Document:

Exhibit
      10.3          
      

       

       

       

      Ruddick Corporation
Director
      Deferral Plan

       

       

       

      Amended and
      Restated
Effective January 1, 2008

       

       

       

RUDDICK CORPORATION DIRECTOR DEFERRAL
PLAN 

Amended and Restated
Effective
January 1, 2008 

1. Name: 

     This plan
shall be known as the "Ruddick Corporation Director Deferral Plan" (the "Plan").

2. Purpose and Intent:

     Ruddick
Corporation (the "Corporation") originally established this Plan effective
January 1, 1998 for the purpose of providing the nonemployee members of its
Board of Directors with the opportunity to defer payment of all (but not any
portion of) the annual retainer fee and/or the regularly-scheduled or
duly-called Board of Directors meetings fees payable during a year. This Plan
(i) allows a participating director to defer all of the director's annual
retainer fee and meeting fees and (ii) sets forth special provisions for
crediting such deferrals in a manner that parallels the performance of the
Corporation's common stock. The Plan was amended by resolution of the Board of
Directors effective November 18, 2004 to provide for discretionary contributions
by the Corporation for each nonemployee member of the Board of Directors. The
Plan was amended and restated effective February 16, 2006. The Plan is hereby
amended and restated again effective January 1, 2008 to comply with final
treasury regulations under Section 409A of the Internal Revenue Code. It is the
intent of the Corporation that amounts deferred under the Plan by a director
shall not be taxable to the director for income tax purposes until the time
actually received by the director. The provisions of the Plan shall be construed
and interpreted to effectuate such intent. 

     This Plan
is intended to comply with the requirements of Section 409A of the Internal
Revenue Code and the regulations and other guidance issued thereunder, as in
effect from time to time. To the extent a provision of the Plan is contrary to
or fails to address the requirements of Code Section 409A, the Plan shall be
construed and administered as necessary to comply with such requirements to the
extent allowed under applicable treasury regulations until this Plan is
appropriately amended to comply with such requirements. 

3. Definitions: 

     For
purposes of the Plan, the following terms shall have the following
meanings:

     (a)
"Accounts" mean collectively the Participants' Stock Accounts.

     (b)
"Board of Directors" means the Board of Directors of the Corporation.

     (c)
"Claim" means a claim for benefits under the Plan.

     (d)
"Claimant" means a person making a Claim. 

     (e)
"Code" means the Internal Revenue Code of 1986, as now in effect or as hereafter
amended, and the regulations thereunder. 

     (f)
"Common Stock" means the common stock of the Corporation. 

     (g)
"Compensation Committee" means the committee of individuals who are serving from
time to time as the members of the Compensation Committee of the Board of
Directors. 

     (h) "Fair
Market Value" of a share of Common Stock means, as of a Valuation Date and for
so long as shares of the Common Stock are listed on a national securities
exchange or reported on The Nasdaq Stock Market as a Nasdaq National Market
security, the mean between the high and low sales prices for the Common Stock on
such Valuation Date, or, if no such shares were sold on such date, the most
recent date on which shares of such Common Stock were sold, as reported in
The Wall Street Journal. If the Common Stock is not listed on a national securities
exchange or reported on The Nasdaq Stock Market as a Nasdaq National Market
security, Fair Market Value shall mean the average of the closing bid and asked
prices for such stock in the over-the-counter market as reported by The Nasdaq
Stock Market. If the Common Stock is not listed on a national securities
exchange, reported on The Nasdaq Stock Market as a Nasdaq National Market
security, or reported by The Nasdaq Stock Market in the over-the-counter market,
Fair Market Value shall be the fair value thereof determined in good faith by
the Board of Directors. 

     (i)
"Fees" means both (i) the annual retainer fee (the "Annual Retainer Fee") and
(ii) any regularly-scheduled or duly-called Board of Directors meeting fees (the
"Meetings Fees") payable to a Nonemployee Director under the Corporation's
compensation policies for directors in effect from time to time. 

     (j)
"Nonemployee Director" means an individual who is a member of the Board of
Directors but who is not an employee of the Corporation or any of its
Subsidiaries. 

     (k)
"Participant" means a Nonemployee Director who has elected to participate in the
Plan as provided in paragraph 5(b) below. 

     (l)
"Payment Date" means the date ninety (90) days following the effective date on
which the director ceases to be a member of the Board of Directors. 

     (m) "Plan
Administrator" means the Compensation Committee, or such other person or entity
designated as the "Plan Administrator" for purposes of the Plan by the
Compensation Committee. 

     (n) "Plan
Year" means the twelve (12) month period beginning January 1 and ending December
31. 

     (o)
"Stock Account" means the account established and maintained on the books of the
Corporation to record a Participant's interest under the Plan attributable to
the Fees credited to the Participant pursuant to paragraphs 5(c) and (d) below,
as adjusted from time to time pursuant to the terms of the Plan. 

     (p)
"Stock Unit" means a unit having a value as of a given date equal to the Fair
Market Value of one (1) share of Common Stock on the Valuation Date. 

     (q)
"Subsidiary" means a subsidiary corporation of the Corporation as that term is
defined in Code section 424(f).

     (r)
"Valuation Date" means any date requiring the determination of a Fair Market
Value; in the case of association with a Payment Date, Valuation Date shall mean
the business day next preceding the Payment Date; and in the case of the
deferral of retainer, Fees or distributions payable on the Common Stock,
Valuation Date shall mean the business day on which such payment would have been
made. 

2 

4. Administration: 

     The Plan
Administrator shall be responsible for administering the Plan. The Plan
Administrator shall have all of the powers necessary to enable it to properly
carry out its duties under the Plan. Not in limitation of the foregoing, the
Plan Administrator shall have the power to construe and interpret the Plan and
to determine all questions that shall arise thereunder. The Plan Administrator
shall have such other and further specified duties, powers, authority and
discretion as are elsewhere in the Plan either expressly or by necessary
implication conferred upon it. The Plan Administrator may appoint such agents as
it may deem necessary for the effective performance of its duties, and may
delegate to such agents such powers and duties as the Plan Administrator may
deem expedient or appropriate that are not inconsistent with the intent of the
Plan. The decision of the Plan Administrator upon all matters within its scope
of authority shall be final and conclusive on all persons, except to the extent
otherwise provided by law. 

5. Operation: 

     (a)
Eligibility. Each Nonemployee Director shall be eligible to participate in the Plan.

     (b)
Elections to
Defer/Contributions. A Nonemployee Director
may become a Participant in the Plan by irrevocably electing, on a form provided
by the Plan Administrator, to defer all of the Annual Retainer Fee payable to
the Nonemployee Director during such Plan Year and/or the Meetings Fees payable
to the Nonemployee Director for all meetings occurring during such Plan Year. In
order to be effective, a Nonemployee Director's written election to defer must
be executed and returned prior to the beginning of the Plan Year to which the
election relates; provided, however, a Nonemployee Director shall have 30 days
following the date he or she first becomes a Nonemployee Director to execute and
return his or her initial written election to defer.

     Effective
on or about November 18, 2004, the Corporation may make discretionary
contributions for the benefit of each Nonemployee Director who holds such
position at the time the contribution is approved. Such amount shall be
allocated to the Stock Account of each Participant as provided in Section 5(c)
below.

     (c)
Establishment of Accounts. The Corporation shall establish and maintain on its books a
Stock Account for each Participant. Each Stock Account shall be designated by
the name of the Participant for whom established. The Fees deferred by a
Participant shall be credited to the Participant's Stock Account as of the date
such Fees would have otherwise been paid to the Participant. The Stock Account
of a Participant shall be credited with a number of Stock Units equal to the
number of whole and fractional shares of Common Stock which the Participant
would have received with respect to such Fees if the Fees had been paid in
Common Stock, determined by dividing such Fees by the Fair Market Value of a
share of Common Stock on the Valuation Date and such Stock Units shall be
credited to the Participant's Stock Account as of the date the Fees would have
been paid to the Participant. 

     (d)
Adjustments to the Accounts. Each Stock Account shall be credited additional whole or
fractional Stock Units for distributions and stock dividends paid on the Common
Stock based on the number of Stock Units in the Stock Account on the applicable
record date, which additional whole or fractional Stock Units shall be
calculated based on the Fair Market Value of the Common Stock on the applicable
Valuation Date. Each Stock Account shall also be equitably adjusted as
determined by the Plan Administrator in the event of any stock dividend, stock
split or similar change in the capitalization of the Corporation. 

3 

     (e)
Method of Payment. When a Participant ceases to serve as a member of the Board of
Directors, such Participant's Accounts shall continue to be credited with
adjustments under paragraph 5(d) above through the Payment Date following the
date on which the Participant's membership on the Board of Directors ceases. The
number of Stock Units in the Stock Account as of such Payment Date shall be
delivered and paid in the form of a certificate, or an electronic equivalent
thereof, for the equivalent number of whole shares of Common Stock, plus cash
equivalent for any fractional shares; provided, however, that the maximum number
of shares of Common Stock deliverable under this Plan shall be 500,000 subject
to equitable adjustment by the Plan Administrator in the event of any stock
dividend, stock split or similar change in the capitalization of the
Corporation. Delivery and payment shall be made on the Payment Date as defined
in Section 3(1) to the Participant or to the Participant's designated
beneficiary, if the Participant's termination as a member of the Board of
Directors was the result of the Participant's death. 

     (f)
Other Payment Provisions. A Participant shall not be paid any portion of the
Participant's Stock Account prior to the Participant's termination of services
as a member of the Board of Directors. Any payment hereunder shall be subject to
applicable payroll and withholding taxes. In the event any amount becomes
payable under the provisions of the Plan to a Participant, beneficiary or other
person who is a minor or an incompetent, whether or not declared incompetent by
a court, such amount may be paid directly to the minor or incompetent person or
to such person's fiduciary (or attorney-in-fact in the case of an incompetent)
as the Plan Administrator, in its sole discretion, may decide, and the Plan
Administrator shall not be liable to any person for any such decision or any
payment pursuant thereto. 

     (g)
Statements of Account. Each Participant shall receive an annual statement of the
balance in the Participant's Account upon the request of a Participant or in the
discretion of the Plan Administrator. 

6. Amendment, Modification and
Termination of the Plan: 

     (a)
Corporation's Right to Amend or
Modify. The Board reserves the right at any
time to amend or terminate the Plan, in whole or in part, and for any
reason.

     (b)
Corporation's Right to
Terminate. If the Plan is terminated, each
Participant will become entitled to payment of the Participant's accrued and
vested benefits if and to the extent permitted under Code Section 409A and the
regulations thereunder. Accordingly, payment of a Participant's accrued and
vested benefits may be made in a lump sum in accordance with one of the
following:

	          	
           (i)
      the termination of the Plan within twelve (12) months of a corporate
      dissolution taxed under Code Section 331 or with the approval of a
      bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), as provided in
      Treasury Regulation Section 1.409A-3(j)(4)(ix)(A); or

           (ii) within the thirty (30) days preceding or the twelve (12)
      months following a Change in Control (as determined under Treasury
      Regulation Section 1.409A-3(i)(5)), provided that all substantially
      similar arrangements are also terminated as provided in Treasury
      Regulation Section 1.409A-3(j)(4)(ix)(B); or 

           (iii) the termination of the Plan, provided that the termination
      does not occur proximate to a downturn in the financial health of Ruddick,
      if all arrangements that would be aggregated with the Plan under Treasury
      Regulation Section 1.409A-1(c) are terminated, no payments other than
      payments that would be payable under the terms of the Plan if the
      termination had not occurred are made within twelve (12) months of the
      

4 

	          	
      Plan termination, and no new
      arrangement that would be aggregated with the Plan under Treasury
      Regulation Section 1.409A-1(c) is adopted within three (3) years following
      the Plan termination, as provided in Treasury Regulation Section
      1.409A-3(j)(4)(ix)(C); or 

           (iv) such other event and conditions as the IRS may prescribe in
      generally applicable published guidance under Code Section 409A.
      

     (c) In no
event shall an amendment or termination reduce or otherwise affect benefits
accrued and vested as of the date of an amendment or termination. 

7. Claims Procedures:

     (a)
General. In
the event that a Claimant has a Claim under the Plan, such Claim shall be made
by the Claimant's filing a notice thereof with the Plan Administrator within
ninety (90) days after such Claimant first has knowledge of such Claim. Each
Claimant who has submitted a Claim to the Plan Administrator shall be afforded a
reasonable opportunity to state such Claimant's position and to present evidence
and other material relevant to the Claim to the Plan Administrator for its
consideration in rendering its decision with respect thereto. The Plan
Administrator shall render its decision in writing within ninety (90) days after
the Claim is referred to it, unless special circumstances, determined in the
sole discretion of the Plan Administrator, require an extension of such time
within which to render such decision, in which event such decision shall be
rendered no later than one hundred eighty (180) days after the Claim is referred
to it. A copy of such written decision shall be furnished to the Claimant.

     (b)
Notice of Decision of Plan
Administrator. Each Claimant whose Claim has
been denied by the Plan Administrator shall be provided written notice thereof,
which notice shall set forth: 

	          	
           (i)
      the specific reason(s) for the denial; 

           (ii) specific reference to pertinent provision(s) of the Plan upon
      which such denial is based; 

           (iii) a description of any additional material or information
      necessary for the Claimant to perfect such Claim and an explanation of why
      such material or information is necessary; and 

           (iv) an explanation of the procedure hereunder for review of such
      Claim; 

all in a manner calculated to be
understood by such Claimant. 

     (c)
Review of Decision of Plan
Administrator. Each such Claimant shall be
afforded a reasonable opportunity for a full and fair review of the decision of
the Plan Administrator denying the Claim. Such review shall be by the Board of
Directors. Such appeal shall be made within ninety (90) days after the Claimant
received the written decision of the Plan Administrator and shall be made by the
written request of the Claimant or such Claimant's duly authorized
representative, to the Board of Directors. In the event of appeal, the Claimant
or such Claimant's duly authorized representative may (i) review pertinent
documents and (ii) submit issues and comments in writing to the Board of
Directors. The Board of Directors shall review the following: 

	          	
           (i)
      the initial proceedings of the Plan Administrator with respect to such
      Claim; 

5 

	          	
           (ii) such issues and comments as were submitted in writing by the
      Claimant or the Claimant's duly authorized representative; and 

           (iii) such other material and information as the Board of
      Directors, in its sole discretion, deems advisable for a full and fair
      review of the decision of the Plan Administrator.

The Board of Directors may approve,
disapprove or modify the decision of the Plan Administrator, in whole or in
part, or may take such other action with respect to such appeal as it deems
appropriate. The decision of the Board of Directors with respect to such appeal
shall be made in no event later than sixty (60) days after receipt of such
appeal, unless special circumstances, determined in the sole discretion of the
Board of Directors, require an extension of such time within which to render
such decision, in which event such decision shall be rendered as soon as
possible and in no event later than one hundred twenty (120) days following
receipt of such appeal. The decision of the Board of Directors shall be in
writing and in a manner calculated to be understandable by the Claimant and
shall include specific reasons for such decision and set forth specific
references to the pertinent provisions of the Plan upon which such decision is
based. The Claimant shall be furnished a copy of the written decision of the
Board of Directors. Such decision shall be final and conclusive upon all persons
interested therein, except to the extent otherwise provided by applicable law.

8. Acceleration of
Payment:

     The time
or schedule of payment of a benefit under the Plan may only be accelerated upon
such events and conditions as the IRS may permit in generally applicable
published regulatory or other guidance under Code Section 409A, including,
without limitation, payment to a person other than the Participant to the extent
necessary to fulfill the terms of a domestic relations order (as defined in Code
Section 414(p)(1)(B)), payment of FICA tax and income tax on wages imposed on
any amounts under this Plan, or payment of the amount required to be included in
income for the Participant as a result of failure of the Plan to meet the
requirements of Code Section 409A with respect to the Participant. 

9. Applicable Law: 

     The Plan
shall be construed, administered, regulated and governed in all respects under
and by the laws of the United States to the extent applicable, and to the extent
such laws are not applicable, by the laws of the state of North Carolina.

10. Miscellaneous: 

     A
Participant's rights and interests under the Plan may not be assigned or
transferred by the Participant. The Plan shall be an unsecured, unfunded
arrangement. To the extent the Participant acquires a right to receive payments
from the Corporation under the Plan, such right shall be no greater than the
right of any unsecured general creditor of the Corporation. Nothing contained
herein shall be deemed to create a trust of any kind or any fiduciary
relationship between the Corporation and any Participant. The Plan shall be
binding on the Corporation and any successor in interest of the Corporation.

6 

     IN
WITNESS WHEREOF, this instrument has been
executed by an authorized officer of the Corporation effective as of the
9th day of December, 2008.

		RUDDICK CORPORATION  
		 	
		By: 
    	 	 
		 	 
		Title:  	 

7EXHIBIT 4.01 

SOUTHERN CALIFORNIA WATER COMPANY

AND 

CHEMICAL TRUST COMPANY OF CALIFORNIA

TRUSTEE 

__________________________________

INDENTURE 

Dated as of September 1,
1993
____________ 

DEBT SECURITIES

PARTIAL CROSS-REFERENCE TABLE

	Indenture Section 		TIA Section 
	2.04  		317(b) 
	2.05  		312(a) 
	2.10  		316(a) 
			(last sentence)
  
	 
	4.04  		314(a)(4) 
	4.05  		314(a)(1) 
	 
	6.04  		316(a)(1)(B) 
	6.05  		316(a)(1)(A) 
	6.07  		317(a)(1) 
	 
	7.04  		315(b) 
	7.05  		313(a) 
	7.05  		313(d) 
	7.07  		310(a), 310(b) 
	7.10  		310(b)(1) 
	 
	8.02  		310(a), 310(b)
  
	 
	9.04 		316(c) 
	 
	10.01 		318(a) 
	10.02 		313(c) 
	10.03 		314(c)(1) 
			314(c)(2) 
	10.04 		314(e) 

i 

TABLE OF CONTENTS 

	Article 	          	Section 	          	Heading 	          	Page 
	1 				DEFINITIONS 		1 
	 
		 	1.01 		Definitions 		1 
			1.02 		Other Definitions
    		2 
			1.03 		Rules
      of Construction 		2 
	 
	2 				THE
      SECURITIES 		3 
	 
			2.01 		Issuable in Series 	 	3 
			2.02 		Execution and
      Authentication 		4 
			2.03 	 	Securities Agents 		5 
			2.04 		Paying Agent to Hold Money
      in 		5 
					     Trust 		
			2.05 		Securityholder Lists 		5 
			2.06 		Transfer and
      Exchange 		5 
			2.07 		Replacement Securities 		6 
			2.08 		Outstanding
      Securities 		6 
			2.09 		Discounted Securities 		6 
			2.10 		Treasury Securities
    		6 
			2.11 		Global Securities 		7 
			2.12 		Temporary
      Securities 		7 
			2.13 		Cancellation 		7 
			2.14 		Defaulted Interest
    		7 
	 
	3 				REDEMPTION 		8 
	 
			3.01 		Notices to Trustee 		8 
			3.02 		Selection of Securities to
      Be 		8 
					    
      Redeemed 		
			3.03 		Notice of Redemption 		8 
			3.04 		Effect of Notice of
    		9 
					    
      Redemption 		
			3.05 		Payment of Redemption Price 		9 
			3.06 		Securities Redeemed in
      Part 		9 
	 
	4 				COVENANTS 		9 
	 
			4.01 		Certain Definitions 		9 
			4.02 		Payment of
      Securities 		10 
			4.03 		Overdue Interest 		10 
			4.04 		No Lien Created,
      etc. 		10 
			4.05 		Compliance Certificate 		10 
			4.06 		SEC Reports 		10 
	 
	5 				SUCCESSORS 		10 

ii 

	Article 	          	Section 	          	Heading 	          	Page 
			5.01 		When
      Company May Merge, etc. 		10 
	 
	6 				DEFAULTS AND REMEDIES 		11 
	 
			6.01 		Events of Default 		11 
			6.02 		Acceleration 		12 
			6.03 		Other
      Remedies 		13 
			6.04 		Waiver of Past
      Defaults 		13 
			6.05 		Control by Majority 		13 
			6.06 	 	Limitation on Suits
    		13 
	 		6.07 		Collection Suit by Trustee 		14 
			6.08 		Priorities 		14 
	 
	7 				TRUSTEE 		14 
	 
			7.01 		Rights of Trustee 		14 
			7.02 		Individual Rights of
      Trustee 		16 
			7.03 		Trustee’s Disclaimer 	 	16 
			7.04 		Notice of Defaults
    		16 
			7.05 		Reports by Trustee to Holders 		16 
			7.06 		Compensation and
      Indemnity 		17 
			7.07 		Replacement of Trustee 		17 
			7.08 		Successor Trustee by
      Merger, 		18 
					     etc. 		
			7.09 		Trustee’s Capital and Surplus 		18 
	 
	8 	 			DISCHARGE OF INDENTURE 		18 
	 
			8.01 		Defeasance 		18 
			8.02 		Conditions to
      Defeasance 		19 
			8.03 		Application of Trust Money 		20 
			8.04 		Repayment to
      Company 		20 
	 
	9 				AMENDMENTS 		20 
	 
			9.01 		Without Consent of Holders 		20 
			9.02 		With Consent of
      Holders 		20 
			9.03 		Compliance with Trust Indenture Act 		21 
			9.04 		Effect of Consents
    		21 
			9.05 		Notation on or Exchange of 		22 
					     Securities 		
			9.06 		Trustee Protected
    		22 
	 
	10 				MISCELLANEOUS 		22 
	 
			10.01 		Trust
      Indenture Act 		22 
			10.02 		Notices 		22 
			10.03 		Certificate and Opinion as to Conditions Precedent
    		23 

iii 

	Article 	          	Section 	          	Heading 	          	Page 
	 		10.04 		Statements Required in Certificate or Opinion 		23 
			10.05 		Rules by Company and
      Agents 		24 
			10.06 	 	Legal Holidays 	 	24 
			10.07 		No Recourse Against
      Others 		24 
		 	10.08 		Counterparts 		24 
			10.09 		Governing Law 		24 
	 
			SIGNATURES 		24 
	 
			Exhibit A: A Form of Security 		25 
			Notes to Exhibit A 		29 
			Exhibit B: A Form of Assignment 		30 

iv 

     INDENTURE
dated as of September 1, 1993 between SOUTHERN CALIFORNIA WATER COMPANY, a
California corporation (“Company”), and CHEMICAL TRUST COMPANY OF CALIFORNIA, a
California corporation, as trustee (“Trustee”). 

     Each party
agrees as follows for the benefit of the Holders of the Company’s debt
securities issued under this Indenture: 

ARTICLE 1 - DEFINITIONS 

SECTION 1.01. Definitions. 

     “Affiliate” means any person directly
or indirectly controlling or controlled by or under direct or indirect common
control with the Company (other than any trust or other entity subject to the
Employee Retirement Income Security Act of 1974, as amended from time to time
and any successor statute). 

     “Agent” means any Registrar, Transfer
Agent or Paying Agent with respect to the Securities. 

     “Board” means the Board of Directors
of the Company or any authorized committee of the Board. 

     “Company” means the party named as
such above until a successor replaces it and thereafter means the successor.

     “Default” means any event which is, or
after notice or passage of time would be, an Event of Default. 

     “Discounted Security” means a Security
where the amount of principal due upon acceleration is less than the stated
principal amount. 

     “Holder” or “Securityholder” means the person in
whose name a Security is registered as to principal and interest by the
Registrar. 

     “Indenture” means this Indenture and
any Securities Resolution as amended or supplemented from time to time.

     “Officer” means the Chairman, the
President, the Chief Financial Officer, any Executive Vice-President, any Senior
Vice-President, any Vice-President, the Treasurer, the Secretary, any Assistant
Treasurer, or any Assistant Secretary of the Company. 

     “Officers’
Certificates” means a certificate signed
by two Officers or by an Officer.

     “Opinion
of Counsel” means a written opinion from
legal counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee. 

     “principal” of a debt security means
the principal of the security plus the premium, if and when applicable, on the
security. 

     “SEC” means the Securities and Exchange Commission. 

     “Securities” means the debt
securities issued under this Indenture. 

    
“Securities Resolution”
means a resolution authorizing a series of Securities adopted by the Board.

    
“series” means a series
of Securities or the Securities of the series. 

    
“TIA” means the Trust
Indenture Act of 1939 (15 U.S. Code § 77aaa-77bbbb) as in effect on the date
shown above. 

    
“Trustee” means the party
named as such above until a successor replaces it and thereafter means the
successor. 

    
“Trustee Officer” means
the Chairman of the Board, the President or any other officer or assistant
officer of the Trustee assigned by the Trustee to administer its corporate trust
matters. 

    
“United States” means the
United States of America, its territories and possessions and other areas
subject to its jurisdiction. 

SECTION 1.02. Other Definitions.

	Term 	     	Defined in
      Section 
	“Bankruptcy Law” 		  6.01 
	“Custodian” 		  6.01 
	“Event of Default” 		  6.01 
	“Legal
      Holiday” 		10.06 
	“Lien” 		  4.01 
	“Paying
      Agent” 		  2.03 
	“Registrar” 		  2.03 
	“Subsidiary” 		  4.01 
	“Transfer Agent” 		  2.03 
	“U.S.
      Government Obligations” 		  8.02 
	“Voting Stock” 		  4.01 
	“Yield to
      Maturity” 		  4.01

SECTION 1.03. Rules of Construction.

     Unless the
context otherwise requires: 

	          	(1)     	a term has the meaning
      assigned to it;
		 
		(2)	an accounting term not
      otherwise defined has the meaning assigned to it in accordance with
      generally accepted accounting principles in the United
States;
		 
		(3)	generally accepted
      accounting principles are those applicable from time to
  time;

2 

	             
      (4)     	all terms used in this
      Indenture that are defined by the TIA, defined by TIA reference to another
      statute or defined by SEC rule under the TIA have meanings assigned to
      them by such definitions;
	 
	             
      (5)	“or” is not exclusive;
      and
	 
	             
      (6)	words in the singular
      include the plural, and in the plural include the
  singular.

ARTICLE 2 - THE SECURITIES

SECTION 2.01. Issuable in
Series. 

     The
aggregate principal amount of Securities that may be issued under this Indenture
is unlimited. The Securities may be issued from time to time in one or more
series. Each series shall be created by a Securities Resolution or a
supplemental indenture that establishes the terms of the series, which may
include the following: 

	             
      (1)     	the title of the
      series;
	 
	             
      (2)	the aggregate
      principal amount of the series;
	 
	             
      (3)	the interest rate or
      rates, if any, or method of calculating the interest rate or
    rates;
	 
	             
      (4)	the date from which
      interest will accrue;
	 
	             
      (5)	the record dates for
      interest payable on Securities;
	 
	             
      (6)	the dates when
      principal and interest are payable;
	 
	             
      (7)	the manner of paying
      principal and interest;
	 
	             
      (8)	the places where
      principal and interest are payable;
	 
	             
      (9)	the Registrar,
      Transfer Agent and Paying Agent;
	 
	             
      (10)	the terms of any
      mandatory or optional redemption by the Company;
	 
	             
      (11)	the denominations in
      which Securities are issuable;
	 
	             
      (12)	whether and upon what
      terms Securities may be exchanged;
	 
	             
      (13)	whether any Securities
      will be represented by a Security in global form and the terms of any
      global Security;

3 

	             
      (14)     	if amounts of
      principal or interest may be determined by reference to an index, formula
      or other method, the manner for determining such amounts;
	 
	             
      (15)	provisions for
      electronic issuance of Securities or for Securities in uncertificated
      form;
	 
	             
      (16)	the amount or portion
      of principal payable upon acceleration of a Discounted
  Security;
	 
	             
      (17)	any Events of Default
      or covenants in addition to or in lieu of those set forth in this
      Indenture;
	 
	             
      (18)	whether and upon what
      terms Securities may be defeased;
	 
	             
      (19)	the form of the
      Securities, which may be in the form of Exhibit A;
	 
	             
      (20)	any terms that may be
      required by or advisable under U.S. or other applicable laws;
  and
	 
	             
      (21)	any other terms not
      inconsistent with this Indenture.

     All
Securities of one series need not be issued at the same time and, unless
otherwise provided in the Securities Resolution or supplemental indenture for
such series, a series may be reopened for issuances of additional Securities of
such series. 

SECTION 2.02. Execution and
Authentication. 

     Two Officers
shall sign the Securities by manual or facsimile signature. The Company’s seal
shall be reproduced on the Securities. 

     If an
Officer whose signature is on a Security no longer holds that office at the time
the Security is authenticated or delivered, the Security shall nevertheless be
valid. 

     A Security
shall not be valid until the Security is authenticated by the manual signature
of the Registrar. The signature shall be conclusive evidence that the Security
has been authenticated under this Indenture. 

     Each Security shall be dated the
date of its authentication. 

     Securities
may have notations, legends or endorsements required by law, stock exchange
rule, agreement or usage. 

     In the event Securities are issued
in electronic or other uncertificated form, such Securities may be validly issued without the signatures or seal
contemplated by this Section 2.02. 

4 

SECTION 2.03. Securities Agents.

     The Company
shall maintain an office or agency where Securities may be authenticated
(“Registrar”), where Securities may be presented for registration of transfer or for
exchange (“Transfer Agent”) and where Securities may be presented for payment
(“Paying Agent”). Whenever the Company must issue or deliver Securities pursuant to this
Indenture, the Registrar shall authenticate the Securities at the Company’s
request contained in an Officer’s Certificate delivered to the Registrar. The
Transfer Agent shall keep a register of the Securities and of their transfer and
exchange. 

     The Company
may appoint more than one Registrar, Transfer Agent or Paying Agent for a
series. The Company shall notify the Trustee of the name and address of any
Agent not a party to this Indenture. If the Company fails to maintain a
Registrar, Transfer Agent or Paying Agent for a series, the Trustee shall act as
such. 

SECTION 2.04. Paying Agent to Hold Money in
Trust. 

     The Company
shall require each Paying Agent for a series other than the Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of the persons
entitled thereto all money held by the Paying Agent for the payment of principal
of or interest on the series, and will notify the Trustee of any default by the
Company in making any such payment. 

     While any
such default continues, the Trustee may require a Paying Agent to pay all money
so held by it to the Trustee. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee upon delivery to the Paying Agent of
an Officer’s Certificate so stating. Upon payment over to the Trustee of all
money held by it in trust, the Paying Agent shall have no further liability for
the money. 

     If the
Company or an Affiliate acts as Paying Agent for a series, it shall segregate
and hold as a separate trust fund all money held by it as Paying Agent for the
series. 

SECTION 2.05. Securityholder Lists.

     The Trustee
shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Securityholders. If the
Trustee is not the Transfer Agent, the Company shall furnish, or cause the
Registrar to furnish, to the Trustee semiannually and at such other times as the
Trustee may reasonably request a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders.

SECTION 2.06. Transfer and Exchange.

     Where
Securities of a series are presented to the Transfer Agent with a request to
register a transfer or to exchange them for an equal principal amount of
Securities of other denominations of the series, the Transfer Agent shall
register the transfer or make the exchange if its requirements for such
transactions are met. The Transfer Agent need not exchange or register the
transfer of any Security or portion of a Security selected for redemption. Also,
it need not exchange or register the transfer of any Securities for a period of
15 days before a selection of Securities to be redeemed. 

     The Transfer
Agent may require a Holder to pay a sum sufficient to cover any taxes imposed on
a transfer or exchange. 

5 

SECTION 2.07. Replacement Securities.

     If the
Holder of a Security claims that it has been lost, destroyed or wrongfully
taken, then, in the absence of notice to the Company or the Trustee that the
Security has been acquired by a bona fide purchaser, the Company shall issue a
replacement Security if the Company and the Trustee receive: 

	             
      (1)     	evidence satisfactory
      to them of the loss, destruction or taking;
	 
	             
      (2)	an indemnity bond
      satisfactory to them; and
	 
	             
      (3)	payment of a sum
      sufficient to cover their expenses and any taxes for replacing the
      Security.

     Every replacement Security is an
additional obligation of the Company. 

SECTION 2.08. Outstanding Securities.

     The
Securities outstanding at any time are all the Securities authenticated by the
Registrar except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section as not outstanding.

     If a
Security is replaced pursuant to Section 2.07, it ceases to be outstanding
unless the Trustee and the Company receive proof satisfactory to them that the
replaced Security is held by a bona fide purchaser. 

     If
Securities are considered paid under Section 4.02, they cease to be outstanding
and interest on them ceases to accrue. 

     A Security
does not cease to be outstanding because the Company or an Affiliate holds the
Security. 

SECTION 2.09. Discounted Securities.

     In
determining whether the Holders of the required principal amount of Securities
have concurred in any direction, waiver or consent, the principal amount of a
Discounted Security shall be the amount of principal that would be due as of the
date of such determination if payment of the Security were accelerated on that
date. 

SECTION 2.10. Treasury Securities.

     In
determining whether the Holders of the required principal amount of Securities
have concurred in any direction, waiver or consent, Securities owned by the
Company or an Affiliate shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded. 

6 

SECTION 2.11. Global Securities.

     If the
Securities Resolution or supplemental indenture so provides, the Company may
issue some or all of the Securities of a series in temporary or permanent global
form. A global Security may be in registered form, in bearer form with or
without coupons or in uncertificated form. A global Security shall represent
that amount of Securities of a series as specified in the global Security or as
endorsed thereon from time to time. At the Company’s request, the Registrar
shall endorse a global Security to reflect the amount of any increase or
decrease in the Securities represented thereby. 

     The Company
may issue a global Security only to a depository designated by the Company. A
depository may transfer a global Security only as a whole to its nominee or to a
successor depository. 

     The
Securities Resolution or supplemental indenture may establish, among other
things, the manner of paying principal and interest on a global Security and
whether and upon what terms a beneficial owner of an interest in a global
Security may exchange such interest for definitive Securities.

     The Company,
an Affiliate, the Trustee and any Agent shall not be responsible for any acts or
omissions of a depository, for any depository records of beneficial ownership
interests or for any transactions between the depository and beneficial owners.

SECTION 2.12. Temporary Securities.

     Until
definitive Securities of a series are ready for delivery, the Company may use
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Temporary Securities may be in global
form. Without unreasonable delay, the Company shall deliver definitive
Securities in exchange for temporary Securities. Until so exchanged, the
temporary Securities are entitled to the same benefits under this Indenture as
definitive Securities. 

SECTION 2.13. Cancellation. 

     The Company
at any time may deliver Securities to the Registrar for cancellation. The
Transfer Agent and the Paying Agent shall forward to the Registrar any
Securities surrendered to them for payment, exchange or registration of
transfer. The Registrar shall cancel all Securities surrendered for payment,
registration of transfer, exchange or cancellation which have been received by
it. The Registrar shall destroy cancelled Securities unless the Company
otherwise directs. 

     Unless the
Securities Resolution or supplemental indenture otherwise provides, the Company
may not issue new Securities to replace Securities that the Company has paid or
that the Company has delivered to the Registrar for cancellation. 

SECTION 2.14. Defaulted Interest

     If the
Company defaults in a payment of interest on Securities, it need not pay the
defaulted interest to Holders on the regular record date. The Company may fix a
special record date for determining Holders entitled to
receive defaulted interest or the Company may pay defaulted interest in any
other lawful manner. 

7 

ARTICLE 3 - REDEMPTION 

SECTION 3.01. Notices to Trustee.

     Securities
of a series that are redeemable before maturity shall be redeemable in
accordance with their terms and, unless the Securities Resolution or
supplemental indenture otherwise provides, in accordance with this Article.

     In the case
of redemption by the Company, the Company shall notify the Trustee and the
Transfer Agent of the redemption date and the principal amount of Securities to
be redeemed. The Company shall notify the Trustee and Transfer Agent at least 45
days before the redemption date unless a shorter notice is satisfactory to the
Trustee. 

     If the
Company is required to redeem Securities, it may reduce the principal amount of
Securities required to be redeemed to the extent it is permitted a credit by the
terms of the Securities and it notifies the Trustee of the amount of the credit
and the basis for it. If the reduction is based on a credit for acquired or
redeemed Securities that the Company has not previously delivered to the
Registrar for cancellation, the Company shall deliver the Securities at the same
time as the notice. 

SECTION 3.02. Selection of Securities to Be
Redeemed. 

     If less than
all the Securities of a series are to be redeemed, the Trustee shall select the
Securities to be redeemed by a method the Trustee considers fair and
appropriate, which shall reflect any method required by applicable law or stock
exchange regulations. The Trustee shall make the selection from the outstanding
Securities of the series not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities having
denominations larger than the minimum denomination for the series. Securities
and portions thereof selected for redemption shall be in amounts equal to the
minimum denomination for the series or an integral multiple thereof. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. At least 20 days before a
redemption date, the Trustee shall notify the Company, the Registrar, the
Transfer Agent and each Paying Agent of the Securities to be redeemed and, if a
Security is to be redeemed only in part, the principal amount thereof so to be
redeemed. 

SECTION 3.03. Notice of Redemption.

     At least 20
days but not more than 60 days before a redemption date, the Company shall mail
a notice of redemption by first-class mail to each Holder whose Securities are
to be redeemed. 

     A notice shall identify the
Securities of the series to be redeemed and shall state: 

	             
      (1)     	the redemption
      date;
	 
	             
      (2)	the redemption
      price;
	 
	             
      (3)	the name and address
      of the Paying Agent;

8 

	             
      (4)     	that Securities called
      for redemption, in whole or in part, must be surrendered to the Paying
      Agent to collect the redemption price; and
	 
	             
      (5)	that interest on
      Securities, or portions thereof, called for redemption ceases to accrue on
      and after the redemption date.

     At the
Company’s written request, the Trustee shall give the notice of redemption in
the Company’s name and at its expense. 

SECTION 3.04. Effect of Notice of Redemption.

     Once notice
of redemption is given, Securities called for redemption become due and payable
on the redemption date at the redemption price stated in the notice. 

SECTION 3.05. Payment of Redemption Price.

     On or before
the redemption date, the Company shall deposit with the Paying Agent money
sufficient to pay the redemption price of and accrued interest, if any, on all
Securities to be redeemed on that date. 

     When the
Holder of a Security surrenders it for redemption in accordance with the
redemption notice, the Company shall pay, or cause the Paying Agent to pay, to
the Holder on the redemption date the redemption price and accrued interest, if
any, to such date, except that the Company will pay any such interest (except
defaulted interest) to Holders on the record date (as such term is defined in
the applicable Securities Resolution) if the redemption date occurs on an
interest payment date (as such term is defined in the applicable Securities
Resolution). 

SECTION 3.06. Securities Redeemed in Part.

     Upon
surrender of a Security that is redeemed in part, the Company shall deliver or
cause the Transfer Agent to deliver to the Holder a new Security of the same
series equal in principal amount to the unredeemed principal amount of the
Security surrendered. 

ARTICLE 4 - COVENANTS 

SECTION 4.01. Certain Definitions.

     “Lien” means any mortgage, pledge, security interest or lien.

     “Subsidiary” means a corporation a
majority of whose Voting Stock is owned by the Company or a Subsidiary.

     “Voting Stock” means capital stock having
voting power under ordinary circumstances to elect directors. 

     “Yield to Maturity” means the yield to
maturity on a Discounted Security at the time of its issuance or at the most
recent determination of interest on the Discounted Security. 

9 

SECTION 4.02. Payment of Securities.

     The Company
shall pay the principal of and interest on a series in accordance with the terms
of the Securities for the series and this Indenture. Principal and interest on a
series shall be considered paid on the date due if the Paying Agent for the
series holds on that date money sufficient to pay all principal and interest
then due on the series. 

SECTION 4.03. Overdue Interest.

     Unless the
Securities Resolution or supplemental indenture otherwise provides, the Company
shall pay interest on overdue principal of a Security of a series at the rate
(or Yield to Maturity in the case of a Discounted Security) borne by the series;
it shall pay interest on overdue installments of interest at the same rate or
Yield to Maturity to the extent lawful. 

SECTION 4.04. No Lien Created, etc.

     This
indenture and the Securities do not create a Lien, charge or encumbrance on any
property of the Company or any Subsidiary. 

SECTION 4.05. Compliance Certificate.

     The Company
shall deliver to the Trustee, within 120 days after the end of each fiscal year
of the Company, a brief certificate signed on its behalf by the principal
executive officer, principal financial officer or principal accounting officer
of the Company, as to the signer’s knowledge of the Company’s compliance with
all conditions and covenants under this Indenture as of the end of such fiscal
year (determined without regard to any period of grace or requirement of notice
provided herein). 

     Any other
obligor on the Securities also shall deliver to the Trustee such a certificate
similarly signed as to its compliance with this Indenture within 120 days after
the end of each of its fiscal years. 

SECTION 4.06. SEC Reports. 

     The Company
shall file with the Trustee, within 15 days after the Company is required to
file the same with the SEC, copies of the annual reports and of the information,
documents, and other reports (or such portions of the foregoing as the SEC may
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934. 

     Any other
obligor on the Securities shall do likewise as to the above items which it is
required to file with the SEC pursuant to those Sections. 

ARTICLE 5 - SUCCESSORS 

SECTION 5.01. When Company May Merge, etc.

     The Company
shall not consolidate with or merge into, or transfer all or substantially all
of its assets to, any person unless: 

10 

	             
      (1)     	the person is
      organized under the laws of the United States or a State
  thereof;
	 
	             
      (2)	the person assumes by
      supplemental indenture all the obligations of the Company under this
      Indenture and the Securities; and
	 
	             
      (3)	immediately after the
      transaction no Default exists.

     The
successor shall be substituted for the Company, and thereafter all obligations
of the Company under this Indenture and the Securities shall terminate.

ARTICLE 6 - DEFAULTS AND REMEDIES

SECTION 6.01. Events of Default.

     An
“Event of Default” on a series occurs if: 

	             
      (1)     	the Company
      defaults in any payment of interest on any Securities of the series when
      the same becomes due and payable and the Default continues for a period of
      60 days;
	 
	             
      (2)	the Company
      defaults in the payment of the principal of any Securities of the series
      when the same becomes due and payable at maturity or upon redemption,
      acceleration or otherwise and the Default continues for a period of three
      business days;
	 
	             
      (3)	the Company
      defaults in the payment or satisfaction of any sinking fund obligation
      with respect to any Securities of a series as required by the Securities
      Resolution or supplemental indenture establishing such series and the
      Default continues for a period of three business days;
	 
	             
      (4)	the Company
      defaults in the performance of any of its other agreements applicable to
      the series and the Default continues for 90 days after the notice
      specified below;
	 
	             
      (5)	the Company
      pursuant to or within the meaning of any Bankruptcy Law:
	 
	 	(A)     	commences a voluntary
      case,
	 
	 	(B)	consents to the entry
      of an order for relief against it in an involuntary case,
	 
	 	(C)	consents to the
      appointment of a Custodian for it or for all or substantially all of its
      property, or

11 

	 	(D)     	makes a general
      assignment for the benefit of its creditors;
	 
	             
      (6)     	a court of
      competent jurisdiction enters an order of decree under any Bankruptcy Law
      that:
	 
	 	(A)	is for relief against
      the Company in an involuntary case,
	 
	 	(B)	appoints a Custodian
      for the Company or for all or substantially all of its property,
    or
	 
	 	(C)	orders the liquidation
      of the Company;
	 
	 	and the
      order or decree remains unstayed and in effect for 60 days;
or
	 
	             
      (7)	any other
      Event of Default provided for in the series
occurs.

     The term
“Bankruptcy Law” means Title 11, U. S. Code or any similar Federal or State law for the
relief of debtors. The term “Custodian” means any receiver,
trustee, assignee, liquidator or a similar official under any Bankruptcy Law.

     A Default
under clause (4) is not an Event of Default until the Trustee or the Holders of
at least 33-1/3% in principal amount of the series notify the Company of the
Default and the Company does not cure the Default within the time specified
after receipt of the notice. The notice must specify the Default, demand that it
be remedied and state that the notice is a “Notice of Default.” If Holders
notify the Company of a Default, they shall notify the Trustee at the same time.

     A Default on
any series of Securities shall not constitute a Default on any other series
unless so provided in such other series. 

SECTION 6.02. Acceleration.

     If an Event
of Default occurs and is continuing on a series, the Trustee by notice to the
Company, or the Holders of at least 33-1/3% in principal amount of the series by
notice to the Company and the Trustee, may declare the principal of and accrued
interest on all the Securities of the series to be due and payable immediately.
Discounted Securities may provide that the amount of principal due upon
acceleration is less than the stated principal amount. 

     The Holders
of a majority in principal amount of the series by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default on
the series have been cured or waived except nonpayment of principal or interest
that has become due solely because of the acceleration. 

12 

SECTION 6.03. Other Remedies.

     If an Event
of Default occurs and is continuing on a series, the Trustee may pursue any
available remedy to collect principal or interest then due on the series, to
enforce the performance of any provision applicable to the series, or otherwise
to protect the rights of the Trustee and Holders of the series. 

     The Trustee
may maintain a proceeding even if it does not possess any of the Securities or
does not produce any of them in the proceeding. A delay or omission by the
Trustee or any Securityholder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law. 

SECTION 6.04. Waiver of Past Defaults.

     Unless the
Securities Resolution or supplemental indenture otherwise provides, the Holders
of a majority in principal amount of a series by notice to the Trustee may waive
an existing Default or Event of Default on the series and its consequences
except: 

	             
      (1)     	an Event of Default
      under clauses (1), (2) or (3) of Section 6.01, or
	 
	             
      (2)	a Default in respect
      of a provision that under Section 9.02 cannot be amended without the
      consent of each Securityholder affected.

SECTION 6.05. Control by Majority.

     The Holders
of a majority in principal amount of a series may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
of exercising any trust or power conferred on the Trustee, with respect to the
series. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture. 

SECTION 6.06. Limitation on Suits.

     A Securityholder of a series may
pursue a remedy with respect to the series only if: 

	             
      (1)     	the Holder gives to the Trustee
      notice of a continuing Event of Default on the series;
	 
	             
      (2)	the Holders of at least 33-1/3%
      in principal amount of the series make a request to the Trustee to pursue
      the remedy;
	 
	             
      (3)	such Holder or Holders offer to
      the Trustee indemnity satisfactory to the Trustee against any loss,
      liability or expense;
	 
	             
      (4)	the Trustee does not comply with
      the request within 60 days after receipt of the request and the offer of
      indemnity; and

13 

	             
    	(5)	      	during such 60-day
      period the Holders of a majority in principal amount of the series do not
      give the Trustee a direction inconsistent with such
  request.

     A
Securityholder may not use this Indenture to prejudice the rights of another
Securityholder or obtain a preference or priority over another Securityholder.

     Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal and (except as contemplated by Section 2.14) interest
on such Security on the respective stated maturities expressed in such Security
and to institute suit for the enforcement of any such payment, and such rights
shall not be impaired without the consent of the Holder. 

SECTION 6.07. Collection Suit by
Trustee. 

     If an Event
of Default in payment of interest, principal or sinking fund payment specified
in Section 6.01(1), (2) or (3) occurs and is continuing on a series, the Trustee
may recover judgment in it own name and as trustee of an express trust against
the Company for the whole amount of principal and interest remaining unpaid on
the series. 

SECTION 6.08. Priorities.

     If the
Trustee collects any money for a series pursuant to this Article, it shall pay
out the money in the following order: 

     First: to the Trustee for amounts
due under Section 7.06; 

Second: to
Securityholders of the series for amounts due and unpaid for principal and
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable for principal and interest, respectively; and

Third: to the
Company.

The Trustee may
fix a payment date for any payment to Securityholders. 

ARTICLE 7 - TRUSTEE 

SECTION 7.01. Rights of Trustee.

		(1)		The Trustee may rely
      on any document believed by it to be genuine and to have been signed or
      presented by the proper person. The Trustee need not investigate any fact
      or matter stated in the document.
	             
    	 
		(2)	      	Before the Trustee
      acts or refrains from acting, it may require an Officers’ Certificate or
      an Opinion of Counsel. The Trustee shall not be liable for any action it
      takes or omits to take in good faith in reliance on the Certificate or
      Opinion.

14 

		(3)		The Trustee may act
      through agents and shall not be responsible for the misconduct or
      negligence of any agent appointed with due care, unless such Agent is
      affiliated with the Trustee.
	             
    	 
		(4)		The Trustee shall not
      be liable for any action it takes or omits to take in good faith in
      accordance with a direction received by it pursuant to Section
    6.05.
		 
		(5)		The Trustee may refuse
      to perform any duty or exercise any right or power which reasonably
      believes may expose it to any loss, liability or expense unless it
      receives indemnity satisfactory to it against such loss, liability or
      expense.
		 
		(6)		The Trustee shall not
      be liable for interest on any money received by it except as the Trustee
      may agree with the Company. Money held in trust by the Trustee need not be
      segregated from other funds except to the extent required by
  law.
		 
		(7)		The Trustee shall have
      no duty with respect to a Default unless it has actual knowledge of the
      Default.
		 
		(8)		The Trustee shall not
      be liable for any action it takes or omits to take in good faith which it
      believes to be authorized and within its powers.
		 
		(9)		Any Agent shall have
      the same rights and be protected to the same extent as if it were
      Trustee.
		 
		(10)		The right of the
      Trustee to perform any discretionary act specified in or contemplated by
      this Indenture shall not be construed as a duty.
		 
		(11)		The Trustee shall not
      be required to expend or risk its own funds or otherwise incur any
      financial liability in the performance of any of its duties hereunder, or
      in the exercise of any of its rights and powers.
		 
		(12)	      	The Trustee may
      consult with counsel (who may be counsel for the Company or for the
      Holders), and with other experts, and the written advice or opinion of
      such counsel or other experts shall be full and complete authorization and
      protection in respect of any action taken, suffered, or omitted by it
      hereunder in good faith and in reliance
thereon.

15 

		(13)	      	Any request or
      direction of the Company mentioned herein shall be sufficiently evidenced
      by a written order signed in the name of the Company by any Officer of the
      Company and delivered to the Trustee or by resolution duly adopted by the
      Board.
	             
    	 
		(14)		Whether or not therein
      expressly provided, every provision of this Indenture relating to the
      conduct or affecting the liability of or affording protection to the
      Trustee shall be subject to the provisions of this Section.
		 
		(15)		Except during the
      continuance of an Event of Default, the Trustee undertakes to perform such
      duties and only such duties as are specifically set forth in this
      Indenture, and no implied covenants or obligations shall be read into this
      Indenture against the Trustee.

SECTION 7.02. Individual Rights of
Trustee. 

     The Trustee
in its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or an Affiliate with the same
rights it would have if it were not Trustee. Any Agent may do the same with like
rights. 

SECTION 7.03. Trustee’s Disclaimer.

     The Trustee
makes no representation as to the validity or adequacy of this Indenture or the
Securities; it shall not be accountable for the Company’s use of the proceeds
from the Securities; it shall not be responsible for any statement in the
Securities; it shall not be responsible for any overissue; it shall not be
responsible for determining whether the form and terms of any Securities were
established in conformity with this Indenture; and it shall not be responsible
for determining whether any Securities were issued in accordance with this
Indenture. 

SECTION 7.04. Notice of Defaults.

     If a default
occurs and is continuing on a series and if it is actually known to the Trustee,
the Trustee shall mail a notice of the Default within 90 days after it occurs to
Holders of Securities of the series. Except in the case of a Default in payment
on a series, the Trustee may withhold the notice if and so long as a committee
of its Trust Officers in good faith determines that withholding the notice is in
the interest of Holders of the series. 

SECTION 7.05. Reports by Trustee to
Holders. 

     Any report
required by TIA § 313(a) to be mailed to Securityholders shall be mailed by the
Trustee on or before June 30 of each year. 

     A copy of
each report at the time of its mailing to Securityholders shall be filed with
the SEC and each stock exchange on which any Securities are listed. The Company
shall notify the Trustee when any Securities are listed on a stock exchange. The
Trustee shall send a copy of each such report to the Company. 

16 

SECTION 7.06. Compensation and
Indemnity. 

     The Company
shall pay to the Trustee from time to time reasonable compensation for its
services. The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred by it in
connection with this Indenture. Such expenses shall include the reasonable
compensation and expenses of the Trustee’s agents and counsel. 

     The Company
shall indemnify the Trustee and each of the Trustee’s director, officers,
employees, agents, successors and assigns against any loss or liability incurred
in connection with the exercise or performance of the powers or duties as
Trustee, Registrar, Transfer Agent and Paying Agent. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel, reasonably acceptable to the Company, and the
Company shall pay the reasonable fees and expenses of such counsel. 

     The Company
need not reimburse any expense or indemnify against any loss or liability
incurred by the Trustee through negligence or willful misconduct. 

     To secure
the Company’s payment obligations in this Section, the Trustee shall have a lien
prior to the Securities on all money or property held or collected by the
Trustee, except that held in trust to pay principal or interest on particular
securities. Such lien shall survive the removal or resignation of the Trustee
for such period as any amount shall remain due and payable to the Trustee
(including any successor Trustee). 

SECTION 7.07. Replacement of Trustee.

     A
resignation of removal of the Trustee and appointment of a successor Trustee
shall become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section. 

     The Trustee
may resign by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee with the Company’s consent. 

     The Company may remove the Trustee
if: 

		(1)		the Trustee fails to
      comply with TIA § 310(a) or § 310(b) or with Section 7.09;
	             
    	 
		(2)		the Trustee is
      adjudged a bankrupt or an insolvent;
		 
		(3)		a Custodian or other
      public officer takes charge of the Trustee or its property;
		 
		(4)		the Trustee becomes
      incapable of acting; or
		 
		(5)	      	an event of the kind
      described in Section 6.01(5) or (6) occurs with respect to the
      Trustee.

17 

     The Company
also may remove the Trustee with or without cause if the Company so notifies the
Trustee 30 days in advance and if no Default occurs during the 30-day period.

     If the
Trustee resigns or is removed or if a vacancy exists in the office of Trustee
for any reason, the Company shall promptly appoint a successor Trustee.

     If a
successor Trustee does not take office within 30 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of a
majority in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee. 

     If the
Trustee fails to comply with TIA § 310(a) or § 310(b) or with Section 7.09, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee. 

     A successor
Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. The successor
Trustee shall mail a notice of its succession to Holders. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, subject to the lien provided for in Section 7.06. 

SECTION 7.08. Successor Trustee by
Merger, etc. 

     If the
Trustee consolidates, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation, and the successor
corporation without any further act shall be the successor Trustee. 

SECTION 7.09. Trustee’s Capital and
Surplus. 

     The Trustee
at all times shall have a combined capital and surplus of at least $50,000,000
as set forth in its most recent published report of condition; provided,
however, that the initial Trustee hereunder shall have a combined capital and
surplus of at least $10,000,000 and shall be a wholly owned subsidiary of a bank
with combined capital and surplus of at least $50,000,000. 

ARTICLE 8 - DISCHARGE OF INDENTURE

SECTION 8.01. Defeasance.

     Securities
of a series may be defeased in accordance with their terms and, unless the
Securities Resolution or supplemental indenture otherwise provides, in
accordance with this Article. 

     The Company
at any time may terminate as to a series all of its obligations under this
Indenture, the Securities of a series and any related coupons (“legal defeasance
option”). The Company at any time may terminate as to a series its obligations,
if any, under any restrictive covenants which may be applicable to a particular
series (“covenant defeasance option”). However, in the case of the legal
defeasance option, the Company’s obligation in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 7.06, 7.07 and 8.04 shall survive until the Securities of the series are
no longer outstanding; thereafter the Company’s obligations in Section 7.06
shall survive. 

18 

     The Company
may exercise its legal defeasance option notwithstanding its prior exercise of
its covenant defeasance option. If the Company exercises its legal defeasance
option, a series may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, a series may not be
accelerated by reference to any restrictive covenants which may be applicable to
a particular series so defeased under the term of the series. 

     The Trustee
upon request shall acknowledge in writing the discharge of those obligations
that the Company terminates. 

SECTION 8.02. Conditions to Defeasance.

     The Company
may exercise as to a series its legal defeasance option or its covenant
defeasance option if: 

		(1)		the Company
      irrevocably deposits in trust with the Trustee or another trustee money or
      U.S. Government Obligations;
	             
    	 
		(2)	      	the Company delivers
      to the Trustee a certificate from a nationally recognized firm of
      independent accountants expressing their opinion that the payments of
      principal and interest when due on the deposited U.S. Government
      Obligations without reinvestment plus any deposited money without
      investment will provide cash at such times and in such amounts as will be
      sufficient to pay principal and interest when due on all the Securities of
      the series to maturity or redemption, as the case may be:
		 
		(3)		immediately after the
      deposit no Default exists;
		 
		(4)		the deposit does not
      constitute a default under any other agreement binding the
    Company;
		 
		(5)		the deposit does not
      cause the Trustee to have a conflicting interest under TIA § 310(a) or §
      310(b) as to another series;
		 
		(6)		the Company delivers
      to the Trustee an Opinion of Counsel to the effect that Holders of the
      series will not recognize income, gain or loss for Federal income tax
      purposes as a result of the defeasance; and
		 
		(7)		91 days pass after the
      deposit is made and during the 91- day period no Default specified in
      Section 6.01(4) or (5) occurs that is continuing at the end of the
      period.

     Before or
after a deposit the Company may make arrangements satisfactory to the Trustee
for the redemption of Securities at a future date in accordance with Article 3.

19 

     “U.S.
Government Obligations” means direct obligations of the United States which have
full faith and credit of the United States pledged for payment and which are not
callable at the issuer’s option, or certificates representing an ownership
interest in such obligations. 

SECTION 8.03. Application of Trust
Money. 

     The Trustee
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 8.02. It shall apply the deposited money and the money from
U.S. Government Obligations through the Paying
Agent and in accordance with this Indenture to the payment of principal and
interest on Securities of the defeased series.

SECTION 8.04. Repayment to
Company.

     The Trustee
and the Paying Agent shall promptly turn over to the Company upon written
request any money or securities held by them at any time in excess of amounts
required under the terms of the Securities Resolution to be held by them.

     The Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for one
year. After payment to the Company, Securityholders entitled to the money must
look to the Company for payment as unsecured general creditors unless an
abandoned property or similar law designates another person. 

ARTICLE 9 - AMENDMENTS

SECTION 9.01. Without Consent of
Holders. 

     The Company
and the Trustee may amend this Indenture and the Securities without the consent
of any Securityholder: 

		(1)		to cure any ambiguity,
      omission, defect or inconsistency;
	             
    	 
		(2)		to comply with Article
      5;
		 
		(3)		to provide that
      specific provisions of this Indenture shall not apply to a series not
      previously issued;
		 
		(4)		to create a series and
      establish its terms;
		 
		(5)		to provide for a
      separate Trustee for one or more series; or
		 
		(6)	      	to make any change
      that does not materially adversely affect the rights of any Securityholder
      under this Indenture or the Securities.

SECTION 9.02. With Consent of Holders.

     Unless the
Securities Resolution otherwise provides, the Company and the Trustee may amend
this Indenture and the Securities with the written consent of the Holders of a
majority in principal amount of the Securities of all series affected by the
amendment voting as one class.

20 

However, without the consent of each
Securityholder affected, an amendment under this Section may not: 

		(1)		reduce the amount of
      Securities whose Holders must consent to an amendment;
	             
    	 
		(2)		reduce the interest on
      or change the time for payment of interest on any Security;
		 
		(3)		change the dates on
      which principal and interest on any Security are payable;
		 
		(4)		change the times at
      which principal or sinking fund payments are payable pursuant to, or the
      amounts of principal or sinking fund payments subject to, provisions, if
      any, relating to mandatory redemption;
		 
		(5)		reduce the principal
      of any non-Discounted Security or reduce the amount of principal of any
      Discounted Security that would be due upon an acceleration thereof;
      or
		 
		(6)	      	make any change in
      Section 6.04 or 9.02, except to increase the amount of Securities whose
      Holders must consent to an amendment or waiver or to provide that other
      provisions of this Indenture cannot be amended or waived without the
      consent of each Securityholder affected
thereby.

     An amendment
applicable solely to one or more series, or a provision included solely for the
benefit of one or more series, does not affect Securityholders of any other
series. 

     Securityholders need not consent to the exact text of a proposed
amendment or waiver; it is sufficient if they consent to the substance thereof.

SECTION 9.03. Compliance with Trust
Indenture Act. 

     Every
amendment pursuant to Section 9.01 or 9.02 shall be set forth in a supplemental
indenture that complies with the TIA as then in effect. 

SECTION 9.04. Effect of Consents.

     An amendment
or waiver becomes effective in accordance with its terms and thereafter binds
every Securityholder entitled to consent to it. 

     A consent to
an amendment or waiver by a Holder of a Security is a continuing consent by the
Holder and every subsequent Holder of a Security that evidences the same debt as
the consenting Holder’s Security. Any Holder or subsequent Holder may revoke the
consent as to his Security if the Trustee receives notice of the revocation
before the amendment or waiver becomes effective. 

21 

     The Company
may fix a record date for the determination of Holders entitled to give a
consent. The record date shall not be less than 10 nor more than 60 days prior
to the first written solicitation of Securityholders. 

SECTION 9.05. Notation on or Exchange
of Securities. 

     The Company
or the Trustee may place an appropriate notation about an amendment or waiver on
any Security thereafter authenticated. The Company may issue in exchange for
affected Securities new Securities that reflect the amendment or waiver.

SECTION 9.06. Trustee Protected.

     The Trustee need not sign any
supplemental indenture that adversely affects its rights. 

ARTICLE 10 - MISCELLANEOUS

SECTION 10.01. Trust Indenture Act.

     The
provisions of TIA §§ 310 through 317 that impose duties on any person (including
the provisions automatically deemed included herein unless expressly excluded by
this Indenture) are a part of and govern this Indenture, whether or not
expressly set forth herein. 

     If any
provision of this Indenture limits, qualifies or conflicts with another
provision which is required to be included in this Indenture by the TIA, the
required provision shall control. 

SECTION 10.02. Notices. 

     Any notice
by one party to another is duly given if in writing and delivered in person,
sent by facsimile transmission confirmed by mail or mailed by first-class mail
to the other’s address shown below: 

		Company: 	 	Southern California Water
      Company  	
	 	 	      	630 East Foothill
      Boulevard  	 
		  		San Dimas, California
      91773  	
		  		Attention: Chief Financial
      Officer  	
		  	
		Trustee:  		Chemical Trust Company of
      California  	
		  		300 S. Grand Ave., 2nd
      Floor  	 
		  		Los Angeles, California
      90071  	
		  		Attention: Corporate Trust
      Department  	

     A party by
notice to the other parties may designate additional or different addresses for
subsequent notices. 

     Any notice
mailed to a Securityholder shall be mailed to his address shown on the register
kept by the Transfer Agent. Failure to mail a notice to a Securityholder or any
defect in a notice mailed to a Securityholder shall not affect the sufficiency
of the notice mailed to other Securityholders or the sufficiency of any
published notice. 

     If a notice
is mailed in the manner provided above within the time prescribed, it is duly
given, whether or not the addressee receives it. 

22 

     If the
Company mails a notice to Securityholders, it shall mail a copy to the Trustee
and each Agent at the same time. 

     If in the
Company’s opinion it is impractical to mail a notice required to be mailed or to
publish a notice required to be published, the Company may give such substitute
notice as the Trustee approves. Failure to publish a notice as required or any
defect in it shall not affect the sufficiency of any mailed notice. 

     All notices
shall be in the English language, except that any published notice may be in an
official language of the county of publication. 

     A “notice” includes any
communication required by this Indenture. 

SECTION 10.03. Certificate and Opinion
as to Conditions Precedent. 

     Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall if so requested furnish to the Trustee:

		(1)		an Officer’s
      Certificate stating that, in the opinion of the signers, all conditions
      precedent, if any, provided for in this Indenture relating to the proposed
      action have been complied with; and
	             
    	 
		(2)	      	an Opinion of Counsel
      stating that, in the opinion of such counsel, all such conditions
      precedent, if any, have been complied with.

SECTION 10.04. Statements Required in
Certificate or Opinion. 

     Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include: 

		(1)		a statement that the
      person making such certificate or opinion has read such covenant or
      condition;
	             
    	 
		(2)		a brief statement as
      to the nature and scope of the examination or investigation upon which the
      statements or opinions contained in such certificate or opinion are
      based;
		 
		(3)	      	as to each
      certificate, a statement that, in the opinion of such person, he has made
      such examination or investigation as is necessary to enable him to express
      an informed opinion as to whether or not such covenant or condition has
      been complied with; and
		 
		(4)		a statement as to
      whether or not, in the opinion of such person, such condition or covenant
      has been complied with.

23 

SECTION 10.05. Rules by Company and
Agents.

     The Company may make reasonable
rules for action by or at a meeting of Securityholders. An Agent may make reasonable rules and set reasonable
requirements for its functions. 

SECTION 10.06. Legal
Holidays.

     A
“Legal Holiday” is a Saturday, a Sunday or a day on which banking institutions in
California or New York are not required to be open. If a payment date is a Legal
Holiday at a place of payment, unless the Securities Resolution otherwise
provides, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.

SECTION 10.07. No Recourse Against
Others. 

     A director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities. 

SECTION 10.08. Counterparts.

     This
Indenture may be executed by the parties in counterparts, each of which shall be
an original, but all of such counterparts shall together constitute one and the
same instrument. 

SECTION 10.09. Governing Law.

     The laws of
the State of California shall govern this Indenture and the Securities, unless
federal law governs. 

	
      SIGNATURES 
      

	  
	
      SOUTHERN CALIFORNIA WATER 

	COMPANY  
	 
	By 	   /s/ James B. Gallagher 
    
		   James B.
      Gallagher  
		   Chief
      Financial Officer   
	 
	CHEMICAL TRUST COMPANY OF   
	CALIFORNIA   
	  
	By 	   /s/ P. Oswald 
  
	 	   Assistant Vice
      President  

24 

EXHIBIT A

A Form of Security 

	No.  	$ 
  

SOUTHERN
CALIFORNIA
WATER COMPANY
(Title of
Security)

	Southern
      California Water Company  	  
	Promises to pay
      to  	 
	  
	or registered
      assigns  	  
	the principal
      sum of  	Dollars
      on  
	  
	Interest Payment
      Dates:  	  
	     Record Dates:  	  
	  
	  
	  	Dated:  
	  
	CHEMICAL TRUST
      COMPANY OF CALIFORNIA  	SOUTHERN
      CALIFORNIA WATER COMPANY  
	Transfer Agent
      and Paying Agent  	  
	  	by 
    
	  	          President  
	  
	Authenticated:  	  
	(SEAL)  	  
	CHEMICAL TRUST
      COMPANY OF CALIFORNIA  	Attest:  
	Registrar,
      by  	          Secretary  
	  
	Authorized
      Signature  	 

SOUTHERN CALIFORNIA WATER
COMPANY
[Title of Security] 

1. Interest.1 

Southern California Water Company
(“Company”), a California corporation, promises to pay interest on the principal
amount of this Security at the rate per annum shown above. The Company will pay
interest semiannually on and of each year
commencing       , 19__. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid,
from              
, 19__. Interest will be computed on the basis of a 360-day year of twelve
30-day months.

2. Method of
Payment.2

The Company will pay interest on the
Securities to the persons who are registered holders of Securities at the close
of business on the record date for the next interest payment date, except as
otherwise provided in the Indenture. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Company may pay principal
and interest by check payable in such money. It may mail an interest check to a
holder’s registered address. 

3. Securities Agents. 

Initially, Chemical Trust Company of
California, a California Corporation, will act as Paying Agent, Transfer Agent
and Registrar. The Company may change any Paying Agent, Transfer Agent or
Registrar without notice. The Company or any Affiliate may act in any such
capacity. Subject to certain conditions, the Company may change the Trustee.

4. Indenture.

The Company issued the securities of this
series (“Securities”) under an Indenture dated as of September 1, 1993
(“Indenture”) between the Company and Chemical Trust Company of California
(“Trustee”). The terms of the Securities include those stated in the Indenture
and in the Securities Resolution or supplemental indenture creating the
Securities and those made part of the Indenture by the Trust Indenture Act of
1939 (15 U.S. Code §§ 77aaa-77bbbb). Securityholders are referred to the
Indenture, the Securities Resolution or supplemental indenture and such Act for
a statement of such terms. 

5. Optional
Redemption.3 

On or after                 , the Company may redeem all
the Securities at any time or some of them from time to time at the following
redemption prices (expressed percentages of principal amount), plus accrued
interest to the redemption date. If redeemed during the 12-month period
beginning,

	Year  	Percentage 
	Year  	Percentage 
  
	and thereafter at
      100%.  	  	  	 

6. Additional Optional
Redemption.6

In addition to redemptions pursuant to the
above paragraph(s), the Company may redeem not more than
$              
principal amount of Securities
on               
and on
each               
thereafter
through               
at a redemption price of 100% of principal amount, plus accrued interest to the
redemption date. 

7. Notice of
Redemption.7

Notice of redemption will be mailed at
least 20 days but not more than 60 days before the redemption date to each
holder of Securities to be redeemed at his registered address. 

8. Denominations, Transfer, Exchange.

The Securities are in registered form
without coupons in denominations of $1,0008 and whole multiples of $1,000. The
transfer of Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Transfer Agent may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or the Indenture. The Transfer Agent need not
exchange or register the transfer of any Security or portion of a Security
selected for redemption. Also, it need not exchange or register the transfer of
any Securities for a period of 15 days before a selection of Securities to be
redeemed. 

9. Persons Deemed Owners. 

The Registered holder of a Security may be
treated as its owner for all purposes. 

10. Amendments and Waivers. 

Subject to certain exceptions, the
Indenture or the Securities may be amended with the consent of the holders of a
majority in principal amount of the securities of all series affected by the
amendment.9 Subject to certain exceptions, a default on a series may be waived with
consent of the holders of a majority in principal amount of the series.

Without the consent of any Securityholder,
the Indenture or the Securities may be amended, among other things, to cure any
ambiguity, omission, defect or inconsistency; to provide for assumption of
Company obligations to Securityholders; or to make any change that does not
materially adversely affect the rights of any Securityholder. 

11. Absence of Restrictive
Covenants.10

The Securities are unsecured general
obligations of the Company limited to $__________ principal amount. The
Indenture does not limit other unsecured debt.

12. Successors.

When a successor assumes all the
obligations of the Company under the Securities and the Indenture, the Company
will be released from those obligations.

13. Defeasance Prior to Redemption or
Maturity.11

Subject to certain conditions, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity. U.S. Government Obligations are securities
backed by the full faith and credit of the United States of America or
certificates representing an ownership interest in such Obligations.

14. Defaults and Remedies.

An event of Default12
includes: default for 60 days in payment of
interest on the Securities; default for three business days in payment of
principal on the Securities; default for three business days in the payment of
sinking fund obligation; default by the Company for a specified period after
notice to it in the performance of any of its other agreements applicable to the
Securities; certain events of bankruptcy or insolvency; and any other Event of
Default provided for in the series. If an Event of Default occurs and is
continuing, the Trustee or the holders of at least 33-1/3% in principal amount
of the Securities may declare the principal13 of all the Securities to be due and payable immediately. 

Securityholders may not enforce the
Indenture or the Securities except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
default (except a default in payment of principal or interest) if it determines
that withholding notice is in their interests. The Company must furnish an
annual compliance certificate to the Trustee.

15. Trustee Dealings with Company.

Chemical Trust Company of California, the
Trustee under the Indenture, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with those persons, as if it were not
Trustee. 

16. No Recourse Against Others.

A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities. 

17. Authentication. 

This Security shall not be valid until
authenticated by a manual signature of the Registrar. 

18. Abbreviations. 

Customary abbreviations may be used in the
name of a Securityholder or an assignee, such as TEN COM (=tenants in common),
TEN ENT (=tenants by the entirety), JT TEN (=joint tenants with right of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A
(=Uniform Gifts to Minors Act). 

     The Company
will furnish to any Securityholder upon written request and without charge a
copy of the Indenture and the Securities Resolution, which contains the text of
this Security in larger type. Requests may be made to: Secretary, Southern
California Water Company, 630 East Foothill Boulevard, San Dimas, California
91773. 

NOTES TO EXHIBIT A 

	1		If the Security is not
      to bear interest at a fixed rate per annum, insert a description of the
      manner in which the rate of interest is to be determined. If the Security
      is not to bear interest prior to maturity, so state.
	 
	2		If the method of
      payment is different, insert a statement thereof.
	 
	3		If
    applicable.
	 
	4		If
    applicable.
	 
	5		If the Security is a
      Discounted Security, insert amount to be redeemed or method of calculating
      such amount.
	 
	6		If
    applicable.
	 
	7		If
    applicable.
	 
	8		If applicable. Insert
      additional or different denominations.
	 
	9		If different terms
      apply, insert a brief summary thereof.
	 
	10		If applicable. If
      covenants apply, insert a brief summary thereof.
	 
	11		If applicable. If
      different defeasance terms apply, insert a brief summary
  thereof.
	 
	12		If additional or
      different Events of Default apply, insert a brief summary
    thereof.
	 
	13	      	If the Security is a
      Discounted Security, set forth the amount due and payable upon an Event of
      Default.

Note: U.S. tax law may require certain
legends on Discounted Securities. 

EXHIBIT B 

ASSIGNMENT FORM 

To assign this Security, fill in the
form below: 

I or we assign and transfer this
Security to 
________________________________

:                                                               
:

:________________________________:
(Insert assignee’s soc. sec. or
tax I.D. no.) 

	 
	 
	 
	  	  
	(Print or type assignee’s name, address and zip
      code) 

and irrevocably
appoint________________________________________________________________________________
agent
to transfer this Security on the books of the Company.
The agent may substitute another to act for him. 

	Date:   	 		Your
      Signature:   	  	 
	 	 	 
	 		
	(Sign exactly as
      your name appears on the other side of this Security)  		

FIRST SUPPLEMENTAL
INDENTURE 

     This
FIRST SUPPLEMENTAL INDENTURE, is dated as of December 12, 2008 (this
“Supplemental Indenture”) between Golden State Water Company (formerly known as
Southern California Water Company), a corporation duly organized and existing
under the laws of the State of California (hereinafter called the
“Company”),
and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank
of New York Trust Company, N.A., as successor to JPMorgan Chase Bank, National
Association (formerly known as Chemical Trust Company of California, then Chase
Manhattan Bank and Trust Company, National Association, and then J.P. Morgan
Trust Company, National Association), as Trustee (hereinafter called the
“Trustee”).

RECITALS 

     WHEREAS, the Company and the Trustee
have executed and delivered an Indenture dated as of September 1, 1993 (the
“Original Indenture”) providing, among other things, for the issuance from time to time by
the Company of its debt securities in one or more series as provided in the
Original Indenture; 

     
WHEREAS,
the Original Indenture permits the Company and the Trustee to amend the Original
Indenture to make any change that does not materially affect the rights of any
Securityholder or the Securities without the consent of the Securityholders;

     WHEREAS, the Company has duly
authorized the execution and delivery of this Supplemental Indenture;
and

     WHEREAS, all things necessary to make
this Supplemental Indenture a valid agreement of the Company, in accordance with
its terms, have been done. 

NOW, THEREFORE, THIS SUPPLEMENTAL
INDENTURE WITNESSETH: 

     For and in consideration of the
premises, it is mutually covenanted and agreed as follows: 

     1. Original Indenture Terms. All terms
used in this Supplemental Indenture which are defined in the Original Indenture
shall have the meanings assigned to them in the Original Indenture. Except as
otherwise set forth in any supplemental indenture or Securities Resolution, all
references in the Original Indenture to “this Indenture” (and indirect
references such as “hereunder,” “hereby” and “herein”) shall be deemed to be
references to the Original Indenture as amended by this Supplemental Indenture
with respect to all Securities issued after December 1, 2008. 

     2. Modification of Terms. The Original
Indenture is hereby amended as follows with respect to all Securities issued
after December 1, 2008: 

	     	(a)	      	
      The definition of “Officer” in
      Section 1.01 of the Original Indenture is amended to read in its entirety
      as follows:

		 
		 		
      “Officer” means the Chief Executive Officer, the President, the
      Chief Financial Officer, the Chief Operating Officer, any Executive Vice
      President, any Senior Vice President, any Vice President, the Treasurer,
      any Assistant Treasurer, the Secretary, any Assistant Secretary, the
      Controller or any Assistant Controller of the Company.

		 

	      	(b)	      	
      The definition of “Opinion of
      Counsel” in Section 1.01 of the Original Indenture is amended to read in
      its entirety as follows:

		 
		 		
      “Opinion of Counsel”
      means a written opinion from legal
      counsel who is reasonably acceptable to the Trustee. The counsel may be an
      employee of or counsel to the Company.

		 
		(c)		
      Section 2.02 of the Original
      Indenture is amended by adding the following paragraph at the end of
      Section 2.02:

				 
				
            Prior to
      authenticating such Securities, the Trustee shall receive an Opinion of
      Counsel stating that:

				 

	               
    		      	(1)	      	
      The form and terms of such
      Securities have been established in conformity with the provisions of this
      Indenture;

				 
		   		(2)		
      Such Securities, when
      authenticated and delivered by the Trustee and issued by the Company in
      the manner and subject to any conditions specified in such Opinion of
      Counsel, will constitute valid and binding obligations of the Company
      enforceable in accordance with their terms, except as the enforceability
      thereof may be limited by bankruptcy, insolvency, reorganization,
      moratorium, or other laws relating to or affecting creditors' rights and
      by general principles of equity; and

				 
				(3)		
      All conditions precedent to the
      execution and delivery by the Company of such Securities have been
      complied with.

				 

	      	(d)	      	
      Section 4.06 of the Original
      Indenture is amended by adding the following paragraph at the end of
      Section 4.06:

		 
		 		
            Delivery of such reports,
      information and documents to the Trustee is for informational purposes
      only and the Trustee's receipt of such shall not constitute constructive
      notice of any information contained therein or determinable from
      information contained therein, including the Company's compliance with any
      of its covenants hereunder (as to which, subject to Section 7.01(a), the
      Trustee is entitled to conclusively rely exclusively on Officers’
      Certificates).

		 
		(e)		
      Section 7.01 of the Original
      Indenture is amended to read in its entirety as follows:

		 

	               
    	(a)	      	
      Except during the continuance of
      an Event of Default,

		 
		   		(1)	      	
      the Trustee undertakes to perform
      such duties and only such duties as are specifically set forth in this
      Indenture, and no implied covenants or obligations shall be read into this
      Indenture against the Trustee; and

		 
		 		(2)		
      in the absence of bad faith on
      its part, the Trustee may conclusively rely, as to the truth of the
      statements and the correctness of the opinions expressed therein, upon
      certificates or opinions furnished to the Trustee and conforming to the
      requirements of this Indenture; but in the case of any such certificates
      or opinions which by any provision hereof are specifically required to be
      furnished to the Trustee, the Trustee shall be under a duty to examine the
      same to determine whether or not they conform to the requirements of this
      Indenture (but need not confirm or investigate the accuracy of
      mathematical calculations or other facts stated therein).

		 

	               
    	(b)	      	
      In case an Event of Default has
      occurred and is continuing, the Trustee shall exercise such of the rights
      and powers vested in it by this Indenture, and use the same degree of care
      and skill in their exercise, as a prudent person would exercise or use
      under the circumstances in the conduct of his or her own
      affairs.

		 
		(c)		
      No provision of this Indenture
      shall be construed to relieve the Trustee from liability for its own
      negligent action, its own negligent failure to act, or its own willful
      misconduct, except that:

		 

	               
    	   	       	(1)	      	
      This Subsection shall not be
      construed to limit the effect of Subsection (a) of this Section
      7.01;

				 
				(2)		
      The Trustee shall not be liable
      for any error of judgment made in good faith by a Trust Officer unless it
      shall be proved that the Trustee was negligent in ascertaining the
      pertinent facts;

				 
				(3)		
      The Trustee shall not be liable
      with respect to any action taken or omitted to be taken by it in good
      faith in accordance with the direction of the Holders of a majority in
      principal amount of the Outstanding Securities of any series relating to
      the time, method and place of conducting any proceeding for any remedy
      available to the Trustee, or exercising any trust or power conferred upon
      the Trustee, under this Indenture with respect to the Securities of such
      series; and

				 
				(4)		
      No provision of this Indenture
      shall require the Trustee to expend or risk its own funds or otherwise
      incur any financial liability in the performance of any of its duties
      hereunder, or in the exercise of any of its rights or
  powers.

				 

	               
    	(d)	      	
      The Trustee shall have the
      following additional rights:

		 
		 		(1)	      	
      The Trustee may rely on any
      document believed by it to be genuine and to have been signed or presented
      by the proper person. The Trustee need not investigate any fact or matter
      stated in the document.

		 
		 		(2)		
      Before the Trustee acts or
      refrains from acting, it may require an Officers’ Certificate or an
      Opinion of Counsel. The Trustee shall not be liable for any action it
      takes or omits to take in good faith in reliance on the Certificate or
      Opinion.

		 
		 		(3)		
      The Trustee may act through
      agents and shall not be responsible for the misconduct or negligence of
      any agent appointed with due care, unless such Agent is affiliated with
      the Trustee.

		 
		 		(4)		
      The Trustee may refuse to perform
      any duty or exercise any right or power which it reasonably believes may
      expose it to any loss, liability or expense unless it receives indemnity
      satisfactory to it against such loss, liability or
  expense.

		 

	               
    	   	       	(5)	      	
      The Trustee shall not be liable
      for interest on any money received by it except as the Trustee may agree
      with the Company. Money held in trust by the Trustee need not be
      segregated from other funds except to the extent required by
      law.

				 
				(6)		
      The Trustee shall have no duty
      with respect to a Default unless it has actual knowledge of the
      Default.

				 
				(7)		
      The Trustee shall not be liable
      for any action it takes or omits to take in good faith which it believes
      to be authorized and within its powers.

				 
				(8)		
      Any Agent shall have the same
      rights and be protected to the same extent as if it were
      Trustee.

				 
				(9)		
      The right of the Trustee to
      perform any discretionary act specified in or contemplated by this
      Indenture shall not be construed as a duty.

				 
				(10)		
      Any request or direction of the
      Company mentioned herein shall be sufficiently evidenced by a written
      order signed in the name of the Company by any Officer of the Company and
      delivered to the Trustee or by resolution duly adopted by the
      Board.

				 
				(11)		
      The Trustee shall not be deemed
      to have notice of any Default or Event of Default unless a Trust Officer
      has actual knowledge thereof or unless written notice of any event which
      is in fact such a default is received by the Trustee at the Corporate
      Trust Office of the Trustee, and such notice references the Securities and
      this Indenture.

				 
				(12)		
      In no event shall the Trustee be
      responsible or liable for any failure or delay in the performance of its
      obligations hereunder arising out of or caused by, directly or indirectly,
      forces beyond its control, including, without limitation strikes, work
      stoppages, accidents, acts of war or terrorism, civil or military
      disturbances, nuclear or natural catastrophes or acts of God, and
      interruptions, loss or malfunctions of utilities, communications or
      computer (software and hardware) services; it being understood that the
      Trustee shall use reasonable efforts which are consistent with accepted
      practices in the banking industry to resume performance as soon as
      practicable under the circumstances.

				 

	               
    	(e)	      	
      Whether or not therein expressly
      so provided, every provision of this Indenture relating to the conduct or
      affecting the liability of or affording protection to the Trustee shall be
      subject to the provisions of this Section 7.01.

		 

	               
    	(f)	      	
      Section 7.06 of the Original
      Indenture is amended by adding the following paragraph at the end of
      Section 7.06:

		 
		 		
            When the Trustee incurs
      expenses or renders services in connection with an Event of Default
      specified in Section 6.01(v) or Section 6.01(vi), the expenses (including
      the reasonable charges and expenses of its counsel) and the compensation
      for the services are intended to constitute expenses of administration
      under any applicable Federal or state bankruptcy, insolvency or other
      similar law.

		 

	               
    	(g)	      	
      Section 9.06 of the Original
      Indenture is amended by adding the following paragraph at the end of
      Section 9.06:

		 
		 		
           In executing any supplemental
      indenture, the Trustee will receive, and (subject to Section 9.01) will be
      fully protected in relying upon, an Officer's Certificate and an Opinion
      of Counsel stating that the execution of such supplemental indenture is
      authorized or permitted by this Indenture.

		 
		(h)		
      Section 10.02 of the Original
      Indenture is amended to read in its entirety as follows:

		 
		 		
            Any notice by one
      party to another is duly given if in writing and delivered in person, sent
      by facsimile or electronic transmission and confirmed by mail or mailed by
      first-class mail to the other’s address shown below:

				 
				     
      Company:  Golden State Water
      Company  
                     
      630 East Foothill
      Boulevard  
                     
      San Dimas, California
      91773  
                     
      Attention: Chief Financial
      Officer  
  
     
      Trustee:  The Bank of New York
      Mellon Trust Company,
      N.A.  
                   700 South Flower Street, Suite
      500  
                   Los Angeles, CA 90017  
                   Attention:
      Corporate Trust Department 
				   
				
            A party by notice to the
      other parties may designate additional or different addresses for
      subsequent notices.

				   
				
            Any notice mailed to a Securityholder shall be mailed to the
      address of the Securityholder shown on the register kept by the Transfer
      Agent. Failure to mail a notice to a Securityholder or any defect in a
      notice mailed to a Securityholder shall not affect the sufficiency of the
      notice mailed to other Securityholders or the sufficiency of any published
      notice.

				 
				
            If a notice is mailed
      in the manner provided above within the time prescribed, it is duly given,
      whether or not the addressee receives it.

				 
				
            If the Company mails a
      notice to Securityholders, it shall mail a copy to the Trustee and each
      Agent at the same time.

				 
				      If in the
      Company’s opinion it is impractical to mail a notice required to be mailed
      or to publish a notice required to be published, the Company may give such
      substitute notice as the Trustee approves. Failure to publish a notice as
      required or any defect in it shall not affect the sufficiency of any
      mailed notice.

				 
				
            All notices shall be
      in the English language, except that any published notice may be in an
      official language of the county of publication.

				 
				     
      A “notice” includes any communication required by this
      Indenture. 
		 

     3. Continued Applicability. Except as
specifically amended, supplemented or deleted by this Supplemental Indenture,
all provisions of the Original Indenture shall be applicable for all purposes
with respect to the Securities issued after December 1, 2008, and the Original
Indenture, as supplemented and amended hereby, is hereby ratified, confirmed and
approved with respect to all Securities issued and to be issued thereunder. The
Original Indenture as supplemented and amended by this Supplemental Indenture
shall be construed as one and the same instrument. 

     4.
Counterparts. This Supplemental Indenture may be executed by the parties in
counterparts, each of which shall be an original, but all of such counterparts
shall together constitute one and the same instrument. 

     5. Trustee Disclaimer. The Trustee has
not investigated any fact or matter stated in the Recitals.

     
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the day and year first above written. 

	 	GOLDEN STATE WATER COMPANY  
		  
		  
		By: 
    	 	/s/ Floyd E.
      Wicks  
		  		Name: Floyd E.
      Wicks  
		  		Title: President
      & CEO  
		  
		  
		THE
      BANK OF NEW YORK MELLON  
		TRUST COMPANY, N.A.  
		  
		  
		By: 
    		/s/ Teresa
      Petta  
		  		Name: Teresa
      Petta  
		  		Title: Vice
      President

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