Document:

Exhibit
4(e)

 

 

 

PACIFICORP

 

 

AND

 

 

THE
BANK OF NEW YORK,

as
Trustee

 

 

 

	
   

  	
                  

  	
  SUPPLEMENTAL
  INDENTURE

  
	
   

  	
   Dated as of
               

  

 

 

SUPPLEMENTAL
TO THE INDENTURE

Dated
as of May 1, 1995

 

 

      %
Junior Subordinated Deferrable Interest Debentures, Series    

 

 

 

 

       SUPPLEMENTAL
INDENTURE, dated as of the          
(the “       Supplemental Indenture”), between
PACIFICORP, a corporation duly organized and existing under the laws of the
State of Oregon (hereinafter sometimes referred to as the “Company”), and THE
BANK OF NEW YORK, a New York banking corporation, as trustee (hereinafter
sometimes referred to as the “Trustee”) (under the Indenture dated as of
May 1, 1995 between the Company and the Trustee (the “Indenture”; all
terms used and not defined herein are used as defined in the Indenture)).

 

WHEREAS, the Company executed and delivered the
Indenture to the Trustee to provide for the future issuance of its junior
subordinated debentures (the “Debentures”), which Debentures are to be issued
from time to time in such series as may be determined by the Company under the
Indenture, in an unlimited aggregate principal amount which may be
authenticated and delivered thereunder as in the Indenture provided; and

 

WHEREAS, the Company and the Trustee previously
executed and delivered a First Supplemental Indenture dated as of May 1,
1995 (the “First Supplemental Indenture”) and in accordance therewith the
Company issued a series of Debentures designated the “8 3/8% Junior
Subordinated Deferrable Interest Debentures, Series A, Due 2035” in the
aggregate principal amount of $120,000,000; and

 

WHEREAS, the Company and the Trustee previously
executed and delivered a Second Supplemental Indenture dated as of October 1,
1995 (the “Second Supplemental Indenture”) and in accordance therewith the
Company issued a series of Debentures designated the “8.55% Junior Subordinated
Deferrable Interest Debentures, Series B, Due 2025” in the aggregate
principal amount of $55,825,925; and

 

WHEREAS, the Company and the Trustee previously
executed and delivered a Third Supplemental Indenture dated as of June 1, 1996
(the “Third Supplemental Indenture”) and in accordance therewith the Company
issued a series of Debentures designated the “8 1/4% Junior Subordinated Deferrable
Interest Debentures, Series C, Due 2036” in the aggregate principal amount
of $223,712,000; and

 

WHEREAS, the Company and the Trustee previously
executed and delivered a Fourth Supplemental Indenture dated as of August 4,
1997 (the “Fourth Supplemental Indenture”) and in accordance therewith the
Company issued a series of Debentures designated the “7.70% Junior Subordinated
Deferrable Interest Debentures, Series D, Due 2037” in the aggregate
principal amount of $139,176,000; and

 

WHEREAS, pursuant to the terms of the Indenture, the
Company desires to provide for the establishment of a new series of its
Debentures to be known as its     % Junior Subordinated
Deferrable Interest Debentures, Series    (such series being
hereinafter referred to as the “Series    Debentures”), the form
and substance of such Series    Debentures and the terms, provisions
and conditions thereof to be set forth as provided in the Indenture and this       
Supplemental Indenture; and

 

WHEREAS, the Company desires and has requested the
Trustee to join with it in the execution and delivery of this       
Supplemental Indenture, and all requirements necessary to

 

 

make this       
Supplemental Indenture a valid instrument, in accordance with its terms, and to
make the Series    Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the
Company, have been performed and fulfilled, and the execution and delivery
hereof have been in all respects duly authorized;

 

NOW, THEREFORE, in consideration of the purchase and
acceptance of the Series    Debentures by the holders thereof, and
for the purpose of setting forth, as provided in the Indenture, the form and
substance of the Series    Debentures and the terms, provisions and
conditions thereof, the Company covenants and agrees with the Trustee as
follows:

 

ARTICLE 1

General Terms and Conditions of

the Series    Debentures

 

SECTION 1.01.  There shall be and is hereby authorized a
series of Debentures designated the “    % Junior Subordinated
Deferrable Interest Debentures, Series   ,” limited in aggregate
principal amount to $        , which
amount shall be as set forth in any written order of the Company for the
authentication and delivery of Series    Debentures.  The Series    Debentures shall
mature and the principal shall be due and payable, together with all accrued
and unpaid interest thereon, on               ,
and shall be issued in the form of registered Series    Debentures
without coupons.

 

SECTION 1.02.  Principal and interest on the Series   
Debentures will be payable, the transfer of such Series    Debentures
will be registrable and such Series    Debentures will be
exchangeable for Series    Debentures bearing identical terms and
provisions at the office or agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the registered holder at such address as shall appear in the Debenture Register
or, with respect to a registered holder of $1,000,000 or more in aggregate
principal amount of Series    Debentures who has delivered a written
request to the Trustee at least 14 days prior to the relevant Interest Payment
Date (as defined in Section 1.03 below) electing to have payments made by wire
transfer to a designated account in the United States, by wire transfer of
immediately available funds to such designated account.

 

SECTION 1.03.  Each Series    Debenture will bear
interest at the rate of     % per annum from and including
the original date of issuance or from the most recent Interest Payment Date
referred to below to which interest has been paid or duly provided for until
the principal thereof becomes due and payable, and on any overdue principal and
(to the extent that payment of such interest is enforceable under applicable
law) on any overdue installment of interest at the same rate per annum, payable
quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year (each, an “Interest Payment Date”), commencing on
                      ,
to the person in whose name such Series    Debenture or any
predecessor Series    Debenture is registered at the close of
business on the March 15, June 15, September 15 or
December 15, respectively, preceding that Interest Payment Date (each, a
“Record Date”).  Any such interest
installment not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and may be paid to the person in whose name the Series
   Debenture (or one or more predecessor

 

2

 

Debentures) is registered
at the close of business on a special record date to be fixed by the Trustee
for the payment of such defaulted interest, notice whereof shall be given to
the registered holders of the Series    Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Series    Debentures may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture; provided, however, that interest (other than interest described in
the next sentence) shall not be considered payable by the Company on any
Interest Payment Date falling within an Extension Period (as defined in Section
3.01 below), unless the Company has elected to make a full or partial payment
of interest accrued on the Series    Debentures on that Interest
Payment Date.  Any partial payment of
interest accrued on the Series    Debentures on any Interest Payment
Date falling within an Extension Period shall be paid pro rata to such registered
holders based upon the principal amount of Series    Debentures then
held by such registered holders.  In
addition, each Series    Debenture will bear interest at the rate of     %
per annum from and including              
to and including              ,
payable on            
to the person in whose name such Series    Debenture or any
predecessor Series    Debenture is registered at the close of
business on              .

 

The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months and, for any
period shorter than a full calendar month, on the basis of the actual number of
days elapsed in such period.  In the
event that any date on which interest is payable on the Series   
Debentures is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.

 

ARTICLE 2

Redemption of the Series    Debentures

 

Subject to the terms of Article Three of the
Indenture, the Company shall have the right to redeem the Series   
Debentures, in whole or in part, from time to time, on or after             ,
at a redemption price equal to 100% of the principal amount of Series   
Debentures to be redeemed plus any accrued and unpaid interest thereon to the
date of such redemption.  If the Series   
Debentures are only partially redeemed pursuant to this Section, the Series   
Debentures will be redeemed by lot or by any other method utilized by the
Trustee.

 

ARTICLE 3

Extension of Interest Payment Period

 

SECTION 3.01.  Subject to Section 4.06 of the Indenture, so
long as the Company shall not be in default in the payment of interest on the
Series    Debentures, the Company shall have the right, at any time
during the term of the Series    Debentures, to extend any interest
payment period of such Series    Debentures at any time and from time
to time for a period not to exceed 20 consecutive calendar quarters from the
last Interest Payment Date to which interest was paid in full (each, an “Extension
Period”), provided that such Extension Period ends on another Interest Payment
Date.  No interest shall be due and
payable during an Extension Period, but on

 

3

 

the Interest Payment Date occurring at the end of each
Extension Period the Company shall pay to the holders of record on the Record
Date for such Interest Payment Date (regardless of who the holders of record
may have been on other dates during the Extension Period) all accrued and
unpaid interest on the Series    Debentures, together with interest
thereon at the rate specified for the Series    Debentures.  Prior to the termination of any Extension
Period, the Company may pay all or (subject to the last sentence of the first
paragraph of Section 1.03 above) any portion of the interest accrued on the
Series    Debentures on any Interest Payment Date to holders of
record on the Record Date for that Interest Payment Date or may from time to
time further extend such Extension Period, provided that any such Extension
Period, together with all such previous and further extensions thereof, shall
not exceed 20 consecutive calendar quarters. 
If the Company shall elect to pay all of the interest accrued on the
Series    Debentures on an Interest Payment Date during an Extension
Period, that Extension Period shall automatically terminate on that Interest
Payment Date.  Upon the termination of an
Extension Period and the payment of all amounts of interest then due, the
Company may commence a new Extension Period, subject to the foregoing
requirements.

 

SECTION 3.02.  The Company shall give the Trustee written
notice of (i) any election by the Company to initiate an Extension Period
and the duration thereof, (ii) any election by the Company to extend an
Extension Period beyond the Interest Payment Date on which that Extension
Period is then scheduled to terminate and the duration of such extension and
(iii) any election by the Company to make a full or partial payment of
interest accrued on the Series    Debentures on any Interest Payment
Date during an Extension Period and the amount of such payment.  In no event shall such notice by the Company
be given less than 15 Business Days prior to the later of (A) the Record
Date next preceding the applicable Interest Payment Date and (B) five
Business Days prior to such Interest Payment Date.  Upon receipt of any such notice, the Trustee
shall give written notice of the Company’s election by mail to the Series   
Debentureholders not less than 10 Business Days prior to such Interest Payment
Date.  The Company shall make a public
announcement of any such election in accordance with New York Stock Exchange
rules not less than five Business Days prior to such Record Date.

 

ARTICLE 4

Form of Series    Debenture

 

The Series    Debentures and the Trustee’s
Certificate of Authentication to be endorsed thereon are to be substantially in
the following forms:

 

4

 

(FORM OF FACE OF
DEBENTURE)

 

[If the Debenture is to be a Global Debenture, insert
- This Debenture is a Global Debenture within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depository or a
nominee of a Depository.  This Debenture
is exchangeable for Debentures registered in the name of a person other than
the Depository or its nominee only in the limited circumstances described in
the Indenture, and no transfer of this Debenture (other than a transfer of this
Debenture as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository) may be registered except in limited circumstances.

 

Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the issuer or its agent for registration of transfer, exchange or payment, and
any Debenture issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]

 

	
  No.                                

  	
         Number
  of       % Junior Subordinated Deferrable

  
	
   

  	
  Interest Debentures,
  Series   , $25 Principal Amount Each:

  
	
   

  	
   

  	
   

  
	
  (                                                                              )

  	
   

  
	
   

  	
   

  	
   

  
	
  CUSIP No.                          

  	
   

  	
   

  

 

PACIFICORP

 

    %

JUNIOR
SUBORDINATED DEFERRABLE INTEREST DEBENTURE,

SERIES   

 

PACIFICORP, a corporation duly organized and existing
under the laws of the State of Oregon (herein referred to as the “Company”,
which term includes any successor corporation under the Indenture), for value
received, hereby promises to pay to                      
or registered assigns, the principal sum equal to the amount obtained by
multiplying the number of     % Junior Subordinated
Deferrable Interest Debentures, Series   , $25 principal amount each,
set forth above by $25, on          ,
and to pay interest on such principal sum from and including             
or from the most recent interest payment date (each such date, an “Interest
Payment Date”) to which interest has been paid or duly provided for, payable
quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on               ,
at the rate of     % per annum until the principal hereof
shall have become due and payable, and on any overdue principal and premium, if
any, and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per
annum.  The amount of interest payable on
any Interest Payment Date shall be computed on the basis of a 360-day year of
twelve 30-day months and, for any period shorter than a full calendar month, on
the basis of the actual number of days elapsed in 

 

5

 

such period.  In
the event that any date on which interest is payable on this Debenture is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. The interest installment so payable, and punctually
paid or duly provided for on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Debenture (or one or more
Predecessor Debentures, as defined in the Indenture) is registered at the close
of business on the March 15, June 15, September 15 or
December 15, respectively, preceding that Interest Payment Date (each, a “Record
Date”).  Any such interest installment
not punctually paid or duly provided for on any Interest Payment Date shall
forthwith cease to be payable to the registered holder on the relevant Record
Date, and may be paid to the person in whose name this Debenture (or one or
more Predecessor Debentures) is registered at the close of business on a
special record date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered holders of
this series of Debentures not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Debentures may
then be listed, and upon such notice as may be required by such exchange, all
as more fully provided in the Indenture hereinafter referred to; provided, however,
that interest (other than Pre-Issuance Accrued Interest (as defined below))
shall not be considered payable by the Company on any Interest Payment Date
falling within an Extension Period (as defined below), unless the Company has
elected to make a full or partial payment of interest accrued on this Debenture
on that Interest Payment Date.  Any
partial payment of interest accrued on this series of Debentures on any
Interest Payment Date falling within an Extension Period shall be paid pro rata
to the registered holder of this Debenture based upon the principal amount of
this Debenture in relation to the aggregate principal amount of all Debentures
of this series then outstanding.  In
addition, this Debenture will bear interest at the rate of     %
per annum from and including            
to and including            ,
payable on             (“Pre-Issuance
Accrued Interest”) to the person in whose name this Debenture (or one or more
Predecessor Debentures) is registered on the close of business on            .  The principal of (and premium, if any) and
the interest on this Debenture shall be payable at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of
New York, in any coin or currency of the United States of America which at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the registered holder at such address as shall appear
in the Debenture Register or, with respect to a registered holder of $1,000,000
or more in aggregate principal amount of Debentures who has delivered a written
request to the Trustee at least 14 days prior to the relevant Interest Payment
Date electing to have payments made by wire transfer to a designated account in
the United States,  by wire transfer of
immediately available funds to such designated account.

 

The indebtedness evidenced by this Debenture is, to
the extent provided in the Indenture, subordinated and junior in right of
payment to the prior payment in full of all Senior Indebtedness, and this
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each holder of this Debenture, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on its behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and

 

6

 

(c) appoints the Trustee its attorney-in-fact for
any and all such purposes.  Each holder
hereof, by its acceptance hereof, hereby waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Indebtedness, whether now outstanding or hereafter incurred,
and waives reliance by each such holder upon those provisions.

 

This Debenture shall not be entitled to any benefit
under the Indenture hereinafter referred to, be valid or become obligatory for
any purpose until the Certificate of Authentication hereon shall have been
signed by or on behalf of the Trustee.

 

The provisions of this Debenture are contained on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.

 

IN WITNESS WHEREOF, the Company has caused this
Instrument to be executed.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  PACIFICORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
							

 

CERTIFICATE
OF AUTHENTICATION

 

This is one of the
Debentures of the series of Debentures described in the within-mentioned
Indenture.

 

 

	
  THE
  BANK OF NEW YORK,

  	
   

  	
   

  	
   

  
	
   

  	
  as Trustee

  	
   

  	
   

  
	
   

  	
  or

  	
  as Authentication Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  
								

 

7

 

(REVERSE)

    %
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,

SERIES   

(continued)

 

This Debenture is one of a duly authorized series of
debentures of the Company (herein sometimes referred to as the “Debentures”),
specified in the Indenture (as defined below), all issued or to be issued in
one or more series under and pursuant to an Indenture dated as of May 1,
1995 duly executed and delivered between the Company and THE BANK OF NEW YORK,
a New York banking corporation, as Trustee (herein referred to as the “Trustee”),
as supplemented by the First Supplemental Indenture dated as of May 1,
1995, the Second Supplemental Indenture dated as of October 1, 1995, the
Third Supplemental Indenture dated as of June 1, 1996, the Fourth Supplemental
Indenture dated as of August 4, 1997 and the      
Supplemental Indenture dated as of           
between the Company and the Trustee (such Indenture as so supplemented being
hereinafter referred to as the “Indenture”), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the Debentures.  By the terms of the Indenture, the Debentures
are issuable in series which may vary as to amount, date of maturity, rate of
interest and in other respects as in the Indenture provided.  This series of Debentures is limited in aggregate
principal amount as specified in the       
Supplemental Indenture.

 

Subject to the terms of Article Three of the
Indenture, the Company shall have the right to redeem the Debentures of this
series at the option of the Company, without premium or penalty, in whole or in
part at any time and from time to time on or after           
(an “Optional Redemption”), at a redemption price equal to 100% of the
principal amount of the Debentures of this series to be redeemed plus any
accrued and unpaid interest thereon to the date of such redemption.  If the Debentures of this series are only
partially redeemed by the Company pursuant to an Optional Redemption, the
Debentures of this series will be redeemed by lot or by any other method
utilized by the Trustee.

 

In the event of redemption of this Debenture in part
only, a new Debenture or Debentures of this series for the unredeemed portion
hereof will be issued in the name of the holder hereof upon the cancellation
hereof.

 

In case an Event of Default, as defined in the
Indenture, with respect to the Debentures of this series shall have occurred
and be continuing, the principal of all of the Debentures of this series may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.

 

The Indenture contains provisions for defeasance at
any time of the entire indebtedness of the Debentures of this series upon
compliance by the Company with certain conditions set forth therein.

 

The Indenture contains provisions permitting the
Company and the Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Debentures of each series
affected at the time outstanding, as defined in the Indenture, to execute 

 

8

 

supplemental indentures
for the purpose of adding any provisions to, changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the holders of the
Debentures; provided, however, that no such supplemental indenture shall
(i) extend the fixed maturity of any Debentures of any series, reduce the
principal amount thereof, reduce the rate or extend the time of payment of
interest thereon or reduce any premium payable upon the redemption thereof,
without the consent of the holder of each Debenture so affected or
(ii) reduce the aforesaid percentage of Debentures, the holders of which
are required to consent to any such supplemental indenture, without the consent
of the holders of each Debenture then outstanding and affected thereby.  The Indenture also contains provisions
permitting the holders of a majority in aggregate principal amount of the
Debentures of all series at the time outstanding affected thereby, on behalf of
the holders of the Debentures of such series, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture with respect to such series, and its consequences,
except a default in the payment of the principal of or premium, if any, or
interest on any of the Debentures of such series, which default may be waived
by the unanimous consent of the holders affected. Any such consent or waiver by
the registered holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all future
holders and owners of this Debenture and of any Debenture issued in exchange
herefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debenture.

 

No reference herein to the Indenture and no provision
of this Debenture or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at
the rate and in the money herein prescribed.

 

Subject to Section 4.06 of the Indenture, so long as
the Company shall not be in default in the payment of interest on this series
of Debentures, the Company shall have the right, at any time during the term of
this series of Debentures, to extend any interest payment period of this series
of Debentures at any time and from time to time for a period not to exceed 20
consecutive calendar quarters from the last Interest Payment Date to which
interest was paid in full (each, an “Extension Period”), provided that such
Extension Period ends on another Interest Payment Date.  No interest (other than Pre-Issuance Accrued
Interest) shall be due and payable during an Extension Period, but on the
Interest Payment Date occurring at the end of each Extension Period the Company
shall pay to the holders of record on the Record Date for such Interest Payment
Date (regardless of who the holders of record may have been on other dates
during such Extension Period) all accrued and unpaid interest on this series of
Debentures, together with interest thereon at the rate specified for this
series of Debentures.  Prior to the
termination of any Extension Period, the Company may pay all or any portion of
the interest accrued on this series of Debentures on any Interest Payment Date
to holders of record on the Record Date for that Interest Payment Date or may
from time to time further extend such Extension Period, provided that any such
Extension Period, together with all such previous and further extensions
thereof, shall not exceed 20 consecutive calendar quarters.  If the Company shall elect to pay all of the
interest accrued on this series of Debentures on an Interest Payment Date
during an Extension Period, that Extension Period shall automatically terminate
on that Interest Payment Date.  Upon

 

9

 

the termination of an Extension Period and the payment
of all amounts of interest then due, the Company may commence a new Extension
Period, subject to the foregoing requirements.

 

As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by the registered
holder hereof on the Debenture Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Company
designated for such purpose in the Borough of Manhattan, The City of New York,
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee duly executed by the registered
holder hereof or its attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees.  No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.

 

Prior to due presentment for registration of transfer
of this Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.

 

No recourse shall be had for the payment of the
principal of or the interest on this Debenture, or for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.

 

The Debentures of this series are issuable in
registered form without coupons in denominations of $25 and any integral
multiple thereof.  As provided in the
Indenture and subject to certain limitations herein and therein set forth,
Debentures of this series so issued are exchangeable for a like aggregate
principal amount of Debentures of this series of a different authorized
denomination, as requested by the holder surrendering the same.

 

All terms used in this Debenture which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

 

10

 

ARTICLE 5

Original Issue of Series    Debentures

 

Series    Debentures in the aggregate
principal amount of $         may, upon
execution of this        Supplemental Indenture,
or from time to time thereafter, be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate
and deliver such Debentures to or upon the written order of the Company, signed
by its Chairman, President or any Vice President and its Treasurer or an
Assistant Treasurer, without any further action by the Company.

 

ARTICLE 6

Miscellaneous Provisions

 

SECTION 6.01.  Except as otherwise expressly provided in
this        Supplemental Indenture or in the form
of Series    Debenture or otherwise clearly required by the context
hereof or thereof, all terms used herein or in the form of Series   
Debenture that are defined in the Indenture shall have the several meanings
respectively assigned to them thereby.

 

SECTION 6.02.  The Indenture, as supplemented by the First
Supplemental Indenture, the Second Supplemental Indenture, the Third
Supplemental Indenture, the Fourth Supplemental Indenture and this       
Supplemental Indenture, is in all respects ratified and confirmed, and this       
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.

 

SECTION 6.03.  The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof.  The Trustee
makes no representation as to the validity or sufficiency of this       
Supplemental Indenture.

 

SECTION 6.04.  This       
Supplemental Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.

 

[Signature page follows.]

 

11

 

IN WITNESS WHEREOF, the parties hereto have caused
this          Supplemental Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, on the date or dates indicated in the acknowledgments and as of
the day and year first above written.

 

	
   

  	
  PACIFICORP

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
     Name:

  
	
   

  	
     Title:

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

12

 

	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY
  OF                    

  	
  )

  

 

On the       day of                   ,
      , before me personally came               
and                
to me known, who, being by me duly sworn, did depose and say that they reside
at                    ;
that they are                
and              ,
respectively, of The Bank of New York, one of the corporations described in and
which executed the above instrument; that they know the corporate seal of the
corporation; that the seal affixed to that instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of that
corporation and that they signed their names thereto by like authority.

 

 

	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  
	
   

  	
  My Commission Expires:

  

 

	
  [Seal]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF OREGON

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF MULTNOMAH

  	
  )

  

 

On the       day of                              ,
     , before me personally came           
and            to me known,
who, being by me duly sworn, did depose and say that they reside at                  ;
that they are the           
and           , respectively,
of PacifiCorp, one of the corporations described in and which executed the
above instrument; that they know the corporate seal of the corporation; that
the seal affixed to that instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of that corporation and that
they signed their names thereto by like authority.

 

 

	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  
	
   

  	
  My Commission Expires:

  
	
   

  	
   

  
	
  [Seal]

  	
   

  

 

13EXHIBIT 10.21

                      AMENDED AND RESTATED ESCROW AGREEMENT

      THIS AMENDED AND RESTATED ESCROW AGREEMENT (this  "Agreement") is made and
entered  into as of  September  1,  2005,  by and among  ETOTALSOURCE,  INC.,  a
Colorado corporation (the "Company");  CORNELL CAPITAL PARTNERS,  LP, a Delaware
limited  partnership  (the  "Investor");  and DAVID GONZALEZ,  ESQ. (the "Escrow
Agent").

                                    RECITALS:

      WHEREAS,  the Company and the Investor  previously entered into an Standby
Equity  Distribution  Agreement (the "Standby  Equity  Distribution  Agreement")
dated as of April 20,  2005,  pursuant to which the Investor  will  purchase the
Company's Common Stock, no par value per share (the "Common Stock"),  at a price
per share equal to the  Purchase  Price,  as that term is defined in the Standby
Equity Distribution Agreement,  for an aggregate price of up to Ten Million U.S.
Dollars  ($10,000,000).  The Standby Equity Distribution Agreement provides that
on each Advance Date the Investor, as that term is defined in the Standby Equity
Distribution Agreement, shall deposit the Advance pursuant to the Advance Notice
in a segregated  escrow account to be held by Escrow Agent and the Company shall
deposit  shares of the Company's  Common Stock,  which shall be purchased by the
Investor as set forth in the Standby  Equity  Distribution  Agreement,  with the
Escrow  Agent,  in order to  effectuate  a  disbursement  to the  Company of the
Advance by the Escrow Agent and a disbursement  to the Investor of the shares of
the Company's  Common Stock by Escrow Agent at a closing to be held as set forth
in the Standby Equity Distribution Agreement (the "Closing").

      WHEREAS,  the Escrow Agent previously agreed to accept, hold, and disburse
the funds and the shares of the  Company's  Common  Stock  deposited  with it in
accordance  with the terms of that certain Escrow  Agreement,  dated as of April
20,  2005,  by and among the  Company,  the  Investor  and the Escrow Agent (the
"Original Escrow Agreement"); and

      WHEREAS,  the parties to the Original Escrow Agreement desire to amend and
restate the Original Escrow Agreement such that this Agreement shall replace the
Original Escrow Agreement in its entirety.

      NOW THEREFORE,  in consideration of the foregoing,  it is hereby agreed as
follows:

      1. Definitions. The following terms shall have the following meanings when
used herein:

            a. "Escrow  Funds" shall mean the Advance funds  deposited  with the
Escrow Agent pursuant to this Agreement.

            b. "Joint Written Direction" shall mean a written direction executed
by the  Investor  and the Company  directing  Escrow  Agent to disburse all or a
portion  of the  Escrow  Funds or to take or  refrain  from  taking  any  action
pursuant to this Agreement.

<PAGE>

            c.  "Common  Stock  Joint  Written  Direction"  shall mean a written
direction executed by the Investor and the Company directing  Investor's Counsel
to disburse all or a portion of the shares of the  Company's  Common Stock or to
refrain from taking any action pursuant to this Agreement.

      2. Appointment of and Acceptance by Escrow Agent.

            a. The Investor and the Company hereby appoint Escrow Agent to serve
as Escrow Agent  hereunder.  Escrow Agent hereby accepts such  appointment  and,
upon receipt by wire transfer of the Escrow Funds in  accordance  with Section 3
below,  agrees to hold,  invest and disburse the Escrow Funds in accordance with
this Agreement.

            b. The Investor and the Company  hereby  appoint the Escrow Agent to
serve as the holder of the shares of the  Company's  Common Stock which shall be
purchased by the Investor. The Escrow Agent hereby accepts such appointment and,
upon receipt via D.W.A.C or the  certificates  representing of the shares of the
Company's  Common Stock in accordance  with Section 3 below,  agrees to hold and
disburse  the  shares of the  Company's  Common  Stock in  accordance  with this
Agreement.

            c. The Company hereby  acknowledges that the Escrow Agent is counsel
to the Investor in connection with the transactions  contemplated and referenced
herein.  The  Company  agrees  that  in the  event  of any  dispute  arising  in
connection  with this Escrow  Agreement  or  otherwise  in  connection  with any
transaction or agreement  contemplated and referenced  herein,  the Escrow Agent
shall be permitted  to continue to  represent  the Investor and the Company will
not seek to disqualify such counsel.

      3. Creation of Escrow Account/Common Stock Account.

            a. On or prior to the date of this  Agreement the Escrow Agent shall
establish  an escrow  account  for the deposit of the Escrow  Funds  entitled as
follows: eTotalSource, Inc./Cornell Capital Partners, LP. The Investor will wire
funds to the account of the Escrow Agent as follows:

Bank:                               Wachovia, N.A. of New Jersey
Routing #:                          031201467
Account #:                          ___________
Name on Account:                    David Gonzalez Attorney Trust Account
Name on Sub-Account:                eTotalSource, Inc./Cornell Capital Partners,
                                    LP Escrow account

                                       2
<PAGE>

            b. On or prior to the date of this  Agreement the Escrow Agent shall
establish an account for the D.W.A.C. of the shares of Common Stock. The Company
will D.W.A.C.  shares of the Company's Common Stock to the account of the Escrow
Agent as follows:

Brokerage Firm:                     Sloan Securities Corp.
Clearing House:                     Fiserv
Account #:                          ____________
DTC #:                              0632
Name on Account:                    David Gonzalez Attorney Trust Account

      4. Deposits  into the Escrow  Account.  The Investor  agrees that it shall
promptly  deliver all monies for the  payment of the Common  Stock to the Escrow
Agent for deposit in the Escrow Account.

      5. Disbursements from the Escrow Account.

            a.  At  such  time as  Escrow  Agent  has  collected  and  deposited
instruments  of payment in the total amount of the Advance and has received such
Common Stock via D.W.A.C from the Company which are to be issued to the Investor
pursuant to the Standby Equity  Distribution  Agreement,  the Escrow Agent shall
notify the Company and the Investor. The Escrow Agent will continue to hold such
funds  until the  Investor  and  Company  execute  and  deliver a Joint  Written
Direction  directing  the Escrow Agent to disburse the Escrow Funds  pursuant to
Joint  Written  Direction  at which time the Escrow  Agent shall wire the Escrow
Funds to the Company.  In disbursing  such funds,  Escrow Agent is authorized to
rely upon such Joint Written Direction from Company and may accept any signatory
from  the  Company  listed  on the  signature  page  to this  Agreement  and any
signature from the Investor that Escrow Agent already has on file.  Simultaneous
with delivery of the executed  Joint  Written  Direction to the Escrow Agent the
Investor  and Company  shall  execute and deliver a Common  Stock Joint  Written
Direction to the Escrow Agent  directing the Escrow Agent to release via D.W.A.C
to the Investor the shares of the  Company's  Common  Stock.  In releasing  such
shares of Common Stock the Escrow Agent is  authorized  to rely upon such Common
Stock Joint Written Direction from Company and may accept any signatory from the
Company  listed on the signature  page to this  Agreement and any signature from
the Escrow Agent has on file.

      In the event the Escrow  Agent does not  receive the amount of the Advance
from the  Investor or the shares of Common Stock to be purchased by the Investor
from the Company, the Escrow Agent shall notify the Company and the Investor.

      In the event that the Escrow Agent has not received the Common Stock to be
purchased by the Investor from the Company, in no event will the Escrow Funds be
released to the Company until such shares are received by the Escrow  Agreement.
For purposes of this Agreement,  the term "Common Stock certificates" shall mean
Common Stock  certificates  to be purchased  pursuant to the respective  Advance
Notice pursuant to the Standby Equity Distribution Agreement.

      6. Deposit of Funds. The Escrow Agent is hereby  authorized to deposit the
wire transfer proceeds in the Escrow Account.

                                       3
<PAGE>

      7. Suspension of Performance: Disbursement Into Court.

            a.  Escrow  Agent.  If at any time,  there  shall  exist any dispute
between the Company and the Investor with respect to holding or  disposition  of
any portion of the Escrow Funds or the Common Stock or any other  obligations of
Escrow  Agent  hereunder,  or if at any time Escrow Agent is unable to determine
the proper  disposition  of any  portion of the Escrow  Funds or Escrow  Agent's
proper  actions with  respect to its  obligations  hereunder,  or if the parties
hereto have not within  thirty (30) days of the  furnishing by Escrow Agent of a
notice of resignation pursuant to Section 9 hereof, appointed a successor Escrow
Agent to act  hereunder,  then  Escrow  Agent  shall take  either or both of the
following actions:

                  i.  Suspend  the   performance  of  any  of  its   obligations
(including without limitation any disbursement obligations) under this Agreement
until the Escrow Agent is notified by the Company and the Investors hereunder in
writing that such dispute or uncertainty  has been resolved to the  satisfaction
of both parties or until a successor  Escrow  Agent shall be  appointed  (as the
case may be); provided however, Escrow Agent shall continue to invest the Escrow
Funds in accordance with Section 8 hereof; and/or

                  ii. Petition (by means of an interpleader  action or any other
appropriate method) any court of competent  jurisdiction in any venue convenient
to Escrow Agent, for  instructions  with respect to such dispute or uncertainty,
and to the  extent  required  by law,  pay into  such  court,  for  holding  and
disposition in accordance with the instructions of such court, all funds held by
it in the Escrow Funds,  after deduction and payment to Escrow Agent of all fees
and expenses  (including  court costs and attorneys'  fees) payable to, incurred
by, or expected to be incurred by Escrow Agent in connection with performance of
its duties and the exercise of its rights hereunder.

                  iii. Escrow Agent shall have no liability to the Company,  the
Investor,  or any person with respect to any such  suspension of  performance or
disbursement  into  court,  specifically  including  any  liability  or  claimed
liability that may arise, or be alleged to have arisen, out of or as a result of
any delay in the  disbursement of funds held in the Escrow Funds or any delay in
with respect to any other action required or requested of Escrow Agent.

      8.  Investment of Escrow Funds.  The Escrow Agent shall deposit the Escrow
Funds in a non-interest bearing money market account.

      If Escrow  Agent has not  received a Joint  Written  Direction at any time
that an  investment  decision  must be made,  Escrow Agent may retain the Escrow
Fund, or such portion thereof,  as to which no Joint Written  Direction has been
received, in a non-interest bearing money market account.

      9.  Resignation and Removal of Escrow Agent.  Escrow Agent may resign from
the performance of its duties  hereunder at any time by giving thirty (30) days'
prior written notice to the parties or may be removed, with or without cause, by
the parties,  acting jointly,  by furnishing a Joint Written Direction to Escrow
Agent,  at any time by the  giving of ten (10)  days'  prior  written  notice to
Escrow Agent as provided  herein below.  Upon any such notice of  resignation or
removal,  the  representatives  of the  Investor and the Company  identified  in
Sections 13a.(iv) and 13b.(iv),  below, jointly shall appoint a successor Escrow
Agent  hereunder,  which  shall be a  commercial  bank,  trust  company or other
financial  institution  with  a  combined  capital  and  surplus  in  excess  of
US$10,000,000.00.  Upon the  acceptance in writing of any  appointment of Escrow
Agent hereunder by a successor  Escrow Agent,  such successor Escrow Agent shall
thereupon succeed to and become vested with all the rights,  powers,  privileges
and duties of the retiring Escrow Agent,  and the retiring Escrow Agent shall be
discharged  from its duties and  obligations  under this Escrow  Agreement,  but
shall not be  discharged  from any  liability  for actions taken as Escrow Agent
hereunder  prior  to  such   succession.   After  any  retiring  Escrow  Agent's
resignation or removal,  the provisions of this Escrow  Agreement shall inure to
its  benefit as to any  actions  taken or omitted to be taken by it while it was
Escrow  Agent under this  Escrow  Agreement.  The  retiring  Escrow  Agent shall
transmit all records pertaining to the Escrow Funds and shall pay all funds held
by it in the Escrow Funds to the successor Escrow Agent,  after making copies of
such records as the retiring  Escrow Agent deems  advisable and after  deduction
and payment to the retiring  Escrow  Agent of all fees and  expenses  (including
court costs and  attorneys'  fees)  payable to,  incurred  by, or expected to be
incurred by the retiring  Escrow Agent in connection with the performance of its
duties and the exercise of its rights hereunder.

                                       4
<PAGE>

      10. Liability of Escrow Agent.

            a. Escrow Agent shall have no liability or  obligation  with respect
to the Escrow  Funds  except  for Escrow  Agent's  willful  misconduct  or gross
negligence.  Escrow Agent's sole  responsibility  shall be for the  safekeeping,
investment, and disbursement of the Escrow Funds in accordance with the terms of
this  Agreement.  Escrow Agent shall have no implied duties or  obligations  and
shall not be charged with  knowledge or notice or any fact or  circumstance  not
specifically  set forth herein.  Escrow Agent may rely upon any instrument,  not
only as to its due  execution,  validity and  effectiveness,  but also as to the
truth and  accuracy of any  information  contained  therein,  which Escrow Agent
shall in good faith  believe to be genuine,  to have been signed or presented by
the person or parties  purporting to sign the same and conform to the provisions
of this  Agreement.  In no event shall  Escrow  Agent be liable for  incidental,
indirect, special, and consequential or punitive damages. Escrow Agent shall not
be obligated to take any legal action or commence any  proceeding  in connection
with the Escrow  Funds,  any account in which Escrow Funds are  deposited,  this
Agreement  or the  Standby  Equity  Distribution  Agreement,  or to  appear  in,
prosecute  or defend  any such  legal  action or  proceeding.  Escrow  Agent may
consult legal counsel  selected by it in the event of any dispute or question as
to construction of any of the provisions hereof or of any other agreement or its
duties  hereunder,  or relating to any dispute  involving any party hereto,  and
shall  incur no  liability  and shall be fully  indemnified  from any  liability
whatsoever  in acting in  accordance  with the opinion or  instructions  of such
counsel.  The Company and the Investor jointly and severally shall promptly pay,
upon  demand,  the  reasonable  fees and expenses of any such counsel and Escrow
Agent is hereby  authorized  to pay such fees and  expenses  from  funds held in
escrow.

            b. The Escrow Agent is hereby authorized, in its sole discretion, to
comply with orders  issued or process  entered by any court with  respect to the
Escrow  Funds,  without  determination  by the  Escrow  Agent  of  such  court's
jurisdiction  in the matter.  If any portion of the Escrow  Funds is at any time
attached,  garnished  or  levied  upon  under any  court  order,  or in case the
payment, assignment, transfer, conveyance or delivery of any such property shall
be stayed or enjoined by any court order,  or in any case any order  judgment or
decree shall be made or entered by any court affecting such property or any part
thereof, then and in any such event, the Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ judgment or decree
which it is advised by legal counsel  selected by it,  binding upon it,  without
the need for appeal or other action;  and if the Escrow Agent  complies with any
such  order,  writ,  judgment  or  decree,  it shall not be liable to any of the
parties  hereto  or to any other  person or entity by reason of such  compliance
even though such order,  writ judgment or decree may be  subsequently  reversed,
modified, annulled, set aside or vacated.

                                       5
<PAGE>

      11.  Indemnification of Escrow Agent. From and at all times after the date
of this  Agreement,  the parties  jointly and severally,  shall,  to the fullest
extent  permitted by law and to the extent provided  herein,  indemnify and hold
harmless Escrow Agent and each director, officer, employee,  attorney, agent and
affiliate of Escrow Agent (collectively,  the "Indemnified Parties") against any
and all actions,  claims (whether or not valid), losses,  damages,  liabilities,
costs  and  expenses  of  any  kind  or  nature  whatsoever  (including  without
limitation  reasonable  attorney's  fees,  costs and  expenses)  incurred  by or
asserted against any of the Indemnified  Parties from and after the date hereof,
whether direct, indirect or consequential,  as a result of or arising from or in
any way relating to any claim,  demand,  suit, action, or proceeding  (including
any inquiry or  investigation) by any person,  including without  limitation the
parties to this Agreement,  whether  threatened or initiated,  asserting a claim
for any legal or  equitable  remedy  against  any  person  under any  statute or
regulation, including, but not limited to, any federal or state securities laws,
or under any common law or  equitable  cause or  otherwise,  arising  from or in
connection with the negotiation,  preparation, execution, performance or failure
of performance of this Agreement or any transaction contemplated herein, whether
or not any such  Indemnified  Party is a party to any such action or proceeding,
suit or the target of any such inquiry or investigation; provided, however, that
no  Indemnified  Party  shall  have the right to be  indemnified  hereunder  for
liability finally determined by a court of competent jurisdiction, subject to no
further  appeal,  to have resulted  solely from the gross  negligence or willful
misconduct  of such  Indemnified  Party.  If any such  action or claim  shall be
brought or asserted against any Indemnified  Party, such Indemnified Party shall
promptly notify the Company and the Investor  hereunder in writing,  and the and
the Company  shall  assume the defense  thereof,  including  the  employment  of
counsel and the payment of all expenses.  Such  Indemnified  Party shall, in its
sole discretion,  have the right to employ separate counsel (who may be selected
by such  Indemnified  Party in its sole  discretion)  in any such  action and to
participate and to participate in the defense thereof, and the fees and expenses
of such  counsel  shall  be paid by such  Indemnified  Party,  except  that  the
Investor  and/or the  Company  shall be required to pay such fees and expense if
(a) the Investor or the Company agree to pay such fees and expenses,  or (b) the
Investor  and/or the Company  shall fail to assume the defense of such action or
proceeding or shall fail, in the sole discretion of such  Indemnified  Party, to
employ counsel  reasonably  satisfactory  to the  Indemnified  Party in any such
action or proceeding,  (c) the Investor and the Company are the plaintiff in any
such  action or  proceeding  or (d) the named or  potential  parties to any such
action or proceeding  (including any potentially impleaded parties) include both
Indemnified  Party the Company and/or the Investor and  Indemnified  Party shall
have been  advised  by  counsel  that  there may be one or more  legal  defenses
available to it which are different from or additional to those available to the
Company or the  Investor.  The  Investor  and the  Company  shall be jointly and
severally  liable to pay fees and expenses of counsel  pursuant to the preceding
sentence, except that any obligation to pay under clause (a) shall apply only to
the party so agreeing.  All such fees and expenses payable by the Company and/or
the Investor pursuant to the foregoing  sentence shall be paid from time to time
as incurred,  both in advance of and after the final  disposition of such action
or claim.  The  obligations  of the parties under this section shall survive any
termination of this  Agreement,  and  resignation or removal of the Escrow Agent
shall be independent of any obligation of Escrow Agent.

                                       6
<PAGE>

      12.  Expenses  of Escrow  Agent.  Except as set  forth in  Section  11 the
Company shall  reimburse  Escrow Agent for all of its  reasonable  out-of-pocket
expenses,  including  attorneys' fees, travel expenses,  telephone and facsimile
transmission  costs,  postage  (including  express mail and  overnight  delivery
charges),  copying  charges  and the like as  outlined  in  Section  12.4 of the
Standby  Equity  Distribution  Agreement  dated  the  date  hereof.  All  of the
compensation  and  reimbursement  obligations set forth in this Section shall be
payable by the Company,  upon demand by Escrow  Agent.  The  obligations  of the
Company under this Section shall survive any  termination  of this Agreement and
the resignation or removal of Escrow Agent.

      13. Warranties.

            a. The Investor makes the following  representations  and warranties
to David Gonzalez, Esq. as the Escrow Agent and Investor's Counsel:

                  i. The  Investor  has full power and  authority to execute and
deliver this Agreement and to perform its obligations hereunder.

                  ii. This  Agreement  has been duly  approved by all  necessary
action of the Investor,  including any necessary approval of the limited partner
of the Investor, has been executed by duly authorized officers of the Investor's
general partner, enforceable in accordance with its terms.

                  iii. The execution,  delivery, and performance of the Investor
of this Agreement will not violate,  conflict with, or cause a default under the
agreement  of  limited  partnership  of  the  Investor,  any  applicable  law or
regulation,  any  court  order or  administrative  ruling or degree to which the
Investor  is a  party  or any of its  property  is  subject,  or any  agreement,
contract, indenture, or other binding arrangement.

                  iv.  Mark A.  Angelo  has been  duly  appointed  to act as the
representative  of  Investor  hereunder  and has full  power  and  authority  to
execute,  deliver, and perform this Agreement,  to execute and deliver any Joint
Written Direction,  to amend,  modify, or waive any provision of this Agreement,
and to take any and all other  actions as the  Investor's  representative  under
this Agreement, all without further consent or direction form, or notice to, the
Investor or any other party.

                  v. No party other than the parties hereto have, or shall have,
any lien, claim or security interest in the Escrow Funds or any part thereof. No
financing  statement  under  the  Uniform  Commercial  Code  is on  file  in any
jurisdiction claiming a security interest in or describing (whether specifically
or generally) the Escrow Funds or any part thereof.

                                       7
<PAGE>

                  vi. All of the  representations and warranties of the Investor
contained  herein are true and  complete  as of the date hereof and will be true
and complete at the time of any disbursement from the Escrow Funds.

            b. The Company makes the following representations and warranties to
Escrow Agent and the Investor:

                  i.  The  Company  is a  corporation  duly  organized,  validly
existing,  and in good standing under the laws of the State of Colorado, and has
full power and  authority to execute and deliver this  Agreement  and to perform
its obligations hereunder.

                  ii. This  Agreement  has been duly  approved by all  necessary
corporate action of the Company,  including any necessary  shareholder approval,
has been executed by duly  authorized  officers of the Company,  enforceable  in
accordance with its terms.

                  iii. The execution,  delivery,  and performance by the Company
of this Escrow  Agreement is in accordance with the Standby Equity  Distribution
Agreement  and will not violate,  conflict  with,  or cause a default  under the
articles  of  incorporation  or bylaws of the  Company,  any  applicable  law or
regulation,  any  court  order or  administrative  ruling or decree to which the
Company  is a  party  or any of  its  property  is  subject,  or any  agreement,
contract, indenture, or other binding arrangement.

                  iv.  Michael  Sullinger has been duly  appointed to act as the
representative  of the Company  hereunder  and has full power and  authority  to
execute,  deliver, and perform this Agreement,  to execute and deliver any Joint
Written Direction, to amend, modify or waive any provision of this Agreement and
to take all other actions as the Company's  Representative under this Agreement,
all without  further consent or direction from, or notice to, the Company or any
other party.

                  v. No party other than the  parties  hereto  shall  have,  any
lien,  claim or security  interest in the Escrow Funds or any part  thereof.  No
financing  statement  under  the  Uniform  Commercial  Code  is on  file  in any
jurisdiction claiming a security interest in or describing (whether specifically
or generally) the Escrow Funds or any part thereof.

                  vi. All of the  representations  and warranties of the Company
contained  herein are true and  complete  as of the date hereof and will be true
and complete at the time of any disbursement from the Escrow Funds.

      14. Consent to Jurisdiction  and Venue. In the event that any party hereto
commences  a  lawsuit  or other  proceeding  relating  to or  arising  from this
Agreement,  the parties  hereto agree that the United States  District Court for
the District of New Jersey shall have the sole and exclusive  jurisdiction  over
any  such   proceeding.   If  all  such  courts  lack  federal   subject  matter
jurisdiction,  the parties agree that the Superior Court Division of New Jersey,
Chancery  Division of Hudson County shall have sole and exclusive  jurisdiction.
Any of these  courts  shall be proper  venue for any such  lawsuit  or  judicial
proceeding and the parties hereto waive any objection to such venue. The parties
hereto consent to and agree to submit to the  jurisdiction  of any of the courts
specified  herein  and agree to accept the  service of process to vest  personal
jurisdiction over them in any of these courts.

                                       8
<PAGE>

      15. Notice.  All notices and other  communications  hereunder  shall be in
writing and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mail, by certified  mail with return
receipt requested and postage prepaid,  when delivered  personally,  one (1) day
delivery to any overnight courier, or when transmitted by facsimile transmission
and addressed to the party to be notified as follows:

If to Investor, to:                  Cornell Capital Partners, LP
                                     101 Hudson Street - Suite 3700
                                     Jersey City, New Jersey 07302
                                     Attention:     Mark Angelo
                                     Facsimile:     (201) 985-8266

If to Escrow Agent, to:              David Gonzalez, Esq.
                                     101 Hudson Street - Suite 3700
                                     Jersey City, New Jersey 07302
                                     Telephone:     (201) 985-8300
                                     Facsimile:     (201) 985-8266

If to Company, to:                   eTotalSource, Inc.
                                     1510 Poole Boulevard
                                     Yuba City, California 95993
                                     Attention:   Michael Sullinger, President
                                     Telephone: (530) 751-9615
                                     Facsimile:  (530) 674-4624

With a copy to:                      Kirkpatrick & Lockhart Nicholson Graham LLP
                                     201 South Biscayne Boulevard - Suite 2000
                                     Miami, FL  33131-2399
                                     Attention:     Clayton E. Parker, Esq.
                                     Telephone:     (305) 539-3300
                                     Facsimile:     (305) 358-7095

      Or to such other  address as each party may  designate  for itself by like
notice.

      16. Acknowledgment of David Gonzalez, Esq. The Company hereby acknowledges
that David Gonzalez, Esq. is general counsel to the Investor(s) and a partner of
the  general  partner  of the  Investor(s)  and  counsel to the  Investor(s)  in
connection with the transactions  contemplated and referred herein.  The Company
agrees  that in the  event  of any  dispute  arising  in  connection  with  this
Agreement  or  otherwise  in  connection   with  any  transaction  or  agreement
contemplated  and referred  herein,  David Gonzalez,  Esq. shall be permitted to
continue  to  represent  the  Investor(s)  and  the  Company  will  not  seek to
disqualify such counsel.

      17.  Amendments  or  Waiver.  This  Agreement  may  be  changed,   waived,
discharged or terminated  only by a writing  signed by the parties of the Escrow
Agent.  No delay or omission by any party in  exercising  any right with respect
hereto  shall  operate  as  waiver.  A waiver on any one  occasion  shall not be
construed as a bar to, or waiver of, any right or remedy on any future occasion.

                                       9
<PAGE>

      18.  Severability.  To the  extent  any  provision  of this  Agreement  is
prohibited  by  or  invalid  under  applicable  law,  such  provision  shall  be
ineffective  to  the  extent  of  such  prohibition,   or  invalidity,   without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

      19.  Governing Law. This Agreement  shall be construed and  interpreted in
accordance  with the  internal  laws of the State of New Jersey  without  giving
effect to the conflict of laws principles thereof.

      20. Entire  Agreement.  This Agreement  constitutes  the entire  Agreement
between the parties relating to the holding, investment, and disbursement of the
Escrow Funds and sets forth in their entirety the  obligations and duties of the
Escrow Agent with respect to the Escrow Funds.

      21. Binding Effect.  All of the terms of this  Agreement,  as amended from
time to time,  shall be binding upon, inure to the benefit of and be enforceable
by the respective heirs, successors and assigns of the Investor, the Company, or
the Escrow Agent.

      22.  Execution  of  Counterparts.  This  Agreement  and any Joint  Written
Direction  may be  executed  in  counter  parts,  which when so  executed  shall
constitute one and same agreement or direction.

      23. Termination. Upon the first to occur of the termination of the Standby
Equity  Distribution  Agreement dated the date hereof or the disbursement of all
amounts in the Escrow  Funds and Common  Stock into court  pursuant to Section 7
hereof,  this Agreement  shall  terminate and Escrow Agent shall have no further
obligation or liability  whatsoever with respect to this Agreement or the Escrow
Funds or Common Stock.

      24. Amended and Restated Agreement.  The parties hereto hereby acknowledge
and agree that this  Agreement  shall be deemed to have amended and restated the
Original Escrow Agreement in its entirety as of the date hereof.

         [SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE INTENTIONALLY BLANK]

                                       10
<PAGE>

      IN WITNESS  WHEREOF,  the parties  hereto have  executed  this Amended and
Restated Escrow Agreement as of the day and year first set forth above.

                                        ETOTALSOURCE, INC.

                                        By:
                                                       -------------------------
                                        Name:          Michael Sullinger
                                        Title:         Chief Operating Officer

                                        CORNELL CAPITAL PARTNERS, LP

                                        By:            Yorkville Advisors, LLC
                                        Its:           General Partner

                                        By:
                                                       -------------------------
                                        Name:          Mark A. Angelo
                                        Title:         Portfolio Manager

                                        ESCROW AGENT

                                        By:
                                                       -------------------------
                                                       David Gonzalez, Esq.

                                       11

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