject to the “Tier 2” amounts specified in Section 5.1,
BUYER will provide SELLER with a notice requesting that SELLER provide such
additional supply.  Such notice shall
state the quantity of Product requested by BUYER

 

7

 

and the date by which BUYER
is requesting delivery (“Requested Delivery Date”).  Such notice shall be delivered to SELLER no
later than ninety (90) days prior to the Requested Delivery Date.

 

SELLER shall promptly make
reasonable commercial efforts to secure a supply of Tier 2 volumes meeting the
terms of the notice.  SELLER will provide
BUYER with a proposal to provide such supply as soon as reasonably possible, but
no later than 75 days prior to the Requested Delivery Date.  Such proposal may propose providing all or
part of such supply from SELLER’s refinery production, by imports or by some
combination of the two, provided that SELLER will not propose providing supply
from both its refinery production and from imports if the cost of such combined
supply would exceed the cost of supplying such quantity solely by imports.  To the extent that all or part of the supply
will be provided by imports, SELLER shall make reasonable commercial efforts to
obtain the most favorable terms then available, in the best judgment of SELLER’s
personnel working to obtain such supply.

 

SELLER’s proposal shall
state the price for such incremental deliveries, consistent with the terms set
forth in Article VI (“Price”), Section 6.1 (“Determination of Product
Price”), B. (“Tier 2 Pricing”), the proposed quantity to be delivered, the
method of delivery, and the anticipated date of delivery.  BUYER shall have 48 hours to respond to
SELLER’s proposal and either accept or reject the terms, provided that if the
end of such 48 hour period is not within a normal business day, BUYER shall
have until 9:00 am Hawaii Standard Time on the first succeeding business day to
respond to such proposal.  If BUYER
accepts such proposal, then SELLER shall provide supply in accordance with such
terms.  If BUYER rejects such proposal or
fails to timely respond to, accept or reject such proposal, then SELLER shall
not provide such incremental supply.

 

6.             The parties agree that this Second Amendment is subject
to and conditioned upon approval by the Public Utilities Commission of the
State of Hawaii (“Commission”) as follows:

 

BUYER will file an
application (“Application”) with the Commission requesting approval of this
Second Amendment following its execution. 
This Second Amendment is contingent upon the issuance of a decision and
order by the Commission that (a) approves this Second Amendment and its
pricing and terms and conditions, (b) is final and reasonable, both as
determined in BUYER’s sole discretion; and (c) allows BUYER to include the
costs incurred by BUYER pursuant to this Second Amendment in its revenue
requirements for ratemaking purposes and for the purposes of determining the
reasonableness of BUYER’s rates and/or for cost recovery above those costs
included in base rate through BUYER’s Energy Cost Adjustment Clause.  A decision and order by the Commission
satisfying these conditions is hereinafter referred to as the “Commission
Approval Order.”

 

Without limiting the
foregoing, SELLER accepts that a Commission decision and order may not be
deemed to be final and/or reasonable to BUYER if (a) it is not an 

 

8

 

unconditional approval; (b) it
denies or defers ruling on any part of Buyer’s Application or (c) BUYER is
not satisfied that the decision and order will not be appealed.

 

Within 15 days of BUYER’s
receipt of a Commission decision and order regarding the Application, BUYER
shall notify SELLER whether or not BUYER considers the decision and order to be
a Commission Approval Order for purposes of this section and this Agreement.

 

If BUYER has not received a
Commission Approval Order within 180 days of the date of this Second Amendment,
or if BUYER’s request for Commission approval of this Second Amendment is
denied, then either SELLER or BUYER may terminate this Second Amendment by
providing 15 days prior written notice of such termination delivered to the
other prior to the Effective Date.  Such
termination shall be effective only as to this Second Amendment and it shall
not be deemed to affect the status of or terminate the Contract, as amended by
the First Amendment, or waive either party’s respective rights or positions
with regard to the status or interpretation of the Contract, as amended by the
First Amendment, which rights and positions shall be reserved.  In such event of termination, each party
shall bear its own respective fees, costs and expenses incurred prior to
termination of the Second Amendment, if any, in preparation for performance
hereunder.

 

Seller, at its own cost,
shall promptly cooperate with Buyer’s reasonable requests for support of Buyer’s
efforts to prepare and file the Application and obtain the Commission Approval
Order.

 

7.             Pipeline Throughput
Contract.  As part of the
consideration for this Second Amendment, the parties have agreed to execute the
separate Pipeline Throughput Contract dated May 5, 2010.

 

8.             Effective Date.  This Second Amendment shall become effective
(the “Effective Date”) upon the filing of the Commission Approval Order or any
earlier date as may be set forth in the Commission Approval Order.  Prior to the Effective Date, the Contract, as
amended by the First Amendment, shall continue to govern the parties’ rights,
obligations and remedies with respect to the subject matter of the Contract,
and the parties reserve and do not waive their respective rights or positions
with regard to the status or interpretation of the Contract, as amended by the
First Amendment.

 

9.             Other than the amendments noted herein, the provisions
of the Contract, as amended by the First Amendment, shall remain in full force
and effect (provided that, in the event this Second Amendment is terminated as
provided in Section 6 above, the parties reserve and do not waive their
respective rights or positions with regard to the status or interpretation of
the Contract, as amended by the First Amendment).  Upon the Effective Date as defined above, in
the event of any conflict between the terms of the Contract and the terms of
this Second Amendment, this Second Amendment shall control.

 

9

 

10.           This Second Amendment  may be executed
in as many counterparts as desired by the parties, any one of which shall have
the force and effect of an original but all of which together shall constitute
the same instrument.  This Second
Amendment  may also be executed by exchange of executed copies via facsimile or
other electronic means, such as PDF, in which case — but not as a condition to
the validity of this agreement — each party shall subsequently send the other
party by mail the original executed copy. 
A party’s signature transmitted by facsimile or similar electronic means
shall be considered an “original” signature for purposes of this Second
Amendment.

 

IN WITNESS WHEREOF, the
parties hereto have executed this Amendment to the Contract as of the day and
year first written above.

 

	
  ACCEPTED AND AGREED:

  	
   

  
	
   

  	
   

  
	
  TESORO HAWAII CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/Claude P. Moreau

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Claude P. Moreau

  	
   

  
	
   

  	
  (Printed or Typed Name)

  	
   

  
	
   

  	
   

  	
   

  
	
  TITLE:

  	
  Senior Vice
  President-Marketing

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  HAWAIIAN ELECTRIC COMPANY, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/ Thomas C. Simmons

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Thomas C. Simmons

  	
   

  
	
   

  	
  (Printed or Typed Name)

  	
   

  
	
   

  	
   

  	
   

  
	
  TITLE:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/ Robert A. Alm

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Robert A. Alm

  	
   

  
	
   

  	
  (Printed or Typed Name)

  	
   

  
	
   

  	
   

  	
   

  
	
  TITLE:

  	
  Executive Vice President

  	
   

  
					

 

10

 

Exhibit B-1

 

ILLUSTRATIVE SCHEDULE OF PRICES

 

Illustrative Price Calculations for Product Delivered to Meet the
Nominated Commitment of the Second Amendment

 

Amendment
2 Price Formula:

 

P1
= [    ]

 

[    ].

 

	
  [    ]

  	
   

  
	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [    ]

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [    ]

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
  [    ]

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
  [    ]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [    ]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [    ]

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  
	
  [    ]

  	
   

  	
  [    ]

  	
   

  	
  [    ]

  	
   

  	
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4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00173-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00173-of-00352.parquet"}]]