Document:

Exhibit 4(a)

 

EXECUTION VERSION

 

	
 

 

HAWAIIAN   ELECTRIC INDUSTRIES, INC.

 

$125,000,000

 

4.41% Series 2011A   Senior Notes, Tranche 1, due March 24,   2016

5.67% Series 2011A   Senior Notes, Tranche 2, due March 24, 2021

 
    

 

MASTER NOTE   PURCHASE AGREEMENT

 
    

 

DATED AS OF MARCH 24,   2011

 
    

 

 

TABLE OF CONTENTS

 

	
SECTION
    	
HEADING
    	
PAGE
    
	
 
    	
 
    	
 
    
	
SECTION 1.
    	
AUTHORIZATION OF NOTES
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 2.
    	
SALE AND PURCHASE OF NOTES
    	
2
    
	
 
    	
 
    	
 
    
	
Section 2.1 Initial Notes
    	
2
    
	
Section 2.2 Additional   Series of Notes
    	
2
    
	
 
    	
 
    
	
SECTION 3.
    	
CLOSING
    	
4
    
	
 
    	
 
    	
 
    
	
SECTION 4.
    	
CONDITIONS PRECEDENT TO THE PURCHASERS’ OBLIGATIONS
    	
4
    
	
 
    	
 
    	
 
    
	
Section 4.1 Representations   and Warranties
    	
4
    
	
Section 4.2 Performance; No   Default
    	
4
    
	
Section 4.3 Compliance   Certificates
    	
4
    
	
Section 4.4 Opinions of   Counsel
    	
5
    
	
Section 4.5 Purchase Permitted   By Applicable Law, Etc.
    	
5
    
	
Section 4.6 Sale of Other   Initial Notes
    	
5
    
	
Section 4.7 Payment of Special   Counsel Fees
    	
5
    
	
Section 4.8 Private Placement   Number
    	
5
    
	
Section 4.9 Changes in   Corporate Structure
    	
5
    
	
Section 4.10 Funding Instructions
    	
6
    
	
Section 4.11 Proceedings and   Documents
    	
6
    
	
 
    	
 
    
	
SECTION 5.
    	
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
    	
6
    
	
 
    	
 
    	
 
    
	
Section 5.1 Organization;   Power and Authority
    	
6
    
	
Section 5.2 Authorization, Etc.
    	
6
    
	
Section 5.3 Disclosure
    	
6
    
	
Section 5.4 Organization and   Ownership of Shares of Subsidiaries; Affiliates
    	
7
    
	
Section 5.5 Financial   Statements; Material Liabilities
    	
8
    
	
Section 5.6 Compliance with   Laws, Other Instruments, Etc.
    	
8
    
	
Section 5.7 Governmental   Authorizations, Etc.
    	
8
    
	
Section 5.8 Litigation; Observance   of Agreements, Statutes and Orders
    	
8
    
	
Section 5.9 Taxes
    	
9
    
	
Section 5.10 Title to   Property; Leases
    	
9
    
	
Section 5.11 Licenses,   Permits, Etc.
    	
9
    
	
Section 5.12 Compliance with   ERISA
    	
10
    
	
Section 5.13 Private Offering   by the Company
    	
10
    
	
Section 5.14 Use of Proceeds;   Margin Regulations
    	
11
    
	
Section 5.15 Existing   Indebtedness; Future Liens
    	
11
    
	
Section 5.16 Foreign Assets   Control Regulations, Etc.
    	
12
    
	
Section 5.17 Status Under   Certain Statutes
    	
12
    
	
Section 5.18 Environmental   Matters
    	
12
    
	
Section 5.19 Ranking of   Obligations
    	
13
    
	
 
    	
 
    
	
SECTION 6.
    	
REPRESENTATIONS OF THE PURCHASERS
    	
13
    

 

 

	
Section 6.1 Purchase for   Investment; No Registration
    	
13
    
	
Section 6.2 Accredited   Investor
    	
13
    
	
Section 6.3 Source of Funds
    	
13
    
	
 
    	
 
    
	
SECTION 7.
    	
INFORMATION AS TO COMPANY
    	
15
    
	
 
    	
 
    	
 
    
	
Section 7.1 Financial and   Business Information
    	
15
    
	
Section 7.2 Officer’s   Certificate
    	
17
    
	
Section 7.3 Visitation
    	
17
    
	
 
    	
 
    	
 
    
	
SECTION 8.
    	
PAYMENT AND PREPAYMENT OF THE NOTES
    	
18
    
	
 
    	
 
    	
 
    
	
Section 8.1 Required   Prepayments
    	
18
    
	
Section 8.2 Optional   Prepayments with Make-Whole Amount
    	
18
    
	
Section 8.3 Allocation of   Partial Prepayments
    	
19
    
	
Section 8.4 Maturity;   Surrender, Etc.
    	
19
    
	
Section 8.5 Purchase of Notes
    	
19
    
	
Section 8.6 Make-Whole Amount
    	
19
    
	
Section 8.7 Prepayment Upon   Change in Control
    	
21
    
	
Section 8.8 Offer to Prepay   Upon Sale of Assets
    	
22
    
	
 
    	
 
    
	
SECTION 9.
    	
AFFIRMATIVE COVENANTS
    	
22
    
	
 
    	
 
    	
 
    
	
Section 9.1 Compliance with   Law
    	
22
    
	
Section 9.2 Insurance
    	
23
    
	
Section 9.3 Maintenance of   Properties
    	
23
    
	
Section 9.4 Payment of Taxes   and Claims
    	
23
    
	
Section 9.5 Corporate   Existence, Etc.
    	
23
    
	
Section 9.6 Books and Records
    	
24
    
	
Section 9.7 Notes Rank Pari   Passu
    	
24
    
	
Section 9.8 Most Favored   Lender Status
    	
24
    
	
 
    	
 
    	
 
    
	
SECTION 10.
    	
NEGATIVE COVENANTS
    	
25
    
	
 
    	
 
    	
 
    
	
Section 10.1 Liens
    	
25
    
	
Section 10.2 Sale of Assets;   Consolidation; Merger; Sale and Leaseback
    	
27
    
	
Section 10.3 Limitation on   Restrictive Agreements
    	
28
    
	
Section 10.4 Transactions with   Affiliates
    	
29
    
	
Section 10.5 Capitalization   Ratio
    	
29
    
	
Section 10.6 Consolidated Net   Worth
    	
29
    
	
Section 10.7 Lines of Business
    	
29
    
	
Section 10.8 Terrorism   Sanctions Regulations
    	
29
    
	
 
    	
 
    	
 
    
	
SECTION 11.
    	
EVENTS OF DEFAULT
    	
30
    
	
 
    	
 
    	
 
    
	
SECTION 12.
    	
REMEDIES ON DEFAULT, ETC.
    	
32
    
	
 
    	
 
    	
 
    
	
Section 12.1 Acceleration
    	
32
    
	
Section 12.2 Other Remedies
    	
33
    
	
Section 12.3 Rescission
    	
33
    
	
Section 12.4 No Waivers or   Election of Remedies, Expenses, Etc.
    	
33
    
	
 
    	
 
    	
 
    
	
SECTION 13.
    	
REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
    	
33
    

 

ii

 

	
Section 13.1 Registration of   Notes
    	
33
    
	
Section 13.2 Transfer and   Exchange of Notes
    	
34
    
	
Section 13.3 Replacement of   Notes
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 14.
    	
PAYMENTS ON NOTES
    	
35
    
	
 
    	
 
    	
 
    
	
Section 14.1 Place of Payment
    	
35
    
	
Section 14.2 Home Office   Payment
    	
35
    
	
 
    	
 
    	
 
    
	
SECTION 15.
    	
EXPENSES, ETC.
    	
35
    
	
 
    	
 
    	
 
    
	
Section 15.1 Transaction   Expenses
    	
35
    
	
Section 15.2 Survival
    	
36
    
	
 
    	
 
    	
 
    
	
SECTION 16.
    	
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE 
    	
36
    
	
AGREEMENT
    	
 
    
	
 
    	
 
    	
 
    
	
SECTION 17.
    	
AMENDMENT AND WAIVER
    	
37
    
	
 
    	
 
    	
 
    
	
Section 17.1 Requirements
    	
37
    
	
Section 17.2 Solicitation of   Holders of Notes
    	
37
    
	
Section 17.3 Binding   Effect, Etc.
    	
38
    
	
Section 17.4 Notes Held by   Company, Etc.
    	
38
    
	
 
    	
 
    	
 
    
	
SECTION 18.
    	
NOTICES
    	
39
    
	
 
    	
 
    	
 
    
	
SECTION 19.
    	
REPRODUCTION OF DOCUMENTS
    	
39
    
	
 
    	
 
    	
 
    
	
SECTION 20.
    	
CONFIDENTIAL INFORMATION
    	
40
    
	
 
    	
 
    	
 
    
	
SECTION 21.
    	
SUBSTITUTION OF PURCHASER OR ADDITIONAL PURCHASER
    	
41
    
	
 
    	
 
    	
 
    
	
SECTION 22.
    	
MISCELLANEOUS
    	
41
    
	
 
    	
 
    	
 
    
	
Section 22.1 Successors and   Assigns
    	
42
    
	
Section 22.2 Payments Due on   Non-Business Days
    	
42
    
	
Section 22.3 Accounting Terms
    	
42
    
	
Section 22.4 Severability
    	
43
    
	
Section 22.5 Construction, Etc.
    	
43
    
	
Section 22.6 Counterparts
    	
43
    
	
Section 22.7 Governing Law
    	
43
    
	
Section 22.8 Jurisdiction and Process; Waiver   of Jury Trial
    	
43
    

 

iii

 

	
SCHEDULES AND EXHIBITS TO MASTER NOTE PURCHASE   AGREEMENT
    
	
 
    
	
Schedule A
    	
—
    	
Information Relating to   Purchasers
    
	
 
    	
 
    	
 
    
	
Schedule B
    	
—
    	
Defined Terms
    
	
 
    	
 
    	
 
    
	
Schedule C
    	
—
    	
Consolidated Funded   Debt and Funded Debt
    
	
 
    	
 
    	
 
    
	
Schedule 5.3
    	
—
    	
Disclosure Documents
    
	
 
    	
 
    	
 
    
	
Schedule 5.4
    	
—
    	
Subsidiaries of the   Company and Ownership of Subsidiary Stock
    
	
 
    	
 
    	
 
    
	
Schedule 5.5
    	
—
    	
Financial Statements
    
	
 
    	
 
    	
 
    
	
Schedule 5.15
    	
—
    	
Existing Indebtedness;   Future Liens
    
	
 
    	
 
    	
 
    
	
Schedule 10.1
    	
—
    	
Existing Liens
    
	
 
    	
 
    	
 
    
	
Schedule 10.3
    	
—
    	
Restrictive Agreements
    
	
 
    	
 
    	
 
    
	
Exhibit 1(a)
    	
—
    	
Form of 4.41% Series   2011A Senior Note, Tranche 1, due March 24, 2016
    
	
 
    	
 
    	
 
    
	
Exhibit 1(b)
    	
—
    	
Form of 5.67% Series   2011A Senior Note, Tranche 2, due March 24, 2021
    
	
 
    	
 
    	
 
    
	
Exhibit 4.4(a)
    	
—
    	
Form of Opinion of Chet   A. Richardson, Senior Vice President, General Counsel, Secretary, and Chief   Administrative Officer of the Company
    
	
 
    	
 
    	
 
    
	
Exhibit 4.4(b)
    	
—
    	
Form of Opinion of   Jenner & Block LLP, Special Counsel to the Company
    
	
 
    	
 
    	
 
    
	
Exhibit 4.4(c)
    	
—
    	
Form of Opinion of   Schiff Hardin LLP, Special Counsel for the Purchasers
    
	
 
    	
 
    	
 
    
	
Exhibit S
    	
—
    	
Form of Supplement to   Note Purchase Agreement
    

 

iv

 

 

HAWAIIAN ELECTRIC INDUSTRIES, INC.
 900 RICHARDS STREET
 HONOLULU, HAWAII 96813

 

$125,000,000

 

4.41% Series 2011A Senior Notes, Tranche 1, due March 24, 2016

5.67% Series 2011A Senior Notes, Tranche 2, due March 24, 2021

 

March 24, 2011

 

To each of the Purchasers

listed in Schedule A hereto:

 

Ladies and Gentlemen:

 

Hawaiian Electric Industries, Inc., a Hawaii corporation (together with any successor thereto that becomes such in the manner prescribed in Section 10.2, the “Company”), agrees with each of the purchasers (each, a “Purchaser” and, collectively, the “Purchasers”) whose names appear at the end of this Master Note Purchase Agreement (as amended, supplemented, or otherwise modified from time to time, this “Agreement”) as follows:

 

SECTION 1.   AUTHORIZATION OF NOTES.

 

The Company will authorize the issue and sale of $125,000,000 aggregate principal amount of its Series 2011A Senior Notes in two tranches, of which $75,000,000 aggregate principal amount shall be its 4.41% Series 2011A Senior Notes, Tranche 1, due March 24, 2016 (the “Tranche 1 Notes”), and $50,000,000 aggregate principal amount shall be its 5.67% Series 2011A Senior Notes, Tranche 2, due March 24, 2021 (the “Tranche  2 Notes”, and together with the Tranche 1 Notes, collectively, the “Initial Notes”).  The Initial Notes, together with each Series of Additional Notes which may from time to time be issued pursuant to the provisions of Section 2.2, are collectively referred to as the “Notes” (such term shall also include any such notes issued in substitution therefor pursuant to Section 13).  The Tranche 1 Notes and the Tranche 2 Notes shall be substantially in the forms set out in Exhibits 1(a) and (b), respectively, with such changes therefrom, if any, as may be approved by the Purchasers and the Company.  Certain capitalized and other terms used in this Agreement are defined in Schedule B; and

 

 

references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.

 

SECTION 2.   SALE AND PURCHASE OF NOTES.

 

Section 2.1 Initial Notes. Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser, and each Purchaser will purchase from the Company, in each case, at the Closing provided for in Section 3, the Initial Notes of the tranche and in the principal amounts specified opposite such Purchaser’s name in Schedule A at the purchase price of 100% of the principal amount thereof.  The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.

 

Section 2.2 Additional Series of Notes.

 

(a)        The Company may, from time to time, in its sole discretion but subject to the terms hereof, issue and sell one or more additional Series of its senior unsecured promissory notes under the provisions of this Agreement pursuant to a supplement (a “Supplement”) substantially in the form of Exhibit S.  Each additional Series of Notes (the “Additional Notes”) issued pursuant to a Supplement shall be subject to the following terms and conditions:

 

(i)         each Series of Additional Notes, when so issued, shall be differentiated from all previous Series by sequential alphabetical or numeric designation inscribed thereon;

 

(ii)        Additional Notes of the same Series may consist of more than one different and separate tranches and may differ with respect to outstanding principal amounts, maturity dates, interest rates and premiums, if any, and price and terms of redemption or payment prior to maturity, but all such different and separate tranches of the same Series shall vote as a single class and constitute one Series;

 

(iii)       each Series of Additional Notes shall initially be dated the date of issue, bear interest at such rate or rates, mature on such date or dates, be subject to such additional or different put and call rights and mandatory and optional prepayment on the dates and at the premiums, if any, have such additional or different conditions precedent to closing, such additional or different representations and warranties and such additional or different covenants and defaults as shall be specified in the Supplement under which such Additional Notes are issued and upon execution of any such Supplement, this Agreement shall be deemed amended (1) to reflect such additional or different put and call rights, covenants and defaults as are contained in such Supplement for the benefit of the holders of such Additional Notes in accordance with the provisions of Section 16 without further action on the part of the holders of the Notes outstanding under this Agreement or any Supplement and (2) to reflect such additional or different representations and warranties as are contained in such Supplement for the benefit of the holders of such Additional Notes in accordance with the provisions of Section 16 without further action on the part of the holders of the Notes outstanding under this Agreement or any Supplement;

 

2

 

(iv)       subject to Section 17.1(a)(ii)(A), (1) all Initial Notes are collectively one class of securities and shall vote as a single class, and (2) each Series of Additional Notes issued under a Supplement is collectively one class of securities and shall vote as a single class;

 

(v)        each Series of Additional Notes issued under this Agreement shall be in substantially the form of Exhibit 1 to Exhibit S hereto, with such variations, omissions and insertions as are necessary or permitted hereunder;

 

(vi)       the minimum principal amount of any Note issued under a Supplement shall be $100,000, except as may be necessary to evidence the outstanding amount of any Note originally issued in a denomination of $100,000 or more;

 

(vii)      all Additional Notes shall constitute Senior Indebtedness of the Company and shall rank pari passu with all other outstanding Notes; and

 

(viii)      no Additional Notes shall be issued hereunder if, before or after giving effect to the issuance and application of the proceeds thereof, any Default or Event of Default shall have occurred and be continuing.

 

(b)        The right of the Company to issue, and the obligations of the Additional Purchasers to purchase, any Additional Notes shall be subject to the following conditions precedent, in addition to the conditions specified in the Supplement pursuant to which such Additional Notes may be issued:

 

(i)         No Default Certificate.  A duly authorized Senior Financial Officer shall execute and deliver to each Additional Purchaser an Officer’s Certificate dated the date of issue of such Series of Additional Notes setting forth the information and computations (in sufficient detail) required to establish whether, after giving effect to the issuance of such Additional Notes and the application of the proceeds thereof, the Company is in compliance with the requirements of Sections 10.5 and 10.6 on such date and stating that such officer has reviewed the provisions of this Agreement (including the relevant Supplements hereto) and stating that, before and after giving effect to the issuance of such Additional Notes and the application of the proceeds thereof, no Default or Event of Default shall have occurred and is continuing;

 

(ii)        Execution and Delivery of Supplement.  The Company and each such Additional Purchaser shall execute and deliver a Supplement substantially in the form of Exhibit S hereto; and

 

(iii)       Additional Purchaser Representations.  Each Additional Purchaser shall have confirmed in the applicable Supplement that the representations set forth in Section 6 are true with respect to such Additional Purchaser on and as of the date of issue of such Additional Notes.

 

3

 

SECTION 3.   CLOSING.

 

The sale and purchase of $125,000,000 aggregate principal amount of the Initial Notes to be purchased by the Purchasers shall occur at the offices of Schiff Hardin LLP at 900 Third Avenue, 23rd Floor, New York, New York 10022, on March 24, 2011, or on such other Business Day thereafter as agreed upon by the Company and the Purchasers (the “Closing”).

 

At the Closing, the Company will deliver to each Purchaser the Initial Notes of each tranche to be purchased by such Purchaser in the form of a single Initial Note of such tranche (or such greater number of Initial Notes of such tranche in denominations of at least $100,000 as such Purchaser may request on at least 2 Business Days’ prior notice) dated the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company in accordance with the funding instructions described in Section 4.10.  If at the Closing the Company shall fail to tender such Initial Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement with respect to the Initial Notes to be acquired by such Purchaser at the Closing, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment.

 

SECTION 4.   CONDITIONS PRECEDENT TO THE PURCHASERS’ OBLIGATIONS.

 

Each Purchaser’s obligation to purchase and pay for the Initial Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:

 

Section 4.1 Representations and Warranties.  The representations and warranties of the Company in this Agreement shall be correct when made and at the time of the Closing (except to the extent that any of the representations and warranties expressly refer to an earlier date, in which case, such representations and warranties shall be correct as of such earlier date).

 

Section 4.2 Performance; No Default.  The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and, after giving effect to the issue and sale of the Initial Notes to be issued at the Closing (and the application of the proceeds thereof as contemplated by Section 5.14), no Default or Event of Default shall have occurred and be continuing.  Neither the Company nor any Subsidiary shall have entered into any transaction since the date of the Offering Memorandum that would have been prohibited by Section 10.1, 10.2, 10.3, or 10.8 had such Sections applied since such date.

 

Section 4.3 Compliance Certificates.

 

(a)        Officer’s Certificate.  The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2, and 4.9 have been fulfilled.

 

4

 

(b)        Secretary’s Certificate.  The Company shall have delivered to such Purchaser a certificate of its Secretary or an Assistant Secretary, dated the date of the Closing, certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Initial Notes and this Agreement.

 

Section 4.4 Opinions of Counsel.  Such Purchaser shall have received opinions in form and substance reasonably satisfactory to such Purchaser, dated the date of the Closing (a) from Chet A. Richardson, Senior Vice President, General Counsel, Secretary and Chief Administrative Officer of the Company, substantially in the form set forth in Exhibit 4.4(a), and covering such other matters incident to the transactions contemplated hereby as such Purchaser or its counsel may reasonably request, (b) from Jenner & Block LLP, special counsel to the Company, substantially in the form set forth in Exhibit 4.4(b) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or its counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to the Purchasers), and (c) from Schiff Hardin LLP, special counsel to the Purchasers in connection with such transactions, substantially to the effect set forth in Exhibit 4.4(c) and covering such other matters incident to the transactions contemplated hereby as such Purchaser may reasonably request.

 

Section 4.5 Purchase Permitted By Applicable Law, Etc.  On the date of the Closing such Purchaser’s purchase of Initial Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date of this Agreement.   If requested by a Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

 

Section 4.6 Sale of Other Initial Notes.  Contemporaneously with the Closing the Company shall sell to each other Purchaser and each other Purchaser shall purchase the Initial Notes to be purchased by it at the Closing as specified in Schedule A.

 

Section 4.7 Payment of Special Counsel Fees.  Without limiting the provisions of Section 15.1, the Company shall have paid on or before the Closing the reasonable and documented fees, charges and disbursements of special counsel to the Purchasers referred to in Section 4.4(c) to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing.

 

Section 4.8 Private Placement Number.  A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for each tranche of the Initial Notes.

 

Section 4.9 Changes in Corporate Structure.  The Company shall not have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or

 

5

 

consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.

 

Section 4.10 Funding Instructions.  At least 3 Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Company directing the manner of the payment of funds and setting forth (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number, (iii) the account name and number into which the purchase price for the Initial Notes is to be deposited and (iv) the name and telephone number of the account representative or other Person responsible for verifying receipt of such funds.

 

Section 4.11 Proceedings and Documents.  All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be reasonably satisfactory to such Purchaser and special counsel to the Purchasers, and such Purchaser and special counsel to the Purchasers shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or special counsel to the Purchasers may reasonably request.

 

SECTION 5.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents and warrants to each Purchaser, as of the date of this Agreement and as of the date of the Closing (except to the extent that any of the following statements expressly refer to an earlier date, in which case, the Company represents and warrants to each Purchaser as of such earlier date), that:

 

Section 5.1 Organization; Power and Authority.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Hawaii, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Initial Notes and to perform its obligations hereunder and thereunder.

 

Section 5.2 Authorization, Etc.  This Agreement and the Initial Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof against payment of the purchase price therefor, each such Initial Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

Section 5.3 Disclosure.  The Company, through its agents, ML and USB, has delivered to each Purchaser a copy of a Private Placement Memorandum dated February 2011 relating to the

 

6

 

transactions contemplated hereby (the “Offering Memorandum”).  The Offering Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Company and its Subsidiaries.  This Agreement, the Offering Memorandum (excluding information and market and industry data specifically identified as being from a third party source), the documents, certificates, or other writings delivered to the Purchasers prior to February 25, 2011 by or on behalf of the Company in connection with the transactions contemplated hereby and identified in Schedule 5.3, the Current SEC Reports and the financial statements of the Company listed in Schedule 5.5 (this Agreement, the Offering Memorandum, such documents, certificates, or other writings, the Current SEC Reports and such financial statements, collectively, the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made; provided that, with respect to market or industry data, projected financial information and other forward-looking information, the Company represents and warrants only that such information was prepared in good faith based upon information and assumptions believed to be reasonable at the time.  Except as disclosed in the Disclosure Documents, since December 31, 2010, there has been no change in the financial condition, operations, business or properties of the Company and its Subsidiaries, taken as a whole, except changes that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.  There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.

 

Section 5.4 Organization and Ownership of Shares of Subsidiaries; Affiliates.  (a) Schedule 5.4 contains (except as noted therein) complete and correct lists, as of the date of this Agreement, of (i) the Company’s Subsidiaries showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, the percentage of shares of each class of its capital stock or similar Equity Interests outstanding owned by the Company and each other Subsidiary, and whether or not such Subsidiary constitutes a Significant Subsidiary as of the date of this Agreement, (ii) the Company’s Affiliates, other than Subsidiaries, and (iii) the Company’s directors and senior officers.

 

(b)        As of the date of this Agreement, all of the outstanding shares of capital stock or similar Equity Interests of each Subsidiary shown on Schedule 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are, where legally applicable, fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 5.4 or permitted by Section 10.1).

 

(c)        Each Significant Subsidiary is a corporation or other legal entity duly organized, validly existing and, where legally applicable: (i) is in good standing under the laws of its jurisdiction of organization and (ii) is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each such Significant Subsidiary has the corporate or other organizational power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.

 

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(d)        No Significant Subsidiary is a party to, or otherwise subject to any legal, regulatory, contractual or other restriction (other than this Agreement, the agreements listed on Schedule 5.4 and customary limitations imposed by banking and/or utility regulations, corporate law or similar statutes) restricting the ability of such Significant Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar Equity Interests of such Significant Subsidiary.

 

Section 5.5 Financial Statements; Material Liabilities.  The Company has delivered to each Purchaser copies of the consolidated financial statements of the Company and its Subsidiaries listed on Schedule 5.5.  The Company’s consolidated financial statements (including, in each case, the related schedules and, where applicable, notes) listed on Schedule 5.5 fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to the absence of footnotes and to normal year-end audit adjustments).  The Company and its Subsidiaries do not have any Material liabilities that are not disclosed on the most recent financial statements listed on Schedule 5.5.

 

Section 5.6 Compliance with Laws, Other Instruments, Etc.  The execution, delivery and performance by the Company of this Agreement and the Initial Notes will not (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Significant Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other material agreement or instrument to which the Company or any Significant Subsidiary is bound or by which the Company or any Significant Subsidiary or any of their respective properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Significant Subsidiary or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Significant Subsidiary.

 

Section 5.7 Governmental Authorizations, Etc.  Subject to the accuracy of the Purchasers’ representations and warranties in Section 6, no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required to be obtained or made by the Company in connection with the execution, delivery or performance by the Company of this Agreement or the Initial Notes, other than the filing of Form 8-K with the SEC.

 

Section 5.8 Litigation; Observance of Agreements, Statutes and Orders.  (a) There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company, threatened against the Company or any Significant Subsidiary or affecting any property of the Company or any Significant Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

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(b)        Neither the Company nor any Significant Subsidiary is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including, without limitation, Environmental Laws, ERISA, or the USA PATRIOT Act) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

Section 5.9 Taxes.  The Company and its Significant Subsidiaries have filed all income and other material tax returns and reports that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which, individually or in the aggregate, is not Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate actions or proceedings and with respect to which the Company or a Significant Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP.  The Company knows of no basis for any other tax or assessment that could reasonably be expected to have a Material Adverse Effect.  The charges, accruals and reserves on the books of the Company and its Significant Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are adequate.  The Federal income tax liabilities of the Company and its Significant Subsidiaries have been finally determined (whether by reason of completed audits or the statute of limitations having run) for all fiscal years ended on or prior to December 31, 2004, except to the extent of net operating losses and credits generated and carried forward for these years.

 

Section 5.10 Title to Property; Leases.  The Company and its Significant Subsidiaries have good and sufficient title or valid leasehold interests to their respective properties that individually or in the aggregate are Material, including all such Material properties reflected in the most recent audited balance sheet referred to in Schedule 5.5 or purported to have been acquired by the Company or any Significant Subsidiary after the date of such balance sheet (except as sold or otherwise Disposed of in the ordinary course of business), in each case, free and clear of Liens, except for Permitted Liens.  All such leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects.

 

Section 5.11 Licenses, Permits, Etc.  (a) The Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks, trade names and domain names or rights thereto, without known conflict with the rights of others, except where the failure to own or possess the same could not reasonably be expected to result in a Material Adverse Effect.

 

(b)        To the knowledge of the Company, no product of the Company or any of its Subsidiaries infringes in any material respect any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name, domain name, or other right owned by any other Person.

 

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(c)        To the knowledge of the Company, there is no violation by any Person of any right of the Company or any of its Significant Subsidiaries with respect to any patent, copyright, proprietary software, service mark, trademark, trade name, domain name, or other right owned or used by the Company or any of its Significant Subsidiaries, except for such violations that could not reasonably be expected to result in a Material Adverse Effect.

 

Section 5.12 Compliance with ERISA.  (a)  The Company and each ERISA Affiliate have operated and administered each Plan and Benefit Plan in compliance with ERISA and all other applicable laws, regulations and guidance except for such instances of noncompliance as have not resulted in and could not reasonably be expected to be Material either individually or in the aggregate.

 

(b)        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 be Material.

 

(c)        The expected postretirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries did not exceed the aggregate current value of the assets that fund such obligation, as reported on the Company’s most recent audited financial statements, by more than 30%.

 

(d)        The adjusted funding target attainment percentage under each of the Plans as of the end of such Plan’s most recently ended plan year, as determined by the Plans’ enrolled actuary pursuant to section 436 of the Code and applicable regulations, is not less than 70% and the accumulated benefit obligations of the Plans determined on the basis of the actuarial assumptions utilized for purposes of the Company’s most recent audited financial statements did not exceed the aggregate current value of the assets of such Plans by more than 30%.

 

(e)        Neither the Company, nor any of its Subsidiaries or any of their respective ERISA Affiliates, have at any time participated in, contributed to, or had any liability or obligation with respect to, a Multiemployer Plan.

 

(f)         The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of ERISA section 406 or in connection with which a tax could be imposed pursuant to Code section 4975(c)(1)(A)-(D).  The representation by the Company to each Purchaser in the first sentence of this Section 5.12(f) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.3 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by such Purchaser.

 

Section 5.13 Private Offering by the Company.  Neither the Company nor anyone acting on its behalf has offered the Initial Notes or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than fifty other Institutional Investors of the type described in clause (c) of the definition thereof, each of which has been offered the Initial

 

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Notes at a private sale for investment.  Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Initial Notes to the registration requirements of Section 5 of the Securities Act or to the registration requirements of any securities or blue sky laws of any applicable jurisdiction.

 

Section 5.14 Use of Proceeds; Margin Regulations.  The Company will apply the proceeds of the sale of the Initial Notes to repay existing Indebtedness and for general corporate and working capital purposes of the Company and its Subsidiaries.  No part of the proceeds from the sale of the Initial Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 25% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 25% of the value of such assets.  As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in Regulation U of the Board of the Governors of the Federal Reserve System.

 

Section 5.15 Existing Indebtedness; Future Liens.  (a)  Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Significant Subsidiaries as of December 31, 2010 (including a description of the obligors and obligees, principal amount outstanding and collateral therefor, if any, and Guarantee thereof, if any), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Significant Subsidiaries.  Neither the Company nor any Significant Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Significant Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Significant Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

 

(b)        Except as disclosed in Schedule 5.15, the Company has not agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien, other than a Permitted Lien.

 

(c)        Neither the Company nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as specifically indicated in Schedule 5.15.

 

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Section 5.16 Foreign Assets Control Regulations, Etc.  (a)  Neither the sale of the Initial Notes by the Company hereunder nor its use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.

 

(b)        Neither the Company nor any Subsidiary (i) is a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti Terrorism Order or (ii) engages in any dealings or transactions with any such Person.  The Company and its Subsidiaries are in compliance, in all material respects, with the USA PATRIOT Act.

 

(c)        No part of the proceeds from the sale of the Initial Notes hereunder will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that such Act applies to the Company.

 

Section 5.17 Status Under Certain Statutes.  Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 2005, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.

 

Section 5.18 Environmental Matters.  (a) Neither the Company nor any Significant Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its Significant Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect.

 

(b)        Neither the Company nor any Significant Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect.

 

(c)        Neither the Company nor any Significant Subsidiary has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them and has not disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that could reasonably be expected to result in a Material Adverse Effect.

 

(d)        All buildings on all real properties now owned, leased or operated by the Company or any Significant Subsidiary are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect.

 

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Section 5.19 Ranking of Obligations.  The Company’s payment obligations under this Agreement and the Initial Notes will, upon issuance of the Initial Notes, rank pari passu in right of payment, without preference or priority, with all other unsecured and unsubordinated Indebtedness of the Company.

 

SECTION 6.   REPRESENTATIONS OF THE PURCHASERS.

 

Each Purchaser severally represents to the Company, as of the date of this Agreement and as of the date of the Closing, that:

 

Section 6.1 Purchase for Investment; No Registration.  Such Purchaser is purchasing the Initial Notes purchased by it hereunder for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not as a nominee or agent for any other Person and not with a view to the distribution or public offering thereof; provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control.  Such Purchaser understands that the Initial Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Initial Notes.

 

Section 6.2 Accredited Investor  Such Purchaser is an “accredited investor” (as defined in Rule 501(a) (1), (2), (3) or (7) of Regulation D under the Securities Act) acting for its own account (and not for the account of others) or as a fiduciary or agent for others (which others are also “accredited investors”).  Such Purchaser has had the opportunity to ask questions of the Company and received answers concerning the Company and the terms and conditions of the sale of the Initial Notes.

 

Section 6.3 Source of Funds.  At least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Initial Notes to be purchased by it hereunder:

 

(a)        the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the National Association of Insurance Commissioners (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general  account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or

 

(b)        the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to

 

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any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or

 

(c)        the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

 

(d)        the Source constitutes assets of an “investment fund” (within the meaning of Part V of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit plan’s assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM (applying the definition of “control” in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company in writing pursuant to this clause (d); or

 

(e)        the Source constitutes assets of a “plan(s)” (within the meaning of Section IV of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Section IV(d) of the INHAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or

 

(f)         the Source is a governmental plan; or

 

(g)        the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or

 

(h)        the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

 

As used in this Section 6.3, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

 

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SECTION 7.   INFORMATION AS TO COMPANY.

 

Section 7.1 Financial and Business Information.  The Company shall deliver to each holder of Notes that is an Institutional Investor:

 

(a)        Quarterly Statements - promptly after the same are available and in any event within 60 days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), copies of

 

(i)         a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and

 

(ii)        consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries, in the case of the first fiscal quarter, for such quarter, and in the case of the second and third quarters for both the quarter and the portion of the fiscal year ending with such quarter,

 

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 in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from normal year-end audit adjustments and the absence of footnotes; provided, however, that delivery within the time period specified above of copies of the Company’s Quarterly Report on Form 10-Q (“Form 10-Q”) prepared in compliance with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section 7.l(a); provided, further, that the Company shall be deemed to have made such delivery of such Form 10-Q if it shall have timely made such Form 10-Q available for free on the SEC’s Electronic Data Gathering Analysis, and Retrieval system, or its successor thereto (“EDGAR”), and shall have given each Purchaser prior notice of such availability on EDGAR.

 

(b)        Annual Statements — promptly after the same are available and in any event within 120 days after the end of each fiscal year of the Company, copies of

 

(i)         a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, and

 

(ii)        consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries for such year,

 

setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon of an independent public accounting firm 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), which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accounting firm in connection with such financial statements has been made

 

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in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, and provided that the delivery within the time period specified above of the Company’s Annual Report on Form 10-K (“Form 10-K”) for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section 7.1(b); provided, further, that the Company shall be deemed to have made such delivery of such Form 10-K if it shall have timely made such Form 10-K available for free on EDGAR, and shall have given each Purchaser prior notice of such availability on EDGAR; and

 

(c)        SEC and Other Reports —  promptly upon their becoming available, one copy of (i) each financial statement, report, notice or proxy statement sent by the Company or any Significant Subsidiary to its principal lending banks as a whole (excluding information sent to such banks in the ordinary course of administration of a bank facility, such as information relating to pricing and borrowing availability) or to its public securities holders generally, and (ii) each regular or periodic report, each registration statement (without exhibits except as expressly requested by such holder), each prospectus and all amendments thereto filed by the Company or any Significant Subsidiary with the SEC, and all press releases and other statements made available generally by the Company or any Significant Subsidiary to the public concerning developments that are Material; provided, however, the Company shall be deemed to have made delivery of any document required by this Section 7.1(c) if it shall have timely made such document available for free on EDGAR and shall have given each Purchaser prior notice of such availability on EDGAR;

 

(d)        Notice of Default or Event of Default — promptly and in any event within 5 Business Days after a Responsible Officer becoming aware of the existence of any Default or Event of Default, or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;

 

(e)        Employee Benefit Matters — promptly and in any event within 5 Business Days after a Responsible Officer becoming aware of the occurrence of any of the following which, individually or in the aggregate, could reasonably be expected to be Material, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto:  (i) the occurrence or expected occurrence of any ERISA Event; (ii) the occurrence of any non-exempt prohibited transaction within the meaning of ERISA section 406 or Code section 4975; (iii) the filing of any funding waiver request with the Internal Revenue Service of the United States of America with respect to any Plan or the failure to make a required contribution to any Plan if such failure is sufficient to give rise to a Lien under Code section 430; (iv) the occurrence of any increase in the benefits provided under any existing Plan or the establishment of any new Plan or the commencement of contributions to any Plan to which the Company, or any of its Subsidiaries or ERISA Affiliates was not previously contributing; or (v) the occurrence of any other event with respect to any Plan which could result in the incurrence by the Company, or any of its Subsidiaries or ERISA Affiliates of any liability, fine or penalty;

 

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(f)         Notices from Governmental Authority — promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect;

 

(g)        Supplements — promptly and in any event within 10 Business Days after the execution and delivery of any Supplement, a copy thereof; and

 

(h)        Requested Information — with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries or relating to the ability of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such holder of Notes.

 

Section 7.2 Officer’s Certificate.  Each set of financial statements delivered to a holder of Notes that is an Institutional Investor pursuant to Section 7.1 (a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer setting forth (which, in the case of the electronic delivery of any such financial statements as permitted by Section 7.1, shall be by separate concurrent delivery of such certificate to each holder of Notes):

 

(a)        Covenant Compliance — the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Sections 10.5 and 10.6 during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage as applicable then in existence); and

 

(b)        Event of Default — a statement that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of such certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default (other than a Default or Event of Default for which notice has been given to the holders of Notes during such period pursuant to Section 7.1(d) and which has been subsequently cured or waived) or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.

 

Section 7.3 Visitation.  The Company shall permit the representatives of each holder of Notes that is an Institutional Investor:

 

(a)        No Default — if no Default or Event of Default then exists, at the expense of such holder and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company’s officers and, in the presence of the Company, independent public accountants (and by this provision the Company authorizes said accountants to discuss the

 

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affairs, finances and accounts of the Company and its Subsidiaries with each holder of Notes in the presence of the Company), and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times during normal business hours; provided that each holder of Notes shall be entitled to not more than two visitations during any fiscal year; and

 

(b)        Default —if a Default or Event of Default then exists, at the expense of the Company and upon reasonable prior notice to the Company, to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with the Company’s officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries with each holder of Notes), all at such times and as often as may be reasonably requested.

 

SECTION 8.   PAYMENT AND PREPAYMENT OF THE NOTES.

 

Section 8.1 Required Prepayments.  (a) The Initial Notes shall not be subject to any required prepayments and the entire unpaid principal amount of each Initial Note shall be due and payable on the stated maturity date thereof.

 

(b)        Each Series and tranche, if applicable, of Additional Notes shall be subject to required prepayments as specified in the Supplement pursuant to which such Series and tranche, if applicable, of Additional Notes were issued.

 

Section 8.2 Optional Prepayments with Make-Whole Amount.  The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, any Series of Notes, in an amount not less than $5,000,000 (and in an integral multiple of $500,000 (or, if less, the aggregate unpaid principal amount of such Notes)) of the aggregate principal amount of such Series of Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, together with interest accrued thereon to the date of such prepayment, plus the Make-Whole Amount, if any, determined for the prepayment date with respect to such principal amount of each Note then outstanding of the applicable Series to be prepaid.  Notwithstanding the foregoing, the Company may not prepay any Series of Notes pursuant to this Section 8.2 if a Default or Event of Default shall exist or would result from such optional prepayment unless all Notes at the time outstanding are prepaid on a pro rata basis.  The Company will give each holder of the Series of Notes to be prepaid (with a copy to each other holder of Notes) written notice of each optional prepayment under this Section 8.2 not less than 20 days and not more than 60 days prior to the date fixed for such prepayment.  Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Series of Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Company shall deliver to each holder of the Series of Notes to be

 

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prepaid a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.

 

Section 8.3 Allocation of Partial Prepayments.  In the case of each partial prepayment of the Notes of any Series pursuant to Section 8.2, the principal amount of the Notes of such Series to be prepaid shall be allocated among all of the Notes of such Series at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.

 

Section 8.4 Maturity; Surrender, Etc.  In the case of each prepayment of Notes of any Series pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment (which shall be a Business Day), together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any.  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

 

Section 8.5 Purchase of Notes.  The Company will not, and will not permit any Affiliate to, purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes of any Series except (a) upon the payment or prepayment of the Notes of any Series in accordance with the terms of this Agreement (including any Supplement hereto) and the Notes or (b) pursuant to a written offer to purchase any outstanding Notes of any Series made by the Company or an Affiliate pro rata to the holders of all Notes of such Series at the time outstanding upon the same terms and conditions (except that if such Series has more than one separate tranche, such written offer shall be allocated among all of the separate tranches of such Series at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof but such written offer may otherwise differ among such separate tranches and such written offer shall be made pro rata to the holders of the same tranches of such Series upon the same terms and conditions).  Any such offer shall provide each holder of the Notes of the Series being offered for purchase with sufficient information to enable it to make an informed decision with respect to such offer and shall remain open for at least 10 Business Days.  If the holders of more than 25% of the outstanding principal amount of the Notes of the Series being offered for purchase accept such offer, the Company shall promptly notify the remaining holders of such Series of such fact and the expiration date for the acceptance by such holders of such offer shall be extended by the number of days necessary to give each such remaining holder at least 5 Business Days from its receipt of such notice to accept such offer.  The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.  Notwithstanding the foregoing, neither the Company nor any Affiliate may offer to purchase any Series of Notes if a Default or Event of Default shall exist or would result therefrom unless such Person shall offer to purchase all outstanding Notes on a pro rata basis upon the same terms and conditions.

 

Section 8.6 Make-Whole Amount.  The term “Make-Whole Amount” means, with respect to any Initial Note, an amount equal to the excess, if any, of the Discounted Value of the

 

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Remaining Scheduled Payments with respect to the Called Principal of such Initial Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero.  For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

 

“Called Principal” means, with respect to any Initial Note, the principal of such Initial Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as applicable.

 

“Discounted Value” means, with respect to the Called Principal of any Initial Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on such Initial Note is payable) equal to the Reinvestment Yield with respect to such Called Principal.

 

“Reinvestment Yield” means, with respect to the Called Principal of any Initial Note, 0.50% over the yield to maturity implied by (i) the yields reported as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on the run U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  In the case of each determination under clause (i) or clause (ii), as the case may be, of the preceding paragraph, such implied yield will be determined, if necessary, by (i) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (ii) interpolating linearly between (A) the actively traded U.S. Treasury security with the maturity closest to and greater than such Remaining Average Life and (B) the actively traded U.S. Treasury security with the maturity closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Initial Note.

 

“Remaining Average Life” means, with respect to any Called Principal of any Initial Note, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (A) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (B) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

 

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“Remaining Scheduled Payments”  means, with respect to the Called Principal of any Initial Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Initial Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or 12.1, as applicable.

 

“Settlement Date” means, with respect to the Called Principal of any Initial Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as applicable.

 

Section 8.7 Prepayment Upon Change in Control.  (a)   Notice of Change in Control; Offer to Prepay if Change in Control has Occurred.  The Company will, within 5 Business Days after any Responsible Officer has knowledge of the occurrence of any Change in Control, give written notice of such Change in Control to each holder of Notes.  If a Change in Control has occurred, such notice shall contain and constitute an offer to prepay Notes as described in clause (b) of this Section 8.7 and shall be accompanied by the certificate described in clause (e) of this Section 8.7.

 

(b)        Offer to Prepay; Time for Payment.  The offer to prepay Notes contemplated by clause (a) of this Section 8.7 shall be an offer to prepay, in accordance with and subject to this Section 8.7, all, but not less than all, of the Notes held by each holder (in the case of this Section 8.7 only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date”).  The Proposed Prepayment Date shall not be less than 30 days and not more than 60 days after the date of such offer (if the Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the first Business Day which is at least 45 days after the date of such offer).

 

(c)        Acceptance; Rejection.  A holder of Notes may accept the offer to prepay made pursuant to this Section 8.7 by causing a notice of such acceptance to be delivered to the Company at least 10 calendar days prior to the Proposed Prepayment Date.  A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.7 within such time period, shall be deemed to constitute a rejection of such offer by such holder.  For the avoidance of doubt, a holder of Notes may accept a prepayment offer contemplated by this Section 8.7 with respect to any Series (or tranche) of Notes held by such holder and reject such prepayment offer with respect to any other Note held by such holder.

 

(d)        Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 8.7 shall be at 100% of the principal amount of such Notes together with interest on such Notes accrued to the date of prepayment, but without payment of the Make-Whole Amount or any premium.  The prepayment shall be made on the Proposed Prepayment Date.

 

(e)        Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.7 shall be accompanied by a certificate, executed by a Senior Financial Officer and dated the date

 

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of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 8.7and that the failure by a holder to respond to such offer by the deadline established in Section 8.7(b) shall result in such offer to such holder being deemed rejected; (iii) that the entire principal amount of each Note is offered to be prepaid without any Make-Whole Amount; (iv) the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date; (v) that the conditions of this Section 8.7 required to be fulfilled prior to the giving of such notice have been fulfilled and (vi) in reasonable detail, the nature and date or proposed date of the Change in Control.

 

Section 8.8 Offer to Prepay Upon Sale of Assets.  (a)  Notice and Offer.  In the event of a Disposition of any assets of the Company or any Significant Subsidiary where the Company is required to or has elected to apply the Net Cash Proceeds of such Disposition pursuant to clause (B) of the second paragraph of Section 10.2(d), the Company shall, no later than the 350th day following the date of such Disposition, give written notice of such event (a “Sale of Assets Prepayment Event”) to each holder of Notes.  Such notice shall contain, and shall constitute, an irrevocable offer to prepay, at 100% of the aggregate Ratable Portion of the Notes of each holder that has accepted such offer, together with interest on that portion of the Notes then being prepaid accrued to the Sale of Assets Prepayment Date but, in any case, without any Make-Whole Amount, a Ratable Portion of the Notes held by such holder on the date specified in such notice (the “Sale of Assets Prepayment Date”), which date shall not be less than 30 days and not more than 60 days after the date of such notice.  Such notice shall also state (1) that such offer is being made pursuant to this Section 8.8 and that the failure by a holder to respond to such offer by the deadline established in Section 8.8(b) shall result in such offer to such holder being deemed rejected; (2) the Ratable Portion of each such Note offered to be prepaid; (3) the prepayment price of each Note as described in Section 8.8(b); (4) the interest that would be due on the Ratable Portion of each such Note offered to be prepaid, accrued to, but not including, the Sale of Assets Prepayment Date and (5) in reasonable detail, a description of the nature and the date of the Sale of Assets Prepayment Event giving rise to such offer of prepayment.

 

(b)        Acceptance and Payment.  A holder of Notes may accept or reject the offer to prepay pursuant to this Section 8.8 by causing a notice of such acceptance or rejection to be delivered to the Company at least 10 days prior to the Sale of Assets Prepayment Date.  A failure by a holder of the Notes to respond to an offer to prepay made pursuant to this Section 8.8 shall be deemed to constitute a rejection of such offer by such holder.  If so accepted, such offered prepayment in respect of the Ratable Portion of the Notes of each holder that has accepted such offer shall be due and payable on the Sale of Assets Prepayment Date.  Such offered prepayment shall be made at 100% of the aggregate Ratable Portion of the Notes of each holder that has accepted such offer, together with interest on that portion of the Notes then being prepaid accrued to the Sale of Assets Prepayment Date but, in any case, without any Make-Whole Amount.

 

SECTION 9.   AFFIRMATIVE COVENANTS.

 

The Company covenants that so long as any of the Notes are outstanding:

 

Section 9.1 Compliance with Law.  Without limiting Section 10.8, the Company will, and will cause each of its Significant Subsidiaries to, comply with all laws, ordinances or

 

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governmental rules or regulations to which each of them is subject, including, without limitation, ERISA, the USA PATRIOT Act and Environmental Laws, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 9.2 Insurance.  The Company will, and will cause each of its Significant Subsidiaries to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.

 

Section 9.3 Maintenance of Properties.  The Company will, and will cause each of its Significant Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear and damage from casualties provided that any such damage is repaired or restored within a commercially reasonable time frame), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent the Company or any Significant Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 9.4 Payment of Taxes and Claims.  The Company will, and will cause each of its Significant Subsidiaries to, file all income and other material tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges or levies imposed on them or any of their properties, assets, income or franchises, to the extent the same have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the Company or any Significant Subsidiary other than a Permitted Lien, provided that neither the Company nor any Significant Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity of which is being contested by the Company or such Significant Subsidiary on a timely basis in good faith by appropriate actions or proceedings, and with respect to which the Company or a Significant Subsidiary, as the case may be, has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Significant Subsidiary or (ii) the nonpayment of all such taxes, assessments, charges, levies and claims in the aggregate could not reasonably be expected to have a Material Adverse Effect.

 

Section 9.5 Corporate Existence, Etc.  Subject to Section 10.2, the Company will at all times preserve and keep in full force and effect its corporate existence.  Subject to Section 10.2, the Company will at all times preserve and keep in full force and effect the corporate existence

 

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of each of its Significant Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and all rights and franchises of the Company and its Significant Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 9.6 Books and Records.  The Company will, and will cause each of its Significant Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Company or such Significant Subsidiary, as the case may be.

 

Section 9.7 Notes Rank Pari Passu.  The Company’s obligations under the Initial Notes and all Series of Additional Notes will, upon issuance thereof, rank pari passu in right of payment, without preference or priority, with all other Notes.  The Notes and all other obligations of the Company under this Agreement or any Supplement are and at all times shall remain direct and unsecured obligations of the Company ranking senior to, or pari passu with, other unsecured Indebtedness of the Company.

 

Section 9.8 Most Favored Lender Status.  (a)  Subject to the Section 9.8(b), if at any time the Company is party to or shall enter into any Major Credit Facility or any other agreement, instrument or other document (or any amendment to any Major Credit Facility or such agreement, instrument or other document) providing for or otherwise evidencing or governing extensions of credit available to the Company in an aggregate amount of at least $50,000,000 (or its equivalent in the relevant currency of payment) (any of the foregoing, a “Reference Agreement”), which Reference Agreement includes any financial covenant (however expressed including, without limitation, as a ratio, as a fixed threshold, as an event of default, or as mandatory prepayment provision), in any event that is not otherwise included in this Agreement or that would be more beneficial to the holders of Notes than the relevant similar covenant or like provisions contained in this Agreement (any such financial covenant, an “Additional Covenant”), then the Company shall, within 30 days after entering into such Reference Agreement, provide notice thereof to the holders of Notes, which notice shall refer specifically to this Section 9.8 and describe in reasonable detail any such Additional Covenant.  Unless waived in writing by the Required Holders within two Business Days of the holders’ receipt of such notice, each such Additional Covenant set forth in such notice shall be deemed incorporated by reference into this Agreement, mutatis mutandis, as if set forth fully herein effective as of the date when such Additional Covenant became effective under the applicable Reference Agreement.

 

(b)        Provided that no Default or Event of Default shall have occurred and be continuing, any Additional Covenant which has been incorporated by reference into this Agreement shall be deemed automatically (1) amended, waived or otherwise modified in this Agreement at such time as each holder of Notes shall have received notice in writing from the Company certifying that such Additional Covenant shall have been so amended, waived or otherwise modified under the applicable Reference Agreement and (2) deleted from this Agreement at such time as each holder of Notes shall have received notice in writing from the Company certifying that such Additional Covenant shall have been deleted from the applicable Reference Agreement or that the applicable Reference Agreement shall have been terminated

 

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and that no amounts are outstanding thereunder.  If a Default or an Event of Default has occurred and is continuing, any such amendment, waiver, modification or deletion referred to in the immediately preceding sentence shall be made at the option of the Required Holders.  If the Company shall pay any fee, additional interest or other consideration to any lender under an applicable Reference Agreement as an inducement to receiving any amendment, modification or deletion that is the subject of any notice set forth in the foregoing clause (1) or (2), then the Company shall pay such fee, additional interest or other consideration to the holders of Notes (if such fee, additional interest or other consideration is measured as a percentage, dollar amount or other metric, as such percentage, dollar amount or metric is applied to the Notes) prior to any such amendment, modification or deletion of any Additional Covenant becoming effective under this Agreement.

 

(c)        For the avoidance of doubt, no financial covenant contained in this Agreement as of the date of this Agreement (or as amended pursuant to Section 17) shall be deemed deleted from this Agreement or made less restrictive than the level set forth herein with respect to such covenant (however expressed) as of the date of this Agreement (or as amended pursuant to Section 17) unless amended or otherwise modified in accordance with Section 17.  Upon the request by the Company or any holder of a Note, the Company and the holders of Notes shall enter into an additional agreement or an amendment to this Agreement (as agreed between the Company and the Required Holders working in good faith) evidencing any of the foregoing.

 

SECTION 10. NEGATIVE COVENANTS.

 

The Company covenants that so long as any of the Notes are outstanding:

 

Section 10.1 Liens.  The Company will not incur, create, assume or permit to exist any Lien on the capital stock or similar Equity Interests of or other ownership interests in any Significant Subsidiary owned by the Company or any Lien on any of its other assets, now or hereafter owned, without effectively providing concurrently therewith to equally and ratably secure the obligations of the Company under this Agreement pursuant to documentation in form and substance reasonably satisfactory to the Required Holders of each Series of Notes, except the following Liens (the “Permitted Liens”):

 

(a)        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 for sums not yet due and payable or the payment of which is not at the time required by Section 9.4;

 

(b)        Liens (other than any Lien imposed by ERISA) 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 the payment of which is not at the time required by Section 9.4, 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;

 

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(c)        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;

 

(d)        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, in each case, for sums not yet due and payable or the payment of which is not at the time required by Section 9.4;

 

(e)        any Lien existing on any property or asset at the time such property or asset is acquired by the Company (including acquisition by merger or consolidation), but only if and so long as (i) such Lien was not created in contemplation of such property or asset being acquired, (ii) 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 (iii) such Lien secures only the obligation secured thereby at the time such property or asset is acquired;

 

(f)         any Lien in existence on the date of this Agreement to the extent set forth on Schedule 10.1, but only, in the case of each such Lien, to the extent it secures an obligation outstanding on the date of this Agreement to the extent set forth on such Schedule;

 

(g)        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;

 

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

 

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

 

(j)         Liens securing obligations, neither assumed by the Company or any Significant Subsidiary nor on account of which the Company or any Significant Subsidiary customarily pays interest, upon real estate or under which the Company or any Significant Subsidiary has a right-of-way, easement, franchise or other servitude or of which the Company or any Significant Subsidiary is the lessee of the whole thereof or any interest therein for the purpose of locating

 

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transmission and distribution lines and related support structures, pipe lines, substations, measuring stations, tanks, pumping or delivery equipment or similar equipment;

 

(k)        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 in the ordinary course of business;

 

(l)         any Lien constituting a renewal, extension or replacement of a Lien permitted under clause (e), (f) or (g) of this Section 10.1, 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 Company, is commercially reasonable at the time of such increase; and

 

(m)       Liens securing Indebtedness or other obligations of the Company 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 (m) does not exceed 15% of Consolidated Net Worth; and provided further that, notwithstanding the foregoing, the Company will not grant any Liens securing Indebtedness outstanding under any Major Credit Facility pursuant to this Section 10.1(m) unless and until all obligations of the Company under this Agreement, each Supplement and the Notes shall concurrently be secured equally and ratably with such Indebtedness pursuant to documentation in form and substance reasonably satisfactory to the Required Holders of each Series of Notes.

 

Section 10.2 Sale of Assets; Consolidation; Merger; Sale and Leaseback.  (a) The Company will not (i) sell, lease, transfer or otherwise Dispose of all or substantially all of its properties and assets to any Person, or (ii) 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 HECO, HELCO, or MECO, other than directors’ qualifying shares.

 

(b)        The Company will not consolidate with or merge into any other corporation (other than a merger of a Subsidiary into, or a consolidation of a Subsidiary with, the Company) 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 Company, the Company is the surviving corporation;

 

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(ii)        after giving effect to any merger or consolidation or acquisition, the Company is in pro forma compliance with Sections 10.5 and 10.6;

 

(iii)       after giving effect to any merger or consolidation or acquisition, no Default or Event of Default shall occur and be continuing; and

 

(iv)       the holders of Notes shall have received prior to the consummation of any such merger, consolidation or acquisition, a certificate executed by a Senior Financial Officer as to each of the matters described in clauses (i) through (iii) above.

 

(c)        The Company will not enter into any arrangement, directly or indirectly, with any Person whereby the Company shall sell or transfer and lease back any portion of its property, real, personal or mixed, and used and useful in its business, whether now owned or hereafter acquired, which constitutes a material portion of the total property of the Company.

 

(d)        Except as permitted by the other provisions of clause (b) of this Section 10.2, the Company will not, and will not permit any Significant Subsidiary to, Dispose of any property, including Equity Interests of Subsidiaries owned by it, in one or more transactions, to any Person, other than (i) Dispositions in the ordinary course of business, (ii) Dispositions by the Company or a Significant Subsidiary to the Company or to a Significant Subsidiary, (iii) any such Dispositions within 365 days of the acquisition or construction by the Company or a Significant Subsidiary of the assets so Disposed of, if the Company or a Significant Subsidiary shall concurrently with such Disposition lease such assets as lessee, or (iv) other Dispositions not otherwise permitted by this Section 10.2(d), provided that (1) after giving effect thereto, no Default or Event of Default shall have occurred and be continuing and (2) the aggregate net book value of all property so disposed of during any period of 12 consecutive months pursuant to this Section 10.2(d)(iv) would not exceed 15% of the consolidated assets of the Company and its Subsidiaries as determined in accordance with GAAP as of the end of the immediately preceding fiscal quarter.

 

Notwithstanding the foregoing, the Company may, or may permit any Significant Subsidiary to, make a Disposition of assets and such assets shall not be subject to or included in the foregoing limitation and computation contained in clause (iv) of the preceding paragraph to the extent, and from the date, that the Net Cash Proceeds (if any) from such Disposition are, within 365 days of such Disposition, either (A) reinvested in (or used, directly or indirectly, to purchase or otherwise acquire) productive assets by the Company or a Significant Subsidiary to be used in the business of the Company or such Significant Subsidiary or (B) applied, or offered to be applied, to the payment or prepayment of any outstanding Indebtedness of the Company or its Significant Subsidiaries other than, in the case of the Company, outstanding Subordinated Debt (in connection with any offer to prepay, whether or not such offer is accepted by the applicable holder of such Indebtedness), provided that in the course of making such application or offer, the Company shall offer to prepay each outstanding Note in accordance with Section 8.8 in a principal amount which equals the Ratable Portion for such Note.

 

Section 10.3 Limitation on Restrictive Agreements.  The Company 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

 

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any Significant Subsidiary to (a) make any Restricted Payments or to repay any Indebtedness owed to the Company, (b) make loans or advances to the Company or (c) transfer any of its property or assets to the Company, 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 expressly permitted by this Agreement, (iii) existing on the date of this Agreement and identified on Schedule 10.3, 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 10.3.

 

Section 10.4 Transactions with Affiliates.  Except as specifically permitted by this Agreement to be entered into with an Affiliate, the Company will not, and will not permit any Significant Subsidiary 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 (a) at prices and on terms and conditions not materially less favorable to the Company or such Significant Subsidiary than could be obtained on an arm’s length basis from unrelated third parties and (b) transactions between the Company and its Subsidiaries or between Subsidiaries of the Company.

 

Section 10.5 Capitalization Ratio.  The Company will not permit its Capitalization Ratio to exceed 0.50 to 1.00 as of the end of any fiscal quarter or fiscal year end.

 

Section 10.6 Consolidated Net Worth.  The Company will not permit its Consolidated Net Worth to be less than $975,000,000 as of the end of any fiscal quarter or fiscal year end.

 

Section 10.7 Lines of Business.  The Company will not, and will not permit any Significant Subsidiary to, engage in any business, if, as a result, when taken as a whole, the general nature of the business of the Company and its Subsidiaries would be substantially changed from the general nature of the business of the Company and its Subsidiaries on the date of this Agreement as described in the Offering Memorandum.

 

Section 10.8 Terrorism Sanctions Regulations.  The Company will not, and will not permit any Subsidiary to, (a) become a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (b) engage in any dealings or transactions with any such Person.

 

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SECTION 11. EVENTS OF DEFAULT.

 

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

 

(a)        the Company defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

 

(b)        the Company defaults in the payment of any interest on any Note for five Business Days or more after the same becomes due and payable; or

 

(c)        the Company defaults in the performance of or compliance with any term  contained in Section 7.1(d), Section 10.1, Section 10.2, Section 10.3, Section 10.5, Section 10.6, Section 10.7, or Section 10.8 or any covenant in a Supplement which specifically provides that it shall have the benefit of this paragraph (c); or

 

(d)        the Company defaults in the performance of or compliance with any term contained herein or in any Supplement (other than those referred to in Sections 11(a), (b) and (c)) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or

 

(e)        any representation or warranty made by or on behalf of the Company in this Agreement or in any Supplement or in any writing furnished by or on behalf of the Company in connection with the transactions contemplated hereby or thereby proves to have been false or incorrect in any material respect on the date as of which made; or

 

(f)         (i) the Company shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Indebtedness that is outstanding in an aggregate principal amount of at least $50,000,000, when and as the same shall become due and payable after any applicable grace period, (ii) the Company shall fail to observe or perform any other term, covenant, condition or agreement contained in any agreement or instrument evidencing, governing or relating to any Indebtedness that is outstanding in an aggregate principal amount of at least $50,000,000 after any applicable grace period if the effect of any failure referred to in this clause (ii) is to cause such Indebtedness to become (or one or more Persons are entitled to declare such Indebtedness to be) due prior to its stated maturity, or (iii) as a consequence of the occurrence or continuation of any event or condition, (x) the Company has become obligated to purchase or repay any such Indebtedness before its regular maturity or before its regularly scheduled dates of payment, or (y) one or more Persons have the right to require the Company so to purchase or repay such Indebtedness; provided that no Event of Default shall occur under clause (iii) of this paragraph (f) as a result of (1) any term, covenant, condition or agreement that triggers a change in control, including, in the case of the Notes, an offer to prepay the Notes pursuant to Section 8.7, (2) any notice of voluntary prepayment delivered by the Company with respect to any Indebtedness, so long as no default or event of default exists with respect to such Indebtedness, (3) any voluntary sale of assets by the Company as a result of which any

 

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Indebtedness secured by such assets is required to be prepaid, or (4) the right of the holder of any such Indebtedness to convert such Indebtedness into Equity Interests; or

 

(g)        (i) any Significant Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Indebtedness that is outstanding in an aggregate principal amount of at least $50,000,000, when and as the same shall become due and payable after any applicable grace period, (ii) any Significant Subsidiary shall fail to observe or perform any other term, covenant, condition or agreement contained in any agreement or instrument evidencing, governing or relating to any Indebtedness that is outstanding in an aggregate principal amount of at least $50,000,000 after any applicable grace period if the effect of any failure referred to in this clause (ii) is to cause such Indebtedness to become due prior to its stated maturity, or (iii) as a consequence of the occurrence or continuation of any event or condition, (x) any Significant Subsidiary has become obligated to purchase or repay any such Indebtedness before its regular maturity or before its regularly scheduled dates of payment, or (y) one or more Persons have exercised the right to require any Significant Subsidiary so to purchase or repay such Indebtedness; provided that no Event of Default shall occur under clause (iii) of this paragraph (g) as a result of (1) any term, covenant, condition or agreement that triggers a change in control, including, in the case of the Notes, an offer to prepay the Notes pursuant to Section 8.7, (2) any notice of voluntary prepayment delivered by a Significant Subsidiary with respect to any Indebtedness, so long as no default or event of default exists with respect to such Indebtedness, (3) any voluntary sale of assets by a Significant Subsidiary as a result of which any Indebtedness secured by such assets is required to be prepaid, or (4) the right of the holder of any such Indebtedness to convert such Indebtedness into Equity Interests; or

 

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

 

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

 

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

 

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(k)        one or more judgments for the payment of money in an aggregate amount in excess of $50,000,000 (excluding any amount that is covered by insurance where the relevant insurance company has been notified of the claim or judgment and has not expressly denied coverage in writing) shall be rendered against the Company or any Significant Subsidiary or any combination thereof and which judgment or judgments are not within 60 days after the entry thereof, bonded, discharged pending appeal or are not discharged within 60 days after the expiration of such stay; or

 

(l)         if one or more ERISA Events shall have occurred, that individually or in the aggregate has resulted in liability of the Company, any of its Subsidiaries or any of their respective ERISA Affiliates that could reasonably be expected to have a Material Adverse Effect; or there shall exist an amount of unfunded benefit liabilities (as defined in ERISA section 4001(a)(18)), individually or in the aggregate for all Plans (excluding for purposes of such computation any Plans with respect to which assets exceed benefit liabilities), which could reasonably be expected to have a Material Adverse Effect; or

 

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

 

SECTION 12. REMEDIES ON DEFAULT, ETC.

 

Section 12.1 Acceleration.  (a)  If an Event of Default with respect to the Company described in Section 11(i) or (j) has occurred and is continuing, all the Notes of every Series then outstanding shall automatically become immediately due and payable.

 

(b)        If any other Event of Default has occurred and is continuing, the Required Holders of any Series of Notes may at any time at their option, by notice or notices to the Company, declare all the Notes of such Series then outstanding to be immediately due and payable.

 

(c)        If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by such holder or holders to be immediately due and payable.

 

Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (y) the applicable Make-Whole Amount, if any, determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein or in any Supplement

 

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specifically provided for) and that the provision for payment of a Make-Whole Amount, if any, by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

 

Section 12.2 Other Remedies.  If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein, in any Supplement, or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

 

Section 12.3 Rescission.  At any time after any Notes of a Series have been declared due and payable pursuant to Section 12.1(b) or (c), the Required Holders of the applicable Series of Notes, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes of such Series, all principal of and the applicable Make-Whole Amount, if any, on any Notes of such Series that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and such Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes of such Series, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto, to any Supplement, or to the terms of the Notes of such Series.  No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

 

Section 12.4 No Waivers or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this Agreement, by any Supplement, or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.

 

SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

 

Section 13.1 Registration of Notes.  The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes.  The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register.  Prior to due presentment for

 

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registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary.  The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.  Without intending to derogate from the foregoing provisions of this Section 13.1, but subject to the provisions of clause (b) of Section 8.7, if a Purchaser shall have designated a nominee to hold its Initial Notes or if an Additional Purchaser shall have designated a nominee to hold its Additional Notes, the Company shall register the name and address of such nominee (and not such Purchaser or Additional Purchaser, as the case may be) in such register.

 

Section 13.2 Transfer and Exchange of Notes.  Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 18(iv)) for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other details for notices of each transferee of such Note or part thereof) within 10 Business Days thereafter the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) of the same Series (and of the same tranche if such Series has separate tranches) as such surrendered Note in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of the Note of such Series and tranche originally issued hereunder or pursuant to any Supplement.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes of any Series or tranche, if applicable, one Note of such Series or tranche, if applicable, may be in a denomination of less than $100,000.  Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.3.

 

Section 13.3 Replacement of Notes.  Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 18(iv)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

 

(a)        in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $100,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

 

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(b)        in the case of mutilation, upon surrender and cancellation thereof, within 10 Business Days thereafter the Company at its own expense shall execute and deliver, in lieu thereof, a new Note of the same Series (and of the same tranche if such Series has separate tranches) as such lost, stolen, destroyed or mutilated Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

 

SECTION 14. PAYMENTS ON NOTES.

 

Section 14.1 Place of Payment.  Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York, at the principal office of Bank of America, N.A. in such jurisdiction.  The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

 

Section 14.2 Home Office Payment.  So long as any Purchaser or Additional Purchaser or such Person’s nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest and all other amounts by the method and at the address specified for such purpose below such Purchaser’s name in Schedule A hereto or, in the case of any Additional Purchaser, Schedule A attached to the applicable Supplement pursuant to which such Additional Purchaser is a party, or by such other method or at such other address as such Purchaser or Additional Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser or Additional Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1.  Prior to any sale or other Disposition of any Note held by any Purchaser or Additional Purchaser or such Person’s nominee, such Person will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2.  The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser or an Additional Purchaser under this Agreement (including any Supplement) and that has made the same agreement relating to such Note as the Purchasers and Additional Purchasers, as applicable, have made in this Section 14.2.

 

SECTION 15. EXPENSES, ETC.

 

Section 15.1 Transaction Expenses.  Whether or not the transactions contemplated hereby or by any Supplement are consummated, the Company will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Required Holders of any Series of Notes, local or other counsel) incurred by the Purchasers, the Additional

 

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Purchasers and each other holder of a Note in connection with the transactions contemplated by this Agreement or any Supplement and in connection with any amendments, waivers or consents under or in respect of this Agreement (including any Supplement) or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation:

 

(a)        the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement (including any Supplement) or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement (including any Supplement) or the Notes, or by reason of being a holder of any Note;

 

(b)        the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby, by any Supplement, and by the Notes; and

 

(c)        the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO, provided that such costs and expenses under this clause (c) shall not exceed $3,000.

 

The Company will pay, and will save each Purchaser, each Additional Purchaser and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser, an Additional Purchaser or other holder in connection with its purchase of the Notes).

 

Section 15.2 Survival.  The obligations of the Company under Section 15.1 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement, any Supplement or the Notes, and the termination of this Agreement or any Supplement.

 

SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

 

All representations and warranties contained herein or in any Supplement shall survive the execution and delivery of this Agreement, such Supplement and the Notes, the purchase or transfer by any Purchaser or any Additional Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of any Purchaser, Additional Purchaser or other holder of a Note.  All written statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement or any Supplement shall be deemed representations and warranties of the Company under this Agreement or such Supplement; provided, that the representations and warranties contained in any Supplement shall only be made for the benefit of the Additional Purchasers which are party to such Supplement and the holders of the Notes issued pursuant to such Supplement, including subsequent holders of any Note issued pursuant to such Supplement.  All representations and warranties of the Purchasers or the Additional Purchasers contained herein or in any Supplement shall survive the execution and delivery of this Agreement, each Supplement

 

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and the Notes, the purchase or transfer by any Purchaser or any Additional Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by the Company and any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of the Company, any Purchaser, Additional Purchaser or other holder of a Note.  Subject to the foregoing provisions of this Section 16, this Agreement (including every Supplement) and the Notes embody the entire agreement and understanding between each Purchaser, each Additional Purchaser and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

 

SECTION 17. AMENDMENT AND WAIVER.

 

Section 17.1 Requirements.

 

(a)        Requirements.  This Agreement (including any Supplement) and the Notes of any Series may be amended as this Agreement (including any Supplement) applies to the Notes of such Series, and the observance of any term hereof (including of any Supplement) that applies to the Notes of such Series or of the Notes of such Series may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders of such Series, except that (i) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6, or 21 hereof or the corresponding provision of any Supplement, or any defined term (as it is used in any such Section or such corresponding provision of any Supplement), will be effective as to any holder of Notes unless consented to by such holder of Notes in writing, and (ii) no such amendment or waiver may, without the written consent of the holder of each Note of any Series or tranche, as applicable, at the time outstanding affected thereby, (A) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the applicable Make-Whole Amount, if any, on, the Notes of such Series or tranche, (B) change the percentage of the principal amount of the Notes of such Series the holders of which are required to consent to any such amendment or waiver, or (C) amend any of Section 8, 11(a), 11(b), 12, 17 or 20 as it applies to Notes of such Series.  For the avoidance of doubt, the Company and the holders of any tranche of any Series of Notes may enter into an amendment or waiver contemplated by clause (ii)(A) of this Section 17.1(a) without the consent of the holders of any Note of a different tranche within such Series which is not affected thereby or the holders of any Note of a different Series which is not affected thereby.

 

(b)        Supplements.  Notwithstanding anything to the contrary contained herein, the Company may enter into any Supplement providing for the issuance of one or more Series of Additional Notes consistent with Section 2.2 hereof without obtaining the consent of any holder of any other Series of Notes.

 

(c)        Holders of Notes Benefitted and Bound.  Each holder of a Note of a Series, by its acceptance of a Note of such Series, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Agreement (and any Supplement) that apply to the Notes of such Series as though it were a Purchaser or an Additional Purchaser of the Notes of such Series.

 

Section 17.2 Solicitation of Holders of Notes.

 

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(a)        Solicitation.  The Company will provide each holder of the Notes of a Series (irrespective of the amount of Notes of such Series then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof as it relates to Notes of such Series, any Supplement as it relates to Notes of such Series or of the Notes of such Series.  The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder of outstanding Notes of the applicable Series promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes of such Series.

 

(b)        Payment.  The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of Notes of a Series as consideration for or as an inducement to the entering into by any holder of Notes of such Series of any waiver or amendment of any of the terms and provisions hereof as it relates to Notes of such Series, of any Supplement as it relates to Notes of such Series or of any Note of such Series unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of Notes of such Series then outstanding even if such holder did not consent to such waiver or amendment.

 

(c)        Consent in Contemplation of Transfer.  Any consent made pursuant to this Section 17 by a holder of Notes that has transferred or has agreed to transfer its Notes to the Company or any Affiliate and has provided or has agreed to provide such written consent as a condition to such transfer shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.

 

Section 17.3 Binding Effect, Etc.  Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders of Notes of a Series (or tranche(s) of such Series) and is binding upon them and upon each future holder of any Note of such Series (or tranche(s) of such Series) and upon the Company without regard to whether such Note of such Series (or tranche(s) of such Series) has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder, under any Supplement, or under any Note shall operate as a waiver of any rights of any holder of such Note.  As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.

 

Section 17.4 Notes Held by Company, Etc.  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, any Supplement, or the Notes, or have directed the taking of any action provided herein, in any Supplement, or in the Notes to be taken upon the direction of the holders of a

 

38

 

specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

 

SECTION 18. NOTICES.

 

All notices and communications provided for hereunder (or under any Supplement) shall be in writing and sent (a) by telecopy or other electronic delivery if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (charges prepaid).  Any such notice or communication must be sent:

 

(i)         if to a Purchaser or its nominee, to such Purchaser or nominee at the address specified for such notices or communications in Schedule A, or at such other address as such Purchaser or nominee shall have specified to the Company in writing,

 

(ii)        if to an Additional Purchaser or its nominee, to such Additional Purchaser or nominee at the address specified for such notices or communications in Schedule A to the applicable Supplement, or at such other address as such Additional Purchaser or nominee shall have specified to the Company in writing,

 

(iii)       if to any other holder of any Note, to such holder at such address as such other holder shall have specified for such notices or communications to the Company in writing, or

 

(iv)       if to the Company:

 

Hawaiian Electric Industries, Inc.

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

Honolulu, Hawaii 96813

P.O. Box 730 (if by mail)

Honolulu, Hawaii 96808-0730

Attention: Mr. James A. Ajello, Senior Financial VP,

Treasurer & Chief Financial Officer

Telephone No.: 808-543-7750

Facsimile No.:  808-203-1184

Email:   jajello@HEI.com

 

or at such other address as the Company shall have specified to the holder of each Note in writing.

 

Notices under this Section 18 will be deemed given only when actually received.

 

SECTION 19. REPRODUCTION OF DOCUMENTS.

 

This Agreement and all documents relating hereto, including, without limitation, (a) all Supplements, consents, waivers, amendments, and modifications that may hereafter be executed,

 

39

 

(b) documents received by any Purchaser at the Closing or any Additional Purchaser at the closing of its purchase of Additional Notes (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any holder of Notes, may be reproduced by such holder of Notes by any photographic, photostatic, electronic, digital or other similar process and such holder of Notes may destroy any original document so reproduced.  The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such holder of Notes in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

 

SECTION 20. CONFIDENTIAL INFORMATION.

 

For the purposes of this Section 20, “Confidential Information” means information delivered to any Purchaser or any Additional Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement or any Supplement that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser or Additional Purchaser as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser or such Additional Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or such Additional Purchaser or any Person acting on such Purchaser’s or such Additional Purchaser’s behalf, (c) otherwise becomes known to such Purchaser or such Additional Purchaser other than through disclosure by the Company or any Subsidiary unless the source of such information is actually known by such Purchaser or such Additional Purchaser to be bound by a confidentiality agreement with respect to such information or (d) constitutes financial statements delivered to such Purchaser or such Additional Purchaser under Section 7.1 that are otherwise publicly available.  Each Purchaser and each Additional Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser or such Additional Purchaser in good faith to protect confidential information of third parties delivered to such Persons, provided that such Purchaser or such Additional Purchaser may deliver or disclose Confidential Information to (i) such Purchaser’s or such Additional Purchaser’s directors, trustees, officers, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by such Purchaser’s or such Additional Purchaser’s Notes), (ii) such Purchaser’s or such Additional Purchaser’s financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which such Purchaser or such Additional Purchaser sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which such Purchaser or such Additional Purchaser offers to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (vi) any Federal or

 

40

 

state regulatory authority having jurisdiction over such Purchaser or such Additional Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s or such Additional Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser or such Additional Purchaser, (x) in response to any subpoena or other legal process (and, subject to clause (z) below, if not prohibited by applicable law, such Purchaser shall use commercially reasonably efforts to give notice to the Company thereof prior to such disclosure), (y) in connection with any litigation to which such Purchaser or such Additional Purchaser is a party(and, subject to clause (z) below, if not prohibited by applicable law, such Purchaser shall use commercially reasonably efforts to give notice to the Company thereof prior to such disclosure), or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser or such Additional Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s or such Additional Purchaser’s Notes and this Agreement (including any Supplement).  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.  On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or under any Supplement or requested by such holder (other than a holder that is a party to this Agreement or any Supplement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.

 

SECTION 21. SUBSTITUTION OF PURCHASER OR ADDITIONAL PURCHASER.

 

Each Purchaser and each Additional Purchaser shall have the right to substitute any one of its Affiliates as the purchaser of the Notes that it has agreed to purchase hereunder or under a Supplement, by written notice to the Company, which notice shall be signed by both such Purchaser or such Additional Purchaser and such Affiliate, shall contain such Affiliate’s agreement to be bound by this Agreement or such Supplement, as the case may be, and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, any reference to such Purchaser or such Additional Purchaser in this Agreement or such Supplement, as the case may be (other than in this Section 21), shall be deemed to refer to such Affiliate in lieu of such original Purchaser or such original Additional Purchaser.  In the event that such Affiliate is so substituted as a Purchaser or an Additional Purchaser hereunder and such Affiliate thereafter transfers to such original Purchaser or such original Additional Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, any reference to such Affiliate as a “Purchaser” or an “Additional Purchaser” in this Agreement or such Supplement, as the case may be (other than in this Section 21), shall no longer be deemed to refer to such Affiliate, but shall refer to such original Purchaser or such original Additional Purchaser, and such original Purchaser or such original Additional Purchaser shall again have all the rights of an original holder of the Notes under this Agreement or such Supplement, as the case may be.

 

SECTION 22. MISCELLANEOUS.

 

41

 

Section 22.1 Successors and Assigns.  All covenants and other agreements contained in this Agreement (including all covenants and other agreements contained in any Supplement) by or on behalf of any of the parties hereto (or thereto) bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.

 

Section 22.2 Payments Due on Non-Business Days.  Anything in this Agreement, any Supplement or the Notes to the contrary notwithstanding (but without limiting the requirement in Section 8.2 and Section 8.4 that the notice of any optional prepayment specify a Business Day as the date fixed for such prepayment), any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that, if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.  Each Purchaser and Additional Purchaser shall provide, upon the reasonable request of the Company and at the sole cost and expense of the Company, copies of Form W-9, Form W-8BEN or similar tax forms that may be required to eliminate or reduce any obligation of the Company to backup withhold or otherwise withhold any tax from any payment due under the Notes to such Purchaser or Additional Purchaser.

 

Section 22.3 Accounting Terms.  All accounting terms used herein or in any Supplement which are not expressly defined in this Agreement or in any Supplement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein or in any Supplement, all terms of an accounting or financial nature shall be construed in accordance with GAAP, all computations made pursuant to this Agreement or a Supplement shall be made in accordance with GAAP, and all financial statements shall be prepared in accordance with GAAP, in each case as in effect from time to time; provided that, if the Company notifies the holders of a Series of Notes that the Company requests an amendment to any provision of this Agreement or a Supplement as it relates to the Notes of such Series to eliminate the effect of any change occurring after the date of this Agreement in GAAP or in the application thereof on the operation of such provision (or if the Required Holders of a Series of Notes notify the Company that the Required Holders of such Series request an amendment to any provision of this Agreement or a Supplement as it relates to Notes of such Series 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, as it relates to the Notes of such Series, 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 with this Agreement.  For purposes of determining compliance with the financial covenants contained in this Agreement or any Supplement, any election by the Company to measure an item of Indebtedness using fair value (as permitted by Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards No. 159) or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.

 

42

 

Section 22.4 Severability.  Any provision of this Agreement (or in any Supplement) that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof (or thereof), and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 22.5 Construction, Etc.  Each covenant contained herein or in any Supplement shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein or in any Supplement, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein or in any Supplement refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

 

For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement or any Supplement shall be deemed to be a part hereof or of such Supplement.

 

Section 22.6 Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.  Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

 

Section 22.7 Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

 

Section 22.8 Jurisdiction and Process; Waiver of Jury Trial.  (a) The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement, any Supplement or the Notes.  To the fullest extent permitted by applicable law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

(b)        The Company consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 22.8(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 18(iv) or at such other address of which such holder shall then have been notified pursuant to said Section.  The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent

 

43

 

permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

 

(c)        Nothing in this Section 22.8 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

 

(d)        THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

 

******

 

[remainder of page is blank]

 

44

 

The execution hereof by the Purchasers shall constitute a contract among the Company and the Purchasers for the uses and purposes hereinabove set forth.

 

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
HAWAIIAN ELECTRIC   INDUSTRIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ James A. Ajello
    
	
 
    	
 
    	
Name:
    	
James A. Ajello
    
	
 
    	
 
    	
Title:
    	
Senior Financial Vice   President, Treasurer 
   and Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ David M. Kostecki
    
	
 
    	
 
    	
Name:
    	
David M. Kostecki
    
	
 
    	
 
    	
Title:
    	
Vice President-Finance,   Controller and 
   Chief Accounting Officer
    
						

 

Signature Page To Master Note Purchase Agreement

 

 

This Agreement is hereby accepted and agreed to as of the date thereof.

 

 

	
 
    	
THE PRUDENTIAL   INSURANCE COMPANY OF 
    
	
 
    	
AMERICA
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jennifer Graham
    
	
 
    	
 
    	
  Vice President
    

 

 

	
 
    	
PRUCO LIFE INSURANCE   COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jennifer Graham
    
	
 
    	
 
    	
  Vice President
    

 

 

	
 
    	
PRUCO LIFE INSURANCE   COMPANY OF NEW
    
	
 
    	
JERSEY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jennifer Graham
    
	
 
    	
 
    	
  Vice President
    

 

 

	
 
    	
PRUDENTIAL RETIREMENT   GUARANTEED COST 
    
	
 
    	
BUSINESS TRUST
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Prudential Investment   Management, Inc.,
    
	
 
    	
 
    	
as investment manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jennifer Graham
    
	
 
    	
 
    	
 
    	
  Vice President
    

 

 

	
 
    	
PRUDENTIAL RETIREMENT   INSURANCE AND 
    
	
 
    	
ANNUITY COMPANY
    
	
 
    	
 
    
	
 
    	
By:
    	
Prudential Investment   Management, Inc.,
    
	
 
    	
 
    	
as investment manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jennifer Graham
    
	
 
    	
 
    	
 
    	
  Vice President
    
					

 

Signature Page To Master Note Purchase Agreement

 

 

	
 
    	
PHYSICIANS MUTUAL   INSURANCE COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Prudential Private   Placement Investors,
    
	
 
    	
 
    	
L.P. (as Investment   Advisor)
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Prudential Private   Placement Investors, Inc. 
    
	
 
    	
 
    	
(as its General   Partner)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jennifer Graham
    
	
 
    	
 
    	
 
    	
  Vice President
    

 

 

	
 
    	
BCBSM, INC. DBA   BLUE CROSS AND BLUE SHIELD 
    
	
 
    	
OF MINNESOTA
    
	
 
    	
 
    
	
 
    	
By:
    	
Prudential Private   Placement Investors,
    
	
 
    	
 
    	
L.P. (as Investment   Advisor)
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Prudential Private   Placement Investors, Inc. 
    
	
 
    	
 
    	
(as its General   Partner)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jennifer Graham
    
	
 
    	
 
    	
 
    	
  Vice President
    

 

Signature Page To Master Note Purchase Agreement

 

 

This Agreement is hereby accepted and agreed to as of the date thereof.

 

 

	
 
    	
ING USA ANNUITY AND   LIFE INSURANCE
    
	
 
    	
COMPANY
    
	
 
    	
RELIASTAR LIFE   INSURANCE COMPANY
    
	
 
    	
ING LIFE INSURANCE AND   ANNUITY
    
	
 
    	
COMPANY
    
	
 
    	
RELIASTAR LIFE   INSURANCE COMPANY OF
    
	
 
    	
NEW YORK
    
	
 
    	
 
    
	
 
    	
By:
    	
ING Investment   Management LLC,
    
	
 
    	
 
    	
as Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul Aronson
    
	
 
    	
 
    	
Name:
    	
Paul Aronson
    
	
 
    	
 
    	
Title:
    	
Senior Vice President
    

 

Signature Page To Master Note Purchase Agreement

 

 

This Agreement is hereby accepted and agreed to as of the date thereof.

 

 

	
 
    	
NATIONWIDE LIFE   INSURANCE COMPANY
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Trent L. Black
    
	
 
    	
 
    	
Name:
    	
Trent L. Black
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
NATIONWIDE LIFE AND   ANNUITY INSURANCE 
    
	
 
    	
COMPANY
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Trent L. Black
    
	
 
    	
 
    	
Name:
    	
Trent L. Black
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    

 

Signature Page To Master Note Purchase Agreement

 

 

This Agreement is hereby accepted and agreed to as of the date thereof.

 

 

	
 
    	
MODERN WOODMEN OF   AMERICA
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael E. Dau
    
	
 
    	
 
    	
Name:
    	
Michael E. Dau
    
	
 
    	
 
    	
Title:
    	
Treasurer & Investment   Manager
    

 

Signature Page To Master Note Purchase Agreement

 

 

This Agreement is hereby accepted and agreed to as of the date thereof.

 

 

	
 
    	
CUNA MUTUAL INSURANCE   COMPANY
    
	
 
    	
 
    
	
 
    	
By:
    	
MEMBERS   Capital Advisors, Inc.
    
	
 
    	
 
    	
acting   as Investor Advisor
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Allen R. Cantrell
    
	
 
    	
 
    	
Name:
    	
Allen R. Cantrell
    
	
 
    	
 
    	
Title:
    	
Managing   Director, Investments
    

 

Signature Page To Master Note Purchase Agreement

 

 

This Agreement is hereby accepted and agreed to as of the date thereof.

 

 

	
 
    	
COUNTRY LIFE INSURANCE   COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ John A. Jacobs
    
	
 
    	
 
    	
Name:
    	
  John A. Jacobs
    
	
 
    	
 
    	
Title:
    	
Director – Fixed Income
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
COUNTRY MUTUAL   INSURANCE COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ John A. Jacobs
    
	
 
    	
 
    	
Name:
    	
  John A. Jacobs
    
	
 
    	
 
    	
Title:
    	
Director – Fixed Income
    

 

Signature Page To Master Note Purchase Agreement

 

 

This Agreement is hereby accepted and agreed to as of the date thereof.

 

 

	
 
    	
FARM BUREAU LIFE   INSURANCE COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Herman L. Riva
    
	
 
    	
 
    	
Name:
    	
Herman L. Riva
    
	
 
    	
 
    	
Title:
    	
Securities Vice   President
    

 

Signature Page To Master Note Purchase Agreement

 

 

	
 
    	
Schedule A
    
	
 
    	
to
    
	
 
    	
Note Purchase Agreement
    

 

INFORMATION RELATING TO PURCHASERS

 

	
Name and Address of Purchaser

 
    	
 
    	
Principal Amount of
   Tranche 1 Notes
   to be Purchased
    	
 
    	
Principal Amount of
   Tranche 2 Notes
   to be Purchased
    
	
THE   PRUDENTIAL INSURANCE COMPANY
   OF AMERICA

c/o Prudential Capital   Group
   2200 Ross Avenue, Suite 4200E
   Dallas, TX 75201
    	
 
    	
 

$9,813,319.50
    	
 
    	
 

$0
    

 

	
(1)
    	
All   payments on account of Notes held by such purchaser shall be made by wire   transfer of immediately available funds for credit to:

 

JPMorgan Chase   Bank

New York, NY

ABA No.:  021-000-021

Account   Name:  Prudential Managed Portfolio

Account   No.:  P86188 (please do not include   spaces)

 

Each   such wire transfer shall set forth the name of the Company, a reference to “4.41%   Series 2011A, Senior Notes, Tranche 1, due 2016, Security No. INV11366,   PPN 419870 E@5” and the due date and application (as among principal,   interest and Make-Whole Amount) of the payment being made.

 
    
	
(2)
    	
All notices of payments   and written confirmations of such wire transfers:

 

The Prudential   Insurance Company of America

c/o Investment   Operations Group

Gateway Center   Two, 10th Floor

100 Mulberry   Street

Newark, NJ   07102-4077

 

Attention:  Manager, Billings and Collections
    

 

Schedule A

 

	
(3)
    	
All other   communications:

 

The Prudential   Insurance Company of America

c/o Prudential   Capital Group

2200 Ross   Avenue, Suite 4200E

Dallas, TX 75201

Attention:  Managing Director, Electric Finance Group

 
    
	
(4)
    	
Recipient of telephonic   prepayment notices:

 

Manager, Trade   Management Group

 

Telephone:  (973) 367-3141

Facsimile:   (888) 889-3832

 
    
	
(5)
    	
Name of Nominee in   which Notes are to be issued: None

 

Tax Identification   Number:  22-1211670
    

 

Schedule A-2

 

	
Name and Address of Purchaser

 
    	
 
    	
Principal Amount of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount of
   Tranche 2 Notes 
   to be Purchased
    
	
PRUCO LIFE INSURANCE   COMPANY
   c/o Prudential Capital Group 
   2200 Ross Avenue, Suite 4200E
   Dallas, TX 75201
    	
 
    	
 

$18,600,000
    	
 
    	
 

$0
    

 

	
(1)
    	
All   payments on account of Notes held by such purchaser shall be made by wire   transfer of immediately available funds for credit to:

 

JPMorgan Chase   Bank

New York, NY

ABA No.:  021-000-021

Account   No.:  P86192 (please do not include   spaces)

Account   Name:  Pruco Life Private Placement

 

Each   such wire transfer shall set forth the name of the Company, a reference to “4.41%   Series 2011A, Senior Notes, Tranche 1, due 2016, Security No. INV11366,   PPN 419870 E@5” and the due date and application (as among principal,   interest and Make-Whole Amount) of the payment being made.

 
    
	
(2)
    	
All notices of payments   and written confirmations of such wire transfers:

 

Pruco Life   Insurance Company

c/o The   Prudential Insurance Company of America

c/o Investment   Operations Group

Gateway Center   Two, 10th Floor

100 Mulberry   Street

Newark, NJ   07102-4077

 

Attention:  Manager, Billings and Collections

 
    
	
(3)
    	
All other   communications:

 

Pruco Life   Insurance Company

c/o Prudential   Capital Group

2200 Ross   Avenue, Suite 4200E

Dallas, TX 75201

Attention:  Managing Director, Electric Finance Group
    

 

Schedule A-3

 

	
(4)
    	
Recipient of telephonic   prepayment notices:

 

Manager, Trade   Management Group

 

Telephone:  (973) 367-3141

Facsimile:   (888) 889-3832

 
    
	
(5)
    	
Name of Nominee in   which Notes are to be issued: None

 

Tax Identification   Number:  22-1944557
    

 

Schedule A-4

 

	
Name and Address of Purchaser

 
    	
 
    	
Principal Amount of
   Tranche 1 Notes
   to be Purchased
    	
 
    	
Principal Amount of
   Tranche 2 Notes
   to be Purchased
    
	
PRUCO   LIFE INSURANCE COMPANY OF
   NEW JERSEY

c/o Prudential Capital   Group

2200 Ross Avenue,   Suite 4200E

Dallas, TX 75201
    	
 
    	
 

$1,616,018.10
    	
 
    	
 

$0
    

 

	
(1)
    	
All   payments on account of Notes held by such purchaser shall be made by wire   transfer of immediately available funds for credit to:

 

JPMorgan Chase   Bank

New York, NY

ABA No.:  021-000-021

Account   No.:  P86202 (please do not include   spaces)

Account   Name:  Pruco Life of New Jersey Private   Placement

 

Each   such wire transfer shall set forth the name of the Company, a reference to “4.41%   Series 2011A, Senior Notes, Tranche 1, due 2016, Security No. INV11366,   PPN 419870 E@5” and the due date and application (as among principal,   interest and Make-Whole Amount) of the payment being made.

 
    
	
(2)
    	
All notices of payments   and written confirmations of such wire transfers:

 

Pruco Life   Insurance Company of New Jersey

c/o The   Prudential Insurance Company of America

c/o Investment   Operations Group

Gateway Center   Two, 10th Floor

100 Mulberry   Street

Newark, NJ   07102-4077

 

Attention:  Manager, Billings and Collections
    
	
 
    	
 
    
	
(3)
    	
All other   communications:

 

Pruco Life   Insurance Company of New Jersey

c/o Prudential   Capital Group

2200 Ross   Avenue, Suite 4200E

Dallas, TX 75201

 

Attention:  Managing Director, Electric Finance Group 
    

 

Schedule A-5

 

	
(4)
    	
Recipient of telephonic   prepayment notices:

 

Manager, Trade   Management Group

 

Telephone:  (973) 367-3141

Facsimile:   (888) 889-3832

 
    
	
(5)
    	
Name of Nominee in   which Notes are to be issued: None

 

Tax Identification   Number:  22-2426091
    

 

Schedule A-6

 

	
 
    	
Name and Address of Purchaser

 
    	
 
    	
Principal Amount of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount of
   Tranche 2 Notes 
   to be Purchased
    
	
 
    	
PRUDENTIAL   RETIREMENT GUARANTEED COST
   BUSINESS TRUST

c/o Prudential Capital   Group
   2200 Ross Avenue, Suite 4200E
   Dallas, TX 75201
    	
 
    	
 

$1,010,662.40
    	
 
    	
 

$0
    
	
 
    	
 
    
	
(1)
    	
All   payments on account of Notes held by such purchaser shall be made by wire   transfer of immediately available funds for credit to:

 

JPMorgan Chase   Bank

New York, NY

ABA   No. 021000021

Beneficiary   Account Name:  North American

Beneficiary   Account No.:  9009000168

BBI:  Account of Prudential for G09966 PRIAC GC   PVT

 

Each   such wire transfer shall set forth the name of the Company, a reference to   “4.41% Series 2011A, Senior Notes, Tranche 1, due 2016, Security   No. INV11366, PPN 419870 E@5” and the due date and application (as among   principal, interest and Make-Whole Amount) of the payment being made.

 
    
	
(2)
    	
All notices of payments   and written confirmations of such wire transfers:

 

Pru &   Co

c/o Prudential   Investment Management, Inc.

Attn:  Private Placement Trade Management

PRIAC   Administration

Gateway Center   Four, 7th Floor

100 Mulberry   Street

Newark, NJ 07102

 

Telephone:  (973) 802-8107

Facsimile:   (800) 224-2278

 
    
	
(3)
    	
All other   communications:

 

Prudential   Retirement Guaranteed Cost Business Trust

c/o Prudential   Capital Group

2200 Ross   Avenue, Suite 4200E
    

 

Schedule A-7

 

	
 
    	
Dallas, TX 75201

 

Attention:  Managing Director, Electric Finance Group
    
	
 
    	
 
    
	
(4)
    	
Name of Nominee in   which Notes are to be issued: None

 

Tax Identification   Number:  06-1050034
    

 

Schedule A-8

 

	
 
    	
Name and Address of Purchaser

 
    	
 
    	
Principal Amount of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount of
   Tranche 2 Notes 
   to be Purchased
    	
 

	
 
    	
PRUDENTIAL   RETIREMENT INSURANCE AND
   ANNUITY COMPANY

c/o Prudential Capital   Group
   2200 Ross Avenue, Suite 4200E
   Dallas, TX 75201
    	
 
    	
 

$3,360,000 

 

$1,100,000
    	
 
    	
 

$0
    	
 

	
 
    	
 
    
	
(1)
    	
All   payments on account of Notes held by such purchaser shall be made by wire   transfer of immediately available funds for credit to:

 

JP Morgan Chase   Bank

New York, NY

ABA No. 021000021

 

Account   Name:  PRIAC - SA - New York Carpenters   - Privates

Account No. P86337   (please do not include spaces) (in the case of payments on account of the   Note originally issued in the principal amount of $3,360,000.00)

 

Account   Name:  PRIAC - SA - Health Care Service   Corp - Privates

Account No. P86341   (please do not include spaces) (in the case of payments on account of the   Note originally issued in the principal amount of $1,100,000.00)

 

Each   such wire transfer shall set forth the name of the Company, a reference to “4.41%   Series 2011A, Senior Notes, Tranche 1, due 2016, Security No. INV11366,   PPN 419870 E@5” and the due date and application (as among principal,   interest and Make-Whole Amount) of the payment being made.

 
    
	
(2)
    	
All notices of payments   and written confirmations of such wire transfers:

 

Prudential   Retirement Insurance and Annuity Company

c/o Prudential   Investment Management, Inc.

Private   Placement Trade Management

PRIAC   Administration

Gateway Center   Four, 7th Floor

100 Mulberry   Street

Newark, NJ 07102

 

Telephone:  (973) 802-8107

Facsimile:   (888) 889-3832
    

 

Schedule A-9

 

	
(3)
    	
All other   communications:

 

Prudential   Retirement Insurance and Annuity Company

c/o Prudential   Capital Group

2200 Ross   Avenue, Suite 4200E

Dallas, TX 75201

 

Attention:  Managing Director, Electric Finance Group

 
    
	
(4)
    	
Name of Nominee in   which Notes are to be issued: None

 

Tax Identification   Number:  06-1050034
    

 

Schedule A-10

 

	
 
    	
Name and Address of Purchaser

 
    	
 
    	
Principal Amount of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount of
   Tranche 2 Notes 
   to be Purchased
    
	
 
    	
PHYSICIANS   MUTUAL INSURANCE COMPANY

c/o Prudential Capital   Group
   2200 Ross Avenue, Suite 4200E
   Dallas, TX 75201
    	
 
    	
 

$3,000,000
    	
 
    	
 

$0
    
	
 
    	
 
    
	
 

(1)
    	
All   payments on account of Notes held by such purchaser shall be made by wire   transfer of immediately available funds for credit to:

 

The Northern   Trust Company

Chicago, IL

ABA No.:  071000152

Account   Name:  Physicians Mutual Insurance   Company

Account   No.:  26-27099

 

Each   such wire transfer shall set forth the name of the Company, a reference to “4.41%   Series 2011A, Senior Notes, Tranche 1, due 2016, PPN 419870 E@5” and the   due date and application (as among principal, interest and Make-Whole Amount)   of the payment being made.

 
    
	
(2)
    	
All notices of payments   and written confirmations of such wire transfers:

 

Physicians Mutual   Insurance Company

2600 Dodge   Street

Omaha, NE 68131

 

Attention:  Steve Scanlan

 

Facsimile:  (402) 633-1096

 
    
	
(3)
    	
All other   communications:

 

Prudential   Private Placement Investors, L.P.

c/o Prudential   Capital Group

2200 Ross   Avenue, Suite 4200E

Dallas, TX 75201

Attention:  Managing Director, Electric Finance Group

 
    
	
(4)
    	
Name of Nominee in   which Notes are to be issued: How & Co.

 

Tax Identification   Number:  47-0270450
    

 

Schedule A-11

 

	
 
    	
Name and Address of Purchaser

 
    	
 
    	
Principal Amount of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount of
   Tranche 2 Notes 
   to be Purchased
    	
 

	
 
    	
BCBSM, INC. DBA   BLUE CROSS AND

BLUE SHIELD OF   MINNESOTA

c/o Prudential   CapitalGroup

2200 Ross Avenue,   Suite 4200E

Dallas, TX 75201
    	
 
    	
 

$1,500,000
    	
 
    	
 

$0
    	
 

	
 
    	
 
    
	
(1)
    	
All   payments on account of Notes held by such purchaser shall be made by wire   transfer of immediately available funds for credit to:

 

U.S. Bank N.A.

ABA No.:  091000022

Account No. 180183083765

60 Livingston   Avenue

St. Paul, MN   55107

Attn:  Income Team (CUSIP Number, Account No. 10561811   and payment breakdown)

 

Each   such wire transfer shall set forth the name of the Company, a reference to “4.41%   Series 2011A, Senior Notes, Tranche 1, due 2016, PPN 419870 E@5” and the   due date and application (as among principal, interest and Make-Whole Amount)   of the payment being made.

 
    
	
(2)
    	
All notices of payments   and written confirmations of such wire transfers:

 

Blue Cross and   Blue Shield of Minnesota

1303 Corporate   Center Drive

Eagan, MN   55121-1204

 

Attention:  James K. Rochat, Director, Investments

 

Telephone:  (651) 662-8372

Facsimile:   (651) 662-2164

 
    
	
(3)
    	
All other   communications:

 

Prudential   Private Placement Investors, L.P.

c/o Prudential   Capital Group

2200 Ross   Avenue, Suite 4200E

Dallas, TX 75201
    

 

Schedule A-12

 

	
 
    	
Attention:  Managing Director, Electric Finance Group

 
    
	
(4)
    	
Name of Nominee in   which Notes are to be issued: Blue Cross and Blue Shield of Minnesota

 

Tax Identification   Number:  41-0984460
    

 

Schedule A-13

 

	
 
    	
 

Name and Address of   Purchaser
    	
 
    	
Principal Amount   of
   Tranche 1 Notes
   to be Purchased
    	
 
    	
Principal Amount   of
   Tranche 2 Notes
   to be Purchased
    
	
 
    	
ING   USA ANNUITY AND LIFE INSURANCE COMPANY

5780   Powers Ferry Road NW, Suite 300

Atlanta,   GA 30327-4347
    	
 
    	
 

$2,675,000
    	
 
    	
 

$8,300,000
    
	
 
    	
 
    
	
 
    	
 
    
	
(1)
    	
All payments on account   of the Notes held by such purchaser should be made by wire transfer of   immediately available funds for credit to:
    
	
 
    	
 
    
	
 
    	
The Bank of New York   Mellon
    
	
 
    	
ABA#:  021000018
    
	
 
    	
 
    
	
 
    	
Account:
    	
IOC   566/INST’L CUSTODY (for scheduled
    
	
 
    	
 
    	
principal   and interest payments)
    
	
 
    	
or
    	
 
    
	
 
    	
 
    	
IOC   565/INST’L CUSTODY (for all payments
    
	
 
    	
 
    	
other   than scheduled principal and interest)
    
	
 
    	
 
    
	
 
    	
For further credit   to:  ING USA/Acct. 136373
    
	
 
    	
Reference:  Insert CUSIPs
    
	
 
    	
 
    
	
 
    	
Each such wire transfer   should set forth the name of the issuer, the full title (including the coupon   rate, issuance date, and final maturity date) of the Notes on account of   which such payment is made, and the due date and application (as among   principal, premium and interest) of the payment being made.
    
	
 
    	
 
    
	
 
    	
 
    
	
(2)
    	
Address for all notices   relating to payments:
    
	
 
    	
 
    
	
 
    	
ING Investment   Management LLC

5780 Powers Ferry Road   NW, Suite 300

Atlanta, GA  30327-4347

Attn:  Operations/Settlements

Fax:  (770) 690-5316
    
	
 
    	
 
    
	
 
    	
 
    
	
(3)
    	
All   other communications:
    
	
 
    	
 
    
	
 
    	
ING Investment   Management LLC

5780 Powers   Ferry Road NW, Suite 300

Atlanta, GA  30327-4347
    
							

 

 

Schedule A-14

 

	
 
    	
Attn:  Private Placements

Fax:  (770) 690-5342
    
	
 
    	
 
    
	
 
    	
 
    
	
(4)
    	
Name of Nominee in   which Notes are to be issued:  None
    
	
 
    	
 
    
	
 
    	
Tax Identification   Number:  41-0991508
    

 

 

Schedule A-15

 

	
 
    	
 

Name and Address of   Purchaser
    	
 
    	
Principal Amount   of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount   of
   Tranche 2 Notes 
   to be Purchased
    
	
 
    	
RELIASTAR LIFE   INSURANCE COMPANY

5780 Powers Ferry Road   NW, Suite 300

Atlanta, GA  30327-4347
    	
 
    	
 

$4,700,000
    	
 
    	
 

$14,000,000
    
	
 
    	
 
    
	
 
    	
 
    
	
(1)
    	
All payments on account   of the Notes held by such purchaser should be made by wire transfer of immediately   available funds for credit to:
    
	
 
    	
 
    
	
 
    	
The Bank of New York   Mellon

ABA#:  021000018
    
	
 
    	
 
    
	
 
    	
Account:
    	
IOC   566/INST’L CUSTODY (for scheduled
    
	
 
    	
 
    	
principal   and interest payments)
    
	
 
    	
or
    	
 
    
	
 
    	
 
    	
IOC   565/INST’L CUSTODY (for all payments
    
	
 
    	
 
    	
other   than scheduled principal and interest)
    
	
 
    	
 
    
	
 
    	
For further credit   to:  RLIC/Acct. 187035

Reference:  Insert CUSIPs
    
	
 
    	
 
    
	
 
    	
Each such wire transfer   should set forth the name of the issuer, the full title (including the coupon   rate, issuance date, and final maturity date) of the Notes on account of   which such payment is made, and the due date and application (as among   principal, premium and interest) of the payment being made.
    
	
 
    	
 
    
	
 
    	
 
    
	
(2)
    	
Address   for all notices relating to payments:
    
	
 
    	
 
    
	
 
    	
ING Investment   Management LLC

5780 Powers Ferry Road   NW, Suite 300

Atlanta, GA  30327-4347

Attn:  Operations/Settlements

Fax:  (770) 690-5316
    
	
 
    	
 
    
	
 
    	
 
    
	
(3)
    	
All   other communications:
    
	
 
    	
 
    
	
 
    	
ING Investment   Management LLC

5780 Powers   Ferry Road NW, Suite 300

Atlanta, GA  30327-4347

Attn:  Private Placements
    
							

 

 

Schedule A-16

 

	
 
    	
Fax:  (770) 690-5342
    
	
 
    	
 
    
	
 
    	
 
    
	
(4)
    	
Name   of Nominee in which Notes are to be issued:    None
    
	
 
    	
 
    
	
 
    	
Tax   Identification Number:  41-0451140
    

 

 

Schedule A-17

 

	
 
    	
 

Name and Address of   Purchaser
    	
 
    	
Principal Amount   of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount   of
   Tranche 2 Notes 
   to be Purchased
    
	
 
    	
ING   LIFE INSURANCE AND ANNUITY
   COMPANY

5780 Powers Ferry Road   NW, Suite 300

Atlanta, GA  30327-4347
    	
 
    	
 

$2,525,000
    	
 
    	
 

$7,300,000
    
	
 
    	
 
    
	
 
    	
 
    
	
(1)
    	
All payments on account   of the Notes held by such purchaser should be made by wire transfer of   immediately available funds for credit to:
    
	
 
    	
 
    
	
 
    	
The Bank of New York   Mellon

ABA#:  021000018
    
	
 
    	
 
    
	
 
    	
Account:
    	
IOC   566/INST’L CUSTODY (for scheduled
    
	
 
    	
 
    	
principal   and interest payments)
    
	
 
    	
or
    	
 
    
	
 
    	
 
    	
IOC   565/INST’L CUSTODY (for all payments
    
	
 
    	
 
    	
other   than scheduled principal and interest)
    
	
 
    	
 
    
	
 
    	
For further credit   to:  ILIAC/Acct. 216101

Reference:  Insert CUSIPs
    
	
 
    	
 
    
	
 
    	
Each such wire transfer   should set forth the name of the issuer, the full title (including the coupon   rate, issuance date, and final maturity date) of the Notes on account of   which such payment is made, and the due date and application (as among   principal, premium and interest) of the payment being made.
    
	
 
    	
 
    
	
 
    	
 
    
	
(2)
    	
Address   for all notices relating to payments:
    
	
 
    	
 
    
	
 
    	
ING Investment   Management LLC

5780 Powers Ferry Road   NW, Suite 300

Atlanta, GA  30327-4347

Attn:  Operations/Settlements

Fax:  (770) 690-5316
    
	
 
    	
 
    
	
 
    	
 
    
	
(3)
    	
All other communications:
    
	
 
    	
 
    
	
 
    	
ING Investment   Management LLC

5780 Powers   Ferry Road NW, Suite 300

Atlanta, GA  30327-4347
    
							

 

 

Schedule A-18

 

	
 
    	
Attn:  Private Placements

Fax:  (770) 690-5342
    
	
 
    	
 
    
	
 
    	
 
    
	
(4)
    	
Name of Nominee in which Notes are to be   issued:  None
    
	
 
    	
 
    
	
 
    	
Tax Identification   Number:  71-0294708
    

 

 

Schedule A-19

 

	
 
    	
 

Name and Address of   Purchaser
    	
 
    	
Principal Amount   of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount   of
   Tranche 2 Notes 
   to be Purchased
    
	
 
    	
RELIASTAR   LIFE INSURANCE COMPANY OF NEW YORK

5780 Powers Ferry Road   NW, Suite 300

Atlanta, GA  30327-4347
    	
 
    	
 

$100,000
    	
 
    	
 

$400,000
    
	
 
    	
 
    
	
 
    	
 
    
	
(1)
    	
All payments on account   of the Notes held by such purchaser should be made by wire transfer of   immediately available funds for credit to:
    
	
 
    	
 
    
	
 
    	
The Bank of New York   Mellon
    
	
 
    	
ABA#:  021000018
    
	
 
    	
 
    
	
 
    	
Account:
    	
IOC   566/INST’L CUSTODY (for scheduled
    
	
 
    	
 
    	
principal   and interest payments)
    
	
 
    	
or
    	
 
    
	
 
    	
 
    	
IOC   565/INST’L CUSTODY (for all payments
    
	
 
    	
 
    	
other   than scheduled principal and interest)
    
	
 
    	
 
    
	
 
    	
For further credit   to:  RLNY/Acct. 187038
    
	
 
    	
Reference:  Insert CUSIPs
    
	
 
    	
 
    
	
 
    	
Each such wire transfer   should set forth the name of the issuer, the full title (including the coupon   rate, issuance date, and final maturity date) of the Notes on account of   which such payment is made, and the due date and application (as among   principal, premium and interest) of the payment being made.
    
	
 
    	
 
    
	
 
    	
 
    
	
(2)
    	
Address for all notices   relating to payments:
    
	
 
    	
 
    
	
 
    	
ING Investment   Management LLC

5780 Powers Ferry Road   NW, Suite 300

Atlanta, GA  30327-4347

Attn:  Operations/Settlements

Fax:  (770) 690-5316
    
	
 
    	
 
    
	
 
    	
 
    
	
(3)
    	
All   other communications:
    
	
 
    	
 
    
	
 
    	
ING Investment   Management LLC

5780 Powers   Ferry Road NW, Suite 300

Atlanta, GA  30327-4347
    
							

 

 

Schedule A-20

 

	
 
    	
Attn:  Private Placements

Fax:  (770) 690-5342
    
	
 
    	
 
    
	
 
    	
 
    
	
(4)
    	
Name of Nominee in   which Notes are to be issued:  None
    
	
 
    	
 
    
	
 
    	
Tax Identification Number:  53-0242530
    

 

 

Schedule A-21

 

	
 
    	
 

Name and Address of   Purchaser
    	
 
    	
Principal Amount   of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount   of
   Tranche 2 Notes 
   to be Purchased
    
	
 
    	
NATIONWIDE LIFE   INSURANCE COMPANY

One Nationwide Plaza   (1-05-401)

Columbus, OH  43215-2220
    	
 
    	
 

$10,000,000
    	
 
    	
 

$0
    
	
 
    	
 
    
	
 
    	
All payments by wire   transfer of immediately available funds to:
    
	
(1)
    	
 
    
	
 
    	
The Bank of New   York Mellon

ABA #021-000-018

BNF: IOC566

F/A/O Nationwide   Life Insurance Co. Acct #267829

Attn:   P & I Department

PPN# 419870 E@5

Security   Description: 4.41% Series 2011A, Senior Notes, Tranche 1, due 2016,

PPN 419870 E@5
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(2)
    	
All   notices of payments and written confirmations of such wire transfers:
    
	
 
    	
 
    
	
 
    	
Nationwide Life   Insurance Company

c/o The Bank of   New York Mellon

P O Box 19266

Attn:  P & I Department

Newark,   NJ  07195
    
	
 
    	
 
    
	
 
    	
With   a copy to:
    
	
 
    	
 
    
	
 
    	
Nationwide Life   Insurance Company

Nationwide   Investments - Investment Operations

One Nationwide   Plaza (1-05-401)

Columbus,   OH  43215-2220
    
	
 
    	
 
    
	
 
    	
 
    
	
(3)
    	
All   other communications:
    
	
 
    	
 
    
	
 
    	
Nationwide Life   Insurance Company

Nationwide   Investments – Private Placements

E-mail:  ooinwpp@nationwide.com

One Nationwide   Plaza (1-05-801)

Columbus, OH   43215-2220
    

 

 

Schedule A-22

 

	
(4)
    	
Name of Nominee in which Notes are to be issued:   None
    
	
 
    	
 
    
	
 
    	
Tax Identification Number:  31-4156830
    

 

 

Schedule A-23

 

	
 
    	
 

Name and Address of   Purchaser
    	
 
    	
Principal Amount   of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount   of

Tranche 2 Notes 
   to be Purchased
    
	
 
    	
NATIONWIDE   LIFE AND ANNUITY INSURANCE COMPANY

One Nationwide Plaza   (1-05-401)

Columbus, OH  43215-2220
    	
 
    	
 

$10,000,000
    	
 
    	
 

$0
    
	
 
    	
 
    
	
 
    	
All payments by wire   transfer of immediately available funds to:
    
	
(1)
    	
 
    
	
 
    	
The Bank of New   York Mellon

ABA #021-000-018

BNF: IOC566

F/A/O Nationwide   Life and Annuity Insurance Company

Account # 267961

Attn:   P & I Department

PPN# 419870 E@5

Security Description:   4.41% Series 2011A, Senior Notes, Tranche 1, due 2016,

PPN 419870 E@5
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(2)
    	
All   notices of payments and written confirmations of such wire transfers:
    
	
 
    	
 
    
	
 
    	
Nationwide Life   and Annuity Insurance Company

c/o The Bank of   New York

P O Box 19266

Attn:  P & I Department

Newark, NJ  07195
    
	
 
    	
 
    
	
 
    	
With   a copy to:
    
	
 
    	
 
    
	
 
    	
Nationwide Life   and Annuity Insurance Company

Attn: Nationwide   Investments - Investment Operations

One Nationwide   Plaza (1-05-401)

Columbus,   OH  43215-2220
    
	
 
    	
 
    
	
 
    	
 
    
	
(3)
    	
All   other communications:
    
	
 
    	
 
    
	
 
    	
Nationwide Life   and Annuity Insurance Company

Attn:  Nationwide Investments – Private Placements

E-mail:  ooinwpp@nationwide.com

One Nationwide   Plaza (1-05-801)
    

 

 

Schedule A-24

 

	
 
    	
Columbus, OH   43215-2220
    
	
 
    	
 
    
	
 
    	
 
    
	
(4)
    	
Name of Nominee in which Notes are to be issued:   None
    
	
 
    	
 
    
	
 
    	
Tax Identification Number:  31-1000740
    

 

 

Schedule A-25

 

	
 
    	
 

Name and Address of   Purchaser
    	
 
    	
Principal Amount   of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount   of
   Tranche 2 Notes 
   to be Purchased
    
	
 
    	
MODERN WOODMEN OF   AMERICA

1701 First Avenue

Rock Island, IL 61201
    	
 
    	
 

$0
    	
 
    	
 

$10,000,000
    
	
 
    	
 
    
	
 
    	
All payments by wire transfer   of immediately available funds to:
    
	
(1)
    	
 
    
	
 
    	
The Northern Trust   Company
    
	
 
    	
50 South LaSalle Street

Chicago, IL 60675

ABA No. 071-000-152

Account Name:  Modern Woodmen of America

Account No. 84352
    
	
 
    	
 
    
	
 
    	
Each such wire transfer   shall set forth the name of the Company, the full title (including the   applicable coupon rate and final maturity date) of the Notes, a reference to   PPN No. 419870 E#3 and the due date and application (as among principal,   premium and interest) of the payment being made.
    
	
 
    	
 
    
	
(2)
    	
All notices of payments and written confirmations of   such wire transfers:
    
	
 
    	
 
    
	
 
    	
Modern Woodmen of   America

Attn:  Investment Accounting Department

1701 First Avenue

Rock Island, IL 61201

Fax:  (309) 793-5688
    
	
 
    	
 
    
	
 
    	
 
    
	
(3)
    	
All other communications:
    
	
 
    	
 
    
	
 
    	
Modern Woodmen of   America

Attn:  Investment Department

1701 First Avenue

Rock Island, IL 61201

investments@modern-woodmen.org

Fax:  (309) 793-5574
    
	
 
    	
 
    
	
 
    	
 
    
	
(4)
    	
Name of Nominee in which Notes are to be issued:   None
    
	
 
    	
 
    
	
 
    	
Tax Identification Number:  36-1493430
    

 

 

Schedule A-26

 

	
 
    	
 

Name and Address of   Purchaser
    	
 
    	
Principal Amount   of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount   of
   Tranche 2 Notes 
   to be Purchased
    
	
 
    	
CUNA MUTUAL INSURANCE   SOCIETY

5910 Mineral Point Road

Madison WI 53705-4456
    	
 
    	
 

$0
    	
 
    	
 

$6,000,000
    
	
 
    	
 
    
	
 
    	
All payments by wire   transfer of immediately available funds to:
    
	
(1)
    	
 
    
	
 
    	
State Street   Bank

ABA: 011000028

Account Name:   CUNA MUTUAL INSURANCE SOCIETY

DDA #:   1044-851-2

Reference Fund:   ZT1E (Must be first 4 digits of reference section / Can include Nominee name   here)

Nominee Name:   TURNKEYS + CO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(2)
    	
All notices of payments   and written confirmations of such wire transfers:
    
	
 
    	
 
    
	
 
    	
 
    
	
(3)
    	
All communications:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
E-MAIL:   DS-PRIVATEPLACEMENTS@CUNAMUTUAL.COM

Members Capital   Advisors, Inc.

Attn: Private   Placements

5910 Mineral Point Road

Madison WI 53705-4456

 

Contacts:

 

Stan Van Aartsen

Sr Analyst, Investments

5910 Mineral Point Road

Madison WI 53705-4456

Email:   stan.vanaartsen@cunamutual.com

Phone: 608/231-7658

Fax: 608/236-8167

 

Allen Cantrell

Managing Director,   Investments

5910 Mineral Point Road
    

 

 

Schedule A-27

 

	
 
    	
Madison WI 53705-4456

Email:   al.cantrell@cunamutual.com

Phone: 608/231-7243

Fax: 608/236-8228
    
	
 
    	
 
    
	
 
    	
Carrie Snell

Servicing & Closing   Specialist

5910 Mineral Point Road

Madison WI 53705-4456

Email:   carrie.snell@cunamutual.com

Phone: 608/231-8639

Fax: 608/236-8639
    
	
 
    	
 
    
	
 
    	
Attorney:

John Britt

Legal Counsel

5910 Mineral Point Road

Madison WI 53705-4456

Email: john.britt@cunamutual.com

Office: 860/693-2844

Cell: 608/231-8653

Fax: 608/539-3394

608/693-6402
    
	
 
    	
 
    
	
 
    	
 
    
	
(4)
    	
Name   of Nominee in which Notes are to be issued: TURNKEYS + CO
    
	
 
    	
 
    
	
 
    	
Tax   Identification Number:
    	
39-0230590   (CUNA Mutual Insurance Society)
    
	
 
    	
 
    	
03-0400481 (TURKEYS +   CO)
    

 

 

Schedule A-28

 

	
 
    	
 

Name and Address of   Purchaser
    	
 
    	
Principal Amount   of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount   of
   Tranche 2 Notes 
   to be Purchased
    
	
 
    	
COUNTRY LIFE INSURANCE   COMPANY

1705 N Towanda Avenue

Bloomington, IL  61702
    	
 
    	
 

$2,000,000
    	
 
    	
 

$0
    
	
 
    	
 
    
	
 
    	
All payments by wire   transfer of immediately available funds to:
    
	
(1)
    	
 
    
	
 
    	
 
    
	
 
    	
Northern   Trust  Chgo/Trust

ABA   Number 071000152

Wire   Account Number 5186041000

For   Further Credit to: 26-02712

Account   Name:  Country   Life Insurance Company

Representing   P & I on (list security)
    
	
 
    	
 
    
	
 
    	
Name   of Company:      Hawaiian Electric Industries,   Inc.
    
	
 
    	
Description   of Security: 4.41% Series 2011A, Senior Notes, Tranche 1
    
	
 
    	
PPN:   419870 E@5
    
	
 
    	
Due   date and application (as among principal, premium and interest) of the   payment being made:
    
	
 
    	
 
    
	
(2)
    	
All notices of payments and written confirmations of   such wire transfers:
    
	
 
    	
 
    
	
 
    	
Country   Life Insurance Company

Attention:  Investment Accounting

1705   N Towanda Avenue

Bloomington,   IL  61702

Tel:  (309) 821-6348

Fax:  (309) 821-2800
    
	
 
    	
 
    
	
 
    	
 
    
	
(3)
    	
All other communications:
    
	
 
    	
 
    
	
 
    	
Country Life   Insurance Company

Attention:  Investments

1705 N Towanda   Avenue

Bloomington,   IL  61702

Tel:  (309) 821-6260

Fax:  (309) 821-6301
    
	
 
    	
 
    
	
(4)
    	
Name   of Nominee in which Notes are to be issued: None
    
	
 
    	
 
    
	
 
    	
Tax   Identification Number:  37-0808781
    

 

 

Schedule A-29

 

	
 
    	
Name and Address of   Purchaser

 
    	
 
    	
Principal Amount   of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount   of
   Tranche 2 Notes 
   to be Purchased
    
	
 
    	
COUNTRY MUTUAL   INSURANCE COMPANY

1705 N Towanda Avenue

Bloomington, IL  61702
    	
 
    	
 

$3,000,000
    	
 
    	
 

$0
    
	
 
    	
 
    
	
 
    	
All payments by wire   transfer of immediately available funds to:
    
	
(1)
    	
 
    
	
 
    	
Northern   Trust  Chgo/Trust

ABA   Number 071000152

Wire   Account Number 5186041000

For   Further Credit to: 26-02698

Account   Name:  Country   Mutual Insurance Company

Representing   P & I on (list security)
    
	
 
    	
Name of Company:          Hawaiian   Electric Industries, Inc.

Description of   Security: 4.41% Series 2011A, Senior Notes, Tranche 1

PPN: 419870 E@5

Due date and   application (as among principal, premium and interest) of the payment being   made:
    
	
 
    	
 
    
	
(2)
    	
All notices of payments   and written confirmations of such wire transfers:
    
	
 
    	
 
    
	
 
    	
Country   Mutual Insurance Company

Attention:  Investment Accounting

1705   N Towanda Avenue

Bloomington,   IL  61702

Tel:  (309) 821-6348

Fax:  (309) 821-2800
    
	
 
    	
 
    
	
(3)
    	
All other   communications:
    
	
 
    	
 
    
	
 
    	
Country Mutual   Insurance Company

Attention:  Investments

1705 N Towanda   Avenue

Bloomington,   IL  61702

Tel:  (309) 821-6260

Fax:  (309) 821-6301
    
	
 
    	
 
    
	
(4)
    	
Name of Nominee in   which Notes are to be issued: None
    
	
 
    	
 
    
	
 
    	
Tax Identification   Number:  37-0807507
    

 

 

Schedule A-30

 

	
 
    	
 

Name and Address of   Purchaser
    	
 
    	
Principal Amount   of
   Tranche 1 Notes 
   to be Purchased
    	
 
    	
Principal Amount   of
   Tranche 2 Notes 
   to be Purchased
    
	
 
    	
FARM BUREAU LIFE   INSURANCE COMPANY

5400 University Avenue

West Des Moines, Iowa   50266
    	
 
    	
 

$0
    	
 
    	
 

$4,000,000
    
	
 
    	
 
    
	
 
    	
All payments by wire   transfer of immediately available funds to:
    
	
(1)
    	
 
    
	
 
    	
Federal   Reserve Bank – Cash Wire Transfer

JP   Morgan Chase Bank

ABA   No. 021000021

A/C   #9009002859

Account No. G10557

Contact:   privateplacements@fblfinancial.com

Reference:   PPN, Name of Issuer & Description

Principal and Interest   Payment
    
	
 
    	
 
    
	
(2)
    	
All communications:
    
	
 
    	
 
    
	
 
    	
Farm Bureau Life   Insurance Company

5400 University Avenue

West Des Moines, Iowa   50266

Attn: Investment   Department
    
	
 
    	
 
    
	
 
    	
 
    
	
(3)
    	
Name of Nominee in   which Notes are to be issued: Cudd & Co.
    
	
 
    	
 
    
	
 
    	
Tax Identification   Number:  42-0623913 (Cudd & Co.)
    

 

 

Schedule A-31

 

	
 
    	
Schedule B

to

Note Purchase   Agreement
    

 

 

DEFINED TERMS

 

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

 

“Additional Covenant” is defined in Section 9.8(a).

 

“Additional Notes” is defined in Section 2.2.

 

“Additional Purchasers” means purchasers of Additional Notes named in Schedule A to the applicable Supplement.

 

“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.  As used in this definition, “Control”  means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  The terms “Controlling” and “Controlled” have meanings correlative thereto.  Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.

 

“Agreement” is defined in the preamble.

 

“Anti-Terrorism Order” means Executive Order No. 13,224 of September 24, 2001, Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

 

“Benefit Plan” means any employee benefit plan as defined in ERISA section 3(3) (other than a Plan or Multiemployer Plan), and in respect of which the Company, any Subsidiary or any ERISA Affiliate is an “employer” as defined in ERISA section 3(5).

 

“Business Day” means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York  are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York or Honolulu, Hawaii are required or authorized to be closed.

 

“Called Principal” is defined in Section 8.6.

 

“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 

 

 

Schedule B

 

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 Company shall constitute a Capital Lease Obligation.

 

“Capitalization” means, at any date of determination with respect to the Company on a non-consolidated basis, the sum of (a) Funded Debt, (b) preferred stock and (c) Common Stock Equity.  The Company’s Capitalization as of December 31, 2010 is annexed hereto as Schedule C (Capitalization); for the avoidance of doubt, such Schedule is attached hereto for illustrative purposes only and is not intended to be a calculation of Capitalization on or for any subsequent date of determination.

 

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

 

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

 

“Closing” is defined in Section 3.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

 

“Common Stock Equity” means, at any date of determination with respect to the Company 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 22.3, 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 Company, that will require adjustments directly to stockholders’ equity.

 

“Company” means Hawaiian Electric Industries, Inc., a Hawaii corporation, or any successor that becomes such in the manner prescribed in Section 10.2.

 

“Confidential Information” is defined in Section 20.

 

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

 

 

Schedule B-2

 

“Consolidated Common Stock Equity” means, at any date of determination, with respect to the Company 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 22.3, 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 Company, that will require adjustments directly to stockholders’ equity.

 

“Consolidated Funded Debt” means, at any date of determination with respect to the Company and its Subsidiaries on a consolidated basis, the sum of (a) net long-term debt, defined as the portion of outstanding debt for borrowed money, bonds, debentures and similar debt obligations (including Capital Lease Obligations, Purchase Money Indebtedness, Indebtedness under credit agreements of the Company or its Subsidiaries, and the Notes), 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 debt for borrowed money, bonds and debentures and similar debt obligations (including Capital Lease Obligations, Purchase Money Indebtedness, Indebtedness under credit agreements of the Company or its Subsidiaries, and the Notes) 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 Company, included on a balance sheet of the Company 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, 2010 is annexed hereto as Schedule C (Consolidated Funded Debt); for the avoidance of doubt, such Schedule is attached hereto for illustrative purposes only and is not intended to be a calculation of Consolidated Funded Debt on or for any subsequent date of determination.

 

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

 

“Current SEC Reports” means the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 filed with the SEC on February 18, 2011, all filings made with, or furnished to, the SEC by the Company pursuant to section 13 or 15(d) of the Exchange Act since the end of the year ended December 31, 2010 until and including February 25, 2011, and all amendments and supplements thereto, in each case made or furnished to the SEC on or prior to such date.

 

“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, unless cured or waived, become an Event of Default.

 

 

Schedule B-3

 

“Default Rate” with respect to any Note, has the meaning assigned to such term in such Note.

 

“Disclosure Documents” is defined in Section 5.3.

 

“Discounted Value” is defined in Section 8.6.

 

“Disposition” means, with respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof.  The terms “Dispose” and “Disposed of” shall have correlative meanings.

 

“Dollars” or “$” means lawful money of the United States of America.

 

“EDGAR” is defined in Section 7.1.

 

“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.

 

“Equity Interests” means (a) shares of capital stock and any other equity security that confers on a Person 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, and the rules and regulations promulgated thereunder from time to time.

 

“ERISA Affiliate”,  as applied to any Person, means (a) any corporation that is a member of a controlled group of corporations within the meaning of Code section 414(b) of which that Person is a member; (b) any trade or business (whether or not incorporated) that is a member of a group of trades or businesses under common control within the meaning of Code section 414(c) of which that Person is a member; and (c) any member of an affiliated service group within the meaning of Code section 414(m) or (o) of which that Person, any corporation described in clause (a) above or any trade or business described in clause (b) above is a member.

 

“ERISA Event” means (a) any “reportable event”, as defined in ERISA section 4043 or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived) or was previously waived under applicable law in effect as of December 31, 2010; (b) the failure with respect to any Plan to pay the “minimum required contribution” (as defined in Code section 430 or ERISA section 303), whether or not waived; (c) the incurrence by the Company or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (d) the provision by the administrator of any Plan pursuant to ERISA section 4041(a)(2) of a notice of intent to terminate such plan in a distress termination described in of ERISA section 4041(c); (e) the institution by the PBGC of proceedings to terminate any Plan, or the occurrence of any event or condition which might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Plan; (f) the imposition 

 

 

Schedule B-4

 

of liability on the Company, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to ERISA section 4062(e) or 4069 or by reason of the application of ERISA section 4212(c); (g) the withdrawal of the Company, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of ERISA sections 4203 and 4205) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by the Company, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to ERISA section 4241 or 4245, or that it intends to terminate or has terminated under ERISA section 4041A or 4042; (h) the assertion of a claim (other than routine claims for benefits) against any Plan (or any other Benefit Plan) or the assets thereof, or against the Company, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Benefit Plan that is not covered by ERISA fiduciary insurance (where the relevant insurance company has been notified of the claim and has not expressly denied coverage in writing); (i) receipt from the Internal Revenue Service of notice of the failure of any Plan (or any Benefit Plan intended to be qualified under Code section 401(a)) to qualify under Code section 401(a), or the failure of any trust forming part of any Plan to qualify for exemption from taxation under Code section 501(a) which is not eligible to be corrected pursuant to Revenue Procedure 2008-50; or (j) the imposition of a Lien pursuant to Code or ERISA with respect to any Plan.

 

“Event of Default” is defined in Section 11.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Form 10-K” is defined in Section 7.1(a).

 

“Form 10-Q” is defined in Section 7.1(b).

 

“Funded Debt” means, at any date of determination with respect to the Company on a non-consolidated basis, the sum of (a) net long-term debt, defined as the portion of outstanding debt for borrowed money, bonds, debentures and similar debt obligations (including Capital Lease Obligations, Purchase Money Indebtedness, Indebtedness under credit agreements of the Company and the Notes), net of cash collateral or other funds on deposit with trustees and unamortized discounts in respect of such debt for borrowed money 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 debt for borrowed money, bonds and debentures and similar debt obligations (including Capital Lease Obligations, Purchase Money Indebtedness, Indebtedness under credit agreements of the Company and the Notes) 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 Company, included on a balance sheet of the Company by reason of the application of Financial Accounting Standards Board Interpretation No. 46 (revised December 2003) shall constitute Funded Debt.  A schedule of Funded Debt as of December 31, 2010 is annexed hereto as Schedule C (Funded Debt); for the avoidance of doubt, such Schedule is attached hereto for illustrative purposes only and is not intended to be a calculation of Funded Debt on or for any subsequent date of determination.

 

 

Schedule B-5

 

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

 

“Governmental Authority” means

 

(a)          the government of

 

(i)            the United States of America or any State or other political subdivision thereof, or

 

(ii)           any other jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or

 

(b)         any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such 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 Company in good faith.  The term “Guaranteed” has a meaning correlative thereto.

 

“Hazardous Material” means any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal of which may be required 

 

 

Schedule B-6

 

or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law including, but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.

 

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

 

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

 

“holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1.

 

“Indebtedness” of any Person means, without duplication,

 

(a)  all obligations of such Person for borrowed money and its redemption obligations in respect of mandatorily redeemable preferred stock,

 

(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.

 

 

Schedule B-7

 

The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.  Indebtedness of the Company or any Subsidiary shall not include deposit liabilities, securities sold pursuant to agreements to repurchase or advances from the Federal Home Loan Bank.

 

“INHAM Exemption” is defined in Section 6.3(e).

 

“Initial Notes” is defined in Section 1.

 

“Institutional Investor”  means (a) any original purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 5% of the aggregate outstanding principal amount of the Notes of the applicable Series, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.

 

“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.

 

“ML” means Merrill Lynch, Pierce, Fenner & Smith Incorporated.

 

“Major Credit Facility” means (a) the Revolving Facility and (b) each successor loan or credit agreement constituting the Company’s primary bank credit facility, with the same or different group of lenders and agents, so long as any such agreement is in effect and as it may be amended, amended and restated, supplemented or otherwise modified, from time to time.

 

“Make-Whole Amount” has the meaning (a) set forth in Section 8.6 with respect to any Initial Note and (b) set forth in the applicable Supplement with respect to any other Series of Notes.

 

“Material” means material in relation to the business, operations, affairs, financial condition, assets, or properties of the Company and its Subsidiaries taken as a whole.

 

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, property or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (b) the ability of the Company to perform its obligations under this Agreement (including any Supplement) and the Notes, or (c) the validity or enforceability of this Agreement (including any Supplement), the Notes or the rights or remedies of the holders of Notes.

 

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

 

 

Schedule B-8

 

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).

 

“NAIC” means the National Association of Insurance Commissioners or any successor thereto.

 

“NAIC Annual Statement” is defined in Section 6.3(a).

 

“Net Cash Proceeds” from a Disposition means the aggregate cash proceeds received by the Company or any Significant Subsidiary, as the case may be, in respect of such Disposition, net of the costs, fees and expenses relating to such Disposition including, without limitation, legal, accounting and investment banking fees, sales commissions, any pension or post-employment benefit liabilities or obligations and taxes paid or payable as a result of such Disposition (after taking into account any available tax credits or deductions).

 

“Notes” is defined in Section 1.

 

“Offering Memorandum” is defined in Section 5.3.

 

“Officer’s Certificate” means a certificate of a  Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.

 

“Permitted Liens” is defined in Section 10.1.

 

“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, business entity or Governmental Authority.

 

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

 

“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

 

“Proposed Prepayment Date” is defined in Section 8.7.

 

“Purchase Money Indebtedness” means Indebtedness of the Company that is incurred to finance part or all of (but not more than) the purchase price of a tangible asset; provided that (a) the Company 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.

 

“Purchasers” means the purchasers of the Initial Notes named in Schedule A hereto.

 

“PTE” is defined in Section 6.3(a).

 

 

Schedule B-9

 

 

“QPAM Exemption” is defined in Section 6.3(d).

 

“Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

 

“Ratable Portion” for any Note means an amount equal to the product of (a) the Net Cash Proceeds received by the Company or a Significant Subsidiary from a Disposition being applied, or offered to be applied, to the payment or prepayment of Indebtedness pursuant to clause (iv) of the second paragraph of Section 10.2(d) multiplied by (b) a fraction, the numerator of which is the aggregate outstanding principal amount of such Note and the denominator of which is the aggregate outstanding principal amount of all Indebtedness of the Company and its Significant Subsidiaries other than Subordinated Debt.

 

“Reference Agreement” is defined in Section 9.8(a).

 

“Reinvestment Yield” is defined in Section 8.6.

 

“Related Fund” means, with respect to any holder of any Note, any fund or entity that (a) invests in Securities or bank loans, and (b) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.

 

“Remaining Average Life” is defined in Section 8.6.

 

“Remaining Scheduled Payments” is defined in Section 8.6.

 

“Required Holders” means, at any time, (i) with respect to the Initial Notes, the holders of more than 50% in principal amount of the Initial Notes, without regard to tranche, at the time outstanding (exclusive of Initial Notes then owned by the Company or any of its Affiliates), and (ii) with respect to Additional Notes issued under a Supplement, the holders of more than 50% in principal amount of such Additional Notes, without regard to tranche (and, for the avoidance of doubt, without regard to Additional Notes issued under any other Supplement), at the time outstanding (exclusive of such Additional Notes then owned by the Company or any of its Affiliates).

 

“Responsible Officer” means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.

 

“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 Facility” means the Credit Agreement, dated as of May 7, 2010, as the same may be amended, restated, supplemented or otherwise modified from time to time, by and among 

 

 

Schedule B-10

 

the Company, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as issuing bank and administrative agent.

 

“Sale of Assets Prepayment Date” is defined in Section 8.8(a).

 

“Sale of Assets Prepayment Event” is defined in Section 8.8(a).

 

“SEC ” means the Securities and Exchange Commission of the United States of America, or any successor thereto.

 

“SEC Reports” means the reports filed by the Company with the SEC pursuant to the Exchange Act, as amended.

 

“Securities” or “Security” have the meanings specified in Section 2(1) of the Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

 

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

 

“Senior Indebtedness” means, as of any date of determination thereof, all Indebtedness of the Company, other than Subordinated Debt.

 

“Series” means any series of Notes issued pursuant to this Agreement or any Supplement.

 

“Settlement Date” is defined in Section 8.6.

 

“Significant Subsidiary” means each of HECO, HELCO, MECO, American Savings Bank, F.S.B., American Savings Holdings, Inc. and any other Subsidiary having 5% or more of the total assets, or 5% or more of the total operating income, of the Company and its Subsidiaries on a consolidated basis, in either case as the consolidated total assets and consolidated total operating income of the Company and its Subsidiaries are reflected in the most recent annual or quarterly report filed by the Company with the SEC.

 

“Source” is defined in Section 6.3.

 

“Subordinated Debt” means all unsecured Indebtedness of the Company which shall contain or have applicable thereto subordination provisions providing for the subordination thereof to other Indebtedness of the Company (including, without limitation, the obligations of the Company under this Agreement, each Supplement and the Notes).

 

“Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the 

 

 

Schedule B-11

 

profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.

 

“Supplement” is defined in Section 2.2.

 

“SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.

 

“tranche” means all Notes of a Series having the same maturity, interest rate and schedule for mandatory prepayments.

 

“Tranche 1 Notes” is defined in Section 1.

 

“Tranche 2 Notes” is defined in Section 1.

 

“USA PATRIOT Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

 

“USB” means U.S. Bancorp Investments, Inc.

 

“Wholly-Owned Subsidiary” means, at any time, any Subsidiary one hundred percent of all the Equity Interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company’s other Wholly-Owned Subsidiaries at such time.

 

 

Schedule B-12

 

	
 
    	
Schedule C

to

Note Purchase   Agreement
    

 

 

HAWAIIAN ELECTRIC INDUSTRIES, INC.

FUNDED DEBT AND CAPITALIZATION

(in thousands)

 

	
December 31, 2010
    	
 
    	
Consolidated
    	
 
    	
Unconsolidated
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Funded Debt:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Notes   payable to subsidiaries
    	
 
    	
 
    	
 
    	
$
    	
6,777
    	
 
    	
 
    
	
Short-term   borrowings-other than bank
    	
 
    	
 $
    	
24,923
    	
 
    	
 
    	
24,923
    	
 
    	
 
    
	
Long-term   debt, net-other than bank
    	
 
    	
1,364,942
    	
 
    	
 
    	
307,000
    	
 
    	
 
    
	
Total   Funded Debt 
    	
 
    	
$
    	
 1,389,865
    	
 
    	
 
    	
$
    	
338,700
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Capitalization:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Funded   Debt
    	
 
    	
 $
    	
 1,389,865
    	
 
    	
 
    	
$
    	
338,700
    	
 
    	
 
    
	
Noncontrolling   interest: Cumulative preferred stock of subsidiaries-not subject to mandatory   redemption
    	
 
    	
34,293
    	
 
    	
 
    	
–
    	
 
    	
 
    
	
Common   Stock Equity *
    	
 
    	
1,496,109
    	
 
    	
 
    	
1,496,109
    	
 
    	
 
    
	
Total   capitalization
    	
 
    	
$
    	
 2,920,267
    	
 
    	
 
    	
$
    	
1,834,809
    	
 
    	
 
    

 

 

*          Excludes accumulated other comprehensive loss of $12,472.

 

 

Schedule C

 

	
 
    	
Schedule 5.3

to

Note Purchase   Agreement
    

 

 

DISCLOSURE DOCUMENTS

 

·           Current reports on Form 8-K filed January 11, 2011, January 14, 2011, January 21, 2011, February 11, 2011, February 14, 2011, March 4, 2011, March 7, 2011, March 14, 2011

·                Annual report on Form 10-K for the fiscal year ended December 31, 2010

·                Annual report on Form 10-K for the fiscal year ended December 31, 2009

·                Annual report on Form 10-K for the fiscal year ended December 31, 2008

·                Annual report on Form 10-K for the fiscal year ended December 31, 2007

·                Annual report on Form 10-K for the fiscal year ended December 31, 2006

·                Annual report on Form 10-K for the fiscal year ended December 31, 2005

 

 

Schedule 5.3

 

	
 
    	
Schedule 5.4

to

Note Purchase   Agreement
    

 

 

SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY STOCK

 

SUBSIDIARIES

 

	
Subsidiary
    	
 
    	
Jurisdiction
    	
 
    	
Owner
    	
 
    	
Shares Owned (% of
   outstanding Capital
   Stock)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Hawaiian Electric   Company, Inc.*
    	
 
    	
Hawaii
    	
 
    	
Hawaiian Electric   Industries, Inc.
    	
 
    	
100%
    
	
Maui Electric Company,   Limited*
    	
 
    	
Hawaii
    	
 
    	
Hawaiian Electric   Company, Inc.
    	
 
    	
100%
    
	
Hawaii Electric Light   Company, Inc.*
    	
 
    	
Hawaii
    	
 
    	
Hawaiian Electric   Company, Inc.
    	
 
    	
100%
    
	
Renewable Hawaii, Inc.
    	
 
    	
Hawaii
    	
 
    	
Hawaiian Electric Company,   Inc.
    	
 
    	
100%
    
	
Uluwehiokama Biofuels   Corp.
    	
 
    	
Hawaii
    	
 
    	
Hawaiian Electric   Company, Inc.
    	
 
    	
100%
    
	
HECO Capital Trust III
    	
 
    	
Delaware
    	
 
    	
Hawaiian Electric   Company, Inc.
    	
 
    	
100%
    
	
American Savings   Holdings, Inc.*
    	
 
    	
Hawaii
    	
 
    	
Hawaiian Electric   Industries, Inc.
    	
 
    	
100%
    
	
American Savings Bank,   F.S.B.*
    	
 
    	
Federally chartered
    	
 
    	
American Savings   Holdings, Inc.
    	
 
    	
100%
    
	
American Savings   Investment Services Corp.
    	
 
    	
Hawaii
    	
 
    	
American Savings Bank,   F.S.B.
    	
 
    	
100%
    
	
Bishop Insurance Agency   of Hawaii, Inc.
    	
 
    	
Hawaii
    	
 
    	
American Savings   Investment Services Corp.
    	
 
    	
100%
    
	
Pacific Energy   Conservation Services, Inc.
    	
 
    	
Hawaii
    	
 
    	
Hawaiian Electric   Industries, Inc.
    	
 
    	
100%
    
	
HEI Properties, Inc.
    	
 
    	
Hawaii
    	
 
    	
Hawaiian Electric   Industries, Inc.
    	
 
    	
100%
    
	
Hawaiian Electric   Industries Capital Trust II (a statutory trust)
    	
 
    	
Delaware
    	
 
    	
Hawaiian Electric   Industries, Inc.
    	
 
    	
100%
    
	
Hawaiian Electric   Industries Capital Trust III (a statutory trust)
    	
 
    	
Delaware
    	
 
    	
Hawaiian Electric   Industries, Inc.
    	
 
    	
100%
    
	
The Old Oahu Tug   Service, Inc.
    	
 
    	
Hawaii
    	
 
    	
Hawaiian Electric   Industries, Inc.
    	
 
    	
100%
    

 

*Denotes Significant Subsidiaries

 

 

Schedule 5.4

 

AFFILIATES

 

The Subsidiaries listed hereinabove.

 

 

DIRECTORS AND SENIOR OFFICERS OF THE COMPANY

 

Directors

 

Don E. Carroll

Shirley J. Daniel

Thomas B. Fargo

Constance H. Lau

Victor H. Li

A. Maurice Myers

James K. Scott

Kelvin H. Taketa

Barry K. Taniguchi

Jeffery N. Watanabe

 

Senior Officers

 

Constance H. Lau—President and Chief Executive Officer

James A. Ajello—Senior Financial Vice President, Treasurer and Chief Financial Officer

Chester A. Richardson—Senior Vice President, General Counsel and Chief Administrative Officer

 

 

Schedule 5.4-2

 

	
 
    	
Schedule 5.5

to

Note Purchase   Agreement
    

 

 

FINANCIAL STATEMENTS

 

 

·                Consolidated Financial Statements for the fiscal year ended December 31, 2010

·                Consolidated Financial Statements for the fiscal year ended December 31, 2009

·                Consolidated Financial Statements for the fiscal year ended December 31, 2008

·                Consolidated Financial Statements  for the fiscal year ended December 31, 2007

·                Consolidated Financial Statements for the fiscal year ended December 31, 2006

·                Consolidated Financial Statements for the fiscal year ended December 31, 2005

 

 

Schedule 5.5

 

	
 
    	
Schedule 5.15

to

Note Purchase   Agreement
    

 

 

EXISTING INDEBTEDNESS; FUTURE LIENS

 

 

CREDIT AGREEMENTS

 

Effective May 7, 2010, the Company entered into a revolving unsecured credit agreement establishing a line of credit  facility of $125 million, subject to the right of the Company to increase this facility to $150 million, with a letter of credit sub-facility, expiring on May 7, 2013, with a syndicate of eight  financial institutions. The credit facility will be maintained to support the issuance of commercial paper, but also may  be drawn to repay the Company’s short-term and long-term indebtedness, to make investments in or loans to subsidiaries  and for the Company’s working capital and general corporate purposes.

 

Effective May 7, 2010, HECO entered into a revolving unsecured credit agreement establishing a line of credit  facility of $175 million, subject to the right of HECO to increase this facility to $250 million, with a letter of credit sub-facility with a syndicate of eight  financial institutions. The agreement had an initial term which expired on May 6, 2011, but its term was extended to May 7, 2013 upon approval by the PUC in January, 2011. The credit facility will be maintained to support the issuance of commercial paper, but also may  be drawn to repay HECO’s short-term indebtedness, to make loans to subsidiaries  and for HECO’s capital expenditures, working capital and general corporate purposes.

 

LONG-TERM DEBT

 

As of December 31, 2010, the Company had $307 million of unsecured medium term notes outstanding with $50 million maturing on March 15, 2011 and $100 million maturing on August 15, 2011. Of the remaining notes, $7 million mature on October 1, 2012, $50 million mature on March 7, 2013, and $100 million mature on May 5, 2014.

 

HECO and its subsidiaries had $1.006 billion of special purpose revenue bonds outstanding as of December 31, 2010, which mature between 2012 and 2037. HECO also had $51.5 million of junior subordinated debentures outstanding.

 

FUTURE LIENS

 

None.

 

 

Schedule 5.15

 

	
 
    	
Schedule 10.1

to

Note Purchase   Agreement
    

 

EXISTING LIENS

 

 

None.

 

 

Schedule 10.1

 

	
 
    	
Schedule 10.3

to

Note Purchase   Agreement
    

 

RESTRICTIVE AGREEMENTS

 

Pursuant to Section 10.3 of the Note Purchase Agreement, the following restrictions and conditions exist on March 24, 2011:

 

1.          Hawaiian Electric Company, Inc. (“HECO”) Credit Agreement dated May, 7 2010 by and between HECO, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent restricts the ability of HECO and its “Significant Subsidiaries,” as defined therein,  to sell, transfer or otherwise dispose of all or substantially all of its properties and assets to any of its Affiliates, as defined therein, on a non-arms length basis.

 

2.            Hawaiian Electric Company, Inc., 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.

 

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

 

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

 

 

Schedule 10.3

 

5.            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.

 

 

Schedule 10.3-2

 

 

	
 
    	
Exhibit 1(a)
   to
   Note Purchase Agreement
    

 

 

[FORM OF SERIES 2011A SENIOR NOTE, TRANCHE 1]

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY STATE.  NO TRANSFER, SALE OR OTHER DISPOSITION OF THIS NOTE MAY BE MADE UNLESS A REGISTRATION STATEMENT WITH RESPECT TO THIS NOTE HAS BECOME EFFECTIVE UNDER SUCH ACT, AND SUCH REGISTRATION OR QUALIFICATION AS MAY BE NECESSARY UNDER THE SECURITIES LAWS OF ANY STATE HAS BECOME EFFECTIVE, OR AN EXEMPTION FROM SUCH REGISTRATIONS AND/OR QUALIFICATIONS IS AVAILABLE UNDER SUCH ACT AND SUCH LAWS.  EACH TRANSFEREE OF THIS NOTE, BY ACCEPTANCE OF THIS NOTE REGISTERED IN ITS NAME (OR THE NAME OF ITS NOMINEE), WILL BE DEEMED TO HAVE MADE CERTAIN REPRESENTATIONS SET FORTH IN THE AGREEMENT PURSUANT TO WHICH THIS NOTE WAS ISSUED.

 

 

HAWAIIAN ELECTRIC INDUSTRIES, INC.

 

4.41% SERIES 2011A SENIOR NOTE, TRANCHE 1, DUE MARCH 24, 2016

 

	
No. [___________]
    	
_________, 20__  
    
	
$ [______________]
    	
PPN: [__________]  
    

 

 

FOR VALUE RECEIVED, the undersigned, Hawaiian Electric Industries, Inc. (herein called the “Company”),  a corporation organized and existing under the laws of the State of Hawaii, hereby promises to pay to [______], or registered assigns, the principal sum of [_____] DOLLARS ($[_____]) (or so much thereof as shall not have been prepaid) on March 24, 2016, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 4.41% per annum from the date hereof, payable semiannually, on the 24th day of March and the 24th day of September in each year, commencing with the March 24th or September 24th next succeeding the date hereof, until the principal hereof shall have become due and payable, and on the maturity date hereof, and (b) to the extent permitted by law, on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum (the “Default Rate”)  from time to time equal to the greater of (i) 6.41% and (ii) 2% over the rate of interest publicly announced by Bank of America, N.A. from time to time in New York, New York as its “base or “prime rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

 

 

Exhibit 1(a)

 

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Bank of America, N.A. in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

 

This Note is one of the Series 2011A Senior Notes, Tranche 1 (herein called the “Notes”)  issued pursuant to the Master Note Purchase Agreement, dated as of March 24, 2011 (as from time to time amended, supplemented or modified, the “Note Purchase Agreement”),  between the Company and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representations set forth in Section 6.3 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

 

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

 

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

 

	
 
    	
HAWAIIAN ELECTRIC   INDUSTRIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    	
 
    
						

 

 

Exhibit 1(a)-2

 

	
 
    	
Exhibit 1(b)

to

Note Purchase   Agreement
    

 

 

[FORM OF SERIES 2011A SENIOR NOTE, TRANCHE 2]

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY STATE.  NO TRANSFER, SALE OR OTHER DISPOSITION OF THIS NOTE MAY BE MADE UNLESS A REGISTRATION STATEMENT WITH RESPECT TO THIS NOTE HAS BECOME EFFECTIVE UNDER SUCH ACT, AND SUCH REGISTRATION OR QUALIFICATION AS MAY BE NECESSARY UNDER THE SECURITIES LAWS OF ANY STATE HAS BECOME EFFECTIVE, OR AN EXEMPTION FROM SUCH REGISTRATIONS AND/OR QUALIFICATIONS IS AVAILABLE UNDER SUCH ACT AND SUCH LAWS.  EACH TRANSFEREE OF THIS NOTE, BY ACCEPTANCE OF THIS NOTE REGISTERED IN ITS NAME (OR THE NAME OF ITS NOMINEE), WILL BE DEEMED TO HAVE MADE CERTAIN REPRESENTATIONS SET FORTH IN THE AGREEMENT PURSUANT TO WHICH THIS NOTE WAS ISSUED.

 

 

HAWAIIAN ELECTRIC INDUSTRIES, INC.

 

5.67% SERIES 2011A SENIOR NOTE, TRANCHE 2, DUE MARCH 24, 2021

 

	
No. [___________]
    	
_________, 20__  
    
	
$ [______________]
    	
PPN: [__________]  
    

 

 

FOR VALUE RECEIVED, the undersigned, Hawaiian Electric Industries, Inc. (herein called the “Company”),  a corporation organized and existing under the laws of the State of Hawaii, hereby promises to pay to [______], or registered assigns, the principal sum of [_____] DOLLARS ($[_____]) (or so much thereof as shall not have been prepaid) on March 24, 2021, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 5.67% per annum from the date hereof, payable semiannually, on the 24th day of March and the 24th day of September in each year, commencing with the March 24th or September 24th next succeeding the date hereof, until the principal hereof shall have become due and payable, and on the maturity date hereof, and (b) to the extent permitted by law, on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum (the “Default Rate”)  from time to time equal to the greater of (i) 7.67% and (ii) 2% over the rate of interest publicly announced by Bank of America, N.A. from time to time in New York, New York as its “base or “prime rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

 

 

Exhibit 1(b)

 

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Bank of America, N.A. in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

 

This Note is one of the Series 2011A Senior Notes, Tranche 2 (herein called the “Notes”)  issued pursuant to the Master Note Purchase Agreement, dated as of March 24, 2011 (as from time to time amended, supplemented or modified, the “Note Purchase Agreement”),  between the Company and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representations set forth in Section 6.3 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

 

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

 

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

 

	
 
    	
HAWAIIAN ELECTRIC   INDUSTRIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    	
 
    
						

 

 

Exhibit 1(b)-2

 

	
 
    	
Exhibit 4.4(a)

To

Note Purchase   Agreement
    

 

 

FORM OF OPINION OF CHET A. RICHARDSON, SENIOR VICE PRESIDENT, GENERAL COUNSEL, SECRETARY, AND CHIEF ADMINISTRATIVE OFFICER OF  THE COMPANY

 

 

March 24, 2011

 

To each of the Purchasers

listed on Schedule A to the

Master Note Purchase Agreement

hereinafter referred to

 

Re:      Hawaiian Electric Industries, Inc.

Master Note Purchase Agreement dated as of March 24, 2011

 

 

Ladies and Gentlemen:

 

I am the Senior Vice President, General Counsel, and Chief Administrative Officer of Hawaiian Electric Industries, Inc., a Hawaii corporation (the “Company”), and, as such, I have acted as its counsel in connection with the Master Note Purchase Agreement, dated as of March 24, 2011 (together with all exhibits and schedules thereto, collectively, the “Note Purchase Agreement”) among the Company and the Purchasers listed in Schedule A thereto (the “Purchasers”). Capitalized terms used herein and not otherwise defined shall have the respective meanings given such terms in the Note Purchase Agreement. This opinion is rendered to you pursuant to Section 4.4(a) of the Note Purchase Agreement.

 

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

 

(i)         a copy of the Note Purchase Agreement executed by the Company;

 

(ii)        copies of the Initial Notes executed by the Company in connection with the Closing;

 

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

 

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

 

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

 

 

Exhibit 4.4(a)

 

with respect to the Note Purchase Agreement and the Initial Notes, and as to the titles, incumbency, and specimen signatures of certain officers of the Company; and

 

(vi)       a Certificate of Good Standing issued on March 21, 2011 by the Director of the Department of Commerce and Consumer Affairs of the State of Hawaii (the “Certificate of Good Standing”).

 

The documents specified in subparagraphs (i) and (ii) above are referred to herein, collectively, as the “Transaction 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 Company, and have also examined such documents and corporate and other records as I have considered necessary or appropriate for the purposes of this opinion.

 

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

 

1.         The Company has been duly incorporated under the laws of the State of Hawaii and is validly existing as a corporation in good standing under the laws of the State of Hawaii.  To my knowledge, the Company 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.

 

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

 

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

 

4.         The execution and delivery by the Company of each of the Transaction Documents and the consummation of the transactions contemplated thereby and compliance by the Company 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 Company’s Governing Documents or, to my knowledge, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease or other material agreement or other material instrument binding upon the Company, (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 Company 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 Transaction Documents, and (iii) will not result in the creation or imposition of any Lien on any asset of the Company. No consent or approval by any court, public body or authority is required to be obtained or effected by the Company in connection with the execution, 

 

 

Exhibit 4.4(a)-2

 

delivery and performance by the Company of its obligations under each of the Transaction Documents or the consummation by the Company of the transactions contemplated thereby.

 

5.         There is no action, suit or proceeding pending or, to my knowledge, threatened,  against the Company 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.

 

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.

 

(b)       I have relied as to matters of fact upon representations and warranties of the Company and the Purchasers in the Transaction Documents and upon certificates and representations of officers and employees of the Company, the Purchasers, ML and USB and upon certificates of public and government officials as to matters set forth therein. My opinion in numbered paragraph 1 as to the good standing of the Company is based solely on the Certificate of Good Standing.

 

(c)       I have assumed the genuineness of all signatures (other than the signatures of the officers of the Company), 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 the Company and the capacity of each party executing a document (other than the Company) to so execute such document.

 

(d)       My advice on each legal issue addressed in this opinion letter represents my opinion as to how that issue would be resolved were it to be considered by the highest court of the jurisdiction upon whose law my 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.

 

(e)       I 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 Transaction Documents (other than the Company) 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 such party;

 

(f)        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 

 

 

Exhibit 4.4(a)-3

 

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 Transaction Documents, but does not include other information that might be revealed if there were to be undertaken a canvass of all lawyers in the Company’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 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 Note Purchase 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 the other Institutional Investor holders from time to time of your Initial Note(s) (any transfer of your Initial Note(s) to an Institutional Investor holder having been made under and in accordance with the Note Purchase 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,
    

 

 

 

Exhibit 4.4(a)-4

 

 

	
 
    	
Exhibit 4.4(b)
    
	
 
    	
To
    
	
 
    	
Note Purchase   Agreement
    

 

 

FORM OF OPINION OF JENNER & BLOCK, SPECIAL COUNSEL TO THE COMPANY

 

 

March 24,2011

 

To each of the Purchasers

listed on Schedule A to the

Master Note Purchase Agreement

hereinafter referred to

 

 

	
Re:
    	
 
    	
Hawaiian Electric   Industries, Inc.
    
	
 
    	
 
    	
Master Note Purchase   Agreement dated as of March 24, 2011
    

 

Ladies and Gentlemen:

 

We are providing this opinion letter to you pursuant to Section 4.4(b) of that certain Master Note Purchase Agreement, dated as of March 24, 2011 (together with all exhibits and schedules thereto, collectively, the “Note Purchase Agreement”), by and among Hawaiian Electric Industries, Inc., a Hawaii corporation (the “Company”), and the Purchasers listed in Schedule A thereto (the “Purchasers”).  Capitalized terms used in this opinion letter, unless specifically defined in this opinion letter, have the meanings given to them in the Note Purchase Agreement.  The term “Transaction Documents” means a copy of the Note Purchase Agreement executed by the Company and copies of the Initial Notes executed by the Company in connection with the Closing (the “Initial Notes”).

 

 

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

 

 

In rendering the opinions set forth in this opinion letter, we have examined originals or copies solely of the following:

 

 

Exhibit 4.4(b)

 

A.                                 each Transaction Document; and

 

B.                                  such other instruments, corporate records, certificates and other documents as we have considered necessary or appropriate for the purposes of this opinion.

 

 

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.

 

 

Subject to the assumptions, qualifications, exclusions and other limitations which are identified in this opinion letter and in the annexes attached to this opinion letter, it is our opinion that:

 

1.                                    Each Transaction Document constitutes a valid and binding obligation of the Company and is enforceable against the Company in accordance with its terms.

 

2.                                    The execution and delivery by the Company of the Transaction Documents and the performance of its obligations under each Transaction Document will not (a) constitute a violation by the Company of any applicable provision of existing statutory law or governmental regulation covered by this opinion letter or (b) to our actual knowledge, violate any order, writ, injunction, judgment, determination, award or decree of any court applicable to the Company.

 

3.                                    The Company is not presently required to obtain any consent, approval, authorization or order of 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 Transaction Documents, to borrow money evidenced by the Initial Notes and to perform its obligations under the Transaction Documents, except, in each case, for actions required in connection with the ordinary course of conduct by the Company of its business and ownership or operation by the Company of its assets.

 

4.                                    Assuming that the representations and warranties of the Company and the Purchasers in the Transaction Documents are true and correct, and assuming compliance by the Company and the Purchasers with their respective covenants and agreements set forth in the Transaction Documents, the offer, sale and delivery of the Initial Notes to the Purchasers under the Note Purchase Agreement do not require registration under the Securities Act of 1933 (it being understood that no opinion is expressed as to any subsequent resale of the Initial Notes) or the qualification of an indenture under the Trust Indenture Act of 1939, as amended.

 

5.                                    The Company is not an “investment company” nor is it controlled by an “investment company”, registered or required to be registered as such, in each case within the meaning of the Investment Company Act of 1940, as amended.

 

 

Exhibit 4.4(b)-2

 

6.                                    Neither the issuance of the Initial Notes nor the application of the proceeds thereof will violate or result in a violation of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

 

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 internal 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 by the Transaction Documents.

 

We have not undertaken any research for purposes of determining whether the Company or any of the transactions which may occur in connection with the Transaction Documents is subject to any law, rule, regulation or other governmental requirement other than to those laws, rules, regulations and requirements which in our experience would generally be recognized as applicable in the absence of a search by lawyers in New York and, except as otherwise provided in this opinion letter, and none of our opinions covers any such law or other requirement.  We have relied without any independent verification upon: (a) information contained in certificates obtained from governmental authorities; (b) factual information represented to be true in the Transaction Documents; (c) factual information provided to us by the Company, including Annex C; and (d) factual information we have obtained from such other sources as we have deemed reasonable.  We have assumed without investigation that there has been no relevant change or development between the dates as of which the information cited in the preceding sentence was given and the date of this opinion letter, and that the information upon which we have relied is accurate and does not omit disclosures necessary to prevent such information from being misleading.

 

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 actual knowledge concerning such facts should be drawn from the fact that such representation has been undertaken by us.  The term “actual knowledge” whenever it is used in this opinion letter with respect to our firm means awareness at the time this letter is delivered on the date it bears by the following Jenner & Block LLP lawyers who have had significant involvement with the negotiation or preparation of the Transaction Documents:  Peter M. Gaines, Michael T. Wolf, Derek A. Higginbotham and Jonathan W. Riley (together, our “Designated Lawyers”).

 

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 our Designated Lawyers 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.

 

 

Exhibit 4.4(b)-3

 

You may rely upon this opinion letter only for the purpose served by the provision in the Note Purchase Agreement cited in the initial paragraph of this opinion letter in response to which it has been delivered.  Without our written consent: (a) no Person other than you and the other Institutional Investor holders from time to time of your Initial Note(s) (any transfer of your Initial Note(s) to an Institutional Investor holder having been made under and in accordance with the Note Purchase Agreement) may rely on this opinion letter for any purpose; (b) this opinion letter may not be cited or quoted in any financial statement, prospectus, private placement memorandum or other similar document; (c) 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 (d) copies of this opinion letter may not be furnished to anyone for purposes of encouraging such reliance.

 

 

	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Jenner & Block   LLP
    

 

 

Exhibit 4.4(b)-4

 

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) the Company is existing and in good standing under the laws of its jurisdiction of formation, (b) the Company has the requisite power (including, without limitation, under the laws of its jurisdiction of formation) to execute, deliver and perform its obligations under each of the Transaction Documents, and (c) each of the Transaction Documents has been duly authorized by all necessary action on its part and has been duly executed and delivered by it.

 

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

 

4.                                    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;

 

5.                                    there has not been any mutual mistake of fact or misunderstanding, fraud, duress or undue influence;

 

6.                                    the conduct of the parties to the Transaction Documents has complied with any requirement of good faith, fair dealing and conscionability;

 

7.                                    there are no agreements or understandings among the parties to any of the Transaction Documents, written or oral, and there is no usage of trade or course or prior dealing among the parties that would, in either case, define, supplement or qualify the terms of any of the Transaction Documents; and

 

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

 

 

Annex A

 

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

 

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) Title 11 of the United States Code, 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 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 Transaction 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;

 

4.                                    the qualification that we express no opinion as to the validity, binding effect or enforceability of any provision of any of the Transaction 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 Transaction 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;

 

 

Annex A-2

 

5.                                    the qualification that any requirement in any of the Transaction 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 Transaction Documents or an implied agreement by trade practice or course of conduct has been created allowing a waiver;

 

6.                                    the qualification as to the validity, binding effect or enforceability of provisions in the Transaction 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;

 

7.                                    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) 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; (g) 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; (h) govern and afford judicial discretion regarding the determination of damages and entitlement to attorneys’ fees and other costs; and (i) may permit a party that has materially failed to render or offer performance required by the contract to cure that failure unless (i) permitting a cure would unreasonably hinder the aggrieved party from making substitute arrangements for performance, or (ii) it was important in the circumstances to the aggrieved party that performance occur by the date stated in the contract;

 

8.                                    the qualifications that, to the extent that any opinion relates to the enforceability of the choice of New York law and the choice of New York forum provisions of the Transaction Documents, (i) our opinion is rendered in reliance upon N.Y. Gen. Oblig. Law §§ 5-1401 and 5-1402 and N.Y. CPLR 327(b) and (ii) such enforceability may be limited by public policy considerations in a jurisdiction, other than the courts of the State of New York, in which enforcement of such provisions, or of a judgment upon an agreement containing such provisions, is sought; and

 

9.                                    the qualification that the choice of New York law on the basis of Section 5-1401 of the New York General Obligation Law is only relevant insofar as litigation is brought to enforce the Transaction Documents in the courts of the State of New York, and we have assumed that there is a basis for jurisdiction in such courts.

 

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 Transaction Documents:

 

 

Annex A-3

 

1.                                    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;

 

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

 

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

 

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

 

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

 

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

 

7.                                    confidentiality and non-competition agreements;

 

8.                                    provisions requiring the Company 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 Transaction Document; and

 

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

 

*     *     *     *

 

 

Annex A-4

 

 

 

ANNEX B

 

Our opinions in the 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 our opinion paragraphs numbered 4 and 5 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 (other than with respect to our opinion paragraph numbered 6 above);

 

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 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 Company 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 Company 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;

 

 

Annex B

 

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

 

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

 

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.

 

As noted in Annex A above, we understand that you are separately receiving an opinion from the legal department of the Company with respect to matters not opined on by us.

 

*     *    *     *

 

 

Annex B-2

 

ANNEX C

 

COMPANY SUPPORT CERTIFICATE

March 24, 2011

 

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

 

1.                                    Introduction.  Jenner & Block LLP has acted as counsel to the Company in connection with the Master Note Purchase Agreement, dated as of March 24, 2011 (together with all exhibits and schedules thereto, collectively, the “Note Purchase Agreement”), among the Company and the Purchasers listed in Schedule A thereto (the “Purchasers”). Section 4.4(b) of the Note Purchase Agreement provides that as a condition precedent to the Note Purchase Agreement being effective, Jenner & Block LLP will deliver an opinion letter to the Purchasers.  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 Company 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 Company 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 Company understands that Jenner & Block LLP will not check, audit or otherwise attempt to verify the information in this certificate.  The Company 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 Company, dated as of the date hereof (the “Secretary’s Certificate”) (attached hereto), as to certain actions taken by the Board of Directors of the Company on November 16, 2010, as to the titles, incumbency, and specimen signatures of certain officers of the Company 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 Transaction Documents.

 

4.                                    Charter.  The copy of the Company’s articles of incorporation (herein called the Company’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 Company’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 Company’s bylaws (herein called the Company’s “Bylaws”) (attached to the Secretary’s Certificate), is accurate

 

 

Annex C

 

and complete and represents the terms of the Company’s Bylaws as constituted at all times since prior to the adoption of the initial resolution authorizing the transactions specified in the Transaction Documents.

 

6.                                    Good Standing.  It is the Company’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.  All material taxes have been paid, except for taxes contested in good faith and to which adequate reserves have been provided.  The Company 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 Company, and attached to the Secretary’s Certificate, are a complete and accurate copy of resolutions.  The Board of Directors of the Company 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 Company, any Committee of any such Board or the equity holders of the Company restricting the Company’s ability to execute, deliver or perform its obligations under the Transaction 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 Transaction Documents or other documents delivered at closing on behalf of the Company was validly appointed to the officership position or other position with the Company indicated in connection with such execution and held that office at the time of such person’s execution and delivery of the Transaction Documents and/or other documents.

 

9.                                    No Required Governmental Approvals.  The Company 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 Transaction Documents to which it is a party or to performing any of its obligations under the Transaction Documents to which it is a party.  The Company 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 Transaction Documents to which it is a party or the performance of its obligations under the Transaction 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 Company does not have any intent (actual or otherwise) in connection with the transactions contemplated by the Transaction Documents or otherwise to hinder, delay or defraud any present or future creditor.  In addition, the Company (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

 

 

Annex C-2

 

transactions, (b) is not engaged nor will it be engaged, nor does it expect to engage in the reasonably foreseeable future in any business or transaction with unreasonably small capital, or (c) does not intend to incur, nor does it expect or believe that it will incur, debts that would be beyond its ability to pay as such debts mature.

 

11.                            Court Orders.  There are no Court Orders binding on the Company which contain any provisions which might be breached or otherwise violated by the Company’s execution or delivery of the Transaction Documents to which it is a party or by the Company’s performance of any of its agreements in the Transaction Documents to which it is a party or which may require the Company 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 Company 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 Company or which might impair the ability of the Company to perform any of its obligations under the Transaction Documents to which it is a party or related document or instrument, or the ability of the Company to perform any of its obligations to any material third party.

 

13.                            No Omissions.  The Company 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.  Hawaiian Electric Industries, Inc. (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 Hawaiian Electric Industries, Inc. (exclusive of government securities and cash items) on  an unconsolidated basis.  Hawaiian Electric Industries, Inc. is not controlled by any person and no person owns beneficially, either directly or through one or more controlled companies, more than 5% of the voting securities of Hawaiian Electric Industries, Inc.

 

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 

 

 

Annex C-3

 

shall be presumed to control such company.  Any person who does not so own more than 25 per centum of the voting securities of any company shall be presumed not to control such company.  Any such presumption may be rebutted by evidence, but except as otherwise provided in the Investment Company Act of 1940, shall continue until a determination to the contrary made by the Securities and Exchange Commission by order either on its own motion or on application by an interested person.

 

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

 

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

 

“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 (3)(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,

 

 

Annex C-4

 

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

 

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

 

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

 

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

 

	
 
    	
HAWAIIAN ELECTRIC   INDUSTRIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    

 

 

Annex C-5

 

 

 

	
 
    	
Exhibit 4.4(c)
    
	
 
    	
To
    
	
 
    	
Note Purchase   Agreement
    

 

 

FORM OF OPINION OF SCHIFF HARDIN LLP, SPECIAL COUNSEL FOR THE PURCHASERS

 

 

The opinion of Schiff Hardin LLP, special counsel for the Purchasers, called for by Section 4.4(c) of the Note Purchase Agreement, shall be dated the date of Closing and addressed to each Purchaser, shall be reasonably satisfactory in form and substance to each Purchaser, and shall be to the effect that:

 

1.         The Note Purchase Agreement constitutes the legal, valid and binding contract of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting creditors’ rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law).

 

2.         The Notes being delivered on the date hereof constitute the legal, valid and binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting creditors’ rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law).

 

3.         The issuance, sale and delivery of the Notes under the circumstances contemplated by the Note Purchase Agreement do not, under existing law, require the registration of the Notes under the Securities Act of 1933, as amended, or the qualification of an indenture under the Trust Indenture Act of 1939, as amended.

 

With respect to matters of fact upon which such opinion is based, Schiff Hardin LLP may rely on appropriate certificates of public officials and officers of the Company and upon representations of the Company and Purchasers delivered in connection with the issuance and sale of the Notes.

 

The opinion of Schiff Hardin LLP is limited to the laws of the State of New York and the Federal laws of the United States.

 

 

Exhibit 4.4(c)

 

	
 
    	
Exhibit S
    
	
 
    	
To
    
	
 
    	
Note Purchase   Agreement
    

 

	
 
    

 

 

HAWAIIAN ELECTRIC INDUSTRIES, INC.

 

[NUMBER] SUPPLEMENT TO NOTE PURCHASE AGREEMENT

 

Dated as of [________ ___, 20__]

 

Re: $[________]%  Series 20[__] Senior Notes

 

DUE [________ ___, 20__]

 

	
 
    

 

 

Exhibit S

 

 

HAWAIIAN ELECTRIC INDUSTRIES, INC.

900 RICHARDS STREET

HONOLULU, HAWAII 96813

 

 

$[     ]

 

[___]% Series [     ] Senior Notes due [_________]

 

[     ] Supplement to Master Note Purchase Agreement

 

 

Dated as of [     ], 20[  ]

 

To the Purchaser(s) named in

Schedule A hereto:

 

Ladies and Gentlemen:

 

This [Number] Supplement (this “[Number] Supplement”) to Master Note Purchase Agreement is between HAWAIIAN ELECTRIC INDUSTRIES, INC., a Hawaii corporation (together with any successor thereto that becomes such in the manner prescribed in Section 10.2 of the Note Purchase Agreement hereinafter referred to, the “Company”),  and the institutional investors named on Schedule A attached hereto (for purposes of this [Number] Supplement, the “Purchasers”).

 

Reference is hereby made to that certain Master Note Purchase Agreement dated as of March 24, 2011 (as amended, supplemented, or otherwise modified from time to time, the “Note Purchase Agreement”) between the Company and the purchasers listed on Schedule A thereto.  All capitalized terms not otherwise defined herein shall have the same meaning as specified in the Note Purchase Agreement.  Reference is further made to Section 2.2 of the Note Purchase Agreement which requires that, prior to the delivery of any Additional Notes, the Company and each Additional Purchaser shall execute and deliver a Supplement.

 

The Company hereby agrees with the Purchaser(s) as follows:

 

 

Exhibit S-2

 

1.         The Company has authorized the issue and sale of $_______ aggregate principal amount of its _______% Series _________Senior Notes due __________, ____ (the “Series ________ Notes”).  The Series ___________ Notes, together with the Initial Notes issued pursuant to the Note Purchase Agreement [and the Additional Notes issued pursuant to the ___________ Supplement[s] dated [    ], between the Company and the Additional Purchasers referred to therein] and each series of Additional Notes which may from time to time hereafter be issued pursuant to the provisions of Section 2.2 of the Note Purchase Agreement, are collectively referred to as the “Notes” (such term shall also include any such notes issued in substitution therefor pursuant to Section 13 of the Note Purchase Agreement).  The Series _________ Notes shall be substantially in the form set out in Exhibit 1 hereto, with such changes therefrom, if any, as may be approved by the Purchaser(s) and the Company.

 

2.         Subject to the terms and conditions hereof and as set forth in the Note Purchase Agreement and on the basis of the representations and warranties hereinafter set forth, the Company agrees to issue and sell to each Purchaser, and each Purchaser agrees to purchase from the Company, Series ____________ Notes in the principal amount set forth opposite such Purchaser’s name on Schedule A hereto at a price of 100% of the principal amount thereof on the closing date hereinafter mentioned. The obligations of each Purchaser hereunder are several and not joint obligations and no Purchaser shall have any obligation or any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.

 

3.         The sale and purchase of the Series ______ Notes to be purchased by each Purchaser shall occur at the offices of Schiff Hardin LLP at 900 Third Avenue, 23rd Floor, New York, New York 10022, at 11:00 A.M. New York, New York time, at a closing (the “Closing”) on _______, ______ or on such other Business Day thereafter on or prior to _______, ________ as may be agreed upon by the Company and the Purchasers.  At the Closing, the Company will deliver to each Purchaser the Series __________ Notes to be purchased by such Purchaser in the form of a single Series _______ Note (or such greater number of Series ________ Notes in denominations of at least $100,000 as such Purchaser may request) dated the date of the Closing and registered in such Purchaser’s name (or in the name of such Purchaser’s nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to account number [__________] at ______________ Bank, [Insert Bank address, ABA number for wire transfers, and any other relevant wire transfer information].  If, at the Closing, the Company shall fail to tender such Series _________ Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to any Purchaser’s satisfaction, such Purchaser shall, at such Purchaser’s election, be relieved of all further obligations under this [Number] Supplement, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment.

 

4.         The obligation of each Purchaser to purchase and pay for the Series _____ Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s reasonable satisfaction, prior to the Closing, of the conditions set forth in Section 2.2(b) and Section 4 of the Note Purchase Agreement as though references to the “Initial Notes” were references to the Series ______ Notes and references to the “Closing” were references to the Closing as defined in this [Number] Supplement and to the following additional conditions:

 

 

Exhibit S-3

 

(i)  Except as supplemented, amended or superseded by the representations and warranties set forth in Exhibit A hereto, each of the representations and warranties of the Company set forth in Section 5 of the Note Purchase Agreement shall be correct  as of the date of Closing (except to the extent that any of such representations and warranties expressly refer to an earlier date, in which case such representations and warranties shall be correct as of such earlier date) and the Company shall have delivered to each Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that such condition has been fulfilled; and

 

(ii)  A Private Placement Number shall have been obtained for the Series __________ Notes.

 

5.         [Here insert special provisions for Series _______ Notes including prepayment provisions applicable to Series ________ Notes (including Make-Whole Amount) and closing conditions applicable to Series _________ Notes].

 

6.         Each Purchaser represents and warrants that the representations and warranties set forth in Section 6 of the Note Purchase Agreement are correct on the date hereof with respect to the purchase of the Series ______ Notes by such Purchaser.

 

7.         The Company and each Purchaser agree to be bound by and comply with the terms and provisions of the Note Purchase Agreement as fully and completely as if such Purchaser were an original signatory to the Note Purchase Agreement.

 

8.         All references in the Note Purchase Agreement and all other instruments, documents and agreements relating to, or entered into in connection with the foregoing documents and agreements, to the Note Purchase Agreement shall be deemed to refer to the Note Purchase Agreement, as supplemented by this __________ Supplement.

 

9.         Except as expressly supplemented by this __________ Supplement, all terms and provisions of the Note Purchase Agreement remain unchanged and continue, unabated, in full force and effect and the Company hereby reaffirms its obligations and liabilities under the Note Purchase Agreement.

 

10.       This __________ Supplement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

 

11.       Any provision of this Supplement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

 

12.       All covenants and other agreements contained in this __________ Supplement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective 

 

 

Exhibit S-4

 

successors and assigns (including, without limitation, any subsequent holder of a Series _________ Note) whether so expressed or not.

 

The execution hereof shall constitute a contract between the Company and the Purchaser(s) for the uses and purposes hereinabove set forth, and this agreement may be executed in any number of counterparts, each executed counterpart constituting an original but all together only one agreement.  Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

 

* * * * *

 

[remainder of page intentionally blank]

 

 

Exhibit S-5

 

	
 
    	
HAWAIIAN ELECTRIC   INDUSTRIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By 
    	
 
    
	
 
    	
 
    	
Name: 
    	
 
    
	
 
    	
 
    	
Title: 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By 
    	
 
    
	
 
    	
 
    	
Name: 
    	
 
    
	
 
    	
 
    	
Title: 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Accepted as of   ________, ____
    	
 
    
	
 
    	
 
    
	
 
    	
[VARIATION]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By 
    	
 
    
	
 
    	
 
    	
Name: 
    	
 
    
	
 
    	
 
    	
Title: 
    	
 
    

 

 

Signature Page

 

 

	
 
    	
Schedule A
    
	
 
    	
To
    
	
 
    	
Supplement
    

 

INFORMATION RELATING TO PURCHASERS

 

	
 
    	
 
    	
 
    	
 
    	
PRINCIPAL
    
	
 
    	
 
    	
 
    	
 
    	
AMOUNT OF SERIES
    
	
 
    	
 
    	
CLOSING
    	
 
    	
___NOTES TO BE
    
	
NAMES AND ADDRESS OF   PURCHASER
    	
 
    	
DATE
    	
 
    	
PURCHASED
    

 

 

 

Payments

 

All payments on account of the Notes held by such purchaser shall be made by wire transfer of immediately available funds, for credit to:

 

Each such wire transfer shall set forth the name of the Company, the full title (including the coupon rate, issuance date and final maturity date) of the Notes on account of which such payment is made, a reference to the PPN, and the due date and application (as among principal, premium and interest) of the payment being made.

 

Notices

 

All notices with respect to payments and written confirmation of each such payment to be addressed:

 

All other notices and communications to be addressed as first provided above.

 

Name of Nominee in which Notes are to be issued:

 

Taxpayer I.D. Number:

 

Schedule A

 

	
 
    	
Schedule 5.4
    
	
 
    	
To
    
	
 
    	
Supplement
    

 

SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY STOCK

 

	
Subsidiary1
    	
 
    	
Jurisdiction
    	
 
    	
Owner
    	
 
    	
 
    	
Shares Owned (% of

outstanding Capital

Stock)
    

 

 

1           “*” indicates a Significant Subsidiary.

 

 

Schedule 5.4

 

	
 
    	
Schedule 5.5
    
	
 
    	
To
    
	
 
    	
Supplement
    

 

FINANCIAL STATEMENTS

 

 

Schedule 5.5

 

	
 
    	
Schedule 5.15
    
	
 
    	
To
    
	
 
    	
Supplement
    

 

 

EXISTING INDEBTEDNESS; FUTURE LIENS

 

 

Schedule 5.15

 

	
 
    	
Exhibit A
    
	
 
    	
To
    
	
 
    	
Supplement
    

 

 

SUPPLEMENTAL REPRESENTATIONS

 

 

The Company represents and warrants to each Purchaser that except as hereinafter set forth in this Exhibit A (which are intended to supersede the corresponding representations and warranties in the Note Purchase Agreement), each of the representations and warranties set forth in Section 5 of the Note Purchase Agreement is correct as of the date hereof with respect to the Series _________ Notes with the same force and effect as if each reference to “Initial Notes” set forth therein was modified to refer the “Series _________ Notes”; each reference to “this Agreement” set forth therein was modified to refer to the Note Purchase Agreement as supplemented by the _________ Supplement to the Note Purchase Agreement; each reference to a particular Schedule set forth therein was modified to refer such Schedule, as set forth in this Exhibit A; and each reference to “Purchasers” (as defined in the Note Purchase Agreement) set forth therein referred to the “Purchasers” (as defined in the ________ Supplement to Note Purchase Agreement).  The Section references hereinafter set forth correspond to the similar sections of the Note Purchase Agreement which are supplemented and superseded hereby:

 

Section 5.3.  Disclosure.  The Company, through its agent[s], [    ], has delivered to each Purchaser a copy of a Private Placement Memorandum dated [  ] relating to the transactions contemplated hereby (the “Offering Memorandum”).  The Offering Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Company and its Subsidiaries.  This Agreement, the Offering Memorandum (excluding information and market and industry data specifically identified as being from a third party source), the documents, certificates, or other writings delivered to the Purchasers prior to [    ],  by or on behalf of the Company in connection with the transactions contemplated hereby and identified in Schedule 5.3 to the [Number] Supplement, the Current SEC Reports and the financial statements of the Company listed in Schedule 5.5 to the [Number] Supplement (this Agreement, the Offering Memorandum, such documents, certificates, or other writings, the Current SEC Reports and such financial statements, collectively, the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a Material fact or omit to state any Material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made; provided that, with respect to market or industry data, projected financial information and other forward-looking information, the Company represents and warrants only that such information was prepared in good faith based upon information and assumptions believed to be reasonable at the time.  Except as disclosed in the Disclosure Documents, since December 31, 20[  ], there has been no change in the financial condition, operations, business or properties of the Company and its Subsidiaries, taken as a

 

 

Exhibit A

 

whole, except changes that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.  There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.  As used in this [Number] Supplement, the term “Current SEC Reports” means the Company’s Annual Report on Form 10-K for the year ended December 31, 20[  ] filed with the SEC on [  ], all filings made with, or furnished to, the SEC by the Company pursuant to section 13 or 15(d) of the Exchange Act since the end of the year ended December 31, 20[  ] until and including _______ __, 20__, and all amendments and supplements thereto made on or prior to _______ __, 20__.

 

Section 5.4.  Organization and Ownership of Shares of Subsidiaries; Affiliates.

 

(a)        Schedule 5.4 to the [Number] Supplement contains (except as noted therein) complete and correct lists, as of the date of such Supplement, of (i) the Company’s Subsidiaries showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, the percentage of shares of each class of its capital stock or similar Equity Interests outstanding owned by the Company and each other Subsidiary, and whether or not such Subsidiary constitutes a Significant Subsidiary as of the date of this [Number] Supplement, (ii) the Company’s Affiliates, other than Subsidiaries, and (iii) the Company’s directors and senior officers.

 

(b)        As of the date of the [Number] Supplement, all of the outstanding shares of capital stock or similar Equity Interests of each Subsidiary shown on Schedule 5.4 to the [Number] Supplement as being owned by the Company and its Subsidiaries have been validly issued, are, where legally applicable, fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 5.4 to the [Number] Supplement or permitted by Section 10.1).

 

(c)        As of the date of the [Number] Supplement, each Significant Subsidiary is a corporation or other legal entity duly organized, validly existing and, where legally applicable: (i) is in good standing under the laws of its jurisdiction of organization and (ii) is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each such Significant Subsidiary has the corporate or other organizational power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.

 

(d)        As of the date of the [Number] Supplement, no Significant Subsidiary is a party to, or otherwise subject to any legal, regulatory, contractual or other restriction (other than the [Number] Supplement, the agreements listed on Schedule 5.4 to the [Number] Supplement and customary limitations imposed by banking and/or utility regulations, corporate law or similar statutes) restricting the ability of such Significant Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar Equity Interests of such Significant Subsidiary.

 

 

Exhibit A-2

 

Section 5.5.  Financial Statements.  The Company has delivered to each Purchaser copies of the consolidated financial statements of the Company and its Subsidiaries listed on Schedule 5.5 to the [Number] Supplement.  The Company’s consolidated financial statements (including, in each case, the related schedules and, where applicable, notes) listed on Schedule 5.5 to the [Number] Supplement fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to the absence of footnotes and to normal year-end audit adjustments).  As of the date of the [Number] Supplement, the Company and its Subsidiaries do not have any Material liabilities that are not disclosed on the most recent financial statements listed on Schedule 5.5 to the [Number] Supplement.

 

Section 5.8.  Litigation; Observance of Agreements, Statutes and Orders.

 

(a) Except as described in [Schedule 5.8 to the [Number] Supplement/the Disclosure Documents], as of the date of the [Number] Supplement, there are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company, threatened against the Company or any Significant Subsidiary or affecting any property of the Company or any Significant Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

(b)  Neither the Company nor any Significant Subsidiary is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including Environmental Laws, ERISA, or the USA PATRIOT Act) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

Section 5.9.  Taxes.  The Company and its Significant Subsidiaries have filed all income and other material tax returns and reports that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which, individually or in the aggregate, is not Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate actions or proceedings and with respect to which, the Company or a Significant Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP.  The Company knows of no basis for any other tax or assessment that could reasonably be expected to have a Material Adverse Effect.  The charges, accruals and reserves on the books of the Company and its Significant Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are adequate.  The Federal income tax liabilities of the Company and its Significant Subsidiaries have been finally determined (whether by reason of completed audits or the statute of limitations having run) for all fiscal years ended on or prior to December 31, [   ],

 

 

Exhibit A-3

 

except to the extent of net operating losses and credits generated and carried forward for these years.

 

Section 5.10.  Title to Property; Leases.  The Company and its Significant Subsidiaries have good and sufficient title or valid leasehold interests to their respective properties that individually or in the aggregate are Material, including all such Material properties reflected in the most recent audited balance sheet referred to in Schedule 5.5 to the [Number] Supplement or the most recent balance sheet delivered to the Purchasers pursuant to Section 7.1(a) or Section 7.1(b) or purported to have been acquired by the Company or any Significant Subsidiary after the date of such balance sheet (except as sold or otherwise Disposed of in the ordinary course of business), in each case, free and clear of Liens, except for Permitted Liens.  All such leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects.

 

Section 5.11.  Licenses, Permits, Etc.

 

(a) The Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, without known conflict with the rights of others, except where the failure to own or possess the same could not reasonably be expected to result in a Material Adverse Effect.

 

(b)  To the knowledge of the Company, no product of the Company or any of its Subsidiaries infringes in any material respect any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name, domain name, or other right owned by any other Person.

 

(c)  To the knowledge of the Company, there is no violation by any Person of any right of the Company or any of its Significant Subsidiaries with respect to any patent, copyright, proprietary software, service mark, trademark, trade name, domain name, or other right owned or used by the Company or any of its Significant Subsidiaries, except for such violations that could not reasonably be expected to result in a Material Adverse Effect.

 

Section 5.13.  Private Offering by the Company.  Prior to the date of this [Number] Supplement, neither the Company nor anyone acting on its behalf has offered the Series ___ Notes or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than [___] other Institutional Investors of the type described in clause (c) of the definition thereof, each of which has been offered the Series ___ Notes at a private sale for investment.  Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Initial Notes to the registration requirements of Section 5 of the Securities Act or to the registration requirements of any securities or blue sky laws of any applicable jurisdiction.

 

Section 5.14.  Use of Proceeds; Margin Regulations.  The Company will apply the proceeds of the sale of the Series ___ Notes to repay existing Indebtedness and for general corporate and working capital purposes of the Company and its Subsidiaries.  No part of the

 

 

Exhibit A-4

 

proceeds from the sale of the Series ___ Notes  hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 25% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 25% of the value of such assets.  As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in Regulation U of the Board of the Governors of the Federal Reserve System.

 

Section 5.15.  Existing Indebtedness; Future Liens.

 

(a)  Except as described therein, Schedule 5.15 to the [Number] Supplement sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Significant Subsidiaries as of [__________] (including a description of the obligors and obligees, principal amount outstanding and collateral therefor, if any, and Guarantee thereof, if any), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Significant Subsidiaries.  Neither the Company nor any Significant Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Significant Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Significant Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

 

(b)  Except as disclosed in Schedule 5.15 to the [Number] Supplement, the Company has not agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien, other than a Permitted Lien.

 

(c)  Neither the Company nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as specifically indicated in Schedule 5.15 to the [Number] Supplement.

 

Section 5.16.  Foreign Assets Control Regulations, Etc.

 

(a)  Neither the sale of the Series ___ Notes by the Company hereunder nor its use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.

 

 

Exhibit A-5

 

(b)  Neither the Company nor any Subsidiary (i) is a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti Terrorism Order or (ii) engages in any dealings or transactions with any such Person.  The Company and its Subsidiaries are in compliance, in all material respects, with the USA PATRIOT Act.

 

(c)  No part of the proceeds from the sale of the Series ___ Notes hereunder will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that such Act applies to the Company.

 

Section 5.19.  Ranking of Obligations.  The Company’s payment obligations under the [Number] Supplement and the Series ___ Notes will, upon issuance of the Series ___ Notes, rank pari passu in right of payment, without preference or priority, with all other outstanding Notes and all other unsecured and unsubordinated Indebtedness of the Company.

 

[Add any additional Sections as appropriate at the time the Series ______ Notes are issued]

 

 

Exhibit A-6

 

	
 
    	
Exhibit 1
    
	
 
    	
To
    
	
 
    	
Supplement
    

 

 

 

[FORM OF SERIES ___________ NOTE]

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY STATE.  NO TRANSFER, SALE OR OTHER DISPOSITION OF THIS NOTE MAY BE MADE UNLESS A REGISTRATION STATEMENT WITH RESPECT TO THIS NOTE HAS BECOME EFFECTIVE UNDER SUCH ACT, AND SUCH REGISTRATION OR QUALIFICATION AS MAY BE NECESSARY UNDER THE SECURITIES LAWS OF ANY STATE HAS BECOME EFFECTIVE, OR AN EXEMPTION FROM SUCH REGISTRATIONS AND/OR QUALIFICATIONS IS AVAILABLE UNDER SUCH ACT AND SUCH LAWS.  EACH TRANSFEREE OF THIS NOTE, BY ACCEPTANCE OF THIS NOTE REGISTERED IN ITS NAME (OR THE NAME OF ITS NOMINEE), WILL BE DEEMED TO HAVE MADE CERTAIN REPRESENTATIONS SET FORTH IN THE AGREEMENT PURSUANT TO WHICH THIS NOTE WAS ISSUED.

 

HAWAIIAN ELECTRIC INDUSTRIES, INC.

 

_______ % SERIES ________ SENIOR NOTE DUE ________

 

	
No. [_______]
    	
 
    	
[Date]
    
	
$[_______]
    	
 
    	
PPN: ______
    

 

FOR VALUE RECEIVED, the undersigned, HAWAIIAN ELECTRIC INDUSTRIES, INC. (herein called the “Company”), a corporation organized and existing under the laws of the State of Hawaii, hereby promises to pay to [_______], or registered assigns, the principal sum of [______] DOLLARS ($[______]) (or so much thereof as shall not have been prepaid) on _______, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of __% per annum from the date hereof, payable [semiannually], on the _____ day of _______ and _______ in each year, commencing with the ______ or ______ next succeeding the date hereof, until the principal hereof shall have become due and payable, and on the maturity date hereof, and (b) to the extent permitted by law, on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum (the “Default Rate”)  from time to time equal to the greater of (i) [__% above the stated rate] and (ii) 2% over the rate of interest publicly announced by Bank of America, N.A. from time to time in New York, New York as its “base or “prime rate, payable [semiannually] as aforesaid (or, at the option of the registered holder hereof, on demand).

 

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Bank of America, N.A. in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

 

 

Exhibit 1

 

This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to a Supplement to the Master Note Purchase Agreement, dated as of March 24, 2011 (as from time to time amended, supplemented or modified, the “Note Purchase Agreement”), between the Company, the Purchasers named therein and Additional Purchasers of Notes from time to time issued pursuant to any Supplement to the Note Purchase Agreement.  This Note and the holder hereof are entitled equally and ratably with the holders of all other Notes of all series from time to time outstanding under the Note Purchase Agreement to all the benefits provided for thereby or referred to therein.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representations set forth in Section 6.3 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

 

[The Company will make required prepayments of principal on the dates and in the amounts specified in the Note Purchase Agreement.] [This Note is not subject to regularly scheduled prepayments of principal.] This Note is [also] subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

 

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

 

Exhibit 1-2

 

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

 

 

 

	
 
    	
HAWAIIAN ELECTRIC   INDUSTRIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
					

 

 

 

Exhibit 1-3

 

	
 
    	
Schedule 5.3
    
	
 
    	
To
    
	
 
    	
Supplement
    

 

[To come]

 

 

Schedule 5.3

 

	
 
    	
Schedule 5.4
    
	
 
    	
To
    
	
 
    	
Supplement
    

 

[To come]

 

 

Schedule 5.4

 

	
 
    	
Schedule 5.5
    
	
 
    	
To
    
	
 
    	
Supplement
    

 

[To come]

 

 

Schedule 5.5

 

	
 
    	
Schedule 5.15
    
	
 
    	
To
    
	
 
    	
Supplement
    

 

[To come]

 

 

Schedule 5.15Exhibit 10.1

 

Execution Version

	
 
    

 

CREDIT AGREEMENT
 Dated as of March 23, 2011

 

Among

 

TEXTRON INC.,

 

THE LENDERS LISTED HEREIN,

 

JPMORGAN CHASE BANK, N.A.,
 as Administrative Agent

 

and

 

CITIBANK, N.A.
 and
 BANK OF AMERICA, N.A.,
 as Syndication Agents

 

and

 

DEUTSCHE BANK SECURITIES INC.
 and
 THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
 as Documentation Agents

 

J.P. MORGAN SECURITIES LLC,
 CITIGROUP GLOBAL MARKETS INC.,
 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
 DEUTSCHE BANK SECURITIES INC.
 and
 THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
 Lead Arrangers and Joint Bookrunners

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
PAGE
    
	
 
    	
 
    
	
ARTICLE 1 Definitions and Accounting Terms
    	
1
    
	
 
    	
 
    
	
Section 1.01
    	
Definitions
    	
1
    
	
Section 1.02
    	
Accounting   Terms and Determinations
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE 2 Amounts and Terms of Commitments and Loans
    	
12
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
Commitments
    	
12
    
	
Section 2.02
    	
Notices   of Conversion/Continuation
    	
15
    
	
Section 2.03
    	
Registry
    	
16
    
	
Section 2.04
    	
Pro   Rata Borrowings
    	
16
    
	
Section 2.05
    	
Interest
    	
17
    
	
Section 2.06
    	
Commissions   and Fee
    	
18
    
	
Section 2.07
    	
Reductions   in Commitments; Repayments and Payments
    	
19
    
	
Section 2.08
    	
Use   of Proceeds
    	
20
    
	
Section 2.09
    	
Special   Provisions Governing Eurodollar Rate Loans
    	
20
    
	
Section 2.10
    	
Capital   Requirements
    	
25
    
	
Section 2.11
    	
Regulation   D Compensation
    	
25
    
	
Section 2.12
    	
Letters   of Credit
    	
25
    
	
Section 2.13
    	
Defaulting   Lenders
    	
31
    
	
Section 2.14
    	
Taxes
    	
33
    
	
 
    	
 
    	
 
    
	
ARTICLE 3 Conditions to Loans and Letters of Credit
    	
36
    
	
 
    	
 
    	
 
    
	
Section 3.01
    	
Conditions to Initial Loans and Letters of Credit
    	
36
    
	
Section 3.02
    	
Conditions   to All Loans and Letters of Credit
    	
37
    
	
 
    	
 
    	
 
    
	
ARTICLE 4   Representations and Warranties
    	
38
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
Organization, Powers and Good Standing
    	
38
    
	
Section 4.02
    	
Authorization   of Borrowing, Etc.
    	
39
    
	
Section 4.03
    	
Financial   Condition
    	
40
    
	
Section 4.04
    	
No   Material Adverse Change
    	
40
    
	
Section 4.05
    	
Litigation
    	
40
    
	
Section 4.06
    	
Payment   of Taxes
    	
40
    
	
Section 4.07
    	
Governmental   Regulation
    	
40
    
	
Section 4.08
    	
Securities   Activities
    	
40
    
	
Section 4.09
    	
ERISA   Compliance
    	
40
    
	
Section 4.10
    	
Certain   Fees
    	
41
    
	
Section 4.11
    	
Subsidiaries
    	
41
    
	
 
    	
 
    	
 
    
	
ARTICLE 5 Affirmative Covenants
    	
42
    
	
 
    	
 
    	
 
    
	
Section 5.01
    	
Financial Statements and Other Reports
    	
42
    

 

i

 

Table of Contents
 (Continued)

 

	
 
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    
	
Section 5.02
    	
Conduct   of Business and Corporate Existence
    	
44
    
	
Section 5.03
    	
Payment   of Taxes
    	
44
    
	
Section 5.04
    	
Maintenance   of Properties; Insurance
    	
44
    
	
Section 5.05
    	
Inspection
    	
44
    
	
Section 5.06
    	
Compliance   with Laws
    	
45
    
	
 
    	
 
    	
 
    
	
ARTICLE 6 Negative Covenants
    	
45
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Merger
    	
45
    
	
Section 6.02
    	
Liens
    	
45
    
	
Section 6.03
    	
Financial   Covenant
    	
46
    
	
Section 6.04
    	
Use   of Proceeds
    	
46
    
	
Section 6.05
    	
Subsidiary   Indebtedness
    	
46
    
	
 
    	
 
    	
 
    
	
ARTICLE 7 Events of Default
    	
47
    
	
 
    	
 
    	
 
    
	
Section 7.01
    	
Failure to Make Payments When Due
    	
47
    
	
Section 7.02
    	
Default   in Other Agreements
    	
47
    
	
Section 7.03
    	
Breach   of Certain Covenants
    	
47
    
	
Section 7.04
    	
Breach   of Warranty
    	
47
    
	
Section 7.05
    	
Other   Defaults under Agreement
    	
47
    
	
Section 7.06
    	
Involuntary   Bankruptcy; Appointment of Receiver, etc.
    	
48
    
	
Section 7.07
    	
Voluntary   Bankruptcy; Appointment of Receiver, etc.
    	
48
    
	
Section 7.08
    	
Judgments   and Attachments
    	
48
    
	
Section 7.09
    	
Dissolution
    	
48
    
	
Section 7.10
    	
ERISA   Title IV Liabilities
    	
49
    
	
Section 7.11
    	
Change   of Control
    	
49
    
	
Section 7.12
    	
Cash   Cover
    	
50
    
	
 
    	
 
    	
 
    
	
ARTICLE 8 Agents
    	
50
    
	
 
    	
 
    	
 
    
	
Section 8.01
    	
Appointment
    	
50
    
	
Section 8.02
    	
Powers;   General Immunity
    	
50
    
	
Section 8.03
    	
Representations   and Warranties; No Responsibility for Appraisal of Creditworthiness
    	
51
    
	
Section 8.04
    	
Right   to Indemnity
    	
52
    
	
Section 8.05
    	
Resignation   by or Removal of the Agents
    	
52
    
	
Section 8.06
    	
Successor   Agents
    	
52
    
	
Section 8.07
    	
Other   Agents
    	
53
    
	
 
    	
 
    	
 
    
	
ARTICLE 9 Miscellaneous
    	
53
    
	
 
    	
 
    	
 
    
	
Section 9.01
    	
Benefit of Agreement
    	
53
    
	
Section 9.02
    	
Expenses
    	
55
    

 

ii

 

Table of Contents
 (Continued)

 

	
 
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    
	
Section 9.03
    	
Indemnity
    	
55
    
	
Section 9.04
    	
Setoff
    	
56
    
	
Section 9.05
    	
Amendments   and Waivers
    	
56
    
	
Section 9.06
    	
Independence   of Covenants
    	
57
    
	
Section 9.07
    	
Notices
    	
57
    
	
Section 9.08
    	
Survival   of Warranties and Certain Agreements
    	
57
    
	
Section 9.09
    	
USA   PATRIOT Act Notice
    	
58
    
	
Section 9.10
    	
Failure   or Indulgence Not Waiver; Remedies Cumulative
    	
58
    
	
Section 9.11
    	
Severability
    	
58
    
	
Section 9.12
    	
Obligations   Several; Independent Nature of Lenders’ Rights
    	
58
    
	
Section 9.13
    	
Headings
    	
58
    
	
Section 9.14
    	
Applicable   Law, Consent to Jurisdiction
    	
58
    
	
Section 9.15
    	
Successors   and Assigns
    	
59
    
	
Section 9.16
    	
Counterparts;   Effectiveness; Integration
    	
59
    
	
Section 9.17
    	
No   Fiduciary Duty
    	
59
    

 

iii

 

EXHIBITS

 

	
Commitment   Schedule
    	
 
    	
 
    	
 
    	
 
    
	
Pricing   Schedule
    	
 
    	
 
    	
 
    	
 
    
	
Schedule   2.15
    	
 
    	
-
    	
 
    	
Existing   Letters of Credit
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Exhibit A
    	
 
    	
-
    	
 
    	
Form of   Note
    
	
Exhibit B
    	
 
    	
-
    	
 
    	
Form of   Opinion of Gibson, Dunn & Crutcher LLP
    
	
Exhibit C
    	
 
    	
-
    	
 
    	
Form of   Opinion of Jayne M. Donegan, Esq. Senior Associate General Counsel of   the Borrower
    
	
Exhibit D
    	
 
    	
-
    	
 
    	
Form of   Opinion of Davis Polk & Wardwell LLP
    
	
Exhibit E-1
    	
 
    	
-
    	
 
    	
Form of   Notice of Borrowing
    
	
Exhibit E-2
    	
 
    	
-
    	
 
    	
Form of   Notice of Conversion/Continuation
    
	
Exhibit F
    	
 
    	
-
    	
 
    	
Form of   Compliance Certificate
    
	
Exhibit G
    	
 
    	
-
    	
 
    	
Form of   Transfer Supplement
    
	
Exhibit H
    	
 
    	
-
    	
 
    	
Form of   Extension Agreement
    

 

iv

 

CREDIT AGREEMENT

 

CREDIT AGREEMENT, dated as of March 23, 2011, among TEXTRON INC., a Delaware corporation (together with its successors, the “Borrower”), the banks and other financial institutions signatory hereto (each a “Lender” and collectively the “Lenders”), JPMORGAN CHASE BANK, N.A., as Administrative Agent for the Lenders (together with its successors in such capacity, the “Administrative Agent”) and CITIBANK, N.A. and BANK OF AMERICA, N.A., as Syndication Agents for the Lenders (together with their successors in such capacity, the “Syndication Agents”) and DEUTSCHE BANK SECURITIES INC. and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as Documentation Agents for the Lenders (together with their successors in such capacity, the “Documentation Agents”).

 

The Borrower, the Lenders and the Agents agree as follows:

 

ARTICLE 1
  DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.01         Definitions.  As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

 

“Administrative Agent” has the meaning assigned to that term in the introduction to this Agreement.

 

“Administrative Questionnaire” means, with respect to each Lender, an administrative questionnaire in the form prepared by the Administrative Agent, completed by such Lender and returned to the Administrative Agent (with a copy to the Borrower).

 

“Affected Lender” means any Lender affected by any of the events described in Section 2.09(b) or 2.09(c) hereof.

 

“Affiliate” means, with respect to any Person, any Person or group of Persons acting in concert in respect of the Person in question that, directly or indirectly, controls or is controlled by or is under common control with such Person.  For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person or group of Persons acting in concert, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

 

“Agent” means any of the Administrative Agent, the Syndication Agents and the Documentation Agents.

 

“Agreement” means this Credit Agreement, as the same may at any time be amended, amended and restated, supplemented or otherwise modified in accordance with the terms hereof.

 

 

“Applicable Lending Office” means, for any Lender with respect to its Loans of any particular Type, the office, branch or affiliate of such Lender specified as the booking office therefor in such Lender’s Administrative Questionnaire, or such other office, branch or affiliate of such Lender as such Lender may specify from time to time for such purpose by notice to the Borrower and the Administrative Agent.

 

“Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment; provided that in the case of Section 2.13 when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the percentage of the total Commitments (disregarding any Defaulting Lender’s Commitment) represented by such Lender’s Commitment.  If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments and to any Lender’s status as a Defaulting Lender at the time of determination.

 

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as from time to time amended and any successor statutes.

 

“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, 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 Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any obligations of such Person hereunder.

 

“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 Federal Funds Rate in effect on such day plus 1/2 of 1% and (c) the sum of 1% plus the rate for deposits in Dollars with a one-month maturity appearing on the Screen at approximately 11:00 A.M., London time, on such day (or if such day is not a Business Day, on the immediately preceding Business Day).

 

“Base Rate Loans” are Loans whose interest rate is based on Base Rate.

 

“Base Rate Margin” has the meaning specified in the Pricing Schedule.

 

“Board” means the Board of Governors of the Federal Reserve System.

 

“Borrower” has the meaning assigned to that term in the introduction to this Agreement.

 

“Borrowing” means a borrowing of Loans hereunder.

 

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“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York City are required or authorized by law to close and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

 

“Capital Lease”, as applied to any Person, means any lease of any property (whether real, personal or mixed) by that Person as lessee which, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person.

 

“Change of Control” means that (a) any Person or group of Persons within the meaning of Section 13(d)(3) of the Exchange Act becomes the beneficial owner, directly or indirectly, of 40% or more of the outstanding common stock of the Borrower or (b) individuals who constitute the Continuing Directors cease for any reason to constitute at least a majority of the board of directors of the Borrower.

 

“Code” means the Internal Revenue Code of 1986, as from time to time amended.  Any reference to the Code shall include a reference to corresponding provisions of any subsequent revenue law.

 

“Commitment” means (i) with respect to each Lender listed on the Commitment Schedule, the amount set forth opposite such Lender’s name on the Commitment Schedule, and (ii) with respect to any substitute Lender or Assignee which becomes a Lender pursuant to Section 9.01 or 9.15, the amount of the transferor Lender’s Commitment assigned to it pursuant to Section 9.01 or 9.15, as such amount may be changed from time to time pursuant to Section 2.07, 9.01 or 9.15; provided that, if the context so requires, the term “Commitment” means the obligation of a Lender to extend credit up to such amount to the Borrower hereunder.

 

“Commitment Schedule” means the Commitment Schedule attached hereto.

 

“Consolidated Capitalization” means, as at any date of determination, the sum (without duplication) of (a) Consolidated Indebtedness of Textron Manufacturing plus (b) Consolidated Net Worth plus (c) preferred stock of the Borrower plus (d) other securities of the Borrower convertible (whether mandatorily or at the option of the holder) into capital stock of the Borrower.

 

“Compliance Certificate” means a certificate substantially in the form annexed hereto as Exhibit F delivered to the Lenders by the Borrower pursuant to Section 5.01(b)(i)(B).

 

“Consolidated Indebtedness of Textron Manufacturing” means, as at any date of determination, the sum of short-term and long-term indebtedness for borrowed money that is shown on a balance sheet of Textron Manufacturing (or would be if a balance sheet were prepared on such date).

 

“Consolidated Net Worth” means, as at any date of determination, the stockholders’ equity of the Borrower and its Subsidiaries on a consolidated basis (but excluding the effects of the Borrower’s accumulated other comprehensive income/loss) calculated in conformity with GAAP.

 

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“Continuing Director” means any member of the board of directors of the Borrower who is (i) a director of the Borrower on the date of this Agreement, (ii) nominated by the board of directors of the Borrower or (iii) appointed by directors referred to in clauses (i) and (ii).

 

“Contractual Obligation”, as applied to any Person, means any provision of any security issued by that Person or of any material indenture, mortgage, deed of trust or other similar instrument of that Person under which Indebtedness is outstanding or secured or by which that Person or any of its properties is bound or to which that Person or any of its properties is subject.

 

“Defaulting Lender” means, subject to Section 2.13(d), any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund all or any portion of its Loans, (ii) fund all or any portion of its participations in Letters of Credit or (iii) pay over to any Agent or Issuing Lender any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s reasonable determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied or, in the case of clause (iii) such payment is the subject of a good faith dispute, (b) has notified the Administrative Agent or the Borrower in writing, or has made a public statement to the effect, that it does not intend or expect to comply with all or any portion of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s reasonable determination that a condition precedent (specifically identified and including the particular default, if any) to funding under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by the Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans and participations in then outstanding Letters of Credit under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s receipt of such certification in form and substance satisfactory to it, (d) has become the subject of a Bankruptcy Event or has a Parent that has become the subject of a Bankruptcy Event, or (e) has defaulted in fulfilling its funding obligations under one or more other agreements in which such Lender commits to extend credit (as reasonably determined by the Administrative Agent in consultation with the Borrower).

 

“Documentation Agent” has the meaning assigned to that term in the introduction to this Agreement.

 

“Dollar”, “Dollars” and the sign “$” mean the lawful currency of the United States.

 

“Domestic Taxes” has the meaning set forth in Section 2.14(a).

 

“Effective Date” has the meaning assigned to that term in Section 9.16 hereof.

 

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

 

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“ERISA Affiliate” means, with respect to any Person, any trade or business (whether or not incorporated) which, together with such Person, is under common control as described in Section 414(c) of the Code or is a member of a controlled group, as defined in Section 414(b) of the Code, which includes such Person.

 

“Eurodollar Margin” has the meaning specified in the Pricing Schedule.

 

“Eurodollar Rate” means, for any Eurodollar Rate Loan for any Interest Period, the rate appearing on the Screen at approximately 11:00 A.M., London time, two Business Days before the first day of such Interest Period as the rate for deposits in Dollars with a maturity comparable to such Interest Period.  If no rate appears on the Screen for the necessary period, then the “Eurodollar Rate” with respect to such Eurodollar Rate Loan for such Interest Period shall be the rate determined by the Administrative Agent to be the average of the rates per annum at which deposits in Dollars, in the approximate amount of such Eurodollar Rate Loan and for a period equal to such Interest Period, are offered to major banks in the London interbank market by (i) the Administrative Agent, (ii) Citibank, N.A., (iii) Bank of America, N.A., (iv) Deutsche Bank AG New York Branch and (v) The Bank of Tokyo-Mitsubishi UFJ, Ltd. at approximately 11:00 A.M., London time, on the date that is two Business Days before the first day of such Interest Period.

 

“Eurodollar Rate Loans” means Loans or portions thereof during the period in which such Loans bear interest at rates determined in accordance with Section 2.05(a)(i) hereof.

 

“Eurodollar Reserve Percentage” means, for any day, that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System in New York City with deposits exceeding five billion dollars in respect of “Eurocurrency liabilities” (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Eurodollar Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any Lender to United States residents).

 

“Event of Default” has the meaning assigned to that term in Article 7 hereof.

 

“Exchange Act” means the Securities Exchange Act of 1934, as from time to time amended, and any successor statutes.

 

“Existing Letters of Credit” means the letters of credit issued before the Effective Date and listed in Schedule 2.15 hereto.

 

“Facility Fee Rate” has the meaning specified in the Pricing Schedule.

 

“FATCA” means Sections 1471 through 1474 of the Code and any current or future regulations or official interpretations thereof; provided, FATCA shall also include any amendments to Sections 1471 through 1474 of the Code if, as amended, FATCA provides a commercially reasonable mechanism to avoid the tax imposed thereunder by satisfying the information reporting and other requirements of FATCA.

 

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“Federal Funds Rate” means on any one day the weighted average of the rate on overnight Federal funds transactions with members of the Federal Reserve System only arranged by Federal funds brokers as published on the next succeeding Business Day by the Federal Reserve Bank of New York, provided that if such day is not a Business Day, the Federal Funds Rate shall be measured as of the immediately preceding Business Day.

 

“Finance Company” means any Person which is (or would be but for the proviso to the definition of such term) a Subsidiary of the Borrower and which is primarily engaged in the business of a finance company.

 

“Finance Company Leverage Ratio” means the ratio of (i) Consolidated Debt less Qualifying Subordinated Debt to (ii) the sum of Consolidated Net Worth and Qualifying Subordinated Obligations.  For purposes of this definition any preferred stock of a Consolidated Subsidiary held by a Person other than the Borrower or a Wholly-Owned Subsidiary of the Borrower shall be included, at the higher of its voluntary or involuntary liquidation value, in “Consolidated Debt”.  Each of the capitalized terms used in this definition shall have the meaning ascribed thereto in the Five-Year Credit Agreement dated as of July 28, 2003, as amended and in effect on the date hereof, among Textron Financial Corporation, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent thereunder.

 

“Funding Date” means the date of the funding of a Loan made pursuant to a Notice of Borrowing but does not mean the date of any conversion or continuation of the interest rate applicable to any Loan pursuant to a Notice of Conversion/Continuation.

 

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board as in effect from time to time.

 

“Governmental Authority” means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“Indebtedness”, as applied to any Person, means, without duplication, (i) all indebtedness for borrowed money of that Person, (ii) that portion of obligations with respect to Capital Leases which is properly classified as a liability on a balance sheet of that Person in conformity with GAAP, (iii) notes payable of that Person and drafts accepted by that Person representing extensions of credit whether or not representing obligations for borrowed money, (iv) any obligation of that Person owed for all or any part of the deferred purchase price of property or services which purchase price is (a) due more than twelve months from the date of incurrence of the obligation in respect thereof, or (b) evidenced by a note or similar written instrument, (v) all non-contingent obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, (vi) all indebtedness secured by any Lien on any property or asset owned by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person and (vii) any guarantee of that Person, direct or indirect,

 

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of any indebtedness, note payable, draft accepted, or obligation described in clauses (i)-(vi) above of any other Person.

 

“Initial Loans” means the initial Loans made under this Agreement.

 

“Interest Payment Date” means, (x) with respect to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Eurodollar Rate Loan; provided that in the case of each Interest Period of six months, “Interest Payment Date” shall also include each Interest Period Anniversary Date (or if such day is not a Business Day, then the next succeeding Business Day) for such Interest Period and (y) in the case of any Base Rate Loan, the last Business Day of each calendar quarter.

 

“Interest Period” means any interest period applicable to a Eurodollar Rate Loan as determined pursuant to Section 2.05(b) hereof.

 

“Interest Period Anniversary Date” means, for each Interest Period applicable to a Eurodollar Rate Loan which is six months, the three-month anniversary of the commencement of that Interest Period.

 

“Interest Rate Determination Date” means each date for calculating the Eurodollar Rate for purposes of determining the interest rate in respect of an Interest Period.  The Interest Rate Determination Date shall be the second Business Day prior to the first day of the related Interest Period.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

 

“Issuing Lender” means JPMorgan Chase, Citibank, N.A., Bank of America, N.A., Deutsche Bank AG New York Branch or any other Lender designated by the Borrower that may agree to issue letters of credit hereunder pursuant to an instrument in form reasonably satisfactory to the Administrative Agent, each in its capacity as an issuer of a Letter of Credit hereunder.  Any other Lender which is the issuer of an Existing Letter of Credit is an Issuing Lender with respect thereto.

 

“JPMorgan Chase” means JPMorgan Chase Bank, N.A., and its successors.

 

“Lender” and “Lenders” have the respective meanings assigned to those terms in the introduction to this Agreement and its or their successors and permitted assigns.  Unless the context otherwise requires, any reference herein to “Lender” (including each such reference in any indemnification, exculpation or expense reimbursement provision of this Agreement) shall include each Issuing Lender.

 

“Letter of Credit” means a letter of credit to be issued hereunder by an Issuing Lender.

 

“Letter of Credit Fee Rate” has the meaning specified in the Pricing Schedule.

 

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“Letter of Credit Liabilities” means, for any Lender and at any time, such Lender’s Applicable Percentage of the sum of (x) the aggregate amount then owing by the Borrower in respect of amounts paid by the Issuing Lender upon a drawing under a Letter of Credit issued hereunder and (y) the aggregate amount then available for drawing under all outstanding Letters of Credit.

 

“Lien” means any lien, mortgage, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest).

 

“Loan” means a loan made pursuant to Section 2.01 of this Agreement.

 

“Margin Stock” has the meaning assigned to that term in Regulation U of the Board as in effect from time to time.

 

“Material Adverse Effect” means a material adverse effect on (i) the business, operations, properties, assets or financial condition of the Borrower and its Subsidiaries, taken as a whole, (ii) the ability of the Borrower to perform any of its material payment obligations under this Agreement and the Notes or (iii) the validity or enforceability of, or the rights of or remedies available to the Lenders under, this Agreement and the Notes.

 

“Multiemployer Plan” has the meaning assigned to that term in Section 4001(a)(3) of ERISA.

 

“Note” shall have the meaning set forth in Section 2.03(b) hereof.

 

“Notice of Borrowing” means a notice described in Section 2.01(b) hereof substantially in the form of Exhibit E-1 hereto.

 

“Notice of Conversion/Continuation” means any notice delivered pursuant to Section 2.02(a) hereof, which shall be substantially in the form of Exhibit E-2 hereto.

 

“Notice of Issuance” means any notice delivered pursuant to Section 2.12(c) hereof.

 

“Officer’s Certificate” means, as applied to any corporation, a certificate executed on behalf of such corporation by its Chairman of the Board (if an officer), its President, any Vice President of such corporation, its Chief Financial Officer, its Treasurer or any Assistant Treasurer of such corporation.

 

“Other Taxes” has the meaning set forth in Section 2.14(b).

 

“Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

 

“Participant Register” has the meaning set forth in Section 9.01(f).

 

“PBGC” means the Pension Benefit Guaranty Corporation created by Section 4002(a) of ERISA or any successor thereto.

 

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“Pension Plan” means any plan (other than a Multiemployer Plan) described in Section 4021(a) of ERISA and not excluded pursuant to Section 4021(b) thereof, which may be, is or has been established or maintained, or to which contributions may be, are or have been made by the Borrower or any of its ERISA Affiliates or as to which the Borrower would be considered as a “contributing sponsor” for purposes of Title IV of ERISA at any relevant time.

 

“Permitted Encumbrances” means:

 

(i)            Liens for taxes, assessments or governmental charges or claims the payment of which is not at the time required by Section 5.03;

 

(ii)           Statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by generally accepted accounting principles then in effect, shall have been made therefor;

 

(iii)          Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);

 

(iv)          Any attachment or judgment Lien individually or in the aggregate not in excess of $100,000,000 unless the judgment it secures shall, within 30 days after the entry thereof, not have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 30 days after the expiration of any such stay;

 

(v)           Leases or subleases granted to others not interfering in any material respect with the business of the Borrower or any of its Subsidiaries;

 

(vi)          Easements, rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances not interfering in any material respect with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;

 

(vii)         Any interest or title of a lessor under any lease;

 

(viii)        Liens arising from UCC financing statements regarding leases;

 

(ix)           Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods incurred in the ordinary course of business; and

 

(x)            Liens (a) of a collection bank on the items in the course of collection, (b) attaching to investment accounts, trading accounts or brokerage accounts incurred in the ordinary course of business, (c) in favor of a banking or other financial institution arising as a matter of law encumbering deposits or other funds maintained with a financial

 

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institution (including the right of set off) and which are customary in the banking industry, (d) attaching to other prepayments, deposits or earnest money in the ordinary course of business and (e) attaching to cash collateral posted pursuant to a hedging, swap or similar contract entered into in the ordinary course of business.

 

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and any Governmental Authority.

 

“Pooled Basket Amount” means 3% of the consolidated total assets of Textron Manufacturing and its Subsidiaries, all as determined in accordance with GAAP on a consolidated basis for Textron Manufacturing and its Subsidiaries.

 

“Potential Event of Default” means a condition or event which, after notice or lapse of time or both, would constitute an Event of Default if that condition or event were not cured or removed within any applicable grace or cure period.

 

“Pricing Schedule” means the Pricing Schedule attached hereto.

 

“Prime Rate” shall mean the rate which JPMorgan Chase announces from time to time as its prime rate, as in effect from time to time.  The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer.  JPMorgan Chase may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

 

“Pro Rata Share or pro rata Share” means, when used with reference to any Lender and any described aggregate or total amount, the percentage designated as such Lender’s Pro Rata Share set forth under the name of such Lender on the applicable signature page of this Agreement, as such pro rata Share may be adjusted pursuant to the terms of this Agreement.

 

“Purchasing Lender” has the meaning specified in Section 9.01(c).

 

“Regulation D” means Regulation D of the Board as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

 

“Reimbursement Obligation” has the meaning specified in Section 2.12(d).

 

“Reportable Event” means a “reportable event” described in Section 4043(b) of ERISA or in the regulations thereunder notice of which to PBGC is required within 30 days after the occurrence thereof, or receipt of a notice of withdrawal liability with respect to a Multiemployer Plan pursuant to Section 4204 of ERISA.

 

“Required Lenders” means, as at any time any determination thereof is to be made, the Lenders holding more than 50% of the Total Commitment or, if no Commitments are in effect, more than 50% of the Total Outstanding Amount (exclusive in each case of the Commitment, Loans and Letter of Credit Liabilities of any Defaulting Lender).

 

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“Restricted Subsidiary” means each Subsidiary (or a group of Subsidiaries that would constitute a Restricted Subsidiary if consolidated and which are engaged in the same or related lines of business) of the Borrower now existing or hereafter acquired or formed by the Borrower which (x) for the most recent fiscal year of the Borrower, accounted for more than 5% of the consolidated revenues of the Borrower and its Subsidiaries, or (y) as at the end of such fiscal year, was the owner of more than 5% of the consolidated assets of the Borrower and its Subsidiaries.  For purposes of this definition, the proviso to the definition of Subsidiary shall not be applicable.

 

The “Screen” means Reuters Screen LIBOR01 Page. The Administrative Agent may nominate an alternative source of screen rates if this page is replaced by others which display rates for inter-bank deposits offered by leading banks in London.

 

“Securities Act” means the Securities Act of 1933, as from time to time amended, and any successor statutes.

 

“Subsidiary” means, with respect to any Person, any corporation, association or other business entity of which more than 50% of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof; provided, however, that (i) no Finance Company or any Subsidiary of any Finance Company and (ii) no Person having consolidated assets less than $1,000,000 shall be treated as a Subsidiary of the Borrower.

 

“Syndication Agents” has the meaning assigned to that term in the introduction to this Agreement.

 

“Taxes” has the meaning set forth in Section 2.14(a).

 

“Termination Date” means March 23, 2015, or such later date to which the Termination Date then in effect may be extended pursuant to Section 2.01(d), or if any such day is not a Business Day, the next preceding Business Day.

 

“Termination Event” means (i) a Reportable Event with respect to any Pension Plan, or (ii) the withdrawal of the Borrower or any of its ERISA Affiliates from a Pension Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, or (iii) the filing of a notice of intent to terminate a Pension Plan (including any such notice with respect to a Pension Plan amendment referred to in Section 4041(e) of ERISA),  or (iv) the institution of proceedings to terminate a Pension Plan by the PBGC, or (v) any other event or condition which, to the best knowledge of the Borrower, would constitute grounds under Section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan.

 

“Textron Manufacturing” means the Borrower and any Subsidiary of the Borrower that is not a Finance Company; provided that, for purposes of this definition, the exclusion set forth in subsection (ii) in the definition of Subsidiary shall be disregarded.

 

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“Total Commitment” means, as at any date of determination, the aggregate Commitments of all Lenders then in effect (as such Commitments may be reduced from time to time pursuant to Section 2.07(a) hereof).  The original amount of the Total Commitment is $1,000,000,000.

 

“Total Outstanding Amount” means, at any time, the sum of (i) the aggregate outstanding principal amount of the Loans plus, without duplication, (ii) the aggregate amount of the Letter of Credit Liabilities of all Lenders at such time.

 

“2005 Credit Agreement” has the meaning assigned to that term in Section 3.01(e).

 

“Type” means the designation of a Loan as either a Base Rate Loan or a Eurodollar Rate Loan.

 

“Withholding Agent” has the meaning set forth in Section 2.14(a).

 

Section 1.02         Accounting Terms and Determinations.  Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP, applied on a basis consistent (except for changes concurred in by the Borrower’s independent public accountants) with the most recent audited consolidated financial statements of the Borrower and its consolidated subsidiaries delivered to the Lenders; provided that, if the Borrower notifies the Administrative Agent that the Borrower wishes to amend any covenant in Article 6 to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Article 6 for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders; provided  further that the implementation of Statement of Financial Accounting Standards No. 142 shall not be deemed a change in GAAP for purposes of the preceding proviso.  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 Statement of Financial Accounting Standards No. 159 (or any other 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
  AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

 

Section 2.01         Commitments.

 

(a)           Loans.  Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Borrower herein set forth, each Lender hereby severally agrees to lend to the Borrower from time to time during the period from and including the Effective Date to but not including the Termination Date its pro rata Share of the Total Commitment.  Each Lender’s Commitment and the Total Commitment shall expire in full on the Termination Date.

 

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Amounts borrowed under this Section 2.01(a) may, subject to the limitations set forth in this Agreement, be repaid and, up to but excluding the Termination Date, be reborrowed.  The Loans and all other amounts owed hereunder with respect to the Loans shall be paid in full no later than the Termination Date.

 

Borrowings on any Funding Date with respect to a  Loan under this Section 2.01(a) shall be in Dollars, in an aggregate minimum amount of $10,000,000 and integral multiples of $1,000,000 in excess of that amount or, if less, the unutilized amount of the Total Commitment.  Notwithstanding the foregoing, (i) no  Loan may be borrowed if the Total Outstanding Amount, after giving effect to the Loan so requested and all other Loans then requested which have not yet been funded, shall exceed the Total Commitment then in effect.

 

(b)           Notice of Borrowing.  Subject to Section 2.01(a), whenever the Borrower desires to borrow under this Section 2.01, it shall deliver to the Administrative Agent a Notice of  Borrowing (which may be telephonic, confirmed promptly in writing) no later than 10:30 A.M. (New York time) (x) in the case of a Base Rate Loan, on the proposed Funding Date and (y) in the case of a Eurodollar Rate Loan, three Business Days in advance of the proposed Funding Date.  The Notice of Borrowing shall specify (i) the proposed Funding Date (which shall be a Business Day), (ii) the amount of the proposed Loans, (iii) whether such Loans are to consist of Base Rate Loans or Eurodollar Rate Loans or a combination thereof and the amounts thereof, and (iv) in the case of Eurodollar Rate Loans, the Interest Period therefor.

 

Neither the Administrative Agent nor any Lender shall incur any liability to the Borrower in acting upon any telephonic notice referred to above which the Administrative Agent believes in good faith to have been given by a duly authorized officer or other person authorized to borrow on behalf of the Borrower or for otherwise acting in good faith under this Section 2.01(b) and, upon funding of Loans by the Lenders in accordance with this Agreement pursuant to any telephonic notice, the Borrower shall have borrowed such Loans hereunder.

 

Except as provided in Sections 2.01(c) and 2.09(d), a Notice of  Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after the related Interest Rate Determination Date, and the Borrower shall be bound to make a borrowing in accordance therewith.

 

(c)           Disbursement of Funds.  Promptly after receipt of a Notice of  Borrowing pursuant to Section 2.01(b) (or telephonic notice in lieu thereof) with respect to a  Loan, the Administrative Agent shall notify each Lender of the proposed borrowing.  Each Lender shall make its pro rata Share of the amount of such Loans available to the Administrative Agent in same day funds not later than 12:00 Noon (New York time) on the Funding Date.  Such Loans of a Lender shall be equal to such Lender’s pro rata Share of the aggregate amount of all such Loans requested by the Borrower pursuant to the applicable Notice of  Borrowing.  Upon satisfaction or waiver of the conditions precedent specified in Section 3.01 (in the case of the Initial Loans) and Section 3.02 (in the case of all Loans) the Administrative Agent shall make the proceeds of such Loans available to the Borrower by causing an amount of funds equal to the proceeds of all such Loans received by the Administrative Agent to be credited to an account in New York City designated by the Borrower in same day funds.

 

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Unless the Administrative Agent shall have been notified by any Lender (which notice may be telephonic, confirmed promptly in writing) prior to any Funding Date (or, in the case of Base Rate Loans, not later than 12:00 Noon (New York time) on the Funding Date) in respect of any  Loan that such Lender does not intend to make available to the Administrative Agent such pro rata Share of such Loan on such Funding Date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such Funding Date and the Administrative Agent in its sole discretion may, but shall not be obligated to, make available to the Borrower a corresponding amount on such Funding Date.  If such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on prompt demand from such Lender together with interest thereon, for each day from such Funding Date until the date such amount is paid to the Administrative Agent at the customary rate set by the Administrative Agent for the correction of errors among Lenders for three Business Days and thereafter at the Base Rate.  If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent.  Nothing in this Section 2.01(c) shall be deemed to relieve any Lender from its obligation to fulfill its Commitment hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any default by such Lender hereunder.

 

(d)           Extension of Commitments.

 

(i)            The Commitments may be extended, if at the time no Potential Event of Default or Event of Default has occurred and is continuing, in the manner and amount set forth in this Section 2.01(d), for a period of one year measured from the Termination Date then in effect.  If the Borrower wishes to request an extension of each Lender’s Commitment, it shall give notice to that effect to the Administrative Agent not less than 45 days nor more than 90 days prior to each anniversary of the date hereof that occurs on or prior to the Termination Date then in effect, whereupon the Administrative Agent shall promptly notify each of the Lenders of such request.  Each Lender will use its best efforts to respond to such request, whether affirmatively or negatively, as it may elect in its sole discretion, within 30 days of such request to the Administrative Agent, but in any event no earlier than 30 days prior to the Termination Date then in effect.  If any Lender shall not have responded affirmatively within such 30-day period, such Lender shall be deemed to have rejected the Borrower’s proposal to extend its Commitment, and only the Commitments of those Lenders which have responded affirmatively shall be extended, subject to receipt by the Administrative Agent of counterparts of an Extension Agreement in substantially the form of Exhibit I hereto (the “Extension Agreement”) duly completed and signed by the Borrower, the Administrative Agent and all of the Lenders which have responded affirmatively.  No extension of the Commitments pursuant to this Section 2.01(d) shall be legally binding on any party hereto unless and until such Extension Agreement is so executed and delivered by Lenders having at least 66 2/3% of the aggregate amount of the Commitments; provided that the Termination Date may only be so extended for two one-year periods.

 

(ii)           If any Lender rejects, or is deemed to have rejected, the Borrower’s proposal to extend its Commitment, (A) this Agreement shall terminate on the

 

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Termination Date then in effect with respect to such Lender, (B) the Borrower shall pay to such Lender on such Termination Date any amounts due and payable to such Lender on such date and (C) the Borrower may, if it so elects, designate a Person not theretofore a Lender and acceptable to the Administrative Agent to become a Lender, or agree with an existing Lender that such Lender’s Commitment shall be increased, provided that the aggregate amount of the Commitments following any designation or agreement may not exceed the aggregate amount of the Commitments on the date hereof.  Upon execution and delivery by the Borrower and such replacement Lender or other Person of an instrument of assumption in form and amount satisfactory to the Administrative Agent and execution and delivery of the Extension Agreement pursuant to Section 2.01(d)(i), such existing Lender shall have a Commitment as therein set forth or such other Person shall become a Lender with a Commitment as therein set forth and all the rights and obligations of a Lender with such a Commitment hereunder.  On the date of termination of any Lender’s Commitment as contemplated by this paragraph, the respective participations of the other Lenders in all outstanding Letters of Credit shall be redetermined on the basis of their respective Commitments after giving effect to such termination, and the participation therein of the Lender whose Commitment is terminated shall terminate; provided that the Borrower shall, if and to the extent necessary to permit such redetermination of participations in Letters of Credit within the limits of the Commitments which are not terminated, prepay on such date a portion of the outstanding Loans, and such redetermination and termination of participations in outstanding Letters of Credit shall be conditioned upon its having done so.

 

(iii)          The Administrative Agent shall promptly notify the Lenders of the effectiveness of each extension of the Commitments pursuant to this Section 2.01(d).

 

Section 2.02         Notices of Conversion/Continuation.  (a)  Subject to the provisions of Section 2.09 hereof, the Borrower shall have the option (i) to convert at any time all or any part of the outstanding Base Rate Loans in an aggregate minimum amount of $10,000,000 and integral multiples of $1,000,000 in excess of that amount, to Eurodollar Rate Loans and (ii) upon the expiration of any Interest Period applicable to outstanding Eurodollar Rate Loans, to continue all or any portion of such Eurodollar Rate Loans in an aggregate minimum amount of $10,000,000 and integral multiples of $1,000,000 in excess of that amount, as Eurodollar Rate Loans.  The succeeding Interest Period(s) of such converted or continued Eurodollar Rate Loan shall commence on the date of conversion in the case of clause (i) above and on the last day of the Interest Period of the Eurodollar Rate Loans to be continued in the case of clause (ii) above.

 

The Borrower shall deliver a Notice of Conversion/Continuation to the Administrative Agent no later than 11:00 A.M. (New York City time) at least three Business Days in advance of the proposed conversion/continuation date.  A Notice of Conversion/Continuation shall specify (i) the proposed conversion/continuation date (which shall be a Business Day), (ii) the amount of the  Loan to be converted/continued, (iii) the nature of the proposed conversion/continuation and (iv) the requested Interest Period.

 

Except as provided in Section 2.09(d) hereof, a Notice of Conversion/Continuation for conversion to, or continuation of, a Eurodollar Rate Loan shall be irrevocable on or after the

 

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related Interest Rate Determination Date, and the Borrower shall be bound to convert or continue in accordance therewith.

 

(b)           Unless the Borrower shall have given the Administrative Agent (x) a timely Notice of Conversion/Continuation in accordance with the provisions of Section 2.02(a) hereof with respect to Eurodollar Rate Loans outstanding or (y) written notice of its intent to prepay Eurodollar Rate Loans, furnished not later than 11:00 A.M. (New York City time) on the third Business Day prior to the last day of the Interest Period with respect to such Eurodollar Rate Loans, the Borrower shall be deemed to have requested that such Eurodollar Rate Loans be continued for an additional Interest Period of one month.

 

Section 2.03         Registry.  (a) The Administrative Agent shall maintain a register (the “Register”) on which it will record the Commitment of each Lender, each Loan made by such Lender, each repayment of any Loan made by such Lender, the stated amount of each Letter of Credit and the principal amount of each Lender’s outstanding Letter of Credit Liabilities.  Any such recordation by the Administrative Agent on the Register shall constitute prima facie evidence thereof, absent manifest error.  Each Lender shall record on its internal records (including computerized systems) the foregoing information as to its own Commitment, Loans and Letter of Credit Liabilities.  Failure to make any such recordation, or any error in such recordation, shall not affect the Borrower’s obligations hereunder in respect of the Loans and the Letters of Credit.

 

(b)           The Borrower hereby agrees that, upon the request of the Administrative Agent if so instructed by any Lender at any time, such Lender’s Loans shall be evidenced by a promissory note substantially in the form of Exhibit A hereto (a “Note”).  The Note issued to each Lender pursuant to this Section 2.03(b) shall (i) be payable to such Lender and its registered assigns, (ii) be payable in the principal amount of the outstanding Loans evidenced thereby, (iii) provide that all Loans then outstanding shall be repaid on the date as provided herein, (iv) bear interest as provided in the appropriate clause of Section 2.05 hereof, (v) be entitled to the benefits of this Agreement, and (vi) have attached thereto a schedule (a “Loans and Principal Payments Schedule”) substantially in the form of the Schedule to Exhibit A hereto.  At the time of the making of each Loan or principal payment in respect thereof, each Lender may, and is hereby authorized to, make a notation on the Loans and Principal Payments Schedule of the date and the amount of such Loan or payment, as the case may be.  Notwithstanding the foregoing, the failure to make a notation with respect to the making of any Loan, shall not limit or otherwise affect the obligation of the Borrower hereunder or under the applicable Note with respect to such Loan and payments of principal by the Borrower shall not be affected by the failure to make a notation thereof on the appropriate Loans and Principal Payments Schedule.

 

Section 2.04         Pro Rata Borrowings.  The Loans comprising each Borrowing under this Agreement shall be made by the Lenders simultaneously and each Lender’s  Loan shall be equal to such Lender’s pro rata Share of such Borrowing.  It is understood that no Lender shall be responsible for any default by any other Lender in its obligation to make a Loan hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder subject to the terms hereof, regardless of the failure of any other Lender to fulfill its commitment to make Loans hereunder.

 

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Section 2.05         Interest.  (a) Rate of Interest on Loans.

 

The Borrower agrees to pay interest in respect of the unpaid principal amount of each  Loan made to it from and including the date made to but not including the date repaid.

 

(i)            Each Eurodollar Rate Loan shall bear interest on the unpaid principal amount thereof for the applicable Interest Period at an interest rate per annum equal to the sum of the Eurodollar Margin plus the applicable Eurodollar Rate.

 

(ii)           Each Base Rate Loan shall bear interest on the unpaid principal amount thereof at an interest rate per annum equal to the sum of the Base Rate Margin plus the applicable Base Rate.

 

The Administrative Agent shall determine each interest rate applicable to the Loans hereunder in accordance with this Section 2.05(a) and Section 2.09(a).  The Administrative Agent shall give prompt notice to the Borrower and Lenders of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error.

 

(b)           Interest Periods.  In connection with each Eurodollar Rate Loan, the Borrower shall elect an interest period (each an “Interest Period”) to be applicable to such Loan, which shall be either a one, two, three or six month period; provided that:

 

(i)            the Interest Period for each Eurodollar Rate Loan shall commence on the date of such Loan;

 

(ii)           if an Interest Period would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided that if any Interest Period would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day;

 

(iii)          any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of such ending calendar month;

 

(iv)          no Interest Period shall extend beyond the Termination Date; and

 

(v)           there shall be no more than 30 Interest Periods outstanding at any time.

 

(c)           Interest Payments.  Interest shall be payable on each Loan in arrears on each Interest Payment Date applicable to that Loan, upon any prepayment of that Loan (to the extent accrued on the amount being prepaid) and when due and payable (whether at maturity, by acceleration or otherwise).

 

(d)           Computation of Interest.  Interest on Eurodollar Rate Loans shall be computed on the basis of a 360-day year and the actual number of days elapsed in the period during which it accrues and interest on Base Rate Loans shall be computed on the basis of a 365-day year and

 

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the actual number of days elapsed in the period during which it accrues.  In computing interest on any Loan, the date of the making of the Loan or, in the case of a Eurodollar Rate Loan, the first day of an Interest Period, as the case may be, shall be included and the date of payment or the expiration of an Interest Period, as the case may be, shall be excluded; provided that if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.

 

(e)           Post-Maturity Interest.  Any principal payments on the Loans not paid when due and, to the extent permitted by applicable law, any interest, fee or other amount not paid when due, in each case whether at stated maturity, by notice of prepayment, by acceleration or otherwise, shall thereafter bear interest payable upon demand at a rate per annum equal to the sum of 2% plus the higher of (i) the rate of interest applicable to such Loans or (ii) the rate of interest otherwise payable under this Agreement for Base Rate Loans.

 

Section 2.06         Commissions and Fee.  (a) Facility Fees.

 

(i)            The Borrower shall pay to the Administrative Agent for the account of the Lenders a facility fee in Dollars at the Facility Fee Rate accrued from and including the Effective Date to but not including the Termination Date on the daily average aggregate amount of the Commitments (whether used or unused).

 

(ii)           Such facility fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed.  Such facility fees shall be paid quarterly in arrears on each March 31, June 30, September 30 and December 31 and upon the date of termination of the Commitments in their entirety (and, if later, the date the Loans shall be repaid in their entirety).  From the effective date of any termination or reduction of Commitments, such facility fees shall cease to accrue or be correspondingly reduced.  If the Commitments are terminated in their entirety or reduced, facility fees accrued on the total Commitments, or accrued on the aggregate amount of the reduction of the Commitments (in the case of such a reduction), shall be payable on the effective date of such termination or reduction.

 

(b)           Letter of Credit Fees.  The Borrower shall pay (i) to the Administrative Agent for the account of the Lenders ratably a letter of credit fee accruing daily on the aggregate undrawn amount of all outstanding Letters of Credit at a rate per annum equal to the Letter of Credit Fee Rate for such day and (ii) to each Issuing Lender for its own account, a letter of credit fronting fee accruing daily on the aggregate amount then available for drawing under all Letters of Credit issued by such Issuing Lender at such rate as may be mutually agreed between the Borrower and such Issuing Lender from time to time.  Such letter of credit fees shall be paid quarterly in arrears on each March 31, June 30, September 30 and December 31 and upon the date of termination of the Commitments in their entirety (and, if later, the date the Letter of Credit Liabilities shall be reduced to zero); provided that the Borrower and an Issuing Lender may agree to alternate dates for payment of the letter of credit fronting fees for the account of such Issuing Lender.

 

(c)           Administrative Fees.  The Borrower agrees to pay to the Administrative Agent an annual fee (the “Administrative Fee”) in Dollars in an amount equal to the amount previously agreed to in writing by the Borrower and the Administrative Agent.  Such Administrative Fee

 

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shall be payable quarterly in advance commencing on the date of this Agreement and on each successive quarterly anniversary of such date, so long as any Loan or Commitment is outstanding on such date; provided that if the Borrower shall terminate the Commitments in their entirety pursuant to Section 2.09(a) prior to the Termination Date, a pro rata portion of the Administrative Fee relating to the period from the Termination Date to the end of the applicable quarter shall be refundable.

 

(d)           Time of Payment.  The Borrower shall make payment of each Lender’s facility and letter of credit fees and of the Administrative Agent’s Administrative Fee hereunder, not later than Noon (New York City time) on the date when due in Dollars and in immediately available funds, to the Administrative Agent.  Upon receipt of any amount representing facility or letter of credit fees paid pursuant to this Section 2.06, the Administrative Agent shall pay such amount to the Lenders based upon their respective pro rata Shares.

 

Section 2.07         Reductions in Commitments; Repayments and Payments.

 

(a)           Reductions of Total Commitment; Reductions of Defaulting Lender’s Commitment.

 

After the Effective Date, the Borrower shall have the right, upon at least three Business Days’ prior irrevocable written notice to the Administrative Agent, who will promptly notify the Lenders thereof, by telephone confirmed in writing, without premium or penalty, to permanently reduce or terminate the Total Commitment, in whole at any time or in part from time to time, in minimum aggregate amounts of $10,000,000 (unless the Total Commitment at such time is less than $10,000,000, in which case, in an amount equal to the Total Commitment at such time) and, if such reduction is greater than  $10,000,000, in integral multiples of $5,000,000 in excess of such amount, provided that (i) any such reduction of the Total Commitment shall apply to the Commitment of each Lender in accordance with its pro rata Share of the aggregate of such reduction, (ii) any such reduction in the Total Commitment shall be permanent and (iii) after giving effect to any such reduction, the Total Commitment shall equal or exceed the Total Outstanding Amount.

 

(b)           Voluntary Prepayments.

 

Subject, in the case of any Eurodollar Rate Loan, to Section 2.09(e), the Borrower shall have the right to prepay any  Loan in whole at any time or in part from time to time without premium or penalty in an aggregate minimum amount of $10,000,000 and integral multiples of $1,000,000 in excess of that amount or, if less, the outstanding principal amount of such Loan.  The Borrower shall give notice (by telex or telecopier, or by telephone (confirmed in writing promptly thereafter)) (which shall be irrevocable) to the Administrative Agent and each Lender of each proposed prepayment hereunder, (x) with respect to Base Rate Loans, not later than 10:30 A.M. (New York City time) on the Business Day preceding the day of the proposed repayment and (y) with respect to Eurodollar Rate Loans, at least three Business Days prior to the day of the proposed prepayment, and in each case shall specify the proposed prepayment date (which shall be a Business Day), the aggregate principal amount of the proposed prepayment and which Loans are to be prepaid.

 

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(c)           Interest on Principal Amounts Prepaid.  All prepayments under this Section 2.07 shall be made together with accrued and unpaid interest to the date of such prepayment on the principal amount prepaid and any other amounts payable pursuant to Section 2.09(e) of this Agreement.

 

(d)           Method and Place of Payment. All payments to be made by the Borrower on account of principal and interest on each Loan shall be made without setoff or counterclaim to the Administrative Agent, for the ratable account of each Lender, not later than 12:00 Noon (New York time) on the date when due and shall be made in Dollars and in same day funds.  Whenever any payment with respect to any Loan shall be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable at the applicable rate during such extension; provided, however, that with respect to Eurodollar Rate Loans, if the next succeeding Business Day falls in another calendar month, such payments shall be made on the next preceding Business Day.  The Administrative Agent shall remit to each Lender its pro rata Share of all such payments received in collected funds by the Administrative Agent for the account of such Lender in respect of which such payment is made.

 

(e)           Order of Payment.  Upon the occurrence and during the continuance of an Event of Default, all payments made by the Borrower to the Administrative Agent (other than any fee or indemnification payments not specifically designated under the terms of this Agreement as being for the benefit of the Lenders) shall be applied by the Administrative Agent, on behalf of each Lender based on its pro rata Share, (i) first, to the payment of expenses referred to in Section 9.02 hereof, (ii) second, to the payment of the fees referred to in Section 2.06 hereof, (iii) third, to the payment of accrued and unpaid interest on such Lender’s Base Rate Loans until all such accrued interest has been paid, (iv) fourth, to the payment of accrued and unpaid interest on such Lender’s Eurodollar Rate Loans until all such accrued interest has been paid, (v) fifth, to the payment of the unpaid principal amount of such Lender’s Base Rate Loans, and (vi) sixth, to the payment of the unpaid principal amount of such Lender’s Eurodollar Rate Loans.

 

Section 2.08         Use of Proceeds.  The proceeds of the Loans made or the Letters of Credit issued by the Lenders may be used for acquisitions, repurchases of capital stock of the Borrower, the funding of dividends payable to shareholders of the Borrower and for general corporate purposes of the Borrower.

 

Section 2.09         Special Provisions Governing Eurodollar Rate Loans.  Notwithstanding any other provisions of this Agreement, the following provisions shall govern with respect  to Eurodollar Rate Loans as to the matters covered:

 

(a)           Determination of Interest Rate.  As soon as practicable on an Interest Rate Determination Date, the Administrative Agent shall determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) the interest rate which shall apply to the Eurodollar Rate Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to the Borrower and to each Lender.

 

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(b)           Substituted Rate of Borrowing. In the event that on any Interest Rate Determination Date any Lender (including the Administrative Agent) shall have determined (which determination shall be final and conclusive and binding upon all parties but, with respect to the following clauses (i) and (ii)(B), shall be made only after consultation with the Borrower and the Administrative Agent) that:

 

(i)            by reason of any changes arising after the date of this Agreement affecting the Eurodollar market or affecting the position of that Lender in such market, adequate and fair means do not exist for ascertaining the applicable interest rate by reference to the Eurodollar Rate with respect to the Eurodollar Rate Loans as to which an interest rate determination is then being made; or

 

(ii)           by reason of (A) any change (including any changes proposed or published prior to the date hereof) after the date hereof in any applicable law or any governmental rule, regulation or order (or any interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation or order (including any thereof proposed or published, prior to the date hereof)) or (B) other circumstances affecting that Lender or the Eurodollar market or the position of that Lender in such market (such as, for example, but not limited to, official reserve requirements required by Regulation D to the extent not compensated pursuant to Section 2.11), the Eurodollar Rate shall not represent the effective pricing to that Lender for deposits in the applicable currency of comparable amounts for the relevant period;

 

then, and in any such event, that Lender shall be an Affected Lender and it shall promptly (and in any event as soon as possible after being notified of a Borrowing) give notice (by telephone confirmed in writing) to the Borrower and the Administrative Agent (which notice the Administrative Agent shall promptly transmit to each other Lender) of such determination.  Thereafter, the Borrower shall pay to the Affected Lender with respect to such Eurodollar Rate Loans, upon written demand therefor, but only if such demand is made within 30 days of the end of the Interest Period for such Interest Rate Determination Date, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as the Affected Lender in its sole discretion shall reasonably determine) as shall be required to cause the Affected Lender to receive interest with respect to such Affected Lender’s Eurodollar Rate Loans for the Interest Period following that Interest Rate Determination Date (such Interest Period being an “Affected Interest Period”) at a rate per annum equal to the Eurodollar Margin in excess of the effective pricing to the Affected Lender for deposits in Dollars to make or maintain Eurodollar Rate Loans.  A certificate as to additional amounts owed the Affected Lender, showing in reasonable detail the basis for the calculation thereof, submitted in good faith to the Borrower and the Administrative Agent by the Affected Lender shall, absent manifest error, be final, conclusive and binding for all purposes.

 

(c)           Required Termination and Prepayment.  In the event that on any date any Lender shall have reasonably determined (which determination shall be final and conclusive and binding upon all parties) that the making or continuation of its Eurodollar Rate Loans (i) has become unlawful by, or would be inconsistent with, compliance by that Lender in good faith with any law, governmental rule, regulation or order (whether or not having the force of law and whether or not failure to comply therewith would be unlawful), or (ii) has become impracticable as a

 

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result of a contingency occurring after the date of this Agreement which materially and adversely affects the Eurodollar market, then, and in any such event, that Lender shall be an Affected Lender and it shall promptly give notice (by telephone confirmed in writing) to the Borrower and the Administrative Agent (which notice the Administrative Agent shall promptly transmit to each Lender) of that determination.  Subject to the prior withdrawal of a Notice of  Borrowing or prepayment of the Eurodollar Rate Loans of the Affected Lender as contemplated by the following Section 2.09(d) hereof, the obligation of the Affected Lender to make Eurodollar Rate Loans during any such period shall be terminated at the earlier of the termination of the Interest Period then in effect or when required by law and the Borrower shall no later than the termination of the Interest Period in effect at the time any such determination pursuant to this Section 2.09(c) is made or earlier, when required by law, repay Eurodollar Rate Loans of the Affected Lender together with all interest accrued thereon.

 

(d)           Options of the Borrower.  In lieu of paying an Affected Lender such additional moneys as are required by Section 2.09(b), 2.09(h), 2.10 or 2.11 hereof or the prepayment of an Affected Lender required by Section 2.09(c), hereof but in no event in derogation of Section 2.09(e) hereof, the Borrower may exercise any one of the following options:

 

(i)            If the determination by an Affected Lender relates only to Eurodollar Rate Loans then being requested by the Borrower pursuant to a Notice of  Borrowing or a Notice of Conversion/Continuation, the Borrower may by giving notice (by telephone confirmed in writing) to the Administrative Agent (who shall promptly give similar notice to each Lender) no later than the date immediately prior to the date on which such Eurodollar Rate Loans are to be made, continued or converted withdraw as to the Affected Lender that Notice of  Borrowing or Notice of Conversion/Continuation, as the case may be; or

 

(ii)           Upon written notice to the Administrative Agent and each Lender, the Borrower may terminate the obligations of the Lenders to make Loans as, and to convert Loans into, Eurodollar Rate Loans and in such event, the Borrower shall, prior to the time any payment pursuant to Section 2.09(c) hereof is required to be made or, if the provisions of Section 2.09(d) hereof are applicable, at the end of the then current  Interest Period, convert all of such Eurodollar Rate Loans into Base Rate Loans; or

 

(iii)          The Borrower may give notice (by telephone confirmed in writing) to the Affected Lender and the Administrative Agent (who shall promptly give similar notice to each Lender) and require the Affected Lender to make the Eurodollar Rate Loan then being requested as a Base Rate Loan or to continue to maintain its outstanding Base Rate Loan then the subject of a Notice of Conversion/Continuation as a Base Rate Loan or to convert its Eurodollar Rate Loan then outstanding that is so affected into a Base Rate Loan at the end of the then current Interest Period (or at such earlier time as prepayment is otherwise required to be made pursuant to Section 2.09(c) hereof), that notice to pertain only to the Loans of the Affected Lender and to have no effect on the obligations of the other Lenders to make or maintain Eurodollar Rate Loans or to convert Base Rate Loans into Eurodollar Rate Loans.

 

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(e)           Compensation.  The Borrower shall compensate each Lender, upon written request by that Lender (which request shall set forth in reasonable detail the basis for requesting such amounts), for all reasonable losses, expenses and liabilities (including, without limitation, any interest paid by that Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss (other than loss of margins) sustained by that Lender in connection with the re-employment of such funds), which that Lender may sustain with respect to its Eurodollar Rate Loans if for any reason (other than a default or error by that Lender) (i) a borrowing of any Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation or a telephonic request for borrowing, (ii) any repayment or conversion of any of such Lender’s Eurodollar Rate Loans occurs on a date which is not the last day of the Interest Period applicable to that Eurodollar Rate Loan, (iii) any repayment of any such Lender’s Eurodollar Rate Loans is not made on any date specified in a notice of repayment given by the Borrower, or (iv) as a consequence of any other failure by the Borrower to repay such Lender’s Eurodollar  Rate Loans when required by the terms of this Agreement.

 

(f)            Affected Lender’s Obligation to Mitigate.  Each Lender agrees that, as promptly as practicable after it becomes aware of the occurrence of an event or the existence of a condition that would cause it to be an Affected Lender under  Section 2.09(b) or 2.09(c) hereof, it will, to the extent not inconsistent with such Lender’s internal policies, use reasonable efforts to make, fund or maintain the affected Loans of such Lender through another Applicable Lending Office if as a result thereof the additional moneys which would otherwise be required to be paid in respect of such Loans pursuant to  Section 2.09(b) hereof would be materially reduced or the illegality or other adverse circumstances which would otherwise require prepayment of such Loans pursuant to  Section 2.09(c) hereof would cease to exist and if, as determined by such Lender, in its sole discretion, the making, funding or maintaining of such Loans through such other Applicable Lending Office would not otherwise materially adversely affect such Loans or such Lender.  The Borrower hereby agrees to pay all reasonable expenses incurred by any Lender in utilizing another Applicable Lending Office pursuant to this Section 2.09(f).

 

(g)           Booking of Loans.  Each Loan shall be booked by the Lender making such Loan at, to, or for the account of, its Applicable Lending Office for such Loan.

 

(h)           Increased Costs.  Except as provided in Section 2.09(b) or with respect to Taxes or Domestic Taxes imposed on or with respect to any payment made by the Borrower under this Agreement or any Note, which shall be governed by Section 2.14, if, by reason of (x) after the date hereof, the introduction of or any change (including, without limitation, any change by way of imposition or increase of reserve requirements) in or in the interpretation of any law or regulation (whether or not proposed or published  prior to the date hereof), or (y) the compliance with any guideline or request from any central bank or other Governmental Authority or quasi governmental authority exercising control over banks or financial institutions generally (whether or not having the force of law):

 

(i)            any Lender (or its Applicable Lending Office) shall be subject to any tax, duty or other charge with respect to its Eurodollar Rate Loans or Letters of Credit or its obligation to make Eurodollar Rate Loans or its obligations hereunder in respect of Letters of Credit or its deposits, reserves, other liabilities or capital attributable thereto; or

 

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(ii)           any reserve (including, without limitation, any imposed by the Board), special deposit or similar requirement against assets of, deposits with or for the account of, or credit (including letters of credit and participations therein) extended by, any Lender’s Applicable Lending Office shall be imposed or deemed applicable or any other condition affecting its Eurodollar Rate Loans or Letters of Credit or its obligation to make Eurodollar Rate Loans or its obligations hereunder in respect of Letters of Credit shall be imposed on any Lender or its Applicable Lending Office or the interbank Eurodollar market;

 

and as a result thereof there shall be any increase in the cost to that Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Loans or of issuing or participating in any Letters of Credit (except to the extent such Lender is entitled to compensation therefor during the relevant Interest Period pursuant to Section 2.07(e) or Section 2.11), or there shall be a reduction in the amount received or receivable by that Lender or its Applicable Lending Office or such Issuing Lender, then the Borrower shall from time to time, upon written notice from and demand by that Lender or Issuing Lender (which shall be promptly furnished upon the Lenders being made subject thereto) (with a copy of such notice and demand to the Administrative Agent), pay to the Administrative Agent for the account of that Lender or Issuing Lender, within five Business Days after the date specified in such notice and demand, additional amounts sufficient to indemnify that Lender or Issuing Lender against such increased cost.  A certificate as to the basis for and calculation of the amount of such increased cost, submitted to the Borrower and the Administrative Agent by that Lender or Issuing Lender, shall, absent manifest error, be final, conclusive and binding for all purposes.

 

(i)            Certain Requirements.  Notwithstanding anything herein to the contrary, (x) the Dodd Frank Wall Street Reform and Consumer Protection Act, and all requests, rules, guidelines and directives promulgated thereunder and (y) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or United States regulatory authorities, in each case pursuant to Basel III, shall be deemed to have been adopted after the date hereof, regardless of the date enacted or adopted.

 

(j)            Assumption Concerning Funding of Eurodollar Rate Loans.  Calculation of all amounts payable to a Lender under this Section 2.09 in respect of a Eurodollar Rate Loan shall be made as though that Lender had actually funded its Eurodollar Rate Loan through the purchase of a Eurodollar deposit, bearing interest at the Eurodollar Rate applicable to such Eurodollar Rate Loan in an amount equal to the amount of the Eurodollar Rate Loan and having a maturity comparable to the relevant Interest Period and through the transfer of such Eurodollar deposit, from an offshore office of that Lender to a domestic office of that Lender in the United States of America; provided, however, that each Lender may fund each of its Eurodollar Rate Loans in any manner it sees fit and the foregoing assumption shall be utilized only for the calculations of amounts payable under this  Section 2.09.

 

(k)           Eurodollar Rate Loans After Default.  After the occurrence of and during the continuance of a Potential Event of Default or an Event of Default, the Administrative Agent may, upon the request of the Required Lenders, prohibit Loans from being requested as, converted into or continued as Eurodollar Rate Loans.

 

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Section 2.10         Capital Requirements.  If while any portion of the Total Commitment is in effect or any Loans are outstanding, any Lender determines that the adoption of any law, treaty, rule, regulation, guideline or order regarding capital adequacy or capital maintenance or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender, with any request or directive regarding capital adequacy or capital maintenance (whether or not having the force of law and whether or not the failure to comply therewith would be unlawful) of any such Governmental Authority, central bank or comparable agency, has or would have the effect of increasing the amount of capital required to be maintained by such Lender or by any corporation controlling such Lender (including, without limitation, with respect to any Lender’s Commitment), then the Borrower shall from time to time, within 15 days of written notice and demand from such Lender (with a copy to the Administrative Agent), pay to the Administrative Agent, for the account of such Lender, additional amounts sufficient to compensate such Lender for the cost of such additional required capital, to the extent such Lender determines such increase to be attributable to the existence, issuance or maintenance of such Loans, Letters of Credit, or obligations for the account of the Borrower.  A certificate showing in reasonable detail the computations made in arriving at such cost, submitted to the Borrower and the Administrative Agent by such Lender shall, absent manifest error, be final, conclusive and binding for all purposes.

 

Section 2.11         Regulation D Compensation.  If and so long as a reserve requirement of the type described in the definition of “Eurodollar Reserve Percentage” is prescribed by the Board of Governors of the Federal Reserve System (or any successor), each Lender subject to such requirement may require the Borrower to pay, contemporaneously with each payment of interest on each of such Lender’s Eurodollar Loans additional interest on such Eurodollar Loan at a rate per annum determined by such Lender up to but not exceeding the excess of (a) (i) the applicable Eurodollar Rate divided by (ii) one minus the Eurodollar Reserve Percentage over (b) the applicable Eurodollar Rate. Any Lender wishing to require payment of such additional interest (x) shall so notify the Borrower and the Administrative Agent, in which case such additional interest on the Eurodollar Loans of such Lender shall be payable to such Lender at the place indicated in such notice with respect to each Interest Period commencing at least three Business Days after such Lender gives such notice and (y) shall notify the Borrower at least five Business Days before each date on which interest is payable on the Eurodollar Loans of the amount then due it under this Section.

 

Section 2.12         Letters of Credit.  (a) Existing Letters of Credit.  On the Effective Date, each Issuing Lender that has issued an Existing Letter of Credit shall be deemed, without further action by any party hereto, to have sold to each Lender, and each Lender shall be deemed, without further action by any party hereto, to have purchased from the Issuing Lender, a participation in such Existing Letter of Credit and the related Letter of Credit Liabilities to the extent of its Applicable Percentage.  On and after the Effective Date, each Existing Letter of Credit shall constitute a Letter of Credit for all purposes hereof.  An Existing Letter of Credit may contain a statement to the effect that such Existing Letter of Credit is issued for the account of a Subsidiary of the Borrower; provided, however, that notwithstanding such statement, the Borrower shall be the actual account party for all purposes of this Credit Agreement for such Existing Letter of Credit and such statement shall not affect the Borrower’s reimbursement obligations hereunder with respect to such Existing Letter of Credit.  The Existing Letters of

 

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Credit include certain Letters of Credit denominated in certain currencies other than Dollars.  Notwithstanding the limitation in Section 2.12(b) that Letters of Credit issued pursuant to this Agreement shall be denominated solely in Dollars, such Existing Letters of Credit (and renewals and extensions thereof) may be maintained in the respective currencies in which they are currently denominated pursuant to procedures mutually satisfactory to the Borrower, the Issuing Lender and the Administrative Agent pursuant to which the Dollar equivalent thereof shall be determined from time to time and such Dollar equivalent shall be utilized for purposes of determining the rights and obligations of the Lenders hereunder with respect to such Existing Letters of Credit; provided that (i) in no event shall any Lender be required to make payment hereunder in any currency other than Dollars, (ii) in no event shall any change in the Dollar equivalent of any such Existing Letter of Credit cause the Total Outstanding Amount to exceed the Total Commitment and (iii) the foregoing shall not affect the obligation of the Borrower to reimburse the Issuing Lender for any drawing under any such Existing Letter of Credit in the currency in which such drawing was made.

 

(b)           Commitment to Issue Letters of Credit.  Subject to the terms and conditions hereof, each Issuing Lender agrees to issue Letters of Credit denominated in Dollars from time to time before the Termination Date upon the request of the Borrower; provided that, (i) immediately after each Letter of Credit is issued (A) the Total Outstanding Amount shall not exceed the Total Commitment and (B) the aggregate amount of the Letter of Credit Liabilities shall not exceed $200,000,000 and (ii) no Letter of Credit is for the benefit, directly or indirectly, of any Governmental Authority other than any Governmental Authority of the United States, or any state or other political subdivision thereof.  Upon the date of issuance by an Issuing Lender of a Letter of Credit, the Issuing Lender shall be deemed, without further action by any party hereto, to have sold to each Lender, and each Lender shall be deemed, without further action by any party hereto, to have purchased from the Issuing Lender, a participation in such Letter of Credit and the related Letter of Credit Liabilities to the extent of its Applicable Percentage.

 

(c)           Method for Issuance; Terms; Extensions.

 

(i)            The Borrower shall give the Issuing Lender notice at least three Business Days (or such shorter notice as may be acceptable to the Issuing Lender in its discretion) prior to the requested issuance of a Letter of Credit (or, in the case of renewal or extension, prior to the Issuing Lender’s deadline for notice of nonextension) specifying the date such Letter of Credit is to be issued, and describing the terms of such Letter of Credit and the nature of the transactions to be supported thereby (such notice, including any such notice given in connection with the extension of a Letter of Credit, a “Notice of Issuance”).  Upon receipt of a Notice of Issuance, the Issuing Lender shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Lender of the contents thereof and of the amount of such Lender’s participation in such Letter of Credit.

 

(ii)           The obligation of the Issuing Lender to issue each Letter of Credit shall, in addition to the conditions precedent set forth in Section 3.02 be subject to the conditions precedent that such Letter of Credit shall be in such form and contain such terms as shall be reasonably satisfactory to the Issuing Lender and that the Borrower shall have executed and delivered such other customary instruments and agreements relating to such

 

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Letter of Credit as the Issuing Lender shall have reasonably requested; provided, however, that any Issuing Lender (other than JPMorgan Chase) may decline to issue any Letter of Credit (other than any Existing Letter of Credit and renewals or extensions thereof) at such Issuing Lender’s sole discretion (including, without limitation, if such Issuing Lender’s internal policies do not permit the issuance of a letter of credit for the purposes for which such Letter of Credit is being requested).  The Borrower shall also pay to the Issuing Lender for its own account issuance, drawing, amendment, settlement and extension charges, if any, in the amounts and at the times as agreed between the Borrower and the Issuing Lender.  Subject to the terms and conditions of this Agreement, JPMorgan Chase shall act as the Issuing Lender if no other Lender desires to act in such capacity with respect to a Notice of Issuance.

 

(iii)          The extension or renewal of any Letter of Credit shall be deemed to be an issuance of such Letter of Credit, and if any Letter of Credit contains a provision pursuant to which it is deemed to be extended unless notice of termination is given by the Issuing Lender, the Issuing Lender shall timely give such notice of termination unless it has theretofore timely received a Notice of Issuance and the other conditions to issuance of a Letter of Credit have also theretofore been met with respect to such extension.  Each Letter of Credit shall expire at or before the close of business on the date that is one year after such Letter of Credit is issued (or, in the case of any renewal or extension thereof, one year after such renewal or extension); provided that (A) a Letter of Credit may contain a provision pursuant to which it is deemed to be extended on an annual basis unless notice of termination is given by the Issuing Lender and (B) in no event will a Letter of Credit expire (including pursuant to a renewal or extension thereof) on a date later than the fifth Business Day prior to the Termination Date.

 

(d)           Payments; Reimbursement Obligations.

 

(i)            Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the Issuing Lender shall notify the Administrative Agent and the Administrative Agent shall promptly notify the Borrower and each other Lender as to the amount to be paid as a result of such demand or drawing and the date such payment is to be made by the Issuing Lender (the “Payment Date”).  The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Lender for any amounts paid by the Issuing Lender upon any drawing under any Letter of Credit, without presentment, demand, protest or other formalities of any kind, which reimbursement may be made through the borrowing of a Base Rate Loan as set forth in Section 2.12(d)(ii).  Such reimbursement shall be due on the Payment Date; provided that no such payment shall be due from the Borrower any earlier than the date of receipt by it of notice of its obligation to make such payment (or, if such notice is received by the Borrower after 10:00 A.M. (New York City time) on any date, on the next succeeding Business Day); and provided further that if and to the extent any such reimbursement is not made by the Borrower in accordance with this clause (i) or clause (ii) below on the Payment Date, then (irrespective of when notice thereof is received by the Borrower), such reimbursement obligation shall bear interest, payable on demand, for each day from and including the Payment Date to but not including the date such reimbursement

 

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obligation is paid in full at a rate per annum equal to the rate applicable to Base Rate Loans for such day.

 

(ii)           If the Commitments remain in effect on the Payment Date, all such amounts paid by the Issuing Lender and remaining unpaid by the Borrower after the date and time required by Section 2.12(d)(i) (a “Reimbursement Obligation”) shall, if and to the extent that the amount of such Reimbursement Obligation would be permitted as a Borrowing of  Loans pursuant to Section 3.02, and unless the Borrower otherwise instructs the Administrative Agent by not less than one Business Day’s prior notice, convert automatically to Base Rate Loans on the date such Reimbursement Obligation arises.  The Administrative Agent shall, on behalf of the Borrower (which hereby irrevocably directs the Administrative Agent so to act on its behalf), give notice no later than 12:00 Noon (New York City time) on such date requesting each Lender to make, and each Lender hereby agrees to make, a Base Rate Loan, in an amount equal to such Lender’s Applicable Percentage of the Reimbursement Obligation with respect to which such notice relates.  Each Lender shall make such Loan available to the Administrative Agent at its address referred to in Section 9.07 in immediately available funds, not later than 2:00 P.M. (New York City time), on the date specified in such notice.  The Administrative Agent shall promptly pay the proceeds of such Loans to the Issuing Lender, which shall immediately apply such proceeds to repay the Reimbursement Obligation.

 

(iii)          To the extent the Reimbursement Obligation is not refunded by a Lender pursuant to clause (ii) above, such Lender will pay to the Administrative Agent, for the account of the Issuing Lender, immediately upon the Issuing Lender’s demand at any time during the period commencing after such Reimbursement Obligation arises until reimbursement therefor in full by the Borrower, an amount equal to such Lender’s Applicable Percentage of such Reimbursement Obligation, together with interest on such amount for each day from the date of the Issuing Lender’s demand for such payment (or, if such demand is made after 1:00 P.M. (New York City time) on such date, from the next succeeding Business Day) to the date of payment by such Lender of such amount at a rate of interest per annum equal to the Federal Funds Rate for the first three Business Days after the date of such demand and thereafter at a rate per annum equal to the Base Rate for each additional day.  The Issuing Lender will pay to each Lender ratably all amounts received from the Borrower for application in payment of its Reimbursement Obligations in respect of any Letter of Credit, but only to the extent such Lender has made payment to the Issuing Lender in respect of such Letter of Credit pursuant hereto; provided that in the event such payment received by the Issuing Lender is required to be returned, such Lender will return to the Issuing Lender any portion thereof previously distributed to it by the Issuing Lender.

 

(e)           Obligations Absolute.  The obligations of the Borrower and each Lender under subsection (d) above shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including without limitation the following circumstances:

 

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(i)            any lack of validity or enforceability of this Agreement or any Letter of Credit or any document related hereto or thereto;

 

(ii)           any amendment or waiver of or any consent to departure from all or any of the provisions of this Agreement or any Letter of Credit or any document related hereto or thereto, provided by any party affected thereby;

 

(iii)          the use which may be made of the Letter of Credit by, or any acts or omission of, a beneficiary of a Letter of Credit (or any Person for whom the beneficiary may be acting);

 

(iv)          the existence of any claim, set-off, defense or other rights that the Borrower may have at any time against a beneficiary of a Letter of Credit (or any Person for whom the beneficiary may be acting), any Lender (including the Issuing Lender) or any other Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction;

 

(v)           any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect whatsoever;

 

(vi)          payment under a Letter of Credit against presentation to the Issuing Lender of documents that do not comply with the terms of such Letter of Credit;

 

(vii)         any termination of the Commitments prior to, on or after the Payment Date for any Letter of Credit, whether at the scheduled termination thereof, by operation of Article 7 or otherwise; or

 

(viii)        any other act or omission to act or delay of any kind by any Lender (including the Issuing Lender), the Administrative Agent or any other Person or any other event or circumstance whatsoever that might, but for the provisions of this subsection (viii), constitute a legal or equitable discharge of or defense to the Borrower’s or the Lender’s obligations hereunder;

 

provided, that this Section 2.12(e) shall not limit the rights of the Borrower or any Lender under Section 2.12(f)(ii).

 

(f)            Indemnification; Expenses.

 

(i)            The Borrower hereby indemnifies and holds harmless each Lender and the Administrative Agent and the officers, directors, employees, agents and advisors and affiliates of each of them from and against any and all claims, damages, losses, liabilities, costs or expenses which it may reasonably incur in connection with a Letter of Credit issued pursuant to this Section 2.12; provided that the Borrower shall not be required to indemnify any Lender, or the Administrative Agent, for any claims, damages, losses, liabilities, costs or expenses, to the extent found by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of such Person.

 

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(ii)           Neither any Lender nor the Administrative Agent nor any of their officers or directors or employees or agents shall be liable or responsible, by reason of or in connection with the execution and delivery or transfer of or payment or failure to pay under any Letter of Credit, including without limitation any of the circumstances enumerated in subsection (e) above; provided that, notwithstanding Section 2.12(e), the Borrower shall have a claim for direct (but not consequential) damage suffered by it, to the extent finally determined by a court of competent jurisdiction to have been caused by (x) the Issuing Lender’s gross negligence or willful misconduct in determining whether documents presented under any Letter of Credit complied with the terms of such Letter of Credit or (y) the Issuing Lender’s failure to pay under any Letter of Credit after the presentation to it of documents strictly complying with the terms and conditions of the Letter of Credit; provided  further that each Lender shall have a claim for direct (but not consequential) damage suffered by it, to the extent finally determined by a court of competent jurisdiction to have been caused by the Issuing Lender’s gross negligence or willful misconduct in determining whether documents presented under any Letter of Credit complied with the terms of such Letter of Credit.  The parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Lender may, in its discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

 

(iii)          Nothing in this subsection (f) is intended to limit the obligations of the Borrower under any other provision of this Agreement.  To the extent the Borrower does not indemnify an Issuing Lender as required by this subsection, the Lenders agree to do so ratably in accordance with their Commitments.

 

(g)           Stop Issuance Notice.  If the Required Lenders reasonably determine at any time that the conditions set forth in Section 3.02 would not be satisfied in respect of a Borrowing at such time, then the Required Lenders may request that the Administrative Agent issue a “Stop Issuance Notice”, and the Administrative Agent shall issue such notice to each Issuing Lender.  Such Stop Issuance Notice shall be withdrawn upon a determination by the Required Lenders that the circumstances giving rise thereto no longer exist.  No Letter of Credit shall be issued while a Stop Issuance Notice is in effect. The Required Lenders may request issuance of a Stop Issuance Notice only if there is a reasonable basis therefor, and shall consider reasonably and in good faith a request from the Borrower for withdrawal of the same on the basis that the conditions in Section 3.02 are satisfied; provided that the Administrative Agent and the Issuing Lenders may and shall conclusively rely upon any Stop Issuance Notice while it remains in effect.

 

(h)           Other Documentation.  If the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to or entered into by the Issuing Lender relating to any Letter of Credit are not consistent with the terms and conditions of this Agreement, the terms and conditions of this Agreement shall control; provided that, to the extent the Issuing Lender so agrees in such other documentation, its liabilities and responsibilities in connection with a Letter of Credit may be governed thereby rather than by subsection (f)(ii), but

 

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such agreement by the Issuing Lender may not directly or indirectly alter the rights and obligations of any other Lender under this Agreement.

 

(i)            Applicability of ISP and UCP.  If so expressly agreed by the Issuing Lender and the Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance shall apply to each Letter of Credit.

 

(j)            Resignation as Issuing Lender.  Notwithstanding anything to the contrary contained herein, any Issuing Lender other than JPMorgan Chase may, upon 10 days’ notice to the Borrower and the Administrative Agent, resign as Issuing Lender.  If an Issuing Lender resigns as Issuing Lender, it shall retain all the rights, powers, privileges and duties of an Issuing Lender hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as Issuing Lender and all Letter of Credit Liabilities with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Reimbursement Obligations pursuant to Section 2.12(d)).

 

Section 2.13         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 unused portion of the Commitment of such Defaulting Lender pursuant to Section 2.06(a).

 

(b)           If any Letter of Credit Liabilities exist at the time such Lender becomes a Defaulting Lender then:

 

(i)            provided no Event of Default shall have occurred and be continuing, the Letter of Credit Liabilities of such Defaulting Lender shall be automatically reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent the sum of each non-Defaulting Lender’s Loans plus its Letter of Credit Liabilities does not exceed such non-Defaulting Lender’s Commitment;

 

(ii)           if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within three Business Days following notice by the Administrative Agent or any Issuing Lender that has an outstanding Letter of Credit (x) first, either (A) procure the reduction or termination of the Defaulting Lender’s Letter of Credit Liabilities (after giving effect to any partial reallocation pursuant to clause (i) above) or (B) cash collateralize for the benefit of the Issuing Lender(s) only the Borrower’s obligations corresponding to such Defaulting Lender’s Letter of Credit Liabilities (after giving effect to any partial reallocation pursuant to clause (i) above) for so long as such Letter of Credit Liabilities are outstanding;

 

(iii)          if the Borrower cash collateralizes any portion of such Defaulting Lender’s Letter of Credit Liabilities pursuant to clause (ii) above, the Borrower shall not

 

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be required to pay any fees to such Defaulting Lender pursuant to Section 2.06(b) with respect to such Defaulting Lender’s Letter of Credit Liabilities during the period and to the extent such Defaulting Lender’s Letter of Credit Liabilities are cash collateralized;

 

(iv)          to the extent that the Letter of Credit Liabilities of the Defaulting Lender are reallocated pursuant to clause (i) above, then the letter of credit fees payable to the Lenders pursuant to Section 2.06(b) shall to the same extent be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

 

(v)           if all or any portion of such Defaulting Lender’s Letter of Credit Liabilities is not reallocated, reduced, terminated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Lender(s) or any other Lender hereunder, all letter of credit fees payable under Section 2.06(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Lender(s) until and to the extent that such Letter of Credit Liabilities are reallocated, reduced, terminated and/or cash collateralized.

 

(c)           So long as such Lender is a Defaulting Lender, the Issuing Lenders shall not be required to issue, amend, extend or increase any Letter of Credit, unless the Defaulting Lender’s Letter of Credit Liabilities after giving effect thereto will be 100% covered by the Commitments of the non-Defaulting Lenders and/or reduced, terminated and/or cash collateralized in accordance with Section 2.13(b), and participating interests in any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.13(b)(i) (and such Defaulting Lender shall not participate therein).

 

(d)           In the event that the Administrative Agent, the Borrower and the Issuing Lenders reasonably determine that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Letter of Credit Liabilities of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders as the Administrative Agent shall determine is necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage, and upon such purchase such Lender shall cease to be a Defaulting Lender and any cash collateral posted for its Letter of Credit Liabilities shall be released; provided that there shall be no retroactive effect on fees which were not paid pursuant to Section 2.13(a) or which were reallocated pursuant to Section 2.13(b)(iv) and (v).

 

(e)           If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.01, 2.12 or 8.04, then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender under this Agreement for the benefit of the Administrative Agent or any Issuing Lender to satisfy such Lender’s obligations to it under such Section until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under any such Section, in the case of each of clauses (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

 

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Section 2.14         Taxes.

 

(a)           Any and all payments by the Borrower to or for the account of any Lender or the Administrative Agent hereunder or under any Note shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, (i) in the case of each Lender and the Administrative Agent, taxes imposed on or measured by its income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Lender or the Administrative Agent (as the case may be) is organized or any political subdivision thereof, (ii) in the case of each Lender, taxes imposed on or measured by its income, and franchise or similar taxes imposed on it, by the jurisdiction of such Lender’s Applicable Lending Office or any political subdivision thereof, and (iii) taxes resulting from FATCA (all such non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as its “Taxes”, and all such excluded taxes being hereinafter referred to as its “Domestic Taxes”).  If the Borrower or the Administrative Agent (the “Withholding Agent”) shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note to any Lender or the Administrative Agent, (i) the sum payable by the Borrower shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.14) such Lender or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Withholding Agent shall make such deductions, (iii) such Withholding Agent shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law and (iv) if the Withholding Agent is the Borrower, the Borrower shall furnish to the Administrative Agent, at its address referred to in Section 9.07, the original or a certified copy of a receipt evidencing payment thereof.

 

(b)           In addition, the Borrower agrees to pay any present or future stamp or documentary taxes and any other excise or property taxes, or charges or similar levies which arise from any payment made hereunder or under any Note or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note (hereinafter referred to as “Other Taxes”).

 

(c)           The Borrower agrees to indemnify each Lender and the Administrative Agent for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 2.14) paid or payable by such Lender or the Administrative Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto; provided, the Borrower shall not be obligated to indemnify any party hereunder pursuant to this Section for penalties, interest or similar liabilities arising therefrom or with respect thereto to the extent such penalties, interest or similar liabilities are attributable to the gross negligence or willful misconduct by such party.  In addition, the Borrower agrees to indemnify the Administrative Agent and each Lender for all Domestic Taxes and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, in each case to the extent that such Domestic Taxes result from any payment or indemnification pursuant to this Section for (i) Taxes or Other Taxes imposed by any jurisdiction other than the United States or (ii) Domestic Taxes of the Administrative Agent or such Lender, as the case may be.  This indemnification shall be made within 15 days from the date such Lender or the Administrative Agent (as the case may be) makes demand therefor.

 

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(d)           Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made hereunder or under any Note shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to any withholding (including backup withholding) or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Sections 2.14(e), (f), (g) and (h) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense (and the Borrower has not elected to reimburse such cost or expense) or would materially prejudice the legal or commercial position of such Lender.

 

(e)           Without limiting the foregoing, at the times indicated herein, each Lender organized under the laws of a jurisdiction outside the United States shall provide the Borrower and the Administrative Agent with Internal Revenue Service form W-8BEN, W-8IMY (accompanied by a form W-8ECI, W-8BEN, W-9 and other certification documents from each beneficial owner, as applicable) or W-8ECI (in each case accompanied by any statements which may be required under applicable Treasury regulations), as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Lender is entitled to receive payments under this Agreement (i) without deduction or withholding of any United States federal income taxes or (ii) subject to a reduced rate of United States federal withholding tax, unless, in each case of clause (i) and (ii) of this Section 2.14(e), an event (including, without limitation, any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders such forms inapplicable or which would prevent the Lender from duly completing and delivering any such form with respect to it and the Lender advises the Borrower and the Administrative Agent that it is not capable of receiving payments without any deduction or withholding of such taxes. Such forms shall be provided (x) on or prior to the date of the Lender’s execution and delivery of this Agreement in the case of each Lender listed on the signature pages hereof, and on or prior to the date on which it becomes a Lender in the case of each other Lender, and (y) on or before the date that such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form so delivered by the Lender.  If the form provided by a Lender at the time such Lender first becomes a party to this Agreement indicates a United States interest withholding tax rate in excess of zero, United States withholding tax at such rate shall be considered excluded from “Taxes” as defined in Section 2.14(a) and shall not be subject to indemnification pursuant to Section 2.14(c), unless the assignor of such Lender was entitled, at the time of such assignment, to receive additional amounts from the Borrower with respect to such withholding taxes pursuant to Section 2.14(a).  In addition, to the extent that for reasons other than a change of treaty, law or regulation any Lender becomes subject to an increased rate of United States interest withholding tax while it is a party to this Agreement, United States withholding tax at such increased rate shall be considered excluded from “Taxes” as defined in Section 2.14(a).

 

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(f)            Any Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent), executed originals of Internal Revenue Service form W-9 certifying, to the extent such Lender is legally entitled to do so, that such Lender is exempt from U.S. Federal backup withholding tax.

 

(g)           If a payment made to a Lender hereunder or under any Note would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower or the Administrative Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for the purposes of this Section 2.14(g), “FATCA” shall include any amendments made to FATCA after the date of this Agreement, whether or not included in the definition of FATCA.

 

(h)           Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

 

(i)            For any period with respect to which a Lender organized under the laws of a jurisdiction outside the United States has failed to provide the Borrower with the appropriate form in accordance with Section 2.14(e) (unless such failure is excused by the terms of Section 2.14(e)), such Lender shall not be entitled to indemnification under Section 2.14(a) or 2.14(c) with respect to Taxes imposed by the United States; provided, however, that should a Lender, which is otherwise exempt from or subject to a reduced rate of withholding tax, become subject to Taxes because of its failure to deliver a form required hereunder, the Borrower shall take such steps as such Lender shall reasonably request to assist such Lender to recover such Taxes.

 

(j)            Each Lender shall severally indemnify the Administrative Agent for any Taxes and Domestic Taxes (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Taxes and Domestic Taxes and without limiting the obligation, if any, of the Borrower to do so), in each case attributable to such Lender that are paid or payable by the Administrative Agent in connection with this Agreement or any Note, and any reasonable expenses arising therefrom or with respect thereto.  This indemnification shall be made within 15 days from the date the Administrative Agent makes demand therefor.

 

(k)           Each party’s obligations under this Section 2.14 shall survive any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all other obligations under this Agreement or any Note.

 

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(l)            If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay over such refund to Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses with respect to such refund of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.

 

ARTICLE 3

CONDITIONS TO LOANS AND LETTERS OF CREDIT

 

Section 3.01         Conditions to Initial Loans and Letters of Credit.  The effectiveness of this Agreement is subject to satisfaction of each of the following conditions:

 

(a)           On or before the Effective Date, the Borrower shall have delivered to the Lenders (or to the Administrative Agent with sufficient copies, originally executed where appropriate, for each Lender) each, unless otherwise noted, dated the Effective Date:

 

(i)            Certified copies of its Certificate of Incorporation, together with a good standing certificate from the Secretary of State of the jurisdiction of its incorporation, each to be dated a recent date prior to the Effective Date;

 

(ii)           Copies of its Bylaws, certified as of the Effective Date by its corporate secretary or an assistant secretary;

 

(iii)          Resolutions of its Board of Directors, directly or indirectly, approving and authorizing the execution, delivery and performance of this Agreement and any other documents, instruments and certificates required to be executed by the Borrower in connection herewith and, directly or indirectly, approving and authorizing the incurrence of the Loans and the issuances of the Letters of Credit, each certified as of the Effective Date by its corporate secretary or an assistant secretary as being in full force and effect without modification or amendment;

 

(iv)          Signature and incumbency certificates with respect to the Persons executing this Agreement;

 

(v)           Executed copies of this Agreement; and

 

(vi)          Such other documents as the Administrative Agent may reasonably request.

 

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(b)           The Administrative Agent shall have received an originally executed copy of the favorable written opinion of Gibson, Dunn & Crutcher LLP, special counsel to the Borrower, dated as of the Effective Date, substantially in the form of Exhibit B annexed hereto; the Borrower hereby expressly instructs such counsel to prepare such opinion and deliver it to the Lenders for their benefit and such opinion shall contain a statement to that effect.

 

(c)           The Administrative Agent shall have received an originally executed copy of the favorable written opinion of Jayne M. Donegan, Esq., Senior Associate General Counsel of the Borrower, dated as of the Effective Date, substantially in the form of Exhibit C annexed hereto; the Borrower hereby expressly instructs such counsel to prepare such opinion and deliver it to the Lenders for their benefit and such opinion shall contain a statement to that effect.

 

(d)           The Administrative Agent shall have received an originally executed copy of the favorable written opinion of Davis Polk & Wardwell LLP, special counsel to the Agents, dated as of the Effective Date, substantially in the form of Exhibit D annexed hereto.

 

(e)           All outstanding principal amounts (if any), accrued interest and accrued fees under the 5-Year Credit Agreement, dated as of March 28, 2005, as amended and extended (the “2005 Credit Agreement”), among the Borrower, the Lenders listed therein and JPMorgan Chase, as administrative agent shall have been paid in full.

 

The Administrative Agent shall promptly notify the Borrower, the Lenders and the Administrative Agent of the satisfaction of the conditions set forth in this Section 3.01, and such notice shall be conclusive and binding on all parties hereto.  The Lenders party hereto, comprising the “Required Banks” under the 2005 Credit Agreement, and the Borrower agree that, upon the effectiveness of this Agreement, all commitments under the 2005 Credit Agreement shall terminate in their entirety, automatically and without any requirement of notice to any party, all “Letters of Credit” issued thereunder and still outstanding (all of which are Existing Letters of Credit) shall be Letters of Credit hereunder and the obligations of the parties under the 2005 Credit Agreement shall terminate, except as provided in Section 10.08(b) of the 2005 Credit Agreement.  Promptly thereafter, the notes issued by the borrowers under the 2005 Credit Agreement shall be returned by the lenders thereunder to the Borrower, marked “Cancelled”.

 

Section 3.02         Conditions to All Loans and Letters of Credit.  (i) The obligation of each Lender to make any Loans pursuant to a Notice of Borrowing is subject to prior or concurrent satisfaction or waiver by the Required Lenders and (ii) the obligation of an Issuing Lender to issue (or renew or extend the term of) any Letter of Credit is subject to the satisfaction or waiver by the Required Lenders, of the following further conditions precedent:

 

(a)           With respect to any such Loan or Letter of Credit, the Administrative Agent shall have received, before the Funding Date thereof or date of issuance (or renewal or extension) of such Letter of Credit, (i) an originally executed Notice of Borrowing signed by any of the chief executive officer, the chief financial officer, the treasurer or any assistant treasurer of the Borrower or (ii) a Notice of Issuance as required by Section 2.12(c) (the furnishing by the Borrower of each such Notice of Borrowing or Notice of Issuance shall be deemed to constitute a representation and warranty of the Borrower that each of the conditions set forth in Section

 

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3.02(b) hereof will be satisfied on the related Funding Date or date of issuance (or renewal or extension) of such Letter of Credit);

 

(b)           As of the Funding Date of such Loan or date of issuance (or renewal or extension) of such Letter of Credit:

 

(i)            With respect to such Loan or Letter of Credit, the representations and warranties contained herein shall be true, correct and complete in all material respects on and as of that Funding Date or date of issuance (or renewal or extension) of such Letter of Credit to the same extent as though made on and as of that date, except that the representations and warranties need not be true and correct to the extent that changes in the facts and conditions on which such representations and warranties are based are required or permitted under this Agreement, except that the representations and warranties set forth in Section 4.04 shall not apply;

 

(ii)           No event shall have occurred and be continuing or would result from the consummation of the Loans or the issuance (or renewal or extension) of the Letter of Credit on such Funding Date or date of issuance (or renewal or extension) of such Letter of Credit and the use of the proceeds thereof which would constitute (a) an Event of Default or (b) a Potential Event of Default;

 

(iii)          The Borrower shall have performed in all material respects all agreements and satisfied in all material respects all conditions which this Agreement provides shall be performed by it on or before such Funding Date or date of issuance (or renewal or extension) of such Letter of Credit;

 

(iv)          No order, judgment or decree of any court, arbitrator or governmental authority shall purport to enjoin or restrain that Lender from making that Loan or issuing (or renewing or extending) that Letter of Credit; and

 

(v)           The making of the Loans or the issuance (or renewal or extension) of the Letter of Credit requested on such Funding Date or date of issuance (or renewal or extension) of such Letter of Credit shall not violate Regulation T, Regulation U or Regulation X of the Board or any other regulation of the Board or the Exchange Act.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Lenders to enter into this Agreement and to make the Loans and issue the Letters of Credit, the Borrower represents and warrants to each Lender as of the Effective Date that the following statements are true, correct and complete:

 

Section 4.01         Organization, Powers and Good Standing.   (a) Organization and Powers.  The Borrower is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation.  The Borrower has all requisite corporate power and authority (i) to own and operate its properties and to carry on its business as now conducted and proposed to be conducted, except where the lack of corporate power and authority would not

 

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have a Material Adverse Effect and (ii) to enter into this Agreement and to carry out the transactions contemplated hereby.

 

(b)           Good Standing.  The Borrower is in good standing wherever necessary to carry on its present business and operations, except in jurisdictions in which the failure to be in good standing would not have a Material Adverse Effect.

 

Section 4.02         Authorization of Borrowing, Etc.     (a) Authorization of Borrowing.  The execution, delivery and performance of this Agreement, and the borrowing of the Loans and the request for the issuance of each Letter of Credit, have been duly authorized by all necessary corporate action by the Borrower.

 

(b)           No Conflict.  The execution, delivery and performance by the Borrower of this Agreement and any Notes and the borrowing of the Loans and the request for the issuance of each Letter of Credit do not and will not (i) violate any provision of law applicable to the Borrower or any of its Subsidiaries except to the extent such violation would not reasonably be expected to result in a Material Adverse Effect, (ii) violate the Certificate of Incorporation or Bylaws of the Borrower or any of its Subsidiaries, (iii) violate any order, judgment or decree of any court or other Governmental Authority binding on the Borrower or any of its Subsidiaries, except to the extent such violation would not reasonably be expected to result in a Material Adverse Effect, (iv) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of the Borrower or any of its Subsidiaries, except to the extent such conflict, breach or default would not reasonably be expected to result in a Material Adverse Effect, or (v) result in or require the creation or imposition of any material Lien upon any of the material properties or assets of the Borrower or any of its Subsidiaries or (vi) require any approval of stockholders or any approval or consent of any Person under any Contractual Obligation of the Borrower or any of its Subsidiaries other than such approvals and consents which (x) have been or will be obtained on or before the Effective Date or (y) the failure to obtain would not reasonably be expected to result in a Material Adverse Effect.

 

(c)           Governmental Consents.  The execution, delivery and performance by the Borrower of this Agreement and the issuance, delivery and performance by the Borrower of any Notes will not require on the part of the Borrower any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority other than any such registration, consent, approval, notice or other action which (i) has been duly made, given or taken or (ii) the failure to make, obtain, give or take would not reasonably be expected to result in a Material Adverse Effect.

 

(d)           Binding Obligation.  This Agreement is and any Notes to be issued when executed and delivered and each Loan when made will be a legally valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

 

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Section 4.03         Financial Condition.  The Borrower has delivered to the Lenders the audited consolidated financial statements of the Borrower and its subsidiaries for the fiscal year ended January 1, 2011 (the “Financial Statements”).  All such Financial Statements were prepared in accordance with generally accepted accounting principles except for the preparation of footnote disclosures for the unaudited statements.  All such Financial Statements fairly present the consolidated financial position of the Borrower and its subsidiaries as at the respective dates thereof and the consolidated statements of income and cash flows of the Borrower and its Subsidiaries for each of the periods covered thereby, subject, in the case of any unaudited interim financial statements, to changes resulting from normal year end adjustments.

 

Section 4.04         No Material Adverse Change.  Since January 1, 2011, there has been no change in the business, operations, properties, assets or financial condition of the Borrower or any of its Subsidiaries, which has been, either in any case or in the aggregate, materially adverse to the Borrower and its Subsidiaries, taken as a whole.

 

Section 4.05         Litigation.  Except as disclosed in the Borrower’s Annual Report on Form 10-K for the fiscal year ended January 2, 2010 and in the Financial Statements delivered to the Lenders pursuant to Section 4.03 hereof, there is no action, suit, proceeding, governmental investigation (including, without limitation, any of the foregoing relating to laws, rules and regulations relating to the protection of the environment, health and safety) of which the Borrower has knowledge or arbitration (whether or not purportedly on behalf of the Borrower or any of its Subsidiaries) at law or in equity or before or by any Governmental Authority, domestic or foreign, pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries or any property of the Borrower or any of its Subsidiaries which is probable of being successful and which would have a Material Adverse Effect.

 

Section 4.06         Payment of Taxes.  Except to the extent permitted by Section 5.03, all taxes, assessments, fees and other governmental charges upon the Borrower and each of its Subsidiaries and upon their respective properties, assets, income and franchises which are material to the Borrower and its Subsidiaries, taken as a whole, and were due and payable, have been paid.

 

Section 4.07         Governmental Regulation.  (a) Neither the Borrower nor any of its Subsidiaries is subject to any federal or state statute or regulation limiting its ability to incur Indebtedness for money borrowed as contemplated by this Agreement.

 

(b)           Neither the Borrower nor any of its Subsidiaries is an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

Section 4.08         Securities Activities.  Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.

 

Section 4.09         ERISA Compliance.  (a) The Borrower and its Subsidiaries and each of their respective ERISA Affiliates are in compliance with all applicable provisions of ERISA and the regulations and published interpretations thereunder with respect to all Pension Plans and all 

 

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Multiemployer Plans, except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

(b)           No Termination Event has occurred or is reasonably expected to occur with respect to any Pension Plan, as the case may be, which has resulted or would result in any liability to the PBGC (or any successor thereto) or to any other Person under Section 4062, 4063, or 4064 of ERISA, except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

(c)           Neither the Borrower nor any of its ERISA Affiliates has incurred or reasonably expects to incur any withdrawal liability under Part E of Title IV of ERISA to any Multiemployer Plan except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

(d)           The sum of the amount of unfunded benefit liabilities under all Pension Plans (excluding each Pension Plan with an amount of unfunded benefit liabilities of zero or less) which are required by ERISA to be funded in the current fiscal year could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

(e)           Neither the Borrower nor any of its ERISA Affiliates has incurred any accumulated funding deficiency (whether or not waived) with respect to any Pension Plan except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

(f)            Neither the Borrower nor any of its ERISA Affiliates has or reasonably expects to become subject to a lien in favor of any Pension Plan under Section 302(f) of ERISA except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

As used in this Section 4.09, the term “amount of unfunded benefit liabilities” has the meaning specified in Section 4001(a)(18) of ERISA, and the term “accumulated funding deficiency” has the meaning specified in Section 302 of ERISA and Section 412 of the Code.

 

Section 4.10         Certain Fees.  No broker’s or finder’s fee or commission will be payable by the Borrower with respect to the offer, issuance and sale of any Note or the borrowing of any Loan or the execution, delivery and performance of this Agreement.

 

Section 4.11         Subsidiaries.  Each of the Borrower’s corporate Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except to the extent the failure to be in good standing or the failure to have such licenses, authorizations, consents or approvals would not reasonably be expected to result in a Material Adverse Effect.

 

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ARTICLE 5
  AFFIRMATIVE COVENANTS

 

The Borrower covenants and agrees that, so long as any of the Commitments hereunder shall be in effect or there is any Total Outstanding Amount, unless Required Lenders shall otherwise give prior written consent, it shall perform all covenants in this Article 5:

 

Section 5.01         Financial Statements and Other Reports.  The Borrower will maintain, and cause each of its subsidiaries to maintain, a system of accounting established  and administered in accordance with sound business practices to permit preparation of consolidated financial statements in conformity with GAAP in effect from time to time.  The Borrower will deliver to the Lenders (except to the extent otherwise expressly provided below in Section 5.01(b)):

 

(i)            (i)            as soon as practicable and in any event within 45 days after the end of each fiscal quarter ending after the Effective Date in the Borrower’s fiscal year the consolidated balance sheet of the Borrower and its consolidated subsidiaries as at the end of such period, and the related consolidated statements of income and cash flows of the Borrower and its consolidated subsidiaries in each case certified by the chief financial officer or controller of the Borrower that they fairly present the financial condition of the Borrower and its consolidated subsidiaries as at the dates indicated and the results of their operations and changes in their cash flows, subject to changes resulting from audit and normal year end adjustments, based on their respective normal accounting procedures applied on a consistent basis (except as noted therein);

 

(ii)           as soon as practicable and in any event within 90 days after the end of each fiscal year the consolidated balance sheet of the Borrower and its consolidated subsidiaries as at the end of such year and the related consolidated statements of income and cash flows of the Borrower and its consolidated subsidiaries for such fiscal year, accompanied by a report thereon of independent certified public accountants of recognized national standing selected by the Borrower which report shall be unqualified as to going concern and scope of audit and shall state that such consolidated financial statements present fairly the financial position of the Borrower and its consolidated subsidiaries as at the dates indicated and the results of their operations and changes in their cash flows for the periods indicated in conformity with generally accepted accounting principles applied on a basis consistent with prior years (except as noted in such report) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards;

 

(i)            (i) together with each delivery of financial statements of the Borrower and its consolidated subsidiaries pursuant to subdivisions (a)(i) and (a)(ii) above, (A) an Officer’s Certificate of the Borrower stating that the signer has reviewed the terms of this Agreement and has made, or caused to be made under such signer’s supervision, a review in reasonable detail of the transactions and condition of the Borrower and its consolidated subsidiaries during the accounting period covered by such financial statements and that such review has not disclosed the existence during or at the end of such accounting 

 

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period, and that the signer does not have knowledge of the existence as at the date of the Officers’ Certificate, of any condition or event which constitutes an Event of Default or Potential Event of Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Borrower has taken, is taking and proposes to take with respect thereto; and (B) a Compliance Certificate demonstrating in reasonable detail compliance (as determined in accordance with GAAP during and at the end of such accounting periods) with the restrictions contained in Section 6.03 and, in addition, a written statement of the chief accounting officer, chief financial officer, any vice president or the treasurer or any assistant treasurer of the Borrower describing in reasonable detail the differences between the financial information contained in such financial statements and the information contained in the Compliance Certificate relating to the Borrower’s compliance with Section 6.03 hereof;

 

(ii)           promptly upon their becoming available but only to the extent requested by a Lender, copies of all publicly available financial statements, reports, notices and proxy statements sent or made available generally by the Borrower to its security holders or by any Subsidiary of the Borrower to its security holders other than the Borrower or another Subsidiary, of all regular and periodic reports and all registration statements and prospectuses, if any, filed by the Borrower or any of its Subsidiaries with any securities exchange or with the Securities and Exchange Commission and of all press releases and other statements made available generally by the Borrower or any Subsidiary to the public concerning material developments in the business of the Borrower and its Subsidiaries;

 

(iii)          promptly upon the chairman of the board, the chief executive officer, the president, the chief accounting officer, the chief financial officer, the treasurer or the general counsel of the Borrower obtaining knowledge (A) of any condition or event which constitutes an Event of Default or Potential Event of Default, (B) that any Person has given any notice to the Borrower or any Subsidiary of the Borrower or taken any other action with respect to a claimed default or event or condition of the type referred to in Section 7.02, or (C) of a material adverse change in the business, operations, properties, assets or condition (financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole (other than any change which has been publicly disclosed), an Officer’s Certificate specifying the nature and period of existence of any such condition or event, or specifying the notice given or action taken by such holder or Person and the nature of such claimed default, Event of Default, Potential Event of Default, event or condition, and what action the Borrower has taken, is taking and proposes to take with respect thereto; and

 

(iv)          with reasonable promptness, such other information and data with respect to the Borrower or any of its subsidiaries as from time to time may be reasonably requested by any Lender.

 

Information required to be delivered pursuant to Sections 5.01(a) and 5.01(b)(ii) above shall be deemed to have been delivered on the date on which the Borrower provides notice to the Lenders that such information has been posted on the Borrower’s website on the Internet at the website address listed on the signature pages hereof, at [sec.gov/edaux/searches.htm] or at another 

 

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website identified in such notice and accessible by the Lenders without charge; provided that (i) such notice may be included in a certificate delivered pursuant to Section 5.01(b) and (ii) the Borrower shall deliver paper copies of the information referred to in Sections 5.01(a) and 5.01(b)(ii) to any Lender which requests such delivery.  The information required to be delivered pursuant to Section 5.01(b)(i) may be delivered electronically to the Administrative Agent.

 

Section 5.02         Conduct of Business and Corporate Existence.

 

(a)           Except as permitted by Section 6.01, the Borrower will at all times preserve and keep in full force and effect its corporate existence.

 

(b)           Except as permitted by Section 6.01, the Borrower will at all times preserve and keep in full force and effect, and will cause each of its Subsidiaries to preserve and keep in full force and effect their respective rights and franchises of the business, except to the extent any such failure would not reasonably be expected to result in a Material Adverse Effect.

 

Section 5.03         Payment of Taxes.  The Borrower will, and will cause each of its Subsidiaries to, pay all taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or in respect of any of its franchises, business, income or property when due which are material to the Borrower and its Subsidiaries, taken as a whole, provided that no such amount need be paid if being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and if such reserve or other appropriate provision, if any, as shall be required in conformity with generally accepted accounting principles shall have been made therefor.

 

Section 5.04         Maintenance of Properties; Insurance.  The Borrower will maintain or cause to be maintained in good repair, working order and condition all properties used or useful in its business of the Borrower and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs and renewals thereto and replacements thereof, except to the extent the failure to so maintain, repair, renew or replace would not reasonably be expected to result in a Material Adverse Effect.  The Borrower will maintain or cause to be maintained, with financially sound and reputable insurers, insurance with respect to its material properties and business and the material properties and business of its Subsidiaries against loss or damage of the kinds customarily insured against by corporations of established reputation engaged in the same or similar businesses and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations and to the extent reasonably prudent may self-insure.

 

Section 5.05         Inspection.  The Borrower shall permit any authorized representatives designated by any Lender to visit and inspect any of the properties of the Borrower or any of its Subsidiaries, including its and their financial and accounting records, and, to make copies and take extracts therefrom, and to discuss its and their affairs, finances and accounts with its and their officers, all upon reasonable notice and at such reasonable times during normal business hours and as often as may be reasonably requested; provided that any confidential information so obtained by any Lender shall remain confidential except where disclosure is mandated by applicable laws or such information otherwise becomes public other than by a breach by such Lender of this Section 5.05; provided  further that this Section shall not prohibit any Lender from 

 

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disclosing to any Agent (or any Agent from disclosing to any Lender) any Event of Default or Potential Event of Default.

 

Section 5.06         Compliance with Laws.  The Borrower and its Subsidiaries shall comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including, without limitation, laws, rules and regulations relating to the disposal of hazardous wastes and asbestos in the environment and ERISA), noncompliance with which would have a Material Adverse Effect.

 

ARTICLE 6
  NEGATIVE COVENANTS

 

The Borrower covenants and agrees that, so long as any of the Commitments shall be in effect or there is any Total Outstanding Amount, unless the Required Lenders shall otherwise give prior written consent, it will perform all covenants in this Article 6:

 

Section 6.01         Merger.  The Borrower may not consolidate with, merge with or into or sell, lease or otherwise transfer all or substantially all of its assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions) to any Person unless:

 

(a)           the Borrower shall be the continuing Person, or the Person (if other than the Borrower) formed by such consolidation or into which the Borrower is merged or to which the properties and assets of the Borrower are sold, leased or transferred shall be a solvent corporation organized and existing under the laws of the United States or any State thereof or the District of Columbia and shall expressly assume, by an agreement, executed and delivered to the Lenders, in form and substance reasonably satisfactory to the Administrative Agent, all of the obligations of the Borrower under this Agreement and the Notes;

 

(b)           immediately before and immediately after giving effect to such transaction, no Event of Default and no Potential Event of Default shall have occurred and be continuing; and

 

(c)           the Borrower shall deliver to the Lenders an Officer’s Certificate (attaching the arithmetic computations to demonstrate compliance with Section 6.03) and an opinion of counsel, each stating that such consolidation, merger, sale, lease or transfer and such agreement comply with this Section 6.01 and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

Section 6.02         Liens.  The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset (including any document or instrument in respect of goods or accounts receivable) (other than Margin Stock) of the Borrower or any of its Subsidiaries, whether now owned or hereafter acquired, or any income or profits therefrom, except:

 

(i)            Liens in existence on the date hereof and modifications, extensions, renewals, replacements or refinancings thereof, provided that such Liens are not extended to cover any other property, assets or revenues;

 

(ii)           Permitted Encumbrances;

 

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(iii)          Liens on accounts receivable sold with recourse;

 

(iv)          Liens incurred in connection with the acquisition or capital improvement of property, plant or equipment by the Borrower or any of its Subsidiaries, provided that the principal amount of the indebtedness so secured shall not exceed in any case 100% of the cost to the Borrower or such Subsidiary of the property, plant or equipment acquired and provided, further, that each such Lien shall cover only the property, plant or equipment acquired or improved and the proceeds thereof, substitutions therefor and replacements thereof;

 

(v)           Liens existing upon any property of a company which is merged with or into or is consolidated into, or substantially all the assets or shares of capital stock of which are acquired by, the Borrower or its Subsidiaries, at the time of such merger, consolidation or acquisition; provided that such mortgage, pledge or other lien does not extend to any other property or assets, other than improvements to the property subject to such Lien; and

 

(vi)          Liens (other than Liens permitted by clauses (i)-(v) above) securing obligations of the Borrower and its Subsidiaries (including Indebtedness) not in excess of an amount equal to the Pooled Basket Amount less the amount of unsecured Indebtedness of Subsidiaries permitted only pursuant to Section 6.05(a)(iii).

 

Nothing in this Section 6.02 shall prohibit the sale, assignment, transfer, conveyance or other disposition of any Margin Stock owned by the Borrower or any of its Subsidiaries at its fair value, or the creation, incurrence, assumption or existence of any Lien on or with respect to any Margin Stock.

 

Section 6.03         Financial Covenant.  The Borrower will not at any time permit Consolidated Indebtedness of Textron Manufacturing to exceed an amount equal to 65% of Consolidated Capitalization.

 

Section 6.04         Use of Proceeds.  Notwithstanding any provisions of this Agreement to the contrary, no portion of the proceeds of any borrowing or the Letters of Credit issued under this Agreement shall be used by the Borrower in any manner which would cause the borrowing or the application of such proceeds to violate Regulation U, Regulation T, or Regulation X of the Board or any other regulation of the Board or to violate the Exchange Act, in each case as in effect on the date or dates of such borrowing and such use of proceeds.

 

Section 6.05         Subsidiary Indebtedness.

 

(a)           The Borrower will not permit any of its Subsidiaries, other than Finance Companies, to incur or be liable in respect of any Indebtedness, other than:

 

(i)            Indebtedness owing to the Borrower or another Subsidiary;

 

(ii)           Indebtedness secured by a Lien permitted by Section 6.02; and

 

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(iii)          Unsecured Indebtedness not in excess of an amount equal to the Pooled Basket Amount less the amount of Indebtedness of the Borrower secured by Liens permitted only pursuant to Section 6.02(vi).

 

(b)           The Borrower will not permit the Finance Company Leverage Ratio at any time to exceed 9 to 1.

 

ARTICLE 7
  EVENTS OF DEFAULT

 

If any of the following conditions or events (“Events of Default”) shall occur and be continuing:

 

Section 7.01         Failure to Make Payments When Due.  Failure to pay any installment of principal of any Loan or any reimbursement obligation in respect of any drawing under a Letter of Credit when due, whether at stated maturity, by acceleration, by notice of prepayment or otherwise; or failure to pay any interest on any Loan or any other amount due under this Agreement when due and such default shall continue for 5 days; or

 

Section 7.02         Default in Other Agreements.  (i) Failure of the Borrower or any of its Subsidiaries to pay when due any principal or interest on any Indebtedness (other than Indebtedness referred to in Section 7.01) in an individual principal amount of $100,000,000 or more or items of Indebtedness with an aggregate principal amount of $100,000,000 or more beyond the end of any period prior to which the obligee thereunder is prohibited from accelerating payment thereunder or any grace period after the maturity thereof, or (ii) breach or default of the Borrower or any of its Subsidiaries (other than a default arising under any restrictive provision relating to any sale, pledge or other disposition of Margin Stock contained in a lending agreement to which any Lender or Affiliate thereof is a party) with respect to any other term of (x) any evidence of any Indebtedness in an individual principal amount of $100,000,000 or more or items of Indebtedness with an aggregate principal amount of $100,000,000 or more or (y) any loan agreement, mortgage, indenture or other agreement relating thereto, if such failure, default or breach shall continue for more than the period of grace, if any, specified therein and shall not at the time of acceleration hereunder be cured or waived; or

 

Section 7.03         Breach of Certain Covenants. Failure of the Borrower to perform or comply with any term or condition contained in (i) Section 5.02, 6.01, 6.03 or 6.04 of this Agreement or (ii) Section 6.05(b) of this Agreement, and in the case of clause (ii) only, such failure to perform or comply shall continue unremedied or waived for five Business Days; or

 

Section 7.04         Breach of Warranty.  Any representation or warranty made by the Borrower in this Agreement or in any statement or certificate at any time given by such Person in writing pursuant hereto or thereto or in connection herewith or therewith shall be false in any material respect on the date as of which made; or

 

Section 7.05         Other Defaults under Agreement.  The Borrower shall default in the performance of or compliance with any term contained in this Agreement other than those referred to above in Section 7.01, 7.03 or 7.04 and such default shall not have been remedied or 

 

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waived within 30 days after receipt of notice from the Administrative Agent or any Lender of such default; or

 

Section 7.06         Involuntary Bankruptcy; Appointment of Receiver, etc.  (a) A court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Borrower or any of its Restricted Subsidiaries in an involuntary case under the Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law; or (b) an involuntary case is commenced against the Borrower or any of its Restricted Subsidiaries under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over the Borrower or any of its Restricted Subsidiaries, or over all or a substantial part of its property, shall have been entered; or an interim receiver, trustee or other custodian of the Borrower or any of its Restricted Subsidiaries for all or a substantial part of the property of the Borrower or any of its Restricted Subsidiaries is involuntarily appointed; or a warrant of attachment, execution or similar process is issued against any substantial part of the property of the Borrower or any of its Restricted Subsidiaries, and the continuance of any such events in subpart (b) for 60 days unless dismissed, bonded or discharged; or

 

Section 7.07         Voluntary Bankruptcy; Appointment of Receiver, etc.  The Borrower or any of its Restricted Subsidiaries shall have an order for relief entered with respect to it or commence a voluntary case under the Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property; the making by the Borrower or any of its Restricted Subsidiaries of any assignment for the benefit of creditors; or the inability or failure of the Borrower or any of its Restricted Subsidiaries, or the admission by the Borrower or any of its Restricted Subsidiaries in writing of its inability to pay its debts as such debts become due; or the Board of Directors of the Borrower or any Restricted Subsidiary (or any committee thereof) adopts any resolution or otherwise authorizes action to approve any of the foregoing; or

 

Section 7.08         Judgments and Attachments.  Any money judgment, writ or warrant of attachment, or similar process involving individually or in the aggregate an amount in excess of $100,000,000 shall be entered or filed against the Borrower or any Restricted Subsidiary or any of its assets and shall remain undischarged, unvacated, unbonded or unstayed, as the case may be, for a period of 30 days or in any event later than five days prior to the date of any proposed sale thereunder; or

 

Section 7.09         Dissolution.  Any order, judgment or decree shall be entered against the Borrower or any of its Restricted Subsidiaries decreeing the dissolution or split up of the Borrower or that Restricted Subsidiary and such order shall remain undischarged or unstayed for a period in excess of 30 days; or

 

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Section 7.10         ERISA Title IV Liabilities.  (a) The Borrower or any of its ERISA Affiliates shall terminate or suffer the termination of (by action of the PBGC  or any successor thereto) any Pension Plan, or shall suffer the appointment of or the institution of proceedings to appoint a trustee to administer any Pension Plan, or shall withdraw (under Section 4063 of ERISA) from a Pension Plan, if as of the date thereof or any subsequent date the sum of the Borrower’s and each ERISA Affiliate’s liabilities to the PBGC or any other Person under Sections 4062, 4063 and 4064 of ERISA (calculated after giving effect to the tax consequences thereof) resulting from or otherwise associated with the above described events could reasonably be expected to result in a Material Adverse Effect; or

 

(b)           The Borrower or any of its ERISA Affiliates shall withdraw from any Multiemployer Plan and the aggregate amount of withdrawal liability (determined pursuant to Sections 4201 et seq. of ERISA) to which the Borrower and its ERISA Affiliates become obligated to all Multiemployer Plans requires annual payments that could reasonably be expected to result in a Material Adverse Effect; or

 

Section 7.11         Change of Control.  A Change of Control shall occur;

 

THEN (i) upon the occurrence of any Event of Default described in the foregoing Sections 7.06 or 7.07, the unpaid principal amount of and accrued interest on all the Loans and any outstanding reimbursement obligation in respect of any drawing under a Letter of Credit shall automatically become immediately due and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by the Borrower, and the Commitments and the obligation of each Lender to make any Loans hereunder and the obligation of each Issuing Lender to issue any Letter of Credit hereunder shall thereupon terminate, and (ii) upon the occurrence of any other Event of Default, the Required Lenders may, by written notice to the Borrower, (A) terminate the Commitments and the obligation of each Lender to make any Loans hereunder and the obligation of each Issuing Lender to issue any Letter of Credit hereunder shall thereupon terminate and/or (B) declare the unpaid principal amount of and accrued interest on all the Loans and any outstanding reimbursement obligation in respect of any drawing under a Letter of Credit to be, and the same shall forthwith become, immediately due and payable.  Nevertheless, if at any time within 60 days after acceleration of the maturity of the Loans and any outstanding reimbursement obligation in respect of any drawing under a Letter of Credit, the Borrower shall pay all arrears of interest and all payments on account of the principal or any outstanding reimbursement obligation in respect of any drawing under a Letter of Credit which shall have become due otherwise than by acceleration (with interest on principal and, to the extent permitted by law, on overdue interest, at the rates specified in this Agreement) and all other fees and expenses then owed hereunder and all Events of Default and Potential Events of Default (other than non payment of principal of and accrued interest on the Loans and any outstanding reimbursement obligation in respect of any drawing under a Letter of Credit, in each case due and payable solely by virtue of acceleration) shall be remedied or waived pursuant to Section 9.05, then the Required Lenders by written notice to the Borrower may (in their sole discretion) rescind and annul the acceleration and its consequences; but such action shall not affect any termination of the Commitments or any subsequent Event of Default or Potential Event of Default or impair any right consequent thereon.

 

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Section 7.12         Cash Cover.  The Borrower agrees, in addition to the provisions in Article 7, that upon the occurrence and during the continuance of any Event of Default, it shall, if requested by the Administrative Agent upon the instruction of the Lenders having more than 50% of the Letter of Credit Liabilities, pay to the Administrative Agent an amount in immediately available funds (which funds shall be held as collateral pursuant to arrangements satisfactory to the Administrative Agent for the benefit of the Lenders and the Issuing Lenders) equal to the aggregate amount available for drawing under all Letters of Credit outstanding at such time, provided that, upon the occurrence of any Event of Default specified in Section 7.06 or 7.07 with respect to the Borrower, the Borrower shall pay such amount forthwith without any notice or demand or any other act by the Administrative Agent or the Lenders.

 

ARTICLE 8
  AGENTS

 

Section 8.01         Appointment.  Each of the Lenders hereby appoints and authorizes each Agent to act hereunder and under the other instruments and agreements referred to herein as its agent hereunder and thereunder.  Each Agent agrees to act as such upon the express conditions contained in this Article 8.  The provisions of this Article 8 are solely for the benefit of the Agents, and the Borrower shall not have any rights as a third party beneficiary of or any obligations under any of the provisions hereof other than Sections 8.05 and 8.06.  In performing its functions and duties under this Agreement, each Agent shall act solely as agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for the Borrower.

 

Section 8.02         Powers; General Immunity.  (a) Duties Specified.  Each Lender irrevocably authorizes each Agent to take such action on such Lender’s behalf and to exercise such powers hereunder and under the other instruments and agreements referred to herein as are specifically delegated to such Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto.  The Agents shall have only those duties and responsibilities which are expressly specified in this Agreement and each may perform such duties by or through its agents or employees.  The duties of the Agents shall be mechanical and administrative in nature; and no Agent shall have by reason of this Agreement a fiduciary or trust relationship in respect of any Lender or its Affiliates, and nothing in this Agreement, expressed or implied, is intended to or shall be so construed as to impose upon the Agents any obligations in respect of this Agreement or the other instruments and agreements referred to herein except as expressly set forth herein or therein.

 

(b)           No Responsibility for Certain Matters.  No Agent shall be responsible to any Lender for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement or any Loan or any Letter of Credit, or for any representations, warranties, recitals or statements made herein or therein or made in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by such Agent to any Lender or by or on behalf of the Borrower to such Agent or any Lender, or be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or therein or as to the use of the proceeds of the Loans or the Letters

 

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of Credit, or of the existence or possible existence of any Event of Default or Potential Event of Default.

 

(c)           Exculpatory Provisions.  Neither any Agent nor any of their respective officers, directors, employees or agents shall be responsible or liable to any Lender for any action taken or omitted hereunder or under the Notes or in connection herewith or therewith unless caused by its or their gross negligence or willful misconduct.  If an Agent shall request instructions from any Lender with respect to any act or action (including the failure to take an action) in connection with this Agreement, such Agent shall be entitled to refrain from such act or taking such action unless and until such Agent shall have received instructions from the Required Lenders.  Without prejudice to the generality of the foregoing, (i) the Agents shall be entitled to rely, and shall be fully protected in relying, upon any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys (who may be attorneys for the Borrower), accountants, experts and other professional advisors selected by it; and (ii) no Lender shall have any right of action whatsoever against any Agent as a result of such Agent acting or (where so instructed) refraining from acting under this Agreement or the other instruments and agreements referred to herein or therein in accordance with the instructions of the Required Lenders.  The Agents shall be entitled to refrain from exercising any power, discretion or authority vested in it under this Agreement or the other instruments and agreements referred to herein or therein unless and until it has obtained the instructions of the Required Lenders.

 

(d)           Agents Entitled to Act as Lender.  The agency hereby created shall in no way impair or affect any of the rights and powers of, or impose any duties or obligations upon, any Agent in its respective individual capacity as a Lender hereunder.  With respect to its participation in the Loans and the Letters of Credit, each of JPMorgan Chase, Citibank, N.A., Bank of America, N.A., Deutsche Bank AG New York Branch and The Bank of Tokyo-Mitsubishi UFJ, Ltd. shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not performing the duties and functions delegated to it hereunder, and the term “Lender” or “Lenders” or any similar term shall, unless the context clearly otherwise indicates, include the Agents in their respective individual capacity.  Each of JPMorgan Chase, Citibank, N.A., Bank of America, N.A., Deutsche Bank AG New York Branch and The Bank of Tokyo-Mitsubishi UFJ, Ltd. and their respective Affiliates may accept deposits from, lend money to and generally engage in any kind of banking, trust, financial advisory or other business with the Borrower or any Affiliate or Subsidiary of the Borrower as if it were not performing the duties specified herein, and may accept fees and other consideration from the Borrower or any such Affiliate or Subsidiary for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.

 

Section 8.03         Representations and Warranties; No Responsibility for Appraisal of Creditworthiness.  Each Lender represents and warrants that it has made its own independent investigation of the financial condition and affairs of the Borrower in connection with the making of the Loans hereunder and has made and shall continue to make its own appraisal of the creditworthiness of the Borrower.  No Agent shall have any duty or responsibility either initially or on a continuing basis to make any such investigation or any such appraisal on behalf of any Lender or to provide any Lender with any credit or other information with respect thereto

 

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whether coming into its possession before the making of the Loan or the issuance of the Letter of Credit or any time or times thereafter, and no Agent shall further have any responsibility with respect to the accuracy of or the completeness of the information provided to the Lenders.

 

Section 8.04         Right to Indemnity.  Each Lender severally in accordance with its Applicable Percentage agrees to indemnify each Agent and each Issuing Lender and the officers, directors, employees, agents and advisors and affiliates of each of them to the extent such Agent or Issuing Lender shall not have been reimbursed by the Borrower, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including, without limitation, counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against such Agent or Issuing Lender in performing its duties hereunder or under the Notes or any Letter of Credit or in any way relating to or arising out of this Agreement; provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from an Agent’s gross negligence or willful misconduct; provided  further that nothing in this Section 8.04 shall affect any right that a Lender may have against an Issuing Lender under Section 2.12(f)(ii).  If any indemnity furnished to an Agent or Issuing Lender for any purpose shall, in the opinion of such Agent or Issuing Lender, be insufficient or become impaired, such Agent or Issuing Lender may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished.

 

Section 8.05         Resignation by or Removal of the Agents.  (a)  Any Agent may resign from the performance of all its functions and duties hereunder at any time by giving 30 days’ prior written notice to the Borrower and the Lenders.  Such resignation shall take effect upon the acceptance by a successor Agent of appointment pursuant to clauses (b) and (c) below or as otherwise provided below.  In addition, in the event the Administrative Agent becomes a Defaulting Lender, the Administrative Agent may be removed by the Borrower, with the consent of the Required Lenders.

 

(b)           Upon any such notice of resignation or upon any such removal, the Required Lenders shall appoint a successor Agent who shall be satisfactory to the Borrower and shall be an incorporated bank or trust company with a combined surplus and undivided capital of at least $500 million.

 

(c)           In the case of resignation of an Agent, if a successor Agent shall not have been so appointed within said 30 day period, the resigning Agent, with the consent of the Borrower, shall then appoint a successor Agent who shall serve in the same capacity as the resigning Agent until such time, if any, as the Required Lenders, with the consent of the Borrower, appoint a successor Agent as provided above.

 

Section 8.06         Successor Agents.  Any Agent may resign at any time as provided in Section 8.05 hereof.  Upon any such notice of resignation, the Required Lenders shall have the right, upon five days’ notice to the Borrower and subject to Section 8.05 hereof, to appoint a successor Agent.  Upon the acceptance of any appointment by a successor Agent, that successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and

 

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obligations as an Agent under this Agreement.  After any retiring Agent’s resignation hereunder as an Agent the provisions of this Article 8 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was an Agent under this Agreement.

 

Section 8.07         Other Agents. Nothing in this Agreement shall impose upon any Agent other than the Administrative Agent any duty or liability whatsoever in its capacity as an Agent.

 

ARTICLE 9
  MISCELLANEOUS

 

Section 9.01         Benefit of Agreement.  (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties hereto, provided that the Borrower may not assign or transfer any of its interest hereunder without the prior written consent of the Lenders, except as permitted by Section 6.01.

 

(b)           Any Lender may make, carry or transfer Loans or Letter of Credit Liabilities at the time owing to it at, to or for the account of, any of its branch offices or the offices of an Affiliate of such Lender, provided that doing so shall not cause the Borrower to incur any additional costs hereunder at the time of such transfer.

 

(c)           Any Lender may assign its rights and delegate its obligations under this Agreement and further may sell participations in all or any part of any Loan or Loans made by it or its Commitment or Letter of Credit Liabilities at the time owing to it or any other interest herein to another bank or other entity; provided that (i) in the case of an assignment, such Lender shall (A) give to the Borrower and the Administrative Agent prior notice thereof (and the Administrative Agent shall promptly notify each Issuing Lender thereof), and, in the case of any assignment, the Borrower, the Issuing Lenders and the Administrative Agent shall, except as set forth in the last sentence of this Section 9.01(c), have consented thereto (such consent not to be unreasonably withheld or delayed) and (B) comply with Section 9.01(e) hereof and thereupon, the assignee (the “Purchasing Lender”) shall have, to the extent of such assignment (unless otherwise provided thereby), the rights and benefits described in Section 9.01(e) hereof, and (ii) in the case of a participation, except as set forth below, (A) the participant shall not have any rights under this Agreement or any other document delivered in connection herewith (the participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto); provided that a participation agreement may provide that a Lender will not agree to any modification, amendment or waiver of any provision in this Agreement described in clause (i), (iii), or (v) of Section 9.05(b) without the consent of the participant and (B) all amounts payable by the Borrower under Sections 2.09(e) and 2.09(h) hereof shall be determined as if the Lender had not sold such participation.  Except with respect to interest rate, principal amount of any Loan, fees, scheduled dates for payment of principal or interest or fees, scheduled termination of commitments and commitment amounts, a Lender will not in any such participation agreement restrict its ability to make any modification, amendment or waiver to this Agreement without the consent of the participant.  Any Lender may furnish any information concerning the Borrower in possession of such Lender from time to time to Affiliates of such Lender and to assignees and participants (including prospective assignees and participants), provided, however, that (i) except when such information is furnished to an Affiliate, the furnishing Lender shall give the Borrower

 

53

 

prior notice of any furnishing of non public information (ii) the recipient shall agree to the terms of this Section 9.01 hereof and (iii) the furnishing of such information (and the nature, manner and extent thereof) by any Lender to its Affiliates and such assignees and participants shall be further governed by the relevant agreement, assignment or participation agreement relating to such arrangement, assignment or participation, as the case may be.  Notwithstanding anything to the contrary in the foregoing, (A) any Lender may, without the consent of the Borrower or the Administrative Agent, assign any of its rights and interests in Loans hereunder to (x) a federal reserve bank, (y) another Lender (other than a Defaulting Lender) or (z) any Affiliate of such Lender; (B) no consent of the Borrower to an assignment shall be required if at the time an Event of Default exists; and (C) the Borrower shall be deemed to have consented to any assignment unless the Borrower shall object thereto by written notice to the Administrative Agent within fifteen Business Days after having received notice thereof.

 

(d)           Except pursuant to an assignment permitted by this Agreement but only to the extent set forth in such assignment, no Lender shall, as between the Borrower and that Lender, be relieved of any of its obligations hereunder as a result of any sale, transfer or negotiation of, or granting of participations in, all or any part of the Loans or Commitment of or Letter of Credit Liabilities at the time owing to that Lender or other obligations owed to such Lender.

 

(e)           Subject to Section 9.01(c), any Lender may at any time assign to one or more Lenders or other financial institutions all, or a proportionate part of all, of its rights and obligations under this Agreement, provided that (i) the minimum amount of such assignment shall be equivalent to (A) if the Purchasing Lender is not a Lender hereunder, $10,000,000 or the aggregate amount of the assigning Lender’s Commitment, whichever is less and (B) if the Purchasing Lender is a Lender hereunder, $5,000,000 or the aggregate amount of the assigning Lender’s Commitment, whichever is less and (ii) after giving effect to such assignment, the Commitment of the assigning Lender is equivalent to not less than $10,000,000, unless such assigning Lender shall have assigned all of its rights and obligations under this Agreement.  Any assignment made pursuant to Section 9.01(c) hereof shall be made pursuant to a Transfer Supplement, substantially in the form of Exhibit G annexed hereto, executed by the Purchasing Lender, the transferor Lender, the Borrower and the Administrative Agent.  Upon (i) such execution of such Transfer Supplement, (ii) delivery of an executed copy thereof to the Borrower, (iii) payment by such Purchasing Lender to such transferor Lender of an amount equal to the purchase price agreed between such transferor Lender and such Purchasing Lender, and (iv) payment by such Purchasing Lender or transferor Lender (as they shall mutually agree) to the Administrative Agent of a non refundable fee of $3,500 to cover administrative and other expenses which may be incurred in connection with such assignment, such Purchasing Lender shall for all purposes be a Lender party to this Agreement and shall have the rights (including without limitation the benefits of Sections 2.09 and 2.10) and obligations of a Lender under this Agreement to the same extent as if it were an original party hereto and thereto with the pro rata Share of the applicable Commitment set forth in such Transfer Supplement, and no further consent or action by the Borrower, the Lenders or the Administrative Agent shall be required.  Such Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender and the resulting adjustment of pro rata Shares arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the Loans.  Upon the consummation of any transfer to a Purchasing Lender pursuant to this

 

54

 

paragraph (e), the transferor Lender, the Administrative Agent and the Borrower shall make appropriate arrangements so that, if requested, a replacement Note is issued to such transferor Lender and a new Note or, as appropriate, a replacement Note, if requested, issued to such Purchasing Lender, in each case in principal amounts reflecting their pro rata Shares or, as appropriate, their outstanding Loans, as adjusted pursuant to such Transfer Supplement.  Notwithstanding anything to the contrary contained in this Agreement, neither the Borrower nor any of its Affiliates nor any Defaulting Lender may be a Purchasing Lender.

 

(f)            Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans, letters of credit or its other obligations under this Agreement) except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent clearly demonstrable error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

 

Section 9.02         Expenses.  Whether or not the transactions contemplated hereby shall be consummated, the Borrower agrees to promptly pay (a) all the actual and reasonable out of pocket costs and expenses of the Agents in connection with the negotiation, preparation and execution of this Agreement; (b) the reasonable fees, expenses and disbursements of Davis, Polk & Wardwell, special counsel to the Agents, in connection with the negotiation, preparation, execution and administration of this Agreement, the Loans and any amendments and waivers hereto or thereto; and (c) all costs and expenses (including attorneys’ fees, expenses and disbursements, and costs of settlement) incurred by the Lenders (including any Issuing Lender) in enforcing any obligations of or in collecting any payments due from the Borrower hereunder by reason of the occurrence of any Event of Default or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work-out” or of any insolvency or bankruptcy proceedings or otherwise.

 

Section 9.03         Indemnity.  In addition to the payment of expenses pursuant to Section 9.02 hereof, whether or not the transactions  contemplated hereby shall be consummated, the Borrower agrees to indemnify, pay and hold each Agent and each Lender (including any Issuing Lender) and the officers, directors, employees, agents, advisors and affiliates of each of them (collectively called the “Indemnitees”) harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, the reasonable fees, expenses and disbursements of counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Indemnitee shall be designated a party thereto), which may be imposed on, incurred by, or asserted against that Indemnitee, in any manner relating to or arising out of this Agreement or any Letter of Credit, the Lenders’ agreement to make the Loans or the use or intended use of the

 

55

 

proceeds of any of the Loans or Letters of Credit hereunder (the “indemnified liabilities”); provided that, the Borrower shall have no obligation to any Indemnitee hereunder to the extent that such indemnified liabilities arose from the gross negligence or willful misconduct of that Indemnitee.  To the extent that the undertaking to indemnify, pay and hold harmless set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy or otherwise, the Borrower shall contribute the maximum portion which it is permitted to pay and satisfy under applicable law, to the payment and satisfaction of all indemnified liabilities incurred by the Indemnitees or any of them.

 

Section 9.04         Setoff.  Each Lender agrees that if it shall, by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount of principal and interest then due with respect to the  Loans and Letter of Credit Liabilities held by it which is greater than the proportion received by any other Lender in respect of the aggregate amount of principal and interest then due with respect to the  Loans and Letter of Credit Liabilities held by such other Lender, the Lender receiving such proportionately greater payment shall purchase such participations in the  Loans and Letter of Credit Liabilities held by the other Lenders, and such other adjustments shall be made, as may be required so that all such payments of principal and interest with respect to the  Loans and Letter of Credit Liabilities held by the Lenders shall be shared by the Lenders pro rata; provided that nothing in this Section shall impair the right of any Lender to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its indebtedness under the Agreement.  The Borrower agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a participation in a Loan or Letter of Credit Liability, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of set-off or counterclaim and other rights with respect to such participation as fully as if such holder of a participation were a direct creditor of the Borrower in the amount of such participation.

 

Section 9.05         Amendments and Waivers.  No amendment, modification, termination or waiver of any provision of this Agreement or any Note or Letter of Credit or consent to any departure by the Borrower therefrom shall in any event be effective without the written concurrence of the Required Lenders; provided that (a) any amendment, modification, termination or waiver (i) of any provision that expressly requires the approval or concurrence of all Lenders, (ii) of any provision that affects the definition of “Required Lenders” or (iii) of any of the provisions contained in Section 7.01 hereof and this Section 9.05, shall be effective only if evidenced by a writing signed by or on behalf of all Lenders, and (b) any amendment, modification, termination or waiver (i) of any provision that increases the principal amount of the Commitments or the Loans, changes a Lender’s pro rata Share, affects the definition of “Termination Date” or postpones (except as expressly provided in Section 2.12) the expiry date of any Letter of Credit, (ii) that permits an extension of the Commitment of any Lender pursuant to Section 2.01(d)(ii) without the approval of such Lender, (iii) that decreases the amount or changes the due date of any amount payable in respect of the fees payable hereunder, (iv) of any of the provisions contained in Sections 2.09(b) and 2.09(c) hereof or (v) that decreases the principal of or interest rates borne by the  Loans or the amount to be reimbursed in respect of any Letter of Credit or any interest thereon, or postpones the payment of principal or interest due on the  Loans or for reimbursement in respect of any Letter of Credit, shall be effective only if evidenced by a writing signed by or on behalf of each Lender affected thereby; provided that no

 

56

 

consent of any Defaulting Lender shall be required pursuant to clause (a) above as to any modification that does not adversely affect such Defaulting Lender in a non-ratable manner.  No amendment, modification, termination or waiver of any provision of Article 8 hereof or any of the rights, duties, indemnities or obligations of any Agent, as agent shall be effective without the written concurrence of such Agent.  No amendment, modification, termination or waiver of any provision of Section 2.12 shall be effective without the written concurrence of the Administrative Agent and the Issuing Lenders.  The Administrative Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of that Lender.  Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.  No notice to or demand on the Borrower in any case shall entitle the Borrower to any further notice or demand in similar or other circumstances.  Any amendment, modification, termination, waiver or consent effected in accordance with this Section 9.05 shall be binding upon each present or future Lender and, if signed by the Borrower, on the Borrower.

 

Section 9.06         Independence of Covenants.  All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitation of, another covenant shall not avoid the occurrence of an Event of Default or Potential Event of Default if such action is taken or condition exists.

 

Section 9.07         Notices.  Unless otherwise provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, telexed or sent by United States mail and shall be deemed to have been given when delivered in person, upon receipt of telecopy or telex or four Business Days after depositing it in the United States mail, registered or certified, with postage prepaid and properly addressed; provided that notices to the Administrative Agent shall not be effective until received by the Administrative Agent.  For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section 9.07) shall be: (a) in the case of the Borrower, at its address or facsimile number set forth on the signature pages hereof, (b) in the case of the Administrative Agent, at its address, facsimile number or telex number in New York City set forth on the signature pages hereof, (c) in the case of any Lender, at its address, facsimile number or telex number set forth in its Administrative Questionnaire or (d) in the case of any party, at such other address, facsimile number or telex number as such party may hereafter specify for the purpose by notice to the Administrative Agent and the Borrower.

 

Section 9.08         Survival of Warranties and Certain Agreements.  (a) All agreements, representations and warranties made herein shall survive the execution and delivery of this Agreement and the making of the Loans and the issuances of the Letters of Credit hereunder.

 

(b)           Notwithstanding anything in this Agreement or implied by law to the contrary, the agreements of the Borrower set forth in Sections 2.09(e), 2.09(h), 2.14, 9.02 and 9.03 and the agreements of Lenders set forth in Sections 8.02(c), 8.04, 9.04 and 9.05 shall survive the payment of the Loans, the reduction of the Letter of Credit Liabilities to zero and the termination of this Agreement.

 

57

 

Section 9.09         USA PATRIOT Act Notice.  Each Lender that is subject to the USA PATRIOT Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that, pursuant to the requirements of the USA PATRIOT Act, it may be 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 such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the USA PATRIOT Act.

 

Section 9.10         Failure or Indulgence Not Waiver; Remedies Cumulative.  No failure or delay on the part of any Lender in the exercise of any power, right or privilege hereunder or the Loans or Letters of Credit shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.  All rights and remedies existing under this Agreement or the Loans or the Letters of Credit are cumulative to and not exclusive of any rights or remedies otherwise available.

 

Section 9.11         Severability.  In case any provision in or obligation under this Agreement or Loan shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations thereof, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

 

Section 9.12         Obligations Several; Independent Nature of Lenders’ Rights.  The obligation of each Lender hereunder is several, and no Lender shall be responsible for the obligation or commitment of any other Lender hereunder.  Nothing contained in this Agreement and no action taken by the Lenders pursuant hereto shall be deemed to constitute the Lenders to be a partnership, an association, a joint venture or any other kind of entity.  The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose.

 

Section 9.13         Headings.  Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.

 

Section 9.14         Applicable Law, Consent to Jurisdiction.

 

(a)           THIS AGREEMENT, THE NOTES AND THE LOANS SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).

 

(b)           ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE BORROWER WITH RESPECT TO THIS AGREEMENT OR THE NOTES MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE CITY OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT THE BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,

 

58

 

GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.  THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.

 

Section 9.15         Successors and Assigns.  This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of the Lenders.  The terms and provisions of this Agreement shall inure to the benefit of any assignee or transferee of the Loans and in the event of such transfer or assignment, the rights and privileges herein conferred upon the Lenders shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof.  The Borrower’s rights hereunder may not be assigned without the written consent of all the Lenders except pursuant to a merger, consolidation or sale, lease or transfer of assets permitted by Section 6.01 hereof.  The Lenders’ rights of assignment are limited by and subject to Section 9.01 hereof.  The Borrower may, in its sole discretion, upon ten (10) days’ prior written notice, replace any of the Lenders with one or more Lenders provided that (i) the Lender being replaced has concurrently therewith been paid in full all amounts due to such Lender hereunder, (ii) the full amount of the Commitments remains unchanged and (iii) the percentages of the total Commitments allocated to each other Lender (or any successors thereto) remains unchanged unless the prior written consent from such Lender has been obtained.  Any such Lender so replaced shall, upon written request of the Borrower, execute and deliver such instruments and agreements as are reasonably necessary to accomplish the same.

 

Section 9.16         Counterparts; Effectiveness; Integration.  This Agreement and any amendments, waivers, consents or supplements may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.  This Agreement shall become effective on such date (the “Effective Date”) as (i) a counterpart hereof shall be executed by each of the parties hereto and copies hereof shall be delivered to the Borrower and the Administrative Agent and (ii) the conditions set forth in Section 3.01 shall be satisfied.  This Agreement and the Notes (and, as applicable, the fee letters entered into in connection herewith) 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.

 

Section 9.17         No Fiduciary Duty.  The Borrower agrees that in connection with all aspects of the Loans contemplated by this Agreement and any communications in connection therewith, the Borrower and its Subsidiaries, on the one hand, and the Agents, the Lenders and their Affiliates, on the other hand, will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of any Agent, Lender or Affiliate, and no such duty will be deemed to have arisen in connection with any such transactions or communications.

 

59

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	
 
    	
Borrower:
    
	
 
    	
 
    
	
 
    	
TEXTRON   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mary F.   Lovejoy
    
	
 
    	
Name:
    	
Mary   F. Lovejoy
    
	
 
    	
Title:
    	
Vice   President and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Notice   Address:
   Textron Inc.
   40 Westminster Street
   Providence, RI 02903
   Attention: Treasurer

 

Telephone   No. (401) 457-6009
   Telecopy No. (401) 457-3533
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
with   a copy to:
   Textron Inc.
   40 Westminster Street
   Providence, RI 02903
   Attention: General Counsel
    

 

60

 

	
$135,000,000
    	
JPMORGAN CHASE BANK, N.A., as 
   Administrative Agent and as Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert P.   Kellas
    
	
 
    	
Name:
    	
Robert   P. Kellas
    
	
 
    	
Title:
    	
Executive   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Notice   Address: 
   JPMorgan Chase Bank, N.A.
   383 Madison Avenue
   New York, New York 10179
   Attention: Jeremy M. Jones 

Telephone   No. (713) 750-3512
   Telecopy No. (713) 750-2878 E-mail: Jeremy.M.Jones@jpmorgan.com
    

 

61

 

	
$135,000,000
    	
CITIBANK,   N.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Andrew Sidford
    
	
 
    	
Name:
    	
Andrew   Sidford
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
$135,000,000
    	
BANK   OF AMERICA, N.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Edwin B.   Cox, Jr.
    
	
 
    	
Name:
    	
Edwin   B. Cox, Jr.
    
	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
$135,000,000
    	
DEUTSCHE   BANK AG NEW YORK BRANCH
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Andreas   Neumeier
    
	
 
    	
Name:
    	
Andreas   Neumeier
    
	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Yvonne Tilden
    
	
 
    	
Name:
    	
Yvonne   Tilden
    
	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
$135,000,000
    	
THE   BANK OF TOKYO-MITSUBISHI UFJ, LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Joanne Nasuti
    
	
 
    	
Name:
    	
Joanne   Nasuti
    
	
 
    	
Title:
    	
Authorized   Signatory
    

 

 

	
$107,500,000
    	
GOLDMAN   SACHS BANK USA
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark Walton
    
	
 
    	
Name:
    	
Mark   Walton
    
	
 
    	
Title:
    	
Authorized   Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
$107,500,000
    	
MORGAN   STANLEY BANK, N.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sherrese   Clarke
    
	
 
    	
Name:
    	
Sherrese   Clarke
    
	
 
    	
Title:
    	
Authorized   Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
$75,000,000
    	
THE   BANK OF NEW YORK MELLON
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kenneth P.   Sneider, Jr.
    
	
 
    	
Name:
    	
Kenneth   P. Sneider, Jr.
    
	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
$35,000,000
    	
THE   NORTHERN TRUST COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Cliff Hoppe
    
	
 
    	
Name:
    	
Cliff   Hoppe
    
	
 
    	
Title:
    	
Second   Vice President
    

 

63

 

COMMITMENT SCHEDULE

 

	
Lender
    	
 
    	
Commitment
    	
 
    
	
JPMorgan Chase Bank, N.A.
    	
 
    	
$
    	
135,000,000
    	
 
    
	
Citibank, N.A.
    	
 
    	
$
    	
135,000,000
    	
 
    
	
Bank of America, N.A.
    	
 
    	
$
    	
135,000,000
    	
 
    
	
Deutsche Bank AG New York Branch
    	
 
    	
$
    	
135,000,000
    	
 
    
	
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
    	
 
    	
$
    	
135,000,000
    	
 
    
	
Goldman Sachs Bank USA
    	
 
    	
$
    	
107,500,000
    	
 
    
	
Morgan Stanley Bank, N.A.
    	
 
    	
$
    	
107,500,000
    	
 
    
	
The Bank of New York Mellon
    	
 
    	
$
    	
75,000,000
    	
 
    
	
The Northern Trust Company
    	
 
    	
$
    	
35,000,000
    	
 
    
	
Total
    	
 
    	
$
    	
1,000,000,000
    	
 
    

 

64

 

PRICING SCHEDULE

 

Each of “Facility Fee Rate” , “Eurodollar Margin” , “Base Rate Margin” and “Letter of Credit Fee Rate” means, for any date, the rate set forth below in the row opposite such term and under the column corresponding to the “Pricing Level” at such date:

 

	
 
    	
 
    	
Level I
    	
 
    	
Level II
    	
 
    	
Level III
    	
 
    	
Level IV
    	
 
    	
Level V
    	
 
    
	
Facility Fee Rate
    	
 
    	
0.20
    	
%
    	
0.25
    	
%
    	
0.30
    	
%
    	
0.35
    	
%
    	
0.50
    	
%
    
	
Eurodollar Margin
    	
 
    	
1.30
    	
%
    	
1.50
    	
%
    	
1.70
    	
%
    	
1.90
    	
%
    	
2.25
    	
%
    
	
Base Rate Margin
    	
 
    	
0.30
    	
%
    	
0.50
    	
%
    	
0.70
    	
%
    	
0.90
    	
%
    	
1.25
    	
%
    
	
Letter of Credit Fee Rate
    	
 
    	
1.30
    	
%
    	
1.50
    	
%
    	
1.70
    	
%
    	
1.90
    	
%
    	
2.25
    	
%
    

 

For purposes of this Schedule, the following terms have the following meanings, subject to the concluding paragraph of this Schedule:

 

“Level I Pricing” applies at any date if, at such date, the Borrower’s long-term debt is rated BBB+ or higher by S&P, Baa1 or higher by Moody’s and BBB+ or higher by Fitch.

 

“Level II Pricing” applies at any date if, at such date, the Borrower’s long-term debt is rated BBB by S&P, Baa2 by Moody’s and BBB by Fitch.

 

“Level III Pricing” applies at any date if, at such date, the Borrower’s long-term debt is rated BBB- by S&P, Baa3 by Moody’s and BBB- by Fitch.

 

“Level IV Pricing” applies at any date, if at such date, the Borrower’s long-term debt is rated BB+ by S&P, Ba1 by Moody’s and BB+ by Fitch.

 

“Level V Pricing” applies at any date if, at such date, no other Pricing Level applies.

 

“Fitch” means Fitch Ratings Ltd.

 

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

 

“Pricing Level” refers to the determination of which of Level I, Level II, Level III, Level IV or Level V applies at any date.

 

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

 

The credit ratings to be utilized for purposes of this Schedule are those assigned to the senior unsecured long-term debt securities of the Borrower without third-party enhancement, and any rating assigned to any other debt security of the Borrower shall be disregarded.  The rating in effect at any date is that in effect at the close of business of such date.

 

 

If the Borrower is split-rated, then for purposes of determining the applicable Pricing Level, (a) if the S&P and Moody’s ratings are the same, all three ratings will be deemed to be at that level, (b) if the S&P and Moody’s ratings are not the same, and the ratings differential is one level, all three ratings will be deemed to be at the higher level of S&P and Moody’s and (c) if the S&P and Moody’s ratings are not the same and the ratings differential is two levels or more, all three ratings will be deemed to be at a level one notch lower than the higher of S&P and Moody’s.

 

2

 

SCHEDULE 2.15

EXISTING LETTERS OF CREDIT

 

Issuing Lender:  Bank of America, N.A.

 

	
Applicant
    	
 
    	
Beneficiary
    	
 
    	
L/C No.
    	
 
    	
Currency
    	
 
    	
Amount
    	
 
    	
Effective Date
    	
 
    	
Expiration
   Date
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cessna Aircraft Company
    	
 
    	
The   Bank of New York Trust Company
    	
 
    	
005665174
    	
 
    	
USD
    	
 
    	
$
    	
613,702.08
    	
 
    	
03/31/2003
    	
 
    	
12/15/2011
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cessna Aircraft Company
    	
 
    	
Wells   Fargo Bank
    	
 
    	
005665185
    	
 
    	
USD
    	
 
    	
$
    	
3,043,150.70
    	
 
    	
03/31/2003
    	
 
    	
11/03/2011
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc. and Cessna Aircraft Company
    	
 
    	
The   Bank of New York
    	
 
    	
005665218
    	
 
    	
USD
    	
 
    	
$
    	
9,030,195.01
    	
 
    	
03/31/2003
    	
 
    	
04/15/2011
    	
 
    

 

Issuing Lender:  JPMorgan Chase Bank, N.A.

 

	
Applicant
    	
 
    	
Beneficiary
    	
 
    	
L/C No.
    	
 
    	
Currency
    	
 
    	
Amount
    	
 
    	
Effective Date
    	
 
    	
Expiration
   Date
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AAI Corporation
    	
 
    	
The   Travelers Indemnity Company
    	
 
    	
TPTS-576869
    	
 
    	
USD
    	
 
    	
$
    	
1,820,00.00
    	
 
    	
11/19/2007
    	
 
    	
11/28/2011
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc. on behalf of BELL HELICOPTER CANADA
    	
 
    	
JPMorgan   Chase Bank, N.A.
    	
 
    	
TFTS-524433
    	
 
    	
CAD
    	
 
    	
$
    	
2,587,185.00
    	
 
    	
05/11/2010
    	
 
    	
06/13/2011
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc. and Cessna Aircraft Company
    	
 
    	
Airlines   Reporting Corporation
    	
 
    	
TPTS-576166
    	
 
    	
USD
    	
 
    	
$
    	
20,000.00
    	
 
    	
03/08/2007
    	
 
    	
03/07/2012
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Jacobsen US
    	
 
    	
Suzuki   Motor Corporation
    	
 
    	
RBRI-515905
    	
 
    	
JPY
    	
 
    	
¥
    	
7,347,780
    	
 
    	
12/24/2009
    	
 
    	
11/11/2011
    	
 
    

 

 

	
Applicant
    	
 
    	
Beneficiary
    	
 
    	
L/C No.
    	
 
    	
Currency
    	
 
    	
Amount
    	
 
    	
Effective Date
    	
 
    	
Expiration
   Date
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Jacobsen US
    	
 
    	
Suzuki   Motor Corporation
    	
 
    	
RBRI-561854
    	
 
    	
JPY
    	
 
    	
¥
    	
35,440,584
    	
 
    	
10/28/2009
    	
 
    	
11/11/2011
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Systems Corporation and Overwatch Systems
    	
 
    	
Willowbrook   Holdings, Inc.
    	
 
    	
TPTS-539798
    	
 
    	
USD
    	
 
    	
$
    	
103,150.14
    	
 
    	
05/06/2009
    	
 
    	
05/05/2011
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc.
    	
 
    	
The   Travelers Indemnity Company
    	
 
    	
TFTS-523530
    	
 
    	
USD
    	
 
    	
$
    	
678,000.00
    	
 
    	
01/05/2010
    	
 
    	
01/04/2012
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc.
    	
 
    	
National   Union Fire Insurance Co, et al.
    	
 
    	
TFTS-523531
    	
 
    	
USD
    	
 
    	
$
    	
1,500,000.00
    	
 
    	
01/14/2010
    	
 
    	
01/07/2012
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc.
    	
 
    	
Unites   States Aviation
    	
 
    	
TPTS-522681
    	
 
    	
USD
    	
 
    	
$
    	
15,000,000.00
    	
 
    	
08/28/2009
    	
 
    	
08/28/2011
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc.
    	
 
    	
Sutton   Brook Disposal Area
    	
 
    	
TPTS-522872
    	
 
    	
USD
    	
 
    	
$
    	
790,401.00
    	
 
    	
09/22/2009
    	
 
    	
09/01/2011
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc.
    	
 
    	
Liberty   Mutual Insurance Company
    	
 
    	
TPTS-538407
    	
 
    	
USD
    	
 
    	
$
    	
1,734,228.00
    	
 
    	
03/17/2009
    	
 
    	
04/01/2012
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc.
    	
 
    	
Insurance   Company of North America
    	
 
    	
TPTS-539567
    	
 
    	
USD
    	
 
    	
$
    	
1,250,000.00
    	
 
    	
04/09/2009
    	
 
    	
04/09/2012
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc.
    	
 
    	
Lasalle   Bank National Association
    	
 
    	
TPTS-539742
    	
 
    	
USD
    	
 
    	
$
    	
431,724.73
    	
 
    	
04/28/2009
    	
 
    	
04/23/2012
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc.
    	
 
    	
Banco   Bradesco SA
    	
 
    	
TPTS-539799
    	
 
    	
BRL
    	
 
    	
$
    	
280,000.00
    	
 
    	
05/21/2009
    	
 
    	
04/12/2012
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc.
    	
 
    	
National   Bank of Abu Dhabi
    	
 
    	
TPTS-524577
    	
 
    	
USD
    	
 
    	
$
    	
34,893.00
    	
 
    	
09/20/2010
    	
 
    	
07/31/2011
    	
 
    

 

2

 

	
Applicant
    	
 
    	
Beneficiary
    	
 
    	
L/C No.
    	
 
    	
Currency
    	
 
    	
Amount
    	
 
    	
Effective Date
    	
 
    	
Expiration
   Date
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Textron Inc.
    	
 
    	
JPMorgan   Chase Bank, N.A.
    	
 
    	
TPTS-576191
    	
 
    	
USD
    	
 
    	
$
    	
23,403.00
    	
 
    	
07/17/2007
    	
 
    	
09/30/2011
    	
 
    

 

3

 

EXHIBIT A to
 Credit Agreement

 

TEXTRON INC.

 

PROMISSORY NOTE

 

New York, New York

                         , 20    

 

FOR VALUE RECEIVED, the undersigned TEXTRON INC., a Delaware corporation (the “Borrower”), HEREBY PROMISES TO PAY to                      or registered assigns (the “Payee”) for the account of its Applicable Lending Office, on the maturity date provided for in the Credit Agreement, the unpaid principal amount of each Loan made by the Payee to the Borrower pursuant to the Credit Agreement referred to below.

 

The Borrower also promises to pay interest on the unpaid principal amount hereof from the date hereof until paid in full at the rates and at the times which shall be determined in accordance with the provisions of the Credit Agreement dated as of March 23, 2011 (such Agreement, as amended, amended and restated, supplemented or otherwise modified from time to time, being the “Credit Agreement”) among the Borrower, the Lenders listed therein, JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A. and Bank of America, N.A., as Syndication Agents, and Deutsche Bank Securities Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Documentation Agents.

 

This Note is one of the Borrower’s “Notes” and is issued pursuant to and entitled to the benefits of the Credit Agreement to which reference is hereby made for a more complete statement of the terms and conditions under which the Loans evidenced hereby were made and are to be repaid.  Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.

 

All payments of principal and interest in respect of this Note shall be made in Dollars in same day funds, in accordance with the terms of the Credit Agreement.  Each of the Payee and any subsequent holder of this Note agrees, by its acceptance hereof, that before disposing of this Note or any part thereof it will make a notation on the Schedule attached hereto of all principal payments previously made hereunder and of the date to which interest hereon has been paid; provided, however, that the failure to make a notation of any payment made on this Note shall not limit or otherwise affect the obligation of the Borrower hereunder with respect to payments of principal or interest on this Note.

 

Whenever any payment on this Note shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next succeeding 

 

 

Business Day and such extension of time shall be included in the computation of the payment of interest on this Note; provided, however, that in the event that the day on which payment relating to a Eurodollar Rate Loan is due is not a Business Day but is a day of the month after which no further Business Day occurs in such month, then the due date thereof shall be the next preceding Business Day.

 

This Note is subject to prepayment at the option of the Borrower as provided in Section 2.07(b) of the Credit Agreement.

 

Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this Note, together with all accrued but unpaid interest thereon, may become, or may be declared to be (shall automatically become and be declared to be, in the case of certain Events of Default relating to bankruptcy matters), due and payable in the manner, upon the conditions and with the effect provided in the Credit Agreement.

 

The terms of this Note are subject to amendment only in the manner provided in the Credit Agreement.

 

The Borrower promises to pay all costs and expenses, including attorneys’ fees, all as provided in Section 9.02 of the Credit Agreement, incurred in the collection and enforcement of this Note.  The Borrower hereby consents to renewals and extensions of time at or after the maturity hereof, without notice, and hereby waives diligence, presentment, protest, demand and notice of every kind and, to the full extent permitted by law, the right to plead any statute of limitations as a defense to any demand hereunder.

 

The Credit Agreement and this Note shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of New York.

 

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly authorized officer, as of the day and year and at the place first above written.

 

	
 
    	
TEXTRON   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

A-2

 

EXHIBIT A

 

LOANS AND PRINCIPAL PAYMENTS SCHEDULE

 

	
Date
    	
 
    	
Type of
   Loan Made
   This Date
    	
 
    	
Amount of
   Loan Made
   This Date
    	
 
    	
Amount of
   Principal
   Paid This
   Date
    	
 
    	
Outstanding
   Principal
   Balance
   This Date
    	
 
    	
Notation
   Made By
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

A-3

 

EXHIBIT B to
 Credit Agreement

 

[Letterhead of

Gibson, Dunn & Crutcher LLP]

 

[Date]

 

The Lenders listed on Schedule I hereto
 and the Agent party to the 
 Credit Agreement referred to below
 (collectively, the “Lender Parties”)

 

c/o JPMorgan Chase Bank, N.A., 

as Agent 

383 Madison Avenue

New York, New York 10179

 

Re:   Textron Inc. — Credit Agreement dated as of March 23, 2011

 

Ladies and Gentlemen:

 

We have acted as counsel to Textron Inc., a Delaware corporation (the “Company”) in connection with the Credit Agreement dated as of March 23, 2011 (the “Credit Agreement”) by and among the Company, certain lenders (the “Lenders”) and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity the “Agent”) and a Lender.  Each capitalized term used and not defined herein has the meaning assigned to that term in the Credit Agreement.

 

In rendering this opinion, we have examined a copy identified to our satisfaction as being a true copy, of the Credit Agreement, including the Exhibits and Schedules thereto.

 

We have assumed without independent investigation that:

 

(a)   The signatures on all documents examined by us are genuine, all individuals executing such documents had all requisite legal capacity and competency and were duly authorized, the documents submitted to us as originals are authentic and the documents submitted to us as certified or reproduction copies conform to the originals;

 

(b)   The Company is a validly existing corporation in good standing under the laws of the State of Delaware, has all requisite power to

 

 

execute and deliver the Credit Agreement and to perform its obligations thereunder, the execution and delivery of the Credit Agreement by the Company and performance of its obligations thereunder have been duly authorized by all necessary corporate action and except as specifically addressed in our opinions in paragraph 2 below, do not violate any law, regulation, order, judgment or decree applicable to the Company, and the Credit Agreement has been duly executed and delivered by the Company; and

 

(c)   There are no agreements or understandings between or among any of the parties to the Credit Agreement or third parties that would expand, modify or otherwise affect the terms of the Credit Agreement or the respective rights or obligations of the parties thereunder.

 

In rendering this opinion, we have made such inquiries and examined, among other things, originals or copies, certified or otherwise identified to our satisfaction, of such records, agreements, certificates, instruments and other documents as we have considered necessary or appropriate for purposes of this opinion.  As to certain factual matters, we have relied to the extent we deemed appropriate and without independent investigation upon the representations and warranties of the Company in the Credit Agreement, a certificate of an officer of the Company, a copy of which is attached hereto, or certificates obtained from public officials and others.

 

Based upon the foregoing and in reliance thereon, and subject to the qualifications, exceptions, assumptions and limitations herein contained, we are of the opinion that:

 

1.     The Credit Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms.

 

2.     The execution and delivery by the Company of the Credit Agreement, and performance of its obligations thereunder do not and will not violate, or require any filing with or approval of any governmental authority or regulatory body of the State of New York under, any law or regulation of the State of New York applicable to the Company that, in our experience, is generally applicable to transactions in the nature of those contemplated by the Credit Agreement.

 

The opinions expressed above are subject to the following additional exceptions, qualifications, limitations and assumptions:

 

A.    We render no opinion herein as to matters involving the laws of any jurisdiction other than the State of New York. This opinion is limited to the effect of the current state of the laws of the State of New York and the facts as they currently exist. We assume no obligation to revise or supplement this opinion in the event of future changes in such laws or the interpretations thereof or such facts.  We express no opinion regarding the Securities Act of 1933, as amended,

 

B-2

 

the Investment Company Act of 1940 or any other federal or state securities laws or regulations.

 

B.    Our opinions are subject to (i) the effect of any bankruptcy, insolvency, reorganization, moratorium, arrangement or similar laws affecting the rights and remedies of creditors generally (including, without limitation, the effect of statutory or other laws regarding fraudulent transfers or preferential transfers) and (ii) general principles of equity, including without limitation concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance, injunctive relief or other equitable remedies regardless of whether enforceability is considered in a proceeding in equity or at law.

 

C.    We express no opinion regarding (a) the effectiveness of (i) any waiver  (whether or not stated as such) under the Credit Agreement of, or any consent thereunder relating to, unknown future rights or the rights of any party thereto existing, or duties owing to it, as a matter of law;  (ii) any waiver (whether or not stated as such) contained in the Credit Agreement of rights of any party, or duties owing to it, that is broadly or vaguely stated or does not describe the right or duty purportedly waived with reasonable specificity; (iii) provisions relating to indemnification, exculpation or contribution, to the extent such provisions may be held unenforceable as contrary to public policy or federal or state securities laws or due to the negligence or willful misconduct of the indemnified party; (iv) any provision in the Credit Agreement waiving the right to object to venue in any court; (v) any agreement to submit to the jurisdiction of any Federal Court; (vi) any waiver of the right to jury trial;   (vii) any provision purporting to establish evidentiary standards; (viii) any provision to the effect that every right or remedy is cumulative and may be exercised in addition to any other right or remedy or that the election of some particular remedy does not preclude recourse to one or more others; (ix) any right of setoff to the extent asserted by a participant in the rights of a Lender under the Credit Agreement; or (b) the availability of damages or other remedies not specified in the Credit Agreement in respect of breach of any covenants (other than covenants relating to the payment of principal, interest, indemnities and expenses).  In addition, we advise you that some of the provisions of the Credit Agreement may not be enforceable by a Lender acting individually (as opposed to the Lenders acting through the Agent).

 

This opinion is rendered as of the date hereof to the Lender Parties in connection with the Credit Agreement and may not be relied upon by any person other than the Lender Parties or by the Lender Parties in any other context.  The Lender Parties may not furnish this opinion or copies hereof to any other person except (i) to bank examiners and other regulatory authorities should they so request in connection with their normal examinations, (ii) to the independent auditors and attorneys of the Lender Parties, (iii) pursuant to order or legal process of any court or governmental agency, (iv) in connection with any legal action to which any Lender Party is a party arising out of the transactions contemplated by the Credit Agreement, or (v) any potential permitted assignee of

 

B-3

 

or participant in the interest of any Lender Party under the Credit Agreement for its information.  This opinion may not be quoted without the prior written consent of this Firm.  Notwithstanding the foregoing, parties referred to in clause (v) of this paragraph who become Lenders after the date hereof may rely on this opinion as if it were addressed to them (provided that such delivery shall not constitute a re-issue or reaffirmation of this opinion as of any date after the date hereof).

 

Very truly yours,

 

B-4

 

SCHEDULE I — LENDER PARTIES

 

	
 
    	
JPMorgan   Chase Bank, N.A.
    
	
 
    	
 
    
	
 
    	
Citibank,   N.A.
    
	
 
    	
 
    
	
 
    	
Bank   of America, N.A.
    
	
 
    	
 
    
	
 
    	
Deutsche   Bank AG New York Branch
    
	
 
    	
 
    
	
 
    	
The   Bank of Tokyo-Mitsubishi UFJ, Ltd.
    

 

B-5

 

Textron Inc.
 Officer’s Certificate

 

[Date]

 

The undersigned, Mary F. Lovejoy, does hereby certify to Gibson, Dunn & Crutcher LLP (“Gibson Dunn”), in her capacity as an officer of Textron Inc., a Delaware corporation (the “Company”), in connection with the Credit Agreement dated as of March 23, 2011 (the “Credit Agreement”) by and among the Company, certain lenders (the “Lenders”) and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity the “Agent”) and a Lender, as follows:

 

1.     I am the duly elected and incumbent Vice President and Treasurer of the Company and am authorized to execute this Certificate on behalf of the Company.

 

2.     I recognize and acknowledge that this Certificate is being furnished to Gibson Dunn in connection with their delivery of their legal opinion of even date herewith pursuant to Section 3.01(b) of the Credit Agreement (the “GDC Opinion”).  I further understand that Gibson Dunn is relying to a material degree on this Certificate in rendering that opinion.  On behalf of the Company, I hereby authorize such reliance.

 

3.     I have asked such questions regarding the meaning of any of the provisions of this Certificate as I have considered necessary.

 

4.     To the best of my knowledge, each and all of the representations and warranties as to factual matters relating to the Company contained in the Credit Agreement are true and correct in all material respects as of the date of such agreement and as of the date hereof.

 

5.     To the best of my knowledge, there are no agreements or understandings between or among the Agent, the Lenders, the Company, the Company’s Subsidiaries or third parties that would expand, modify or otherwise affect the terms of the Credit Agreement referred to in the GDC Opinion or the respective rights or obligations of the parties thereunder.

 

Capitalized terms used herein and not defined herein have the meanings given to such terms in the Credit Agreement. This Certificate may be executed in two or more counterparts.  A copy of this Certificate executed and delivered by facsimile or email transmission shall be valid for all purposes.

 

B-6

 

IN WITNESS WHEREOF, the undersigned have executed this Certificate as of the date first set forth above.

 

	
 
    	
 
    
	
 
    	
Name: Mary F. Lovejoy
    
	
 
    	
Title:  Vice   President and Treasurer
    

 

B-7

 

EXHIBIT C to
 Credit Agreement

 

OPINION OF COUNSEL

 

FOR THE

 

BORROWER

 

[Letterhead of Textron Inc.]

 

[DATE]

 

JPMorgan Chase Bank, N.A.

as Administrative Agent

383 Madison Avenue

New York, New York 10179

and

The Lenders Party to the 

Credit Agreement Referenced Below

 

Re:                               Credit Agreement dated as of March 23, 2011 among Textron Inc., the Lenders named therein, JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A. and Bank of America, N.A., as Syndication Agents, and Deutsche Bank Securities Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Documentation Agents

 

Ladies and Gentlemen:

 

I am the Senior Associate General Counsel of Textron Inc., a Delaware corporation (the “Borrower”).  This opinion is rendered to you pursuant to Section 3.01(b) of the Credit Agreement dated as of March 23, 2011 (the “Credit Agreement”) among the Borrower, the Lenders party thereto (the “Lenders”), JPMorgan Chase Bank, N.A., as Administrative Agent (“Agent”) and Citibank, N.A. and Bank of America, N.A., as Syndication Agents, and Deutsche Bank Securities Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Documentation Agents.  The undersigned has prepared this opinion and delivered it to the Lenders for their benefit at the request of the Borrower.  Unless otherwise defined herein, capitalized terms used herein have the meanings set forth in the Credit Agreement.

 

In my capacity as Senior Associate General Counsel I have examined originals, or copies identified to my satisfaction, of such records, documents or

 

 

other instruments as in my judgment are necessary or appropriate to enable me to render the opinions expressed below.  I am familiar, either directly or by inquiry of other officers or employees of the Borrower and its Subsidiaries or others, and/or through examination of the Borrower’s and its Subsidiaries’ books and records, with the business, affairs and records of the Borrower and its Subsidiaries requisite to giving this opinion.  Where and as this opinion states conclusions based upon the absence of facts, I have received in the course of my employment no contrary information and would expect to receive such information if an officer of the Borrower had notice thereof.

 

I have been furnished with, and have obtained and relied without independent investigation upon, such certificates and assurances from public officials as I have deemed necessary or appropriate.  In my examinations, I have assumed (a) the genuineness of all signatures as to all parties other than the Borrower, the conformity to original documents of all documents submitted to them as copies or drafts and the authenticity of such originals of such latter documents, (b) as to all Persons other than the Borrower, the due completion, execution, acknowledgment as indicated thereon and delivery of documents recited herein and therein and the validity and enforceability against all parties thereto, and (c) that each Person other than the Borrower which is a party to the Credit Agreement has full power, authority and legal right, under its charter and other governing documents, corporate legislation and the laws of its jurisdiction of incorporation, to perform its respective obligations under the Credit Agreement.

 

I have investigated such questions of law for the purpose of rendering this opinion as I have deemed necessary.  I am opining herein only as to the United States federal laws and the corporate laws of the State of Delaware.

 

On the basis of the foregoing, and in reliance thereon, and subject to the limitations, qualifications and exceptions set forth herein, I am of the opinion that:

 

1.             The Borrower is a corporation duly organized, validly existing and in good standing under the laws of Delaware.  The Borrower has all requisite corporate power and authority to own and operate its properties, to carry on its business as now conducted and proposed to be conducted, to enter into the Credit Agreement and to carry out the transactions contemplated thereby.

 

2.             The Borrower is in good standing wherever necessary to carry on its present business and operations, except in jurisdictions in which the failure to be in good standing has not had and will not have a Material Adverse Effect.

 

3.             The execution, delivery and performance of the Credit Agreement and the borrowing of the Loans and the request for the issuance of each Letter of Credit have been duly authorized by all necessary corporate action by the Borrower.

 

C-2

 

4.             The execution, delivery and performance by the Borrower of the Credit Agreement and the issuance, delivery and performance of the Notes issued thereunder today and the borrowing of the Loans and the request for the issuance of each Letter of Credit do not and will not (i) violate any provision of law applicable to the Borrower, except to the extent such violation would not reasonably be expected to result in a Material Adverse Effect, (ii) violate the Restated Certificate of Incorporation or Amended and Restated By-laws of the Borrower, (iii) to my knowledge (after inquiry), violate any order, judgment or decree of any court or other agency of government binding on the Borrower, except to the extent such violation would not reasonably be expected to result in a Material Adverse Effect, (iv) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of the Borrower or any of its Subsidiaries that is filed as an exhibit to the most recent Form 10-K filed by the Borrower with the Securities and Exchange Commission, except to the extent such violation would not reasonably be expected to result in a Material Adverse Effect, (v) result in or require the creation or imposition of any material Lien upon any of the material properties or assets of the Borrower or any of its Subsidiaries under any such Contractual Obligation or (vi) require any approval of stockholders or any approval or consent of any Person under any such Contractual Obligation.

 

5.             The execution, delivery and performance by the Borrower of the Credit Agreement and the issuance, delivery and performance by the Borrower of the Notes to be issued by the Borrower today will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other Governmental Authority or regulatory body other than any such registration, consent, approval, notice or other action which (i) has been or, with respect to filings with the Securities and Exchange Commission, will be duly made, given or taken or (ii) the failure to make, obtain, give or take would not reasonably be expected to result in a Material Adverse Effect.

 

6.             Except as disclosed in the Financial Statements delivered to the Lenders pursuant to Section 4.03 of the Credit Agreement, to my knowledge (after inquiry), there is no action, suit, proceeding, governmental investigation or arbitration (whether or not purportedly on behalf of the Borrower or any of its Subsidiaries) at law or in equity or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency, court or instrumentality, domestic or foreign, pending or, to my knowledge threatened against or affecting the Borrower or any of its Subsidiaries or any property of the Borrower or any of its Subsidiaries which is probable of being successful and which would have Material Adverse Effect.

 

7.             The Borrower is not subject to any federal or state statute or regulation limiting its ability to incur Indebtedness for money borrowed as contemplated by the Credit Agreement.

 

C-3

 

8.             Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.

 

I am furnishing this opinion to you solely in connection with the entry by the Borrower into the Credit Agreement; the opinion is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to for any other purpose without my express permission.

 

	
 
    	
Very   truly yours,
    

 

C-4

 

Exhibit D to
 Credit Agreement

 

[Letterhead of
 Davis Polk & Wardwell LLP]

 

[Date]

 

To the Lenders and the Agents
 Referred to Below
 c/o JPMORGAN CHASE BANK, N.A.

as Administrative Agent
 383 Madison Avenue
 New York, New York 10179

 

Dear Sirs:

 

We have participated in the preparation of the Credit Agreement dated as of March 23, 2011 (the “Credit Agreement”) among Textron Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”), Citibank, N.A. and Bank of America, N.A., as Syndication Agents (the “Syndication Agents”), and Deutsche Bank Securities Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Documentation Agents (the “Documentation Agents” and together with the Administrative Agent and the Syndication Agents, the “Agents”), and have acted as special counsel for the Agents for the purpose of rendering this opinion pursuant to Section 3.01(c) of the Credit Agreement.  Terms defined in the Credit Agreement are used herein as therein defined.

 

We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion.

 

Upon the basis of the foregoing, we are of the opinion that:

 

1.             The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate action.

 

 

2.             The Credit Agreement constitutes a valid and binding agreement of the Borrower and each Note to be issued thereunder today constitutes a valid and binding obligation of the Borrower, in each case enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and general principles of equity.

 

We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York, the federal laws of the United States of America and the General Corporation Law of the State of Delaware.  In giving the foregoing opinion, we express no opinion as to the effect (if any) of any law of any jurisdiction (except the State of New York) in which any Lender is located which limits the rate of interest that such Lender may charge or collect.

 

This opinion is rendered solely to you in connection with the above matter.  This opinion may not be relied upon by you for any other purpose or relied upon by any other Person without our prior written consent.

 

	
 
    	
Very   truly yours,
    

 

D-2

 

Exhibit E-1 to
 Credit Agreement

 

[FORM OF NOTICE OF BORROWING]

 

Pursuant to Section 2.01(b) of that certain Credit Agreement dated as of March 23, 2011 among Textron Inc., a Delaware corporation (the “Borrower”), the Lenders listed therein (the “Lenders”), JPMorgan Chase Bank, N.A., as Administrative Agent (the “Agent”), Citibank, N.A. and Bank of America, N.A., as Syndication Agents, and Deutsche Bank Securities Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Documentation Agents (such Agreement as amended to the date hereof being the “Credit Agreement”), this represents the undersigned Borrower’s request to borrow on                    , 20     from the Lenders in accordance with each Lender’s Pro Rata share                    as [Base Rate/Eurodollar Rate] Loans.  [The initial Interest Period for such Loans is requested to be a                   period.] The proceeds of such Loans are to be deposited in the Borrower’s account designated below.  Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.

 

Dated:

 

	
 
    	
TEXTRON   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
Account   Designation
    
	
 
    	
 
    	
Name   of Bank:
    
	
 
    	
 
    	
Account   Number:
    

 

 

Exhibit E-2 to
 Credit Agreement

 

[FORM OF NOTICE OF CONVERSION/CONTINUATION]

 

Pursuant to that certain Credit Agreement dated as of March 23, 2011 (as amended to the date hereof, the “Credit Agreement”) among Textron Inc. (the “Borrower”), the Lenders listed therein, JPMorgan Chase Bank, N.A., as Administrative Agent and Citibank, N.A. and Bank of America, N.A., as Syndication Agents, and Deutsche Bank Securities Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Documentation Agents, this represents the undersigned Borrower’s request [A: to convert $              in principal amount of presently outstanding Base Rate Loans with an Interest Payment Date of               , 20     to Eurodollar Rate Loans on                , 20    .  The Interest Period for such Eurodollar Rate Loans commencing on such Interest Payment Date is requested to be a                     period.] [B: to continue as Eurodollar Rate Loans                  in principal amount of presently outstanding [Eurodollar Rate] Loans with an Interest Payment Date of                     , 20    .  The Interest Period for such Eurodollar Rate Loans commencing on such Interest Payment Date is requested to be a                  period.](1)

 

Dated:

 

	
 
    	
TEXTRON   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

(1)  Insert A or B with appropriate insertions.

 

 

Exhibit F to
 Credit Agreement

TEXTRON INC.

 

Compliance Certificate

 

With reference to the provisions of Section 5.01 of the Credit Agreement (the “Agreement”) dated as of March 23, 2011, as amended, among Textron Inc. (the “Borrower”), the Lenders listed therein, JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A. and Bank of America, N.A., as Syndication Agents, and Deutsche Bank Securities Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Documentation Agents, the undersigned, being the [Vice President and Controller (Principal Accounting Officer)] of the Borrower, hereby certifies that:

 

(a)                                  the consolidated balance sheet at [insert date] and the related consolidated statements of income and cash flows for the year then ended which were included in the accompanying Annual Report on Form 10-K/10-Q for the [year/quarter] ended [insert date], present fairly the consolidated financial position of Textron Inc. at [insert date] and the consolidated results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles which have been applied on a consistent basis during the period except as noted in such Report;

 

(b)                                 with respect to Section 6.03 of the Agreement, the Consolidated Indebtedness of Textron Manufacturing did not exceed an amount equal to 65% of Consolidated Capitalization (as such terms are defined in the Agreement) as at [insert date] (see Schedule A attached hereto);

 

(c)                                  the undersigned has reviewed the terms of the Agreement and has made, or caused to be made under the undersigned’s supervision, a review in reasonable detail of the transactions and condition of the Borrower and its consolidated subsidiaries during the accounting period covered by the above-referenced financial statements and the undersigned has no knowledge of the existence as at the date of this certificate of any condition or event which constitutes an Event of Default or a Potential Event of Default (as such terms are defined in the Agreement).

 

 

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this       day of            ,        .

 

	
 
    	
 
    
	
 
    	
[Vice   President and Controller]
    

 

F-2

 

Schedule A

 

TEXTRON INC.

Financial Covenant

(in millions)

 

	
 
    	
 
    	
[Insert Date]
    	
 
    
	
Section 6.03 -
    	
 
    	
 
    	
 
    
	
Consolidated Indebtedness of Textron Manufacturing
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Maximum permitted:
    	
 
    	
 
    	
 
    
	
Consolidated Capitalization, i.e., the sum of   (without duplication):
    	
 
    	
 
    	
 
    
	
(a) Consolidated Indebtedness of Textron   Manufacturing
    	
 
    	
$
    	
 
    	
 
    
	
(b) Plus   Consolidated Net Worth
    	
 
    	
 
    	
 
    
	
(b) Plus preferred   stock of the Borrower
    	
 
    	
 
    	
 
    
	
(c) Plus other   securities of the Borrower convertible (whether mandatorily or at the option   of the holder) into capital stock of the Borrower
    	
 
    	
 
    	
 
    
	
Equals:   Consolidated Capitalization 
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
X 65% equals   maximum permitted as of [Insert Date]
    	
 
    	
$
    	
 
    	
 
    

 

 

Exhibit G to

Credit Agreement

 

FORM OF TRANSFER SUPPLEMENT

 

TRANSFER SUPPLEMENT, dated as of                 , 20    , among [NAME OF LENDER] (the “Transferor Lender”) and each Lender listed as a Purchasing Lender on the signature pages hereof (each, a “Purchasing Lender”), and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Agent”) for the Lenders under the Credit Agreement described below and as agreed to by Textron Inc., a Delaware corporation (the “Borrower”).

 

W  I  T  N  E  S  S  E  T  H

 

WHEREAS, this Transfer Supplement is being executed and delivered pursuant to Section 9.01(e) of the Credit Agreement dated as of March 23, 2011, among the Borrower, the Agent, the Lenders listed therein, Citibank, N.A. and Bank of America, N.A., as Syndication Agents, Deutsche Bank Securities Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Documentation Agents (as such agreement may be amended, amended and restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”); capitalized terms used and not otherwise defined herein being used herein as therein defined);

 

WHEREAS, each Purchasing Lender (if it is not already a Lender party to the Credit Agreement) wishes to become a Lender party to the Credit Agreement; and

 

WHEREAS, the Transferor Lender is selling and assigning to each Purchasing Lender certain rights, obligations and commitments of the Transferor Lender under the Credit Agreement;

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

(a)           Upon the execution and delivery of this Transfer Supplement by each Purchasing Lender, the Transferor Lender, the Agent and the Borrower, each such Purchasing Lender shall be a Lender party to the Credit Agreement for all purposes thereof.

 

(b)           The Transferor Lender acknowledges receipt from each Purchasing Lender of an amount equal to the purchase price, as agreed between the Transferor Lender and such Purchasing Lender, of the portion being purchased by such Purchasing Lender (such Purchasing Lender’s “Purchased Pro Rata Share”) of the outstanding principal amount of, and accrued interest on, the Loans and the Letter of Credit Liabilities and all other amounts owing to the Transferor Lender under the Credit Agreement to the extent shown on Schedule I hereto.  The

 

 

Transferor Lender hereby irrevocably sells, assigns and transfers to each Purchasing Lender, without recourse, representation or warranty, and each Purchasing Lender hereby irrevocably purchases, takes and assumes from the Transferor Lender, such Purchasing Lender’s Purchased Pro Rata Share of the Commitment of the Transferor Lender and the presently outstanding Loans and Letter of Credit Liabilities and other amounts owing to the Transferor Lender under the Credit Agreement as shown on Schedule I, together with all the corresponding rights and obligations of the Transferor Lender in, to and under all instruments and documents pertaining thereto.

 

(c)           The Transferor Lender has made arrangements with each Purchasing Lender with respect to the portion, if any, to be paid by the Transferor Lender to such Purchasing Lender of fees heretofore received by the Transferor Lender pursuant to the Credit Agreement.

 

(d)           Each Purchasing Lender or the Transferor Lender (as they have mutually agreed) has paid to the Agent a non-refundable fee of $3,500 (per Purchasing Lender) to cover administrative and other expenses, as provided in Section 9.01(e) of the Credit Agreement.

 

(e)           From and after the date hereof, principal, interest, fees, commissions and other amounts that would otherwise be payable to or for the account of the Transferor Lender pursuant to or in respect of the Credit Agreement or any Letter of Credit Liability transferred to each Purchasing Lender hereunder shall, instead, be payable to or for the account of the Transferor Lender and each of the Purchasing Lenders, as the case may be, in accordance with their respective interests as reflected in this Transfer Supplement, whether such amounts have accrued prior to the date hereof or accrue subsequent to the date hereof.

 

(f)            Concurrently with the execution and delivery hereof, the Borrower, the Transferor Lender and each Purchasing Lender shall make appropriate arrangements so that replacement Notes, if requested, are issued to the Transferor Lender, and new Notes or replacement Notes, if requested, are issued to each Purchasing Lender, in each case in principal amounts reflecting, in accordance with the Credit Agreement, outstanding Loans owing to them in which they participate and, as appropriate, their Commitment (as adjusted pursuant to this Transfer Supplement) as shown in Schedule I.

 

(g)           Concurrently with the execution and delivery hereof, the Agent will, at the expense of the Transferor Lender, provide to each Purchasing Lender (if it is not already a Lender party to the Credit Agreement) conformed copies of all documents delivered to the Agent on the Effective Date in satisfaction of the conditions precedent set forth in the Credit Agreement.

 

(h)           Each of the parties to this Transfer Supplement agrees that at any time and form time to time upon the written request of any other party, it will

 

G-2

 

execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Transfer Supplement.

 

(i)            Schedule I hereto sets forth the revised Commitment, amount of outstanding Loans and Letter of Credit Liabilities and the Pro Rata Shares of the Transferor Lender and each Purchasing Lender as well as administrative information with respect to each Purchasing Lender.

 

(j)            THIS TRANSFER SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

G-3

 

IN WITNESS WHEREOF, the parties hereto have caused this Transfer Supplement to be executed by their respective duly authorized officers as of the date first set forth above.

 

	
 
    	
[NAME   OF LENDER], as Transferor Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
[NAME   OF PURCHASING LENDER],
    
	
 
    	
as   Purchasing Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A.
    
	
 
    	
as   Administrative Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
[Agreed   to as of this          day   of       , 20       
    	
 
    
	
 
    	
 
    
	
TEXTRON   INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

G-4

 

SCHEDULE I

 

to

 

Transfer Supplement dated as of        , 20     

[Transferor Lender]

 

Amount of Commitment, Outstanding Loans, Letter of Credit Liabilities and Pro Rata share:

 

	
Prior to giving effect to transfer:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Amount of Commitment
    	
 
    	
$
    	
 
    	
 
    
	
Amount of Outstanding Loans
    	
 
    	
$
    	
 
    	
 
    
	
Amount of Outstanding Letter of Credit Liabilities
    	
 
    	
$
    	
 
    	
 
    
	
Pro Rata Share
    	
 
    	
 
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
After giving effect to transfer:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Amount of Commitment
    	
 
    	
$
    	
 
    	
 
    
	
Amount of Outstanding Loans
    	
 
    	
$
    	
 
    	
 
    
	
Amount of Outstanding Letter of Credit Liabilities
    	
 
    	
$
    	
 
    	
 
    
	
Pro Rata Share
    	
 
    	
 
    	
%
    

 

	
[Purchasing Lender]
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Offices:
    	
 
    	
Notices
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    	
 
    
	
Attn:
    	
 
    	
 
    	
 
    
	
Telephone:
    	
 
    	
 
    	
 
    
	
Telecopy:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Commitment, Loans Transferred and Pro Rata Share:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Amount of Commitment
    	
 
    	
$
    	
 
    	
 
    
	
Amount of Outstanding Loans
    	
 
    	
$
    	
 
    	
 
    
	
Amount of Letter of Credit Liabilities
    	
 
    	
$
    	
 
    	
 
    
	
Purchased Pro Rata Share
    	
 
    	
 
    	
%
    

 

 

Exhibit H to

Credit Agreement

 

EXTENSION AGREEMENT

 

JPMorgan Chase Bank, N.A., as Administrative Agent
 under the Credit Agreement referred to below

383 Madison Avenue

New York, New York 10179

 

Ladies and Gentlemen:

 

Effective as of [insert pre-effectiveness Termination Date], the undersigned hereby agrees to extend its Commitment and the Termination Date under the Credit Agreement dated as of March 23, 2011 (the “Credit Agreement”) among Textron Inc., the Lenders listed therein, JPMorgan Chase Bank, N.A., as Administrative Agent, and Citibank, N.A. and Bank of America, N.A., as Syndication Agents, Deutsche Bank Securities Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Documentation Agents, for one year to [date to which the Termination Date is to be extended] pursuant to Section 2.01(d) of the Credit Agreement.  Terms defined in the Credit Agreement are used herein as therein defined.

 

This Extension Agreement shall be construed in accordance with and governed by the law of the State of New York. This Extension Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

	
 
    	
[NAME   OF LENDER]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

	
Agreed   and Accepted:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
TEXTRON   INC.
    	
 
    
	
as   Borrower
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
JPMORGAN CHASE BANK, N.A.
    	
 
    
	
as Administrative Agent
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

H-2

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