INTER-ISLAND INDUSTRIAL FUEL OIL AND DIESEL FUEL CONTRACT By and Between CHEVRON U.S.A. INC. and HAWAIIAN ELECTRIC COMPANY, INC.; MAUI ELECTRIC COMPANY, LTD.; HAWAII ELECTRIC LIGHT CO., INC.; HAWAIIAN TUG & BARGE CORP.; and YOUNG BROTHERS, LIMITED.

HECO Exhibit 10.9

INTER-ISLAND INDUSTRIAL FUEL OIL AND DIESEL FUEL CONTRACT
By and Between
CHEVRON U.S.A. INC.
and
HAWAIIAN ELECTRIC COMPANY, INC.; MAUI ELECTRIC COMPANY, LTD.;
HAWAII ELECTRIC LIGHT CO., INC.; HAWAIIAN TUG & BARGE CORP.;
and YOUNG BROTHERS, LIMITED.

TABLE OF CONTENTS
ARTICLE PAGE

I. DEFINITIONS............................... 1
II. TERM...................................... 4
III. QUANTITY.................................. 4
IV. QUALITY................................... 8
V. PRICE, BTU DETERMINATION.................. 10
VI. DELIVERIES................................ 14
VII. DETERMINATION OF QUALITY.................. 17
VIII. MEASUREMENT OF QUANTITY................... 18
IX. INVOICING AND PAYMENT.................... 19
X. SELLER'S FACILITIES ON OAHU............... 21
XI. SELLER'S FACILITIES ON MAUI AND HAWAII.... 22
XII. CONTINGENCIES............................. 31
XIII. EFFECT OF SUSPENSION OR REDUCTION......... 33
XIV. WAIVER AND NONASSIGNABILITY............... 35
XV. CONFLICT OF INTEREST...................... 35

XVI. DEFAULT................................... 36
XVII. APPLICABLE LAW............................ 37
XVIII. INDEMNITY................................. 37
XIX. PUBLIC UTILITIES COMMISSION............... 39
XX. INSURANCE................................. 40
XXI. SAFETY AND TERMINAL PROTECTION............ 42
XXII. POLLUTION MITIGATION...................... 43
XXIII. MISCELLANEOUS............................. 44

ADDENDUMS

NO. 1 SAMPLE PRICE CALCULATIONS---NOVEMBER, 1995

NO. 2 QUALITY CONTROL SAMPLES 3/4 SUMMARY
AND SCHEMATIC OF SAMPLE LOCATIONS

INTER-ISLAND INDUSTRIAL FUEL OIL AND DIESEL FUEL CONTRACT

THIS CONTRACT, dated as of November 20, 1995, by and between CHEVRON
U.S.A. INC., a Pennsylvania corporation ("Seller"), and HAWAIIAN ELECTRIC
COMPANY, INC.; MAUI ELECTRIC COMPANY, LTD.; HAWAII ELECTRIC LIGHT CO., INC.;
HAWAIIAN TUG & BARGE CORP.; and YOUNG BROTHERS, LIMITED, each a Hawaii
corporation (collectively referred to as "Buyers" and individually referred to
as "Buyer" herein unless otherwise indicated).

WHEREAS, Seller is a supplier of petroleum fuels with terminal and
refinery facilities in Hawaii.

WHEREAS, Buyers are engaged in various business activities: HECO,
HELCO, and MECO are utilities engaged in the generation, purchase and sale of
electricity in Hawaii; HT&B is a tug and barge company; YB is a barge company
engaged in general marine transportation.

NOW, therefore, the parties agree as follows:

ARTICLE I

DEFINITIONS

Except where otherwise indicated, the following definitions shall
apply throughout this Contract:

1. "CIFO" means Chevron Industrial Fuel Oil No. 6 per Section 4.1.

2. "Fuel Oil" means either Chevron Industrial Fuel Oil No. 6 or
third party industrial fuel oil similar to Chevron Industrial Fuel Oil No. 6.

3. "Diesel" means Chevron Diesel Fuel No. 2 per Section 4.2.

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4. "diesel" means either Chevron Diesel Fuel No. 2 or a third party
diesel fuel similar to Chevron Diesel Fuel No. 2.

5. "Jet" means Chevron Jet Fuel per Section 4.3.

6. "jet" means either Chevron Jet Fuel or a third party jet fuel
similar to Chevron Jet Fuel.

7. "Oil" means either Chevron Industrial Fuel Oil No. 6 or Chevron
Diesel Fuel No. 2.

8. "oil" means Chevron Industrial Fuel Oil No. 6, Chevron Diesel
Fuel No. 2, a third party industrial fuel oil similar to Chevron Industrial Fuel
Oil No. 6, or a third party diesel fuel similar to Chevron Diesel Fuel Oil No.
2.

9. "HECO" means Hawaiian Electric Company, Inc., which has
electrical generating facilities on the island of Oahu.

10. "MECO" means Maui Electric Company, Ltd., which has electrical
generating facilities on the islands of Maui, Lanai and Molokai. For the
purposes of this Contract "MECO" refers to the operations on the island of Maui
only.

11. "MECO-Molokai" means the Molokai Division of Maui Electric
Company, Ltd., which has electrical generation facilities on the island of
Molokai.

12. "HELCO" means Hawaii Electric Light Co., Inc., which has
electrical generating facilities on the island of Hawaii.

13. "HT&B" means Hawaiian Tug & Barge Corp., which operates a tug and
barge fleet.

14. "YB" means Young Brothers, Limited, which operates a general
marine transportation business.

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15. "HMT" means Seller's Honolulu Marine Terminal at Honolulu Harbor
Piers 30 and 31.

16. "HDT" means Seller's Honolulu Distribution Terminal at Honolulu
Harbor Pier 35.

17. "Kaunakakai Terminal" means a third party Marine Terminal at
Xxxxxxxxxx Xxxxxx, Xxxxxxx.

00. "Oahu P/L" means Seller's Light product distribution pipeline
between Seller's Barbers Point oil refinery and HECO's Waiau electric generating
station.

19. "affiliate", except where otherwise expressly provided, means a
corporation controlling, controlled by or under common control with Seller or
Buyer, as the case may be.

20. "Carrier" means Buyer's nominated barge or designated trucking
company.

21. "gallon" means a United States gallon of 231 cubic inches at 60
degrees F.

22. "physical barrel" means 42 American bulk gallons at 60 degrees F.

23. "year" means a calendar year.

24. "Deliver, Delivery, Deliveries or Delivered" refers to the Oil or
Jet sold by Seller and purchased by Buyer.

25. "Loaded", when used in conjunction with Oil or Jet, refers to
Buyer's Delivered Oil or Jet mixed with any cargo retains within Buyer's
nominated barge.

26. "loaded", when used in conjunction with Oil or Jet, refers to
Buyer's Delivered Oil or Jet or a third party's delivered oil or jet mixed with
any cargo retains within Buyer's nominated barge.

Page 3

27. "Received", when used in conjunction with Oil or Jet, refers to
Buyer's Oil or Jet to be received by Seller into its terminals on Maui and
Hawaii. "Received", when used in conjunction with oil, means a third party
industrial fuel oil similar to Chevron Industrial Fuel Oil No. 6 or a third
party diesel fuel similar to Chevron Diesel Fuel Oil No. 2 received by Seller
into its terminals on Maui and Hawaii from Buyer's nominated barge.

28. "Returned", when used in conjunction with Oil, oil or Jet, refers
to the Oil, oil or Jet returned by Seller from its terminals on Maui and Hawaii
to Buyer for Buyer's use in Buyer's electrical generating facilities.

ARTICLE II
TERM

The term of this Contract shall be from January 1, 1996 (the "Effective Date"),
through December 31, 1997, and shall continue thereafter for additional 12-month
periods (each 12-month period being an "Extension") beginning each successive
January 1, unless Buyer or Seller gives written notice of termination at least
120 days before the beginning of an Extension.

ARTICLE III
QUANTITY

Section 3.1

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This portion is confidential; therefore, it has been omitted and
filed separately with the Commission.
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Page 4

Page 5

Section 3.2 Prior to the 15th day of each month, HECO shall give Seller a
forecast of each Buyer's monthly lifting of Diesel, CIFO and Jet from each
supply point for each of the coming three months. Each Buyer recognizes the
importance to Seller of reasonably accurate lifting forecasts because of
Seller's need to plan production and shipments.

Section 3.3 Buyers' purchases and Seller's Deliveries of CIFO and Diesel
will occur in a ratable fashion throughout the year. At the end of each
calendar year, Buyers' CIFO and Diesel purchase performance will each be
reviewed by Seller for ratability.

i. If upon review Buyers' volumes in any calendar quarter were less than
15% of the total minimum annual liftings for either CIFO or Diesel, a premium of
$0.42/barrel will be charged to Buyer for the difference between 15% of total
minimum annual liftings of that product and Buyers' actual liftings of that
product.

ii. If upon review Buyers' volumes in any calendar quarter were greater
than 35% of the total maximum annual liftings for either CIFO or Diesel, a
premium of $0.42/barrel will be

Page 6

charged to Buyer for the difference between Buyers' actual liftings of that
product and 35% of total maximum annual liftings of that product.

iii. Seller understands Buyers' jet fuel purchases will occur in a non-
ratable fashion and no ratability premiums will be applied to jet fuel
purchases.

Section 3.4

Page 7

ARTICLE IV
QUALITY

Section 4.1 The CIFO to be supplied hereunder shall be Seller's regular
commercial grade of Chevron Industrial Fuel Oil No. 6, having the following
specifications:

ASTM
Item Specifications Test Method

Gravity, API 6.5 min. D1298 or D4052-86
Flash, degrees F 150 min. D93
Viscosity, SSF @ 122 degrees F 179 min., 226 max. D445/D2161
Pour Point, degrees F 55 max. D97
Sulfur, % Wt. 2.0 max. D1552, D2622 or D4294
Sediment & Water, % Vol. 0.5 max. D1796
Heat Value, Gross** 6.0 D240

MM BTU/BBL
** Typical Value is 6.3.

Section 4.2 The Diesel to be supplied hereunder shall be similar to
Seller's regular commercial grade of Chevron Diesel Fuel No. 2 and have the
following specifications:

Specification Test
Item Units Limits Method

Gravity @ 60 degrees F degrees API 30.0 min. D1298 or D4052-86
Specific 0.88 max.
Viscosity @ 100 degrees F SSU 32.3 - 40.0

Page 8

Specification Test
Item Units Limits Method

Heat Value, Gross** MM BTU/BBL 5.84 Calculated or D240
Flash Point, PM degrees F 150 min. D93
Pout Point** degrees F 35 D97
Ash PPM, wt. 100 max. D482
Cetane Index 40 min. D4737
Carbon Residue,
10% Residuum %, wt. 0.35 max. D524
Sediment & Water %, vol. 0.05 max. D1796
Sulfur %, wt. 0.40 max. D1552, D2622 or D4294
Distillation
90% Recovered degrees F 540 - 650 D86
Sodium + Potassium PPM, wt. 0.5 max. D3605

** Chevron does not provide specifications on these items. Values are
typical; they are not guaranteed.

Section 4.3 The Jet to be supplied hereunder shall be similar to Seller's
regular commercial grade of Chevron Jet Fuel; provided, however, Buyer agrees
that the Jet shall be used exclusively as stationary combustion turbine start-up
fuel. Any other use, including without limitation its use for aviation
purposes, shall constitute unforeseeable misuse.

Section 4.4 SELLER MAKES NO WARRANTY, EXPRESSED OR IMPLIED IN FACT OR BY
LAW, AS TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE concerning the
Oil other than it shall comply with the quality herein specified, that the
Diesel shall be suitable for use as a fuel, the CIFO shall be suitable for use
as a boiler fuel, and the Jet shall be suitable for use as stationary combustion
turbine start-up fuel.

Page 9

ARTICLE V
PRICE, BTU DETERMINATION
Section 5.1
i. NO. 2 DIESEL FUEL

Page 10

ii. CIFO

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This portion is confidential; therefore, it has been omitted and
filed separately with the Commission.
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iii. Jet.

Page 11

Section 5.2 To provide the flexibility needed by Seller to meet its
obligations to Buyer, the source and type of crude oil and other raw material,
the place of manufacture, and the manufacturer of Oil for delivery to Buyer
hereunder shall be determined solely by Seller. The price of all Oil Delivered
by Seller to Buyer hereunder shall be determined in accordance with the terms of
this Contract regardless of where, how and by whom such Oil is manufactured and
regardless of the type or source of crude oil or other raw materials used in its
manufacture.

Section 5.3 In addition to all other amounts payable by Buyer under this
Contract, Buyer shall reimburse Seller for all taxes, assessments, levies and
imposts of whatsoever kind or nature imposed on Seller by any governmental or
quasi-governmental body, including without limitation the Hawaii General Excise
(Gross Income) Tax, the Hawaii Environmental Response Tax and Hawaii Liquid Fuel
Tax, where applicable, with respect to the execution or performance of this
Contract or the receipt by Seller of payments hereunder. Notwithstanding the
foregoing, Buyer shall not be required to reimburse Seller for any tax measured
by or based on the net income of Seller or for real property taxes. To avoid
duplication of recovery, Buyer shall not be required to reimburse Seller under
this Section 5.3

Page 12

for any item expressly mentioned by Xxxxx'x or Bunkerwire, or confirmed by
Xxxxx'x or Bunkerwire in writing upon inquiry by either Buyer or Seller, as
being included in a price used to compute PD1, PD2, PF or PJ under Section 5.1.
As of the Contract execution date, the Superfund Petroleum fee of the Superfund
Revenue Act of 1986 is the only tax, assessment, levy or impost implicitly
reimbursed to Seller through inclusion in the Xxxxx'x listings within DI, FI and
JI of Section 5.1.

Section 5.4

Section 5.5 Seller will draw representative samples of each CIFO Delivery,
which will be used to determine the CIFO BTU content per Section 7.1. If the
weighted average BTU content of the CIFO Delivered to Buyer during any half of
any annual period is less than 6.2 MM BTU per physical barrel, the price of such
CIFO delivered to Buyer during each month of that semiannual period shall be
adjusted by multiplying the CIFO price as determined by Section 5.1.ii. for each
month by a ratio of actual average heat content to 6.2 MM BTU and Seller shall
issue Buyer a credit for the difference between such aggregate and the adjusted
price.

Section 5.6 All prices, adjustments thereto and other sums payable
hereunder shall be stated in the nearest thousandth of a dollar.

Page 13

ARTICLE VI
DELIVERIES
Section 6.1

i. Seller agrees to Deliver and MECO and HELCO agree to receive their Oil
into their nominated barge, F.O.B. the HMT. The delivery rate on
Diesel shall be 3,000 BPH minimum. The delivery rate on CIFO shall be
1,600 BPH minimum. Seller agrees to make its best, reasonable efforts
in operating its current CIFO delivery systems to Deliver CIFO into
the nominated barge at a temperature above 120(degrees)F. Buyer
acknowledges that the CIFO delivery temperature is determined by
Seller's and HECO's scheduling of other fuels in Seller's pipeline,
and hence cannot be guaranteed.

ii. When mutually agreed to, Seller may Deliver and MECO and HELCO may
receive their Diesel into their nominated barge, F.O.B. Honolulu
Harbor Piers 31 or 32. The delivery rate shall be 2,000 BPH minimum.

iii. When mutually agreed to, Seller may Deliver and MECO and HELCO may
receive their Oil into their nominated barge, F.O.B. Barbers Point
Piers 5 or 6. The delivery rate shall be 4,000 BHP minimum.

iv Seller and Buyer's agent or a mutually agreed upon independent
inspector shall inspect the receiving barge cargo tanks to ensure that
they contain only minimal remains of the previous cargo, before Seller
will Deliver Oil to be terminaled per Article XI. Remains exceeding
common commercial practice shall be removed by Buyer to protect the
quality of the Delivered Oil. Buyer or Buyer's agent may remove the
remains by any legal method at their disposal, including pumping the
remains into Seller's slop tank at the HMT, if convenient to Seller.
Seller shall have the right to charge Buyer for accepting remains if
the quantity to be removed from any barge or the number of barges

Page 14

requiring remains to be removed becomes excessive. Seller shall have
the right to flush the receiving barge cargo tanks with a small
quantity of Seller's Oil before loading the Delivered Oil.

v. Seller and Buyer's agent or a mutually agreed upon independent
inspector shall take a representative sample of the oil in the barge
cargo tanks, after Seller has delivered Oil into MECO's and HELCO's
nominated barges. See Addendum 2 hereto for an overview on all
sampling. This sample will be divided into two parts and dated. One
part shall be labeled "Seller's Loaded Sample." One part shall be
sealed and labeled "Buyer's Loaded Retain." These samples shall
indicate the quality of the mixture of Delivered Oil and the previous
cargo remains and will provide an early warning of any quality
problems with the Received Oil as described in Section 11.3.

Section 6.2 Seller agrees to Deliver and HT&B and YB agree to receive their
Diesel into their nominated vessel F.O.B. the HMT, Pier 31 or 32. The delivery
rate shall be 175 BPH minimum.

Section 6.3 Seller agrees to Deliver and HECO agrees to receive its Diesel
under either of the options below.

i. Seller will Deliver Diesel from the HDT into HECO's nominated tank
truck at a delivery rate of 190 BPH minimum.

ii. Seller will Deliver Diesel from the Oahu P/L into HECO's storage at
HECO's Waiau Power Plant, at a delivery rate of 1,000 BPH minimum.

Section 6.4 Seller agrees to deliver and MECO and HELCO agree to receive
Jet at MECO's or HELCO's respective power plant truck unloading rack.

Section 6.5 Seller agrees to Deliver and MECO-Molokai agrees to receive its
Oil into its nominated marine terminal at Kaunakakai Harbor, Molokai. The
delivery rate shall be 1,000 BPH minimum. Buyer will provide discharge
facilities through an independent third party; Seller has no responsibility to
procure discharge facilities on the island of Molokai.

Page 15

Section 6.6

i. For the Delivered Oil under Sections 6.1 and 6.2, care, custody,
control, title and risk of loss shall pass to Buyer as the Oil passes
the flange connecting the cargo hose of the Buyer's nominated barge or
vessel and Seller's pipeline.

ii. For the Delivered Diesel under Section 6.3.i., care, custody, control,
title and risk of loss shall pass to Buyer as the Oil passes the
flange connecting the cargo hose of the Buyer's nominated tank truck
or vessel and Sellers' truck loading rack.

iii. For the Delivered Diesel under Section 6.3.ii., care, custody,
control, title and risk of loss shall pass to Buyer as the Oil passes
the flange connecting Buyer's pipeline at the Waiau Power Plant to the
Oahu P/L.

iv. For the Delivered Diesel under Section 6.5, care, custody, control,
title and risk of loss shall pass to Buyer as the Oil passes the
flange connecting the cargo hose of the Seller's nominated barge or
vessel and the Buyer's designated pipeline.

v. For the delivered Jet under section 6.4, care, custody, control, title
and risk of loss shall pass to Buyer as the jet passes the flange
connecting the cargo hose of the Seller's tank truck and Buyer's truck
unloading rack at HELCO's and MECO's respective power plant.

Section 6.7 Buyer agrees to provide Seller with five (5) days advance
written notice of Oil to be Delivered under Section 6.1, 6.3.ii. or 6.4, and
telephone notification for Diesel to be Delivered under Section 6.2 or 6.3.i.
Seller shall make all reasonable effort to comply with this notice and advise
Buyer promptly if the delivery time cannot be met.

Page 16

ARTICLE VII
DETERMINATION OF QUALITY

Section 7.1 The quality of the Oil purchased by HECO and the quality of Jet
purchased by HELCO and MECO shall be determined on the basis of composite
samples drawn by Seller in such a manner as to be representative of each
Delivery. The quality of the Oil purchased by MECO or HELCO, i.e., barge
cargos, shall be determined on the basis of composite samples drawn by Seller,
collected at a point prior to entry into each barge, in such a manner as to be
representative of each barge cargo. The quality of the Oil purchased by MECO-
Molokai shall be determined on the basis of composite samples drawn by Seller
from receiving tanks at the Kaunakakai Terminal after each delivery. The heat
content of the Oil shall be determined on a monthly weighted average basis for
each Buyer from the same composite samples drawn by Seller at the time and place
described above. See Addendum 2 hereto for an overview on all sampling. Such
samples shall be divided into three (3) parts and dated.

1. One part shall be used by Seller to determine the heat content (gross
BTU) per physical gallon and, if needed, the other qualities of Article
IV ("Seller's Delivered Sample").

2. One part shall be provided to Buyer for the purpose of verifying Seller's
determinations ("Buyer's Delivered Sample").

3. One sealed part shall be provided to Buyer ("Buyer's Delivered Retain").

Section 7.2 Within sixty (60) days after the end of each month, Buyer shall
give Seller notice of any disagreement with Seller's quality or heat content
determination for Delivered Oil and Delivered Jet during such month. In the
event that such disagreement is not resolved within thirty (30) days, Buyer's
Delivered Retain shall be submitted to a mutually agreed upon independent
laboratory for inspection, whose determination shall be final and binding on
both parties. Seller and Buyer shall share equally the cost of such independent
inspections.

Page 17

Section 7.3 If Buyer and Seller agree or the independent inspector
determines that the quality of Delivered Oil and Delivered Jet did not equal the
qualities described in Article IV (regardless if such Oil and Jet passed tests
of conditional acceptance), the Buyer and Seller shall attempt to minimize the
impact. This may include specification waiver especially if use of Oil and Jet
will not harm Buyer or Seller, or delivering higher quality Oil and Jet in a
timely manner to produce a specification quality blend in Seller's terminal. If
all such, or similar efforts fail to resolve the quality problem, then Seller at
Seller's expense, shall exchange the non-specification Oil and Jet and other oil
downgraded by commingling with Seller's Oil and Jet, with Oil and Jet meeting
the qualities of Article IV. However, in no event shall Seller be liable for
any indirect, consequential, special or incidental damages of any kind whether
based in contract, tort (including without limitation negligence or strict
liability), warranty or otherwise allegedly caused by or based upon the
qualities of the Oil and Jet.

ARTICLE VIII
MEASUREMENT OF QUANTITY

Section 8.1 Quantities of the Oil sold and purchased under this Contract at
the HMT shall be determined at the time of each Delivery by gauging the HMT
tanks before and after pumping. Diesel sold and purchased under this Contract
from the Oahu P/L shall be determined at the time of each Delivery by gauging
Seller's tanks at its Barbers Point Refinery before and after pumping. Diesel
sold and purchased under this Contract at the Kaunakakai Terminal shall be
determined at the time of each Delivery by gauging Buyers' tanks at Kaunakakai
before and after pumping. Volumes Delivered hereunder shall be converted to
60(degrees)F, using the latest revision of Table 6 of ASTM IP Petroleum
Measurement Tables, American Edition, ASTM Designation D-1250. Measurements
shall be taken by Seller and witnessed by Buyer or Buyer's agent. However, at
Buyer's option, such measurements shall be taken by a mutually agreed upon
independent inspector. Seller and Buyer shall share equally the

Page 18

cost of independent inspections. Seller reserves the right to install meters
on the Oahu P/L and to determine quantity as in Section 8.2.

Section 8.2 Diesel sold and purchased under this Contract at the HDT and
Jet sold and purchased by HELCO and MECO shall be determined at the time of each
Delivery by reading calibrated meters, corrected in each instance to volume at
60(degrees)F in accordance with the latest issue of Table 6 of ASTM IP Petroleum
Measurement Tables, American Edition, ASTM Designation D-1250. The meters used
at the HDT and Seller's terminals on Hawaii and Maui shall be Seller's meters.
Both Buyer and Seller shall have the right to review each other's routine
certification documents.

Section 8.3 If Buyer or Seller has reason to believe that the quantity of
Oil and Jet stated for a particular Delivery per Sections 8.1 or 8.2 is
incorrect, the party shall within sixty (60) days of the Delivery date, present
the other party with documentation supporting such determination and the parties
will confer, in good faith, on the causes for the discrepancy and shall proceed
to correct such causes and adjust the quantity, if justified, for the deliveries
in question.

ARTICLE IX
INVOICING AND PAYMENT

Section 9.1 Invoices for the sale of CIFO, Diesel, and Jet and for the
services provided by Seller as outlined in Article XI shall be rendered promptly
to Buyer, upon receipt of all required information.

Section 9.2 Payments shall be made in U.S. dollars. Timing of payments of
invoices shall be as follows:

i. Invoices to HECO, MECO, MECO-Molokai and HELCO:

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a. Payment for Deliveries and services from the first through the
tenth calendar day of a month for which invoices have been received
is due on the twentieth day of the month.

b. Payment for Deliveries and services from the eleventh through the
twentieth calendar day of a month for which invoices have been
received is due on the last day of the month.

c. Payment for Deliveries and services from the twenty-first through
the last calendar day of a month for which invoices have been
received is due on the tenth day of the following month.

Due dates are dates payments are to reach Seller. If the due date falls
on a Saturday, the payment shall be due on the preceding business day.
If such date falls on a Sunday or a holiday, payment shall be due the
following business day.

ii. Payment for Deliveries to HT&B and YB for which invoices have been
received shall be paid within thirty (30) days of the Delivery date.

Section 9.3 Method of payment shall be as follows:

i. Payments of HECO, MECO, MECO-Molokai, and HELCO shall be by bank wire
transfer of immediately available funds to:
First National Bank of Chicago, Xxxxxxx, Xxxxxxxx 00000
Attention: GFTS
for credit to the following accounts, depending on which Buyer is
making a payment:
a. HECO Chevron U.S.A. Inc. - Section #632

Account No. 0000000

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x. XXXXX Chevron U.S.A. Inc. - Section #632

Account No. 0000000

c. MECO Chevron U.S.A. Inc. - Section #632

Account No. 0000000

d. MECO-Molokai Chevron U.S.A. Inc. - Section #632

Account No. 0000000

For identification purposes, all wires must clearly indicate that
payment is being made by order of Buyer and indicate the invoice reference
number. In addition, written documentation evidencing specific invoices being
paid shall be immediately forwarded to:

Chevron U.S.A. Inc
X.X. Xxx X
Xxxxxxx, Xxxxxxxxxx 00000

ii. Payment by HT&B and YB shall be mailed to:

Chevron U.S.A.
c/o First Interstate Bank
Dept. 7351
Xxx Xxxxxxx, XX 00000

Payment shall include written documentation evidencing specific invoices being
paid.

ARTICLE X
SELLER'S FACILITIES ON OAHU

Seller agrees to provide the use of its Oahu P/L for the Diesel Delivered to
HECO's Waiau Power Plant per Section 6.3.ii.

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ARTICLE XI
SELLER'S FACILITIES ON MAUI AND HAWAII

As used in this Article XI, "Buyer" will refer only to MECO or HELCO.
Section 11.1

ii. Whenever Buyer purchases third party oil which is to be terminaled in
Seller's facilities, Buyer shall obtain a sample representative of the
oil in the barge cargo tanks, after the third party supplier has
completed the loading of such oil into Buyer's nominated barge. See
Addendum 2 hereto for an overview on all sampling. This sample shall be
divided into three parts and dated. One part shall be labeled
"Supplier's loaded sample" and delivered to Seller's representative as
soon as possible. One part shall be labeled "Buyer's loaded sample."
One part shall be sealed and labeled "Buyer's loaded retain." These
samples shall indicate the quality of this mixture of purchased oil and
the previous

Page 22

cargo remains. To provide an early warning of any quality problems
with the Received oil, Buyer agrees to perform a preliminary analysis on the
Buyer's loaded sample consisting of API gravity, appearance and, in the case of
diesel fuel, flash point, at the time such third party oil is loaded for
transport. Buyer also agrees to deliver one copy of such preliminary analysis
promptly to Seller's representative at the Honolulu Marine Terminal and to carry
a second copy on board Buyer's nominated barge for delivery to Seller's
representative upon arrival at the appropriate outer island terminal. Buyer
further agrees that the cost of any additives which may be required to eliminate
compatibility problems between third party oil and Seller's Oil at the outer
island terminal shall be solely for Buyer's account.

Section 11.2 Buyer shall provide Seller with estimated arrival times of
the barge transporting the oil for which Buyer desires to use Seller's
facilities on Maui or Hawaii. Buyer or Buyer's agent shall provide radio or
phone notification to Seller's representative at each unloading location at
least seven days prior to a third-party supplied oil delivery and at least 24
hours prior to a Seller supplied oil delivery. Buyer or Buyer's agent shall
also provide the Captain of the Port with radio or phone notification at least
24 hours prior to any delivery. Should the estimated time of arrival change by
two or more hours following the 24 hour arrival report, Buyer or Buyer's agent
shall promptly report the change to Seller's representative and the Captain of
the Port at the place of planned arrival.

Section 11.3
i. Seller shall analyze Seller's Loaded sample of Section 6.1.iv and
Buyer's supplied results from any Buyer's loaded sample of Section
11.1.ii for conditional acceptance for receiving the oil, and if
warranted, analyze Seller's Loaded sample of Section 6.1.iv and
Supplier's loaded sample of Section 11.1.ii for all the qualities
described in Article IV, while Buyer's nominated barge is enroute to
Maui or Hawaii, to reduce the risk of contaminating Seller's terminal
inventories. See Addendum 2 hereto for an overview of

Page 23

all sampling. If the loaded sample fails conditional acceptance, Seller
shall promptly notify Buyer of any quality problems with the loaded oil.
Both Buyer and Seller shall attempt to minimize the impact of any
quality problem by specifications waiver especially if use of the loaded
oil will not harm either Buyer or Seller, or by Buyer or Seller
delivering higher quality oil in a timely manner to produce a
specification quality blend at Seller's terminal. If all such, and
similar, efforts fail to resolve the quality problem, then Buyer's
loaded oil shall not be unloaded into Seller's terminal tanks.
Buyer may return nonspecification Loaded Oil to Seller's Barbers Point
refinery, in which case Seller shall replace the non-specification
Loaded Oil by delivering an equal volume of Oil into Buyer's nominated
barge at the HMT, in a timely manner.
ii. All costs and expenses, including transportation, re-refining and
handling costs incurred in returning and replacing non-specification
loaded oil and Loaded Oil shall be paid by the party responsible for the
contamination. Responsibility shall be determined by analyzing the
Delivered Oil samples of Section 7.1 and the loaded oil samples of
Section 6.1.iii and Section 11.1.ii. If Buyer and Seller cannot agree
whether the Delivered Oil or the loaded oil meet the qualities specified
in Article IV, then the sealed retain of the oil in question, Buyer's
Delivered retain, Buyer's Loaded retain or Buyer's loaded retain shall
be submitted to a mutually agreed upon independent laboratory, whose
determination shall be final and binding on both parties. Seller shall
have the responsibility for Buyer's transportation and handling costs
for its own re-refining cost if it is determined that the qualities
described in Article IV are not met by the Delivered Oil. Otherwise,
Buyer shall be responsible for Seller's handling and re-refining cost
and its own transportation and handling costs. The responsible party
shall reimburse the other party for such costs and expenses within sixty
(60) days of the delivery date of the non-specification loaded oil.
However, in no event shall such party be responsible for any indirect,
consequential, special or incidental damages of any kind whether based
in contract, tort (including without limitation negligence or strict
liability), warranty or otherwise

Page 24

allegedly caused by or based upon the quality of the non-specification
loaded oil. Seller and Buyer shall share equally the cost of any
independent inspections.

Section 11.4 Buyer shall be responsible for meeting all Coast Guard dock
watch requirements at Hilo, Hawaii and Kahului, Maui. Charges levied by any
governmental agency for the use of their facilities at Hilo, Hawaii or Kahului,
Maui, including but not limited to the State of Hawaii's wharf and pipeline
fees, shall be for Buyer's account.

Section 11.5 Seller will take care, custody and control of Received oil
having conditionally acceptable quality per Section 11.6 at the flange
connecting Seller's independently owned pipeline at each location to the
multiparty diesel pipeline at Kahului Harbor, Maui and the multiparty diesel and
fuel oil pipelines at Hilo Harbor, Hawaii. Title and risk of loss shall remain
with Buyer. Seller shall not be responsible for any type of loss of the oil
while it is in Seller's custody except when loss or damage is caused by Seller's
failure to use reasonable care in receiving, handling, storing, or delivering
such oil. Received oil will be commingled with Seller's Oil in Seller's tankage
at Seller's Kahului, Maui or Hilo, Hawaii terminals.

Section 11.6

i. Quality of Received oil at the unloading location shall be determined
by testing representative samples taken from Carrier's barge tanks.
See Addendum 2 hereto for an overview of all sampling. Seller, or a
mutually agreed third party, shall perform the sampling and testing as
prescribed in the latest API-ASTM laboratory testing standards.
Samples will be divided into four parts and dated. One part shall be
tested promptly per Section 11.6.ii. One part shall be labeled
"Seller's Received Sample," one part shall be sealed and labeled
"Seller's Received Retain" and one part shall be labeled "Buyer's
Received Sample" and provided to Buyer.

ii. To facilitate Buyer's barge turnaround, one part of the sample taken
in Section 11.6.i will be promptly tested for its API gravity,
appearance and in the case of Diesel also for its

Page 25

flash point. Received Oil will be considered conditionally acceptable
if its API gravity is within 0.3 degrees of its gravity delivered to
Buyer under Article VI. Received oil will be considered acceptable if
its API gravity is within 0.3 degrees of the Supplier's loaded sample
gravity as determined in Section 11.1.ii, and for diesel cargos, if
its Flash point is above its 150 (degrees)F specification of Section
4.2.

iii. Notwithstanding the above conditional acceptance, Seller may use
Seller's Received Sample to determine all the qualities described in
Article IV for Received oil. Within thirty (30) days after each oil
cargo unloading, Seller shall give Buyer notice of any claim of
contamination of Seller's Oil from commingling with Received oil. In
the event that such claim is not resolved within thirty (30) days of
the original claim, Seller's Received Retain shall be submitted to a
mutually agreed upon independent laboratory for inspection, whose
determination shall be final and binding on both parties. Seller and
Buyer shall share equally the cost of such independent inspections.

iv. If Buyer and Seller agree or the independent inspector determines that
the quality of the Received oil did not meet the qualities described
in Article IV, and the most recent Delivered Oil did meet the quality
described in Article IV, both Buyer and Seller shall attempt to
minimize the impact of any quality problem on Buyer by waiver of
Buyer's requirement to meet specifications especially if Seller's use
of the oil will not significantly harm Seller, or by Buyer or Seller
delivering higher quality oil in a timely manner to produce a
specification quality blend at Seller's terminal. If all such, and
similar, efforts fail to resolve the quality problem, then Buyer will
reimburse Seller the transportation, handling and re-refining costs of
exchanging Buyer's and Seller's oil, with oil meeting the qualities
described in Article IV. Such reimbursement shall occur within 60 days
of Seller's original claim. However, in no event shall Buyer be liable
for any indirect, consequential, special or incidental damages of any
kind whether based in contract, tort (including without limitation
negligence or strict liability), warranty or otherwise allegedly
caused by or based upon the quality of the Received oil.

Page 26

Section 11.7 The quantity of Received oil and Received Oil over which
Seller takes custody shall be determined at the time of each barge cargo
unloading by gauging Seller's terminal tank before and after pumping. Free water
shall be drawn off prior to each level measurement. Volumes delivered hereunder
shall be converted to 60(degrees)F, using the latest revision of Table 6 of ASTM
IP Petroleum Measurement Tables, American Edition, ASTM Designation D-1250.
Measurements shall be taken by Seller and witnessed by Buyer or Buyer's agent.
However, at Buyer's option, such measurement shall be taken by a mutually agreed
upon independent inspector. Buyer and Seller shall share equally the cost of
independent inspections.

Section 11.8 In the event that Buyer and Seller have agreed to commingle
their oil in a barge or vessel compartment to reduce freight costs, and there
are discrepancies between either the quantities of oil loaded per Section 6.1
and unloaded per Section 11.7 or the qualities of oil loaded per Section 7.1 and
unloaded per Section 11.6, then Buyer and Seller shall share the benefits or
losses of the discrepancy proportionally to the loaded volumes.

Section 11.9 Buyer will provide Seller's terminal representative, during
normal working hours, at least 24-hour notice of any transfers required from
Seller's facilities in Kahului or Hilo.

Section 11.10 Buyer shall regain care, custody and control of Returned Fuel
Oil at the flange connecting Seller's Hilo terminal pipeline to Buyer's
pipeline.

i. The quantity of Fuel Oil over which Seller returns custody shall be
determined at the time of each transfer by gauging Seller's terminal
tanks before and after pumping. Volumes Returned hereunder shall be
converted to 60(degrees)F, using the latest revision of Table 6 of
ASTM IP Petroleum Measurement Tables, American Edition, ASTM
Designation D-1250. Measurements shall be taken by Seller and
witnessed by Buyer or Buyer's agent. However, at Buyer option, such
measurements shall be taken by a mutually agreed upon

Page 27

independent inspector. Buyer and Seller shall share equally the cost
of independent inspections.

ii. Buyer and Seller agree that Buyer shall maintain a positive inventory
of Fuel Oil at Seller's Hilo terminal for Buyer's use, but
acknowledge that a small negative inventory may occasionally result
after Fuel Oil custody transfers from Seller to Buyer. Seller shall
maintain a record of Buyer's net Fuel Oil inventory stored in its
Hilo terminal based on receipts as determined in Section 11.7 and
returns as determined in Section 11.10.i. Seller will provide book
inventory records once each week, convenient to Seller's normal
weekly inventory period. If at the end of any annual period, the net
Fuel Oil inventory is negative, Seller will invoice Buyer and Buyer
will pay Seller an amount equal to the net negative inventory in
barrels multiplied by the sum of the December CIFO sales price at the
end of the annual period per Section 5.1 and the December commercial
freight rate charged by HELCO's carrier for a minimum cargo size of
38,000 barrels to Seller at the end of the annual period for CIFO
transport between Honolulu Harbor, Oahu and Hilo Harbor, Hawaii.

Section 11.11 Buyer shall regain care, custody and control of Returned
diesel at the end of the fill pipe connecting Seller's terminal pipelines to
Carrier's tank trucks. Transfers will be made in minimum 5,000 gallons per
delivery load.

i. The quantity of diesel over which Seller returns custody shall be
determined at the time of each transfer by reading Seller's calibrated
meters corrected in each instance to volume at 60(degrees)F using the
latest revision of Table 6 of ASTM IP Petroleum Measurement Tables,
American Edition, ASTM Designation D-1250. If Buyer or Seller have
reason to believe that the quantity of Returned diesel stated for a
particular transfer is incorrect, that party shall within fifteen days
of the transfer date, present the other party with documentation
supporting such determination and the parties will confer, in good
faith, on the causes for the discrepancy and shall proceed to correct
such causes and adjust the quantity, if justified, for the transfers
in question.

Page 28

ii. Seller shall maintain records of Buyer's net diesel inventories stored
at each of its Kahului, Maui and Hilo, Hawaii terminals, based on
receipts as determined in Section 11.7 and returns as determined in
Section 11.11.i. Seller will provide book inventory records once each
week, convenient to Seller's normal weekly inventory period.

iii. Seller will periodically reconcile meter measurements with tank
gaugings. Buyer may review Seller's reconciliation calculations.
However, there will be no retroactive adjustments to the volumes
delivered or received as a result of this procedure.

Section 11.12 Seller shall be under no obligation to provide Buyer
quantities of Returned oil greater than Buyer's current net oil inventory.
However, Seller will attempt to meet Buyer's unanticipated needs, after
considering the needs of its other customers and its own available inventory.

Section 11.13

i. Returned oil transferred by Seller shall meet the qualities described
in Article IV. Seller shall verify the quality of the Returned oil by
taking a representative sample of the oil in Seller's tanks on Maui
and Hawaii after each receipt of Buyer's or Seller's oil. See Addendum
2 hereto for an overview of all sampling. This sample shall be
promptly tested by Seller for its API gravity, appearance and in the
case of diesel also for its flash point. Buyer and Seller agree that
successful passage of the prompt test on this sample is sufficient
evidence for Seller to return oil to Buyer, without limiting Buyer's
rights within Section 11.13.ii. Seller shall also take samples
representative of the Returned oil after each receipt of Buyer's or
Seller's oil into Seller's terminal. These samples will be divided
into three parts and dated. One part shall be labeled "Seller's
Returned Sample." One part shall be sealed and labeled "Buyer's
Returned Retain" and one part shall be labeled "Buyer's Returned
Sample." Both shall be provided to Buyer.

ii. Notwithstanding the above conditional acceptance, Buyer may use
Buyer's Returned Sample to determine all the qualities described in
Article IV for the Returned oil. Within

Page 29

thirty (30) days after each oil delivery, Buyer shall give Seller
notice of any claim of contamination and of resulting losses. In the
event that such claim is not resolved within thirty (30) days of the
original claim, Buyer's Returned Retain shall be submitted to a
mutually agreed upon independent laboratory for inspection, whose
determination shall be final and binding on both parties. Seller and
Buyer share equally the cost of such independent inspections.

iii. If Buyer and Seller agree or the independent inspector determines that
the quality of the Returned oil did not meet the qualities described
in Article IV and that the most recent Received Oil and Received oil
did meet the qualities described in Article IV, both Buyer and Seller
shall attempt to minimize the impact of any quality problem on Seller
by waiver of Seller's requirement to meet specifications, especially
if Buyer's use of the oil will not significantly harm Buyer, or by
Seller returning higher quality oil to produce a specification quality
blend at Buyer's plants. If all such, and similar, efforts fail to
resolve the quality problem, then Seller will, at Seller's expense,
exchange Buyer's Returned oil and, if appropriate, any of Buyer's
other similar oil which has been downgraded by commingling with the
Returned oil, with oil meeting the qualities described in Article IV.
Seller shall make its best, reasonable effort to replace Buyer's oil
in a timely manner. However, in no event shall Seller be liable for
any indirect, consequential, special or incidental damages of any kind
whether based in contract, tort (including without limitation
negligence or strict liability), warranty or otherwise allegedly
caused by or based upon the quality of the Returned oil.

Section 11.14

Page 30

ii.

ARTICLE XII
CONTINGENCIES

Section 12.1 As used in this Article XII, the term "contingency" means:
(a) any event reasonably beyond the control of the party affected;

(b) compliance, voluntary or involuntary, with a direction or request of any
government or person purporting to act with governmental authority; excluding,
however, any such direction or request restricting or otherwise regulating
combustion of the oil to be purchased by Buyer hereunder, the effect of which
restrictions or regulation upon the parties' performance shall be governed by
Section 12.5 of this Contract;

(c) total or partial expropriation, nationalization, confiscation,
requisitioning or abrogation or breach of a government contract or concession;

(d) closing of, or restriction on the use of, a port or pipeline;

(e) maritime peril (including but not limited to, negligence in navigation
or management of vessel, collision, stranding, destruction, or loss of vessel),
storm, earthquake, flood;

(f) accident, fire, explosion;

(g) hostilities or war (declared or undeclared), embargo, blockage, riot,
civil unrest, sabotage, revolution, insurrection;

(h) strike or other labor difficulty (whomever's employees are involved),
even though the strike or other labor difficulty could be settled by acceding to
the demands of a labor group; or,

(i) loss or shortage of supply, production, manufacturing, distribution,
refining, transportation, delivery facilities, receiving facilities, equipment,
labor, material, power

Page 31

generation or power distribution caused by circumstances which the affected
party is not able to overcome by the exercise of reasonable diligence or which
the affected party is able to overcome only at substantial additional expense in
relation to the expected revenue, benefits or rights related directly to this
Contract.

Section 12.2 Seller shall not be obligated to sell or deliver Oil or Jet
to the extent that performance of this Contract is prevented, restricted or
delayed by a contingency which significantly affects Seller's ability to supply,
manufacture or transport Oil or Jet to Buyer under this Contract from Seller's
U.S. West Coast and Hawaiian refineries. In such circumstances, Deliveries of
Oil or Jet to Buyer may be reduced on a basis as equitable to Buyer as to
Seller's and its affiliates' other customers of crude and petroleum products,
and Seller shall not be obligated to acquire additional crude, oil or jet but to
the extent that it does acquire additional crude, oil or jet, Buyer shall be
entitled to an equitable share of the oil or jet acquired or derived from the
crude acquired, at a price to be agreed from time to time.

Section 12.3 Buyer shall not be obligated to purchase, receive or use Oil
or Jet to the extent that performance of this Contract in the customary manner
is prevented, restricted or delayed by a contingency. In such circumstances,
purchases from Seller may be reduced on any basis as equitable to Seller as to
Buyer's other suppliers of oil or jet.

Section 12.4 If at any time any price determined under this Contract
cannot be given effect because to do so would violate a direction or request of
any government or person purporting to act with governmental authority, Buyer
and Seller shall attempt to agree on an alternate course of action but failing
agreement within 10 days the party adversely affected may suspend performance
with respect to the quantity of Oil or Jet affected by the direction or request.

Page 32

Section 12.5 To the extent that any governmental regulation requires
combustion of oil or jet meeting specifications other than those in Article IV,
Buyer and Seller shall negotiate in good faith to agree on an alternative course
of action that will allow Buyer to comply with such regulation while purchasing
the equivalent of the full quantity of oil or jet it would be required to
purchase under Article III, at a price and on other terms and conditions that
are fair to both parties. Seller shall have no obligation to deliver oil or jet
meeting new specifications if it is not available for purchase from third
parties and Seller cannot manufacture such oil or jet in existing facilities
without new capital investment.

If Buyer and Seller do not agree on such an alternative course of action, then
Buyer may comply with such regulation in any reasonable manner it chooses,
including the option to purchase from other sources for its plant located within
the area in which such regulation specifically applies, fuels which will enable
Buyer to comply with such regulation. In such case, Buyer's minimum purchase
requirement under Article III shall be reduced accordingly.

Section 12.6 Seller's obligations under this Contract shall be contingent
on Seller's continued ownership or operation of its refining or delivery
facilities in Hawaii or the U.S. West Coast. Seller shall have the right to
terminate this Contract in the event the ownership and operation of its refining
and delivery facilities in Hawaii and the U.S. West Coast are transferred to an
entity other than an affiliate. Seller shall give Buyer 180 days' written
notice.

ARTICLE XIII
EFFECT OF SUSPENSION OR REDUCTION

Section 13.1 In the event of any suspension of sales and Deliveries under
Article XII, Seller shall not be obligated to sell and Buyer shall not be
obligated to buy, after the period of suspension or reduction, the undelivered
quantity of Oil or Jet which normally would have been sold and delivered
hereunder during the period of suspension or reduction.

Page 33

Section 13.2 If sales and Deliveries are suspended under Article XII for
more than 180 days, Seller or Buyer shall then have the option while such
suspension continues to terminate its obligations to the other party under this
Contract on 30 days' written notice to the other party.

Section 13.3 Any party which relies upon Article XII shall give the other
party prompt notice thereof specifying the anticipated amount and duration of
any suspension or reduction of Deliveries. It shall also give prompt notice when
it no longer expects to rely on Article XII and Deliveries shall be reinstated
subject to all conditions of this Contract, unless this Contract has been
terminated previously under Section 13.2.

Section 13.4 Nothing in Article XII shall relieve Buyer of the obligations
to pay in full in United States currency for the Oil or Jet sold and Delivered
hereunder and for other amounts due to Buyer to Seller under this Contract, nor
relieve Seller of the obligation to return to Buyer the net positive inventory
of Buyer's oil stored in Seller's Hilo, Hawaii and Kahului, Maui terminals.

Section 13.5 While Deliveries are suspended or reduced by Seller pursuant
to Article XII, it shall not be a breach of this Contract for Buyer to buy from
a supplier other than Seller the quantities of Oil or Jet which Seller does not
Deliver. During this period of time, there will be no minimum volume
requirements. After any suspension or reduction has ended, minimum and maximum
volume requirements for the semiannual period in which the suspension or
reduction occurred will be reduced in proportion to the ratio of the number of
days within the semiannual period during which no suspension or reduction was in
effect, to the number of days within the semiannual period.

Page 34

ARTICLE XIV
WAIVER AND NONASSIGNABILITY

Section 14.1 Waiver by one party of the other's breach of any provision of
this Contract shall not be deemed a waiver of any subsequent or continuing
breach of such provisions or of the breach of any other provision or provisions
hereof.

Section 14.2 This Contract shall not be assignable by either party without
the written consent of the other, which shall not be unreasonably withheld,
except that Seller may assign this Contract to any affiliate, provided that any
such assignment shall not release Seller from any of its obligations hereunder,
and except that HECO, MECO, MECO-Molokai, and HELCO may assign their interests
in the Contract to the Trustee under their respective First Mortgage Bond
Indentures. Seller does not, by agreement to such an assignment, waive any right
it may have to terminate this Contract for any breach hereof occurring at any
time before or after any such assignment or release Buyer of any obligations
arising under this Contract after any such assignment. Following any such
assignment, no further assignment may be made without the consent of Seller.

ARTICLE XV
CONFLICT OF INTEREST

Conflicts of interest related to this Contract are strictly prohibited.
Except as otherwise expressly provided herein, neither party nor any director,
employee or agent of a party shall give to or receive from any director,
employee or agent of the other party any gift, entertainment or other favor of
significant value, or any commission, fee or rebate. Likewise, neither party nor
any director, employee or agent of a party shall enter into any business
arrangement with any director, employee or agent of the other party (or any
affiliate), unless such person is acting for and on behalf of the other party,
without prior written notification thereof to the other party. In the event of
any violation of this paragraph, including any violation occurring prior to the
date of this Contract which resulted directly or indirectly in one party's
consent to enter into this

Page 35

Contract with the other party, such party may, at its sole option, terminate
this Contract at any time and, except for Buyer's obligation to pay in full in
United States currency for the Oil sold and Delivered hereunder and for other
amounts due by Buyer to Seller under this Contract, and for Seller's obligation
to return to Buyer the net positive inventory of Buyer's oil stored in Seller's
Hilo, Hawaii and Kahului, Maui terminals, shall be relieved of any further
obligation under this Contract.

Both parties agree to immediately notify the other of any known violation of
this Article.

ARTICLE XVI
DEFAULT

If Buyer or Seller considers the other party to be in default of any
obligation under this Contract, such party shall give the other party notice
thereof. Such other party shall then have 30 days in which to remedy such
default. If the default is not cured, the other party may, without prejudice to
any other right or remedy of such party in respect of such breach, terminate its
obligations under this Contract, except for Buyer's obligation to pay in full in
United States currency for the Oil or Jet sold and delivered hereunder and for
other amounts due by Buyer to Seller under this Contract, and for Seller's
obligation to return to Buyer the net positive inventory of Buyer's oil stored
in Seller's Hilo, Hawaii and Kahului, Maui terminals, by 45 days' written notice
to the party in breach. Any termination shall be without prejudice to accrued
rights. All rights and remedies hereunder are independent of each other and
election of one remedy shall not exclude another.

Except as provided under Sections 18.2 and 18.4, in no event shall either party
be liable for any indirect, consequential, special or incidental damages of any
kind whether based in contract, tort (including without limitation negligence or
strict liability), warranty or otherwise.

Seller's termination of its obligations to a Buyer in this Contract due to
default by that Buyer shall not terminate Seller's obligations to the remaining
Buyers not in default of this Contract.

Page 36

ARTICLE XVII
APPLICABLE LAW
This Contract shall be construed in accordance with, and all disputes
arising hereunder shall be determined in accordance with, the local law of the
State of Hawaii, U.S.A.

ARTICLE XVIII
INDEMNITY

Section 18.1 Seller shall indemnify, defend and hold harmless Buyer, its
directors, officers, employees and agents (including but not limited to
affiliates and contractors and their employees) from and against all
liabilities, damages, losses, penalties, claims, demands, suits, costs, expenses
(including reasonable attorneys' fees), and proceedings of any nature whatsoever
for personal injury (including death), or property damage, including but not
limited to Buyer's facilities (collectively "Injury or Damage"), that results
from non-specification or contaminated Delivered Oil or Jet, or that arises out
of or is in any manner connected with the Delivery or Receipt of Oil or Jet
related to this Contract at Seller's facilities when in the custody of Seller or
the transportation of Oil or Jet related to this Contract when in the custody of
Seller, except to the extent that such Injury or Damage may be attributable to
the negligence or willful action of Buyer. This Section 18.1 shall not include
any indirect, consequential, special or incidental damages of any kind whether
based in contract, tort (including without limitation negligence or strict
liability), warranty or otherwise.

Section 18.2 Without limiting the generality of Section 18.1, Seller shall
indemnify, defend and hold harmless Buyer, its directors, officers, employees
and agents (including but not limited to affiliates and contractors and their
employees) from and against all liabilities, damages, losses, penalties, claims,
demands, suits, costs, expenses, and proceedings of any nature whatsoever
directly or indirectly arising out of or attributable to the release, threatened
release, discharge, disposal or presence of Oil, Jet or hazardous material
related to this Contract when in the custody of Seller, or of MECO-Molokai
Diesel related to this Contract when in the custody

Page 37

of any carrier, except to the extent that such release, threatened release,
discharge, disposal or presence of Oil, Jet or hazardous material may be
attributable to the negligence or willful action of Buyer, including without
limitation: (1) all foreseeable and unforeseeable consequential damages; (2)
the reasonable costs of any required or necessary repair, cleanup or
detoxification of an area of oil, jet or hazardous material and the preparation
and implementation of any closure, remedial or other required plans; (3) the
reasonable costs of the investigation of any environmental claims by Buyer; (4)
the reasonable costs of Buyer's enforcement of this Contract; and (5) all
reasonable costs and expenses incurred by Buyer in connection with clauses (1),
(2), (3), and (4), including without limitation reasonable attorneys' fees and
court costs.

Section 18.3 Buyer shall indemnify, defend and hold harmless Seller, its
directors, officers, employees and agents (including but not limited to
affiliates and contractors and their employees) from and against all
liabilities, damages, losses, penalties, claims, demands, suits, costs, expenses
(including reasonable attorneys' fees), and proceedings of any nature whatsoever
for personal injury (including death), or property damage, including but not
limited to Seller's facilities (collectively "Injury or Damage"), that results
from non-specification or contaminated Received oil or jet, or that arises out
of or is in any manner connected with the delivery or receipt of oil or jet at
Seller's facilities when in the custody of Buyer, any carrier or subsequent
buyer of oil or jet related to this Contract or the transportation of oil or jet
when in the custody of Buyer, any carrier or subsequent buyer of oil or jet
related to this Contract, except to the extent that such Injury or Damage may be
attributable to the negligence or willful action of Seller. This Section 18.3
shall not include any indirect, consequential, special or incidental damages of
any kind whether based in contract, tort (including without limitation
negligence or strict liability), warranty or otherwise.

Section 18.4 Without limiting the generality of Section 18.3, Buyer shall
indemnify, defend and hold harmless Seller, its directors, officers, employees
and agents (including but not limited to affiliates and contractors and their
employees) from and against all liabilities, damages,

Page 38

losses, penalties, claims, demands, suits, costs, expenses, and proceedings of
any nature whatsoever directly or indirectly arising out of or attributable to
the release, threatened release, discharge, disposal or presence of oil, jet or
hazardous material related to this Contract when in the custody of Buyer, any
carrier (except any carrier of MECO-Molokai diesel related to this Contract) or
subsequent buyer of oil or jet related to this Contract, except to the extent
that such release, threatened release, discharge, disposal or presence of oil,
jet or hazardous material may be attributable to the negligence or willful
action of Seller, including without limitation: (1) all foreseeable and
unforeseeable consequential damages; (2) the reasonable costs of any required or
necessary repair, cleanup or detoxification of an area of oil, jet or hazardous
material and the preparation and implementation of any closure, remedial or
other required plans; (3) the reasonable costs of the investigation of any
environmental claims by Seller; (4) the reasonable costs of Seller's enforcement
of this Contract; and (5) all reasonable costs and expenses incurred by Seller
in connection with clauses (1), (2), (3), and (4), including without limitation
reasonable attorneys' fees and court costs.

ARTICLE XIX
PUBLIC UTILITIES COMMISSION

Section 19.1 This Contract is required to be filed with the Hawaii Public
Utilities Commission ("PUC") for approval. If in the proceedings initiated as a
result of the filing of this Contract the PUC disapproves or fails to authorize
the recovery of the fuel costs incurred under this Contract through Buyer's
Energy Cost Adjustment Clause, Buyer may terminate this Contract by 30 days'
written notice to Seller.

Section 19.2 In the event that a Decision and Order or other action by a
governmental regulatory body impairs Seller's ability to enforce any terminal
and safety protection or operation provisions under this Contract, Buyer and
Seller shall attempt to agree on an alternate course of action, but failing
agreement within 10 days, the Seller may suspend performance with respect to

Page 39

the quantity of oil or jet affected by said Decision and Order after giving
Buyer 90 days' written notice.

ARTICLE XX
INSURANCE

Section 20.1 Without in any way limiting Buyer's liability pursuant to
this Contract, Buyer shall maintain and require any carrier or subsequent buyer
of oil or jet related to this Contract to maintain the following insurance and
all insurance that may be required under the applicable laws, ordinances, and
regulations of any governmental authority:

i. Workers' Compensation and Employers' Liability Insurance as prescribed
by applicable law, including insurance covering liability under the
Longshoremen's and Harbor Workers' Act, the Xxxxx Act and the Outer
Continental Shelf Land Act, if applicable.

ii. Commercial General Liability Insurance including Bodily Injury and
Property Damage Insurance with a limit not less than $1,000,000
combined single limit per occurrence.

iii. Automobile Bodily Injury and Property Damage Liability Insurance on
all owned, non-owned and hired vehicles used in receiving oil or jet
from Seller's facilities with a limit not less than $1,000,000
combined single limit per occurrence for bodily injury and property
damage.

iv. Hull and Machinery Insurance including collision liability and tower's
liability on vessels engaged in towage with a limit at least equal to
the actual value of each vessel and barge.

v. Marine Insurance under one of the two following options:

Option One: Protection and Indemnity Insurance including coverage for
injuries to or death of masters, mates and crew and excess collision
liabilities. The limits of such insurance shall not be less than $25
million per occurrence. Vessel pollution liability insurance including
coverage for TOVALOP liabilities and

Page 40

pollution liabilities imposed by federal and state laws now or
hereafter in effect in an amount not less than $500 million; or,

Option Two: Protection and Indemnity Insurance on a full entry basis
with an International Group P&I Club. Such insurance shall include,
but not be limited to, coverage for injuries to or death of masters,
mates and crew; excess collision liabilities and pollution liabilities
imposed by federal and state laws now or hereafter in effect as well
as TOVALOP liabilities (if applicable). Such insurance shall be
unlimited as per International Group, P&I Club rules except for
pollution liabilities which shall be limited to $500 million or the
maximum pollution limit offered by the P&I Clubs of the International
Group.

Section 20.2 The above insurance shall include a requirement that the
insurer provide Seller with 30 days' written notice prior to the effective date
of any cancellation or material change of the insurance. The insurance
specified in Sections 20.1 (i) and 20.1 (iv) shall contain a waiver of
subrogation against Seller and an assignment of statutory lien, if applicable.
The insurance specified in Sections 20.1 (ii), 20.1 (iii), and 20.1 (v) Option
One Protection and Indemnity Insurance shall name Seller as additional insured.

Section 20.3 Before performance of this Contract, Buyer shall provide Seller
with certificates or other documentary evidence satisfactory to Seller of the
insurance coverages and endorsements.

Section 20.4 Without in any way limiting Seller's liability, Seller shall
obtain from any Seller carrier or subsequent buyer from Seller of oil or jet
related to this Contract the insurance coverages and endorsements set forth in
this Article excepting that both Seller and Buyer be named as additional
insureds.

Page 41

Section 20.5 The terminaling and handling fees listed in Section 11.14 do
not include any insurance covering loss of Buyer's oil or jet while it is in the
custody of Seller. It is expressly understood and agreed that insurance, if any
is desired by Buyer, shall be carried by Buyer at its own expense.

ARTICLE XXI
SAFETY AND TERMINAL PROTECTION

Section 21.1 Any buyer or carrier of oil or jet related to this Contract
or their agents shall comply with all of the operating and safety regulations of
Seller, as amended from time-to-time, when alongside, upon, or when approaching
the premises of Seller for the purpose of loading oil or jet related to this
Contract or when departing Seller's premises after loading oil or jet related to
this Contract. In particular, all smoking shall be limited to such locations
and occasions as are specifically authorized in writing by Seller. If Seller
determines that an unsafe condition exists, Seller may, at its absolute
discretion, cease the loading or unloading operations and order any buyer or
carrier of oil or jet related to this Contract or their agents to leave its
place of mooring. Any loss or damage incurred by Seller, any buyer or carrier
of oil or jet related to this Contract or their agents due to any violation by
any buyer or carrier of oil or jet related to this Contract or their agents of
Seller's operating and safety regulations shall be for Buyer's or Carrier's
account. Copies of Seller's operating and safety regulations are available upon
request.

Section 21.2 In addition to its rights under Section 21.1, Seller shall
have the right to refuse acceptance of any barge or vessel nominated by Buyer to
load or discharge if in Seller's Terminal's sole opinion such barge or vessel
for any reason is unacceptable. Seller's Terminal's acceptance or rejection of
Buyer's nominated barge or vessel shall be communicated to Buyer within forty-
eight (48) hours after the Terminal's receipt of nomination, and in the event
Buyer's barge nomination is rejected, Seller shall provide Buyer satisfactory
documentation of the basis for the rejection of such nomination. Seller's
Terminal's acceptance or rejection of any barge or

Page 42

vessel shall not constitute a continuing acceptance or rejection of such barge
or vessel for subsequent loading or discharge. Seller shall not be liable for
any loss, damage or delay caused by its rejection of a vessel nomination
hereunder, nor any loss, damage or delay caused by its rejection of a vessel for
failure to comply pursuant to Section 21.1. In no event shall the acceptance of
a vessel by Seller be construed in any manner as a representation as to the
vessel's operational, environmental or safety status. Neither Buyer nor any
other party shall be entitled to rely on any such acceptance of a vessel by
Seller hereunder.

ARTICLE XXII
POLLUTION MITIGATION

Section 22.1 In the event an escape or discharge of oil or jet occurs from
any barge or vessel carrying oil or jet related to this Contract and causes or
threatens to cause pollution damage, Buyer or carrier will promptly take
whatever measures are necessary to prevent or mitigate such damage. Buyer
hereby authorizes Seller, or its agent, at Seller's option, upon notice to Buyer
or master on the tug, to undertake such measures as are reasonably necessary to
prevent or mitigate the pollution damage. Seller or its agent shall keep Buyer
advised of the nature and results of any such measures taken and, if time
permits, intended to be taken. Any of the aforementioned measures shall be at
Buyer's sole expense (except to the extent that such escape or discharge was
caused by the negligence or willful action of Seller or its agent), provided
that if Buyer considers said measures should be discontinued, Buyer shall so
notify Seller or its agent and thereafter Seller or its agent shall have no
right to continue said measures at Buyer's authority or expense except as
provided in Section 18.4. This provision shall be applicable only between Buyer
and Seller and shall not affect, as between Buyer and Seller, any liability of
Buyer to any third parties, including but not limited to governments.

Section 22.2 In addition to its duties under Section 22.1, Buyer agrees to
cooperate with all efforts and to pay all reasonable costs associated with
preventive booming or other preventive measures that Seller reasonably
determines is advisable on an isolated or routine basis.

Page 43

ARTICLE XXIII
MISCELLANEOUS

Section 23.1 Headings of the Articles and Sections are for convenient
reference only and are not to be considered part of this Contract.

Section 23.2 This document contains the entire agreement between the
parties covering the subject matter and cancels, as of the effective date
hereof, all prior agreements of any kind between the parties covering such
subject matter and any amendments thereto. There are no other agreements which
constitute any part of the consideration for, or any condition to, either
party's compliance with its obligations under this Contract.

Section 23.3 Except as otherwise expressly provided herein, all notices
shall be given in writing, by letter, facsimile, telegraph or telex to the
following addresses, or such other address as the parties may designate by
notice, and shall be deemed given upon receipt.

Seller: Manager, Petroleum Coke, Heavy Fuels & Sulfur
Chevron U.S.A. Inc.
X.X. Xxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
FAX: (000) 000-0000

Buyer: Manager, Power Supply Services Department
Hawaiian Electric Company, Inc.
Xxx 0000
Xxxxxxxx, XX 00000-0000
FAX: (000) 000-0000

Page 44

The Manager, Power Supply Services Department, for Hawaiian Electric
Company, Inc., shall be responsible for forwarding notices to the other parties
to this Contract.

Section 23.4 If any term or provision, or any part of any term or
provision, of this Contract is held by any court or other competent authority to
be illegal or unenforceable, the remaining terms, provisions, rights and
obligations shall not be affected.

Section 23.5 This Contract shall inure to the benefit of and be binding
upon the parties hereto, their successors and permitted assigns.

Section 23.6 Effective as of the Effective Date of the Term hereunder,
this Contract hereby supersedes that certain Inter-Island Industrial Fuel Oil
and Diesel Fuel Contract between the parties dated September 23, 1991, and all
amendments thereto.

IN WITNESS WHEREOF, the parties have caused these presents to become
effective as of the day and year first hereinabove written.

ACCEPTED AND AGREED:

"Seller"

CHEVRON U.S.A. INC.

BY: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx

TITLE: Manager, Petroleum Coke, Heavy Fuels & Sulfur

Page 45

"Buyers"

HAWAIIAN ELECTRIC COMPANY, INC. MAUI ELECTRIC COMPANY, LTD.
BY: /s/ Xxxxxx X. Xxxxxx BY: /s/ Xxxxxx X. Xxxxxx

Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx
(Printed or Typed Name) (Printed or Typed Name)

Vice President

TITLE: Regulatory Affairs TITLE: Vice President

BY: /s/ Xxxxx X. Xxxxx BY: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx Xxxxx X. Xxxxx
(Printed or Typed Name) (Printed or Typed Name)
TITLE: Secretary TITLE: Secretary

HAWAII ELECTRIC LIGHT COMPANY, INC. HAWAIIAN TUG & BARGE CORP.

BY: /s/ Xxxxxx X. Xxxxxx BY: /s/ Xxxxx K. Y. Hong

Xxxxxx X. Xxxxxx President Xxxxx K. Y. Hong
(Printed or Typed Name) (Printed or Typed Name)

TITLE: Vice President TITLE: President

BY: /s/ Xxxxx X. Xxxxx BY: /s/ Xxxxx X. Xxxxx

Xxxxx X. Xxxxx Xxxxx X. Xxxxx
(Printed or Typed Name) (Printed or Typed Name)

TITLE: Secretary TITLE: Secretary

Page 46

YOUNG BROTHERS, LIMITED

BY: /s/ Xxxxx K. Y. Xxxx

Xxxxx K. Y. Hong
(Printed or Typed Name)

TITLE: President

BY: /s/ Xxxxx X. Xxxxx

Xxxxx X. Xxxxx
(Printed or Typed Name)

TITLE: Secretary

Page 47

ADDENDUM NO. 1
SAMPLE PRICE CALCULATIONS-NOVEMBER, 1995

I. FUEL OIL

II. DIESEL FUEL NO. 2

III. JET FUEL

ADDENDUM NO. 2
QUALITY CONTROL SAMPLES
SUMMARY

Frequency
Sample Sample Method &
Type Label Tanking Analysis Location

1. Refinery Production --- After Each Tank Receipt After Each Receipt Composite from Refinery

Tank
2. HMT Inventory --- After Each Tank Receipt After Each Receipt Composite from HMT Tank

3. Delivered A. Buyer's During Each Barge Loading Only if Necessary Drip From Loading Line at

Sample or Monthly HMT or Composite from
B. Seller's Seller's Tanks at Barbers

Sample Point
C. Buyer's Retain
4. Loaded A. Seller's After Each Barge Loading A. After Each Loading Composite from Barge Tank

Sample B. Only if Necessary at HMT
B. Buyer's Retain
5. Loaded (Third- A. Buyer's After Each Barge Loading of A. After Each Loading Composite from Barge
Party) Sample Third-Party Oil B. (Only if Necessary Tanks at Third-Party
B. Supplier's C. ( Supplier's Dock
Sample
C. Buyer's Retain
6. Received A. Prompt Before Each Barge A. Before Each Unloading Composite from Barge
B. Buyer's Unloading Whether Buyer's B. (Only if Necessary Tanks at Hilo or Kahului
Sample or Seller's C. ( Harbor
C. Seller's D. (
Sample
D. Seller's Retain
7. Returned A. Prompt After Each Barge Unloading A. After Each Barge Composite from Seller's
B. Buyer's Whether Buyer's or Seller's Unloading Tanks at Hilo or Kahului
Sample B. (Only if Necessary Terminals
C. Seller's C. (
Sample
D. Buyer's Retain

Applicable Contract Selection
Sample Sample Action on
Type Taking Analysis Failure

1. Refinery Production N/A N/A N/A

2. HMT Inventory N/A N/A N/A

3. Delivered 7.1 7.2 7.3

4. Loaded 6.1iii 11.3i 11.3i & 11.3ii

5. Loaded (Third- 11.1ii 11.3i 11.3i & 11.3ii
Party)

6. Received A. (11.6i 11.6ii 11.6iv
B. (11.6i 11.6iii 11.6iv
C. (
D. (

7. Returned A. 11.13i 11.13i 11.13iii
B. (11.13i 11.13ii 11.13iii
C. (
D. (

Description of Addendum No. 2 to the Inter-Island Industrial Fuel and Diesel
Fuel Contract by and between Chevron U.S.A. Inc. and Hawaiian Electric Company,
Inc., Maui Electric Company, Ltd., Hawaii Electric Light Company, Inc., Hawaiian
Tug & Barge Corp. and Young Brothers, Ltd. dated November 20, 1995 (the
"Interisland Contract"):

Page 2:

Page two of Addendum No. 2 consists of one page entitled "ADDENDUM NO. 2 -
QUALITY CONTROL SAMPLES SCHEMATIC" which in addition to the printed text,
includes a diagram of the flow of 'DIESEL FUEL" and "INDUSTRIAL FUEL OIL" from
refinery or third-party source to purchasers' locations, then to supplier's
marine terminal where fuel is to be loaded into a vessel, then to the harbor
where the vessel is to be discharged, through a multi-party pipeline, to the
supplier's, purchaser's or a third-party terminal at the purchaser's destination
island, and then to the purchaser. At numerous points in the flow of fuel sold,
shipped and stored under the Interisland Contract, there are letters referencing
11 notes which are located at the bottom of the form and which provide a sample
name, description, point of custody transfer, type of analysis to be performed
or description of an inspection step.

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Table of Contents

INTER-ISLAND INDUSTRIAL FUEL OIL AND DIESEL FUEL CONTRACT By and Between CHEVRON U.S.A. INC. and HAWAIIAN ELECTRIC COMPANY, INC.; MAUI ELECTRIC COMPANY, LTD.; HAWAII ELECTRIC LIGHT CO., INC.; HAWAIIAN TUG & BARGE CORP.; and YOUNG BROTHERS, LIMITED.

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