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Exhibit 10.1

 
The York Water Company

$30,000,000

3.24% Senior Notes due September 30, 2050

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Note Purchase Agreement

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Dated September 30, 2020
 

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Table of Contents
 
Section
Heading
Page
Section 1.
Authorization of Notes
1
     
Section 2.
Sale and Purchase of Notes
1
     
Section 3.
Closing
2
     
Section 4.
Conditions to Closing
2
     

 
Section 4.1.
Representations and Warranties
2
 
Section 4.2.
Performance; No Default
2
 
Section 4.3.
Compliance Certificates
2
 
Section 4.4.
Opinions of Counsel
3

 
Section 4.5.
Purchase Permitted By Applicable Law, Etc.
3
 
Section 4.6.
Sale of Other Notes
3
 
Section 4.7.
Payment of Special Counsel Fees
3
 
Section 4.8.
Private Placement Number
3
 
Section 4.9.
Changes in Corporate Structure
3
 
Section 4.10.
Funding Instructions
3
 
Section 4.11.
Commission Approval
4
 
Section 4.12.
Consent of Holders of Other Securities
4
 
Section 4.13.
Proceedings and Documents
4
       

Section 5.
Representations and Warranties of the Company
4
     

 
Section 5.1.
Organization; Power and Authority
4
 
Section 5.2.
Authorization, Etc.
4
 
Section 5.3.
Disclosure
5
 
Section 5.4.
Organization and Ownership of Shares of Subsidiaries; Affiliates
5
 
Section 5.5.
Financial Statements; Material Liabilities
5
 
Section 5.6.
Compliance with Laws, Other Instruments, Etc.
5
 
Section 5.7.
Governmental Authorizations, Etc.
5
 
Section 5.8.
Litigation; Observance of Statutes and Orders
6
 
Section 5.9.
Taxes
6
 
Section 5.10.
Title to Property; Leases
6
 
Section 5.11.
Licenses, Permits, Etc.
6
 
Section 5.12.
Compliance with Employee Benefit Plans
7
 
Section 5.13.
Private Offering by the Company
7
 
Section 5.14.
Use of Proceeds; Margin Regulations
8
 
Section 5.15.
Existing Indebtedness
8
 
Section 5.16.
Foreign Assets Control Regulations, Etc.
8
 
Section 5.17.
Status under Certain Statutes
9

 
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Section 6.
Representations of the Purchasers
9
     

 
Section 6.1.
Purchase for Investment
9
 
Section 6.2.
Source of Funds
9

     
Section 7.
Information as to Company
11

         
Section 7.1.
Financial and Business Information
11
 
Section 7.2.
Officer’s Certificate
13
 
Section 7.3.
Visitation
14
 
Section 7.4.
Electronic Delivery
14
       

Section 8.
Payment and Prepayment of the Notes
15
     

 
Section 8.1.
Maturity
15
 
Section 8.2.
Optional Prepayments with Make-Whole Amount
16
 
Section 8.3.
Allocation of Partial Prepayments
16
 
Section 8.4.
Maturity; Surrender, Etc.
16
 
Section 8.5.
Purchase of Notes
16
 
Section 8.6.
Make-Whole Amount
17
 
Section 8.7.
Payments Due on Non-Business Days
18
 
Section 8.8.
[Reserved]
18

     
Section 9.
Affirmative Covenants.
21

         
Section 9.1.
Compliance with Laws
21
 
Section 9.2.
Insurance
21
 
Section 9.3.
Maintenance of Properties
21
 
Section 9.4.
Payment of Taxes
21
 
Section 9.5.
Corporate Existence, Etc.
22
 
Section 9.6.
Books and Records
22
 
Section 9.7.
Subsidiary Guarantors
22

     
Section 10.
Negative Covenants.
23

         
Section 10.1.
Transactions with Affiliates
23
 
Section 10.2.
Merger, Consolidation, Etc.
23
 
Section 10.3.
Line of Business
25
 
Section 10.4.
Economic Sanctions, Etc.
25
 
Section 10.5.
Liens
25
 
Section 10.6.
Limitations on Indebtedness
26
 
Section 10.7.
Dividends, Stock Purchases
27

     
Section 11.
Events of Default
28
     
Section 12.
Remedies on Default, Etc.
30

         
Section 12.1.
Acceleration
30
 
Section 12.2.
Other Remedies
31
 
Section 12.3.
Rescission
31
 
Section 12.4.
No Waivers or Election of Remedies, Expenses, Etc.
31

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Section 13.
Registration; Exchange; Substitution of Notes
32
     

 
Section 13.1.
Registration of Notes
32
 
Section 13.2.
Transfer and Exchange of Notes
32
 
Section 13.3.
Replacement of Notes
32
       

Section 14.
Payments on Notes
33
     

 
Section 14.1.
Place of Payment
33
 
Section 14.2.
Payment by Wire Transfer
33
 
Section 14.3.
FATCA Information
34
       

Section 15.
Expenses, Etc.
34
     

 
Section 15.1.
Transaction Expenses
34
 
Section 15.2.
Certain Taxes
35
 
Section 15.3.
Survival
35
       

Section 16.
Survival of Representations and Warranties; Entire Agreement
35
     
Section 17.
Amendment and Waiver
35
     

 
Section 17.1.
Requirements
35
 
Section 17.2.
Solicitation of Holders of Notes
36
 
Section 17.3.
Binding Effect, Etc.
36
 
Section 17.4.
Notes Held by Company, Etc.
37

     
Section 18.
Notices
37
     
Section 19.
Reproduction of Documents
37
     
Section 20.
Confidential Information
38
     
Section 21.
Substitution of Purchaser
39
     
Section 22.
Miscellaneous
39

         
Section 22.1.
Successors and Assigns
39
 
Section 22.2.
Accounting Terms
40

 
Section 22.3.
Severability
40
 
Section 22.4.
Construction, Etc.
40
 
Section 22.5.
Counterparts; Electronic Contracting
41
 
Section 22.6.
Governing Law
41
 
Section 22.7.
Jurisdiction and Process; Waiver of Jury Trial
41

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Schedule A
—
Defined Terms
     
Schedule 1
—
Form of 3.24% Senior Note due September 30, 2050
     
Schedule 4.4(a)
—
Form of Opinion of Special Counsel for the Company      
Schedule 4.4(b)
—
 Form of Opinion of Special Counsel for the Purchasers      
Schedule 5.3
—
Disclosure Materials
     
Schedule 5.4
—
Subsidiaries of the Company and Ownership of Subsidiary Stock
     
Schedule 5.5
—
Financial Statements
     
Schedule 5.15
—
Existing Indebtedness

Purchaser Schedule
—
Information Relating to Purchasers

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The York Water Company
130 East Market Street
York, Pennsylvania  17405

3.24% Senior Notes due September 30, 2050

September 30, 2020

To Each of the Purchasers Listed in
the Purchaser Schedule Hereto:
 
Ladies and Gentlemen:
 
The York Water Company, a Pennsylvania corporation (the “Company”), agrees with
each of the Purchasers as follows:
 
Section 1.          Authorization of Notes.
 
The Company will authorize the issue and sale of $30,000,000 aggregate principal
amount of its 3.24% Senior Notes due September 30, 2050 (the “Notes”).  The
Notes shall be substantially in the form set out in Schedule 1.  Certain
capitalized and other terms used in this Agreement are defined in Schedule A
and, for purposes of this Agreement, the rules of construction set forth in
Section 22.4 shall govern.
 
Section 2.          Sale and Purchase of 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, at
the Closing provided for in Section 3, Notes in the principal amount specified
opposite such Purchaser’s name in the Purchaser Schedule 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.

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The York Water Company
Note Purchase Agreement

Section 3.          Closing.
 
The sale and purchase of the Notes to be purchased by each Purchaser shall occur
at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago,
Illinois 60603, at 8:00 a.m., Chicago time, at a closing (the “Closing”) on
September 30, 2020.  At the Closing the Company will deliver to each Purchaser
the Notes to be purchased by such Purchaser in the form of a single Note (or
such greater number of 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 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 account number XXXXXXXXXX at
XXXXXXXXXXXXXXXXX, ABA Number XXXXXXXXX.  If at the Closing the Company shall
fail to tender such 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, without thereby
waiving any rights such Purchaser may have by reason of such failure by the
Company to tender such Notes or any of the conditions specified in Section 4 not
having been fulfilled to such Purchaser’s satisfaction.
 
Section 4.          Conditions to Closing.
 
Each Purchaser’s obligation to purchase and pay for the 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 Closing.
 
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. 
Before and after giving effect to the issue and sale of the Notes (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.
 
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.
 
(b)     Secretary’s Certificate.  The Company shall have delivered to such
Purchaser a certificate of its Secretary or Assistant Secretary, dated the date
of the Closing, certifying as to (i) the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and this Agreement and (ii) the Company’s organizational documents as
then in effect.

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The York Water Company
Note Purchase Agreement

  Section 4.4.          Opinions of Counsel.  Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated the date of
the Closing (a) from Reed Smith LLP, counsel for the Company, covering the
matters set forth in Schedule 4.4(a) 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 (b) from Chapman and Cutler LLP, the Purchasers’
special counsel in connection with such transactions, substantially in the form
set forth in Schedule 4.4(b) and covering such other matters incident to such
transactions 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 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 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 hereof.  If
requested by such 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 Notes.  Contemporaneously with the Closing
the Company shall sell to each other Purchaser and each other Purchaser shall
purchase the Notes to be purchased by it at the Closing as specified in the
Purchaser Schedule.
 
Section 4.7.         Payment of Special Counsel Fees.  Without limiting Section
15.1, the Company shall have paid on or before the Closing the fees, charges and
disbursements of the Purchasers’ special counsel referred to in Section 4.4 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 the 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 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 five 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 confirming the
information specified in Section 3 including (i) the name and address of the
transferee bank, (ii) such transferee bank’s ABA number and (iii) the account
name and number into which the purchase price for the Notes is to be deposited. 
Each Purchaser has the right, but not the obligation, upon written notice (which
may be by email) to the Issuer, to elect to deliver a micro deposit (less than
$50.00) to the account identified in the written instructions no later than two
(2) Business Days prior to Closing.  If a Purchaser delivers a micro deposit, a
Responsible Officer must verbally verify the receipt and amount of the micro
deposit to such Purchaser on a telephone call initiated by such Purchaser prior
to Closing.  The Company shall not be obligated to return the amount of the
micro deposit, nor will the amount of the micro deposit be netted against the
Purchaser’s purchase price of the Notes.

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The York Water Company
Note Purchase Agreement

Section 4.11.        Commission Approval.  The Pennsylvania Public Utility
Commission shall have entered an appropriate order authorizing the issuance and
sale of the Notes upon terms not inconsistent with this Agreement and the Notes
and such order shall not be the subject of a pending appeal. 
 
Section 4.12.       Consent of Holders of Other Securities.  On or prior to the
Closing, any consents or approvals required to be obtained from any holder or
holders of any outstanding Security of the Company and any amendments of
agreements pursuant to which any Securities may have been issued which shall be
necessary to permit the consummation of the transactions contemplated hereby
shall have been obtained and all such consents or amendments shall be
satisfactory in form and substance to you and your special counsel.
 
Section 4.13.       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
satisfactory to such Purchaser and its special counsel, and such Purchaser and
its special counsel shall have received all such counterpart originals or
certified or other copies of such documents as such Purchaser or such special
counsel may reasonably request.
 
Section 5.          Representations and Warranties of the Company.
 
The Company represents and warrants to each Purchaser 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 its jurisdiction of incorporation, 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 would 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 Notes and to perform the provisions hereof and thereof.
 
Section 5.2.         Authorization, Etc.  This Agreement and the 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 each
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 (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

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The York Water Company
Note Purchase Agreement

Section 5.3.         Disclosure.  The Company, through its agent, Janney
Montgomery Scott LLC, has delivered to each Purchaser a copy of a Private
Placement Investor Presentation, dated September 2020 (the “Presentation”),
relating to the transactions contemplated hereby.  This Agreement, the
Presentation, the financial statements listed in Schedule 5.5 and the documents,
certificates or other writings delivered to the Purchasers by or on behalf of
the Company prior to September 18, 2020 in connection with the transactions
contemplated hereby and identified in Schedule 5.3 (this Agreement, the
Presentation and such documents, certificates or other writings and such
financial statements delivered to each Purchaser being referred to,
collectively, as 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.  Except as disclosed in the Disclosure
Documents, since December 31, 2019, there has been no change in the financial
condition, operations, business or properties of the Company except changes that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
 
Section 5.4.       Organization and Ownership of Shares of Subsidiaries;
Affiliates.  Schedule 5.4 contains (except as noted therein) complete and
correct lists of (i) the Company’s Affiliates, and (ii) the Company’s directors
and senior officers.  The Company has no Subsidiaries.
 
Section 5.5.          Financial Statements; Material Liabilities.  The Company
has delivered to each Purchaser copies of the financial statements of the
Company listed on Schedule 5.5.  All of such financial statements (including in
each case the related schedules and notes) fairly present in all material
respects the financial position of the Company as of the respective dates
specified in such Schedule and the results of its 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
normal year-end adjustments).  The Company does not have any Material
liabilities that are not disclosed in the Disclosure Documents.
 
Section 5.6.         Compliance with Laws, Other Instruments, Etc.  The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (i) 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 under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter, regulations or by‑laws, shareholders
agreement or any other agreement or instrument to which the Company is bound or
by which the Company or any of its properties may be bound or affected, (ii)
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 (iii) violate any provision
of any statute or other rule or regulation of any Governmental Authority
applicable to the Company.
 
Section 5.7.         Governmental Authorizations, Etc.  No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes, other than the authorization of
the Pennsylvania Public Utility Commission, which authorization has been duly
obtained pursuant to an order of the Commission which is in full force and
effect, has not been revoked or amended, is not the subject of a pending appeal
and is legally sufficient to authorize the offer, issuance, sale and delivery of
the Notes and the execution, delivery and performance of this Agreement by the
Company.

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The York Water Company
Note Purchase Agreement

Section 5.8.         Litigation; Observance of Statutes and Orders.  (a) There
are no actions, suits, investigations or proceedings pending or, to the best
knowledge of the Company, threatened against or affecting the Company or any
property of the Company in any court or before any arbitrator of any kind or
before or by any Governmental Authority that would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
 
(b)    The Company is not (i) in violation of any order, judgment, decree or
ruling of any court, any arbitrator of any kind or any Governmental Authority or
(ii) in violation of any applicable law, ordinance, rule or regulation of any
Governmental Authority (including Environmental Laws, the USA PATRIOT Act or any
of the other laws and regulations that are referred to in Section 5.16), which
violation would, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
 
Section 5.9.        Taxes.  The Company has filed all tax returns 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
payable by them, 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 proceedings and with respect to
which the Company has established adequate reserves in accordance with GAAP. 
The charges, accruals and reserves on the books of the Company in respect of
U.S. federal, state or other taxes for all fiscal periods are adequate.  The
U.S. federal income tax liabilities of the Company has been finally determined
(whether by reason of completed audits or the statute of limitations having run)
for all fiscal years up to and including the fiscal year ended December 31,
2015. 
 
Section 5.10.        Title to Property; Leases.  The Company has good and
sufficient title to its Material properties, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company after such date (except as sold
or otherwise disposed of in the ordinary course of business), in each case free
and clear of Liens prohibited by this Agreement, except for those defects in
title and Liens that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.  All Material leases are valid and
subsisting and are in full force and effect in all material respects.
 
Section 5.11.        Licenses, Permits, Etc.  The Company owns or possesses all
licenses, permits, franchises, authorizations, patents, copyrights, proprietary
software, service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict with the
rights of others, except for those conflicts that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.

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The York Water Company
Note Purchase Agreement

Section 5.12.       Compliance with Employee Benefit Plans.  (a) The Company and
each ERISA Affiliate have operated and administered each Plan in compliance with
all applicable laws except for such instances of noncompliance as have not
resulted in and would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.  Neither the Company nor any
ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in section 3 of ERISA), and no event, transaction or condition
has occurred or exists that would, individually or in the aggregate, reasonably
be expected to result in the incurrence of any such liability by the Company or
any ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any
such penalty or excise tax provisions under the Code or federal law or section
4068 of ERISA or by the granting of a security interest in connection with the
amendment of a Plan, other than such liabilities or Liens as would not
reasonably be expected to be individually or in the aggregate Material.
 
(b)    The present value of the aggregate benefit liabilities under each of the
Plans (other than Multiemployer Plans), determined as of the end of such Plan’s
most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan’s most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $5,000,000 in the case of any
single Plan and by more than $10,000,000 in the aggregate for all Plans.  The
term “benefit liabilities” has the meaning specified in section 4001 of ERISA
and the terms “current value” and “present value” have the meaning specified in
section 3 of ERISA.
 
(c)    The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
 
(d)     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 Accounting Standards Codification Topic
715-60, without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Company is not Material.
 
(e)     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 section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.  The representation
by the Company to each Purchaser in the first sentence of this Section 5.12(e)
is made in reliance upon and subject to the accuracy of such Purchaser’s
representation in Section 6.2 as to the sources of the funds to be used to pay
the purchase price of the Notes to be purchased by such Purchaser.
 
(f)      The Company does not have any Non-U.S. Plans.
 
Section 5.13.        Private Offering by the Company.  Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar Securities for
sale to, or solicited any offer to buy the Notes or any similar Securities from,
or otherwise approached or negotiated in respect thereof with, any Person other
than not more than nine (9) offerees (including the Purchasers), each of which
has been offered the 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 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.

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The York Water Company
Note Purchase Agreement

Section 5.14.       Use of Proceeds; Margin Regulations.  The Company will apply
the proceeds of the sale of the Notes hereunder to repay existing Indebtedness,
finance various capital projects and for general corporate purposes.  No part of
the proceeds from the sale of the 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).  The Company does not own
any margin stock and the Company does not have any present intention that margin
stock will constitute more than 10% the value of its consolidated assets.  As
used in this Section, the terms “margin stock” and “purpose of buying or
carrying” shall have the meanings assigned to them in said Regulation U.
 
Section 5.15.        Existing Indebtedness.   (a) Except as described therein,
Schedule 5.15 sets forth a complete and correct list of all outstanding
Indebtedness of the Company as of June 30, 2020 (including descriptions of the
obligors and obligees, principal amounts outstanding, any collateral therefor
and any Guaranty thereof), 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.  The Company is not 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 and no event or condition exists with respect
to any Indebtedness of the Company the outstanding principal amount of which
exceeds $5,000,000 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)    The Company is not a party to, or otherwise subject to any provision
contained in, any instrument evidencing Indebtedness of the Company, any
agreement relating thereto or any other agreement (including its charter or any
other organizational document) which limits the amount of, or otherwise imposes
restrictions on the incurring of, Indebtedness of the Company, other than items
of Indebtedness listed in Schedule 5.15.
 
Section 5.16.        Foreign Assets Control Regulations, Etc.  (a) Neither the
Company nor any Controlled Entity (i) is a Blocked Person, (ii) has been
notified that its name appears or may in the future appear on a State Sanctions
List or (iii) is a target of sanctions that have been imposed by the United
Nations or the European Union.
 
(b)    Neither the Company nor any Controlled Entity (i) has violated, been
found in violation of, or been charged or convicted under, any applicable U.S.
Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws or
(ii) to the Company’s knowledge, is under investigation by any Governmental
Authority for possible violation of any U.S. Economic Sanctions Laws, Anti-Money
Laundering Laws or Anti-Corruption Laws.
 
(c)     No part of the proceeds from the sale of the Notes hereunder:

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(i)     constitutes or will constitute funds obtained on behalf of any Blocked
Person or will otherwise be used by the Company or any Controlled Entity,
directly or indirectly, (A) in connection with any investment in, or any
transactions or dealings with, any Blocked Person, (B) for any purpose that
would cause any Purchaser to be in violation of any U.S. Economic Sanctions Laws
or (C) otherwise in violation of any U.S. Economic Sanctions Laws;
 
(ii)     will be used, directly or indirectly, in violation of, or cause any
Purchaser to be in violation of, any applicable Anti-Money Laundering Laws; or
 
(iii)     will be used, directly or indirectly, for the purpose of making any
improper payments, including bribes, to any Governmental Official or commercial
counterparty in order to obtain, retain or direct business or obtain any
improper advantage, in each case which would be in violation of, or cause any
Purchaser to be in violation of, any applicable Anti-Corruption Laws.
 
(d)         The Company has established procedures and controls which it
reasonably believes are adequate (and otherwise comply with applicable law) to
ensure that the Company and each Controlled Entity is and will continue to be in
compliance with all applicable U.S. Economic Sanctions Laws, Anti-Money
Laundering Laws and Anti-Corruption Laws.
 
Section 5.17.        Status under Certain Statutes.  The Company is not subject
to regulation under the Investment Company Act of 1940, the Public Utility
Holding Company Act of 2005, the ICC Termination Act of 1995, or the Federal
Power Act.
 
Section 6.          Representations of the Purchasers.
 
Section 6.1.          Purchase for Investment.  Each Purchaser severally
represents that (a) it is purchasing the Notes 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 with a view to the distribution thereof,
provided that the disposition of such Purchaser’s or their property shall at all
times be within such Purchaser’s or their control and (b) it is an “accredited
investor” (as defined in Rule 501(a)(1), (2), (3), or (7) under the Securities
Act).  Each Purchaser understands that the 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 Notes.
 
Section 6.2.         Source of Funds.  Each Purchaser severally represents that
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 Notes to be purchased by such Purchaser hereunder:

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(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
NAIC (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 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 the 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 VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified
professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM
Exemption), no employee benefit plan’s assets that are managed by the QPAM 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 Part VI(c)(1) of the QPAM Exemption) of such employer or
by the same employee organization and managed by such QPAM, represent more than
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 maintains an ownership interest in the
Company that would cause the QPAM and the Company to be “related” within the
meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM
and (ii) the names of any employee benefit plans whose assets in the 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 Part VI(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization, represent 10% or more of the assets of 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
Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset
manager” or “INHAM” (within the meaning of Part IV(a) 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 Part IV(d)(3) of the INHAM Exemption) owns a 10%
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

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(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 6.2, the terms “employee benefit plan,” “governmental
plan,” and “separate account” shall have the respective meanings assigned to
such terms in section 3 of ERISA.
 
Section 7.          Information as to Company.
 
Section 7.1.          Financial and Business Information.  The Company shall
deliver to each holder of a Note that is an Institutional Investor:
 
(a)      Quarterly Statements — within 60 days (or such shorter period as is the
earlier of (x) 15 days greater than the period applicable to the filing of the
Company’s Quarterly Report on Form 10‑Q (the “Form 10‑Q”) with the SEC
regardless of whether the Company is subject to the filing requirements thereof
and (y) the date by which such financial statements are required to be delivered
under any Material Credit Facility or the date on which such corresponding
financial statements are delivered under any Material Credit Facility if such
delivery occurs earlier than such required delivery date) 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), duplicate 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, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries, for such quarter and (in the
case of the second and third quarters) for the portion of the fiscal year ending
with such quarter,
 
setting forth in each case in comparative form the figures for the corresponding
periods in 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 year-end
adjustments;

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(b)      Annual Statements — within 120 days (or such shorter period as is the
earlier of (x) 15 days greater than the period applicable to the filing of the
Company’s Annual Report on Form 10‑K (the “Form 10‑K”) with the SEC regardless
of whether the Company is subject to the filing requirements thereof and (y) the
date by which such financial statements are required to be delivered under any
Material Credit Facility or the date on which such corresponding financial
statements are delivered under any Material Credit Facility if such delivery
occurs earlier than such required delivery date) after the end of each fiscal
year of the Company, duplicate 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, changes in shareholders’ equity 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 (without a “going concern” or similar
qualification or exception and without any qualification or exception as to the
scope of the audit on which such opinion is based) of independent public
accountants of recognized national standing, 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 accountants in connection with such financial statements has
been made in accordance with generally accepted auditing standards, and that
such audit provides a reasonable basis for such opinion in the circumstances;
 
(c)     SEC and Other Reports — promptly upon their becoming available, one copy
of (i) each financial statement, report, notice, proxy statement or similar
document sent by the Company or any Subsidiary (x) to its creditors under any
Material Credit Facility (excluding information sent to such creditors in the
ordinary course of administration of a credit facility, such as information
relating to pricing and borrowing availability) or (y) 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), and
each prospectus and all amendments thereto filed by the Company or any
Subsidiary with the SEC;
 
(d)     Notice of Default or Event of Default — promptly, and in any event
within 5 days after a Responsible Officer becoming aware of the existence of any
Default or Event of Default, 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 Benefits Matters — promptly, and in any event within 5 days
after a Responsible Officer becoming aware of any of the following, 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:

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(i)       with respect to any Plan, any reportable event, as defined in section
4043(c) of ERISA and the regulations thereunder, for which notice thereof has
not been waived pursuant to such regulations as in effect on the date hereof;
 
(ii)      the taking by the PBGC of steps to institute, or the threatening by
the PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to such
Multiemployer Plan;
 
(iii)      any event, transaction or condition that could result in the
incurrence of any liability by the Company or any ERISA Affili-ate pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the imposition of any Lien on any of
the rights, properties or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax provisions, if such
liability or Lien, taken together with any other such liabilities or Liens then
existing, would reasonably be expected to have a Material Adverse Effect; or
 
(iv)      receipt of notice of the imposition of a Material financial penalty
(which for this purpose shall mean any tax, penalty or other liability, whether
by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans;
 
(f)       Resignation or Replacement of Auditors — within 10 days following the
date on which the Company’s auditors resign or the Company elects to change
auditors, as the case may be, notification thereof, together with such further
information as the Required Holders may request; and
 
(g)      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 (including actual
copies of the Company’s Form 10‑Q and Form 10‑K) 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 a Note.
 
Section 7.2.          Officer’s Certificate.  Each set of financial statements
delivered to a holder of a Note pursuant to Section 7.1(a) or Section 7.1(b)
shall be accompanied by a certificate of a Senior Financial Officer:
 
(a)      Covenant Compliance — setting forth the information from such financial
statements that is required in order to establish whether the Company was in
compliance with the requirements of Section 10 during the quarterly or annual
period covered by the financial statements then being furnished (including with
respect to each such provision that involves mathematical calculations, the
information from such financial statements that is required to perform such
calculations) and detailed calculations of the maximum or minimum amount, ratio
or percentage, as the case may be, permissible under the terms of such Section,
and the calculation of the amount, ratio or percentage then in existence.  In
the event that the Company or any Subsidiary has made an election to measure any
financial liability using fair value (which election is being disregarded for
purposes of determining compliance with this Agreement pursuant to Section 22.2)
as to the period covered by any such financial statement, such Senior Financial
Officer’s certificate as to such period shall include a reconciliation from GAAP
with respect to such election;

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The York Water Company
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(b)      Event of Default — certifying 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 the 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 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; and
 
(c)      Subsidiary Guarantors – setting forth a list of all Subsidiaries that
are Subsidiary Guarantors and certifying that each Subsidiary that is required
to be a Subsidiary Guarantor pursuant to Section 9.7 is a Subsidiary Guarantor,
in each case, as of the date of such certificate of Senior Financial Officer.

Section 7.3.         Visitation.  The Company shall permit the representatives
of each holder of a Note 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 (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 and as often as may be reasonably
requested in writing; and
 
(b)      Default — if a Default or Event of Default then exists, at the expense
of 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 their respective
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), all at such times and as often as may be
requested.
 
Section 7.4.         Electronic Delivery.  Financial statements, opinions of
independent certified public accountants, other information and Officer’s
Certificates that are required to be delivered by the Company pursuant to
Sections 7.1(a), (b) or (c) and Section 7.2 shall be deemed to have been
delivered if the Company satisfies any of the following requirements with
respect thereto:

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The York Water Company
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(a)      such financial statements satisfying the requirements of Section 7.1(a)
or (b) and related Officer’s Certificate satisfying the requirements of Section
7.2 and any other information required under Section 7.1(c) are delivered to
each holder of a Note by e-mail at the e-mail address set forth in such holder’s
Purchaser Schedule or as communicated from time to time in a separate writing
delivered to the Company;
 
(b)      the Company shall have timely filed such Form 10–Q or Form 10–K,
satisfying the requirements of Section 7.1(a) or Section 7.1(b), as the case may
be, with the SEC on EDGAR and shall have made such form and the related
Officer’s Certificate satisfying the requirements of Section 7.2 available on
its home page on the internet, which is located at http://www.yorkwater.com as
of the date of this Agreement;
 
(c)      such financial statements satisfying the requirements of Section 7.1(a)
or Section 7.1(b) and related Officer’s Certificate(s) satisfying the
requirements of Section 7.2 and any other information required under Section
7.1(c) are timely posted by or on behalf of the Company on IntraLinks or on any
other similar website to which each holder of Notes has free access; or
 
(d)      the Company shall have timely filed any of the items referred to in
Section 7.1(c) with the SEC on EDGAR and shall have made such items available on
its home page on the internet or on IntraLinks or on any other similar website
to which each holder of Notes has free access;
 
provided however, that in no case shall access to such financial statements,
other information and Officer’s Certificates be conditioned upon any waiver or
other agreement or consent (other than confidentiality provisions consistent
with Section 20 of this Agreement); provided further, that in the case of any of
clauses (b), (c) or (d), the Company shall have given each holder of a Note
prior written notice, which may be by e-mail or in accordance with Section 18,
of such posting or filing in connection with each delivery, provided further,
that upon request of any holder to receive paper copies of such forms, financial
statements, other information and Officer’s Certificates or to receive them by
e-mail, the Company will promptly e-mail them or deliver such paper copies, as
the case may be, to such holder.
 
Section 8.          Payment and Prepayment of the Notes.
 
Section 8.1.          Maturity.  As provided therein, the entire unpaid
principal balance of each Note shall be due and payable on the Maturity Date
thereof.

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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, the Notes, in an amount not less than 5% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, and the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount; provided, that at any time on or after March 30, 2050 the
Company may, at its option, upon notice as provided below, prepay all or any
part of the Notes at 100% of the principal amount so prepaid, together with
accrued interest to the prepayment date.  The Company will give each holder of
Notes written notice of each optional prepayment under this Section 8.2 not less
than 10 days and not more than 60 days prior to the date fixed for such
prepayment unless the Company and the Required Holders agree to another time
period pursuant to Section 17.  Each such notice shall specify such date (which
shall be a Business Day), the aggregate principal amount of the 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 Notes 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 pursuant to Section 8.2, the principal amount of
the Notes to be prepaid shall be allocated among all of the Notes 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 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, 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 except (a) upon the payment or
prepayment of the Notes in accordance with this Agreement and the Notes or (b)
pursuant to an offer to purchase made by the Company or an Affiliate pro rata to
the holders of all Notes at the time outstanding upon the same terms and
conditions.  Any such offer shall provide each holder with sufficient
information to enable it to make an informed decision with respect to such
offer, and shall remain open for at least 15 Business Days.  If the holders of
more than 25% of the principal amount of the Notes then outstanding accept such
offer, the Company shall promptly notify the remaining holders of such fact and
the expiration date for the acceptance by holders of Notes 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 this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.

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Section 8.6.          Make-Whole Amount.
 
The term “Make-Whole Amount” means, with respect to any Note, an amount equal to
the excess, if any, of the Discounted Value of the Remaining Scheduled Payments
with respect to the Called Principal of such 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 Note, the principal of such 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 the context requires.
 
“Discounted Value” means, with respect to the Called Principal of any 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 the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
 
“Reinvestment Yield” means, with respect to the Called Principal of any Note,
the sum of (a) 0.50% plus (b) the yield to maturity implied by the “Ask
Yield(s)” 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 (“Reported”) having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date.  If
there are no such U.S. Treasury securities Reported having a maturity equal to
such Remaining Average Life, then such implied yield to maturity will be
determined by (i) converting U.S. Treasury bill quotations to bond equivalent
yields in accordance with accepted financial practice and (ii) interpolating
linearly between the “Ask Yields” Reported for the applicable most recently
issued actively traded on-the-run U.S. Treasury securities with the maturities
(1) closest to and greater than such Remaining Average Life and (2) 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 Note. 
 
If such yields are not Reported or the yields Reported as of such time are not
ascertainable (including by way of interpolation), then “Reinvestment Yield”
means, with respect to the Called Principal of any Note, the sum of (x) 0.50%
plus (y) the yield to maturity implied by the U.S. Treasury constant maturity
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 the U.S. Treasury constant maturity having a term
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date.  If there is no such U.S. Treasury constant maturity having a
term equal to such Remaining Average Life, such implied yield to maturity will
be determined by interpolating linearly between (1) the U.S. Treasury constant
maturity so reported with the term closest to and greater than such Remaining
Average Life and (2) the U.S. Treasury constant maturity so reported with the
term 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 Note.

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The York Water Company
Note Purchase Agreement

“Remaining Average Life” means, with respect to any Called Principal, the number
of years 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, computed on the basis of a 360-day year comprised of twelve 30-day months
and calculated to two decimal places, that will elapse between the Settlement
Date with respect to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment.
 
“Remaining Scheduled Payments” means, with respect to the Called Principal of
any 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 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 Section 12.1.
 
“Settlement Date” means, with respect to the Called Principal of any 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 the context requires.
 
Section 8.7.          Payments Due on Non-Business Days.  Anything in this
Agreement or the Notes to the contrary notwithstanding, (x) except as set forth
in clause (y), any payment of interest on any Note that is due on a date that is
not 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; and (y) any payment of principal of or
Make‑Whole Amount on any Note (including principal due on the Maturity Date of
such Note) that is due on a date that is not a Business Day 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.
 
Section 8.8.          [Reserved]
 
Section 8.9.          Change in Control.
 
(a)     Notice of Change in Control or Control Event. The Company will, within
five Business Days after any Responsible Officer has knowledge of the occurrence
of any Change in Control or Control Event, give written notice of such Change in
Control or Control Event to each holder of Notes unless notice in respect of
such Change in Control (or the Change in Control contemplated by such Control
Event) shall have been given pursuant to subparagraph (b) of this Section 8.9. 
If a Change in Control has occurred, such notice shall contain and constitute an
offer to prepay Notes as described in subparagraph (c) of this Section 8.9 and
shall be accompanied by the certificate described in subparagraph (g) of this
Section 8.9.

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The York Water Company
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(b)     Condition to Company Action.  The Company will not take any action that
consummates or finalizes a Change in Control unless (i) at least 30 days prior
to such action it shall have given to each holder of Notes written notice
containing and constituting an offer to prepay Notes as described in
subparagraph (c) of this Section 8.9, accompanied by the certificate described
in subparagraph (g) of this Section 8.9, and (ii) contemporaneously with such
action, it prepays all Notes required to be prepaid in accordance with this
Section 8.9.
 
(c)     Offer to Prepay Notes.  The offer to prepay Notes contemplated by
subparagraphs (a) and (b) of this Section 8.9 shall be an offer to prepay, in
accordance with and subject to this Section 8.9, all, but not less than all, the
Notes held by each holder (in this case 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”).  If such Proposed Prepayment Date is in connection with an
offer contemplated by subparagraph (a) of this Section 8.9, such date shall be
not 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 after the 45th day after the
date of such offer).
 
(d)     Acceptance/Rejection.  A holder of Notes may accept the offer to prepay
made pursuant to this Section 8.9 by causing a notice of such acceptance to be
delivered to the Company not later than 15 days after receipt by such holder of
the most recent offer of prepayment.  A failure by a holder of Notes to respond
to an offer to prepay made pursuant to this Section 8.9 shall be deemed to
constitute a rejection of such offer by such holder.
 
(e)     Prepayment.  Prepayment of the Notes to be prepaid pursuant to this
Section 8.9 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
Make‑Whole Amount or other premium.  The prepayment shall be made on the
Proposed Prepayment Date except as provided in subparagraph (f) of this Section
8.9.
 
(f)     Deferral Pending Change in Control.  The obligation of the Company to
prepay Notes pursuant to the offers required by subparagraph (c) and accepted in
accordance with subparagraph (d) of this Section 8.9 is subject to the
occurrence of the Change in Control in respect of which such offers and
acceptances shall have been made.  In the event that such Change in Control has
not occurred on the Proposed Prepayment Date in respect thereof, the prepayment
shall be deferred until, and shall be made on, the date on which such Change in
Control occurs.  The Company shall keep each holder of Notes reasonably and
timely informed of (i) any such deferral of the date of prepayment, (ii) the
date on which such Change in Control and the prepayment are expected to occur,
and (iii) any determination by the Company that efforts to effect such Change in
Control have ceased or been abandoned (in which case the offers and acceptances
made pursuant to this Section 8.9 in respect of such Change in Control shall be
deemed rescinded).
 
(g)    Officer’s Certificate. Each offer to prepay the Notes pursuant to this
Section 8.9 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying: 
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this
Section 8.9; (iii) the principal amount of each Note offered to be prepaid; (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 8.9 have
been fulfilled; and (vi) in reasonable detail, the nature and date or proposed
date of the Change in Control.

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The York Water Company
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(h)    Certain Definitions.  “Change in Control” shall be deemed to have
occurred if any person (as such term is used in section 13(d) and section
14(d)(2) of the Exchange Act as in effect on the date of the Closing) or related
persons constituting a group (as such term is used in Rule 13d‑5 under the
Exchange Act),
 
(i)      become the “beneficial owners” (as such term is used in Rule 13d‑3
under the Exchange Act as in effect on the date of the Closing), directly or
indirectly, of more than 50% of the total voting power of all classes then
outstanding of the Company’s Voting Stock, or
 
(ii)     acquire after the date of the Closing (x) the power to elect, appoint
or cause the election or appointment of at least a majority of the members of
the board of directors of the Company, through beneficial ownership of the
capital stock of the Company or otherwise, or (y) all or substantially all of
the properties and assets of the Company.
 
“Control Event” means:
 
(i)      the execution by the Company or any of its Subsidiaries or Affiliates
of any agreement or letter of intent with respect to any proposed transaction or
event or series of transactions or events which, individually or in the
aggregate, may reasonably be expected to result in a Change in Control,
 
(ii)      the execution of any written agreement which, when fully performed by
the parties thereto, would result in a Change in Control, or
 
(iii)     the making of any written offer by any person (as such term is used in
section 13(d) and section 14(d)(2) of the Exchange Act as in effect on the date
of the Closing) or related persons constituting a group (as such term is used in
Rule 13d‑5 under the Exchange Act as in effect on the date of the Closing) to
the holders of the common stock of the Company, which offer, if accepted by the
requisite number of holders, would result in a Change in Control.
 
(i)      All calculations contemplated in this Section 8.9 involving the capital
stock of any Person shall be made with the assumption that all convertible
Securities of such Person then outstanding and all convertible Securities
issuable upon the exercise of any warrants, options and other rights outstanding
at such time were converted at such time and that all options, warrants and
similar rights to acquire shares of capital stock of such Person were exercised
at such time.

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The York Water Company
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Section 9.          Affirmative Covenants.
 
The Company covenants that so long as any of the Notes are outstanding:
 
Section 9.1.         Compliance with Laws.  Without limiting Section 10.4, the
Company will, and will cause each of its Subsidiaries to, comply with all laws,
ordinances or governmental rules or regulations to which each of them is subject
(including ERISA, Environmental Laws, the USA PATRIOT Act and the other laws and
regulations that are referred to in Section 5.16) 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 would
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
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 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), so that the business carried on
in connection therewith may be properly conducted at all times, provided that
this Section 9.3 shall not prevent the Company or any 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 would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
 
Section 9.4.        Payment of Taxes.  The Company will, and will cause each of
its Subsidiaries to, file all 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
payable by any of them, to the extent the same have become due and payable and
before they have become delinquent, provided that neither the Company nor any
Subsidiary need pay any such tax, assessment, charge or levy if (i) the amount,
applicability or validity thereof is contested by the Company or such Subsidiary
on a timely basis in good faith and in appropriate proceedings, and the Company
or a Subsidiary has established adequate reserves therefor in accordance with
GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of
all such taxes, assessments, charges and levies would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

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Section 9.5.         Corporate Existence, Etc.  Subject to Section 10.2, the
Company will at all times preserve and keep its corporate existence in full
force and effect.  Subject to Section 10.2, the Company will at all times
preserve and keep in full force and effect the corporate existence of each of
its Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary)
and all rights and franchises of the Company and its 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
would not, individually or in the aggregate, have a Material Adverse Effect.
 
Section 9.6.         Books and Records.  The Company will, and will cause each
of its 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
Subsidiary, as the case may be.  The Company will, and will cause each of its
Subsidiaries to, keep books, records and accounts which, in reasonable detail,
accurately reflect all transactions and dispositions of assets.  The Company and
its Subsidiaries have devised a system of internal accounting controls
sufficient to provide reasonable assurances that their respective books,
records, and accounts accurately reflect all transactions and dispositions of
assets and the Company will, and will cause each of its Subsidiaries to,
continue to maintain such system.
 
Section 9.7.          Subsidiary Guarantors.  (a) The Company will cause each of
its Subsidiaries that guarantees or otherwise becomes liable at any time,
whether as a borrower or an additional or co-borrower or otherwise, for or in
respect of any Indebtedness under any Material Credit Facility to concurrently
therewith:
 
(i)          enter into an agreement in form and substance satisfactory to the
Required Holders providing for the guaranty by such Subsidiary, on a joint and
several basis with all other such Subsidiaries, of (x) the prompt payment in
full when due of all amounts payable by the Company pursuant to the Notes
(whether for principal, interest, Make-Whole Amount or otherwise) and this
Agreement, including all indemnities, fees and expenses payable by the Company
thereunder and (y) the prompt, full and faithful performance, observance and
discharge by the Company of each and every covenant, agreement, undertaking and
provision required pursuant to the Notes or this Agreement to be performed,
observed or discharged by it (a “Subsidiary Guaranty”); and
 
(ii)         deliver the following to each holder of a Note:
 
(A)       an executed counterpart of such Subsidiary Guaranty;
 
(B)      a certificate signed by an authorized responsible officer of such
Subsidiary containing representations and warranties on behalf of such
Subsidiary to the same effect, mutatis mutandis, as those contained in Sections
5.1, 5.2, 5.6 and 5.7 of this Agreement (but with respect to such Subsidiary and
such Subsidiary Guaranty rather than the Company);
 
(C)       all documents as may be reasonably requested by the Required Holders
to evidence the due organization, continuing existence and, where applicable,
good standing of such Subsidiary and the due authorization by all requisite
action on the part of such Subsidiary of the execution and delivery of such
Subsidiary Guaranty and the performance by such Subsidiary of its obligations
thereunder; and

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(D)     an opinion of counsel reasonably satisfactory to the Required Holders
covering such matters relating to such Subsidiary and such Subsidiary Guaranty
as the Required Holders may reasonably request.
 
(b)         At the election of the Company and by written notice to each holder
of Notes, any Subsidiary Guarantor that has provided a Subsidiary Guaranty under
subparagraph (a) of this Section 9.7 may be discharged from all of its
obligations and liabilities under its Subsidiary Guaranty and shall be
automatically released from its obligations thereunder without the need for the
execution or delivery of any other document by the holders, provided that (i) if
such Subsidiary Guarantor is a guarantor or is otherwise liable for or in
respect of any Material Credit Facility, then such Subsidiary Guarantor has been
released and discharged (or will be released and discharged concurrently with
the release of such Subsidiary Guarantor under its Subsidiary Guaranty) under
such Material Credit Facility, (ii) at the time of, and after giving effect to,
such release and discharge, no Default or Event of Default shall be existing,
(iii) no amount is then due and payable under such Subsidiary Guaranty, (iv) if
in connection with such Subsidiary Guarantor being released and discharged under
any Material Credit Facility, any fee or other form of consideration is given to
any holder of Indebtedness under such Material Credit Facility for such release,
the holders of the Notes shall receive equivalent consideration substantially
concurrently therewith and (v) each holder shall have received a certificate of
a Responsible Officer certifying as to the matters set forth in clauses (i)
through (iv).  In the event of any such release, for purposes of Section 10.6,
all Indebtedness of such Subsidiary shall be deemed to have been incurred
concurrently with such release.
 
Section 10.        Negative Covenants.
 
The Company covenants that so long as any of the Notes are outstanding:
 
Section 10.1.       Transactions with Affiliates.  The Company will not, and
will not permit any Subsidiary to, enter into directly or indirectly any
Material transaction or Material group of related transactions (including the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than the Company or another Subsidiary),
except pursuant to the reasonable requirements of the Company’s or such
Subsidiary’s business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a comparable
arm’s-length transaction with a Person not an Affiliate.
 
Section 10.2.       Merger, Consolidation, Etc.  The Company will not, and will
not permit any Subsidiary Guarantor to, consolidate with or merge with any other
Person or convey, transfer or lease all or substantially all of its assets in a
single transaction or series of related transactions to any Person unless:

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The York Water Company
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(a)      in the case of any such transaction involving the Company, the
successor formed by such consolidation or the survivor of such merger or the
Person that acquires by conveyance, transfer or lease all or substantially all
of the assets of the Company as an entirety, as the case may be, shall be a
solvent corporation or limited liability company organized and existing under
the laws of the United States or any state thereof (including the District of
Columbia), and, if the Company is not such corporation or limited liability
company, (i) such corporation or limited liability company shall have executed
and delivered to each holder of any Notes its assumption of the due and punctual
performance and observance of each covenant and condition of this Agreement and
the Notes and (ii) such corporation or limited liability company shall have
caused to be delivered to each holder of any Notes an opinion of nationally
recognized independent counsel, or other independent counsel reasonably
satisfactory to the Required Holders, to the effect that all agreements or
instruments effecting such assumption are enforceable in accordance with their
terms and comply with the terms hereof;
 
(b)      in the case of any such transaction involving a Subsidiary Guarantor,
the successor formed by such consolidation or the survivor of such merger or the
Person that acquires by conveyance, transfer or lease all or substantially all
of the assets of such Subsidiary Guarantor as an entirety, as the case may be,
shall be (1) the Company, such Subsidiary Guarantor or another Subsidiary
Guarantor; or (2) a solvent corporation or limited liability company (other than
the Company or another Subsidiary Guarantor) that is organized and existing
under the laws of the United States or any state thereof (including the District
of Columbia) and, if such Subsidiary Guarantor is not such corporation or
limited liability company, (A) such corporation or limited liability company
shall have executed and delivered to each holder of Notes its assumption of the
due and punctual performance and observance of each covenant and condition of
the Subsidiary Guaranty of such Subsidiary Guarantor and (B) the Company shall
have caused to be delivered to each holder of Notes an opinion of nationally
recognized independent counsel, or other independent counsel reasonably
satisfactory to the Required Holders, to the effect that all agreements or
instruments effecting such assumption are enforceable in accordance with their
terms and comply with the terms hereof;
 
(c)      each Subsidiary Guarantor under any Subsidiary Guaranty that is
outstanding at the time such transaction or each transaction in such a series of
transactions occurs reaffirms its obligations under such Subsidiary Guaranty in
writing at such time pursuant to documentation that is reasonably acceptable to
the Required Holders; and
 
(d)     immediately before and immediately after giving effect to such
transaction or each transaction in any such series of transactions, no Default
or Event of Default shall have occurred and be continuing.
 
No such conveyance, transfer or lease of substantially all of the assets of the
Company or any Subsidiary Guarantor shall have the effect of releasing the
Company or such Subsidiary Guarantor, as the case may be, or any successor
corporation or limited liability company that shall theretofore have become such
in the manner prescribed in this Section 10.2, from its liability under (x) this
Agreement or the Notes (in the case of the Company) or (y) the Subsidiary
Guaranty (in the case of any Subsidiary Guarantor), unless, in the case of the
conveyance, transfer or lease of substantially all of the assets of a Subsidiary
Guarantor, such Subsidiary Guarantor is released from its Subsidiary Guaranty in
accordance with Section 9.7(b) in connection with or immediately following such
conveyance, transfer or lease.

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Section 10.3.       Line of Business.  The Company will not and will not permit
any Subsidiary to engage in any business if, as a result, the general nature of
the business in which the Company and its Subsidiaries, taken as a whole, would
then be engaged would be substantially changed from the general nature of the
business in which the Company and its Subsidiaries, taken as a whole, are
engaged on the date of this Agreement as described in the Presentation.
 

Section 10.4.       Economic Sanctions, Etc.  The Company will not, and will not
permit any Controlled Entity to (a) become (including by virtue of being owned
or controlled by a Blocked Person), own or control a Blocked Person or (b)
directly or indirectly have any investment in or engage in any dealing or
transaction (including any investment, dealing or transaction involving the
proceeds of the Notes) with any Person if such investment, dealing or
transaction (i) would cause any holder or any affiliate of such holder to be in
violation of, or subject to sanctions under, any law or regulation applicable to
such holder, or (ii) is prohibited by or subject to sanctions under any U.S.
Economic Sanctions Laws.
 
Section 10.5.        Liens.  (a) The Company will not, and will not permit any
Subsidiary to, create or incur, or suffer to be incurred or to exist, any
mortgage, pledge, security interest, encumbrance, lien or charge of any kind on
its or their property or assets, whether now owned or hereafter acquired, or
upon any income or profits therefrom, or transfer any property for the purpose
of subjecting the same to the payment of obligations in priority to the payment
of its or their general creditors, or acquire or agree to acquire any property
or assets upon conditional sales agreements or other title retention devices,
except Excepted Encumbrances; provided, however, that this requirement shall not
be applicable to, nor prevent:
 
(i)      the pledging by the Company of its assets as security for the payment
of any tax, assessment or other similar charge demanded of the Company by any
governmental authority or public body as long as the Company in good faith
contests its liability to pay the same, or as security to be deposited with any
governmental authority or public body for any purpose at any time required by
law or governmental regulation as a condition to the transaction of any business
or the exercise of any privilege, license or right; or
 
(ii)      the pledging by the Company of any assets for the purpose of securing
a stay or discharge or for any other purpose in the course of any legal
proceeding in which the Company is a party; or
 
(iii)     making good faith deposits in connection with tenders, contracts or
leases to which the Company is a party; or

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The York Water Company
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(iv)     the pledging by the Company or any Subsidiary of any assets for the
purpose of securing Indebtedness of the Company or any Subsidiary not otherwise
permitted by clauses (i) through (iii) or permitted as an Excepted Encumbrance,
provided that Priority Debt at any one time outstanding shall not at any time
exceed 10% of the Plant Account of the Company and its Subsidiaries (determined
as of the end of the then most recently ended quarterly fiscal period),
provided, further, that notwithstanding the foregoing, the Company shall not,
and shall not permit any of its Subsidiaries to, secure pursuant to this Section
10.5(a)(iv) any Indebtedness outstanding under or pursuant to any Material
Credit Facility unless and until the Notes (and any guaranty delivered in
connection therewith) shall concurrently be secured equally and ratably with
such Indebtedness pursuant to documentation reasonably acceptable to the
Required Holders in substance and in form, including an intercreditor agreement
and opinions of counsel to the Company and/or any such Subsidiary, as the case
may be, from counsel that is reasonably acceptable to the Required Holders.
 
(b)        In the event any Property or assets of the Company are subject to a
lien or charge not otherwise permitted by paragraph (a) above to secure any
Indebtedness of the Company (for purposes of this paragraph (b), the “Liened
Property”), such lien or charge shall nevertheless be deemed permitted if the
Company makes effective provision whereby the Notes shall (so long as any other
Indebtedness shall be so secured) be secured (along with any other Indebtedness
similarly entitled to be equally and ratably secured) by a direct lien on the
Liened Property on parity to the lien or liens securing any and all such other
Indebtedness;
 
Section 10.6.        Limitations on Indebtedness.
 
(a)     The Company will not, and will not permit any Subsidiary to, have
outstanding, or in any manner be liable in respect of, any Funded Debt or
Seasonal Indebtedness, except the following:
 
          (i)            Seasonal Indebtedness of the Company and its
Subsidiaries, provided that (A) such Seasonal Indebtedness has not existed for a
period of at least 30 consecutive days in the twelve preceding months or (B) the
amount of such Seasonal Indebtedness, when added to the outstanding amount of
Funded Debt, does not exceed 60% of Plant Account on the books of the Company
and its Subsidiaries at any one time outstanding; and
 
(ii)          Funded Debt (including the Notes) of the Company and its
Subsidiaries; provided that:
 
(A)     such Funded Debt shall not exceed 60% of the Plant Account on the books
of the Company and its Subsidiaries at any one time outstanding, and
 
(B)     in the case of any Funded Debt constituting Priority Debt, Priority Debt
at any one time outstanding shall not exceed 10% of the Plant Account of the
Company and its Subsidiaries (determined as of the end of the then most recently
ended quarterly fiscal period).
 
(b)    The renewal, extension or refunding of any Funded Debt issued or incurred
in accordance with the limitations of Section 10.6(a)(ii) shall constitute the
issuance of additional Funded Debt that is subject to the limitations of this
Section 10.6.  Any Indebtedness paid or defeased from the proceeds of additional
Funded Debt may be excluded from outstanding Indebtedness for purposes of this
Section 10.6. 

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(c)    Subject to compliance with this Section 10.6 hereof, nothing contained in
this Agreement shall prohibit the Company or any Subsidiary from incurring,
issuing or permitting to exist any Indebtedness. 
 
Section 10.7.        Dividends, Stock Purchases.  The Company will not, except
as hereinafter provided:
 
(a)    Declare or pay any dividends, either in cash or property, on any shares
of its capital stock of any class (except dividends or other distributions
payable solely in shares of capital stock of the Company, including the portion
of dividends reinvested in shares of the Company’s common capital stock under
the Company’s Optional Dividend Reinvestment Plan); or
 
(b)      Directly or indirectly, purchase, redeem or retire any shares of its
capital stock of any class or any warrants, rights or options to purchase or
acquire any shares of its capital stock (other than in exchange for or out of
the net proceeds to the Company from the substantially concurrent issue or sale
of other shares of capital stock of the Company or warrants, rights or options
to purchase or acquire any shares of its capital stock); or
 
(c)       Make any other payment or distribution, either directly or indirectly,
in respect of its capital stock; or
 
(d)      Make any payment, distribution, conveyance or transfer of any property
to any Subsidiary;
 
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options, and all such other
distributions, conveyances and transfers being herein collectively called
“Restricted Payments”), if after giving effect thereto the aggregate amount of
Restricted Payments made during the period from and after December 31, 1982 to
and including the date of the making of the Restricted Payment in question,
would exceed the sum of (1) $1,500,000 plus (2) earned surplus of the Company,
on a non-consolidated basis, accumulated after December 31, 1982, determined
without any deduction on account of such Restricted Payments, provided, however,
that notwithstanding the foregoing, in no event shall the Company make any
distribution, conveyance or transfer to any Subsidiary of any property
constituting the Plant Account. 
 
The Company will not declare any dividend which constitutes a Restricted Payment
payable more than 60 days after the date of declaration thereof.
 
For the purposes of this Section 10.7 the amount of any Restricted Payment
declared, paid or distributed in property of the Company shall be deemed to be
the greater of the book value or fair market value (as determined in good faith
by the Board of Directors of the Company) of such property at the time of the
making of the Restricted Payment in question.

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Note Purchase Agreement

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 more
than five Business Days 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) or Sections 10.5, 10.6 or 10.7; or
 
(d)   the Company or any Subsidiary Guarantor defaults in the performance of or
compliance with any term contained herein (other than those referred to in
Sections 11(a), (b) and (c)) or in any Subsidiary Guaranty 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)    (i) any representation or warranty made in writing by or on behalf of the
Company or by any officer of the Company in this Agreement or any writing
furnished in connection with the transactions contemplated hereby proves to have
been false or incorrect in any material respect on the date as of which made, or
(ii) any representation or warranty made in writing by or on behalf of any
Subsidiary Guarantor or by any officer of such Subsidiary Guarantor in any
Subsidiary Guaranty or any writing furnished in connection with such Subsidiary
Guaranty proves to have been false or incorrect in any material respect on the
date as of which made; or
 
(f)     (i) the Company or any Significant Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any Indebtedness that is outstanding
in an aggregate principal amount of at least $5,000,000 (or its equivalent in
the relevant currency of payment) beyond any period of grace provided with
respect thereto, or (ii) the Company or any Significant Subsidiary is in default
in the performance of or compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount of at least $5,000,000
(or its equivalent in the relevant currency of payment) or of any mortgage,
indenture or other agreement relating thereto or any other condition exists, and
as a consequence of such default or condition, such Indebtedness has become or
has been declared (or one or more Persons are entitled to declare such
Indebtedness to be) due and payable before its stated maturity or before its
regularly scheduled dates of payment, or (iii) as a consequence of the
occurrence or continuation of any event or condition (other than the passage of
time or the right of the holder of Indebtedness to convert such Indebtedness
into equity interests), (x) the Company or any Significant Subsidiary has become
obligated to purchase or repay Indebtedness before its regular maturity or
before its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $5,000,000 (or its equivalent in the relevant
currency of payment), or (y) one or more Persons have the right to require the
Company or any Significant Subsidiary so to purchase or repay such Indebtedness;
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(g)   the Company or any Significant Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due, (ii)
files, or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (iii) makes
an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or
 
(h)    a court or other Governmental Authority of competent jurisdiction enters
an order appointing, without consent by the Company or any of its Significant
Subsidiaries, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company or any of its
Significant Subsidiaries, or any such petition shall be filed against the
Company or any of its Significant Subsidiaries and such petition shall not be
dismissed within 60 days; or
 
(i)     any event occurs with respect to the Company or any Significant
Subsidiary which under the laws of any jurisdiction is analogous to any of the
events described in Section 11(g) or Section 11(h), provided that the applicable
grace period, if any, which shall apply shall be the one applicable to the
relevant proceeding which most closely corresponds to the proceeding described
in Section 11(g) or Section 11(h); or
 
(j)    one or more final judgments or orders for the payment of money
aggregating in excess of $5,000,000 (or its equivalent in the relevant currency
of payment), including any such final order enforcing a binding arbitration
decision, are rendered against one or more of the Company and its Significant
Subsidiaries and which judgments are not, within 60 days after entry thereof,
bonded, discharged or stayed pending appeal, or are not discharged within 60
days after the expiration of such stay; or

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(k)    if (i) any Plan shall fail to satisfy the minimum funding standards of
ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under ERISA section 4042 to terminate or appoint a
trustee to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such proceedings,
(iii) there is any “amount of unfunded benefit liabilities” (within the meaning
of section 4001(a)(18) of ERISA) under one or more Plans, determined in
accordance with Title IV of ERISA, (iv) the aggregate present value of accrued
benefit liabilities under all funded Non-U.S. Plans exceeds the aggregate
current value of the assets of such Non-U.S. Plans allocable to such
liabilities, (v) the Company or any ERISA Affiliate shall have incurred or is
reasonably expected to incur any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans, (vi) the Company or any ERISA Affiliate withdraws from any Multiemployer
Plan, (vii) the Company or any Subsidiary establishes or amends any employee
welfare benefit plan that provides post-employment welfare benefits in a manner
that would increase the liability of the Company or any Subsidiary thereunder,
(viii) the Company or any Subsidiary fails to administer or maintain a Non-U.S.
Plan in compliance with the requirements of any and all applicable laws,
statutes, rules, regulations or court orders or any Non-U.S. Plan is
involuntarily terminated or wound up, or (ix) the Company or any Subsidiary
becomes subject to the imposition of a financial penalty (which for this purpose
shall mean any tax, penalty or other liability, whether by way of indemnity or
otherwise) with respect to one or more Non-U.S. Plans; and any such event or
events described in clauses (i) through (ix) above, either individually or
together with any other such event or events, would reasonably be expected to
have a Material Adverse Effect.  As used in this Section 11(k), the terms
“employee benefit plan” and “employee welfare benefit plan” shall have the
respective meanings assigned to such terms in section 3 of ERISA; or
 
(l)     any Subsidiary Guaranty shall cease to be in full force and effect, any
such Subsidiary Guarantor or any Person acting on behalf of any such Subsidiary
Guarantor shall contest in any manner the validity, binding nature or
enforceability of any Subsidiary Guaranty, or the obligations of any Subsidiary
Guarantor under any Subsidiary Guaranty are not or cease to be legal, valid,
binding and enforceable in accordance with the terms of such Subsidiary
Guaranty.
 
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(g), (h) or (i) (other than an Event of
Default described in clause (i) of Section 11(g) or described in clause (vi) of
Section 11(g) by virtue of the fact that such clause encompasses clause (i) of
Section 11(g)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.
 
(b)     If any other Event of Default has occurred and is continuing, the
Required Holders may at any time at its or their option, by notice or notices to
the Company, declare all the Notes 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 it or them to be
immediately due and payable.

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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 interest accrued thereon at the Default Rate) and (y) the
Make-Whole Amount determined in respect of such principal amount, 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 specifically provided for) and that the provision for payment
of a Make-Whole Amount 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 or in any Note or Subsidiary Guaranty, 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 have been declared
due and payable pursuant to Section 12.1(b) or (c), the Required Holders, 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,
all principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, 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 or to the
Notes.  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, any Subsidiary Guaranty or 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 reasonable attorneys’ fees, expenses and disbursements.

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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.  If any holder of one or more Notes
is a nominee, then (a) the name and address of the beneficial owner of such Note
or Notes shall also be registered in such register as an owner and holder
thereof and (b) at any such beneficial owner’s option, either such beneficial
owner or its nominee may execute any amendment, waiver or consent pursuant to
this Agreement.  Prior to due presentment for 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.
 
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(iii)), 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 information 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) 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 Schedule 1.  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, one Note 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 6.2.
 
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(iii)) 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

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 (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 $50,000,000 or a Qualified Institutional Buyer, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory), or
 
 (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, 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 PNC
Bank 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.      Payment by Wire Transfer.  So long as any Purchaser or its
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, interest and
all other amounts becoming due hereunder by the method and at the address
specified for such purpose below such Purchaser’s name in the Purchaser
Schedule, or by such other method or at such other address as such 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 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 a Purchaser or its nominee, such Purchaser 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 under this Agreement
and that has made the same agreement relating to such Note as the Purchasers
have made in this Section 14.2.

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Section 14.3.        FATCA Information.  By acceptance of any Note, the holder
of such Note agrees that such holder will with reasonable promptness duly
complete and deliver to the Company, or to such other Person as may be
reasonably requested by the Company, from time to time (a) in the case of any
such holder that is a United States Person, such holder’s United States tax
identification number or other Forms reasonably requested by the Company
necessary to establish such holder’s status as a United States Person under
FATCA and as may otherwise be necessary for the Company to comply with its
obligations under FATCA and (b) in the case of any such holder that is not a
United States Person, such documentation prescribed by applicable law (including
as prescribed by section 1471(b)(3)(C)(i) of the Code) and such additional
documentation as may be necessary for the Company to comply with its obligations
under FATCA and to determine that such holder has complied with such holder’s
obligations under FATCA or to determine the amount (if any) to deduct and
withhold from any such payment made to such holder.  Nothing in this
Section 14.3 shall require any holder to provide information that is
confidential or proprietary to such holder unless the Company is required to
obtain such information under FATCA and, in such event, the Company shall treat
any such information it receives as confidential.
 
Section 15.        Expenses, Etc.
 
Section 15.1.        Transaction Expenses.  Whether or not the transactions
contemplated hereby 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, local or other counsel) incurred by the
Purchasers and each other holder of a Note in connection with such transactions
and in connection with any amendments, waivers or consents under or in respect
of this Agreement, any Subsidiary Guaranty or the Notes (whether or not such
amendment, waiver or consent becomes effective), including: (a) the costs and
expenses incurred in enforcing or defending (or determining whether or how to
enforce or defend) any rights under this Agreement, any Subsidiary Guaranty or
the Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement, any Subsidiary
Guaranty 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 and
by the Notes and any Subsidiary Guaranty 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 $3,500.  If required by the
NAIC, the Company shall obtain and maintain at its own cost and expense a Legal
Entity Identifier (LEI).
 
The Company will pay, and will save each Purchaser and each other holder of a
Note harmless from, (i) 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
or other holder in connection with its purchase of the Notes), (ii) any and all
wire transfer fees that any bank or other financial institution deducts from any
payment under such Note to such holder or otherwise charges to a holder of a
Note with respect to a payment under such Note and (iii) any judgment,
liability, claim, order, decree, fine, penalty, cost, fee, expense (including
reasonable attorneys’ fees and expenses) or obligation resulting from the
consummation of the transactions contemplated hereby, including the use of the
proceeds of the Notes by the Company.

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Section 15.2.       Certain Taxes.  The Company agrees to pay all stamp,
documentary or similar taxes or fees which may be payable in respect of the
execution and delivery or the enforcement of this Agreement or any Subsidiary
Guaranty or the execution and delivery (but not the transfer) or the enforcement
of any of the Notes in the United States or any other jurisdiction where the
Company or any Subsidiary Guarantor has assets or of any amendment of, or waiver
or consent under or with respect to, this Agreement or any Subsidiary Guaranty
or of any of the Notes, and to pay any value added tax due and payable in
respect of reimbursement of costs and expenses by the Company pursuant to this
Section 15, and will save each holder of a Note to the extent permitted by
applicable law harmless against any loss or liability resulting from nonpayment
or delay in payment of any such tax or fee required to be paid by the Company
hereunder.
 
Section 15.3.       Survival.  The obligations of the Company under this Section
15 will survive the payment or transfer of any Note, the enforcement, amendment
or waiver of any provision of this Agreement, any Subsidiary Guaranty or the
Notes, and the termination of this Agreement.
 
Section 16.        Survival of Representations and Warranties; Entire Agreement.
 
All representations and warranties contained herein shall survive the execution
and delivery of this Agreement and the Notes, the purchase or transfer by any
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 such Purchaser or any
other holder of a Note.  All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement.  Subject to the preceding sentence, this Agreement, the Notes and any
Subsidiary Guaranties embody the entire agreement and understanding between each
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.  This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), only with the written consent of the Company
and the Required Holders, except that:
 
(a)    no amendment or waiver of any of Sections 1, 2, 3, 4, 5, 6 or 21 hereof,
or any defined term (as it is used therein), will be effective as to any
Purchaser unless consented to by such Purchaser in writing; and

(b)    no amendment or waiver may, without the written consent of each Purchaser
and the holder of each Note at the time outstanding, (i) subject to 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 (x) interest on the Notes or (y) the
Make-Whole Amount, (ii) change the percentage of the principal amount of the
Notes the holders of which are required to consent to any amendment or waiver,
or (iii) amend any of Sections 8 (except as set forth in the second sentence of
Section 8.2), 11(a), 11(b), 12, 17 or 20.
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Section 17.2.        Solicitation of Holders of Notes.
 
(a)         Solicitation. The Company will provide each holder of a Note 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 or of the Notes or any Subsidiary Guaranty.  The Company will
deliver executed or true and correct copies of each amendment, waiver or consent
effected pursuant to this Section 17 or any Subsidiary Guaranty to each holder
of a Note promptly following the date on which it is executed and delivered by,
or receives the consent or approval of, the requisite holders of Notes.
 
(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 a Note as consideration for or as an inducement to the
entering into by such holder of any waiver or amendment of any of the terms and
provisions hereof or of any Subsidiary Guaranty or any Note 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 a Note even if such holder did not consent to such waiver or amendment.
 
(c)        Consent in Contemplation of Transfer.  Any consent given pursuant to
this Section 17 or any Subsidiary Guaranty by a holder of a Note that has
transferred or has agreed to transfer its Note to (i) the Company, (ii) any
Subsidiary or any other Affiliate or (iii) any other Person in connection with,
or in anticipation of, such other Person acquiring, making a tender offer for or
merging with the Company and/or any of its Affiliates, in each case in
connection with such consent, 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 or any Subsidiary Guaranty applies equally to all
holders of Notes and is binding upon them and upon each future holder of any
Note and upon the Company without regard to whether such Note 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 any holder of a Note and no delay in
exercising any rights hereunder or under any Note or Subsidiary Guaranty shall
operate as a waiver of any rights of any holder of such Note.

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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 Subsidiary
Guaranty or the Notes, or have directed the taking of any action provided herein
or in any Subsidiary Guaranty or the Notes to be taken upon the direction of the
holders of a 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.
 
 Except to the extent otherwise provided in Section 7.4, all notices and
communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice by
an internationally recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by an internationally recognized overnight delivery service
(charges prepaid).  Any such notice must be sent:
 
(i)    if to any Purchaser or its nominee, to such Purchaser or nominee at the
address specified for such communications in the Purchaser Schedule, or at such
other address as such Purchaser or nominee shall have specified to the Company
in writing,
 
(ii)    if to any other holder of any Note, to such holder at such address as
such other holder shall have specified to the Company in writing, or
 
(iii)   if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of Chief Financial Officer, 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 thereto, including (a) consents,
waivers and modifications that may hereafter be executed, (b) documents received
by any Purchaser at the Closing (except the Notes themselves), and (c) financial
statements, certificates and other information previously or hereafter furnished
to any Purchaser, may be reproduced by such Purchaser by any photographic,
photostatic, electronic, digital, or other similar process and such Purchaser
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 Purchaser 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.

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The York Water Company
Note Purchase Agreement

Section 20.        Confidential Information.
 
For the purposes of this Section 20, “Confidential Information” means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
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 prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such Purchaser
or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to
such Purchaser other than through disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to such Purchaser under
Section 7.1 that are otherwise publicly available.  Each Purchaser will maintain
the confidentiality of such Confidential Information in accordance with
procedures adopted by such Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser, provided that such
Purchaser may deliver or disclose Confidential Information to (i) its directors,
officers, employees, agents, attorneys, trustees and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by its Notes), (ii) its auditors, financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which it 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 this Section 20), (v) any Person from which it 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 this
Section 20), (vi) any federal or state regulatory authority having jurisdiction
over such 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 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, (x) in response to any subpoena or other legal process, (y) in
connection with any litigation to which such Purchaser is a party or (z) if an
Event of Default has occurred and is continuing, to the extent such 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 Notes, this Agreement or any Subsidiary Guaranty.  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 requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying this Section 20.

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The York Water Company
Note Purchase Agreement

In the event that as a condition to receiving access to information relating to
the Company or its Subsidiaries in connection with the transactions contemplated
by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is
required to agree to a confidentiality undertaking (whether through IntraLinks,
another secure website, a secure virtual workspace or otherwise) which is
different from this Section 20, this Section 20 shall not be amended thereby
and, as between such Purchaser or such holder and the Company, this Section 20
shall supersede any such other confidentiality undertaking.
 
Section 21.        Substitution of Purchaser.
 
Each Purchaser shall have the right to substitute any one of its Affiliates or
another Purchaser or any one of such other Purchaser’s Affiliates (a “Substitute
Purchaser”) as the purchaser of the Notes that it has agreed to purchase
hereunder, by written notice to the Company, which notice shall be signed by
both such Purchaser and such Substitute Purchaser, shall contain such Substitute
Purchaser’s agreement to be bound by this Agreement and shall contain a
confirmation by such Substitute Purchaser 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 in this Agreement (other than in this Section 21),
shall be deemed to refer to such Substitute Purchaser in lieu of such original
Purchaser.  In the event that such Substitute Purchaser is so substituted as a
Purchaser hereunder and such Substitute Purchaser thereafter transfers to such
original Purchaser all of the Notes then held by such Substitute Purchaser, upon
receipt by the Company of notice of such transfer, any reference to such
Substitute Purchaser as a “Purchaser” in this Agreement (other than in this
Section 21), shall no longer be deemed to refer to such Substitute Purchaser,
but shall refer to such original Purchaser, and such original Purchaser shall
again have all the rights of an original holder of the Notes under this
Agreement.
 
Section 22.        Miscellaneous.
 
Section 22.1.        Successors and Assigns.  All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including
any subsequent holder of a Note) whether so expressed or not, except that,
subject to Section 10.2, the Company may not assign or otherwise transfer any of
its rights or obligations hereunder or under the Notes without the prior written
consent of each holder.  Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto and their
respective successors and assigns permitted hereby) any legal or equitable
right, remedy or claim under or by reason of this Agreement. 

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The York Water Company
Note Purchase Agreement

Section 22.2.       Accounting Terms.  All accounting terms used herein which
are not expressly defined in this Agreement have the meanings respectively given
to them in accordance with GAAP.  Except as otherwise specifically provided
herein, (i) all computations made pursuant to this Agreement shall be made in
accordance with GAAP, and (ii) all financial statements shall be prepared in
accordance with GAAP.  For purposes of determining compliance with this
Agreement (including Section 9, Section 10 and the definition of
“Indebtedness”), any election by the Company to measure any financial liability
using fair value (as permitted by Financial Accounting Standards Board
Accounting Standards Codification Topic No. 825-10-25 – Fair Value Option,
International Accounting Standard 39 – Financial Instruments: Recognition and
Measurement or any similar accounting standard) shall be disregarded and such
determination shall be made as if such election had not been made.
 
Section 22.3.       Severability.  Any provision of this Agreement 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.
 
Section 22.4.        Construction, Etc.  Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, 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 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.
 
Defined terms herein shall apply equally to the singular and plural forms of the
terms defined.  Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.  The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will” shall be construed to have the same meaning and
effect as the word “shall.”  Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein)
and, for purposes of the Notes, shall also include any such notes issued in
substitution therefor pursuant to Section 13, (b) subject to Section 22.1, any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein
to Sections and Schedules shall be construed to refer to Sections of, and
Schedules to, this Agreement, and (e) any reference to any law or regulation
herein shall, unless otherwise specified, refer to such law or regulation as
amended, modified or supplemented from time to time.

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The York Water Company
Note Purchase Agreement

Section 22.5.       Counterparts; Electronic Contracting.  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.  The parties agree to electronic
contracting and signatures with respect to this Agreement and the other
documents (other than the Notes).  Delivery of an electronic signature to, or a
signed copy of, this Agreement and such other documents (other than the Notes)
by facsimile, email or other electronic transmission shall be fully binding on
the parties to the same extent as the delivery of the signed originals and shall
be admissible into evidence for all purposes.  The words “execution,” “execute”,
“signed,” “signature,” and words of like import in or related to any document to
be signed in connection with this Agreement and the other documents (other than
the Notes) shall be deemed to include electronic signatures, the electronic
matching of assignment terms and contract formations on electronic platforms
approved by the Company, or the keeping of records in electronic form, each of
which shall be of the same legal effect, validity or enforceability as a
manually executed signature or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar
state laws based on the Uniform Electronic Transactions Act.  Notwithstanding
the foregoing, if any Purchaser shall request manually signed counterpart
signatures to any document, the Company hereby agrees to use its reasonable
endeavors to provide such manually signed signature pages as soon as reasonably
practicable (but in any event within 30 days of such request or such longer
period as the requesting Purchaser and the Company may mutually agree).
 
Section 22.6.      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 22.7.       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 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 agrees, to the fullest extent permitted by applicable
law, that a final judgment in any suit, action or proceeding of the nature
referred to in Section 22.7(a) brought in any such court shall be conclusive and
binding upon it subject to rights of appeal, as the case may be, and may be
enforced in the courts of the United States of America or the State of New York
(or any other courts to the jurisdiction of which it or any of its assets is or
may be subject) by a suit upon such judgment.

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The York Water Company
Note Purchase Agreement

(c)         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 22.7(a) by mailing a copy thereof by registered, certified priority or
express mail (or any substantially similar form of mail), postage prepaid,
return receipt or delivery confirmation requested, to it at its address
specified in Section 18 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 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.
 
(d)        Nothing in this Section 22.7 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.
 
(e)         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.

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If you are in agreement with the foregoing, please sign the form of agreement on
a counterpart of this Agreement and return it to the Company, whereupon this
Agreement shall become a binding agreement between you and the Company.

 
Very truly yours,
     
The York Water Company
     
By
/s/ Joseph T. Hand
   
Its President and CEO

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This Agreement is hereby
   
accepted and agreed to as
   
of the date hereof.
           
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
        By:
Macquarie Investment Management Advisers, a series of Macquarie Investment
Management Business Trust, Attorney in Fact
        By:
/s/ Karl Spaeth
   
Name: Karl Spaeth
   
Title: Senior Vice President
       
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
 
    By:
Macquarie Investment Management
   
Advisers, a series of Macquarie Investment
   
Management Business Trust, Attorney in
   
Fact
        By:
/s/ Karl Spaeth
   
Name: Karl Spaeth
   
Title: Senior Vice President

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This Agreement is hereby
 
accepted and agreed to as
 
of the date hereof.
       
UNITED OF OMAHA LIFE INSURANCE COMPANY
     
By:
/s/ Justin P. Kavan
   
Name: Justin P. Kavan
   
Title: Senior Vice President

 

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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:
 
“Affiliate” means, at any time, and with respect to any Person, any other Person
that at such time directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, such first
Person.  Unless the context otherwise clearly requires, any reference to an
“Affiliate” is a reference to an Affiliate of the Company.
 
“Agreement” means this Note Purchase Agreement, including all Schedules attached
to this Agreement.
 
“Anti-Corruption Laws” means any law or regulation in a U.S. or any non-U.S.
jurisdiction regarding bribery or any other corrupt activity, including the U.S.
Foreign Corrupt Practices Act and the U.K. Bribery Act 2010.
 
“Anti-Money Laundering Laws” means any law or regulation in a U.S. or any
non-U.S. jurisdiction regarding money laundering, drug trafficking,
terrorist-related activities or other money laundering predicate crimes,
including the Currency and Foreign Transactions Reporting Act of 1970 (otherwise
known as the Bank Secrecy Act) and the USA PATRIOT Act.
 
“Blocked Person” means (a) a Person whose name appears on the list of Specially
Designated Nationals and Blocked Persons published by OFAC, (b) a Person,
entity, organization, country or regime that is blocked or a target of sanctions
that have been imposed under U.S. Economic Sanctions Laws or (c) a Person that
is an agent, department or instrumentality of, or is otherwise beneficially
owned by, controlled by or acting on behalf of, directly or indirectly, any
Person, entity, organization, country or regime described in clause (a) or (b).
 
“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 City
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 York, Pennsylvania are required
or authorized to be closed.
 
“Capitalized Lease” shall mean any lease, the obligation for Rentals with
respect to which is required to be capitalized on a balance sheet of the lessee
in accordance with generally accepted accounting principles.
 
“Capitalized Rentals” shall mean as of the date of any determination the amount
at which the aggregate Rentals due and to become due under all Capitalized
Leases under which the Company is a lessee would be reflected as a liability on
a balance sheet of the Company.
 
“Closing” is defined in Section 3.

Schedule A
(to Note Purchase Agreement)

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“Code” means the Internal Revenue Code of 1986 and the rules and regulations
promulgated thereunder from time to time.
 
“Company” is defined in the first paragraph of this Agreement.
 
“Confidential Information” is defined in Section 20.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise; and the
terms “Controlled” and “Controlling” shall have meanings correlative to the
foregoing. 
 
“Controlled Entity” means (a) any of the Subsidiaries of the Company and any of
their or the Company’s respective Controlled Affiliates and (b) if the Company
has a parent company, such parent company and its Controlled Affiliates.
 
“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, become an Event
of Default.
 
“Default Rate” means that rate of interest per annum that is the greater of
(a) 2% above the rate of interest stated in clause (a) of the first paragraph of
the Notes or (b) 2% over the rate of interest publicly announced by PNC Bank in
New York, New York as its “base” or “prime” rate, but in no event in excess of
the maximum rate of interest permitted by applicable law.
 
“Disclosure Documents” is defined in Section 5.3.
 
“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System
or any successor SEC electronic filing system for such purposes.
 
“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 those related to
Hazardous Materials.
 
“ERISA” means the Employee Retirement Income Security Act of 1974 and the rules
and regulations promulgated thereunder from time to time in effect.
 
“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is treated as a single employer together with the Company under section 414 of
the Code.
 
“Excepted Encumbrances” shall mean any of the following: 
 
(a)    liens for taxes, assessments or governmental charges not delinquent and
liens for workers’ compensation awards and similar obligations not delinquent
and undetermined liens or charges incidental to construction;

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(b)   any liens securing Indebtedness neither assumed nor guaranteed by the
Company on which it customarily pays interest, existing in or relating to real
estate acquired by the Company for transmission, distribution or right‑of‑way
purposes;
 
(c)   easements or reservations in any property of the Company created for the
purpose of roads, railroads, railroad side tracks, water and gas transmission
and distribution mains, conduits, water power rights of the Commonwealth of
Pennsylvania or others, building and use restrictions and defects of title to,
or leases of, any parts of the property of the Company which do not in the
opinion of the Company’s counsel materially impair the use of the property as an
entirety in the operation of the business of the Company;
 
(d)   undetermined liens and charges incidental to current construction,
including mechanics’, laborers’, materialmen’s and similar liens not delinquent;
 
(e)    any obligations or duties affecting the property of the Company to any
municipality or public authority with respect to any franchise, grant, license,
permit or certificate;
 
(f)    rights reserved to or vested in any municipality or public authority to
control or regulate any property of the Company or to use such property in a
manner which does not materially impair the use of such property for the
purposes for which it is held by the Company;
 
(g)    judgments in course of appeal or otherwise in contest and secured by
sufficient bond or security; or
 
(h)   any right of set-off or banker’s lien in favor of any bank lender or any
security interest in favor of any bank lender in deposits, moneys, securities or
other property in the possession of or on deposit with, or in transit to, such
bank lender or any of its affiliates.
 
“Event of Default” is defined in Section 11.
 
“FATCA” means (a) sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), together with any current or
future regulations or official interpretations thereof, (b) any treaty, law or
regulation of any other jurisdiction, or relating to an intergovernmental
agreement between the United States of America and any other jurisdiction, which
(in either case) facilitates the implementation of the foregoing clause (a), and
(c) any agreements entered into pursuant to section 1471(b)(1) of the Code. 
 
“Form 10‑K” is defined in Section 7.1(b).
 
“Form 10‑Q” is defined in Section 7.1(a).

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“Funded Debt” of any Person shall mean (a) all Indebtedness for borrowed money
or which has been incurred in connection with the acquisition of assets in each
case having a final maturity of one or more than one year from the date of
origin thereof (or which is renewable or extendible at the option of the obligor
for a period or periods more than one year from the date of origin), including
all payments in respect thereof that are required to be made within one year
from the date of any determination of Funded Debt and (b) all Guaranties of such
Indebtedness described in clause (a).
 
“GAAP” means (a) generally accepted accounting principles as in effect from time
to time in the United States of America and (b) for purposes of Section 9.6,
with respect to any Subsidiary, generally accepted accounting principles
(including International Financial Reporting Standards, as applicable) as in
effect from time to time in the jurisdiction of organization of such Subsidiary.
 
“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.
 
“Governmental Official” means any governmental official or employee, employee of
any government-owned or government-controlled entity, political party, any
official of a political party, candidate for political office, official of any
public international organization or anyone else acting in an official capacity.
 
“Guaranty” means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including obligations incurred through an
agreement, contingent or otherwise, by such Person:
 
(a)     to purchase such indebtedness or obligation or any property constituting
security therefor;
 
(b)    to advance or supply funds (i) for the purchase or payment of such
indebtedness or obligation, or (ii) to maintain any working capital or other
balance sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase or payment of such
indebtedness or obligation;

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(c)     to lease properties or to purchase properties or services primarily for
the purpose of assuring the owner of such indebtedness or obligation of the
ability of any other Person to make payment of the indebtedness or obligation;
or
 
(d)    otherwise to assure the owner of such indebtedness or obligation against
loss in respect thereof.
 
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
 
“Hazardous Materials” 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 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
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls,
petroleum, petroleum products, lead based paint, radon gas or similar
restricted, prohibited or penalized substances.
 
“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,
provided, however, that if such Person is a nominee, then for the purposes of
Sections 7, 12, 17.2 and 18 and any related definitions in this Schedule A,
“holder” shall mean the beneficial owner of such Note whose name and address
appears in such register.
 
“INHAM Exemption” is defined in Section 6.2(e).
 
“Indebtedness” with respect to any Person means, at any time, without
duplication,
 
(a)    its liabilities for borrowed money and its redemption obligations in
respect of mandatorily redeemable Preferred Stock;
 
(b)    its liabilities for the deferred purchase price of property acquired by
such Person (excluding accounts payable arising in the ordinary course of
business but including all liabilities created or arising under any conditional
sale or other title retention agreement with respect to any such property);
 
(c)    (i) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capitalized Leases and (ii) all liabilities which would
appear on its balance sheet in accordance with GAAP in respect of Synthetic
Leases assuming such Synthetic Leases were accounted for as Capitalized Leases;
 
(d)     all liabilities for borrowed money secured by any Lien with respect to
any property owned by such Person (whether or not it has assumed or otherwise
become liable for such liabilities);

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(e)    all its liabilities in respect of letters of credit or instruments
serving a similar function issued or accepted for its account by banks and other
financial institutions (whether or not representing obligations for borrowed
money);
 
(f)     the aggregate Swap Termination Value of all Swap Contracts of such
Person; and
 
(g)    any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof. 
 
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
 
“Institutional Investor” means (a) any 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 principal amount of the Notes then outstanding, (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.
 
“Make-Whole Amount” is defined in Section 8.6.
 
“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, affairs, financial condition, assets or properties of the Company
and its Subsidiaries taken as a whole, (b) the ability of the Company to perform
its obligations under this Agreement and the Notes, (c) the ability of any
Subsidiary Guarantor to perform its obligations under its Subsidiary Guaranty,
or (d) the validity or enforceability of this Agreement, the Notes or any
Subsidiary Guaranty.
 
“Material Credit Facility” means, as to the Company and its Subsidiaries, 
 
(a)  the $50,000,000 revolving line of credit from Fulton Bank, N.A., including
any renewals, extensions, amendments, supplements, restatements, replacements or
refinancing thereof; and
 
(b)    any other agreement creating or evidencing indebtedness for borrowed
money entered into on or after the date of Closing by the Company or any
Subsidiary, or in respect of which the Company or any Subsidiary is an obligor
or otherwise provides a guarantee or other credit support (“Credit Facility”),
in a principal amount outstanding or available for borrowing equal to or greater
than $40,000,000 (or the equivalent of such amount in the relevant currency of
payment, determined as of the date of the closing of such facility based on the
exchange rate of such other currency); and if no Credit Facility equals or
exceeds such amount, then the largest Credit Facility shall be deemed to be a
Material Credit Facility but only if it is in a principal amount outstanding or
available for borrowing equal to or greater than $10,000,000. 

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“Maturity Date” is defined in the first paragraph of each Note.
 
“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.
 
“Non-U.S. Plan” means any plan, fund or other similar program that (a) is
established or maintained outside the United States of America by the Company or
any Subsidiary primarily for the benefit of employees of the Company or one or
more Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and (b) is not subject to ERISA or the Code.
 
“Notes” is defined in Section 1.
 
“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.
 
“OFAC Sanctions Program” means any economic or trade sanction that OFAC is
responsible for administering and enforcing.  A list of OFAC Sanctions Programs
may be found at
http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.
 
“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.
 
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA.
 
“Person” means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, business entity or
Governmental Authority.
 
“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA)
subject to Title I of ERISA that is or, within the preceding five years, has
been established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.
 
“Plant Account” shall mean the plant account under the Pennsylvania Public
Utilities Commission Uniform System of Accounts for Water Utilities dated
November 21, 1946, as the same may be amended from time to time.

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“Preferred Stock” means any class of capital stock of a Person that is preferred
over any other class of capital stock (or similar equity interests) of such
Person as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such Person.
 
 “Presentation” is defined in Section 5.3.
 
“Priority Debt” means Indebtedness of the Company or any Subsidiary secured by
assets not otherwise permitted by clauses (i) through (iv) of Section 10.5(a) or
as an Excepted Encumbrance and, without duplication, the aggregate amount of
Indebtedness of all Subsidiaries (other than Subsidiary Guarantors).
 
“property” or “properties” means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, choate or inchoate.
 
“PTE” is defined in Section 6.2(a).
 
“Purchaser” or “Purchasers” means each of the purchasers that has executed and
delivered this Agreement to the Company and such Purchaser’s successors and
assigns (so long as any such assignment complies with Section 13.2), provided,
however, that any Purchaser of a Note that ceases to be the registered holder or
a beneficial owner (through a nominee) of such Note as the result of a transfer
thereof pursuant to Section 13.2 shall cease to be included within the meaning
of “Purchaser” of such Note for the purposes of this Agreement upon such
transfer.
 
“Purchaser Schedule” means the Purchaser Schedule to this Agreement listing the
Purchasers of the Notes and including their notice and payment information.
 
“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.
 
“QPAM Exemption” is defined in Section 6.2(d).
 
“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.
 
“Rentals” shall mean and include all fixed rents (including as such all payments
which the lessee is obligated to make to the lessor on termination of the lease
or surrender of the Property) payable by the Company, as lessee or sublessee
under a lease of real or personal property, but shall be exclusive of any
amounts required to be paid by the Company (whether or not designated as rents
or additional rents) on account of maintenance, repairs, insurance, taxes and
similar charges.  Fixed rents under any so-called “percentage leases” shall be
computed solely on the basis of the minimum rents, if any, required to be paid
by the lessee regardless of sales volume or gross revenues.

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“Required Holders” means at any time on or after the Closing, the holders of
more than 50% in principal amount of the Notes at the time outstanding
(exclusive of 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” is defined in Section 10.8.
 
“Seasonal Indebtedness” as of the date of any determination thereof shall mean
(a) all Indebtedness for money borrowed or which has been incurred in connection
with the acquisition of assets in each case other than Funded Debt and (b)
Guaranties of Seasonal Indebtedness of others.
 
“SEC” means the Securities and Exchange Commission of the United States of
America.
 
“Securities” or “Security” shall have the meaning specified in section 2(1) of
the Securities Act.
 
“Securities Act” means the Securities Act of 1933 and the rules and regulations
promulgated thereunder from time to time in effect.
 
“Senior Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
 
“Significant Subsidiary” means at any time any Subsidiary that would at such
time constitute a “significant subsidiary” (as such term is defined in
Regulation S-X of the SEC as in effect on the date of the Closing) of the
Company.
 
“Source” is defined in Section 6.2.
 
“State Sanctions List” means a list that is adopted by any state Governmental
Authority within the United States of America pertaining to Persons that engage
in investment or other commercial activities in Iran or any other country that
is a target of economic sanctions imposed under U.S. Economic Sanctions Laws.
 
“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 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.

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“Subsidiary Guarantor” means each Subsidiary that has executed and delivered a
Subsidiary Guaranty.
 
“Subsidiary Guaranty” is defined in Section 9.7(a).
 
“Substitute Purchaser” is defined in Section 21.
 
“SVO” means the Securities Valuation Office of the NAIC.
 
“Swap Contract” means (a) any and all interest rate swap transactions, basis
swap transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or bond index swaps
or options or forward foreign exchange transactions, cap transactions, floor
transactions, currency options, spot contracts or any other similar transactions
or any of the foregoing (including any options to enter into any of the
foregoing), and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc. or any International Foreign Exchange Master
Agreement.
 
“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amounts(s) determined as the
mark-to-market values(s) for such Swap Contracts, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts.
 
“Synthetic Lease” means, at any time, any lease (including leases that may be
terminated by the lessee at any time) of any property (a) that is accounted for
as an operating lease under GAAP and (b) in respect of which the lessee retains
or obtains ownership of the property so leased for U.S. federal income tax
purposes, other than any such lease under which such Person is the lessor.
 
“United States Person” has the meaning set forth in Section 7701(a)(30) of the
Code.
 
“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 and the rules and regulations
promulgated thereunder from time to time in effect.
 
“U.S. Economic Sanctions Laws” means those laws, executive orders, enabling
legislation or regulations administered and enforced by the United States
pursuant to which economic sanctions have been imposed on any Person, entity,
organization, country or regime, including the Trading with the Enemy Act, the
International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan
Accountability and Divestment Act and any other OFAC Sanctions Program.

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“Voting Stock” means Securities of any class or classes, the holders of which
are ordinarily, in the absence of contingencies, entitled to elect the corporate
directors (or Persons performing similar functions). 
 
“Wholly-Owned Subsidiary” means, at any time, any Subsidiary all of 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.

A - 11

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[Form of Note]
 
This Note has not been registered under the Securities Act of 1933, as amended,
and may not be transferred, sold or otherwise disposed of except while
registration under said Act is in effect or pursuant to an exemption from
registration under said Act or if said Act does not apply.
 
The York Water Company
 
3.24% Senior Note Due September 30, 2050

No. R__

[Date] $[_______] PPN 987184 E#1

For Value Received, the undersigned, The York Water Company (herein called the
“Company”), a corporation organized and existing under the laws of the
Commonwealth of Pennsylvania, hereby promises to pay to [____________], or
registered assigns, the principal sum of [_____________________] Dollars (or so
much thereof as shall not have been prepaid) on September 30, 2050 (the
“Maturity Date”), 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 3.24% per
annum from the date hereof, payable semiannually, on the 30th day of March and
September in each year, commencing with the March or September next succeeding
the date hereof, and on the Maturity Date, until the principal hereof shall have
become due and payable, and (b) to the extent permitted by law, (x) on any
overdue payment of interest and (y) during the continuance of an Event of
Default, on such unpaid balance and on any overdue payment of any Make-Whole
Amount, at the Default 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
PNC Bank 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 a series of Senior Notes (herein called the “Notes”) issued
pursuant to the Note Purchase Agreement, dated September 30, 2020 (as from time
to time amended, 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 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.

Schedule 1
(to Note Purchase Agreement)

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This Note is a registered Note and, as provided in the Note Purchase Agreement,
upon surrender of this Note for registration of transfer 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 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.

 
The York Water Company
       
By
     
Its

 
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Form of Opinion of Special Counsel
For The Company
 
The following opinions are to be provided by special counsel for the Company,
subject to customary assumptions, limitations, qualifications and exceptions. 
All capitalized terms used herein without definition shall have the meanings
ascribed thereto in the Note Purchase Agreement.

 
1.      The Company is a corporation presently subsisting under the laws of
Pennsylvania and has the corporate power and authority to conduct its business
as currently conducted and currently proposed to be conducted, to execute and
deliver the Note Purchase Agreement and the Notes and to perform the provisions
thereof.
 
2.      The Note Purchase Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms.
 
3.      The Notes being purchased by you at the Closing have been duly
authorized, executed and delivered by the Company and constitute legal, valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms.
 
4.      No consent, approval or authorization of, or registration, filing or
declaration with, the United States of America or the Commonwealth of
Pennsylvania or any agency thereof is required in connection with the execution,
delivery or performance by the Company of the Note Purchase Agreement or the
Notes, except for the approval required from the Pennsylvania Public Utility
Commission.
 
5.       Based upon, and assuming the accuracy of, the representations and
warranties of the Company and the Purchasers set forth in the Agreement and the
confirmations of Janney Montgomery Scott LLC in that certain offeree letter
dated the date hereof, and assuming that no general solicitation or general
advertising has been used in connection with the offering of the Notes, it was
not necessary in connection with the offering, sale and delivery of the Notes
purchased by you at the Closing, under the circumstances contemplated by the
Note Purchase Agreement, to register said Notes under the Securities Act of 1933
or to qualify an indenture in respect of the Notes under the Trust Indenture Act
of 1939, it being understood that no opinion is expressed as to any subsequent
resale of the Notes.
 
6.        The execution, delivery and performance by the Company of the Note
Purchase Agreement and the Notes does not and 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 Subsidiary under, any
indenture, mortgage, deed of trust, loan, or credit agreement evidencing or
governing the terms of any Indebtedness of the Company that is identified in
Schedule 5.15 to the Note Purchase Agreement, or the articles of incorporation
or bylaws of the Company, (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 the United States of America, the
Commonwealth of Pennsylvania or the State of New York that is known to us and
that is applicable to the Company or (c) violate any provision of any statute or
other rule or regulation of any Governmental Authority of the United States of
American, the Commonwealth of Pennsylvania or the State of New York that is
applicable to the Company.

Schedule 4.4(a)
(to Note Purchase Agreement)

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7.       The Company is not an “investment company” or, to the knowledge of such
counsel, a Person directly or indirectly controlled by or acting on behalf of an
“investment company” within the meaning of the Investment Company Act of 1940.
 
8.      None of the transactions contemplated by the Note Purchase Agreement
(including, without limitation, the use of the proceeds from the sale of the
Notes) will violate or result in a violation of Regulation T, U or X of the
Board of Governors of the United States Federal Reserve System, 12 CFR,
Part 220, Part 221 and Part 224, respectively.

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Form of Opinion of Special Counsel
For The Purchasers
 
[To Be Provided on a Case by Case Basis]

Schedule 4.4(b)
(to Note Purchase Agreement)

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Schedule 5.3
 
Disclosure Materials

•
All public filings made by the Company with the SEC in 2020 prior to September
18, 2020

Schedule 5.3
(to Note Purchase Agreement)

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Schedule 5.4
 
Affiliates and Directors of the Company
 
(i)
Affiliates: None.

(ii)
Company’s Directors and Senior Officers:

Directors

James H. Cawley, Esq.1
Cynthia A. Dotzel, CPA
Michael W. Gang, Esq.
Joseph T. Hand
Jeffrey R. Hines, P.E.
George W. Hodges
George Hay Kain, III
Jody L. Keller, SPHR
Erin C. McGlaughlin
Robert P. Newcomer
Steven R. Rasmussen, CPA
Ernest J. Waters

Officers

Joseph T. Hand, President and Chief Executive Officer
Mark A. Wheeler, Chief Operating Officer
Matthew E. Poff, CPA, Chief Financial Officer
Vernon L. Bracey, Vice President of Customer Service
Natalee Colón, SPHR, Vice President of Human Resources
Mark J. Hardman, Vice President of Technology
Mark S. Snyder, P.E., Vice President of Engineering
Alexandra C. Chiaruttini, Chief Administrative Officer and General Counsel2

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1
On September 12, 2020, James H. Cawley, Esq. will retire from the Board of
Directors of The York Water Company pursuant to the Company’s retirement policy.

 
2
Effective October 13, 2020.

 
Schedule 5.4
(to Note Purchase Agreement)

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Schedule 5.5
 
Financial Statements

 
•
December 31, 2019 Audited Financial Statements, which include balance sheets as
of December 31, 2019 and 2018, and related statements of income, changes in
common stockholder’s equity, and cash flows for the years then ended, and the
related notes to the financial statements.

 
•
June 30, 2020 Unaudited Financial Statements, which include condensed balance
sheets as of June 30, 2020 and December 31, 2019, and related statements of
income, changes in common stockholder’s equity, and cash flows for the six month
periods ended June 30, 2020 and June 30, 2019, and the related notes to the
interim financial statements.

Schedule 5.5
(to Note Purchase Agreement)

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Schedule 5.15
 
Existing Indebtedness of the Company and its Subsidiaries

Schedule 5.15
(to Note Purchase Agreement)

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