Document:

Exhibit
4.2

 

 

 

 

 

THE
BANCORP, INC.

to

[TRUSTEE],

Trustee

 

 

 

 INDENTURE

 

 

 

 

Dated
as of [                    ]

 

 

 

 

SUBORDINATED
DEBT SECURITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    

 

THE
BANCORP, INC.

Certain
Sections of this Indenture relating to Sections 310

through 318, inclusive, of the Trust Indenture Act of 1939

	Trust
                                         Indenture Act Section
	Indenture
                                         Section

	Section 3.10(a)(1)	6.09
	(a)(2)	6.09
	(a)(3)	Not Applicable
	(a)(4)	Not Applicable
	(b)	6.08
	Section 3.11(a)	6.13
	(b)	6.13
	Section 3.12(a)	7.01, 7.02
	(b)	7.02
	(c)	7.02
	Section 3.13(a)	7.03
	(b)	7.03
	(c)	7.03
	(d)	7.03
	Section 3.14(a)	7.04
	(a)(4)	1.01
	(b)	Not Applicable
	(c)(1)	1.02
	(c)(2)	1.02
	(c)(3)	Not Applicable
	(d)	Not Applicable
	(e)	1.02
	Section 3.15(a)	6.01
	(b)	6.02
	(c)	6.01
	(d)	6.01
	(e)	5.13
	Section 3.16(a)	1.01
	(a)(1)(A)	5.02, 5.11
	(a)(1)(B)	5.12
	(a)(2)	Not Applicable
	(b)	Not Applicable
	(c)	1.04
	Section 3.17(a)(1)	5.03
	(a)(2)	5.04
	(b)	10.03
	Section 3.18(a)	1.07
	 	 

Note:
This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.

 

    	i

    	 

    

 

Table
of Contents

Page

	Article
    I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	1
	Section
    1.01.   Definitions	1
	Section
    1.02.   Compliance Certificates and Opinions	9
	Section
    1.03.   Form of Documents Delivered to Trustee	10
	Section
    1.04.   Acts of Holders; Record Dates	10
	Section
    1.05.   Notices, Etc., to Trustee and Company	12
	Section
    1.06.   Notice to Holders; Waiver	13
	Section
    1.07.   Conflict with Trust Indenture Act	13
	Section
    1.08.   Effect of Headings and Table of Contents	13
	Section
    1.09.   Successors and Assigns	13
	Section
    1.10.   Separability Clause	13
	Section
    1.11.   Benefits of Indenture	13
	Section
    1.12.   Governing Law	14
	Section
    1.13.   Legal Holidays	14
	Section
    1.14.   No Adverse Interpretation of Other Agreements	14
	Section
    1.15.   No Personal Liability of Directors, Officers, Employees and Stockholders	14
	Section
    1.16.   Language of Notices, Etc.	14
	Section
    1.17.   Force Majeure	14
	Section
    1.18.   Waiver of Jury Trial	15
	Section
    1.19.   U.S.A. Patriot Act	15
	Article
    II SECURITY FORMS	15
	Section
    2.01.   Forms Generally	15
	Section
    2.02.   Form of Face of Security	15
	Section
    2.03.   Form of Reverse of Security	17
	Section
    2.04.   Form of Legend for Global Securities	20
	Section
    2.05.   Form of Trustee’s Certificate of Authentication	21
	Article
    III THE SECURITIES	21
	Section
    3.01.   Amount Unlimited; Issuable in Series	21
	Section
    3.02.   Denominations	24
	Section
    3.03.   Execution, Authentication, Delivery and Dating	24
	Section
    3.04.   Temporary Securities	25
	Section
    3.05.   Registration, Registration of Transfer and Exchange	26
	Section
    3.06.   Mutilated, Destroyed, Lost and Wrongfully Taken Securities	28
	Section
    3.07.   Payment of Interest; Interest Rights Preserved	29
	Section
    3.08.   Persons Deemed Owners	30
	Section
    3.09.   Cancellation	30
	Section
    3.10.   Computation of Interest	31
	Section
    3.11.   CUSIP Numbers	31

 

    	ii

    	 

    

 

	Article
    IV SATISFACTION AND DISCHARGE	31
	Section
    4.01.   Satisfaction and Discharge of Indenture	31
	Section
    4.02.   Application of Trust Money	32
	Article
    V REMEDIES	32
	Section
    5.01.   Events of Default	32
	Section
    5.02.   Acceleration of Maturity; Rescission and Annulment	34
	Section
    5.03.   Collection of Indebtedness and Suits for Enforcement by Trustee	35
	Section
    5.04.   Trustee May File Proofs of Claim	35
	Section
    5.05.   Trustee May Enforce Claims Without Possession of Securities	36
	Section
    5.06.   Application of Money Collected	36
	Section
    5.07.   Limitation on Suits	36
	Section
    5.08.   Restoration of Rights and Remedies	37
	Section
    5.09.   Rights and Remedies Cumulative	37
	Section
    5.10.   Delay or Omission Not Waiver	37
	Section
    5.11.   Control by Holders	37
	Section
    5.12.   Waiver of Past Defaults	38
	Section
    5.13.   Undertaking for Costs	38
	Section
    5.14.   Waiver of Usury, Stay or Extension Laws	38
	Article
    VI THE TRUSTEE	39
	Section
    6.01.   Certain Duties and Responsibilities	39
	Section
    6.02.   Notice of Defaults	40
	Section
    6.03.   Certain Rights of Trustee	40
	Section
    6.04.   Not Responsible for Recitals or Issuance of Securities	41
	Section
    6.05.   May Hold Securities	41
	Section
    6.06.   Money Held in Trust	41
	Section
    6.07.   Compensation and Reimbursement	42
	Section
    6.08.   Conflicting Interests	42
	Section
    6.09.   Corporate Trustee Required; Eligibility	42
	Section
    6.10.   Resignation and Removal; Appointment of Successor	43
	Section
    6.11.   Acceptance of Appointment by Successor	44
	Section
    6.12.   Merger, Conversion, Consolidation or Succession to Business	45
	Section
    6.13.   Preferential Collection of Claims Against Company	45
	Section
    6.14.   Appointment of Authenticating Agent	46
	Article
    VII HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY	47
	Section
    7.01.   Company to Furnish Trustee Names and Addresses of Holders	47
	Section
    7.02.   Preservation of Information; Communications to Holders	47
	Section
    7.03.   Reports by Trustee	48
	Section
    7.04.   Reports by Company	48
	Article
    VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE	48
	Section
    8.01.   Company May Consolidate, Etc., Only on Certain Terms	48
	Section
    8.02.   Successor Substituted	49

 

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	Article
    IX SUPPLEMENTAL INDENTURES	49
	Section
    9.01.   Supplemental Indentures Without Consent of Holders	49
	Section
    9.02.   Supplemental Indentures With Consent of Holders	51
	Section
    9.03.   Execution of Supplemental Indentures	52
	Section
    9.04.   Effect of Supplemental Indentures	52
	Section
    9.05.   Conformity with Trust Indenture Act	52
	Section
    9.06.   Reference in Securities to Supplemental Indentures	52
	Section
    9.07.   Subordination Unimpaired	53
	Article
    X COVENANTS	53
	Section
    10.01.   Payment of Principal, Premium and Interest	53
	Section
    10.02.   Maintenance of Office or Agency	53
	Section
    10.03.   Money for Securities Payments to Be Held in Trust	54
	Section
    10.04.   Corporate Existence	55
	Section
    10.05.   Statement by Officers as to Default	55
	Section
    10.06.   Waiver of Certain Covenants	55
	Article
    XI REDEMPTION OF SECURITIES	55
	Section
    11.01.   Applicability of Article	55
	Section
    11.02.   Election to Redeem; Notice to Trustee	55
	Section
    11.03.   Selection by Trustee of Securities to Be Redeemed	56
	Section
    11.04.   Notice of Redemption	56
	Section
    11.05.   Deposit of Redemption Price	57
	Section
    11.06.   Securities Payable on Redemption Date	58
	Section
    11.07.   Securities Redeemed in Part	58
	Article
    XII DEFEASANCE AND COVENANT DEFEASANCE	58
	Section
    12.01.   Company’s Option to Effect Defeasance or Covenant Defeasance	58
	Section
    12.02.   Defeasance and Discharge	58
	Section
    12.03.   Covenant Defeasance	59
	Section
    12.04.   Conditions to Defeasance or Covenant Defeasance	59
	Section
    12.05.   Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions	61
	Section
    12.06.   Reinstatement	61
	Article
    XIII [RESERVED]	62
	Section
    13.01.   Reserved	62

 

	Article
    XIV SUBORDINATION OF SECURITIES	62
	Section
    14.01.   Securities Subordinate to Senior Debt	62
	Section
    14.02.   Payment Over of Proceeds Upon Dissolution, Etc	62
	Section
    14.03.   Prior Payment to Senior Debt Upon Acceleration of Securities	63
	Section
    14.04.   No Payment When Senior Debt in Default	64
	Section
    14.05.   Payment Permitted in Certain Situations	65
	Section
    14.06.   Subrogation to Rights of Holders of Senior Debt	65
	Section
    14.07.   Provisions Solely to Define Relative Rights	65
	Section
    14.08.   Trustee to Effectuate Subordination	66

 

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	Section
    14.09.   No Waiver of Subordination Provisions	66
	Section
    14.10.   Notice to Trustee	66
	Section
    14.11.   Reliance on Judicial Order or Certificate of Liquidating Agent	67
	Section
    14.12.   Trustee Not Fiduciary For Holders of Senior Debt	67
	Section
    14.13.   Rights of Trustee as Holder of Senior Debt; Preservation of Trustees Rights	67
	Section
    14.14.   Article Applicable to Paying Agents	67
	Article
    XV SECURITY	68
	Section
    15.01.   Security	68
	 	 

    	v

    	 

    

 

 

INDENTURE,
dated as of [ _________________], between The Bancorp, Inc., a corporation duly organized and existing under the laws of the State
of Delaware (herein called the “Company”), having its principal office at 409 Silverside Road,  Wilmington,
 DE 19809, and [Trustee], as Trustee (herein called the “Trustee”).

 

RECITALS
OF THE COMPANY

The
Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its
subordinated secured or unsecured debentures, notes or other evidences of indebtedness (herein called the “Securities”)
to be issued in one or more series as in this Indenture provided.

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

NOW,
THEREFORE, THIS INDENTURE WITNESSETH:

For
and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:

Article
I

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION

Section
1.01. Definitions. For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

(1)
the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

(2)
all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;

(3)
all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;

(4)
unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article
or a Section, as the case may be, of this Indenture;

(5)
the words “herein”, “hereof”, “hereto” and “hereunder” and other words of similar
import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;

(6)
references to agreements and other instruments include subsequent amendments and supplements thereto;

    

    

    

 

(7)
when used with respect to any Security, the words “convert”, “converted” and “conversion”
are intended to refer to the right of the Holder or the Company to convert or exchange such Security into or for securities or
other property in accordance with such terms, if any, as may hereafter be specified for such Security as contemplated by Section
3.01, and these words are not intended to refer to any right of the Holder or the Company to exchange such Security for other
Securities of the same series and like tenor pursuant to Section 3.04, Section 3.05, Section 3.06, Section
9.06 or Section 11.07 or another similar provision of this Indenture, unless the context otherwise requires; and references
herein to the terms of any Security that may be converted mean such terms as may be specified for such Security as contemplated
in Section 3.01; and

(8)
unless the context otherwise requires, any reference to “duly provided for” and other words of similar import with
respect to any amount or property required to be paid or delivered, as applicable, shall include, without limitation, having made
such amount or property available for payment or delivery.

“Act”,
when used with respect to any Holder, has the meaning specified in Section 1.04.

“Affiliate”
of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition, “control” when used with respect to
any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.

“Applicable
Procedures” of a Depositary means, with respect to any matter at any time, the policies and procedures of such Depositary,
if any, that are applicable to such matter at such time.

“Authenticating
Agent” means, when used with respect to Securities of any series, any Person authorized by the Trustee to act on
behalf of the Trustee to authenticate the Securities of such series.

“Board
of Directors” means either the board of directors of the Company or any duly authorized committee of that board.

“Board
Resolution” means a copy of a resolution certified by an Officer of the Company to have been duly adopted by the
Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. Where any
provision of this Indenture refers to action to be taken pursuant to a Board Resolution (including the establishment of any series
of the Securities and the forms and terms thereof), such action may be taken by any officer or employee of the Company authorized
to take such action by the Board of Directors as evidenced by a Board Resolution.

“Business
Day”, when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order
to close; provided 

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that,
when used with respect to any Security, “Business Day” may have such other meaning, if any, as may be specified for
such Security as contemplated by Section 3.01.

“Capital
Stock” means:

(1)
in the case of a corporation, corporate stock;

(2)
in the case of a limited liability company or similar entity, any membership or similar interests therein;

(3)
in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;

(4)
in the case of a partnership, partnership interests (whether general or limited); and

(5)
any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions
of assets of, the issuing Person.

“Commission”
means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.

“Company”
means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor
Person.

“Company
Request” or “Company Order” means a written request or order signed in the name of the
Company by any Officer of the Company, or any other officer or officers of the Company designated in writing by or pursuant to
authority of the Board of Directors and delivered to the Trustee from time to time.

“Corporate
Trust Office” means the designated office of the Trustee in [_________________] at which at any particular time
its corporate trust business shall be administered and which, at the date hereof, is located at [_________________], Attention:
[_________________] or at such other address as the Trustee may designate from time to time by notice to the Holders and the Company,
or the principal corporate trust office of any successor Trustee.

“corporation”
means a corporation, association, company (including a limited liability company), joint-stock company, business trust or other
similar entity.

“Covenant
Defeasance” has the meaning specified in Section 12.03.

“Credit
Agreement” means the credit agreement dated as of __________,____, among the Company, the financial institutions
party thereto as lenders, and ________________, as administrative agent, together with related documents thereto including any
guarantee 

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agreements
and security documents, as amended, modified supplemented, restated, renewed, refunded, replaced, restructured repaid or refinanced
from time to time (including any agreement extending the maturity thereof or increasing the amount of available borrowings thereunder
or adding entities as additional borrowers or guarantors thereunder) whether with the original agents and lenders or otherwise
and whether provided under the original credit agreement or other credit agreements or otherwise.

“Defaulted
Interest” has the meaning specified in Section 3.07.

“Defeasance”
has the meaning specified in Section 12.02.

“Depositary”
means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing
agency that is designated to act as depositary for such Securities as contemplated by Section 3.01.

“DTC”
has the meaning specified in Section 1.04.

“Equity
Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding
any debt security that is convertible into, or exchangeable for, Capital Stock).

“Event
of Default” has the meaning specified in Section 5.01.

“Exchange
Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time
to time.

“Expiration
Date” has the meaning specified in Section 1.04.

“GAAP”
means, at any time, (i) generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of
the accounting profession in the United States or (ii) if at such time the Company is required to prepare its financial statements
for reports filed with the Commission under Section 13 or 15(d) of the Exchange Act pursuant to standards other than those specified
in clause (i) (which may include International Financial Reporting Standards), such other standards, in each case which are in
effect at such time.

“Global
Security” means a Security that evidences all or part of the Securities of any series and bears the legend set forth
in Section 2.04 (or such legend as may be specified as contemplated by Section 3.01 for such Securities).

“Holder”
means a Person in whose name a Security is registered in the Security Register.

“Indebtedness”
means, with respect to any Person, without duplication, any indebtedness of such Person, whether or not contingent: (i) in
respect of borrowed money; (ii) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof); (iii) in respect of banker’s acceptances; (iv) representing capital lease 

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obligations;
(v) in respect of any guarantee by such Person of production or payment with respect to a production payment recorded as
a liability or deferred revenue in accordance with GAAP; (vi) representing the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an accrued expense or trade payable; or (vii) representing
any hedging obligation, if and to the extent any of the foregoing indebtedness (other than letters of credit and hedging obligations)
would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP. In addition, the term “Indebtedness”
includes (x) all indebtedness of any other Person, of the types described above in clauses (i) through (vii), secured
by a lien on any asset of such Person (whether or not such indebtedness is assumed by such Person), and (y) to the extent
not otherwise included, the guarantee by such Person of any indebtedness of any other Person of the types described above in clauses
(i) through (vii). Notwithstanding the foregoing, the following shall not constitute “Indebtedness”: (a) accrued
expenses and trade accounts payable arising in the ordinary course of business; (b) any obligation in respect of any production
payment recorded as a liability or deferred revenue in accordance with GAAP; (c) any indebtedness which has been defeased
in accordance with GAAP or defeased pursuant to the deposit of cash or government securities (in an amount sufficient to satisfy
all such indebtedness obligations at maturity or redemption, as applicable, and all payments of interest and premium, if any)
in a trust or account created or pledged for the sole benefit of the holders of such indebtedness, and subject to no other liens,
and the other applicable terms of the instrument governing such indebtedness; (d) any obligations in respect of completion
bonds, performance bonds, bid bonds, appeal bonds, surety bonds, bankers acceptances, letters of credit, insurance obligations
or bonds and other similar bonds and obligations incurred in the ordinary course of business and any guaranties or letters of
credit functioning as or supporting any of the foregoing bonds or obligations; (e) any obligation arising from the honoring
by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary
course of business (provided, however, that such obligation is extinguished within five business days of its incurrence); (f) any
obligation arising from any agreement providing for indemnities, guarantees, purchase price adjustments, holdbacks, contingency
payment obligations based on the performance of the acquired or disposed assets or similar obligations (other than guarantees
of Indebtedness) incurred by any Person in connection with the acquisition or disposition of assets; and (h) any obligation
in respect of operating agreements, joint venture agreements, partnership agreements, assignments, purchase and sale agreements,
royalties, joint interest billing arrangements, net profits interests, participation agreements, subleases, licenses or subleases
and other agreements similar to any of the foregoing that are customary in the transportation industry.

“Indenture”
means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument
and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this
instrument and any such supplemental indenture, respectively. The term “Indenture” shall also include the terms
of any particular series or specific Securities within a series established as contemplated by Section 3.01.

“interest”,
when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

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“Interest
Payment Date”, when used with respect to any Security, means the Stated Maturity of an installment of interest on
such Security.

“Maturity”,
when used with respect to any Security, means the date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided (as extended or deferred), whether at the Stated Maturity or by declaration
of acceleration, call for redemption or otherwise.

“Notice
of Default” means a written notice of the kind specified in Section 5.01(3).

“Officer”
means a Chairman of the Board, a Chief Executive Officer, a Chief Financial Officer, a President, a Vice President, a Treasurer,
an Assistant Treasurer, a Secretary or an Assistant Secretary of the Company.

“Officers’
Certificate” means a certificate signed by any two Officers of the Company, or any other officer or officers of
the Company designated in a writing by or pursuant to authority of the Board of Directors and delivered to the Trustee from time
to time.

“Opinion
of Counsel” means a written opinion of counsel, who may be an employee of or counsel for the Company.

“Original
Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof
to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.02.

“Outstanding”,
when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:

(1)
Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;

(2)
Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

(3)
Securities as to which Defeasance has been effected pursuant to Section 12.02;

(4)
Securities which have been paid pursuant to Section 3.06 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are held by a protected purchaser in whose hands such Securities
are valid obligations of the Company; and

(5)
Securities as to which any property deliverable upon conversion thereof has been delivered (or such delivery has been duly provided
for), or as to which any other particular 

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conditions
have been satisfied, in each case as may be provided for such Securities as contemplated in Section 3.01;

provided,
however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given,
made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date,
(A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant
to Section 5.02, (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable,
the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 3.01, (C) the principal amount of a Security denominated in one or more foreign currencies, composite
currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such
date in the manner provided as contemplated by Section 3.01, of the principal amount of such Security (or, in the case
of a Security described in Clause (A) or (B) above, of the amount determined as provided in such Clause), and (D) Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which a Responsible Officer
of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act
with respect to such Securities and that the pledgee is not the Company of such Securities or any other obligor upon the Securities
or any Affiliate of the Company or such other obligor.

“Paying
Agent” means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities
on behalf of the Company.

“Person”
means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency
or political subdivision thereof.

“Place
of Payment”, when used with respect to the Securities of any series and subject to Section 10.02, means the
place or places where the principal of and any premium and interest on the Securities of that series are payable as specified
as contemplated by Section 3.01.

“Predecessor
Security” of any particular Security means every previous Security evidencing all or a portion of the same debt
as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered
under Section 3.06 in exchange for or in lieu of a mutilated, destroyed, lost or wrongfully taken Security shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or wrongfully taken Security.

“Redemption
Date”, when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant
to this Indenture.

    	7

    	 

    

“Redemption
Price”, when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.

“Regular
Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date
specified for that purpose as contemplated by Section 3.01.

“Responsible
Officer”, when used with respect to the Trustee, means any officer of the Trustee within the corporate trust department,
including any Vice President, assistant secretary, assistant treasurer, assistant cashier, trust officer, assistant trust officer
or assistant controller assigned to the Corporate Trust Office, or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust
matter, any other officer of the Trustee to whom such matter is referred because of his knowledge of and familiarity with the
particular subject, and who, in each case, shall have direct responsibility for the administration of this Indenture.

“Securities”
has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

“Securities
Act” means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time.

“Security
Register” and “Security Registrar” have the respective meanings specified in Section
3.05.

“Senior
Debt” means: (a) indebtedness of the Company under or in respect of the Credit Agreement, whether for principal,
interest (including interest accruing after the filing of a petition initiating any proceeding pursuant to any bankruptcy law,
whether or not the claim for such interest is allowed as a claim in such proceeding), reimbursement obligations, fees, commissions,
expenses, indemnities or other amounts; and (b) any other Indebtedness permitted under the terms of this Indenture, unless
the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right
of payment to the Securities. Notwithstanding the foregoing, “Senior Debt” will not include: (i) Equity Interests;
(ii) any liability for federal, state, local or other taxes due or owed by the Company; (iii) any Indebtedness of the
Company to any of its Subsidiaries or Affiliates; (iv) any trade payables; or (v) any Indebtedness that is incurred
in violation of this Indenture.

“Special
Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section
3.07.

“Stated
Maturity”, when used with respect to any Security or any installment of principal thereof or interest thereon, means
the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal
or interest is due and payable.

“Subsidiary”
means any Person a majority of the combined voting power of the total outstanding ownership interests in which is, at the time
of determination, beneficially owned or held, directly or indirectly, by the Company or one or more other Subsidiaries. For this
purpose, 

    	8

    	 

    

 

“voting
power” means power to vote in an ordinary election of directors (or, in the case of a Person that is not a corporation,
ordinarily to appoint or approve the appointment of Persons holding similar positions), whether at all times or only as long as
no senior class of ownership interests has such voting power by reason of any contingency.

“Trustee”
means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall
have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include
each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used
with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

“Trust
Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act”
means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

“Uniform
Commercial Code” means the Uniform Commercial Code in effect in the State of Maryland or the State of New York,
as applicable, in each case as amended from time to time.

“U.S.
Government Obligation” has the meaning specified in Section 12.04.

“Vice
President”, when used with respect to the Company or the Trustee, means any vice president, whether or not designated
by a number or a word or words added before or after the title “vice president.”

Section
1.02. Compliance Certificates and Opinions. Upon any application or request by the
Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust Indenture Act; provided, however, that no such opinion
shall be required in connection with the issuance of Securities that are part of any series as to which such an opinion has been
furnished. Each such certificate or opinion shall be given in the form of an Officers’ Certificate, if to be given by an
Officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust
Indenture Act and any other requirements set forth in this Indenture.

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

(1)
a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein
relating thereto;

(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)
a statement that, in the opinion of each such individual, he or she 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

    	9

    	 

    

(4)
a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

Section
1.03. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.

Any
certificate or opinion of an Officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such Officer knows that the certificate or opinion or representations with
respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of, or representation
by, counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an
Officer or Officers of the Company stating that the information with respect to such factual matters is in the possession of the
Company, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.

Where
any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Section
1.04. Acts of Holders; Record Dates. Any request, demand, authorization, direction, notice, consent, waiver or other action
provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or by an agent or agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee, the Company, if made in the
manner provided in this Section.

Without
limiting the generality of this Section, unless otherwise provided in or pursuant to this Indenture, (i) a Holder, including a
Depositary or its nominee that is a Holder of a Global Security, may give, make or take, by an agent or agents duly appointed
in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted in or
pursuant to this Indenture to be given, made or taken by Holders, and a Depositary or its nominee that is a Holder of a Global
Security may duly appoint in writing as its agent or agents members of, or participants in, such Depositary holding interests
in such Global Security in the records of such Depositary; and (ii) with respect to any Global Security the Depositary for which
is The Depository Trust Company (“DTC”), any consent or other action given, made or taken by 

    	10

    	 

    

 

an
“agent member” of DTC by electronic means in accordance with the Automated Tender Offer Procedures system or other
Applicable Procedures of, and pursuant to authorization by, DTC shall be deemed to constitute the “Act” of the Holder
of such Global Security, and such Act shall be deemed to have been delivered to the Company and the Trustee upon the delivery
by DTC of an “ agent’s message” or other notice of such consent or other action having been so given, made or
taken in accordance with the Applicable Procedures of DTC.

The
fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a
signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient
proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing
the same, may also be proved in any other manner which the Trustee deems sufficient.

The
ownership of Securities shall be proved by the Security Register.

Any
request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.

The
Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled
to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted
by this Indenture to be given, made or taken by Holders of Securities of such series, provided that the Company may not set a
record date for, and the provisions of this paragraph shall not apply with respect to, the giving, making or taking of any notice,
declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph, the
Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to give,
make or take the relevant action, whether or not such Holders remain Holders after such record date; provided, however,
that no such action shall be effective hereunder unless given, made or taken on or prior to the applicable Expiration Date by
Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph
shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action given, made or
taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is
given, made or taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall
cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee
in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.05 and Section
1.06.

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The
Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled
to join in the giving, making or taking of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section
5.02, (iii) any request to institute proceedings referred to in Section 5.07(2) or (iv) any direction referred to in
Section 5.11, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph,
the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to give, make
or take such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided,
however, that no such action shall be effective hereunder unless given, made or taken on or prior to the applicable Expiration
Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this
paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action
by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action
given, made or taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date
such action is given, made or taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s
expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given
to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.05
and Section 1.06.

With
respect to any record date set pursuant to this Section, the party hereto which sets such record date may designate any day as
the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day;
provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party
hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 1.06, on
or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto which set such record date shall be deemed to have initially designated the 180th day after
such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date to an earlier
day as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.

Without
limiting the foregoing, a Holder entitled hereunder to give, make or take any action hereunder with regard to any particular Security
may do so, in person or by an agent duly appointed in writing, with regard to all or any part of the principal amount of such
Security.

Section
1.05. Notices, Etc., to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed
in writing (which may be by facsimile transmission) to or with the Trustee at [_________________], Attention: [_________________],
facsimile: [_____________] or any other address previously furnished in writing to the Company and the Holders by the Trustee
or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, 

    	12

    	 

    

 

to
the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the Company.

Section
1.06. Notice to Holders; Waiver. Where this Indenture provides for notice to Holders
of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than
the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to
any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides
for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or
after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In
case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.

Where
this Indenture provides for notice of any event to a Holder of a Global Security, such notice shall be sufficiently given if given
to the Depositary for such Security (or its designee), pursuant to its Applicable Procedures, not later than the latest date (if
any), and not earlier than the earliest date (if any), prescribed for the giving of such notice.

Section
1.07. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the
Trust Indenture Act which is required under such Act to be a part of and govern this Indenture, the latter provision shall control.
If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded,
the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

Section
1.08. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

Section
1.09. Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.

Section
1.10. Separability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section
1.11. Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, the holders of Senior Debt and the Holders, any benefit or any legal
or equitable right, 

    	13

    	 

    

 

remedy
or claim under this Indenture, except as may otherwise be provided pursuant to Section 3.01 with respect to any Securities
of a particular series or under this Indenture with respect to such Securities.

Section
1.12. Governing Law. This Indenture and the Securities and the rights and obligations of the parties hereto and thereto,
including the interpretation, construction, validity and enforceability thereof, shall be governed by and construed and interpreted
in accordance with the law of the State of New York, without regard to conflicts of laws principles thereof

Section
1.13. Legal Holidays. In any case where any Interest Payment Date, Redemption Date or Maturity of any Security, or any
date on which a Holder has the right to convert his Security, shall not be a Business Day at any Place of Payment, then (notwithstanding
any other provision of this Indenture or of the Securities (other than a provision of any Security which specifically states that
such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any), or conversion of
such Security need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such
Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Maturity,
or on such date for conversion, as the case may be.

Section
1.14 No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any other indenture, loan
or other agreement of the Company or any Subsidiaries of any thereof or of any other Person. Any such indenture, loan or other
agreement may not be used to interpret this Indenture.

Section
1.15. No Personal Liability of Directors, Officers, Employees and Stockholders. No past, present or future director, officer,
employee, incorporator or stockholder of the Company, as such, will have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Securities by accepting a Security waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Securities. The waiver may not be effective to waive liabilities under the federal securities
laws.

Section
1.16. Language of Notices, Etc. Any request, demand, authorization, direction, notice, consent, waiver, other action or
Act provided or permitted under this Indenture shall be in the English language, except that any published notice may be in an
official language of the country of publication.

Section
1.17. Force Majeure. Subject to Section 6.01, 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 that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under
the circumstances.

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Section
1.18. Waiver of Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS INDENTURE.

Section
1.19. U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act,
the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required
to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens
an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it
may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

Article
II

SECURITY FORMS

Section
2.01. Forms Generally. The Securities of each series shall be in substantially the form set forth in this Article, or in
such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto
and with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture,
and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined
by the officers executing such Securities as evidenced by their execution thereof. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified
by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 3.03 for the authentication and delivery of such Securities.

Section
2.02. Form of Face of Security.

[Insert
any legend required by the Internal Revenue Code and the regulations thereunder.]

THE
BANCORP, INC.

	No                  $	 	CUSIP No.            

THE
BANCORP, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”,
which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to
pay to __________________, or registered assigns, the principal sum of ________________ Dollars on ___________ [if the Security
is to bear interest prior to Maturity, insert — , and to pay interest thereon from __________ or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually on __________ and __________ in each year, commencing
__________, and at the Maturity thereof, at the rate of __________% per annum, until the principal hereof is paid or made available
for payment [if applicable, insert —, provided that any premium, and any such installment of interest, which is overdue
shall bear interest at the 

    	15

    	 

    

 

rate
of __________% per annum (to the extent that the payment of such interest shall be legally enforceable), from the date such overdue
amount is due until such amount is paid or duly provided for, and such interest on any overdue amount shall be payable on demand].
The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the __________ or __________ (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date. Any such interest so payable, but not punctually paid or duly provided
for, will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid in any other lawful manner not inconsistent with the
requirements of any securities exchange on which this Security may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture].

[If
the Security is not to bear interest prior to Maturity, insert — The principal of this Security shall not bear interest
except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case
the overdue principal and any overdue premium shall bear interest at the rate of _______% per annum (to the extent that the payment
of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for
payment. Interest on any overdue principal or premium shall be payable on demand.]

Payment
of the principal of (and premium, if any) and [if applicable, insert — any such] interest on this Security will be made
at the office or agency of the Company maintained for that purpose in New York, New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of public and private debts, against surrender of this
Security in the case of any payment due at the Maturity of the principal thereof or any payment of interest becomes payable on
a day other than an Interest Payment Date; provided, however, that if this Security is not a Global Security, (i) payment of interest
on an Interest Payment Date will be made by check mailed to the address of the Person entitled thereto as such address shall appear
in the Security Register; and all other payments will be made by check against surrender of this Security; and (ii) all payments
by check will be made in next-day funds (i.e., funds that become available on the day after the check is cashed); provided further,
that notwithstanding anything in the foregoing to the contrary, if this Security is a Global Security, payment shall be made pursuant
to the Applicable Procedures of the Depositary as permitted in said Indenture. Any interest shall be computed on the basis of
a 360-day year of twelve 30-day months.

Reference
is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

    	16

    	 

    

Unless
the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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

THE
BANCORP, INC.

By:______________________________

Name:______________________________

Title:______________________________

Section
2.03. Form of Reverse of Security. This Security is one of a duly authorized issue of senior securities of the Company
(herein called the “Securities”), issued and to be issued in one or more series under an Indenture,
dated as of [                              ]
(herein called the “Indenture”, which term shall have the meaning assigned to it in such instrument),
between the Company and [Trustee], as Trustee (herein called the “Trustee,” which term includes any
successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Debt and the Holders
of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof [if applicable, insert — limited in aggregate principal amount to $__________].

This
Security is the general, [unsecured,] senior obligation of the Company.

[If
applicable, insert — The Securities of this series are subject to redemption upon not less than 30 days’ nor more
than 60 days’ notice, at any time [if applicable, insert — on or after __________, 20__], as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed
[if applicable, insert — on or before __________, _____%, and if redeemed] during the 12-month period beginning ________________
of the years indicated,

	Year
	Redemption
                                         Price
	Year
	Redemption
                                         Price

	 	 	 	 

and
thereafter at a Redemption Price equal to % of the principal amount, together in the case of any such redemption with accrued
interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]

[If
the Security is subject to redemption of any kind, insert — In the event of redemption of this Security in part only, a
new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.]

    	17

    	 

    

The
indebtedness evidenced by this Security is, to the extent provided in the Indenture, subordinate and subject in right of payment
to the prior payment in full of all Senior Debt, and this Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on his or her behalf to take such actions as may be necessary or appropriate to effectuate the subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any and all such purposes. Each Holder hereof, by
his or her acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Debt, whether now outstanding or hereafter created, incurred, assumed or guaranteed, and waives
reliance by each such holder upon said provisions.

[If
applicable, insert — The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security
or certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain
conditions set forth in the Indenture.]

[If
the Security is not an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner
and with the effect provided in the Indenture.]

[If
the Security is an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this
series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable
in the manner and with the effect provided in the Indenture. Such amount shall be equal to — insert formula for determining
the amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal,
premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s
obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall
terminate.]

The
Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Company and the rights of the Holders of the Securities to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount (including consents obtained in connection with
a purchase of, or tender offer or exchange offer for, Securities) of all Securities at the time Outstanding to be affected (considered
together as one class for this purpose and such Securities to be affected potentially being Securities of the same or different
series and, with respect to any series, potentially comprising fewer than all the Securities of such series), except as may otherwise
be provided pursuant to the Indenture for all or any specific Securities of any series. The Indenture also contains provisions
(i) permitting the Holders of a majority in principal amount (including waivers obtained in connection with a purchase of, or
tender offer or exchange offer for, Securities) of the Securities at the time Outstanding to be affected under the Indenture (considered
together as one class for this purpose and such affected Securities potentially being Securities of the same or different series
and, with respect to any particular series, potentially comprising fewer than all the Securities of such series), on behalf of

    	18

    	 

    

 

the
Holders of all Securities so affected, to waive compliance by the Company with certain provisions of the Indenture and (ii) permitting
the Holders of a majority in principal amount (including waivers obtained in connection with a purchase of, or tender offer or
exchange offer for, Securities) of the Securities at the time Outstanding of any series to be affected under the Indenture (with
each such series considered separately for this purpose), on behalf of the Holders of all Securities of such series, to waive
certain past defaults under the Indenture with respect to such series and their consequences, in the case of Clause (i) or (ii),
except as may otherwise be provided pursuant to the Indenture for all or any specific Securities of any series. Any such consent
or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether
or not notation of such consent or waiver is made upon this Security.

As
provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute
any proceeding with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy thereunder,
unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 30% in principal amount of the Securities of this series at the time Outstanding
shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered
the Trustee indemnity reasonably satisfactory to it, and the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or
any premium or interest hereon on or after the respective due dates expressed herein.

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

As
provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in
any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The
Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable
for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.

    	19

    	 

    

No
service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.

Prior
to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

[If
this Security is a Global Security, insert — This Security is a Global Security and is subject to the provisions of the
Indenture relating to Global Securities, including the limitations therein on transfers and exchanges of Global Securities.]

When
a successor entity assumes, in accordance with the Indenture, all the obligations of its predecessor under the Securities and
the Indenture, and immediately before and thereafter no Event of Default exists and all other conditions of the Indenture are
satisfied, the predecessor entity will be released from those obligations.

This
Security and the Indenture shall be governed by and construed in accordance with the law of the State of New York, without regard
to the conflicts of laws principles thereof.

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

Section
2.04. Form of Legend for Global Securities. Unless otherwise specified as contemplated by Section 3.01 for the Securities
evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following
form:

THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS
SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

Section
2.05. Form of Trustee’s Certificate of Authentication. The Trustee’s certificates of authentication shall be
in substantially the following form:

This
is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

[TRUSTEE],

AS TRUSTEE

 

	Dated:	By:       ______________________________
	 	            Authorized Signatory

 

 

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Article
III

THE SECURITIES

Section
3.01. Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture is unlimited.

The
Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and, subject
to Section 3.03, set forth, or determined in the manner provided, in an Officers’ Certificate, or established in
one or more indentures supplemental hereto, prior to the issuance of Securities of any series,

(1)
the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series);

(2)
any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Securities of the series pursuant to Section 3.04, Section 3.05, Section 3.06, Section 9.06
or Section 11.07 and except for any Securities which, pursuant to Section 3.03, are deemed never to have been
authenticated and delivered hereunder);

(3)
the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest;

(4)
the date or dates on which the principal of any Securities of the series is payable;

(5)
the rate or rates at which any Securities of the series shall bear interest, if any, the date or dates from which any such interest
shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any such
interest payable on any Interest Payment Date;

(6)
the place or places where the principal of and any premium and interest on any Securities of the series shall be payable and the
manner in which any payment may be made;

(7)
the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the
series may be redeemed, in whole or in part, at the option of the Company and, if other than by a Board Resolution, the manner
in which any election by the Company to redeem the Securities shall be evidenced;

(8)
the obligation, if any, of the Company to redeem or purchase any Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof and the period or periods within which, the price or prices at which and the
terms and conditions upon which any Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;

    	21

    	 

    

(9)
if other than denominations of $1,000 and any multiple thereof, the denominations in which any Securities of the series shall
be issuable;

(10)
if the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an
index or pursuant to a formula, the manner in which such amounts shall be determined;

(11)
if other than the currency of the United States of America, the currency, currencies, composite currency, composite currencies
or currency units in which the principal of or any premium or interest on any Securities of the series shall be payable and the
manner of determining the equivalent thereof in the currency of the United States of America for any purpose, including for the
purposes of making payment in the currency of the United States of America and applying the definition of “Outstanding”
in Section 1.01;

(12)
if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company
or the Holder thereof, in one or more currencies, composite currencies or currency units other than that or those in which such
Securities are stated to be payable, the currency, currencies, composite currency, composite currencies or currency units in which
the principal of or any premium or interest on such Securities as to which such election is made shall be payable, the periods
within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which
such amount shall be determined);

(13)
if other than the entire principal amount thereof, the portion of the principal amount of any Securities of the series which shall
be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.02;

(14)
if the principal amount payable at the Stated Maturity of any Securities of the series will not be determinable as of any one
or more dates prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as
of any such date for any purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable
upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated
Maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined);

(15)
if applicable, that the Securities of the series, in whole or any specified part, shall not be defeasible pursuant to Section
12.02 or Section 12.03 or both such Sections, and, if such Securities may be defeased, in whole or in part, pursuant
to either or both such Sections, any provisions to permit a pledge of obligations other than U.S. Government Obligations (or the
establishment of other arrangements) to satisfy the requirements of Section 12.04(1) for defeasance of such Securities
and, if other than by a Board Resolution, the manner in which any election by the Company to defease such Securities shall be
evidenced;

(16)
if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities
and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne
by any such Global Security in addition to or in lieu of that set forth in Section 2.04, any addition to, 

    	22

    	 

    

 

elimination
of or other change in the circumstances set forth in Clause (2) of the penultimate paragraph of Section 3.05 in which any
such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security
in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a
nominee thereof and any other provisions governing exchanges or transfers of any such Global Security;

(17)
any addition to, elimination of or other change in the Events of Default which applies to any Securities of the series and any
change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and
payable pursuant to Section 5.02;

(18)
any addition to, elimination of or other change in the covenants set forth in Article X which applies to Securities of
the series;

(19)
any provisions necessary to permit or facilitate the issuance, payment or conversion of any Securities of the series that may
be converted into securities or other property other than Securities of the same series and of like tenor, whether in addition
to, or in lieu of, any payment of principal or other amount and whether at the option of the Company or otherwise;

(20)
if applicable, that Persons other than those specified in Section 1.11 shall have such benefits, rights, remedies and claims
with respect to any Securities of the series or under this Indenture with respect to such Securities, as and to the extent provided
for such Securities;

(21)
any change in the actions permitted or required under this Indenture to be taken by or on behalf of the Holders of the Securities
of the series, including any such change that permits or requires any or all such actions to be taken by or on behalf of the Holders
of any specific Securities of the series rather than or in addition to the Holders of all Securities of the series;

(22)
whether the Securities of such series are to be secured by any property, assets or other collateral and, if so, the applicable
collateral, any deletions from, or modifications or additions to, the provisions of Article XV hereof or any other provisions
of this Indenture in connection therewith or in connection with any other instrument or agreement entered into in connection therewith;
and

(23)
any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted
by Section 9.01(7)).

All
Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided
in or pursuant to the Board Resolution referred to above and (subject to Section 3.03) set forth, or determined in the
manner provided, in the Officers’ Certificate referred to above or in any such indenture supplemental hereto. All Securities
of any one series need not be issued at the same time and, unless otherwise provided pursuant to this Section 3.01 for
any series, after issuance of Securities of such series, such series may be reopened for issuances of additional Securities of
that series.

    	23

    	 

    

The
terms of any Security of a series may differ from the terms of other Securities of the same series, if and to the extent provided
pursuant to this Section 3.01. The matters referenced in any or all of Clauses (1) through (23) above may be established
and set forth or determined as aforesaid with respect to all or any specific Securities of a series (in each case to the extent
permitted by the Trust Indenture Act).

If
any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record
of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or
prior to the delivery of the Officers’ Certificate setting forth the terms of the series.

The
Securities shall be subordinated in right of payment to Senior Debt as provided in Article XIV.

Section
3.02. Denominations. The Securities of each series shall be issuable only in registered form without coupons and only in
such denominations as shall be specified as contemplated by Section 3.01. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any
integral multiple thereof.

Section
3.03. Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company by its
Chairman of the Board, President or a Vice President of the Company (or any other officer of the Company designated in writing
by or pursuant to authority of the Board of Directors and delivered to the Trustee from time to time). The signature of any of
these officers on the Securities may be manual or facsimile.

Securities
endorsed thereon bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company
shall bind the Company notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication
and delivery of such Securities or did not hold such offices at the date of such Securities.

At
any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of
such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form
or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by
Sections 2.01 and 3.01, in authenticating such Securities, and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall
be fully protected in relying upon, an Opinion of Counsel stating,

(1)  
if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 2.01,
that such form has been established in conformity with the provisions of this Indenture;

    	24

    	 

    

(2)  
if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 3.01,
that such terms have been established in conformity with the provisions of this Indenture; and

(3)  
that when such Securities have been 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, such Securities will constitute valid and legally binding
obligations of the Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general
equity principles and subject to any limitation with respect to payments in currency other than U.S. dollars.

If
such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of
such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities
and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

Notwithstanding
the provisions of Section 3.01 and of the preceding paragraph, if all Securities of a series are not to be originally issued
at one time, it shall not be necessary to deliver the Officers’ Certificate otherwise required pursuant to Section 3.01
or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the authentication
of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the
first Security of such series to be issued.

Each
Security shall be dated as of the date of its authentication.

No
Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears
on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual
signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has
been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated
and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.09, for all purposes of this Indenture such Security shall be deemed never to have
been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

Section
3.04. Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and
upon Company Order, the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in
lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such Securities.

If
temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of 

    	25

    	 

    

 

definitive
Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series
upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the
Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of
the same series, of any authorized denominations and of like tenor and aggregate principal amount. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities
of such series and tenor.

Section
3.05. Registration, Registration of Transfer and Exchange. The Company shall cause to be kept at each office or agency
of the Company designated as a Place of Payment pursuant to the first paragraph of Section 10.02 a register (the register
maintained in each such office or agency of the Company in a Place of Payment being herein sometimes collectively referred to
as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of Securities and of transfers of Securities. [Each such office or agency] is
hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein
provided.

Upon
surrender for registration of transfer of any Security of a series at the office or agency of the Company in a Place of Payment
for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate
principal amount.

At
the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized
denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office
or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate
and deliver, the Securities, which the Holder making the exchange is entitled to receive.

All
Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of
transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required
by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.

No
service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer
or exchange of Securities, other than exchanges pursuant to Section 3.04, Section 9.06 or Section 11.07 not
involving any transfer.

    	26

    	 

    

If
the Securities of any series (or of any series and specified tenor) are to be redeemed in whole or in part, the Company shall
not be required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified
tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of mailing of a notice
of redemption of any such Securities under Section 11.03 and ending at the close of business on the day of such mailing
(or during such period as otherwise specified pursuant to Section 3.01 for such Securities), or (B) to register the transfer
of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being
redeemed in part.

The
provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Securities:

(1)
Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such
Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such
Global Security shall constitute a single Security for all purposes of this Indenture.

(2)
Notwithstanding any other provision in this Indenture, and subject to such applicable provisions, if any, as may be specified
as contemplated by Section 3.01, no Global Security may be exchanged in whole or in part for Securities registered, and
no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for
such Global Security or a nominee thereof unless (A) such Depositary has notified the Company that it (i) is unwilling or unable
to continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act,
or (B) the Company has executed and delivered to the Trustee a Company Order stating that such Global Security shall be exchanged
in whole for Securities that are not Global Securities (in which case such exchange shall promptly be effected by the Trustee).
If the Company receives a notice of the kind specified in Clause (A) above or has delivered a Company Order of the kind specified
in Clause (B) above, it may, in its sole discretion, designate a successor Depositary for such Global Security within 90 days
after receiving such notice or delivery of such order, as the case may be. If the Company designates a successor Depositary as
aforesaid, such Global Security shall promptly be exchanged in whole for one or more other Global Securities registered in the
name of the successor Depositary, whereupon such designated successor shall be the Depositary for such successor Global Security
or Global Securities and the provisions of Clauses (1), (2), (3) and (4) of this provision shall continue to apply thereto.

(3)
Subject to Clause (2) above and to such applicable provisions, if any, as may be specified as contemplated by Section 3.01,
any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange
for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall
direct.

(4)
Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security
or any portion thereof, whether pursuant to this Section, Section 3.04, Section 3.06, Section 9.06 or Section
11.07 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security

    	27

    	 

    

 

is
registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.

Every
Person who takes or holds any beneficial interest in a Global Security agrees that:

(1)
the Company and the Trustee may deal with the Depositary as sole owner of the Global Security and as the authorized representative
of such Person;

(2)
such Person’s rights in the Global Security shall be exercised only through the Depositary and shall be limited to those
established by law and agreement between such Person and the Depositary and/or direct and indirect participants of the Depositary;

(3)
the Depositary and its participants make book-entry transfers of beneficial ownership among, and receive and transmit distributions
of principal and interest on the Global Securities to, such Persons in accordance with the Applicable Procedures of the Depositary;
and

(4)
none of the Company, the Trustee nor any agent of the Company or the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership interests.

Section
3.06. Mutilated, Destroyed, Lost and Wrongfully Taken Securities. If (a) any mutilated
Security is surrendered to the Trustee or (b) both (i) there shall be delivered to the Company and the Trustee (A) a claim by
a Holder as to the destruction, loss or wrongful taking of any Security of such Holder and a request thereby for a new replacement
Security of the same series, and (B) such indemnity bond as may be required by them to save each of them and any agent of either
of them harmless and (ii) such other reasonable requirements as may be imposed by the Company as permitted by Section 8-405 of
the Uniform Commercial Code have been satisfied, then, in the absence of notice to the Company or the Trustee that such Security
has been acquired by a “protected purchaser” within the meaning of Section 8-405 of the Uniform Commercial Code, the
Company shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such mutilated, destroyed,
lost or wrongfully taken Security, a new Security of the same series and of like tenor and principal amount and bearing a number
not contemporaneously Outstanding. In case any such mutilated, destroyed, lost or wrongfully taken Security has become or is about
to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

Upon
the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith.

Every
new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or wrongfully taken Security shall constitute
an original additional contractual obligation of the Company, whether or not the destroyed, lost or wrongfully taken Security
shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of that series duly issued hereunder.

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The
provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or wrongfully taken Securities.

Section
3.07. Payment of Interest; Interest Rights Preserved. Except as otherwise provided
as contemplated by Section 3.01 with respect to any Securities of a series, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest (or,
if no business is conducted by the Trustee at its Corporate Trust Office on such date, at 5:00 P.M. New York City time on such
date).

Any
interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment
Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in Clause (1) or (2) below:

(1)
The Company may elect to make payment of any Defaulted Interest payable on any Securities of a series to the Persons in whose
names such Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee
in writing of the amount of Defaulted Interest proposed to be paid on each of such Securities and the date of the proposed payment,
and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be given to each Holder of such Securities in the manner set forth
in Section 1.06, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose
names such Securities (or their respective Predecessor Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following Clause (2).

(2)
The Company may make payment of any Defaulted Interest on any Securities of a series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner
of payment shall be deemed practicable by the Trustee.

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Except
as may otherwise be provided in this Section 3.07 or as contemplated in Section 3.01 with respect to any Securities
of a series, the Person to whom interest shall be payable on any Security that first becomes payable on a day that is not an Interest
Payment Date shall be the Holder of such Security on the day such interest is paid.

Subject
to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.

In
the case of any Security which is converted after any Regular Record Date and on or prior to the next succeeding Interest Payment
Date (other than any Security whose Maturity is prior to such Interest Payment Date), interest whose Stated Maturity is on such
Interest Payment Date shall be payable on such Interest Payment Date notwithstanding such conversion, and such interest (whether
or not punctually paid or duly provided for) shall be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on such Regular Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security which is converted, interest whose Stated Maturity is after the date
of conversion of such Security shall not be payable.

Notwithstanding
the foregoing, the terms of any Security that may be converted may provide that the provisions of this paragraph do not apply,
or apply with such additions, changes or omissions as may be provided thereby, to such Security.

Section
3.08. Persons Deemed Owners. Prior to due presentment of a Security for registration
of transfer, the Company and the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security
is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject
to Section 3.07) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

Section
3.09. Cancellation. All Securities surrendered for payment, redemption, registration
of transfer or exchange or conversion or for credit against any sinking fund payment shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any
Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall
be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled
as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities held by the Trustee shall
be disposed of in accordance with the Trustee’s customary procedures.

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Section
3.10. Computation of Interest. Except as otherwise specified as contemplated by Section
3.01 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year
of twelve 30-day months.

Section
3.11. CUSIP Numbers. The Company in issuing the Securities may use CUSIP numbers (if then generally in use) and, if so,
the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any
notice of redemption and that reliance may be placed only on the other identification numbers printed on the Securities. Any such
redemption shall not be affected by any defect in or omission of such CUSIP numbers. The Company shall promptly notify the Trustee
in writing of any change in the CUSIP numbers.

Article
IV

SATISFACTION AND DISCHARGE

Section
4.01. Satisfaction and Discharge of Indenture. This Indenture shall upon Company Request
cease to be of further effect with respect to the Securities of any series (except as to any surviving rights of conversion, registration
of transfer or exchange of any such Security expressly provided for herein or in the terms of such Security), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with
respect to such Securities, when

(1)
either

(A)
all such Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or wrongfully
taken and which have been replaced or paid as provided in Section 3.06 and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 10.03) have been delivered to the Trustee for cancellation; or

(B) 
all such Securities not theretofore delivered to the Trustee for cancellation

		(i)	have
                                         become due and payable, or

		(ii)	will
                                         become due and payable at their Stated Maturity within one year, or

		(iii)	are
                                         to be called for redemption within one year under arrangements satisfactory to the Trustee
                                         for the giving of notice of redemption by the Trustee in the name, and at the expense,
                                         of the Company,

and
the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds
in trust for such purpose money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit 

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(in
the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;

(2)
the Company has paid or caused to be paid all other sums payable hereunder by the Company with respect to such Securities; and

(3)
the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this Indenture with respect to such Securities have
been complied with.

Notwithstanding
the satisfaction and discharge of this Indenture with respect to Securities of any series, the obligations of the Company to the
Trustee under Section 6.07, the obligations of the Company to any Authenticating Agent under Section 6.14, and,
if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section with respect to such
Securities, the obligations of the Company of such series under Section 10.02 and the obligations of the Trustee under
Section 4.02, Section 6.06 and the last paragraph of Section 10.03 with respect to such Securities shall
survive such satisfaction and discharge.

Section
4.02. Application of Trust Money. Subject to the provisions of the last paragraph
of Section 10.03, all money deposited with the Trustee pursuant to Section 4.01 with respect to Securities of any
series shall be held in trust and applied by it, in accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been
deposited with the Trustee. All moneys deposited with the Trustee pursuant to Section 4.01 (and held by it or any Paying
Agent) for the payment of Securities subsequently converted shall be returned to the Company upon Company Request, to the extent
originally deposited by the Company. The Company may direct by a Company Order the investment of any money deposited with the
Trustee pursuant to Section 4.01, without distinction between principal and income, in (1) United States Treasury Securities
with a maturity of one year or less or (2) a money market fund that invests solely in short term United States Treasury Securities
and from time to time the Company may direct the reinvestment of all or a portion of such money in other securities or funds meeting
the criteria specified in Clause (1) or (2) of this sentence.

Article
V

REMEDIES

Section
5.01. Events of Default.

Except
as may otherwise be provided pursuant to Section 3.01 for all or any specific Securities of any series, “Event
of Default,” wherever used herein with respect to the Securities of that series, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be occasioned by the provisions of Article XIV
or be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

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(1)
default in the payment of any interest upon any Security of that series when it becomes due and payable (as extended or deferred),
and continuance of such default for a period of 90 days; or

(2)
default in the payment of the principal of, any premium or sinking fund payment, if any, on any Security of that series at its
Maturity; or

(3)
default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly
been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such
default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 30% in principal amount of the Outstanding Securities of that series
a written notice specifying such default or breach and requiring it to be remedied within a specified time after receipt of such
notice and stating that such notice is a “Notice of Default” hereunder; or

(4)
the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days (provided that, if any
Person becomes the successor to the Company pursuant to Article VIII and such Person is organized and validly existing
under the law of a jurisdiction outside the United States, each reference in this Clause (4) to an applicable Federal or State
law of a particular kind shall be deemed to refer to such law or any applicable comparable law of such non-U.S. jurisdiction,
for as long as such Person is the successor to the Company hereunder and is so organized and existing); or

(5)
the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent
by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial
part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of
any such action (provided that, if any Person becomes the successor 

    	33

    	 

    

 

to
the Company pursuant to Article VIII and such Person is organized and validly existing under the law of a jurisdiction
outside the United States, each reference in this Clause (5) to an applicable Federal or State law of a particular kind shall
be deemed to refer to such law or any applicable comparable law of such non-U.S. jurisdiction, for as long as such Person is the
successor to the Company hereunder and is so organized and existing); or

(6)
any other Event of Default provided with respect to Securities of that series in accordance with Section 3.01.

Section
5.02. Acceleration of Maturity; Rescission and Annulment. Except as may otherwise be provided pursuant to Section 3.01
for all or any specific Securities of any series, if an Event of Default (other than an Event of Default specified in Section
5.01(4) or Section 5.01(5)) with respect to Securities of that series at the time Outstanding occurs and is continuing,
then in every such case the Trustee or the Holders of not less than 30% in principal amount of the Outstanding Securities of that
series may declare the principal amount of all the Securities of that series (or, in the case of any Security of that series which
specifies an amount to be due and payable thereon upon acceleration of the Maturity thereof, such amount as may be specified by
the terms thereof) to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders),
and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable. Except as
may otherwise be provided pursuant to Section 3.01 for all or any specific Securities of any series, if an Event of Default
specified in Section 5.01(4) or Section 5.01(5) with respect to Securities of that series at the time Outstanding
occurs, the principal amount of all the Securities of that series (or, in the case of any Security of that series which specifies
an amount to be due and payable thereon upon acceleration of the Maturity thereof, such amount as may be specified by the terms
thereof) shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately
due and payable.

Except
as may otherwise be provided pursuant to Section 3.01 for all or any specific Securities of any series, at any time after
such a declaration of acceleration with respect to Securities of that series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in
principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if:

(1)
the Company has paid or deposited with the Trustee a sum sufficient to pay:

(A)
all overdue interest on all Securities of that series;

(B) 
the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities;

(C) 
to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor
in such Securities; and

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(D)
all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and

(2)
all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section
5.12.

No
such rescission shall affect any subsequent default or impair any right consequent thereon.

Section
5.03. Collection of Indebtedness and Suits for Enforcement by Trustee. The Company
covenants that if

(1)
default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues
for a period of 60 days, or

(2)
default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof,

the
Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then
due and payable on such Securities for principal and any premium and interest and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.

If
an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed
to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant
or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

Section
5.04. Trustee May File Proofs of Claim. In case of any judicial proceeding relative
to the Company or any other obligor upon the Securities, their property or their creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such proceeding. The Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07.

    	35

    	 

    

No
provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors’ or other similar committee.

Section
5.05. Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture
or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.

Section
5.06. Application of Money Collected. Any money collected by the Trustee pursuant
to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution
of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST:
To the payment of all amounts due the Trustee under Section 6.07;

SECOND:
To the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal and any premium and interest, respectively; and

THIRD:
To the payment of the remainder, if any, to the Company or to whomsoever may be lawfully entitled to receive the same as a court
of competent jurisdiction may direct.

Section
5.07. Limitation on Suits. No Holder of any Security of any series shall have any
right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless

(1)
such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities
of that series;

(2)
the Holders of not less than 30% in principal amount of the Outstanding Securities of that series shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

(3)
such Holder or Holders have offered to the Trustee indemnity reasonably satisfactory to it against the losses, expenses and liabilities
to be incurred in compliance with such request;

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(4)
the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding;
and

(5)
no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of
a majority in principal amount of the Outstanding Securities of that series; it being understood and intended that no one or more
of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to
affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all of such Holders.

Section
5.08. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right
or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the
Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

Section
5.09. Rights and Remedies Cumulative. Except as otherwise provided with respect to
the replacement or payment of mutilated, destroyed, lost or wrongfully taken Securities in the last paragraph of Section 3.06,
no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate
right or remedy.

Section
5.10. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Securities to exercise
any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders
may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.

Section
5.11. Control by Holders. The Holders of a majority in principal amount of the Outstanding Securities of any series shall
have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that

(1)
such direction shall not be in conflict with any rule of law or with this Indenture;

(2)
the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction; and

    	37

    	 

    

(3)
subject to the provisions of Section 6.01, the Trustee shall have the right to decline to follow any such direction if
the Trustee in good faith shall determine that the proceeding so directed would involve the Trustee in personal liability.

Section
5.12. Waiver of Past Defaults. Except as may otherwise be provided pursuant to Section
3.01 for all or any specific Securities of any series, the Holders of not less than a majority in principal amount (including
waivers obtained in connection with a purchase of, or tender offer or exchange offer for, Securities) of the Outstanding Securities
of any series to be affected under this Indenture may by notice to the Trustee on behalf of the Holders of all the Securities
of such series waive any existing default and its consequences hereunder with respect to such series and its consequences, except
a default

(1)
in the payment of the principal of or any premium or interest on any Security of such series, or

(2)
in respect of a covenant or provision hereof which under Article IX cannot be modified or amended without the consent of
the Holder of each Outstanding Security of such series affected.

Upon
any such waiver with respect to any series, such default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, with respect to such series for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other default or impair any right consequent thereon. A waiver of any past default and its consequences given
by or on behalf of any Holder of Securities in connection with a purchase of, or tender or exchange offer for, such Holder’s
Securities will not be rendered invalid by such purchase, tender or exchange.

Section
5.13. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such
suit to file an undertaking to pay the costs of such suit, and may assess costs, including reasonable attorneys’ fees and
expenses, against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided that
neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or the Trustee or, if applicable, in any suit for the enforcement of
the right to convert any Security in accordance with its terms.

Section
5.14. Waiver of Usury, Stay or Extension Laws. The Company covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

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Article
VI

THE TRUSTEE

Section
6.01. Certain Duties and Responsibilities. (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 as are
provided by the Trust Indenture Act, and, except for implied covenants or obligations under the Trust Indenture Act, 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 such person’s 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 the first paragraph of this Section;

(2)
the Trustee shall not be liable for any error of judgment made in good faith by a Responsible 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, determined as provided
in Section 5.11, 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, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured
to it.

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(d)
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.

Section
6.02. Notice of Defaults. If a default occurs hereunder with respect to Securities of any series, the Trustee shall give
the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section 5.01(3) with respect to Securities
of such series, no such notice to Holders shall be given until at least 60 days after the occurrence thereof. For the purpose
of this Section, the term “default” means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.

Section
6.03. Certain Rights of Trustee. Subject to the provisions of Section 6.01:

(1)
the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(2)
any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution;

(3)
whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) shall
be entitled to receive and may, in the absence of bad faith on its part, conclusively rely upon an Officers’ Certificate;

(4)
the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel 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;

(5)
the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security
or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;

(6)
the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled
to examine the books, records and premises of the 

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Company,
personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any
kind by reason of such inquiry or investigation;

(7)
the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder and shall not be responsible for the supervision of officers and employees of such agents
or attorneys;

(8)
the Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate
may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized
in any such certificate previously delivered and not superseded;

(9)
the Trustee shall not be liable for any action taken, suffered or omitted to be taken by it in good faith and reasonably believed
by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

(10)
the Trustee shall not be deemed to have notice of any default or Event of Default unless a Responsible Officer of the Trustee
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; and

(11)
the rights, privileges, protections, immunities and benefits given to the Trustee, including its rights to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder.

Section
6.04. Not Responsible for Recitals or Issuance of Securities. The recitals contained
herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the
Company, and the Trustee does not assume any responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.

Section
6.05. May Hold Securities. The Trustee, any Authenticating Agent, any Paying Agent,
any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee
of Securities and, subject to Section 6.08 and Section 6.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

Section
6.06. Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except
to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except
as otherwise agreed in writing with the Company.

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Section
6.07. Compensation and Reimbursement.

The
Company agrees

(1)
to pay to the Trustee from time to time such compensation as the Company and Trustee shall agree in writing for all services rendered
by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of
an express trust);

(2)
except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable
to its negligence or willful misconduct; and

(3)
to indemnify each of the Trustee or any predecessor Trustee and its officers, directors, agents and employees for, and to hold
it harmless against, any and all losses, liabilities, damages, claims or expenses including taxes (other than taxes based upon,
measured by or determined by the earnings or income of the Trustee) incurred without negligence or willful misconduct on its part,
arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim (whether asserted by the Company, a Holder or any other Person) or liability in
connection with the exercise or performance of any of its powers or duties hereunder.

As
security for the performance of the obligations of the Company under this Section the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal
of (and premium, if any) or interest on Securities.

Without
limiting any rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.01(4) or Section 5.01(5), 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.

The
provisions of this Section shall survive the termination of this Indenture.

Section
6.08. Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject
to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by the Trust Indenture Act, the Trustee
shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities
of more than one series.

Section
6.09. Corporate Trustee Required; Eligibility. There shall at all times be one (and only one) Trustee hereunder with respect
to the Securities of each series, which may be Trustee hereunder for Securities of one or more other series. Each Trustee shall
be a Person that is eligible pursuant to the Trust Indenture Act to act as such, has a combined capital and surplus of at least
$50,000,000 and has its Corporate Trust Office in the continental United States of America. If any such Person publishes reports
of condition at least annually, pursuant to law or 

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to
the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted
by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. If at any time the Trustee with respect to the Securities of
any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.

Section
6.10. Resignation and Removal; Appointment of Successor. No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee
in accordance with the applicable requirements of Section 6.11.

The
Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company.
If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee
within 60 days after the giving of such notice of resignation, the resigning Trustee may petition, at the expense of the Company,
any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

The
Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. If the instrument of acceptance
by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving
of a notice of removal pursuant to this paragraph, the Trustee being removed may petition, at the expense of the Company, any
court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

If
at any time:

(1)
the Trustee shall fail to comply with Section 6.08 after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Security for at least six months, or

(2)
the Trustee shall cease to be eligible under Section 6.09 and shall fail to resign after written request therefor by the
Company or by any such Holder, or

(3)
the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,

then,
in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject
to Section 5.13, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to
all Securities and the appointment of a successor Trustee or Trustees.

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If
the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any
cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee
may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section
6.11. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after
the giving of such notice of removal, the Trustee being removed may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. If, within one year after
such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect
to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment
in the manner required by Section 6.11, any Holder who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such series.

The
Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series
in the manner provided in Section 1.06. Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

Section
6.11. Acceptance of Appointment by Successor. In case of the appointment hereunder
of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company
or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring
to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver
to such successor Trustee all property and money held by such retiring Trustee hereunder.

In
case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and
deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain
such provisions as shall be necessary or desirable to transfer and confirm to, and 

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to
vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring
with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the
retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by
more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee
relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver
to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates.

Upon
request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting
in and confirming to such successor Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph,
as the case may be.

No
successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified
and eligible under this Article.

Section
6.12. Merger, Conversion, Consolidation or Succession to Business. Any corporation
into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall
be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then
in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

Section
6.13. Preferential Collection of Claims Against Company. If and when the Trustee shall
be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions
of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).

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Section
6.14. Appointment of Authenticating Agent. The Trustee may appoint an Authenticating
Agent or Agents with respect to any series of Securities which shall be authorized to act on behalf of the Trustee to authenticate
the Securities of such Series issued upon original issue and upon exchange, registration of transfer, partial conversion or partial
redemption or pursuant to Section 3.06, and Securities of such series so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference
is made in this Indenture to the authentication and delivery of Securities of such series by the Trustee or the Trustee’s
certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent so appointed with respect to such series and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent so appointed with respect to such series. Each Authenticating Agent shall be acceptable
to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America,
any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital
and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating
Agent publishes reports of condition at least annually pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed
to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

Any
corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation
succeeding to all or substantially all the corporate agency or corporate trust business of an Authenticating Agent, shall continue
to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution
or filing of any paper or any further act on the part of the Trustee, the Company, the Authenticating Agent or such successor
corporation. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company.
The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating
Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor
Authenticating Agent with respect to any series of Securities which shall be acceptable to the Company and shall give notice of
such appointment to all Holders of Securities of such series in the manner provided in Section 1.06. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless
eligible under the provisions of this Section.

The
Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section.

    	46

    	 

    

If
an appointment is made pursuant to this Section with respect to Securities of any series, the Securities of such series may have
endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternate certificate of authentication
in the following form:

This
is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

[TRUSTEE],

AS TRUSTEE

	By: 	 _____________________________
	 	As Authenticating Agent

	By: 	 _____________________________
	 	Authorized Signatory

 

Article
VII

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section
7.01. Company to Furnish Trustee Names and Addresses of Holders. The Company will
furnish or cause to be furnished to the Trustee

(1)
semi-annually, not later than [______] and [______] in each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders of Securities of each series as of the immediately preceding [______] or [______] as
the case may be, and

(2)
at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request,
a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

excluding
from any such list names and addresses received by the Trustee in its capacity as Security Registrar.

Section
7.02. Preservation of Information; Communications to Holders. The Trustee shall preserve,
in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished
to the Trustee as provided in Section 7.01 and the names and addresses of Holders received by the Trustee in its capacity
as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new
list so furnished.

The
rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities,
and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

Every
Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither of the Company nor
the Trustee nor any agent of any of them shall 

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be
held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture
Act.

Section
7.03. Reports by Trustee. The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.

Reports
so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than [_____] and shall
be dated as of [_____] in each calendar year, commencing in 20[_].

A
copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange
upon which any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities
are listed on any stock exchange and of any delisting thereof.

Section
7.04. Reports by Company. The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant
to the Trust Indenture Act, if any, at the times and in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act need not be
filed with the Trustee until the 15th day after the same are actually filed with the Commission. 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 compliance by the
Company with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

Article
VIII

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section
8.01. Company May Consolidate, Etc., Only on Certain Terms. The Company shall not consolidate with or merge into any other
Person or sell, convey, transfer or lease all or substantially all its properties and assets to any Person, and the Company shall
not permit any Person to consolidate with or merge into the Company, unless:

(1)
in case the Company shall consolidate with or merge into another Person or sell, convey, transfer or lease all or substantially
all its properties and assets to any Person, the Person formed by such consolidation or into which the Company is merged or the
Person which acquires by sale, conveyance or transfer, or which leases, all or substantially all the properties and assets of
the Company shall be organized and validly existing under the laws of the United States, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities
and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed and,
for each Security that by its terms provides for 

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conversion,
shall have provided for the right to convert such Security in accordance with its terms;

(2)
immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or
any Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction,
no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened
and be continuing; and

(3)
the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction
have been complied with.

Section
8.02. Successor Substituted. Upon any consolidation of the Company with, or merger of the Company into, any other Person
or any sale, conveyance, transfer or lease of all or substantially all the properties and assets of the Company in accordance
with Section 8.01, the successor Person formed by such consolidation or into which the Company is merged or to which such
sale, conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture
and the Securities.

Article
IX

SUPPLEMENTAL INDENTURES

Section
9.01. Supplemental Indentures Without Consent of Holders. Except as may otherwise be provided pursuant to Section 3.01
for all or any specific Securities of any series, without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:

(1)
to cure any ambiguity or omission, to correct or supplement any provision herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture; or

(2)
to comply with Article VIII; or

(3)
to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company
herein and in the Securities, as the case may be; or

(4)
to add to the covenants of the Company for the benefit of the Holders of all or any Securities of any series (and if such covenants
are to be for the benefit of less than all Securities of such series, stating that such covenants are expressly being included
solely for the benefit of such Securities within such series) or to surrender any right or power herein conferred upon the 

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Company
with regard to all or any Securities of any series (and if any such surrender is to be made with regard to less than all Securities
of such series, stating that such surrender is expressly being made solely with regard to such Securities within such series);
or

(5)
to add any additional Events of Default for the benefit of the Holders of all or any Securities of any series (and if such additional
Events of Default are to be for the benefit of less than all Securities of such series, stating that such additional Events of
Default are expressly being included solely for the benefit of such Securities within such series); or

(6)
to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance
of Securities in definitive form, or to permit or facilitate the issuance of Securities in uncertificated form; or

(7)
to add to, change or eliminate any of the provisions of this Indenture in respect of all or any Securities of any series (and
if such addition, change or elimination is to apply with respect to less than all Securities of such series stating that it is
expressly being made to apply solely with respect to such Securities within such series), provided that any such addition, change
or elimination (A) shall neither (i) apply to any Security of any series created prior to the execution of such supplemental indenture
and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of any such Security with respect to such
provision or (B) shall become effective only when there is no such Security Outstanding; or

(8)
to secure the Securities; or

(9)
to establish the form or terms of all or any Securities of any series as permitted by Section 2.01 and Section 3.01;
or

(10)
to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11; or

(11)
to add to or change any of the provisions of this Indenture with respect to any Securities that by their terms may be converted
into securities or other property other than Securities of the same series and of like tenor, in order to permit or facilitate
the issuance, payment or conversion of such Securities; or

(12)
to comply with any requirement of the Commission in connection with the qualification of this Indenture under the Trust Indenture
Act; or

(13)
to make any amendment to the provisions of this Indenture relating to the transfer and legending of Securities; provided, however,
that (a) compliance with this Indenture as so amended would not result in Securities being transferred in violation of the Securities
Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders
to transfer Securities; or

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(14)
to make any other change to this Indenture that does not adversely affect the interests of the Holders of Securities of any series
in any material respect.

The
Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage
or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture which
affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Section
9.02. Supplemental Indentures With Consent of Holders. Except as may otherwise be provided pursuant to Section 3.01
for all or any specific Securities of any series, with the consent of the Holders of a majority in principal amount (including
consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities) of the Outstanding Securities
of all series affected by such supplemental indenture (considered together as one class for this purpose and such affected Securities
potentially being Securities of the same or different series and, with respect to any series, potentially comprising fewer than
all the Securities of such series), by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner
the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security affected thereby (including consents obtained
in connection with a purchase of, or tender offer or exchange offer for, Securities),

(1)
change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or

(2)
permit the Company to redeem any Security if, absent such supplemental indenture, the Company would not be permitted to do so,
or

(3)
change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable,
or

(4)
change the ranking or priority of any Security that would adversely affect the Holders, or

(5)
impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the
case of redemption, on or after the Redemption Date), or

(6)
reduce the percentage in principal amount of the Outstanding Securities of any one or more series (considered separately or together
as one class, as applicable, and whether comprising the same or different series or less than all the Securities of a series),
the consent of whose Holders

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is
required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or

(7)
modify any of the provisions of this Section, Section 5.12 or Section 10.06, except to increase any such percentage
or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of
each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the
consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes
in this Section and Section 10.06, or the deletion of this proviso, in accordance with the requirements of Section 6.11
and Section 9.01(10).

A
supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular Securities or series of Securities, or which modifies the rights of
the Holders of such Securities or series with respect to such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of any other Securities or of any other series, as applicable. It shall not be necessary for
any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient
if such Act shall approve the substance thereof. A consent to any indenture supplemental hereto by or on behalf of any Holder
of Securities given in connection with a purchase of, or tender or exchange offer for, such Holder’s Securities will not
be rendered invalid by such purchase, tender or exchange.

Section
9.03. Execution of Supplemental Indentures. In executing, or accepting the additional
trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in conclusively
relying upon, an Opinion of Counsel and Officers’ Certificate stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Section
9.04. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture
shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

Section
9.05. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform
to the requirements of the Trust Indenture Act.

Section
9.06. Reference in Securities to Supplemental Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the 

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Company
and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

Section
9.07. Subordination Unimpaired. No supplemental indenture shall adversely affect the
interests of any holder of Senior Debt then outstanding under Article XIV in any material respect unless each holder of
Senior Debt so affected (or the group or representative thereof authorized or required to consent thereto pursuant to the instrument
creating or evidencing, or pursuant to which there is outstanding, such Senior Debt) consents to such supplemental indenture in
writing.

Article
X

COVENANTS

Section
10.01.  Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal
of and any premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture.

Section
10.02.  Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series
may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or
exchange, where Securities may be surrendered for conversion and where notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee
as its agent to receive all such presentations, surrenders, notices and demands.

The
Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series
may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an
office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

With
respect to any Global Security, and except as otherwise may be specified for such Global Security as contemplated by Section
3.01, the Corporate Trust Office of the Trustee shall be the Place of Payment where such Global Security may be presented
or surrendered for payment or for registration of transfer or exchange, or where successor Securities may be delivered in exchange
therefor, provided, however, that any such payment, presentation, surrender or delivery effected pursuant to the
Applicable Procedures of the Depositary for such Global Security shall be deemed to have been effected at the Place of Payment
for such Global Security in accordance with the provisions of this Indenture.

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Section
10.03.  Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each
due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.

Whenever
the Company shall have one or more Paying Agents for any series of Securities, it will, on or prior to 11:00 A.M., New York City
time, on each due date of the principal of or any premium or interest on any Securities of that series, deposit (or, if the Company
has deposited any trust funds with a trustee pursuant to Section 12.04(1), cause such trustee to deposit) with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

The
Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying
Agent will (1) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2) during
the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment
in respect of the Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee all sums held
in trust by such Paying Agent for payment in respect of the Securities of that series.

The
Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent,
such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.

Any
money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of
or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or
interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as an [unsecured] general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may, at the direction and expense of the Company, cause to be
published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation
in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the
Company.

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Section
10.04.  Corporate Existence.
Subject to Article VIII, the Company will do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence.

Section
10.05.  Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date
hereof, an Officers’ Certificate stating whether or not to the best knowledge of the signers thereof the Company is in default
in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period
of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge;

Section
10.06.  Waiver of Certain Covenants. Except as otherwise
provided pursuant to Section 3.01 for all or any Securities of any series, the Company may, with respect to all or any
Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in Section
10.04 or in any covenant provided pursuant to Section 3.01(18), Section 9.01(4), Section 9.01(8) or Section
9.01(9) for the benefit of the Holders of such series or in Article VIII if, before the time for such compliance, the
Holders of a majority in principal amount (including waivers obtained in connection with a purchase of, or tender offer or exchange
offer for, Securities) of all Outstanding Securities affected by such waiver (considered together as one class for this purpose
and such affected Securities potentially being Securities of the same or different series and, with respect to any particular
series, potentially comprising fewer than all the Securities of such series) shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend
to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain
in full force and effect. A waiver of compliance given by or on behalf of any Holder of Securities in connection with a purchase
of, or tender or exchange offer for, such Holder’s Securities will not be rendered invalid by such purchase, tender or exchange.

Article
XI

REDEMPTION OF SECURITIES

Section
11.01.  Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms
and (except as otherwise specified as contemplated by Section 3.01 for such Securities) in accordance with this Article.

Section
11.02.  Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be established in or pursuant to a Board Resolution or in another manner
specified as contemplated by Section 3.01 for such Securities. In case of any redemption at the election of the Company
of less than all the Securities of any series (including any such redemption affecting only a single Security), the Company shall,
not less than 30 days nor more than 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series
to be redeemed and, if applicable, of the tenor of the

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Securities
to be redeemed. In the case of any redemption of Securities (1) prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, or (2) pursuant to an election of the Company that is
subject to a condition specified in the terms of the Securities of the series to be redeemed, the Company shall furnish the Trustee
with an Officers’ Certificate evidencing compliance with such restriction or condition.

Section
11.03.  Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified
tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 40 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of a portion of the principal amount of any Security of such series, provided that the unredeemed
portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of such series and of a specified tenor are to be
redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not
more than 40 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor
not previously called for redemption in accordance with the preceding sentence.

If
any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the
portion of the Security so selected, the converted portion of such Security shall be deemed (so far as it may be) to be the portion
selected for redemption. Securities which have been converted during a selection of Securities to be redeemed shall be treated
by the Trustee as Outstanding for the purpose of such selection.

The
Trustee shall promptly notify the Company and each Security Registrar in writing of the Securities selected for redemption as
aforesaid and, in case of any Securities selected for partial redemption as aforesaid, the principal amount thereof to be redeemed.

The
provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether
such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the
principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination)
for such Security.

For
all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of
such Securities which has been or is to be redeemed.

Section
11.04.  Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 1.06 not less than 30 days nor more than 60 days
prior to the Redemption Date (or within such period as otherwise specified as contemplated by Section 3.01 for the

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relevant
Securities), to each Holder of Securities to be redeemed, at his address appearing in the Security Register.

All
notices of redemption shall identify the Securities to be redeemed (including CUSIP numbers, if any) and shall state:

(1)
the Redemption Date,

(2)
the Redemption Price,

(3)
if less than all the Outstanding Securities of any series consisting of more than a single Security are to be redeemed, the identification
(and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed
and, if less than all the Outstanding Securities of any series consisting of a single Security are to be redeemed, the principal
amount of the particular Security to be redeemed,

(4)
that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date,

(5)
the place or places where each such Security is to be surrendered for payment of the Redemption Price,

(6)
for any Securities that by their terms may be converted, the terms of conversion, the date on which the right to convert the Security
to be redeemed will terminate and the place or places where such Securities may be surrendered for conversion, and

(7)
that the redemption is for a sinking fund, if such is the case.

Notice
of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s
request, by the Trustee in the name and at the expense of the Company.

Section
11.05.  Deposit of Redemption Price.
Prior to 11:00 A.M., New York City time, on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent
(or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.03) an amount
of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date, other than any Securities called for redemption on that
date which have been converted prior to the date of such deposit.

If
any Security called for redemption is converted, any money deposited with the Trustee or with any Paying Agent or so segregated
and held in trust for the redemption of such Security shall (subject to any right of the Holder of such Security or any Predecessor
Security to receive interest as provided in the last paragraph of Section 3.07 or in the terms of such Security) be paid
to the Company upon Company Request or, if then held by the Company, shall be discharged from such trust.

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Section
11.06.  Securities Payable on Redemption Date. Notice
of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable
at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption
in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 3.01,
installments of interest whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 3.07.

If
any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.

Section
11.07.  Securities Redeemed in Part. Any Security
which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series
and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.

Article
XII

DEFEASANCE AND COVENANT DEFEASANCE

Section
12.01.  Company’s Option to Effect Defeasance or
Covenant Defeasance. Unless otherwise designated pursuant to Section 3.01(15),
the Securities of any series of Securities shall be subject to defeasance or covenant defeasance pursuant to such Section 12.02
or Section 12.03, in accordance with any applicable requirements provided pursuant to Section 3.01 and upon
compliance with the conditions set forth below in this Article. The Company may elect, at its option, at any time, to have Section
12.02 or Section 12.03 applied to any Securities or any series of Securities so subject to defeasance or covenant defeasance.
Any such election shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 3.01
for such Securities.

Section
12.02.  Defeasance and Discharge. Upon the Company’s
exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be,
the Company shall be deemed to have been discharged from its obligations, and the provisions of Article XIV shall cease
to be effective, with respect to such Securities as provided in this Section on and after the date the conditions set forth in
Section 12.04 are satisfied (hereinafter called “Defeasance”). For this purpose, such Defeasance
means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and
to have satisfied all its other respective obligations under such Securities and this Indenture insofar as 

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such
Securities (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject
to the following which shall survive until otherwise terminated or discharged hereunder: (1) the rights of Holders of such Securities
to receive, solely from the trust fund described in Section 12.04(1) and as more fully set forth in such Section, payments
in respect of the principal of and any premium and interest on such Securities when payments are due, (2) the obligations of the
Company with respect to such Securities under Section 3.04, Section 3.05, Section 3.06, Section 10.02
and Section 10.03, (3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (4) this Article.
Subject to compliance with this Article, the Company may exercise its option (if any) to have this Section applied to any Securities
notwithstanding the prior exercise of its option (if any) to have Section 12.03 applied to such Securities.

Section
12.03.  Covenant Defeasance.
Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities,
as the case may be, (1) the Company shall be released from its obligations under Section 10.04 and any covenants provided
pursuant to Section 3.01(18), Section 9.01(4), Section 9.01(10) or Section 9.01(10) for the benefit
of the Holders of such Securities, (2) the occurrence of any event specified in Section 5.01(3) (with respect to Section
10.04 and any such covenants provided pursuant to Section 3.01(18), Section 9.01(4), Section 9.01(10)
or Section 9.01(10) and Section 5.01(6) shall be deemed not to be or result in an Event of Default and (3) the provisions
of Article XIV shall cease to be effective, in each case with respect to such Securities as provided in this Section on
and after the date the conditions set forth in Section 12.04 are satisfied (hereinafter called “Covenant Defeasance”).
For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent
so specified in the case of Section 5.01(3)) or Article XIV, whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or Article or by reason of any reference in any such Section or Article to any other provision
herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.

Section
12.04.  Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 12.02 or Section 12.03 to any Securities or
any series of Securities, as the case may be:

(1)
The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 6.09 and agrees to comply with the provisions of this Article applicable to it) as
trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely
to, the benefits of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, money in an amount, or (C) such other obligations or arrangements as may be specified
as contemplated by Section 3.01 with respect to such Securities, or (D) a combination thereof, in each case sufficient,
in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee)
to pay and discharge, the principal of and any premium and interest on such 

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Securities
on the respective Stated Maturities, in accordance with the terms of this Indenture and such Securities. As used herein, “U.S.
Government Obligation” means (x) any security which is (i) a direct obligation of the United States of America for
the payment of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled
or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable
or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)
(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in Clause (x) above
and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal
of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced
by such depositary receipt.

(2)
In the event of an election to have Section 12.02 apply to any Securities or any series of Securities, as the case may
be, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change
in the applicable Federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm
that, the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit,
Defeasance and discharge to be effected with respect to such Securities and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur.

(3)
In the event of an election to have Section 12.03 apply to any Securities or any series of Securities, as the case may
be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will
not recognize gain or loss for Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with
respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times
as would be the case if such deposit and Covenant Defeasance were not to occur.

(4)
The Company shall have delivered to the Trustee an Officers’ Certificate to the effect that neither such Securities nor
any other Securities of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit.

(5)
No event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities
or any other Securities (other than such an event or Event of Default solely with respect to such Securities resulting from the
borrowing of funds to be applied to such deposit) shall have occurred and be continuing at the time of such deposit.

    	60

    	 

    

(6)
Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it is bound.

(7)
The Company shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company
with the intent of preferring the Holders of such Securities over the other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding creditors of the Company.

(8)
The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with.

Section
12.05.  Deposited Money and U.S. Government Obligations
to Be Held in Trust; Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 10.03, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee or other qualifying trustee (solely for purposes of this Section and Section 12.06, the Trustee and any such other
trustee are referred to collectively as the “Trustee”) pursuant to Section 12.04 in respect of
any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent
or any Subsidiary or Affiliate of the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Securities,
of all sums due and to become due thereon in respect of principal and any premium and interest, but money and U.S. Government
Obligations so held in trust need not be segregated from other funds except to the extent required by law. Money and U.S. Government
Obligations (including the proceeds thereof) so held in trust shall not be subject to the provisions of Article XIV, provided
that the applicable conditions of Section 12.04 have been satisfied.

The
Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 12.04 or the principal and interest received in respect thereof other than any
such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities.

Anything
in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in Section 12.04 with respect to any Securities
which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance
or Covenant Defeasance, as the case may be, with respect to such Securities.

Section
12.06.  Reinstatement. If the Trustee or the Paying
Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the respective obligations
under this Indenture and such Securities from which the Company has been discharged or released pursuant to Section 12.02
or Section 12.03

    	61

    	 

    

 

shall
be revived and reinstated as though no deposit had occurred pursuant to this Article with respect to such Securities, until such
time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 12.05 with respect
to such Securities in accordance with this Article; provided, however, that if the Company makes any payment of
principal of or any premium or interest on any such Security following such reinstatement of its obligations, the Company shall
be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust.

Article
XIII

[RESERVED]

Section
13.01.  Reserved.

Article
XIV

SUBORDINATION OF SECURITIES

Section
14.01.  Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by his acceptance thereof, likewise covenants and agrees, that,
to the extent and in the manner hereinafter set forth in this Article XIV, the indebtedness represented by the Securities
and the payment of the principal of (and premium, if any) and interest on each and all of the Securities are hereby expressly
made subordinate and subject in right of payment to the prior payment in full of all Senior Debt.

Notwithstanding
the foregoing, if a deposit referred to in Section 12.04(1) is made pursuant to Section 12.02 or Section 12.03 with respect to
any Securities (and provided all other conditions set out in Section 12.02 or Section 12.03, as applicable, shall have been satisfied
with respect to such Securities), then no money or U.S. Government Obligations so deposited, and no proceeds thereon, will be
subject to any rights of holders of Senior Debt, including any such rights arising under this Article XIV.

Section
14.02.  Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or
other similar case or proceeding in connection therewith, relative to the Company or to its creditors, as such, or to its assets,
or (b) any liquidation, dissolution or other winding up of the Company, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshalling of assets
and liabilities of the Company, then and in any such event the holders of Senior Debt shall be entitled to receive payment in
full of all amounts due or to become due on or in respect of all Senior Debt (including any interest accruing thereon after the
commencement of any such case or proceeding), or provision shall be made for such payment in cash or cash equivalents or otherwise
in a manner satisfactory to the holders of Senior Debt, before the Holders of the Securities are entitled to receive any payment
on account of principal of (or premium, if any) or interest on the Securities, and to that end the holders of Senior Debt shall
be entitled to receive, for application to the payment thereof, any payment or distribution of any kind or character, whether
in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company being

    	62

    	 

    

 

subordinated
to the payment of the Securities, which may be payable or deliverable in respect of the Securities in any such case, proceeding,
dissolution, liquidation or other winding up event.

In
the event that, notwithstanding the foregoing provisions of this Section, the Trustee or the Holder of any Security shall have
received any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities,
including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness
of the Company being subordinated to the payment of the Securities, before all Senior Debt is paid in full or payment thereof
provided for, and if such fact shall, at or prior to the time of such payment or distribution, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such payment or distribution shall be paid over or delivered forthwith
to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment or distribution
of assets of the Company for application to the payment of all Senior Debt remaining unpaid, to the extent necessary to pay all
Senior Debt in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt. Any taxes
that have been withheld or deducted from any payment or distribution in respect of the Securities, or any taxes that ought to
have been withheld or deducted from any such payment or distribution that have been remitted to the relevant taxing authority,
shall not be considered to be an amount that the Trustee or the Holder of any Security receives for purposes of this Section.

For
purposes of this Article only, the words “cash, property or securities” shall not be deemed to include shares of stock
of the Company as reorganized or readjusted, or securities of the Company or any other corporation or other entity, provided for
by a plan of reorganization or readjustment which are subordinated in right of payment to all Senior Debt which may at the time
be outstanding to substantially the same extent as, or to a greater extent than, the Securities are so subordinated as provided
in this Article. The consolidation of the Company with, or the merger of the Company into, or the sale, conveyance, transfer or
lease by the Company of all or substantially all its properties and assets to, another Person upon the terms and conditions set
forth in Article VIII, or the liquidation or dissolution of the Company following any such sale, conveyance or transfer,
shall not be deemed a dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors or marshalling
of assets and liabilities of the Company for the purposes of this Section if the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by sale, conveyance, transfer or lease all or substantially all of such properties
and assets, as the case may be, shall, as a part of such consolidation, merger, sale, conveyance, transfer or lease, comply with
the conditions set forth in Article VIII.

Section
14.03.  Prior Payment to Senior Debt Upon Acceleration
of Securities. In the event that any Securities are declared due and payable before their
Stated Maturity, then and in such event the holders of Senior Debt shall be entitled to receive payment in full of all amounts
due or to become due on or in respect of all Senior Debt or provision shall be made for such payment in cash, before the Holders
of the Securities are entitled to receive any payment (including any payment which may be payable by reason of the payment of
any other indebtedness of the Company being subordinated to the payment of the Securities) by the Company on account of the principal
of (or premium, if any) or interest on the Securities or on account of the purchase or other acquisition of Securities.

    	63

    	 

    

In
the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the Holder of any Security
prohibited by the foregoing provisions of this Section, and if such fact shall, at or prior to the time of such payment, have
been made known to the Trustee or, as the case may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.

Section
14.04.  No Payment When Senior Debt in Default.
Subject to the last paragraph of this Section, (a) (i) in the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on any Senior Debt beyond any applicable grace period with respect thereto,
or (ii) in the event that any event of default with respect to any Senior Debt shall have occurred and be continuing permitting
the holders of such Senior Debt (or a trustee on behalf of the holders thereof) to declare such Senior Debt due and payable prior
to the date on which it would otherwise have become due and payable, whether or not such Senior Debt has been so accelerated (provided
that, in the case of Clause (i) or Clause (ii), if such default in payment or event of default shall have been cured or waived
or shall have ceased to exist and any such declaration of acceleration shall have been rescinded or annulled, then such default
in payment or event of default, as the case may be, shall be deemed not to have occurred for the purposes of this Section 14.04),
or (b) in the event that any judicial proceeding shall be pending with respect to any such default in payment or event of
default that shall be deemed to have occurred for the purpose of this Section 14.04, then no payment (including any payment
which may be payable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of the
Securities) shall be made by the Company on account of principal of (or premium, if any) or interest on the Securities or on account
of the purchase or other acquisition of Securities.

In
the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the Holder of any Security
prohibited by the provisions of this Section 14.04, and if such fact shall, at or prior to the time of such payment, have
been made known to the Trustee or, as the case may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.

No
default in payment or event of default with respect to any Senior Debt shall be deemed to be a default in payment or event of
default of the kind specified in Clause (a)(i) or (a)(ii) of this Section, and no judicial proceeding with respect to any such
default in payment or event of default shall be deemed to be a judicial proceeding of the kind specified in Clause (b) of
this Section 14.04, if (x) the Company shall be disputing the occurrence or continuation of such default in payment
or event of default, or any obligation purportedly giving rise to such default in payment or event of default, and (y) no
final judgment holding that such default in payment or event of default has occurred and is continuing shall have been issued.
For this purpose, a “final judgment” means a judgment that is issued by a court having jurisdiction over the Company
or its property, is binding on the Company or its property, is in full force and effect and is not subject to judicial appeal
or review (including because the time within which a party may seek appeal or review has expired), provided that, if any such
judgment has been issued but is subject to judicial appeal or review, it shall nevertheless be deemed to be a final judgment unless
the Company shall in good faith be prosecuting such appeal or a proceeding for such review and shall have obtained a stay of execution
pending such appeal or review. Notwithstanding the foregoing, this paragraph shall not apply to any default in payment or event
of default with 

    	64

    	 

    

 

respect
to any Senior Debt as to which the Company has waived the application of this paragraph in the instrument evidencing such Senior
Debt or by which such Senior Debt is created, incurred, assumed or guaranteed by the Company.

Section
14.05.  Payment Permitted in Certain Situations.
Nothing contained in this Article or elsewhere in this Indenture or in any of the Securities shall prevent (a) the Company,
at any time except during the pendency of any case, proceeding, dissolution, liquidation or other winding up, assignment for the
benefit of creditors or other marshalling of assets and liabilities of the Company referred to in Section 14.02 or under
the conditions described in Section 14.03 or Section 14.04, from making payments at any time of or on account of
the principal of (and premium, if any) or interest on the Securities, or on account of the purchase or other acquisition of Securities,
or (b) the application by the Trustee of any money deposited with it hereunder to the payment of or on account of the principal
of (and premium, if any) or interest on the Securities or the retention of such payment by the Holders, if, at the time of such
application by the Trustee, it did not have knowledge that such payment would have been prohibited by the provisions of this Article.

Section
14.06.  Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all Senior Debt or the provision for such payment in cash or cash equivalents or otherwise in
a manner satisfactory to the holders of Senior Debt, the Holders of the Securities shall be subrogated to the extent of the payments
or distributions made to the holders of such Senior Debt pursuant to the provisions of this Article (equally and ratably with
the holders of indebtedness of the Company which by its express terms is subordinated to Indebtedness of the Company to substantially
the same extent as the Securities are subordinated to the Senior Debt and is entitled to like rights of subrogation) to the rights
of the holders of such Senior Debt to receive payments and distributions of cash, property and securities applicable to the Senior
Debt until the principal of (and premium, if any) and interest on the Securities shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of the Senior Debt of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this Article XIV, and no payments over pursuant
to the provisions of this Article XIV to the holders of Senior Debt by Holders of the Securities or the Trustee, shall,
as among the Company, its creditors other than holders of Senior Debt and the Holders of the Securities, be deemed to be a payment
or distribution by the Company to or on account of the Senior Debt.

Section
14.07.  Provisions Solely to Define Relative Rights.
The provisions of this Article XIV are and are intended solely for the purpose of defining the relative rights of the Holders
of the Securities on the one hand and the holders of Senior Debt on the other hand. Nothing contained in this Article XIV
or elsewhere in this Indenture or in the Securities is intended to or shall (a) impair, as among the Company, its creditors
other than holders of Senior Debt and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional
(and which, subject to the rights under this Article XIV of the holders of Senior Debt, is intended to rank equally with
all other general obligations of the Company), to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Holders of the Securities and creditors of the Company other than the holders of
Senior Debt; or (c) prevent the Trustee or the Holder of any Security from

    	65

    	 

    

 

exercising
all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this
Article XIV of the holders of Senior Debt to receive cash, property and securities otherwise payable or deliverable to
the Trustee or such Holder.

Section
14.08.  Trustee to Effectuate Subordination. Each
Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this Article XIV and appoints the Trustee his attorney-in-fact
for any and all such purposes.

Section
14.09.  No Waiver of Subordination Provisions. No
right of any present or future holder of any Senior Debt to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good
faith, by any such holder, or by any non-compliance by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise charged with.

Without
in any way limiting the generality of the foregoing paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the Securities, without incurring responsibility to the Holders
of the Securities and without impairing or releasing the subordination provided in this Article or the obligations hereunder of
the Holders of the Securities to the holders of Senior Debt do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior Debt or otherwise amend or supplement in any manner
Senior Debt or any instrument evidencing the same or any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the collection of Senior Debt; and (iv) exercise or refrain from exercising any rights against the
Company and any other Person.

Section
14.10.  Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of
any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making
of any payment to or by the Trustee in respect of the Securities, unless and until the Trustee shall have received written notice
thereof from the Company or a holder of Senior Debt or from any trustee therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Section 6.01, shall be entitled in all respects to assume that no such
facts exist.

Subject
to the provisions of Section 6.01, the Trustee shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Debt (or a trustee therefor) to establish that such notice has been given
by a holder of Senior Debt (or a trustee therefor). In the event that the Trustee determines in good faith that further evidence
is required with respect to the right of any Person as a holder of Senior Debt to participate in any payment or distribution pursuant
to this Article XIV, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment or

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distribution
and any other facts pertinent to the rights of such Person under this Article XIV, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

Section
14.11.  Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in this
Article XIV, the Trustee, subject to the provisions of Section 6.01, and the Holders of the Securities shall be
entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate
of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other
Person making such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose of ascertaining
the Persons entitled to participate in such payment or distribution, the holders of Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XIV.

Section
14.12.  Trustee Not Fiduciary For Holders of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt and shall not be liable to any such holders
or creditors if it shall in good faith pay over or distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be entitled by virtue of this Article XIV or otherwise.
With respect to the holders of Senior Debt, the Trustee undertakes to perform or to observe only such of its covenants or obligations
as are specifically set forth in this Article XIV and no implied covenants or obligations with respect to holders of Senior
Debt shall be read into this Indenture against the Trustee.

Section
14.13.  Rights of Trustee as Holder of Senior Debt; Preservation
of Trustees Rights. The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XIV with respect to any Senior Debt which may at any time be held by it, to the same extent
as any other holder of Senior Debt and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder.

Nothing
in this Article XIV shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.07.

Section
14.14.  Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder,
the term “Trustee” as used in this Article XIV shall in such case (unless the context otherwise requires) be
construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article XIV in addition to or in place of the Trustee.

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Article
XV

SECURITY

Section
15.01.  Security. If so provided pursuant to Section
3.01 with respect to the Securities of any series, the Securities of such series may be secured by such property, assets or
other collateral as may be specified in or pursuant to Section 3.01. Any and all terms and provisions applicable to the
security for the Securities of such series shall also be provided in or pursuant to Section 3.01, which may include, without
limitation, provisions for the execution and delivery of such security agreements, pledge agreements, collateral agreements and
other similar or related agreements as the Company may elect and which may provide for the Trustee to act as collateral agent
or in a similar or other capacity. The Trustee shall comply with Sections 313(a)(5) and (6) and 313(b)(1) of the Trust Indenture
Act and the Company shall comply with Sections 314(b), 314(c) and 314(d) of the Trust Indenture Act, in each case in respect of
any secured Securities that may be outstanding hereunder from time to time.

*
* * * *

This
instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all
such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Indenture and of signature
pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto
and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile
or PDF shall be deemed to be their original signatures for all purposes.

    	68

    	 

    

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

 

THE
BANCORP, INC.

By:________________________________

Name:

Title:

 

 

[TRUSTEE],

AS TRUSTEE

By:________________________________

Name:

Title:Exhibit

Exhibit 10.1

AMENDED AND RESTATED  
CREDIT AGREEMENT

Dated as of June 3, 2005

among

AMERICAN STATES WATER COMPANY,

as Borrower,

THE LENDERS NAMED HEREIN

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Lead Arranger

TABLE OF CONTENTS

	
			
	 
	 
	Page

	 
	 

	Article 1. DEFINITIONS AND ACCOUNTING TERMS   
	1

	 
	 
	 

	1.1
	Defined Terms   
	1

	1.2
	Use of Defined Terms   
	16

	1.3
	Accounting Terms; Covenant Calculations
	17

	1.4
	Rounding   
	17

	1.5
	Exhibits and Schedules   
	17

	1.6
	References to “Borrower and its Subsidiaries”   
	17

	1.7
	Miscellaneous Terms   
	17

	 
	 
	 

	Article 2. ADVANCES AND LETTERS OF CREDIT   
	17

	 
	 
	 

	2.1
	Advances-General   
	17

	2.2
	Alternate Base Rate Advances   
	18

	2.3
	Eurodollar Rate Advances   
	18

	2.4
	Conversion and Continuation of Advances   
	18

	2.5
	Letters of Credit   
	19

	2.6
	Termination or Reduction of the Commitments   
	22

	2.7
	Administrative Agent’s Right to Assume Funds Available for Advances   
	22

	2.8
	Swing Line   
	22

	2.9
	Adjusting Purchase Payments   
	23

	 
	 
	 

	Article 3. PAYMENTS AND FEES   
	23

	 
	 
	 

	3.1
	Principal and Interest.   
	23

	3.2
	Unused Revolving Facility Commitment Fee   
	24

	3.3
	Closing Fees; Arrangement Fee; Agency Fee etc.   
	24

	3.4
	Letter of Credit Fees   
	25

	3.5
	Increased Commitment Costs   
	25

	3.6
	Eurodollar Costs and Related Matters   
	25

	3.7
	Late Payments and Default Rate   
	27

	3.8
	Computation of Interest and Fees   
	27

	3.9
	Non-Banking Days   
	28

	3.10
	Manner and Treatment of Payments   
	28

	3.11
	Funding Sources   
	28

	3.12
	Failure to Charge Not Subsequent Waiver   
	28

	3.13
	Administrative Agent’s Right to Assume Payments Will be Made   
	29

	3.14
	Fee Determination Detail   
	29

	3.15
	Survivability   
	29

	 
	 
	 

	Article 4. REPRESENTATIONS AND WARRANTIES   
	29

	 
	 
	 

	4.1
	Existence and Qualification; Power; Compliance With Laws   
	29

	4.2
	Authority; Compliance With Other Agreements and Instruments and Government Regulations   
	29

	
			
	 
	 
	Page

	4.3
	No Governmental Approvals Required   
	30

	4.4
	Subsidiaries   
	30

	4.5
	Financial Statements   
	30

	4.6
	No Other Liabilities; No Material Adverse Changes   
	30

	4.7
	Title to and Location of Property   
	31

	4.8
	Intangible Assets   
	31

	4.9
	Litigation   
	31

	4.10
	Binding Obligations   
	31

	4.11
	No Default   
	31

	4.12
	ERISA   
	31

	4.13
	Regulation U; Investment Company Act   
	32

	4.14
	Disclosure   
	32

	4.15
	Tax Liability   
	32

	4.16
	Projections   
	32

	4.17
	Hazardous Materials   
	32

	4.18
	Employee Matters   
	32

	4.19
	Fiscal Year   
	32

	4.20
	Solvency   
	32

	 
	 
	 

	Article 5. AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)   
	32

	 
	 
	 

	5.1
	Payment of Taxes and Other Potential Liens   
	32

	5.2
	Preservation of Existence   
	33

	5.3
	Maintenance of Properties   
	33

	5.4
	Maintenance of Insurance   
	33

	5.5
	Compliance With Laws   
	33

	5.6
	Inspection Rights   
	33

	5.7
	Keeping of Records and Books of Account   
	33

	5.8
	Compliance With Agreements   
	33

	5.9
	Use of Proceeds   
	33

	5.10
	Hazardous Materials Laws   
	33

	5.11
	Minimum Debt Rating   
	34

	5.12
	Syndication Process   
	34

	 
	 
	 

	Article 6. NEGATIVE COVENANTS   
	34

	 
	 
	 

	6.1
	Prepayment of Indebtedness   
	34

	6.2
	Prepayment of Subordinated Obligations   
	34

	6.3
	Disposition of Property   
	34

	6.4
	Mergers   
	34

	6.5
	Hostile Tender Offers   
	34

	6.6
	Distributions   
	34

	6.7
	ERISA   
	35

	6.8
	Change in Nature of Business   
	35

	6.9
	Liens and Negative Pledges   
	35

	6.10
	Indebtedness and Guaranty Obligations   
	35

	6.11
	Transactions with Affiliates   
	35

	6.12
	Total Funded Debt Ratio   
	35

	
			
	 
	 
	Page

	6.13
	Interest Coverage Ratio   
	36

	6.14
	Investments and Acquisitions   
	36

	6.15
	Operating Leases   
	36

	6.16
	Amendments   
	36

	6.17
	Use of Lender’s Name   
	36

	6.18
	Change of Fiscal Periods   
	36

	 
	 
	 

	Article 7. INFORMATION AND REPORTING REQUIREMENTS   
	36

	 
	 
	 

	7.1
	Financial and Business Information   
	36

	7.2
	Compliance Certificates   
	38

	 
	 
	 

	Article 8. CONDITIONS   
	38

	 
	 
	 

	8.1
	Closing Date Advances   
	38

	8.2
	Any Advance   
	39

	 
	 
	 

	Article 9. EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT   
	40

	 
	 
	 

	9.1
	Events of Default   
	40

	9.2
	Remedies Upon Event of Default   
	41

	 
	 
	 

	Article 10. THE ADMINISTRATIVE AGENT   
	42

	 
	 
	 

	10.1
	Appointment and Authorization   
	42

	10.2
	Administrative Agent and Affiliates   
	42

	10.3
	Proportionate Interest in any Collateral   
	42

	10.4
	Lenders’ Credit Decisions   
	43

	10.5
	Action by Administrative Agent   
	43

	10.6
	Liability of Administrative Agent   
	43

	10.7
	Indemnification   
	44

	10.8
	Successor Administrative Agent   
	44

	10.9
	No Obligations of Borrower   
	45

	 
	 
	 

	Article 11. MISCELLANEOUS   
	45

	 
	 
	 

	11.1
	Cumulative Remedies; No Waiver   
	45

	11.2
	Amendments; Consents   
	45

	11.3
	Costs and Expenses   
	45

	11.4
	Nature of Lenders’ Obligations   
	46

	11.5
	Survival of Representations and Warranties   
	46

	11.6
	Notices   
	46

	11.7
	Execution of Loan Documents   
	47

	11.8
	Binding Effect; Assignment   
	47

	11.9
	Right of Setoff   
	48

	11.10
	Sharing of Setoffs   
	49

	11.11
	Indemnity by Borrower   
	49

	11.12
	Nonliability of the Lenders   
	50

	
			
	 
	 
	Page

	11.13
	No Third Parties Benefited   
	50

	11.14
	Confidentiality   
	50

	11.15
	Further Assurances   
	51

	11.16
	Integration   
	51

	11.17
	Governing Law   
	51

	11.18
	Severability of Provisions   
	51

	11.19
	Headings   
	51

	11.20
	Time of the Essence   
	51

	11.21
	Foreign Lenders and Participants   
	51

	11.22
	Waiver of Right to Trial by Jury   
	52

	11.23
	Purported Oral Amendments   
	52

	11.24
	Replacement of Lender   
	52

	11.25
	USA Patriot Act Notice   
	52

Exhibits

	
			
	A
	-
	Assignment and Acceptance

	B
	-
	Compliance Certificate

	C
	-
	Letter of Credit Agreement

	D
	-
	Note

	E
	-
	Opinion of Counsel

	F
	-
	Request for Borrowing

	G
	-
	Request for Continuation/Conversion

	H
	-
	Request for Letter of Credit

	I
	-
	Adjusting Purchase Payments

Schedules

	
		
	1.1
	Lender Commitments/Pro Rata Shares

	1.3
	Material Contracts

	4.4
	Subsidiaries

	4.7
	Existing Liens, Negative Pledges and Rights of Others

	4.8
	Intangible Assets

	4.9
	Material Litigation

	4.17
	Hazardous Materials Matters

	6.14
	Existing Investments

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of June 3, 2005

This AMENDED AND RESTATED CREDIT AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”) is entered into by and among AMERICAN STATES WATER COMPANY, a California corporation (“Borrower”), each lender whose name is set forth on the signature pages of this Agreement and each lender that may hereafter become a party to this Agreement pursuant to Section 11.8 (each a “Lender” and collectively, “Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lead Arranger.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

Article 1. 
DEFINITIONS AND ACCOUNTING TERMS

1.1    Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

“Acquired Person” means (a) any Person that is the subject of an Acquisition after the Closing Date and (b) any assets constituting a discrete business or operation unit that is the subject of an Acquisition after the Closing Date.

“Acquisition” means any transaction, or any series of related transactions, consummated after the Closing Date, by which Borrower or any of its Subsidiaries directly or indirectly (a) acquires any ongoing business or all or substantially all of the assets of any firm, partnership, joint venture, limited liability company, corporation or division thereof, whether through purchase of assets, merger or otherwise, (b) acquires in one transaction or as the most recent transaction in a series of transactions control of Securities of a Person engaged in an ongoing business representing more than 50% of the ordinary voting power for the election of directors or other governing position if the business affairs of such Person are managed by a board of directors or other governing body or (c) acquires control of more than 50% of the ownership interest in any partnership, joint venture, limited liability company, business trust or other Person that is not managed by a board of directors or other governing body.

“Administrative Agent” means Wells Fargo when acting in its capacity as the Administrative Agent under any of the Loan Documents, or any successor Administrative Agent.

“Administrative Agent’s Office” means the Administrative Agent’s address as set forth on the signature pages of this Agreement, or such other address as the Administrative Agent hereafter may designate by written notice to Borrower and the Lenders.

“Advance” means any advance made or to be made by any Lender to Borrower as provided in Section 2.1(a).

“Advances for Construction” means funds advanced by any person in connection with the addition of utility plant which funds are subject to refund and, in accordance with GAAP as in effect on the date hereof, are reflected as “Other Credits” in the financial statements of Borrower and its Subsidiaries, until refunded.

“Aerojet Write-Off” means any write-off of regulatory assets that may be required as a result of the failure of the California Public Utilities Commission to approve all, or in part, the request of SCW to amortize the remainder of the costs in the memorandum account established by SCW to record the costs incurred in connection with prosecuting the water contamination lawsuits filed by SCW against the State of California and Aerojet General Corporation.

“Affiliate” means, as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person.  As used in this definition, “control” (and the correlative terms, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of Securities or partnership or other ownership interests, by contract or otherwise); provided that, in any event, any Person that owns, directly or indirectly, 10% or more of the Securities having ordinary voting power for the election of directors or other governing body of a corporation that has more than 100 record holders of such Securities, or 10% or more of the partnership or other ownership interests of any other Person that has more than 100 record holders of such interests, will be deemed to be an Affiliate of such corporation, partnership or other Person.

1

“Aggregate Effective Amount” means, as of any date of determination and with respect to all Letters of Credit then outstanding, the sum of (a) the aggregate effective face amounts of all such Letters of Credit not then paid by Issuing Lender plus (b) the aggregate amounts paid by Issuing Lender under such Letters of Credit not then reimbursed to Issuing Lender by Borrower pursuant to Section 2.5(d) and not the subject of one or more Advances made pursuant to Section 2.5(e) or (f).

“Alternate Base Rate” means, as of any date of determination, the rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the higher of (a) the Prime Rate in effect on such date and (b) the Federal Funds Rate in effect on such date plus 1⁄2 of 1% (50 basis points).

“Alternate Base Rate Advance” means an Advance that bears interest in relation to the Alternate Base Rate as provided in Section 3.1(b).

“Applicable Alternate Base Rate Margin” means, with respect to any Alternate Base Rate Advance, for each Pricing Period, the interest rate margin set forth below

(expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:

	
				
	Applicable 
Pricing 
Level
	 
	Margin
	 

	I
	 
	0
	 

	II
	 
	0
	 

	III
	 
	0
	 

	IV
	 
	0
	 

	V
	 
	0
	 

“Applicable Commitment Fee Margin” means, for each Pricing Period, the margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:

	
				
	Applicable 
Pricing 
Level
	 
	Margin
	 

	I
	 
	7.5
	 

	II
	 
	10.0
	 

	III
	 
	12.5
	 

	IV
	 
	15.0
	 

	V
	 
	17.5
	 

“Applicable Eurodollar Rate Margin” means, with respect to any Eurodollar Rate Advance, for each Pricing Period, the interest rate margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:

	
				
	Applicable 
Pricing 
Level
	 
	Margin
	 

	I
	 
	50.0
	 

	II
	 
	62.5
	 

	III
	 
	75.0
	 

	IV
	 
	87.5
	 

	V
	 
	100.0
	 

“Applicable Letter of Credit Fee Rate” means, as of any date of determination, the then effective Applicable Eurodollar Rate Margin.

2

3

“Applicable Pricing Level” means,  for each Pricing Period the pricing level set forth below opposite the Debt Rating achieved by Borrower as of the first day of that Pricing Period:

	
			
	Pricing Level
	 
	Debt Rating

	 
	 
	 

	I
	 
	Greater than or equal to A1 / A+

	II
	 
	Less than A1 / A+ but greater than or equal to A2 / A

	III
	 
	Less than A2 / A but greater than or equal to A3 / A-

	IV
	 
	Less than A3 / A- but greater than or equal to Baa2/BBB

	V
	 
	Less than Baa2/BBB

provided that in the event that the then prevailing Debt Ratings are “split ratings”, Borrower will receive the benefit of the higher Debt Rating, unless the split is a “double split rating” (in which case the pricing level applicable to the middle Debt Rating will apply) or a “triple split rating” (in which case the pricing level applicable to the Debt Rating above the Debt Rating applicable to the lowest pricing level will apply).  For purposes hereof, a Debt Rating is only a “split rating” if the Debt Rating applies to a different pricing level.

“Assignment and Acceptance” means an assignment and acceptance agreement substantially in the form of Exhibit A.

“Banking Day” means any Monday, Tuesday, Wednesday, Thursday or Friday, other than a day on which banks are authorized or required to be closed in California or New York.

“Borrowing” means a borrowing consisting of simultaneous Advances of the same type.

“Capital Expenditure” means any expenditure that is treated as a capital expenditure under GAAP, including any expenditure that is required to be capitalized in accordance with GAAP that relates to an asset subject to a Capital Lease.

“Capital Lease” means, as to any Person, a lease of any Property by that Person as lessee that is, or should be in accordance with GAAP (including Financial Accounting Standards Board Statement No. 13, as amended or superseded from time to time), recorded as a “capital lease” on the balance sheet of that Person prepared in accordance with GAAP.

“Capital Lease Obligations” means all monetary obligations of a Person under any Capital Lease.

“Cash” means, when used in connection with any Person, all monetary and non-monetary items owned by that Person that are treated as cash in accordance with GAAP.

“Cash Equivalents” means, when used in connection with any Person, that Person’s Investments in:

(a)    Government Securities due within one year after the date of the making of the Investment;

(b)    readily marketable direct obligations of any State of the United States of America or any political subdivision of any such State or any public agency or instrumentality thereof given on the date of such Investment a credit rating of at least Aa by Moody’s or AA by S&P, in each case due within one year from the making of the Investment;

(c)    certificates of deposit issued by, bank deposits in, eurodollar deposits through, bankers’ acceptances of, and repurchase agreements covering Government Securities executed by any Lender or any bank incorporated under the Laws of the United States of America, any State thereof or the District of Columbia and  having on the date of such Investment combined capital, surplus and undivided profits of at least $250,000,000, or total assets of at least $5,000,000,000, in each case due within one year after the date of the making of the Investment;

(d)    certificates of deposit issued by, bank deposits in, eurodollar deposits through, bankers’ acceptances of, and repurchase agreements covering Government Securities executed by any Lender or any branch or office located in the United States of America of a bank incorporated under the Laws of any jurisdiction outside the United States of America having on the date of such Investment combined capital, surplus and undivided profits of at least $500,000,000, or total assets of at least $15,000,000,000, in each case due within one year after the date of the making of the Investment;

4

5

(e)    repurchase agreements covering Government Securities executed by a broker or dealer registered under Section 15(b) of the Securities Exchange Act of 1934, as amended, having on the date of the Investment capital of at least $50,000,000, due within 90 days after the date of the making of the Investment; provided that the maker of the Investment receives written confirmation of the transfer to it of record ownership of the Government Securities on the books of a “primary dealer” in such Government Securities or on the books of such registered broker or dealer, as soon as practicable after the making of the Investment;

(f)    readily marketable commercial paper or other debt Securities issued by corporations doing business in and incorporated under the Laws of the United States of America or any State thereof or of any corporation that is the holding company for a bank described in clause (c) or (d) above given on the date of such Investment a credit rating of at least P-1 by Moody’s or A-1 by S&P, in each case due within one year after the date of the making of the Investment;

(g)    “money market preferred stock” issued by a corporation incorporated under the Laws of the United States of America or any State thereof (i) given on the date of such Investment a credit rating of at least Aa by Moody’s and AA by S&P, in each case having an investment period not exceeding 50 days or (ii) to the extent that investors therein have the benefit of a standby letter of credit issued by Lender or a bank described in clauses (c) or (d) above; provided that (y) the amount of all such Investments issued by the same issuer does not exceed $5,000,000 and (z) the aggregate amount of all such Investments does not exceed $10,000,000;

(h)    a readily redeemable “money market mutual fund” sponsored by a bank described in clause (c) or (d) hereof, or a registered broker or dealer described in clause (e) hereof, that has and maintains an investment policy limiting its investments primarily to instruments of the types described in clauses (a) through (g) hereof and given on the date of such Investment a credit rating of at least Aa by Moody’s and AA by S&P; and

(i)    corporate notes or bonds having an original term to maturity of not more than one year issued by a corporation incorporated under the Laws of the United States of America, or a participation interest therein; provided that (i) commercial paper issued by such corporation is given on the date of such Investment a credit rating of at least Aa by Moody’s and AA by S&P, (ii) the amount of all such Investments issued by the same issuer does not exceed $5,000,000 and (iii) the aggregate amount of all such Investments does not exceed $10,000,000.

“Certificate” means a certificate signed by a Senior Officer or Responsible Official (as applicable) of the Person providing the certificate.

“Change in Control” means any of the following events:  (a) the sale, lease, transfer or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Borrower and its Subsidiaries taken as a whole to any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act), (b) Borrower shall fail to own, directly or indirectly, 100% of the outstanding capital stock or other equity interests of any Closing Date Subsidiary, (c) any Person or two or more Persons acting in concert shall have acquired beneficial ownership, directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of, control over, 20% or more of the capital stock or other equity interests of Borrower, (d) during any period of up to 24 consecutive months, commencing after the Closing Date, individuals who at the beginning of such 24-month period were directors of Borrower (together with any new director whose election by Borrower’s board of directors or whose nomination for election by Borrower’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors of Borrower then in office or (e) any transaction or series of related transactions constituting a “change in control” or similar occurrence under documentation evidencing or governing Indebtedness of Borrower and/or any of its Subsidiaries of $1,000,000 or more, which gives the holder(s) of such Indebtedness the right to accelerate or otherwise require payment of such Indebtedness prior to the maturity date thereof.  As used herein, “beneficial ownership” shall have the meaning provided in Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act.

“Closing Date” means the time and Banking Day on which the conditions set forth in Section 8.1 are satisfied or waived.  The Administrative Agent shall notify Borrower and the Closing Date Lenders of the date that is the Closing Date.

“Closing Date Lenders” means Wells Fargo, CoBank, ACB, Union Bank of California, N.A., Comerica Bank, The Northern Trust Company, and any other lender party to this Agreement as of the Closing Date.

6

“Closing Date Subsidiaries” means SCW, American States Utility Services, Inc., a California corporation, Chaparral City Water Company, an Arizona corporation, California Cities Water Company, Inc., a California corporation, AWR Merger Company, a California corporation, and Fort Bliss Water Services Company, a Texas corporation.

“Code” means the Internal Revenue Code of 1986, as amended or replaced and as in effect from time to time.

“Commitment” means with respect to each Lender, the commitment of such Lender to make Advances (expressed as the maximum aggregate amount of the Advances to be made by such Lender hereunder), as such commitment may be (a) reduced from time to time pursuant to Section 2.6 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.8.  The initial amount of each Lender’s Commitment is set forth on Schedule 1.1 or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable.  The initial aggregate amount of the Lenders’ Commitments is $85,000,000.

“Compliance Certificate” means a certificate in the form of Exhibit B, properly completed and signed by the president or chief financial officer of Borrower.

“Continuation,” “Continue” and “Continued” each refers to a continuation of Eurodollar Rate Advances from one Eurodollar Period to the next Eurodollar Period pursuant to Section 2.4(c).

“Contractual Obligation” means, as to any Person, any provision of any outstanding Security issued by that Person or of any material agreement, instrument or undertaking to which that Person is a party or by which it or any of its Property is bound.

“Conversion,” “Convert” and “Converted” each refers to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.4(a) or 2.4(b).

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, as amended from time to time, and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws from time to time in effect affecting the rights of creditors generally.

“Debt Ratings” means, as of each date of determination, (a) in the event such a credit rating is issued by either Moody’s or S&P, the bank debt credit rating assigned to the Indebtedness evidenced by this Agreement by that credit reporting agency, or (b) if no bank debt credit rating is assigned, the most creditworthy credit rating, actual or implicit, assigned to senior unsecured Indebtedness of Borrower by that credit rating agency.

“Default” means any event that, with the giving of any applicable notice or passage of time specified in Section 9.1, or both, would be an Event of Default.

“Default Rate” means the interest rate prescribed in Section 3.7.

“Designated Deposit Account” means a deposit account to be maintained by Borrower with Wells Fargo or one of its Affiliates, as from time to time designated by Borrower by written notification to the Administrative Agent.

“Designated Eurodollar Market” means, with respect to any Eurodollar Rate Advance, the London Eurodollar Market.

“Disqualified Stock” means any capital stock, warrants, options or other rights to acquire capital stock (but excluding any debt Security which is convertible, or exchangeable, for capital stock), which, by its terms (or by the terms of any Security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the Maturity Date.

“Disposition” means the sale, transfer or other disposition (each, a “Transfer”) in any single transaction or series of related transactions of any asset, or group of related assets, of Borrower or any Subsidiary other than (a) a Transfer of Cash, Cash Equivalents, Investments (other than Investments in a Subsidiary), Inventory or other assets sold or otherwise disposed of in the ordinary course of business of Borrower or any Subsidiary, (b) a Transfer of equipment sold or otherwise disposed of where substantially similar equipment in replacement thereof has theretofore been acquired, or thereafter within 90 days is acquired, by Borrower or any Subsidiary and (c) a Transfer of obsolete assets no longer useful in the business of Borrower or 

7

any Subsidiary whose carrying value on the books of Borrower or such Subsidiary is less than $1,000,000 and (d) a Transfer to Borrower or a wholly-owned Subsidiary of Borrower.

“Distribution” means, with respect to any equity interest or Security issued by a Person, or any warrant or right to acquire any equity interest or Security of a Person, (a) the retirement, redemption, purchase, or other acquisition for value by such Person of any such equity interest or Security, (b) the declaration or (without duplication) payment by such Person of any dividend in Cash or in Property (other than in common stock or an equivalent equity interest of such Person) on or with respect to any such equity interest or Security, (c) any Investment by such Person in the holder of any such equity interest or Security, and (d) any other payment by such Person constituting a distribution under applicable Laws with respect to such equity interest or Security.

“Dollars” or “$” means United States of America dollars.

“EBITDA” means, with respect to any fiscal period, the sum of (a) Net Income for that period, plus (b) any extraordinary loss reflected in such Net Income, minus (c) any extraordinary gain reflected in such Net Income, plus (d) Interest Expense of Borrower and its Subsidiaries for that period, plus (e) the aggregate amount of federal and state taxes on or measured by income of Borrower and its Subsidiaries for that period (whether or not payable during that period), plus (f) depreciation and amortization expense of Borrower and its Subsidiaries for that period, plus (g) (i) the  actual amount of the Aerojet Write-Off taken during such period (provided that for purposes of this calculation, such amount shall not exceed $16,000,000) and (ii) all other non-cash, extraordinary expenses of Borrower and its Subsidiaries for that period acceptable, in the case of clause (ii), to the Requisite Lenders, in each case as determined in accordance with GAAP, consistently applied and, in the case of items (d), (e), (f), and (g) only to the extent reflected in the determination of Net Income for that period.

“Eligible Assignee” means (a) another Lender, (b) with respect to any Lender, any Affiliate of that Lender, (c) any commercial bank having total assets of $250,000,000 or more, (d) any (i) savings bank, savings and loan association, finance company or similar financial institution or entity or (ii) insurance company engaged in the business of writing insurance which, in either case (A) has total assets of $250,000,000 or more, (B) is engaged in the business of lending money and extending credit under credit facilities similar to those extended under this Agreement and (C) is operationally and procedurally able to meet the obligations of a Lender hereunder to the same degree as a commercial bank (as reasonably determined by the assigning Lender) and (e) any other financial institution (including a mutual fund or other fund) having total assets of $250,000,000 or more which meets the requirements set forth in subclauses (B) and (C) of clause (d) above; provided that each Eligible Assignee must either (x) be organized under the Laws of the United States of America, any State thereof or the District of Columbia or (y) be organized under the Laws of the Cayman Islands or any country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of such a country, and (1) act hereunder through a branch, agency or funding office located in the United States of America and (2) be exempt from withholding of tax on interest and deliver the documents related thereto pursuant to Section 11.21.

“ERISA” means the Employee Retirement Income Security Act of 1974, and any regulations issued pursuant thereto, as amended or replaced and as in effect from time to time.

“ERISA Affiliate” means, with respect to any Person, any Person (or any trade or business, whether or not incorporated) that is under common control with that Person within the meaning of Section 414 of the Code.

“Eurodollar Banking Day” means any Banking Day on which dealings in Dollar deposits are conducted by and among banks in the Designated Eurodollar Market.

“Eurodollar Base Rate” means with respect to any Eurodollar Rate Advance comprising part of the same Borrowing, the interest rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) at which deposits in Dollars are offered by the Eurodollar Reference Lender to prime banks in the Designated Eurodollar Market at or about 10:00 a.m. local time in the Designated Eurodollar Market, two (2) Eurodollar Banking Days before the first day of the applicable Eurodollar Period in an aggregate amount approximately equal to the amount of the Advance to be made by the Eurodollar Reference Lender comprising part of such Borrowing and for a period of time comparable to the number of days in the applicable Eurodollar Period.  The determination of the Eurodollar Base Rate by the Administrative Agent shall be conclusive in the absence of manifest error.

8

“Eurodollar Lending Office” means, as to each Lender, its office or branch so designated by written notice to Borrower and the Administrative Agent as its Eurodollar Lending Office.  If no Eurodollar Lending Office is designated by a Lender, its Eurodollar Lending Office shall be its office at its address for purposes of notices hereunder.

“Eurodollar Market” means a regular established market located outside the United States of America by and among banks for the solicitation, offer and acceptance of Dollar deposits in such banks.

“Eurodollar Obligations” means eurocurrency liabilities, as defined in Regulation D or any comparable regulation of any Governmental Agency having jurisdiction over any Lender.

“Eurodollar Period” means, as to each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date specified by Borrower pursuant to Section 2.1(b) and ending 1, 2, 3 or 6 months (or, if available to all Lenders, 9 or 12 months) thereafter, as specified by Borrower in the applicable Request for Borrowing or Request for Continuation/Conversion provided that:

(a)    The first day of any Eurodollar Period shall be a Eurodollar Banking Day;

(b)    Any Eurodollar Period that would otherwise end on a day that is not a Eurodollar Banking Day shall be extended to the immediately succeeding Eurodollar Banking Day unless such Eurodollar Banking Day falls in another calendar month, in which case such Eurodollar Period shall end on the immediately preceding Eurodollar Banking Day; and

(c)    No Eurodollar Period for any Eurodollar Rate Advance shall extend beyond the Maturity Date.

“Eurodollar Rate” means, with respect to any Eurodollar Rate Advance comprising part of the same Borrowing, an interest rate per annum (rounded upward, if necessary, to the nearest 1/100th of one percent) determined pursuant to the following formula:

	
					
	Eurodollar
	 
	Eurodollar Base Rate
	 
	 

	Rate
	=
	1.00-Eurodollar Reserve
	 
	 

	 
	 
	Percentage
	 
	 

“Eurodollar Rate Advance” means an Advance that bears interest in relation to the Eurodollar Rate as provided in Section 3.1(c).

“Eurodollar Reference Lender” means Wells Fargo or the Administrative Agent if Wells Fargo is no longer the Administrative Agent.

“Eurodollar Reserve Percentage” means, with respect to any Eurodollar Rate Advance comprising part of the same Borrowing, the maximum reserve percentage (expressed as a decimal, rounded upward, if necessary, to the nearest 1/100th of one percent) in effect on the date the Eurodollar Base Rate for the Borrowing of which such Eurodollar Rate Advance is a part is determined (whether or not such reserve percentage is applicable to any Lender) under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to eurocurrency funding (currently referred to as “eurocurrency liabilities”) having a term comparable to the Eurodollar Period for such Eurodollar Rate Advance.  The determination by the Administrative Agent of any applicable Eurodollar Reserve Percentage shall be conclusive in the absence of manifest error.

“Event of Default” shall have the meaning provided in Section 9.1.

“Federal Funds Rate” means, as of any date of determination, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Federal Reserve Board (including any such successor, “H.15(519)”) for such date opposite the caption “Federal Funds (Effective)”.  If for any relevant date such rate is not yet published in H.15(519), the rate for such date will be the rate set forth in the daily statistical release designated as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any successor publication, published by the Federal Reserve Bank of New York (including any such successor, the “Composite 3:30 p.m. Quotation”) for such date under the caption “Federal Funds Effective Rate”.  If on any relevant date the appropriate rate for such date is not yet published in either H.15(519) or the Composite 

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3:30 p.m. Quotations, the rate for such date will be the arithmetic mean of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that date by each of three leading brokers of Federal funds transactions in New York City selected by the Administrative Agent.  For purposes of this Agreement, any change in the Alternate Base Rate due to a change in the Federal Funds Rate shall be effective as of the opening of business on the effective date of such change.

“Fiscal Quarter” means any fiscal quarter of Borrower and its Subsidiaries ending on each March 31, June 30, September 30 and December 31.

“Fiscal Year” means the fiscal year of Borrower and its Subsidiaries ending on each December 31.

“GAAP” means, as of any date of determination, accounting principles (a) set forth as generally accepted in then currently effective Opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants, (b) set forth as generally accepted in then currently effective Statements of the Financial Accounting Standards Board or (c) that are then approved by such other entity as may be approved by a significant segment of the accounting profession in the United States of America.  The term “consistently applied,” as used in connection therewith, means that the accounting principles applied are consistent in all material respects with those applied at prior dates or for prior periods.

“Government Securities” means readily marketable (a) direct full faith and credit obligations of the United States of America or obligations guaranteed by the full faith and credit of the United States of America and (b) obligations of an agency or instrumentality of, or corporation owned, controlled or sponsored by, the United States of America that are generally considered in the securities industry to be implicit obligations of the United States of America.

“Governmental Agency” means (a) any international, foreign, federal, state, county or municipal government, or political subdivision thereof, (b) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality or public body or (c) any court or administrative tribunal of competent jurisdiction.

“Guaranty Obligation” means, as to any Person, any (a) guarantee by that Person of Indebtedness of, or other obligation performable by, any other Person or (b) assurance given by that Person to an obligee of any other Person with respect to the performance of an obligation by, or the financial condition of, such other Person, whether direct, indirect or contingent, including any purchase or repurchase agreement covering such obligation or any collateral security therefor, any agreement to provide funds (by means of loans, capital contributions or otherwise) to such other Person, any agreement to support the solvency or level of any balance sheet item of such other Person or any “keep-well” or other arrangement of whatever nature given for the purpose of assuring or holding harmless such obligee against loss with respect to any obligation of such other Person; provided, however, that the term Guaranty Obligation shall not include endorsements of instruments for deposit or collection or similar arrangements in the ordinary course of business.  The amount of any Guaranty Obligation in respect of Indebtedness shall be deemed to be an amount equal to the stated or determinable amount of the related Indebtedness (unless the Guaranty Obligation is limited by its terms to a lesser amount, in which case to the extent of such amount) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the Person in good faith.  The amount of any other Guaranty Obligation shall be deemed to be zero unless and until the amount thereof has been (or in accordance with Financial Accounting Standards Board Statement No. 5 should be) quantified and reflected or disclosed in the consolidated financial statements (or notes thereto) of Borrower and its Subsidiaries.

“Hazardous Materials” means oil or petrochemical products, poly-chlorinated biphenyls, asbestos, urea formaldehyde, flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including any substances considered “hazardous substances,” “hazardous wastes,” “hazardous materials,” “infectious wastes”, “pollutant substances”, “solid waste” or “toxic substances” under any Hazardous Materials Laws.

“Hazardous Materials Laws” means all Laws pertaining to the treatment, transportation or disposal of Hazardous Materials on or about any Real Property owned or leased by Borrower or any Subsidiary thereof, or any portion thereof, including without limitation the following:  the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.), the Federal Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901, et seq.), the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. § 9601, et seq.) and the Superfund Amendments and Reauthorization Act of 1986, the Hazardous Materials Transportation Act, as amended (44 U.S.C. § 1801, et seq.), the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the California Health and Safety Code (Section 25100, et seq.), the California Water Code and the California Administrative Code, in each case as such Laws are amended from time to time.

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“Indebtedness” means, as to any Person (without duplication), (a) indebtedness of such Person for borrowed money or for the deferred purchase price of Property (excluding trade and other accounts payable in the ordinary course of business in accordance with ordinary trade terms), including any Guaranty Obligation for any such indebtedness, (b) indebtedness of such Person of the nature described in clause (a) that is non-recourse to the credit of such Person but is secured by assets of such Person, to the extent of the fair market value of such assets as determined in good faith by such Person, (c) Capital Lease Obligations of such Person, (d) indebtedness of such Person arising under bankers’ acceptance facilities or under facilities for the discount of accounts receivable of such Person, (e) any direct or contingent obligations of such Person under letters of credit issued for the account of such Person and (f) any net obligations of such Person under Interest Rate Protection Agreements.  For the avoidance of doubt, (i) Advances for Construction of any Subsidiary of the Borrower in the ordinary course of business, and (ii) the purchase price obligation in connection with a Military Utility Privatization, to the extent that such obligation is recorded as a liability offset by a receivable in the same amount on the financial statements of Borrower, will not constitute Indebtedness hereunder.

“Intangible Assets” means assets that are considered intangible assets under GAAP, including customer lists, goodwill, covenants not to compete, copyrights, trade names, trademarks and patents.

“Interest Coverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio of (a)  EBITDA for the Rolling Period ending on that date, to (b) Interest Expense of Borrower and its Subsidiaries for such Rolling Period.

“Interest Expense” means, with respect to any Person and as of the last day of any fiscal period, the sum of (a) all interest, fees, charges and related expenses (in each case as such expenses are calculated according to GAAP) paid or payable (without duplication) for that fiscal period by that Person to a lender in connection with borrowed money (including any obligations for fees, charges and related expenses payable to the issuer of any letter of credit) or the deferred purchase price of assets that are considered “interest expense” under GAAP plus (b) the portion of rent paid or payable (without duplication) for that fiscal period by that Person under Capital Lease Obligations that should be treated as interest in accordance with Financial Accounting Standards Board Statement No. 13.

“Interest Rate Protection Agreement” means a written agreement between Borrower  and one or more financial institutions providing for “swap”, “cap”, “collar” or other interest rate protection with respect to any Indebtedness.

“Investment” means, when used in connection with any Person, any investment by or of that Person, whether by means of purchase or other acquisition of stock or other Securities of any other Person or by means of a loan, advance creating a debt, capital contribution, guaranty or other debt or equity participation or interest in any other Person, including any partnership, limited liability company and joint venture interests of such Person.  The amount of any Investment shall be the amount actually invested (minus any return of capital with respect to such Investment which has actually been received in Cash or has been converted into Cash), without adjustment for subsequent increases or decreases in the value of such Investment.

“Issuing Lender” means Wells Fargo, when acting in its capacity as Issuing Lender under any of the Loan Documents (including such other Persons that may act as agent for and on behalf of Wells Fargo) or any successor Issuing Lender.

“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, regulations, ordinances, codes and administrative or judicial precedents.

“Lead Arranger” means Wells Fargo Bank, National Association.

“Lender” means each Closing Date Lender and each lender that may hereafter become a party to this Agreement pursuant to Section 11.8.

“Letter of Credit” means any of the standby letters of credit issued by the Issuing Lender under the Revolving Facility pursuant to Section 2.5, either as originally issued or as the same may be supplemented, modified, amended, extended, restated or supplanted.

“Letter of Credit Agreement” means the standby letter of credit agreement  executed by Borrower in connection with the Original Credit Agreement and attached hereto in the form of Exhibit C, either as originally executed or as it may from time to time be supplemented, modified, amended, extended, restated or supplanted.

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“Letter of Credit Collateral Account” means a deposit account to be maintained at Wells Fargo in the name of the Administrative Agent, for the benefit of the Lenders, which account shall be held as collateral for any and all Obligations incurred by Borrower or its Subsidiaries in connection with any Letter of Credit outstanding subsequent to the Maturity Date.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, lien or charge of any kind, whether voluntarily incurred or arising by operation of Law or otherwise, affecting any Property, including any conditional sale or other title retention agreement, any lease in the nature of a security interest, and/or the filing of any financing statement (other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest) under the UCC or comparable Law of any jurisdiction with respect to any Property.

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“Loan Documents” means, collectively, this Agreement, the Notes, the Letter of Credit Agreement, any Request for Borrowing, any Request for Letter of Credit (and any corresponding application and/or reimbursement agreement with respect to any Letter of Credit), any Compliance Certificate, and any other agreements of any type or nature hereafter executed and delivered by Borrower or any other Party to the Administrative Agent or to any Lender in any way relating to or in furtherance of this Agreement, in each case either as originally executed or as the same may from time to time be supplemented, modified, amended, restated, extended or supplanted.

“Margin Stock” means “margin stock” as such term is defined in Regulation U.

“Material Adverse Effect” means any set of circumstances or events which (a) has had or would reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of any Loan Document, (b) has been or would reasonably be expected to be material and adverse to the business, condition (financial or otherwise), prospects or operations of Borrower and its Subsidiaries, taken as a whole, (c) has materially impaired or would reasonably be expected to materially impair the ability of Borrower to perform the Obligations, or (d) has materially impaired or would reasonably be expected to materially impair the ability of Borrower to perform its Obligations under the Loan Documents.

“Material Contracts” means, collectively, (a) the agreements identified on Schedule 1.3 attached hereto and (b) any other agreement that would, if terminated, materially affect the business, condition (financial or otherwise), prospects or operations of Borrower and its Subsidiaries, taken as a whole.

“Maturity Date” means the earlier of (a) June 3, 2010 and (b) the termination or cancellation of the Revolving Facility (and all of the Commitments pertaining thereto) pursuant to the terms of this Agreement.

“Maximum Revolving Credit Amount” means $85,000,000.00.

“Military Utility Privatization” means the acquisition of a water or wastewater system or systems from the U.S. Government pursuant to 10 USC §2688 in connection with a contract to provide utility services. It is understood that, in accordance with GAAP as in effect on the date hereof, the water and wastewater systems acquired are not reflected as fixed assets on the financial statements of the Borrower and the purchase price obligation is recorded as a liability offset by a receivable in the same amount, thereby having no effect on the financial position of the Borrower.

“Monthly Payment Date” means the last Banking Day of each calendar month.

“Moody’s” means Moody’s Investor Service, Inc. and its successors.

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA to which Borrower or any of its ERISA Affiliates contributes, is obligated to contribute or has had an obligation to contribute.

“Negative Pledge” means a Contractual Obligation which contains a covenant binding on Borrower or any Subsidiary that prohibits Liens on any of its Property, other than (a) any such covenant contained in a Contractual Obligation granting or relating to a particular Lien which affects only the Property that is the subject of such Lien and (b) any such covenant that does not apply to Liens securing the Obligations.

“Net Income” means, with respect to any fiscal period, the consolidated net income of Borrower and its Subsidiaries for that period, determined in accordance with GAAP, consistently applied.

“Note” means any of the promissory notes made by Borrower to a Lender evidencing Advances under that Lender’s Commitment, substantially in the form of Exhibit D, either as originally executed or as the same may from time to time be supplemented, modified, amended, renewed, extended or supplanted.

“Obligations” means all present and future obligations of every kind or nature of Borrower at any time and from time to time owed to the Lenders, the Administrative Agent and/or the Issuing Lender, under any one or more of the Loan Documents, whether due or to become due, matured or unmatured, liquidated or unliquidated, or contingent or noncontingent, including obligations of performance as well as obligations of payment, and including interest that accrues after the commencement of any proceeding under any Debtor Relief Law by or against Borrower.

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“Opinion of Counsel” means the favorable written legal opinion of O’Melveny & Myers LLP, special counsel to Borrower, substantially in the form of Exhibit E.

“Original Administrative Agent” means Wells Fargo Bank, National Association, in its capacity as administrative agent under the Original Credit Agreement.

“Original Credit Agreement” means the Credit Agreement, dated as of June 6, 2002 by and among Borrower, each of the Original Lenders from time to time parties thereto, and the Original Administrative Agent, as amended, supplemented or otherwise modified from time to time prior to the date hereof.

“Original Lenders” means each of the Lenders from time to time parties to the Original Credit Agreement.

“Party” means any Person other than Lenders and/or Administrative Agent, which now or hereafter is a party to any of the Loan Documents.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereof established under ERISA.

“Pension Plan” means any “pension plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, which is maintained by Borrower or to which Borrower contributes or has or has had an obligation to contribute.

“Permitted Acquisition” means  an Acquisition by Borrower or any wholly-owned Subsidiary of Borrower of all or substantially all of the assets of, or all of the capital stock or other equity interests of, an Acquired Person engaged in similar or related line(s) of business as Borrower or any of its Subsidiaries, provided, that:

(a)    if such Acquisition is of all of the capital stock or other equity interests of the Acquired Person, such Acquired Person is merged with and into Borrower or such Subsidiary substantially simultaneously with such party’s acquisition of such capital stock or other equity interests or becomes a wholly-owned Subsidiary of Borrower or such Subsidiary;

(b)    in the case of the Acquisition of the capital stock or other equity interest of an Acquired Person, the board of directors (or comparable governing body) of such Acquired Person shall have duly approved such Acquisition;

(c)    Borrower shall have delivered a pro-forma Compliance Certificate for the most recently completed Rolling Period, demonstrating that, upon giving effect to the proposed Acquisition as of the last day of such Rolling Period, Borrower and its Subsidiaries shall be in compliance with the covenants set forth in Sections 6.12 and 6.13;

(d)    such Acquired Person shall have had a positive “EBITDA” for the twelve-month fiscal period immediately preceding the date of such Acquisition (with EBITDA calculated for such Acquired Person in a manner consistent with the calculation of EBITDA for Borrower and its Subsidiaries specified herein);

(e)    at the time of such Acquisition, each of the representations and warranties contained in the Loan Documents shall be true and correct in all material respects (except to the extent such representations and warranties expressly relate to an earlier date),  no Default or Event of Default shall have occurred and remain in effect and after giving effect to such Acquisition, on a pro forma combined basis, (i) no Default of Event of Default would have occurred at any time during the twelve-month fiscal period immediately preceding the date of such Acquisition assuming that such Acquisition had occurred on the first day of such period and (ii) Borrower and its Subsidiaries, on a projected basis, will be in compliance with Section 6.12 and 6.13, as of each of the four Fiscal Quarters ending after the date of the Acquisition, as reflected in updated projections provided by Borrower to the Administrative Agent and the Lenders prior to the effective date of such Acquisition;

(f)    if such Acquisition involves the purchase of an interest in a partnership between Borrower (or a Subsidiary of Borrower) as a general partner and entities unaffiliated with Borrower or such Subsidiary as the other partners, such transaction shall be effected by having such equity interest acquired by a corporate holding company directly or indirectly wholly-owned by Borrower newly formed for the sole purpose of effecting such transaction;

(g)    the Indebtedness assumed or consideration paid or payable in cash in connection with such Acquisition shall not exceed the lesser of (x) $15,000,000 and (y) the fair market value thereof; and

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(h)    the Indebtedness assumed or consideration paid or payable in cash in connection with such Acquisition, when taken together with each other Permitted Acquisitions consummated since the Closing Date shall not exceed $25,000,000 in the aggregate.

“Permitted Acquisition Indebtedness” means Indebtedness in existence at the time of, and assumed by Borrower or its Subsidiaries in connection with, a Permitted Acquisition provided that (a) such Indebtedness was not created in contemplation of such Permitted Acquisition and (b) the aggregate amount of all such Indebtedness does not at any time exceed $10,000,000.

“Permitted Capital Asset Indebtedness” means Indebtedness of Borrower and its Subsidiaries consisting of Capital Lease Obligations, or otherwise incurred to finance the purchase or construction of capital assets (which shall be deemed to exist if the Indebtedness is incurred at or within 90 days before or after the purchase or construction of the capital asset), or to refinance any such Indebtedness; provided that the aggregate principal amount of such Indebtedness shall not exceed $10,000,000 at any one time outstanding (as determined in accordance with GAAP consistently applied).

“Permitted Encumbrances” means:

(a)    Inchoate Liens incident to construction on or maintenance of Property; or Liens incident to construction on or maintenance of Property now or hereafter filed of record for which adequate reserves have been set aside (or deposits made pursuant to applicable Law) and which are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Property is subject to an impending risk of loss or forfeiture;

(b)    Liens for taxes and assessments on Property which are not yet past due; or Liens for taxes and assessments on Property for which adequate reserves have been set aside and are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Property is subject to an impending risk of loss or forfeiture;

(c)    defects and irregularities in title to any Property which in the aggregate do not materially impair the fair market value or use of the Property for the purposes for which it is or may reasonably be expected to be held;

(d)    easements, exceptions, reservations, or other agreements for the purpose of pipelines, conduits, cables, wire communication lines, power lines and substations, streets, trails, walkways, drainage, irrigation, water, and sewerage purposes, dikes, canals, ditches, the removal of oil, gas, coal, or other minerals, and other like purposes affecting Property which in the aggregate do not materially burden or impair the fair market value or use of such Property for the purposes for which it is or may reasonably be expected to be held;

(e)    easements, exceptions, reservations, or other agreements for the purpose of facilitating the joint or common use of Property in or adjacent to a shopping center or similar project affecting Property which in the aggregate do not materially burden or impair the fair market value or use of such Property for the purposes for which it is or may reasonably be expected to be held;

(f)    rights reserved to or vested in any Governmental Agency to control or regulate, or obligations or duties to any Governmental Agency with respect to, the use of any Property;

(g)    rights reserved to or vested in any Governmental Agency to control or regulate, or obligations or duties to any Governmental Agency with respect to, any right, power, franchise, grant, license, or permit;

(h)    present or future zoning laws and ordinances or other laws and ordinances restricting the occupancy, use, or enjoyment of Property;

(i)    statutory Liens, other than those described in clauses (a) or (b) above, arising in the ordinary course of business with respect to obligations which are not delinquent or are being contested in good faith, provided that, if delinquent, adequate reserves have been set aside with respect thereto and, by reason of nonpayment, no Property is subject to an impending risk of loss or forfeiture;

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(j)    covenants, conditions, and restrictions affecting the use of Property which in the aggregate do not materially impair the fair market value or use of the Property for the purposes for which it is or may reasonably be expected to be held;

(k)    rights of tenants under leases and rental agreements covering Property entered into in the ordinary course of business of the Person owning such Property;

(l)    Liens consisting of pledges or deposits to secure obligations under workers’ compensation laws or similar legislation, including Liens of judgments thereunder which are not currently dischargeable;

(m)    Liens consisting of pledges or deposits of Property to secure performance in connection with operating leases made in the ordinary course of business, provided the aggregate value of all such pledges and deposits (excluding the property subject to such lease) in connection with any such lease does not at any time exceed 10% of the annual fixed rentals payable under such lease;

(n)    Liens consisting of deposits of Property to secure bids made with respect to, or performance of, contracts (other than contracts creating or evidencing an extension of credit to the depositor);

(o)    Liens consisting of any right of offset, or statutory bankers’ lien, on bank deposit accounts maintained in the ordinary course of business so long as such bank deposit accounts are not established or maintained for the purpose of providing such right of offset or bankers’ lien;

(p)    any (i) interest or title of a lessor or sublessor under any lease not prohibited by this Agreement, but only to the extent such interest or title pertains solely to the property leased, (ii) Lien or restriction that the interest or title of such lessor or sublessor may be subject to, or (iii) subordination of the interest of the lessee or sublessee under such lease to any Lien or restriction referred to in the preceding clause (ii), so long as the holder of such Lien or restriction agrees to recognize the rights of such lessee or sublessee under such lease;

(q)    Liens consisting of deposits of Property to secure statutory obligations of Borrower; and

(r)    Liens consisting of deposits of Property to secure (or in lieu of) surety, appeal or customs bonds.

“Permitted Right of Others” means a Right of Others consisting of (a) an interest (other than a legal or equitable co-ownership interest, an option or right to acquire a legal or equitable co-ownership interest and any interest of a ground lessor under a ground lease), that does not materially impair the fair market value or use of Property for the purposes for which it is or may reasonably be expected to be held, (b) an option or right to acquire a Lien that would be a Permitted Encumbrance or other encumbrance permitted pursuant to Section 6.9, (c) the subordination of a lease or sublease in favor of a financing entity and (d) a license, or similar right, of or to Intangible Assets or other similar Property granted in the ordinary course of business.

“Person” means any individual or entity, including a trustee, corporation, limited liability company, general partnership, limited partnership, joint stock company, trust, estate, unincorporated organization, business association, firm, joint venture, Governmental Agency, or other entity.

“Platform” means an electronic delivery system (which may be provided by Administrative Agent, an Affiliate of Administrative Agent or any Person that is not an Affiliate of Administrative Agent), such as IntraLinks or a substantially similar electronic system.

“Pricing Occurrence” means with respect to any change in the  Debt Rating which results in a change in the Applicable Pricing Level, the date which is five (5) Banking Days after the Administrative Agent has received evidence reasonably satisfactory to it of such change.

“Pricing Period” means (a) the period commencing on the Closing Date and ending on the first Pricing Occurrence to occur thereafter and (b) each subsequent period commencing on the date of a Pricing Occurrence and ending on the next Pricing Occurrence to occur.

“Prime Rate” means the rate of interest most recently announced within Wells Fargo, at its principal office in San Francisco, California, as its “prime rate.”  The “prime rate” is one of several base rates used by Wells Fargo and serves as 

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the basis upon which effective rates of interest are calculated for loans and other credits making reference thereto.  The “prime rate” is evidenced by the recording thereof after its announcement in such internal publication or publications as Wells Fargo may designate.  Any change in the Prime Rate shall take effect on the day the change is announced within Wells Fargo.

“Projections” means the financial projections of Borrower and its Subsidiaries heretofore and hereafter distributed by or on behalf of Borrower to the Administrative Agent.

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

“Pro Rata Share” of any amount means, with respect to any Lender at any time, the product of (a) a fraction the numerator of which is the amount of such Lender’s Commitment (or, if such Commitment shall have expired or been terminated, the amount of such Lender’s Advances), and the denominator of which is the aggregate Commitments or Advances, as the case may be, at such time, multiplied by (b) such amount.  Schedule 1.1 sets forth the Pro Rata Shares of the Closing Date Lenders as of the Closing Date.

“Quarterly Payment Date” means each March 31, June 30, September 30 and  December 31.

“Real Property” means, as of any date of determination, all real property then or theretofore owned, leased or occupied by Borrower or any Subsidiary.

“Regulation D” means Regulation D, as at any time amended, of the Board of Governors of the Federal Reserve System, or any other regulation in substance substituted therefor.

“Regulation U” means Regulation U, as at any time amended, of the Board of Governors of the Federal Reserve System, or any other regulation in substance substituted therefor.

“Request for Borrowing” means a written request for a Borrowing substantially in the form of Exhibit F, signed by a Responsible Official of Borrower, and properly completed to provide all information required to be included therein.

“Request for Continuation/Conversion” means a written request to Continue or Convert a Borrowing substantially in the form of Exhibit G, signed by a Responsible Official of Borrower, and properly completed to provide all information required to be included therein.

“Request for Letter of Credit” means a written request for a Letter of Credit substantially in the form of Exhibit H, signed by a Responsible Official of Borrower, and properly completed to provide all information required to be included therein.

“Requirement of Law” means, as to any Person, the articles or certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any Law, or judgment, award, decree, writ or determination of a Governmental Agency, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

“Requisite Lenders” means, (a) as of any date of determination if the Commitments are then in effect, Lenders having in the aggregate more than 50% of such aggregate Commitments, and (b) as of any date of determination if the Commitments have then been terminated and there is then any outstanding Indebtedness evidenced by the Notes, the Swing Line Documents and/or Letters of Credit, Lenders owed or holding in the aggregate more than 50% of then applicable Revolving Credit Facility Usage.

“Responsible Official” means, as to any Person, (a) when used with reference to a Person other than an individual, a corporate officer of such Person, general partner of such Person, corporate officer of a corporate general partner of such Person, corporate officer of a corporate general partner of a partnership that is a general partner of such Person, manager or managing member (in the case of a Person that is a limited liability company), or any other responsible official thereof duly acting on behalf thereof, and (b) when used with reference to a Person who is an individual, such Person.  The Lenders shall be entitled to conclusively rely upon any document or certificate that is signed or executed by a Responsible Official of Borrower or any Subsidiary as having been authorized by all necessary corporate, partnership, limited liability company and/or other action on the part of  Borrower or such Subsidiary.

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“Revolving Credit Facility Usage” means, as of any date of determination, the sum of (a) the aggregate principal amount of funded Indebtedness then outstanding under the Notes plus (b) the Aggregate Effective Amount under all outstanding Letters of Credit plus (c) the Swing Line Outstandings.

“Revolving Facility” means the revolving credit facility provided hereunder in respect of the aggregate Commitments.

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“Right of Others” means, as to any Property in which a Person has an interest, any legal or equitable right, title or other interest (other than a Lien) held by any other Person in that Property, and any option or right held by any other Person to acquire any such right, title or other interest in that Property, including any option or right to acquire a Lien; provided, however, that (a) no covenant restricting the use or disposition of Property of such Person contained in any Contractual Obligation of such Person and (b) no provision contained in a contract creating a right of payment or performance in favor of a Person that conditions, limits, restricts, diminishes, transfers or terminates such right shall be deemed to constitute a Right of Others.

“Rolling Period” means any period of four consecutive Fiscal Quarters of Borrower and its Subsidiaries.

“S&P” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc. and its successors.

“Sale and Leaseback” means, with respect to any Person, the sale of Property owned by that Person (the “Seller”) to another Person (the “Buyer”), together with the substantially concurrent leasing of such Property by the Buyer to the Seller.

“SCW” means Southern California Water Company, a California corporation and wholly-owned Subsidiary of Borrower.

“Security” means any capital stock, share, voting trust certificate, bond, debenture, note or other evidence of Indebtedness, limited partnership interest, member interest, or any warrant, option or other right to purchase or acquire any of the foregoing.

“Senior Officer” means (a) the chief executive officer, (b) the president, (c) any executive vice president, (d) the chief financial officer, (e) the treasurer, or (f) any assistant treasurer, in each case of any Person.

“Solvent” means, as of any date of determination, and as to any Person, that on such date:  (a) the fair valuation of the assets of such Person is greater than the fair valuation of such Person’s probable liability in respect of existing debts; (b) such Person does not intend to, and does not believe that it will, incur debts beyond such Person’s ability to pay as such debts mature; (c) such Person is not engaged in a business or transaction, and is not about to engage in a business or transaction, which would leave such Person with assets remaining which would constitute unreasonably small capital after giving effect to the nature of the particular business or transaction (including, in the case of Borrower, the transactions occurring on the Closing Date); and (d) such Person is generally paying its debts as they become due.  For purposes of the foregoing (1) the “fair valuation” of any assets means the amount realizable within a reasonable time, either through collection or sale, of such assets at their regular market value, which is the amount obtainable by a capable and diligent businessman from an interested buyer willing to purchase such assets within a reasonable time under ordinary circumstances; and (2) the term “debts” includes any legal liability whether matured or unmatured, liquidated or unliquidated, absolute, fixed, or contingent.

“Special Eurodollar Circumstance” means the application or adoption after the Closing Date of any Law or interpretation, or any change therein or thereof, or any change in the interpretation or administration thereof by any Governmental Agency, central bank or comparable authority charged with the interpretation or administration thereof, or compliance by any Lender or its Eurodollar Lending Office with any request or directive (whether or not having the force of Law) of any such Governmental Agency, central bank or comparable authority.

“Stockholders’ Equity” means, as of any date of determination and with respect to Borrower and its Subsidiaries, the consolidated stockholders’ equity of Borrower and its Subsidiaries as of that date determined in accordance with GAAP; provided that there shall be excluded from Stockholders’ Equity (i) any amount attributable to Disqualified Stock and (ii) any actual reduction attributable to the Aerojet Write-Off in an amount not to exceed $16,000,000.

“Swing Line” means the revolving line of credit established by the Swing Line Lender in favor of Borrower pursuant to Section 2.8.

“Swing Line Documents” means the promissory note and any other documents executed by Borrower in favor of the Swing Line Lender in connection with the Swing Line.

“Swing Line Lender” means Wells Fargo.

“Swing Line Loans” means loans made by the Swing Line Lender to Borrower pursuant to Section 2.8.

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“Swing Line Outstandings” means, as of any date of determination, the aggregate principal Indebtedness of Borrower on all Swing Line Loans then outstanding.

“Subordinated Obligations” means, as of any date of determination (without duplication), any Indebtedness of Borrower or any Subsidiary on that date which has been subordinated in right of payment to the Obligations in a manner reasonably satisfactory to the Administrative Agent and the Requisite Lenders and contains such other protective terms with respect to senior debt (such as payment blockage) as the Administrative Agent and the Requisite Lenders may reasonably require.

“Subsidiary” means, as of any date of determination and with respect to any Person, any corporation, limited liability company or partnership (whether or not, in any case, characterized as such or as a “joint venture”), whether now existing or hereafter organized or acquired:  (a) in the case of a corporation or limited liability company, of which a majority of the Securities having ordinary voting power for the election of directors or other governing body (other than Securities having such power only by reason of the happening of a contingency) are at the time beneficially owned by such Person and/or one or more Subsidiaries of such Person, or (b) in the case of a partnership, of which a majority of the partnership or other ownership interests are at the time beneficially owned by such Person and/or one or more of its Subsidiaries.  Any reference to a “Subsidiary” or “Subsidiaries” shall, unless otherwise provided, be deemed to be a reference to a Subsidiary (or Subsidiaries, as the case may be) of Borrower.

“Termination Date” means the date on which the Advances and all other Obligations under this Agreement and the other Loan Documents (including, without limitation, Obligations with respect to any Letters of Credit which remain outstanding subsequent to the Maturity Date pursuant to Section 2.5(a))  are indefeasibly paid in full, in Cash, and Borrower shall have no further right to borrow any moneys or obtain other credit extensions or financial accommodations under this Agreement or any of the other Loan Documents.

“to the best knowledge of” means, when modifying a representation, warranty or other statement of any Person, that the fact or situation described therein is known by the Person (or, in the case of a Person other than a natural Person, known by a Responsible Official of that Person) making the representation, warranty or other statement, or with the exercise of reasonable due diligence under the circumstances (in accordance with the standard of what a reasonable Person in similar circumstances would have done) would have been known by the Person (or, in the case of a Person other than a natural Person, would have been known by a Responsible Official of that Person).

“Total Funded Debt” means, as of any date of determination, without duplication, the sum of (a) all principal Indebtedness of Borrower and its Subsidiaries for borrowed money (including Subordinated Obligations and any other subordinated indebtedness, debt Securities issued by Borrower and any of its Subsidiaries, the aggregate principal Indebtedness outstanding under the Notes and the Aggregate Effective Amount of all outstanding Letters of Credit) on that date plus (b) the aggregate amount of the principal portion of all Capital Lease Obligations of Borrower and its Subsidiaries plus (c) any Guaranty Obligations of Borrower and its Subsidiaries with respect to the Indebtedness of others of the types referred to in (a) and (b) above.

“Total Funded Debt Ratio” means, as of the last day of any Fiscal Quarter, the ratio of (a) Total Funded Debt as of such date to (b) the sum of (i) Total Funded Debt as of such date plus Stockholders’ Equity as of such date.

“Type” refers to the distinction between Advances bearing interest at the Alternate Base Rate and Advances bearing interest at the Eurodollar Rate.

“UCC” means the Uniform Commercial Code as the same may from time to time be enacted and in effect in the State of California; provided that, in the event by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the Administrative Agent’s or any Lender’s Lien on any collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of California, the term “UCC” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

“Wells Fargo” means Wells Fargo Bank, National Association.

1.2    Use of Defined Terms.  Any defined term used in the plural shall refer to all members of the relevant class, and any defined term used in the singular shall refer to any one or more of the members of the relevant class.

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1.3    Accounting Terms; Covenant Calculations.  All accounting terms not specifically defined in this Agreement shall be construed in conformity with, and all financial data required to be submitted by this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, except as otherwise specifically prescribed herein.  In the event that GAAP changes during the term of this Agreement such that the covenants contained in Sections 6.12 and 6.13 would then be calculated in a different manner or with different components, (i) Borrower and the Lenders agree to amend this Agreement in such respects as are necessary to conform those covenants as criteria for evaluating Borrower’s financial condition to substantially the same criteria as were effective prior to such change in GAAP and (ii) Borrower shall be deemed to be in compliance with the covenants contained in the aforesaid Sections if and to the extent that Borrower would have been in compliance therewith under GAAP as in effect immediately prior to such change, but shall have the obligation to deliver each of the materials described in Article 7 to the Administrative Agent and the Lenders, on the dates therein specified, with financial data presented in a manner which conforms with GAAP as in effect immediately prior to such change.

1.4    Rounding.  Any financial ratios required to be maintained by Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed in this Agreement and rounding the result up or down to the nearest number (with a round-up if there is no nearest number) to the number of places by which such ratio is expressed in this Agreement.

1.5    Exhibits and Schedules.  All Exhibits and Schedules to this Agreement, either as originally existing or as the same may from time to time be supplemented, modified or amended, are incorporated herein by this reference.  A matter disclosed on any Schedule shall be deemed disclosed on all Schedules.

1.6    References to “Borrower and its Subsidiaries”.  Any reference herein to  “Borrower and its Subsidiaries” or the like shall refer solely to Borrower during such times, if any, as Borrower shall have no Subsidiaries.

1.7    Miscellaneous Terms.  The term “or” is disjunctive; the term “and” is conjunctive.  The term “shall” is mandatory; the term “may” is permissive.  Masculine terms also apply to females; feminine terms also apply to males.  The term “including” is by way of example and not limitation.

Article 2.
ADVANCES AND LETTERS OF CREDIT

2.1    Advances-General.

(a)    Subject to the terms and conditions set forth in this Agreement, from time to time on any Banking Day during the period from the Closing Date to but not including the Maturity Date, each Lender severally agrees to make Advances (“Advances”) to Borrower under the Revolving Facility in such amounts as Borrower may request provided that, after giving effect to such Advances, (i) Revolving Credit Facility Usage does not exceed the Maximum Revolving Credit Amount and (ii) as to each Lender, such Lender’s Pro Rata Share of Revolving Credit Facility Usage does not exceed such Lender’s Commitment.  All Advances shall be made by the Lenders ratably according to their respective Commitments.  Within the limits of each Lender’s Commitment in effect from time to time and subject to the foregoing, Borrower may borrow under this Section 2.1(a), prepay Advances pursuant to Section 3.1 and reborrow under this Section 2.1(a).

(b)    Subject to the next sentence, each Borrowing shall be made pursuant to a Request for Borrowing which shall specify (i) the date of such requested Borrowing, (ii)  the Type of Advances comprising such Borrowing, (iii) the amount of such Borrowing, and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances, the Eurodollar Period therefor.  Unless the Administrative Agent has notified, in its sole and absolute discretion, Borrower to the contrary not less than three (3) days prior to the date of any Borrowing, a Borrowing may be requested by telephone by a Responsible Official of  Borrower, in which case Borrower shall confirm such request by promptly delivering a Request for Borrowing (conforming to the preceding sentence) in person or by telecopier to the Administrative Agent.  The Administrative Agent shall incur no liability whatsoever hereunder in acting upon any telephonic request for a Borrowing purportedly made by a Responsible Official of  Borrower, and Borrower hereby agrees to indemnify the Administrative Agent from any loss, cost, expense or liability as a result of so acting.

(c)    Promptly following receipt of a Request for Borrowing, the Administrative Agent shall notify each Lender by telephone or telecopier (and if by telephone, promptly confirmed by telecopier) of the date of the requested Borrowing, the Type of Advances comprising such Borrowing, the Eurodollar Period (if applicable), and the amount corresponding to that Lender’s ratable share of the Borrowing.  Not later than 1:00 p.m., California time, on the date specified for any Borrowing (which must be a Banking Day), each Lender shall make its ratable share of the Borrowing in immediately available funds available to the Administrative Agent at the Administrative Agent’s Office.  Upon satisfaction or waiver of the applicable 

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conditions set forth in Article 8, all Advances shall be credited on that date in immediately available funds to the Designated Deposit Account.

(d)    Anything in paragraph (b) above to the contrary notwithstanding, Borrower may not (a) request Alternate Base Rate Advances for any Borrowing if the aggregate amount of such Borrowing is less than $500,000 (and any such Borrowing exceeding such minimum amount shall be in an integral multiple of $100,000), provided that the foregoing minimum amount shall not apply to an Alternate Base Rate Advance that causes the aggregate amount borrowed under the Revolving Facility to equal the full amount available for Advances hereunder or Advances pursuant to Section 2.5, or (b) elect Eurodollar Rate Advances for any Borrowing (i) if the aggregate amount of such Borrowing is less than $1,000,000 (and any such Borrowing exceeding such minimum amount shall be in an integral multiple of $500,000) or (ii) if the obligation of the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.4, 3.5 or 3.6.

(e)    The Advances made by each Lender under its Commitment shall be evidenced by that Lender’s Note.

(f)    A Request for Borrowing shall be irrevocable upon the Administrative Agent’s first notification thereof.

(g)    The Administrative Agent, on behalf of the Lenders, is hereby authorized to make Borrowings available to Borrower upon fulfillment of the applicable conditions set forth in Article 8. Upon fulfillment of such applicable conditions, the proceeds of Borrowings shall either be credited in immediately available funds to the Designated Deposit Account or remitted directly to one or more third parties, as directed by Borrower and approved by the Administrative Agent. The proceeds of any Borrowing consisting of Eurodollar Rate Advances shall be so credited or remitted on the first day of the applicable Eurodollar Period for such Borrowings.

2.2    Alternate Base Rate Advances.  Each request by Borrower for a Borrowing comprised of Alternate Base Rate Advances shall be made pursuant to a Request for Borrowing (or telephonic or other request for Borrowing referred to in the second sentence of Section 2.1(b), if applicable) received by the Administrative Agent, at the Administrative Agent’s Office, not later than 11:00 a.m. California time, at least one (1) Banking Day before the requested Borrowing.  All Advances shall constitute Alternate Base Rate Advances unless properly designated as a Eurodollar Rate Advance pursuant to Section 2.3 or 2.4.

2.3    Eurodollar Rate Advances.

(a)    Each request by Borrower for a Borrowing comprised of Eurodollar Rate Advances shall be made pursuant to a Request for Borrowing (or telephonic or other request for Borrowing referred to in the second sentence of Section 2.1(b), if applicable) received by the Administrative Agent, at the Administrative Agent’s Office, not later than 9:00 a.m., California time, at least three (3) Eurodollar Banking Days before the first day of the applicable Eurodollar Period.

(b)    On the date which is two (2) Eurodollar Banking Days before the first day of the applicable Eurodollar Period, the Administrative Agent shall confirm its determination of the applicable Eurodollar Rate (which determination shall be conclusive in the absence of manifest error) and promptly shall give notice of the same to Borrower and the Lenders by telephone or telecopier (and if by telephone, promptly confirmed by telecopier).

(c)    Unless the Administrative Agent and the Requisite Lenders otherwise consent, Eurodollar Rate Advances may not be outstanding under more than  five (5) separate Eurodollar Periods at any one time.

(d)    No Borrowing comprised of Eurodollar Rate Advances may be requested during the continuation of a Default or Event of Default.

(e)    Nothing contained herein shall require any Lender to fund any Eurodollar Rate Advance in the Designated Eurodollar Market.

2.4    Conversion and Continuation of Advances.

(a)    Optional Conversion.  Borrower may on any Banking Day, upon notice given to the Administrative Agent not later than 9:00 a.m. (California time) on the third Eurodollar Banking Day prior to the date of a proposed Conversion if the Conversion is into Eurodollar Rate Advances, or one Banking Day prior to the date of a proposed Conversion if the Conversion is into Alternate Base Rate Advances, and subject to the provisions of Sections 3.5 and 3.6, Convert all or any portion 

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of the Advances of one Type outstanding under the Revolving Facility (and, in the case of Eurodollar Rate Advances, having the same Eurodollar Period) into Advances of the other Type under the Revolving Facility; provided that any Conversion of Eurodollar Rate Advances into Alternate Base Rate Advances on other than the last day of a Eurodollar Period for such Eurodollar Rate Advances shall be subject to Section 3.6(e), any Conversion of Alternate Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less than $1,000,000 or integral multiples of $500,000 in excess thereof and no Conversion of any Advances shall result in more than five (5) separate Eurodollar Periods being outstanding under the Revolving Facility.  Each such notice of Conversion shall be made pursuant to a Request for Continuation/Conversion and shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the aggregate amount and Type of the Advances (and, in the case of Eurodollar Rate Advances, the Eurodollar Period therefor) to be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Eurodollar Period for such Advances.  Each request for Conversion shall be irrevocable and binding on Borrower.

(b)    Certain Mandatory Conversions.

(i)    On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $1,000,000 such Advances shall automatically Convert into Alternate Base Rate Advances.

(ii)    If Borrower shall fail to select the duration of any Eurodollar Period for any outstanding Eurodollar Rate Advances in accordance with the provisions contained in Section 2.1(b) and in clause (a) or (c) of this Section 2.4, each such Eurodollar Rate Advance will automatically, on the last day of the then existing Eurodollar Period therefor, Convert into an Alternate Base Rate Advance.

(iii)    Upon the occurrence and during the continuance of any Event of Default and upon notice from the Administrative Agent to Borrower at the request of the Requisite Lenders, (x) each Eurodollar Rate Advance will automatically, on the last day of the then existing Eurodollar Period therefor, Convert into an Alternate Base Rate Advance and (y) the obligation of the Lenders to make, or to Convert Advances into, or to Continue, Eurodollar Rate Advances shall be suspended.

(c)    Continuations.  Borrower may, on any Eurodollar Banking Day, upon notice given to the Administrative Agent not later than 9:00 a.m. (California time) on the third Eurodollar Banking Day prior to the date of the proposed Continuation and subject to the provisions of Sections 3.5 and 3.6, Continue all or any portion of the Eurodollar Rate Advances outstanding under a Facility having the same Eurodollar Period; provided that any such Continuation shall be made only on the last day of a Eurodollar Period for such Eurodollar Rate Advances, no Continuation of Eurodollar Rate Advances shall be in an amount less than $1,000,000 and no Continuation of any Eurodollar Rate Advances shall result in more than five (5) separate Eurodollar Periods being outstanding under the Revolving Facility.  Each such notice of Continuation shall be made pursuant to a Request for Continuation/Conversion and shall, within the restrictions specified above, specify (i) the date of such Continuation, (ii) the aggregate amount and category of, and the Eurodollar Period for, the Advances being Continued and (iii) the duration of the initial Eurodollar Period for the Eurodollar Rate Advances subject to such Continuation.  Each notice of Continuation shall be irrevocable and binding on Borrower.

2.5    Letters of Credit.

(a)    Subject to the terms and conditions hereof, at any time and from time to time from the Closing Date to but not including the Maturity Date, the Issuing Lender shall issue such Letters of Credit under the Revolving Facility for the benefit of Borrower and/or its wholly-owned Subsidiaries as Borrower may request by a Request for Letter of Credit; provided that giving effect to all such Letters of Credit, (i) Revolving Credit Facility Usage does not exceed the Maximum Revolving Credit Amount and (ii) the Aggregate Effective Amount under all outstanding Letters of Credit shall not exceed $20,000,000.  Each Letter of Credit shall be in a form reasonably acceptable to the Issuing Lender.  Unless the Issuing Lender and the Requisite Lenders otherwise consent, the term of any Letter of Credit shall not exceed three years. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, the term of any Letter of Credit shall not extend beyond the date that is one year after the Maturity Date; provided, however, that no Letter of Credit shall extend beyond the Maturity Date unless, on or prior to the Maturity Date, Borrower shall have (a) deposited into the Letter of Credit Collateral Account an amount equal to one hundred five percent (105%) of the Aggregate Effective Amount of all Letters of Credit outstanding on the Maturity Date and (b) executed and delivered to the Administrative Agent such security agreements or other similar agreement as shall be reasonably required to provide the Administrative Agent, for the benefit of the Lenders, with a first priority perfected security interest in such Letter of Credit Collateral Account. Notwithstanding such deposit into the Letter of Credit Collateral Account, 

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in the event that any Letter of Credit remains outstanding subsequent to the Maturity Date, (a) the Termination Date shall be extended until such time as all Obligations in connection with such Letters of Credit shall have been fully performed and paid in full and (b) each of the Lenders agrees to continue to comply with the provisions of this Section 2.5 until the Termination Date, as so extended.  A Request for Letter of Credit shall be irrevocable absent the consent of the Issuing Lender.

(b)    Each Request for Letter of Credit shall be submitted to the Issuing Lender, with a copy to the Administrative Agent, at least three (3) Banking Days prior to the date upon which the related Letter of Credit is proposed to be issued. The Administrative Agent shall promptly notify the Issuing Lender whether such request, and the issuance of a Letter of Credit pursuant thereto, conforms to the requirements of this Agreement.  Upon issuance of a Letter of Credit, the Issuing Lender shall promptly notify the Administrative Agent of the amount and terms thereof.  Unless the Issuing Lender has notified, in its sole and absolute discretion, Borrower to the contrary not less than three (3) days prior to the date of any Request for Letter of Credit, a Request for Letter of Credit may be delivered to the Issuing Lender by facsimile by a Responsible Official of  Borrower, in which case Borrower shall confirm such request by promptly delivering a Request for Letter of Credit (conforming to the preceding sentence) in person  to the Issuing Lender.  The Issuing Lender shall incur no liability whatsoever hereunder in acting upon any  Request for Letter of Credit received by facsimile purportedly made by a Responsible Official of  Borrower, and Borrower hereby agrees to indemnify the Issuing Lender from any loss, cost, expense or liability as a result of so acting.

(c)    Upon issuance of a Letter of Credit, each Lender shall be deemed to have purchased a pro rata participation in such Letter of Credit from the Issuing Lender in proportion to that Lender’s Pro Rata Share of the Revolving Facility.  Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed by Borrower for any payment required to be made by the Issuing Lender under any Letter of Credit, each Lender shall, pro rata according to its Pro Rata Share of the Revolving Facility, reimburse the Issuing Lender through the Administrative Agent promptly upon demand for the amount of such payment.  The obligation of each Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event.  Any such reimbursement shall not relieve or otherwise impair the obligation of Borrower to reimburse the Issuing Lender for the amount of any payment made by the Issuing Lender under any Letter of Credit together with interest as hereinafter provided.

(d)    Borrower agrees to pay to the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of Credit within one (1) Banking Day after demand made by the Issuing Lender therefor, together with interest on such amount from the date of any payment made by the Issuing Lender at the rate applicable to Alternate Base Rate Advances under the Revolving Facility for the period commencing on the date of any such payment and continuing through the first Banking Day following such demand and thereafter at the Default Rate.  The principal amount of any such payment shall be used to reimburse the Issuing Lender for the payment made by it under the Letter of Credit.  Each Lender that has reimbursed the Issuing Lender pursuant to Section 2.5(c) for its Pro Rata Share of any payment made by the Issuing Lender under a Letter of Credit shall thereupon acquire a pro rata participation, to the extent of such reimbursement, in the claim of the Issuing Lender against Borrower under this Section 2.5(d) and shall share, in accordance with that pro rata participation, in any payment made by Borrower with respect to such claim.  Upon receipt of any such reimbursement from Borrower, the Issuing Lender shall pay to the Administrative Agent, for the ratable benefit of those Lenders that had reimbursed the Issuing Lender pursuant to Section 2.5(c) for their respective Pro Rata Shares of any payment made by the Issuing Lender under a Letter of Credit to which such reimbursement applies, the amount of such reimbursement.

(e)    Borrower may, pursuant to a Request for Borrowing, request that Advances be made pursuant to Section 2.1(a) to provide funds for the payment required by Section 2.5(d).  The proceeds of such Advances shall be paid directly to the Issuing Lender to reimburse it for the payment made by it under the Letter of Credit.

(f)    If Borrower fails to make the payment required by Section 2.5(d) within the time period therein set forth, in lieu of the reimbursement to the Issuing Lender under Section 2.5(c) the Issuing Lender may (but is not required to), without notice to or the consent of Borrower, instruct the Administrative Agent to cause Advances to be made by the Lenders under the Revolving Facility in an aggregate amount equal to the amount paid by the Issuing Lender with respect to that Letter of Credit and, for this purpose, the conditions precedent set forth in Article 8 shall not apply.  The proceeds of such Advances shall be paid to the Issuing Lender to reimburse it for the payment made by it under the Letter of Credit.

(g)    The issuance of any supplement, modification, amendment, renewal, or extension to or of any Letter of Credit shall be treated in all respects the same as the issuance of a new Letter of Credit.

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(h)    The obligation of Borrower to pay to the Issuing Lender the amount of any payment made by the Issuing Lender under any Letter of Credit shall be absolute, unconditional, and irrevocable, subject only to performance by the Issuing Lender of its obligations to Borrower under Section 5108 of the UCC.  Without limiting the foregoing, Borrower’s obligations shall not be affected by any of the following circumstances:

(i)    any lack of validity or enforceability of the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;

(ii)    any amendment or waiver of or any consent to departure from the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, with the written consent of Borrower executed by a Responsible Official of Borrower;

(iii)    the existence of any claim, setoff, defense, or other rights that Borrower may have at any time against the Issuing Lender, the Administrative Agent or any Lender, any beneficiary of the Letter of Credit (or any Persons for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions;

(iv)    any demand, statement, or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever so long as any such document reasonably appeared to comply with the terms of the Letter of Credit;

(v)    payment by the Issuing Lender in good faith under the Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of the Letter of Credit;

(vi)    the existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by documents presented in connection with any Letter of Credit or for any difference between any such Property and the character, quality, quantity, condition, or value of such Property as described in such documents;

(vii)    the time, place, manner, order or contents of shipments or deliveries of Property as described in documents presented in connection with any Letter of Credit or the existence, nature and extent of any insurance relative thereto;

(viii)    the solvency or financial responsibility of any party issuing any documents in connection with a Letter of Credit;

(ix)    any failure or delay in notice of shipments or arrival of any Property;

(x)    any error in the transmission of any message relating to a Letter of Credit not caused by the Issuing Lender, or any delay or interruption in any such message;

(xi)    any error, neglect or default of any correspondent of the Issuing Lender in connection with a Letter of Credit;

(xii)    any consequence arising from acts of God, war, insurrection, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of the Issuing Lender; and

(xiii)    so long as the Issuing Lender in good faith determines that the contract or document appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Issuing Lender in connection with a Letter of Credit.

Notwithstanding anything to the contrary contained in this Section 2.5(h), Borrower shall retain any and all rights it may have against the Issuing Lender for any liability arising solely out of the gross negligence or willful misconduct of the Issuing Lender, as determined by a final judgment of a court of competent jurisdiction.

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(i)    The Issuing Lender shall be entitled to the protection accorded to the Administrative Agent pursuant to Section 10.6 (subject to the standards set forth therein), mutatis mutandis.

(j)    The Uniform Customs and Practice for Documentary Credits, as published in its most current version by the International Chamber of Commerce, shall be deemed a part of this Section and shall apply to all Letters of Credit to the extent not inconsistent with applicable Law.

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2.6    Termination or Reduction of the Commitments.

(a)    Optional.  Borrower may at any time or from time to time, upon not less than three (3) Banking Days’ notice to the Administrative Agent, terminate in whole or reduce in part the Commitments, provided that each partial reduction of the Commitments shall be in an aggregate amount of $1,000,000 or an integral multiple of $500,000 in excess thereof.

(b)    Mandatory.  The Commitments shall be automatically and permanently reduced to zero on the Maturity Date.

(c)    Reduction Pro Rata; No Reinstatements.  Each reduction of the Commitments shall be applied to the respective Commitments of the Lenders according to their respective Pro Rata Shares.  Commitments once terminated or reduced may not be reinstated.

2.7    Administrative Agent’s Right to Assume Funds Available for Advances.  Unless the Administrative Agent shall have been notified by any relevant Lender no later than 10:00 a.m., California time, on the Banking Day of the proposed funding by the Administrative Agent of any Borrowing that such Lender does not intend to make available to the Administrative Agent such Lender’s portion of the total amount of such Borrowing, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on the date of the Borrowing and the Administrative Agent may, in reliance upon such assumption, make available to Borrower a corresponding amount.  If the Administrative Agent has made funds available to Borrower based on such assumption and such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender.  If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent promptly shall notify Borrower and Borrower shall pay such corresponding amount to the Administrative Agent.  The Administrative Agent also shall be entitled to recover from such Lender interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to Borrower to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to the daily Federal Funds Rate.  Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitments or to prejudice any rights which the Administrative Agent or Borrower may have against any Lender as a result of any default by such Lender hereunder.

2.8    Swing Line.

(a)    The Swing Line Lender shall from time to time from the Closing Date through the day prior to the Maturity Date make Swing Line Loans to Borrower in such amounts as Borrower may request, provided that (a) after giving effect to such Swing Line Loan,  Revolving Credit Facility Usage does not exceed the Maximum Revolving Credit Amount, (b) after giving effect to such Swing Line Loan, the Swing Line Outstandings do not exceed $10,000,000 and/or, (c) without the consent of all of the Lenders, no Swing Line Loan may be made during the continuation of an Event of Default if written notice of such Event of Default shall have been provided to Swing Line Lender by the Administrative Agent or a Lender sufficiently in advance of the making of such Swing Line Loan.  Borrower may borrow, repay and reborrow under this Section.  Borrowings under the Swing Line may be made in amounts which are integral multiples of $100,000 (or the remaining availability under the Swing Line) upon telephonic request by a Responsible Official of Borrower made to the Administrative Agent not later than 2:00 p.m., California time, on the Banking Day of the requested borrowing (which telephonic request shall be promptly confirmed in writing by telecopier or electronic mail).  Promptly after receipt of such a request for borrowing, the Administrative Agent shall provide telephonic verification to the Swing Line Lender that, after giving effect to such request, availability for Loans will exist under Section 2.1(a) (and such verification shall be promptly confirmed in writing by telecopier or electronic mail).  Each repayment of a Swing Line Loan shall be in an amount which is an integral multiple of $100,000 (or the Swing Line Outstandings).  Borrower shall notify the Swing Line Lender of its intention to make a repayment of a Swing Line Loan not later than 1:00 p.m. California time on the date of repayment. If Borrower instructs the Swing Line Lender to debit its demand deposit account at the Swing Line Lender in the amount of any payment with respect to a Swing Line Loan, or the Swing Line Lender otherwise receives repayment, after 3:00 p.m., California time, on a Banking Day, such payment shall be deemed received on the next Banking Day.  The Swing Line Lender shall promptly notify the Administrative Agent of the Swing Loan Outstandings each time there is a change therein.

(b)    Swing Line Loans shall bear interest at a fluctuating rate per annum equal to the Alternate Base Rate plus the Applicable Alternate Base Rate Margin.  Interest shall be payable on such dates, not more frequent than monthly, as may be specified by the Swing Line Lender and in any event on the Maturity Date.  The Swing Line Lender shall be responsible for invoicing Borrower for such interest.  The interest payable on Swing Line Loans is solely for the account of the Swing Line Lender (subject to clause (d) below).

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(c)    Subject to subsection (e) below, the principal amount of all Swing Line Loans shall be due and payable on the earlier of (i) the maturity date agreed to by the Swing Line Lender and Borrower with respect to such loan (which maturity date shall not be a date more than ten (10) consecutive Banking Days from the date of advance thereof) or (ii) the Maturity Date.

(d)    Upon the making of a Swing Line Loan, each Lender shall be deemed to have purchased from the Swing Line Lender a participation therein in an amount equal to that Lender’s Pro Rata Share of the Revolving Facility times the amount of the Swing Line Loan.  Upon demand made by the Swing Line Lender, each Lender shall, according to its Pro Rata Share of the Revolving Facility, promptly provide to the Swing Line Lender its purchase price therefor in an amount equal to its participation therein.  The obligation of each Lender to so provide its purchase price to the Swing Line Lender shall be absolute and unconditional (except only demand made by the Swing Line Lender) and shall not be affected by the occurrence of a Default or Event of Default; provided that no Lender shall be obligated to purchase its Pro Rata Share of (i) Swing Line Loans to the extent that, after giving effect to such Swing Line Loan, Revolving Credit Facility Usage exceeds the Maximum Revolving Credit Amount, (ii) Swing Line Loans to the extent that, after giving effect to such Swing Line Loan, Swing Line Outstandings exceed  $5,000,000 and (iii) any Swing Line Loan made (absent the consent of all of the Lenders) during the continuation of an Event of Default if written notice of such Event of Default shall have been provided to Swing Line Lender by the Administrative Agent or a Lender sufficiently in advance of the making of such Swing Line Loan.  Each Lender that has provided to the Swing Line Lender the purchase price due for its participation in Swing Line Loans shall thereupon acquire a pro rata participation, to the extent of such payment, in the claim of the Swing Line Lender against Borrower for principal and interest and shall share, in accordance with that pro rata participation, in any principal payment made by Borrower with respect to such claim and in any interest payment made by Borrower (but only with respect to periods subsequent to the date such Lender paid the Swing Line Lender its purchase price) with respect to such claim.

(e)    In the event that any Swing Line Loan remains outstanding for ten (10) consecutive Banking Days, then on the next Banking Day (unless Borrower has made other arrangements acceptable to the Swing Line Lender to repay such Swing Line Loan, in full), Borrower shall request a Loan pursuant to Section 2.1(a) sufficient to repay the aggregate principal amount of such Swing Line Loan together with any and all accrued and unpaid interest with respect thereto.  In addition, the Swing Line Lender may, at any time, in its sole discretion, by written notice to Borrower and the Lenders, demand payment of the Swing Line Loans by way of a Advance in the full amount or any portion of the Swing Line Outstandings.  In each case, the Administrative Agent shall automatically provide the responsive Advances made by each Lender to the Swing Line Lender (which the Swing Line Lender shall then apply to the Swing Line Outstandings).  In the event that Borrower fails to request a Loan within the time specified by Section 2.2 on any such date, the Administrative Agent may, but is not required to, without notice to or the consent of Borrower, cause Alternate Base Rate Advances to be made by the Lenders under the Revolving Facility in amounts which are sufficient to reduce the Swing Line Outstandings as required above.  The proceeds of such Advances shall be paid directly to the Swing Line Lender for application to the Swing Line Outstandings.

2.9    Adjusting Purchase Payments.  Principal amounts outstanding under the Commitment (as defined in the Original Credit Agreement) on the Closing Date (the “Carryover Principal Balance”), shall remain outstanding hereunder.  Concurrently with the effectiveness of this Agreement, the Lenders agree to purchase and sell undivided interests in the Carryover Principal Balance by making or receiving adjusting purchase payments as specified in Exhibit I hereto (the “Adjusting Purchase Payment(s)”) so that the Carryover Principal Balance will be properly allocated and owing to the Lenders under the Notes in accordance with the Pro Rata Shares specified in Schedule 1.1 hereto.  Each Lender making an Adjusting Purchase Payment shall deliver it to the Agent and the Agent shall forward such Adjusting Purchase Payments to the Lenders entitled thereto promptly after receipt in accordance with the allocations specified in Exhibit I.  On the Closing Date, in addition to any other Advances that may be made, each Lender shall be deemed as having an Advance outstanding in the amount of its Pro Rata Share of the Carryover Principal Balance.  As of the Effective Date, the Lenders shall hold participations in all issued and outstanding Letters of Credit in accordance with their Pro Rata Shares. As of the Closing Date, Revolving Credit Facility Usage is $60,181,000 which amount consists of (i) $49,000,000 of outstanding Advances under the Revolving Facility, (ii) issued and outstanding Letters of Credit with an Aggregate Effective Amount of $11,181,000.00 and (iii) no outstanding Swing Line Loans.

Article 3. 
PAYMENTS AND FEES

3.1    Principal and Interest.

(a)    Interest shall be payable on the outstanding daily unpaid principal amount of each Advance from the date thereof until payment in full is made and shall accrue and be payable at the rates set forth or provided for herein before and after Default, before and after maturity, before and after judgment, and before and after the commencement of any proceeding 

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under any Debtor Relief Law, with interest on overdue interest at the Default Rate to the fullest extent permitted by applicable Laws.

(b)    Interest accrued on each Alternate Base Rate Advance shall be due and payable on each Monthly Payment Date.  Except as otherwise provided in Section 3.7, the unpaid principal amount of any Alternate Base Rate Advance shall bear interest at a fluctuating rate per annum equal to the Alternate Base Rate plus the Applicable Alternate Base Rate Margin.  Each change in the interest rate under this Section 3.1(b) due to a change in the Alternate Base Rate shall take effect simultaneously with the corresponding change in the Alternate Base Rate.

(c)    Interest accrued on each Eurodollar Rate Advance which is for a term of three months or less shall be due and payable on the last day of the related Eurodollar Period.  Interest accrued on each other Eurodollar Rate Advance shall be due and payable on the date which is three months after the date such Eurodollar Rate Advance was made (and, in the event that all of the Lenders have approved a Eurodollar Period of longer than six months, every three months thereafter through the last day of the Eurodollar Period) and on the last day of the related Eurodollar Period.  Except as otherwise provided in Section 3.7, the unpaid principal amount of any Eurodollar Rate Advance shall bear interest at a rate per annum equal to the Eurodollar Rate for that Eurodollar Rate Advance plus the Applicable Eurodollar Rate Margin.

(d)    If not sooner paid, the principal Indebtedness evidenced by the Notes shall be payable as follows:

(i)    the amount, if any, by which the principal Indebtedness evidenced by the Notes at any time exceeds the Maximum Revolving Credit Amount shall be payable immediately; and

(ii)    the principal Indebtedness evidenced by the Notes shall in any event be payable on the Maturity Date.

(e)    The principal Indebtedness evidenced by the Notes may, at any time and from time to time, voluntarily be paid or prepaid in whole or in part without premium or penalty, except that with respect to any voluntary prepayment under this subsection, (i) any partial prepayment shall be not less than $1,000,000 and shall be an integral multiple of $500,000, except as provided in Section 2.8(a), (ii) the Administrative Agent shall have received written notice of any prepayment by 9:00 a.m. California time on the date that is (x) in the case of a Eurodollar Rate Advance three (3) Banking Days before the date of prepayment unless the prepayment is of a Eurodollar Rate Advance to be made at the end of its applicable Eurodollar Period and (y) in the case of an Alternate Base Rate Advance or a prepayment of a Eurodollar Rate Advance made at the end of its applicable Eurodollar Period, one (1) Banking Day before the date of prepayment, which notice shall identify the date and amount of the prepayment and the Advance(s) being prepaid, (iii) each prepayment of principal on any Eurodollar Rate Advance shall be accompanied by payment of interest accrued to the date of payment on the amount of principal paid, and (iv) any payment or prepayment of all or any part of any Eurodollar Rate Advance on a day other than the last day of the applicable Eurodollar Period shall be subject to Section 3.6(e).

3.2    Unused Revolving Facility Commitment Fee.  From the Closing Date to but not including the Maturity Date, Borrower shall pay to the Administrative Agent, for the ratable accounts of the applicable Lenders in accordance with their respective Pro Rata Shares, a commitment fee equal to the Applicable Commitment Fee Margin times the average daily amount by which the Maximum Revolving Credit Amount exceeds the sum of (a) the aggregate principal amount of funded Indebtedness then outstanding under the Notes plus (b) the Aggregate Effective Amount under all outstanding Letters of Credit.  The commitment fee shall be payable quarterly in arrears on each Quarterly Payment Date.

3.3    Closing Fees; Arrangement Fee; Agency Fee etc.

(a)    On the Closing Date, Borrower shall pay to the Closing Date Lenders, through the Administrative Agent, the closing fees in the amount heretofore agreed upon by letter agreement among Borrower and each Closing Date Lender.  All such fees shall be fully earned when paid and shall be non-refundable.

(b)    On the date of the execution hereof, Borrower shall pay to the Administrative Agent, for the sole account of the Lead Arranger, an arrangement fee in the amount heretofore agreed upon by letter agreement between Borrower and the Lead Arranger.  Such arrangement fee is for the services of the Lead Arranger in arranging the credit facility under this Agreement, is fully earned as of the date hereof and is nonrefundable.

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(c)    Borrower shall pay to the Administrative Agent an annual agency fee in such amounts and at such times as heretofore agreed upon by letter agreement between Borrower and the Administrative Agent.  The agency fee is for the services to be performed by the Administrative  Agent in acting as Administrative Agent and is fully earned on the date paid.  The agency fee paid to the Administrative Agent is solely for its own account and is nonrefundable.

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3.4    Letter of Credit Fees.  With respect to each Letter of Credit, Borrower shall pay the following fees:

(a)    concurrently with the issuance of each Letter of Credit and on each Quarterly Payment Date thereafter so long as such Letter of Credit shall remain outstanding, to the Administrative Agent for the ratable accounts of the Lenders in accordance with their respective Pro Rata Shares, a standby letter of credit fee in an amount equal to the product of the then Applicable Letter of Credit Fee Rate times the then outstanding undrawn amount of such Letter of Credit, for the period commencing on such payment date and ending on the next succeeding Quarterly Payment Date or for the remaining term of such Letter of Credit, whichever is shorter; provided, however, that the applicable standby letter of credit fee payable in connection with the original issuance of any Letter of Credit (and on each anniversary date thereof if such Letter of Credit is renewed or extended) shall be no less than $410; and

(b)    concurrently with the issuance of each Letter of Credit, and on each Quarterly Payment Date thereafter so long as such Letter of Credit shall remain outstanding, to the Issuing Lender for its own account, a fronting fee equal to 0.125% (12.5 basis points) per annum on the daily average stated amount of such Letter of Credit.

In addition to the foregoing, in connection with a Letter of Credit and activity relating thereto, Borrower also shall pay amendment, transfer, issuance, negotiation and such other fees as the Issuing Lender normally charges, in the amounts set forth from time to time as the Issuing Lender’s published scheduled fees for such services.  Each of the fees payable with respect to Letters of Credit under this Section is earned when due and is nonrefundable.

3.5    Increased Commitment Costs.  If any Lender shall determine in good faith that the introduction after the Closing Date of any applicable law, rule, regulation or guideline regarding capital adequacy, or any change therein or any change in the interpretation or administration thereof by any central bank or other Governmental Agency charged with the interpretation or administration thereof, or compliance by such Lender (or its Eurodollar Lending Office) or any corporation controlling such Lender, with any request, guideline or directive regarding capital adequacy (whether or not having the force of Law) of any such central bank or other authority not imposed as a result of such Lender’s or such corporation’s failure to comply with any other Laws, affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy and such Lender’s desired return on capital) determines in good faith that the amount of such capital is increased, or the rate of return on capital is reduced, as a consequence of its obligations under this Agreement, then, within five (5) days after demand of such Lender, Borrower shall pay to such Lender, from time to time as specified in good faith by such Lender, additional amounts sufficient to compensate such Lender in light of such circumstances, to the extent reasonably allocable to such obligations under this Agreement, provided that Borrower shall not be obligated to pay any such amount which arose prior to the date which is 180 days preceding the date of such demand or is attributable to periods prior to the date which is 180 days preceding the date of such demand.  Each Lender’s determination of such amounts shall be conclusive in the absence of manifest error.

3.6    Eurodollar Costs and Related Matters.

(a)    In the event that any Governmental Agency imposes on any Lender any reserve or comparable requirement (including any emergency, supplemental or other reserve) with respect to the Eurodollar Obligations of that Lender, other than the Eurodollar Reserve Percentage, Borrower shall pay that Lender within five (5) days after demand all amounts necessary to compensate such Lender (determined as though such Lender’s Eurodollar Lending Office had funded 100% of its Eurodollar Rate Advances in the Designated Eurodollar Market) in respect of the imposition of such reserve requirements (provided that Borrower shall not be obligated to pay any such amount which arose prior to the date which is 180 days preceding the date of such demand or is attributable to periods prior to the date which is 180 days preceding the date of such demand).  Any Lender’s determination of such amount shall be conclusive in the absence of manifest error.

(b)    If, after the date hereof, the existence or occurrence of any Special Eurodollar Circumstance:

(i)    shall subject any Lender or its Eurodollar Lending Office to any tax, duty or other charge or cost with respect to any Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate Advances or its obligation to make Eurodollar Rate Advances, or shall change the basis of taxation of payments to any Lender attributable to the principal of or interest on any Eurodollar Rate Advance or any other amounts due under this Agreement in respect of any Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate Advances or its obligation to make Eurodollar Rate Advances, excluding (A) taxes imposed on or measured in whole or in part by its overall net income by (1) any jurisdiction (or political subdivision thereof) in which it is organized or maintains its principal office or Eurodollar Lending Office or (2) any jurisdiction (or political subdivision thereof) in which it is “doing business” and (B) any withholding taxes or other taxes based on gross income imposed by the United States of America for any period 

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with respect to which it has failed to provide Borrower with the appropriate form or forms required by Section 11.21, to the extent such forms are then required by applicable Laws;

(ii)    shall impose, modify or deem applicable any reserve not applicable or deemed applicable on the date hereof (including any reserve imposed by the Board of Governors of the Federal Reserve System (other than the Eurodollar Reserve Percentage), special deposit, capital or similar requirements against assets of, deposits with or for the account of, or credit extended by, any Lender or its Eurodollar Lending Office); or

(iii)    shall impose on any Lender or its Eurodollar Lending Office or the Designated Eurodollar Market any other condition affecting any Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate Advances, its obligation to make Eurodollar Rate Advances or this Agreement, or shall otherwise affect any of the same;

and the result of any of the foregoing, as determined in good faith by such Lender, increases the cost to such Lender or its Eurodollar Lending Office of making or maintaining any Eurodollar Rate Advance or in respect of any Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate Advances or its obligation to make Eurodollar Rate Advances or reduces the amount of any sum received or receivable by such Lender or its Eurodollar Lending Office with respect to any Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate Advances or its obligation to make Eurodollar Rate Advances (assuming such Lender’s Eurodollar Lending Office had funded 100% of its Eurodollar Rate Advances in the Designated Eurodollar Market), then, within five (5) Banking Days after demand by such Lender (with a copy to the Administrative Agent), Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender for such increased cost or reduction (determined as though such Lender’s Eurodollar Lending Office had funded 100% of its Eurodollar Rate Advances in the Designated Eurodollar Market); provided that Borrower shall not be obligated to pay any such amount which arose prior to the date which is 180 days preceding the date of such demand or is attributable to periods prior to the date which is 180 days preceding the date of such demand.  A statement of any Lender claiming compensation under this subsection shall be conclusive in the absence of manifest error.

(c)    If, after the date hereof, the existence or occurrence of any Special Eurodollar Circumstance shall, in the good faith opinion of any Lender, make it unlawful or impossible for such Lender or its Eurodollar Lending Office to make, maintain or fund its portion of any Borrowing consisting of Eurodollar Rate Advances, or materially restrict the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the Designated Eurodollar Market, or to determine or charge interest rates based upon the Eurodollar Rate, then such Lender’s obligation to make Eurodollar Rate Advances shall be suspended for the duration of such illegality or impossibility and the Administrative Agent forthwith shall give notice thereof to the other Lenders and Borrower.  Upon receipt of such notice, the outstanding principal amount of such Lender’s affected Eurodollar Rate Advances, together with accrued interest thereon, automatically shall be converted to Alternate Base Rate Advances on either (i) the last day of the Eurodollar Period(s) applicable to such Eurodollar Rate Advances if such Lender may lawfully continue to maintain and fund such Eurodollar Rate Advances to such day(s) or (ii) immediately if such Lender may not lawfully continue to fund and maintain such Eurodollar Rate Advances to such day(s).  Each Lender agrees to endeavor promptly to notify Borrower of any event of which it has actual knowledge, occurring after the Closing Date, which will cause such Lender to notify Borrower as set forth in the first sentence of this Section, and agrees to designate a different Eurodollar Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.  In the event that any Lender is unable, for the reasons set forth above, to make, maintain or fund any Eurodollar Rate Advance, such Lender shall fund such Eurodollar Dollar Rate Advance as an Alternate Base Rate Advance for the same period of time, and such amount shall be treated in all respects as an Alternate Base Rate Advance.  In the event that any Lender’s obligation to make Eurodollar Rate Advances has been suspended under this Section, such Lender shall promptly notify the Administrative Agent and Borrower of the cessation of the Special Eurodollar Circumstance which gave rise to such suspension.

(d)    If, with respect to any proposed Borrowing comprised of Eurodollar Rate Advances:

(i)    the Administrative Agent reasonably determines that, by reason of circumstances affecting the Designated Eurodollar Market generally that are beyond the reasonable control of the Lenders, deposits in Dollars (in the applicable amounts) are not being offered to any Lender in the Designated Eurodollar Market for the applicable Eurodollar Period; or

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(ii)    the Requisite Lenders advise the Administrative Agent that the Eurodollar Rate as determined by the Administrative Agent (A) does not represent the effective pricing to such Lenders for deposits in Dollars in the Designated Eurodollar Market in the relevant amount for the applicable Eurodollar Period, or (B) will not adequately and fairly reflect the cost to such Lenders of making the applicable Eurodollar Rate Advances;

then the Administrative Agent forthwith shall give notice thereof to Borrower and the Lenders, whereupon until the Administrative Agent notifies Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of the Lenders to make any future Eurodollar Rate Advances shall be suspended.

(e)    Upon payment or prepayment of any Eurodollar Rate Advance on a day other than the last day in the applicable Eurodollar Period (whether voluntarily, involuntarily, by reason of acceleration, or otherwise), or upon the failure of Borrower (for a reason other than the breach by a Lender of its obligation pursuant to Section 2.1(a)) to borrow on the date or in the amount specified for a Borrowing comprised of Eurodollar Rate Advances in any Request for Borrowing, Borrower shall pay to the appropriate Lender within five (5) Banking Days after demand a prepayment fee or failure to borrow fee, as the case may be (determined as though 100% of the Eurodollar Rate Advance had been funded in the Designated Eurodollar Market) equal to the sum of:

(1)    the amount, if any, by which (i) the additional interest would have accrued on the amount prepaid or not borrowed at the Eurodollar Rate plus the Applicable Eurodollar Rate Margin if that amount had remained or been outstanding through the last day of the applicable Eurodollar Period exceeds (ii) the interest that such Lender could recover by placing such amount on deposit in the Designated Eurodollar Market for a period beginning on the date of the prepayment or failure to borrow and ending on the last day of the applicable Eurodollar Period (or, if no deposit rate quotation is available for such period, for the most comparable period for which a deposit rate quotation may be obtained); plus

(2)    all out-of-pocket expenses incurred by such Lender reasonably attributable to such payment, prepayment or failure to borrow.

Each Lender’s determination of the amount of any prepayment fee payable under this Section shall be conclusive in the absence of manifest error.

(f)    Each Lender agrees to endeavor promptly to notify Borrower of any event of which it has actual knowledge, occurring after the Closing Date, which will entitle such Lender to compensation pursuant to clause (a) or clause (b) of this Section, and agrees to designate a different Eurodollar Lending Office if such designation will avoid the need for or reduce the amount of such compensation and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.  Any request for compensation by a Lender under this Section shall set forth the basis upon which it has been determined that such an amount is due from Borrower,  a calculation of the amount due, and a certification that the corresponding costs have been incurred by such Lender.

3.7    Late Payments and Default Rate.  If any installment of principal or interest or any fee or cost or other amount payable under any Loan Document to the Administrative Agent or any Lender is not paid when due, it shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the sum of the interest rate otherwise applicable thereto hereunder (or, if no interest rate is otherwise applicable thereto hereunder, the Alternate Base Rate) plus 2.00% (the “Default Rate”), to the fullest extent permitted by applicable Laws.  While any Event of Default exists or after acceleration, at the option of the Requisite Lenders, Borrower shall pay interest (after as well as before entry of judgment thereon to the extent permitted by Law) on the principal amount of all outstanding Obligations, at the Default Rate, to the fullest extent permitted by Law.  Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be compounded monthly, on the last day of each calendar month, to the fullest extent permitted by applicable Laws.

3.8    Computation of Interest and Fees.  Computation of interest on  Alternate Base Rate Advances calculated with reference to the Prime Rate shall be calculated on the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed; computation of interest on Alternate Base Rate Advances calculated by reference to the Federal Funds Rate, and on Eurodollar Rate Advances and all fees under this Agreement shall be calculated on the basis of a year of 360 days and the actual number of days elapsed.  Borrower acknowledges that such latter calculation method will result in a higher yield to the Lenders than a method based on a year of 365 or 366 days.  Interest shall accrue on each Advance for the day on which the Advance is made; interest shall not accrue on an Advance, or any portion thereof, for the day on which the Advance or such portion is paid.  Any Advance that is repaid on the same day on which it is made shall bear interest for one day.  Notwithstanding anything in this Agreement to the contrary, interest in excess of the maximum amount permitted by applicable Laws shall not accrue or be payable hereunder or under the Notes, and any amount paid 

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as interest hereunder or under the Notes which would otherwise be in excess of such maximum permitted amount shall instead be treated as a payment of principal.

3.9    Non-Banking Days.  If any payment to be made by Borrower or any other Party under any Loan Document shall come due on a day other than a Banking Day, payment shall instead be considered due on the next succeeding Banking Day and the extension of time shall be reflected in computing interest and fees.

3.10    Manner and Treatment of Payments.

(a)    Each payment hereunder (except payments pursuant to Sections 3.4, 3.5, 11.3, 11.11 and 11.21) or on the Notes or under any other Loan Document shall be made to the Administrative Agent at the Administrative Agent’s Office, in immediately available funds not later than 11:00 a.m. California time, on the day of payment (which must be a Banking Day).  All payments received after such time, on any Banking Day, shall be deemed received on the next succeeding Banking Day.  The amount of all payments received by the Administrative Agent for the account of each Lender shall be immediately paid by the Administrative Agent to the applicable Lender in immediately available funds and, if such payment was received by the Administrative Agent by 11:00 a.m., California time, on a Banking Day and not so made available to the account of a Lender on that Banking Day, the Administrative Agent shall reimburse that Lender for the cost to such Lender of funding the amount of such payment at the Federal Funds Rate.  All payments shall be made in lawful money of the United States of America.

(b)    Borrower hereby authorizes the Administrative Agent to debit the Designated Deposit Account to effect any payment due to the Lenders or the Administrative Agent pursuant to this Agreement.  Any resulting overdraft in the Designated Deposit Account shall be payable by Borrower to the Administrative Agent on the next following Banking Day.

(c)    Each payment or prepayment on account of any Borrowing shall be applied pro rata according to the outstanding Advances made by each Lender comprising such Borrowing.

(d)    Each Lender shall use its best efforts to keep a record (in writing or by an electronic data entry system) of Advances made by it and payments received by it with respect to its Note and, subject to Section 10.6(g), such record shall, as against Borrower,  be presumptive evidence of the amounts owing.  Notwithstanding the foregoing sentence, the failure by any Lender to keep such a record shall not affect Borrower’s obligation to pay the Obligations.

(e)    Each payment of any amount payable by Borrower or any other Party to any Lender under this Agreement or any other Loan Document shall be made free and clear of, and without reduction by reason of, any taxes, assessments or other charges imposed by any Governmental Agency, central bank or comparable authority, excluding (i) taxes imposed on or measured in whole or in part by its overall net income and franchise taxes imposed in lieu of net income taxes by (A) any jurisdiction (or political subdivision thereof) in which it is organized or maintains its principal office or Eurodollar Lending Office or (B) any jurisdiction (or political subdivision thereof) in which it is “doing business” and (ii) any withholding taxes or other taxes based on gross income imposed by the United States of America for any period with respect to which it has failed to provide Borrower with the appropriate form or forms required by Section 11.21, to the extent such forms are then required by applicable Laws (all such non-excluded taxes, assessments or other charges being hereinafter referred to as “Taxes”).  To the extent that Borrower is obligated by applicable Laws to make any deduction or withholding on account of Taxes from any amount payable to any Lender under this Agreement, Borrower shall (1) make such deduction or withholding and pay the same to the relevant Governmental Agency and (2) pay such additional amount to that Lender as is necessary to result in that Lender’s receiving a net after-Tax amount equal to the amount to which that Lender would have been entitled under this Agreement absent such deduction or withholding.  If and when receipt of such payment results in an excess payment or credit to that Lender on account of such Taxes, that Lender shall promptly refund such excess to Borrower.

3.11    Funding Sources.  Nothing in this Agreement shall be deemed to obligate any Lender to obtain the funds for any Advance in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Advance in any particular place or manner.

3.12    Failure to Charge Not Subsequent Waiver.  Any decision by the Administrative Agent or any Lender not to require payment of any interest (including interest arising under Section 3.7), fee, cost or other amount payable under any Loan Document, or to calculate any amount payable by a particular method, on any occasion shall in no way limit or be deemed a waiver of the Administrative Agent’s or such Lender’s right to require full payment of any interest (including interest arising under Section 3.7), fee, cost or other amount payable under any Loan Document, or to calculate an amount payable by another method that is not inconsistent with this Agreement, on any other or subsequent occasion, except as provided in Sections 3.5 and 3.6.

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3.13    Administrative Agent’s Right to Assume Payments Will be Made.  Unless the Administrative Agent shall have been notified by Borrower prior to the date on which any payment to be made by Borrower hereunder is due that Borrower does not intend to remit such payment (or otherwise cause sufficient funds to be available in the Designated Deposit Account for debit pursuant to Section 3.10(b)), the Administrative Agent may, in its discretion, assume that Borrower has remitted such payment (or caused funds sufficient to make such payment to be available) when so due and the Administrative Agent may, in its discretion and in reliance upon such assumption, make available to each Lender on such payment date, an amount equal to such Lender’s share of such assumed payment.  If Borrower has not in fact remitted such payment (or caused funds sufficient to make such payment to be available) to the Administrative Agent, each Lender shall forthwith on demand repay to the Administrative Agent the amount of such assumed payment made available to such Lender, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent at the Federal Funds Rate.

3.14    Fee Determination Detail.  The Administrative Agent, and any Lender, shall provide reasonable detail to Borrower regarding the manner in which the amount of any payment to the Administrative Agent and the Lenders, or that Lender, under Article 3 has been determined, concurrently with demand for such payment.

3.15    Survivability.  All of Borrower’s obligations under Sections 3.4 and 3.5 shall survive for the one year period following the Termination Date, and Borrower shall remain obligated thereunder for all claims under such Sections made by any Lender to Borrower prior to the expiration of such period.

Article 4. 
REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to the Administrative Agent and each of the Lenders that:

4.1    Existence and Qualification; Power; Compliance With Laws.  Borrower is a corporation duly formed, validly existing and in good standing under the Laws of the State of California.  Borrower is duly qualified or registered to transact business and is in good standing in the State of California, and each other jurisdiction in which the conduct of its business or the ownership or leasing of its Properties makes such qualification or registration necessary, except where the failure so to qualify or register and to be in good standing could not reasonably be expected to have a Material Adverse Effect.  Borrower has all requisite power and authority to conduct its business, to own and lease its Properties and to execute and deliver each Loan Document to which it is a Party and to perform its Obligations.  The chief executive offices of Borrower are located in San Dimas, California.  All outstanding capital stock of Borrower is duly authorized, validly issued, fully paid and non-assessable, and no holder thereof has any enforceable right of rescission under any applicable state or federal securities or other Laws.  Borrower is in compliance with all Laws and other legal requirements applicable to its business, has obtained all authorizations, consents, approvals, orders, licenses and permits from, and has accomplished all filings, registrations and qualifications with, or obtained exemptions from any of the foregoing from, any Governmental Agency that are necessary for the transaction of its business, except where the failure so to comply with Laws and other legal requirements applicable to its business, obtain authorizations, etc., file, register, qualify or obtain exemptions could not reasonably be expected to have a Material Adverse Effect.

4.2    Authority; Compliance With Other Agreements and Instruments and Government Regulations.  The execution and delivery by Borrower of the Loan Documents to which it is a Party and payment of the Obligations have been duly authorized by all necessary corporate or company action, as applicable, and do not and will not:

(a)    Require any consent or approval not heretofore obtained of any partner, director, stockholder, member, security holder or creditor of Borrower;

(b)    Violate or conflict with any provision of Borrower’s charter, certificate of incorporation, bylaws, or other organizational documents, as applicable;

(c)    Result in or require the creation or imposition of any Lien (other than pursuant to the Loan Documents) or Right of Others upon or with respect to any Property now owned or leased or hereafter acquired by Borrower;

(d)    Violate any Requirement of Law applicable to Borrower;

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(e)    Result in a breach of or constitute a default under, or cause or permit the acceleration of any obligation owed under, any indenture or loan or credit agreement or any other Contractual Obligation to which Borrower is a party or by which Borrower or any of its Property is bound or affected; and Borrower is not in violation of, or default under, any Requirement of Law or Contractual Obligation, or any indenture, loan or credit agreement described in Section 4.2(e), in any respect that could reasonably be expected to have a Material Adverse Effect.

4.3    No Governmental Approvals Required.  Except as previously obtained or made, no authorization, consent, approval, order, license or permit from, or filing, registration or qualification with, any Governmental Agency is or will be required to authorize or permit under applicable Laws the execution and delivery by Borrower of the Loan Documents to which it is a Party and payment of the Obligations.

4.4    Subsidiaries.

(a)    Schedule 4.4 hereto correctly sets forth, as of the Closing Date, the names, form of legal entity, number of shares of capital stock or membership or other equity interests, as applicable, issued and outstanding, number of shares of capital stock or membership or other equity interests, as applicable, owned by Borrower or any Subsidiary of Borrower (specifying such owner) and jurisdictions of organization of all Subsidiaries of Borrower.  Except as described in Schedule 4.4, as of the Closing Date, Borrower does not own any capital stock, membership interest, other equity interest or debt Security which is convertible, or exchangeable, for capital stock, membership interests or other equity interests in any Person.  Unless otherwise indicated in Schedule 4.4, as of the Closing Date, all of the outstanding shares of capital stock, all of the outstanding membership interests or all of the units of other equity interest, as the case may be, of each Subsidiary are owned of record and beneficially by Borrower,  there are no outstanding options, warrants or other rights to purchase capital stock of any such Subsidiary, and all such shares, membership interests or other equity interests so owned are duly authorized, validly issued, fully paid and non-assessable, and were issued in compliance with all applicable state and federal securities and other Laws, and are free and clear of all Liens, except for Permitted Encumbrances and other encumbrances permitted pursuant to Section 6.9.

(b)    As of the Closing Date, each Subsidiary is a legal entity of the type described in Schedule 4.4 duly formed, validly existing and, if such concept is legally recognized in such Subsidiary’s jurisdiction of organization, in “good standing” under the Laws of its jurisdiction of organization, is duly qualified to do business as a foreign organization and, if such concept is legally recognized in any applicable jurisdiction, is in “good standing” as such in each jurisdiction in which the conduct of its business or the ownership or leasing of its Properties makes such qualification necessary (except where the failure to be so duly qualified and in good standing could not reasonably be expected to have a Material Adverse Effect), and has all requisite power and authority to conduct its business and to own and lease its Properties.

(c)    Each Subsidiary is in compliance with all Laws and other requirements applicable to its business and has obtained all authorizations, consents, approvals, orders, licenses, and permits from, and each such Subsidiary has accomplished all filings, registrations, and qualifications with, or obtained exemptions from any of the foregoing from, any Governmental Agency that are necessary for the transaction of its business, except where the failure to be in such compliance, obtain such authorizations, consents, approvals, orders, licenses, and permits, accomplish such filings, registrations, and qualifications, or obtain such exemptions, could not reasonably be expected to have a Material Adverse Effect.

4.5    Financial Statements.  Borrower has furnished to the Lenders (a) the audited consolidated financial statements of Borrower and its Subsidiaries for the Fiscal Year ended December 31, 2004 and (b) the consolidating and consolidated financial statements of Borrower and its Subsidiaries for the Fiscal Quarter ended March 31, 2005.  Such financial statements fairly present in all material respects the financial condition, results of operations and changes in financial position as of such dates and for such periods in conformity with GAAP consistently applied.

4.6    No Other Liabilities; No Material Adverse Changes.  As of the Closing Date, Borrower and its Subsidiaries do not have any material liability or material contingent liability required under GAAP to be reflected or disclosed, and not reflected or disclosed, in the financial statements described in Section 4.5, other than liabilities and contingent liabilities arising in the ordinary course of business since the date of such financial statements.  As of the Closing Date, no circumstance or event has occurred that could reasonably be expected to have a Material Adverse Effect since December 31, 2004.

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4.7    Title to and Location of Property.  As of the Closing Date, except as set forth in Schedule 4.7, Borrower and its Subsidiaries have valid title to the Property (other than assets which are the subject of a Capital Lease Obligation) reflected in the financial statements described in Section 4.5, other than items of Property or exceptions to title which are in each case immaterial and Property subsequently sold or disposed of in the ordinary course of business.  Such Property is free and clear of all Liens and Rights of Others, other than Liens or Rights of Others described in Schedule 4.7 and Permitted Encumbrances, other encumbrances permitted pursuant to Section 6.9, and Permitted Rights of Others.

4.8    Intangible Assets.  Borrower and its Subsidiaries own, or possess the right to use to the extent necessary in their respective businesses, all material trademarks, trade names, copyrights, patents, patent rights, computer software, licenses and other Intangible Assets that are used in the conduct of their businesses as now operated, and no such Intangible Asset, to the best knowledge of Borrower,  conflicts with the valid trademark, trade name, copyright, patent, patent right or Intangible Asset of any other Person to the extent that such conflict could reasonably be expected to have a Material Adverse Effect.  Schedule 4.8 sets forth all patents, patent applications, trademarks, trade names and trade styles used by Borrower or any of its Subsidiaries at any time within the five (5) year period ending on the Closing Date.

4.9    Litigation.  Except for (a) any matter fully covered as to subject matter and amount (subject to applicable deductibles and retentions) by insurance for which the insurance carrier has not asserted lack of subject matter coverage or reserved its right to do so, (b) any matter, or series of related matters, involving a claim against Borrower or any of its Subsidiaries of less than $250,000, (c) matters of an administrative nature not involving a claim or charge against Borrower or any Subsidiary of Borrower and (d) matters set forth in Schedule 4.9, there are no actions, suits, proceedings or investigations pending as to which Borrower or any of its Subsidiaries have been served or have received notice or, to the best knowledge of Borrower  threatened against or affecting Borrower or any of its Subsidiaries or any Property of any of them before any Governmental Agency.  None of  Borrower,  its Subsidiaries, or, to the best knowledge of Borrower, any executive officer of any such Persons has been indicted or convicted in connection with or is engaging in any criminal conduct which constitutes a felony, or is currently subject to any lawsuit or proceeding or, to the best of Borrower’s knowledge, under investigation in connection with any anti-racketeering or criminal conduct or activity which constitutes a felony.

4.10    Binding Obligations.  Each of the Loan Documents to which Borrower is a Party will, when executed and delivered by Borrower, constitute the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as enforcement may be limited by Debtor Relief Laws or equitable principles relating to the granting of specific performance and other equitable remedies as a matter of judicial discretion.

4.11    No Default.  No event has occurred and is continuing that is a Default or Event of Default.

4.12    ERISA.

(a)    With respect to each Pension Plan:

(i)    such Pension Plan complies in all material respects with ERISA and any other applicable Laws to the extent that noncompliance could reasonably be expected to have a Material Adverse Effect;

(ii)    such Pension Plan has not incurred any “accumulated funding deficiency” (as defined in Section 302 of ERISA) that could reasonably be expected to have a Material Adverse Effect;

(iii)    no “reportable event” (as defined in Section 4043 of ERISA, but excluding such events as to which the PBGC has by regulation waived the requirement therein contained that it be notified within thirty days of the occurrence of such event) has occurred that could reasonably be expected to have a Material Adverse Effect; and

(iv)    neither Borrower nor any of its Subsidiaries has engaged in any non-exempt “prohibited transaction” (as defined in Section 4975 of the Code) that could reasonably be expected to have a Material Adverse Effect.

(b)    Neither Borrower nor any of its Subsidiaries has incurred or expects to incur any withdrawal liability to any Multiemployer Plan that could reasonably be expected to have a Material Adverse Effect.

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4.13    Regulation U; Investment Company Act.  No part of the proceeds of any Advance hereunder will be used to purchase or carry, or to extend credit to others for the purpose of purchasing or carrying, any Margin Stock in violation of Regulation U.  Neither Borrower nor any of its Subsidiaries is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

4.14    Disclosure.  No written statement made by a Senior Officer of Borrower to the Administrative Agent or any Lender pursuant to this Agreement, or in connection with any Advance, as of the date thereof contained any untrue statement of a material fact or omitted a material fact necessary to make the statement made not misleading in light of all the circumstances existing at the date the statement was made.

4.15    Tax Liability.  Borrower and its Subsidiaries have filed all tax returns which are required to be filed, and have paid, or made provision for the payment of, all taxes with respect to the periods, Property or transactions covered by said returns, or pursuant to any assessment received by Borrower or any of its Subsidiaries, except (a) such taxes, if any, as are being contested in good faith by appropriate proceedings and as to which adequate reserves have been established and maintained and (b) immaterial taxes so long as no material Property of Borrower or any Subsidiary is at impending risk of being seized, levied upon or forfeited.

4.16    Projections.  As of the Closing Date, to the best knowledge of Borrower  the assumptions set forth in the Projections most recently delivered to the Administrative Agent are reasonable and consistent with each other and with all facts known to Borrower, and the Projections are reasonably based on such assumptions.  Nothing in this Section 4.16 shall be construed as a representation or covenant that the Projections in fact will be achieved.

4.17    Hazardous Materials.  Except as described in Schedule 4.17, or as may subsequently be disclosed by Borrower in writing to the Administrative Agent, (a) neither Borrower nor any of its Subsidiaries at any time has disposed of, discharged, released or threatened the release of any Hazardous Materials on, from or under the Real Property in violation of any Hazardous Materials Law that would individually or in the aggregate constitute a Material Adverse Effect, (b) no condition exists that violates any Hazardous Material Law affecting any Real Property except for such violations that would not individually or in the aggregate constitute a Material Adverse Effect, (c) no Real Property or any portion thereof is or has been utilized by Borrower or any Subsidiary as a site for the manufacture of any Hazardous Materials and (d) to the extent that any Hazardous Materials are used, generated or stored by Borrower or any Subsidiary on any Real Property, or transported to or from such Real Property by Borrower, or any Subsidiary, such use, generation, storage and transportation are in compliance in all material respects with all Hazardous Materials Laws.

4.18    Employee Matters.  There is no strike, work stoppage or labor dispute with any union or group of employees pending or, to the best knowledge of Borrower overtly threatened involving Borrower or any Subsidiary that individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

4.19    Fiscal Year.  Borrower and its Subsidiaries each operate on a fiscal year ending on December 31.

4.20    Solvency.  After giving effect to this Agreement and the other Loan Documents (including after giving effect to Advances under this Agreement as of the Closing Date), Borrower shall be Solvent.

Article 5.
AFFIRMATIVE COVENANTS 
(OTHER THAN INFORMATION AND 
REPORTING REQUIREMENTS)

So long as any Advance remains unpaid, or any other Obligation remains unpaid, or any portion of any of the Commitments remains in force, Borrower shall, and shall cause each of the Subsidiaries to, unless the Administrative Agent (with the written approval of the Requisite Lenders) otherwise consents:

5.1    Payment of Taxes and Other Potential Liens.  Pay and discharge promptly all taxes, assessments and governmental charges or levies imposed upon any of them, upon their respective Property or any part thereof and upon their respective income or profits or any part thereof, except that Borrower and its Subsidiaries shall not be required to pay or cause to be paid (a) any tax, assessment, charge or levy that is not yet past due, or is being contested in good faith by appropriate proceedings so long as the relevant entity has established and maintains adequate reserves for the payment of the same or (b) any immaterial tax so long as no material Property of  Borrower or any Subsidiary is at impending risk of being seized, levied upon or forfeited.

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5.2    Preservation of Existence.  Preserve and maintain their respective existences (except as permitted by Section 6.4) in their respective jurisdictions of formation and all material authorizations, rights, franchises, privileges, consents, approvals, orders, licenses, permits, or registrations from any Governmental Agency that are necessary for the transaction of their respective business and qualify and remain qualified to transact business in each jurisdiction in which such qualification is necessary in view of their respective business or the ownership or leasing of their respective Properties except where the failure to so qualify or remain qualified could not reasonably be expected to have a Material Adverse Effect.

5.3    Maintenance of Properties.  Maintain, preserve and protect all of their respective Properties in good order and condition, subject to wear and tear in the ordinary course of business, and not permit any waste of their respective Properties, except (a) that the failure to maintain, preserve and protect a particular item of Property that is at the end of its useful life or that is not of significant value, either intrinsically or to the operations of Borrower and Subsidiaries, taken as a whole, shall not constitute a violation of this covenant, and (b) this covenant shall not be construed to prohibit any Disposition otherwise permitted pursuant to Section 6.3.

5.4    Maintenance of Insurance.  Maintain, or cause to be maintained, liability, casualty and other insurance (subject to customary deductibles and retentions) with responsible insurance companies in such amounts and against such risks as is carried by responsible companies engaged in similar businesses and owning similar assets.

5.5    Compliance With Laws.  Comply with all Requirements of Law noncompliance with which could reasonably be expected to have a Material Adverse Effect, except that Borrower and its Subsidiaries need not comply with a Requirement of Law then being contested by any of them in good faith by appropriate proceedings.

5.6    Inspection Rights.  Upon reasonable notice, at any time during regular business hours and, as requested by the Administrative Agent (but not so as to materially interfere with the business of Borrower or any of the Subsidiaries) permit the Administrative Agent, or any Lender, or any authorized employee, agent or representative thereof, to examine, audit and make copies and abstracts from the records and books of account of (including any software or CD Rom files relating thereto), and to visit and inspect the Properties of, Borrower and its Subsidiaries and to discuss the affairs, finances and accounts of Borrower and its Subsidiaries with any of their officers, key employees or accountants and, upon request, furnish promptly to the Administrative Agent or any Lender true copies of all financial information made available to the board of directors or audit committee of the board of directors of Borrower.  If any of the Properties, books or records of Borrower or any of the Subsidiaries are in the possession of a third party, Borrower authorizes that third party to permit the Administrative Agent or any Lender or any agents thereof to have access to perform inspections or audits and to respond to the Administrative Agent’s or any Lender’s request for information concerning such Properties, books and records.  Notwithstanding the foregoing, no prior notice of any such examination, audit, visit, inspection or discussion shall be required if an Event of Default has occurred and remains in effect.

5.7    Keeping of Records and Books of Account.  Keep adequate records and books of account reflecting all financial transactions in conformity with GAAP, consistently applied, and in material conformity with all applicable requirements of any Governmental Agency having regulatory jurisdiction over Borrower and its Subsidiaries.

5.8    Compliance With Agreements.  Promptly and fully comply with all Contractual Obligations to which any one or more of them is a party, except for any such Contractual Obligations (a) the performance of which would cause a Default or (b) then being contested by any of them in good faith by appropriate proceedings or (c) if the failure to comply could not reasonably be expected to have a Material Adverse Effect.

5.9    Use of Proceeds.  Use the proceeds of all Advances to (a) refinance certain Indebtedness of Borrower and its Subsidiaries (including SCW), (ii) finance certain acquisitions and (c) provide for the working capital and general corporate purpose need of Borrower and its Subsidiaries.

5.10    Hazardous Materials Laws.  Keep and maintain all Real Property and each portion thereof in compliance with all applicable Hazardous Materials Laws, except to the extent that would not individually or in the aggregate constitute a Material Adverse Effect, and promptly notify the Administrative Agent in writing (attaching a copy of any pertinent written material) of (a) any and all material enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened in writing by a Governmental Agency pursuant to any applicable Hazardous Materials Laws, (b) any and all material claims made or threatened in writing by any Person against Borrower or any Subsidiary relating to damage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous Materials and (c) discovery by any Senior Officer of Borrower of any material occurrence or condition on any real property adjoining or in the vicinity of such Real Property that could reasonably be expected to cause such Real Property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of such Real Property under any applicable Hazardous Materials Laws.

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5.11    Minimum Debt Rating.  Maintain at all times a Debt Rating (in the case of Borrower only) equal to (or better than) Baa3 or BBB-.   For purposes of this Section 5.11, if the prevailing Debt Ratings as of any date of determination are “split ratings”, the lower/lowest Debt Rating shall apply.

5.12    Syndication Process.  Cooperate in such respects as may be reasonably requested by the Lead Arranger in connection with the syndication of the credit facility under this Agreement, including the provision of information (in form and substance acceptable to the Lead Arranger) for inclusion in written materials furnished to prospective syndicate members and the participation by Senior Officers of Borrower and its Subsidiaries in meetings with prospective syndicate members.

Article 6.
NEGATIVE COVENANTS

So long as any Advance remains unpaid, or any other Obligation remains unpaid, or any portion of any of the Commitments remains in force, Borrower shall not, and shall not permit any of its Subsidiaries to, unless the Administrative Agent (with the written approval of the Requisite Lenders or, if required by Section 11.2, all of the Lenders) otherwise consents:

6.1    Prepayment of Indebtedness.  Prepay any principal or interest on any Indebtedness of Borrower or any Subsidiary  prior to the date when due, or make any payment or deposit with any Person that has the effect of providing for the satisfaction of any Indebtedness of Borrower or any Subsidiary prior to the date when due, except (a) Indebtedness to the Administrative Agent and the Lenders under this Agreement and the other Loan Documents, (b) the prepayment or refunding of Indebtedness solely through the issuance of additional Indebtedness that is permitted under this Agreement; provided that such additional Indebtedness has either (i) a longer weighted average life than the Borrowings hereunder, or (ii) a weighted average life that is equal to or longer than the Indebtedness being refunded and (c) Indebtedness to other Persons the prepayment of which is approved in advance by the Requisite Lenders in writing.

6.2    Prepayment of Subordinated Obligations.  Pay any (a) principal (including sinking fund payments) or any other amount (other than scheduled interest payments) with respect to any Subordinated Obligation, or purchase or redeem any Subordinated Obligation or deposit any monies, Securities or other Property with any trustee or other Person to provide assurance that the principal or any portion thereof of any Subordinated Obligation will be paid when due or otherwise to provide for the defeasance of any Subordinated Obligation or (b) scheduled interest on any Subordinated Obligation if the payment thereof is then prohibited under the terms of the subordination provisions governing such Subordinated Obligations.

6.3    Disposition of Property.  Make any Disposition of its Property, whether now owned or hereafter acquired, except (a) Dispositions of obsolete Property or Property with no material remaining useful life, (b) Dispositions in an aggregate amount not to exceed $2,000,000 in any Fiscal Year ending after the Closing Date or $8,000,000 in the aggregate from and after the Closing Date to the Termination Date; provided that (i) at the time of any such Disposition pursuant to clause (b) only, no Default or Event of Default shall exist or shall result from such Disposition and (ii) the sales price relating to a Disposition (pursuant to clause (a) or (b)) shall be paid in Cash and/or Indebtedness or other evidence of an Investment permitted pursuant to Section 6.14(h), and (c) Dispositions pursuant to any order of any Governmental Agency in an eminent domain proceeding and any settlement of any such proceeding.

6.4    Mergers.  Merge or consolidate with or into any Person, except mergers and consolidations of a Subsidiary into Borrower (with Borrower as the surviving entity), mergers of Subsidiaries with each other or mergers entered into in connection with Permitted Acquisitions, provided that (a) no Default or Event of Default would result therefrom and (b) any such “surviving” entity shall have executed such amendments to the Loan Documents, if any, as the Administrative Agent may reasonably determine are appropriate as a result of such merger.

6.5    Hostile Tender Offers.  Make any offer to purchase or acquire, or consummate a purchase or acquisition of, five percent (5%) or more of the voting interest in any corporation or other business entity if the board of directors or management of such corporation or business entity has notified Borrower that it opposes such offer or purchase and such notice has not been withdrawn or superseded.

6.6    Distributions.  Declare or pay or make any form of Distribution, whether from capital, income or otherwise, and whether in Cash or other Property, except:

(a)    Distributions by any Subsidiary to Borrower or to any wholly-owned Subsidiary of Borrower;

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(b)    Distributions consisting of dividends payable solely in capital stock or rights to purchase capital stock so long as no Default or Event of Default then exists; and

(c)    Distributions consisting of (i) repurchases of preferred stock of Borrower in an amount not to exceed $2,500,000 in the aggregate from and after the Closing Date and (ii) dividends paid in Cash in a manner reasonably consistent with Borrower’s past practices made in any Fiscal Year if, in any such case, no Default or Event of Default then exists and, giving effect thereto on a pro-forma estimated basis, Borrower would be in compliance with Section 6.12 as of the end of the then current Fiscal Quarter.

6.7    ERISA.  (a) At any time, permit any Pension Plan to:  (i) engage in any non-exempt “prohibited transaction” (as defined in Section 4975 of the Code); (ii) fail to comply with ERISA or any other applicable Laws; (iii) incur any material “accumulated funding deficiency” (as defined in Section 302 of ERISA); or (iv) terminate in any manner, which, with respect to each event listed above, could reasonably be expected to result in a Material Adverse Effect or (b) withdraw, completely or partially, from any Multiemployer Plan if to do so could reasonably be expected to result in a Material Adverse Effect.

6.8    Change in Nature of Business.  Make any change in the nature of the business of Borrower and its Subsidiaries, taken as a whole, as at present conducted; provided that a Permitted Acquisition shall not be deemed such a change.

6.9    Liens and Negative Pledges.  Create, incur, assume or suffer to exist any Lien or Negative Pledge of any nature upon or with respect to any of their respective Properties, or engage in any Sale and Leaseback transaction with respect to any of their respective Properties, whether now owned or hereafter acquired, except:

(a)    Liens and Negative Pledges existing on the Closing Date and disclosed in Schedule 4.7 and any renewals/extensions or amendments thereof, provided that the obligations secured or benefited thereby are not increased;

(b)    Liens and Negative Pledges under the Loan Documents;

(c)    Permitted Encumbrances;

(d)    Liens which secure Permitted Acquisition Indebtedness which were in existence at the time of the Permitted Acquisition and were not created in contemplation of such Permitted Acquisition;

(e)    Liens securing Permitted Capital Asset Indebtedness on and limited to the capital assets acquired, constructed or financed with the proceeds of such Permitted Capital Asset Indebtedness or with the proceeds of any Indebtedness directly or indirectly refinanced by such Indebtedness; provided that the aggregate principal amount of such Indebtedness secured by such Liens and incurred by Borrower and/or its Subsidiaries after the Closing Date shall not exceed $10,000,000 at any one time outstanding (as determined in accordance with GAAP consistently applied); and

(f)    any Negative Pledge with respect to the rights of a Subsidiary of Borrower under a Military Utility Privatization entered into by such Subsidiary.

6.10    Indebtedness and Guaranty Obligations.  Create, incur or assume any Indebtedness or Guaranty Obligation if an Event of Default has occurred and is continuing or if, after giving effect thereto, Borrower would not be in compliance with the provisions of Section 6.12 or Section 6.13 or an Event of Default would otherwise occur.  Notwithstanding the foregoing, Borrower shall not permit any Subsidiary to create, incur, assume or suffer to exist any Indebtedness or Guaranty Obligation, except (a) Permitted Acquisition Indebtedness, (b) Permitted Capital Asset Indebtedness, (c) existing Indebtedness set forth on Schedule 6.10(b), (d) Indebtedness owed to Borrower or a wholly-owned Subsidiary, (e) unsecured term Indebtedness (i.e., not revolving credit) that (i) either has a longer weighted average life than the Borrowings hereunder or satisfies the requirements of Section 6.1, (ii) to the extent that a Governmental Agency has regulatory jurisdiction over the issuance of such Indebtedness of such Subsidiary, the issuance of such Indebtedness is permitted by such regulatory jurisdiction, (iii) is incurred in the ordinary course of business of such Subsidiary and is substantially consistent with the prior practices of SCW, and (iv) is provided by any Person or Governmental Agency, other than a commercial bank under a credit agreement or facility substantially similar thereto, and (f) other unsecured Indebtedness in the aggregate principal amount not to exceed $1,000,000.

6.11    Transactions with Affiliates.  Enter into any transaction of any kind with any Affiliate of Borrower other than (without duplication):  (a) salary, bonus, employee stock option and other compensation arrangements with directors or officers in the ordinary course of business; (b) Investments permitted pursuant to Section 6.14(d), (c) Distributions permitted pursuant to Section 6.6; 

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(d) transactions with wholly-owned Subsidiaries; and (e) transactions on overall terms at least as favorable to Borrower or its Subsidiaries as would be the case in an arm’s-length transaction between unrelated parties of equal bargaining power.

6.12    Total Funded Debt Ratio.  Permit the Total Funded Debt Ratio, as of the last day of any Fiscal Quarter, to be greater than 0.65 to 1.00.
6.13    Interest Coverage Ratio.  Permit the Interest Coverage Ratio, as of the last day of any Fiscal Quarter, to be less than 3.25 to 1.00.

6.14    Investments and Acquisitions.  Make any Acquisition or enter into any agreement to make any Acquisition unless approved in advance by the Administrative Agent and the Requisite Lenders in writing, or make or suffer to exist any Investment, other than:

(a)    Permitted Acquisitions;

(b)    Investments in existence on the Closing Date and disclosed on Schedule 6.14;

(c)    Investments consisting of Cash Equivalents;

(d)    Investments consisting of loans and advances to officers, directors and employees of Borrower and its Subsidiaries for travel, entertainment, relocation, anticipated bonus, exercise of stock options and analogous ordinary business purposes provided that the aggregate amount of such Investments does not exceed $1,000,000 at any time outstanding;

(e)    Investments in a Subsidiary that is a wholly-owned Subsidiary of Borrower;

(f)    Investments consisting of the extension of credit to customers or suppliers of Borrower and its Subsidiaries in the ordinary course of business and any Investments received in satisfaction or partial satisfaction thereof;

(g)    Investments received in connection with the settlement of a bona fide dispute with another Person provided that the aggregate amount of such Investments does not exceed $500,000 at any time outstanding;

(h)    Investments representing all or a portion of the sales price of Property sold or services provided to another Person provided that the aggregate amount of such Investments does not exceed $500,000 at any time outstanding; and

(i)    Investments consisting of Indebtedness and Guaranty Obligations owed to Borrower or any of its Subsidiaries.

6.15    Operating Leases.  Incur any obligation to pay rent under an operating lease in any Fiscal Year if to do so would result in the aggregate obligation of Borrower and its Subsidiaries to pay rent under all operating leases in that Fiscal Year to exceed $4,000,000.

6.16    Amendments.  Amend or modify any  term or provision of (a) any indenture, agreement or instrument evidencing or governing any Subordinated Obligation or (b) any material provision of any Material Contract, if in any such case such amendment or modification in any respect will or may adversely affect the interest of the Lenders.

6.17    Use of Lender’s Name.  Use any Lender’s name (or the name of any of any Lender’s Affiliates) in connection with any of their business operations except to identify the existence of the Revolving Facility and the names of the Lenders in the ordinary course of Borrower’s business or to comply with Borrower’s obligations under Law.  Nothing contained in this Agreement is intended to permit or authorize Borrower to make any commitment or contract on behalf of any Lender or the Administrative Agent.

6.18    Change of Fiscal Periods.  Change its Fiscal Year or any other fiscal period with respect to which it reports financial results hereunder or otherwise.

Article 7.
INFORMATION AND REPORTING REQUIREMENTS

7.1    Financial and Business Information.  So long as any Advance remains unpaid, or any other Obligation remains unpaid, or any portion of any of the Commitments remains in force, Borrower shall, unless the Administrative Agent (with the written 

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approval of the Requisite Lenders) otherwise consents, at Borrower’s sole expense, deliver to the Administrative Agent for distribution by it to the Lenders, a sufficient number of copies for all of the Lenders of the following:

(a)    (i) As soon as practicable, and in any event within fifty (50) days after the end of each Fiscal Quarter ending March 31, June 30 and September 30 (commencing with the Fiscal Quarter ending June 30, 2005), the consolidating and consolidated balance sheet of Borrower and its Subsidiaries as at the end of such Fiscal Quarter and the consolidating and consolidated statements of income, operations and cash flows for such Fiscal Quarter, and the portion of the Fiscal Year ended with such Fiscal Quarter, together with a statement of Stockholders’ Equity as of the last day of such  Fiscal Quarter, all in reasonable detail, (ii) such financial statements shall be certified by the president or chief financial officer of Borrower as fairly presenting the financial condition, results of operations and cash flows of Borrower and its Subsidiaries in accordance with GAAP (other than footnote disclosures), consistently applied, as at such date and for such periods, subject only to normal year-end accruals and audit adjustments.

(b)    (i) As soon as practicable, and in any event within one hundred (100) days after the end of each Fiscal Year, the consolidating and consolidated balance sheet of Borrower and its Subsidiaries as at the end of such Fiscal Year and the consolidating and consolidated statements of income, operations, stockholders’ equity and cash flows, in each case of Borrower and its Subsidiaries for such Fiscal Year, all in reasonable detail.  Such financial statements shall be prepared in accordance with GAAP, consistently applied, and such consolidated financial statements shall be accompanied by a report of PricewaterhouseCoopers LLP or other independent public accountants of recognized standing selected by Borrower and reasonably satisfactory to the Requisite Lenders, which report shall be prepared in accordance with generally accepted auditing standards as at such date, and shall not be subject to any qualifications or exceptions, and which report shall specifically disclose any changes discovered by such accountants in Borrower’s or its Subsidiaries’ applicable process of management of accounts, (ii) such accountants’ report shall be accompanied by a certificate stating that, in making the examination pursuant to generally accepted auditing standards necessary for the certification of such financial statements and such report, such accountants have obtained no knowledge of any Default then existing or, if, in the opinion of such accountants, any such Default shall exist, stating the nature and status of such Default, and stating that such accountants have reviewed Borrower’s financial calculations as at the end of such Fiscal Year (which shall accompany such certificate) under Sections 6.12 and 6.13, have read such Sections (including the definitions of all defined terms used therein) and that nothing has come to the attention of such accountants in the course of such examination that would cause them to believe that the same were not calculated by Borrower in the manner prescribed by this Agreement, and (iii) in addition, Borrower shall deliver to the Administrative Agent a copy of (A) any “management letter” prepared by such accountants in conjunction with preparation of the foregoing report and (B) a separate report prepared by such accountants in conjunction with preparation of the foregoing report, pursuant to which separate report such accountants shall be required to disclose any material changes discovered by such accountants in the then current account management process (including the determination of returns and reserves, inventory management practices, and accounts receivable management practices).

(c)    As soon as practicable, and in any event not later than sixty (60) days subsequent to the commencement of each Fiscal Year, a budget and projection of Borrower and its Subsidiaries setting forth (i) by Fiscal Quarter for the four (4) Fiscal Quarters of that Fiscal Year and (ii) on an annual basis for each succeeding Fiscal Year thereafter through the Maturity Date, projected balance sheets, statements of operations and statements of cash flow, all in reasonable detail;

(d)    Promptly after request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to Borrower (or its board of directors) by independent accountants in connection with the accounts or books of Borrower, or any of its Subsidiaries, or any audit of any of them;

(e)    Promptly after the same are available, and in any event within five (5) Banking Days after filing with the Securities and Exchange Commission, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of Borrower or any of its Subsidiaries, and copies of all annual, regular, periodic and special reports and registration statements which Borrower or any of its Subsidiaries may file or be required to file with the Securities and Exchange Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and not otherwise required to be delivered to the Lenders pursuant to other provisions of this Section 7.1;

(f)    Promptly after request by Lender, subject to confidentiality requirements of any Governmental Agency, copies of any other report or other document that was filed by Borrower, with any Governmental Agency;

(g)    Promptly upon a Senior Officer of Borrower, becoming aware, and in any event within five (5) Banking Days after becoming aware, of the occurrence of any (i) “reportable event” (as such term is defined in Section 4043 

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of ERISA, but excluding such events as to which the PBGC has by regulation waived the requirement therein contained that it be notified within thirty days of the occurrence of such event) or (ii) non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of the Code) involving any Pension Plan or any trust created thereunder, telephonic notice specifying the nature thereof, and, no more than two (2) Banking Days after such telephonic notice, written notice again specifying the nature thereof and specifying what action Borrower is taking or proposes to take with respect thereto, and, when known, any action taken by the Internal Revenue Service with respect thereto; provided that no such notice shall be required pursuant to this Section 7.1(g) if the anticipated liability is less than $100,000;

(h)    As soon as practicable, and in any event within two (2) Banking Days after a Senior Officer of Borrower becomes aware of the existence of any condition or event which constitutes a Default or Event of Default, telephonic notice specifying the nature and period of existence thereof, and, no more than two (2) Banking Days after such telephonic notice, written notice again specifying the nature and period of existence thereof and specifying what action Borrower is taking or proposes to take with respect thereto;

(i)    Promptly upon a Senior Officer of Borrower becoming aware that (i) any Person has commenced a legal proceeding with respect to a claim against Borrower or any of its Subsidiaries that is $250,000 or more in excess of the amount thereof that is fully covered by insurance, (ii) any creditor under a credit agreement involving Indebtedness of $250,000 or more or any lessor under a lease involving aggregate rent of $250,000 or more has asserted a default thereunder on the part of Borrower or any of its Subsidiaries or, (iii) any Person has commenced a legal proceeding with respect to a claim against Borrower or any of its Subsidiaries under a contract that is not a credit agreement or material lease with respect to a claim of in excess of $250,000 or which otherwise may reasonably be expected to result in a Material Adverse Effect, a written notice describing the pertinent facts relating thereto and what action Borrower and/or its applicable Subsidiaries are taking or propose to take with respect thereto; and

(j)    Such other data and information as from time to time may be reasonably requested by the Administrative Agent or the Requisite Lenders.

Information required to be delivered pursuant to this Section 7.1 (to the extent any such documents are included in materials otherwise filed with the Securities and Exchange Commission) shall be deemed to have been delivered on the date (a) on which Borrower provides notice to Lenders that such information has been posted on Borrower’s Internet website at the website address listed on the signature page hereof or at another website identified in such notice and accessible to Lenders without charge, or (b) on which documents are posted on Borrower’s behalf on the Platform; provided that (i) Company shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.

7.2    Compliance Certificates.  So long as any Advance remains unpaid, or any other Obligation remains unpaid or unperformed, or any portion of any of the Commitments remain outstanding, Borrower shall, at Borrower’s sole expense, deliver to the Administrative Agent for distribution by it to the Lenders concurrently with the financial statements required pursuant to Sections 7.1(a) and 7.1(b), a Compliance Certificate signed by the president or chief financial officer of Borrower.

Article 8.
CONDITIONS

8.1    Closing Date Advances.  The obligation of each Closing Date Lender to make Advances on and after the Closing Date, and the obligation of the Issuing Lender to issue additional Letters of Credit (as applicable), is subject to the following conditions precedent, each of which shall be satisfied prior to the making of any further Advances or the issuance of the additional Letters of Credit (as applicable) (unless all of the Closing Date Lenders, in their sole and absolute discretion, shall agree otherwise):

(a)    The Administrative Agent shall have received all of the following, each of which shall be originals unless otherwise specified, each properly executed by a Responsible Official of each party thereto, each dated as of the Closing Date and each in form and substance satisfactory to the Administrative Agent and its legal counsel (unless otherwise specified or, in the case of the date of any of the following, unless the Administrative Agent otherwise agrees or directs):

(1)    at least one (1) executed counterpart of this Agreement, together with arrangements satisfactory to the Administrative Agent for additional executed counterparts, sufficient in number for distribution to the Closing Date Lenders and Borrower;

(2)    Notes executed by Borrower in favor of each Closing Date Lender, each in a principal amount equal to that Lender’s Commitment;

(3)    the Swing Line Documents executed by Borrower;

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(4)    with respect to Borrower, such documentation as the Administrative Agent may reasonably require to establish the due organization, valid existence and good standing of Borrower, its qualification to engage in business in each material jurisdiction in which it is engaged in business or required to be so qualified, its authority to execute, deliver and perform the Loan Documents to which it is a Party, the identity, authority and capacity of each Responsible Official thereof authorized to act on its behalf, including certified copies of articles of incorporation and amendments thereto, bylaws and amendments thereto, certificates of good standing and/or qualification to engage in business, tax clearance certificates, certificates of corporate resolutions or other applicable authorization documents, incumbency certificates, Certificates of Responsible Officials, and the like;

(5)    the Opinion of Counsel;

(6)    one or more Requests for Borrowing, Requests for Letters of Credit or Requests for Continuation/Conversion, as applicable;

(7)    a Certificate signed by a Senior Officer of Borrower certifying that the conditions specified in Sections 8.1(d) and 8.1(e) have been satisfied; and

(8)    such other assurances, certificates, documents, consents or opinions as the Administrative Agent and/or any Closing Date Lender reasonably may require.

(b)    The fees payable on or before the Closing Date pursuant to Section 3.3 shall have been paid.

(c)    The reasonable costs and expenses of the Administrative Agent in connection with the preparation of this Agreement and each of the other Loan Documents prepared in connection therewith payable pursuant to Section 11.3, and invoiced to Borrower prior to the Closing Date, shall have been paid.

(d)    The representations and warranties of Borrower contained in Article 4 shall be true and correct in all material respects.

(e)    Borrower and any other Parties shall be in compliance with all the terms and provisions of the Loan Documents, and giving effect to the any Advances made, or Letters of Credits issued, on the Closing Date, no Default or Event of Default shall have occurred and be continuing.

(f)    All legal matters relating to the Loan Documents shall be reasonably satisfactory to Sheppard, Mullin, Richter & Hampton LLP, special counsel to Lender.

(g)    The Closing Date shall have occurred on or before June 6, 2005.

8.2    Any Advance.  The obligation of each Lender to make any Advance, and the obligation of the Issuing Lender to issue any Letter of Credit, is subject to the following conditions precedent (unless the Requisite Lenders or, in any case where the approval of all of the Lenders is required pursuant to Section 11.2, all of the Lenders, in their sole and absolute discretion, shall agree otherwise):

(a)    except (i) for representations and warranties which expressly speak as of a particular date or are no longer true and correct as a result of a change which is permitted by this Agreement or (ii) as disclosed by Borrower and approved in writing by the Requisite Lenders, the representations and warranties contained in Article 4 (other than Sections 4.4, 4.6 (first sentence), 4.9 and 4.16) shall be true and correct in all material respects on and as of the date of the Advance or the Letter of Credit as though made on that date;

(b)    no circumstance or event shall have occurred that constitutes a Material Adverse Effect since the Closing Date;

(c)    other than matters described in Schedule 4.9 or not required as of the Closing Date to be therein described, there shall not be then pending or threatened any action, suit, proceeding or investigation against or affecting Borrower or any Subsidiary of Borrower or any Property of any of them before any Governmental Agency that constitutes a Material Adverse Effect;

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(d)    the Administrative Agent shall have timely received a Request for Borrowing (or telephonic or other request for Borrowing referred to in the second sentence of Section 2.1(b), if applicable), or the Issuing Lender shall have received a Request for Letter of Credit, as the case may be, in compliance with Article 2; and

(e)    the Administrative Agent shall have received, in form and substance reasonably satisfactory to the Administrative Agent, such other certificates, documents or consents related to the foregoing as the Administrative Agent or Requisite Lenders reasonably may require.

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Article 9.
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT

9.1    Events of Default.  The existence or occurrence of any one or more of the following events, whatever the reason therefor and under any circumstances whatsoever, shall constitute an Event of Default:

(a)    Borrower fails to pay any principal on any of the Notes, or any portion thereof, on the date when due; or

(b)    Borrower fails to pay any interest on any of the Notes, or any fees under Sections 3.2 or 3.4, or any portion thereof, within five  (5) Banking Days after the date when due; or fails to pay any other fee or amount payable to the Lenders or the Administrative Agent under any Loan Document, or any portion thereof, within five (5) Banking Days after written demand therefor; or

(c)    Borrower fails to comply with, or cause or permit any of its Subsidiaries to fail to comply with, any of the covenants contained in Article 6; or

(d)    (i) Borrower fails to comply with Section 7.1(i) in the manner stated therein or (ii) Borrower fails to perform any other reporting requirement set forth in Article 7 within five (5) Banking Days of the date specified for performance therein; or

(e)    Borrower or any other Party fails to perform or observe any other covenant or agreement (not specified in clause (a), (b), (c) or (d) above) contained in any Loan Document on its part to be performed or observed and such default shall continue unremedied for twenty (20) days after the giving of notice by the Administrative Agent on behalf of the Requisite Lenders of such Default; or

(f)    Any representation or warranty of  Borrower or any other Party made in any Loan Document, or in any certificate or other writing delivered by Borrower or such other Party pursuant to any Loan Document, proves to have been incorrect when made or reaffirmed in any material respect; or

(g)    Borrower or any of its Subsidiaries (i) fails to pay the principal, or any principal installment, of any present or future Indebtedness of $2,500,000 or more, or any guaranty of present or future Indebtedness of $2,500,000 or more, on its part to be paid, when due (or within any stated grace period), whether at the stated maturity, upon acceleration, by reason of required prepayment or otherwise or (ii) fails to perform or observe any other term, covenant or agreement on its part to be performed or observed, or suffers any event of default to occur, in connection with any present or future Indebtedness of $2,500,000 or more, or of any guaranty of present or future Indebtedness of $2,500,000 or more, if as a result of such failure or sufferance any holder or holders thereof (or an agent or trustee on its or their behalf) has the right to declare such Indebtedness due before the date on which it otherwise would become due or the right to require  Borrower or any such Subsidiary to redeem or purchase, or offer to redeem or purchase, all or any portion of such Indebtedness; or

(h)    Any Loan Document, at any time after its execution and delivery and for any reason other than the agreement or action (or omission to act) of the Administrative Agent or satisfaction in full of all the Obligations, ceases to be in full force and effect or is declared by a court of competent jurisdiction to be null and void, invalid or unenforceable in any respect which is materially adverse to the interests of the Lenders; or any Party thereto denies in writing that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind same; or

(i)    A final judgment against Borrower or any of its Subsidiaries is entered for the payment of money in excess of $2,500,000 (not covered by insurance or for which an insurer has reserved its rights) and, absent procurement of a stay of execution, such judgment remains unsatisfied for thirty (30) calendar days after the date of entry of judgment, or in any event later than five (5) days prior to the date of any proposed sale thereunder; or any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the Property of Borrower or any of its Subsidiaries and is not released, vacated or fully bonded within thirty (30) calendar days after its issue or levy; or

(j)    Borrower or any of its Subsidiaries institutes or consents to the institution of any proceeding under a Debtor Relief Law relating to it or to all or any material part of its Property, or is unable or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its Property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of that Person and the appointment continues undischarged or unstayed for sixty (60) calendar days; or 

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any proceeding under a Debtor Relief Law relating to any such Person or to all or any part of its Property is instituted without the consent of that Person and continues undismissed or unstayed for sixty (60) calendar days; or

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(k)    A Change in Control occurs; or

(l)    The dissolution or liquidation of Borrower, any of SCW or Chapparal City Water Company, or any other Subsidiary that has, immediately prior to the commencement of such dissolution or liquidation, assets having a fair market value of more than $20,000,000  or Borrower or any such Subsidiary, or any of their respective partners, members, directors or stockholders, as the case may be, shall take action seeking to effect the dissolution or liquidation of Borrower or such Subsidiary; or

(m)    The occurrence of an Event of Default (as such term is or may hereafter be specifically defined in any other Loan Document) under any other Loan Document; or

(n)    Any Pension Plan maintained by Borrower is finally determined by the PBGC to have a material “accumulated funding deficiency” as that term is defined in Section 302 of ERISA in excess of an amount equal to 5% of the consolidated total assets of Borrower as of the most-recently ended Fiscal Quarter; or

(o)    Any holder of a Subordinated Obligation asserts in writing that such Subordinated Obligation is not subordinated to the Obligations in accordance with its terms and Borrower does not promptly deny in writing such assertion and contest any attempt by such holder to take action based on such assertion; or

(p)    Any event occurs which gives the holder or holders of any Subordinated Obligation (or an agent or trustee on its or their behalf) the right to declare such Subordinated Obligation due before the date on which it otherwise would become due, or the right (other than by reason of a Change in Control) to require the issuer thereof, to redeem or purchase, or offer to redeem or purchase, all or any portion of any Subordinated Obligation, or a final judgment is entered by a court of competent jurisdiction that any Subordinated Obligation is not subordinated in accordance with its terms to the Obligations.

9.2    Remedies Upon Event of Default.  Without limiting any other rights or remedies of the Administrative Agent or the Lenders provided for elsewhere in this Agreement, or the other Loan Documents, or by applicable Law, or in equity, or otherwise:

(a)    Upon the occurrence, and during the continuance, of any Event of Default other than an Event of Default described in Section 9.1(j):

(1)    the commitments to make Advances and all other obligations of the Administrative Agent or the Lenders and all rights of Borrower and any other Parties under the Loan Documents shall be suspended without notice to or demand upon Borrower, which are expressly waived by Borrower  except that all of the Lenders or the Requisite Lenders (as the case may be, in accordance with Section 11.2) may waive an Event of Default or, without waiving, determine, upon terms and conditions satisfactory to the Lenders or Requisite Lenders, as the case may be, to reinstate the Commitments and such other obligations and rights and make further Advances, which waiver or determination shall apply equally to, and shall be binding upon, all the Lenders;

(2)    the Issuing Lender may demand immediate payment by Borrower of an amount equal to the Aggregate Effective Amount of all outstanding Letters of Credit to be held by the Administrative Agent, on behalf of the Lenders, in an interest-bearing cash collateral account as collateral for all of the Obligations; and

(3)    the Requisite Lenders may request the Administrative Agent to, and the Administrative Agent thereupon shall, terminate the Commitments and/or declare all or any part of the unpaid principal of all Notes, all interest accrued and unpaid thereon and all other amounts payable under the Loan Documents to be forthwith due and payable, whereupon the same shall become and be forthwith due and payable, without protest, presentment, notice of dishonor, demand or further notice of any kind, all of which are expressly waived by Borrower.

(b)    Upon the occurrence of any Event of Default described in Section 9.1(j):

(1)    the Commitments shall terminate without notice to or demand upon Borrower, which are expressly waived by Borrower, except that all of the Lenders may waive the Event of Default or, without waiving, determine, upon terms and conditions satisfactory to all the Lenders, to reinstate the Commitments and make further Advances, which determination shall apply equally to, and shall be binding upon, all the Lenders;

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(2)    an amount equal to the Aggregate Effective Amount of all outstanding Letters of Credit shall be immediately due and payable to the Issuing Lender without notice to or demand upon Borrower, which are expressly waived by Borrower, to be held by the Administrative Agent, on behalf of the Lenders, in an interest-bearing cash collateral account as collateral for all of the Obligations; and

(3)    the unpaid principal of all Notes, all interest accrued and unpaid thereon and all other amounts payable under the Loan Documents shall be forthwith due and payable, without protest, presentment, notice of dishonor, demand or further notice of any kind, all of which are expressly waived by Borrower.

(c)    Upon the occurrence of any Event of Default, the Lenders and the Administrative Agent, or any of them, without notice to (except as expressly provided for in any Loan Document) or demand upon Borrower, which are expressly waived by Borrower (except as to notices expressly provided for in any Loan Document), may proceed (but only with the consent of the Requisite Lenders) to protect, exercise and enforce their rights and remedies under the Loan Documents against Borrower and any other Party and such other rights and remedies as are provided by Law or equity.

(d)    The order and manner in which the Lenders’ rights and remedies are to be exercised shall be determined by the Requisite Lenders in their sole discretion, and all payments received by the Administrative Agent and the Lenders, or any of them, shall be applied first to the costs and expenses (including reasonable attorneys’ fees and disbursements and the reasonably allocated costs of attorneys employed by the Administrative Agent or by any Lender) of the Administrative Agent and of the Lenders, and thereafter paid pro rata to the Lenders in the same proportions that the aggregate Obligations owed to each Lender under the Loan Documents bear to the aggregate Obligations owed under the Loan Documents to all the Lenders, without priority or preference among the Lenders.  Regardless of how each Lender may treat payments for the purpose of its own accounting, for the purpose of computing Borrower’s Obligations hereunder and under the Notes, payments shall be applied first, to the costs and expenses of the Administrative Agent and the Lenders, as set forth above, second, to the payment of accrued and unpaid interest due under any Loan Documents to and including the date of such application (ratably, and without duplication, according to the accrued and unpaid interest due under each of the Loan Documents), and third, to the payment of all other amounts (including principal and fees) then owing to the Administrative Agent or the Lenders under the Loan Documents.  No application of payments will cure any Event of Default, or prevent acceleration, or continued acceleration, of amounts payable under the Loan Documents, or prevent the exercise, or continued exercise, of rights or remedies of the Lenders hereunder or thereunder or at Law or in equity.

Article 10.
THE ADMINISTRATIVE AGENT

10.1    Appointment and Authorization.  Subject to Section 10.8, each Lender hereby irrevocably appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Administrative Agent by the terms thereof or are reasonably incidental, as determined by the Administrative Agent, thereto.  This appointment and authorization is intended solely for the purpose of facilitating the servicing of the Revolving Facility and does not constitute appointment of the Administrative Agent as trustee for any Lender or as representative of any Lender for any other purpose and, except as specifically set forth in the Loan Documents to the contrary, the Administrative Agent shall take such action and exercise such powers only in an administrative and ministerial capacity.

10.2    Administrative Agent and Affiliates.  Wells Fargo (and each successor Administrative Agent) has the same rights and powers under the Loan Documents as any other Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” includes Wells Fargo in its individual capacity.  Wells Fargo (and each successor Administrative Agent) and its Affiliates may accept deposits from, lend money to and generally engage in any kind of banking, trust or other business with Borrower, any Subsidiary thereof, or any Affiliate of Borrower or any Subsidiary thereof, as if it were not the Administrative Agent and without any duty to account therefor to the Lenders.  Wells Fargo (and each successor Administrative Agent) need not account to any other Lender for any monies received by it for reimbursement of its costs and expenses as Administrative Agent hereunder, or (subject to Section 11.10) for any monies received by it in its capacity as a Lender hereunder.  The Administrative Agent shall not be deemed to hold a fiduciary relationship with any Lender and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Administrative Agent.

10.3    Proportionate Interest in any Collateral.  The Administrative Agent, on behalf of all the Lenders, shall hold in accordance with the Loan Documents all items of collateral (if any) or interests therein received or held by the Administrative Agent.  Subject to the Administrative Agent’s and the Lenders’ rights to reimbursement for their costs and expenses hereunder (including reasonable attorneys’ fees and disbursements and other professional services and the reasonably allocated costs of attorneys employed by the Administrative Agent or a Lender) and subject to the application of payments in accordance with Section 9.2(d), each Lender shall have an interest in the Lenders’ interest in such collateral or interests therein in the same proportions that the aggregate Obligations owed such 

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Lender under the Loan Documents bear to the aggregate Obligations owed under the Loan Documents to all the Lenders, without priority or preference among the Lenders.

10.4    Lenders’ Credit Decisions.  Each Lender agrees that it has, independently and without reliance upon the Administrative Agent, any other Lender or the directors, officers, agents, employees or attorneys of the Administrative Agent or of any other Lender, and instead in reliance upon information supplied to it by or on behalf of Borrower and upon such other information as it has deemed appropriate, made its own independent credit analysis and decision to enter into this Agreement.  Each Lender also agrees that it shall, independently and without reliance upon the Administrative Agent, any other Lender or the directors, officers, agents, employees or attorneys of the Administrative Agent or of any other Lender, continue to make its own independent credit analyses and decisions in acting or not acting under the Loan Documents.

10.5    Action by Administrative Agent.

(a)    The Administrative Agent may assume that no Default has occurred and is continuing, unless the Administrative Agent (or the Lender that is then the Administrative Agent) has received notice from Borrower stating the nature of the Default or has received notice from a Lender stating the nature of the Default and that such Lender considers the Default to have occurred and to be continuing.

(b)    The Administrative Agent has only those obligations under the Loan Documents as are expressly set forth therein.

(c)    Except for any obligation expressly set forth in the Loan Documents and as long as the Administrative Agent may assume that no Event of Default has occurred and is continuing, the Administrative Agent may, but shall not be required to, exercise its discretion to act or not act, except that the Administrative Agent shall be required to act or not act upon the instructions of the Requisite Lenders (or of all the Lenders, to the extent required by Section 11.2) and those instructions shall be binding upon the Administrative Agent and all the Lenders, provided that the Administrative Agent shall not be required to act or not act if to do so would be contrary to any Loan Document or to applicable Law or would result, in the reasonable judgment of the Administrative Agent, in substantial risk of liability to the Administrative Agent.

(d)    If the Administrative Agent has received a notice specified in clause (a), the Administrative Agent shall immediately give notice thereof to the Lenders and shall act or not act upon the instructions of the Requisite Lenders (or of all the Lenders, to the extent required by Section 11.2), provided that the Administrative Agent shall not be required to act or not act if to do so would be contrary to any Loan Document or to applicable Law or would result, in the reasonable judgment of the Administrative Agent, in substantial risk of liability to the Administrative Agent, and except that if the Requisite Lenders (or all the Lenders, if required under Section 11.2) fail, for five (5) Banking Days after the receipt of notice from the Administrative Agent, to instruct the Administrative Agent, then the Administrative Agent, in its sole discretion, may act or not act as it deems advisable for the protection of the interests of the Lenders.

(e)    The Administrative Agent shall have no liability to any Lender for acting, or not acting, as instructed by the Requisite Lenders (or all the Lenders, if required under Section 11.2), notwithstanding any other provision hereof.

10.6    Liability of Administrative Agent.  Neither the Administrative Agent nor any of its directors, officers, agents, employees or attorneys shall be liable for any action taken or not taken by them under or in connection with the Loan Documents, except for their own gross negligence or willful misconduct.  Without limitation on the foregoing, the Administrative Agent and its directors, officers, agents, employees and attorneys:

(a)    May treat the payee of any Note as the holder thereof until the Administrative Agent receives notice of the assignment or transfer thereof, in form satisfactory to the Administrative Agent, signed by the payee, and may treat each Lender as the owner of that Lender’s interest in the Obligations for all purposes of this Agreement until the Administrative Agent receives notice of the assignment or transfer thereof, in form satisfactory to the Administrative Agent, signed by that Lender;

(b)    May consult with legal counsel (including in-house legal counsel), accountants (including in-house accountants) and other professionals or experts selected by it, or with legal counsel, accountants or other professionals or experts for Borrower or any Subsidiary of Borrower and/or any of their Affiliates or the Lenders, and shall not be liable for any action taken or not taken by it in good faith in accordance with any advice of such legal counsel, accountants or other professionals or experts;

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(c)    Shall not be responsible to any Lender for any statement, warranty or representation made in any of the Loan Documents or in any notice, certificate, report, request or other statement (written or oral) given or made in connection with any of the Loan Documents;

(d)    Except to the extent expressly set forth in the Loan Documents, shall have no duty to ask or inquire as to the performance or observance by Borrower of any of the terms, conditions or covenants of any of the Loan Documents or to inspect any Property, books or records of Borrower or any Subsidiary of Borrower;

(e)    Will not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, effectiveness, sufficiency or value of any Loan Document, any other instrument or writing furnished pursuant thereto or in connection therewith;

(f)    Will not incur any liability by acting or not acting in reliance upon any Loan Document, notice, consent, certificate, statement, request or other instrument or writing believed in good faith by it to be genuine and signed or sent by the proper party or parties; and

(g)    Will not incur any liability for any arithmetical error in computing any amount paid or payable by Borrower or paid or payable to or received or receivable from any Lender under any Loan Document, including principal, interest, commitment fees, Advances and other amounts; provided that, promptly upon discovery of such an error in computation, the Administrative Agent, the Lenders and (to the extent applicable) Borrower shall make such adjustments as are necessary to correct such error and to restore the parties to the position that they would have occupied had the error not occurred.

10.7    Indemnification.  Each Lender shall, ratably in accordance with its Pro Rata Share of all of the then applicable Commitments (if any of the Commitments are then in effect) and/or in accordance with its proportion of the aggregate Indebtedness then evidenced by the Notes (if all of the Commitments have then been terminated), indemnify and hold the Administrative Agent and its directors, officers, agents, employees and attorneys harmless against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including reasonable attorneys’ fees and disbursements and allocated costs of attorneys employed by the Administrative Agent) that may be imposed on, incurred by or asserted against it or them in any way relating to or arising out of the Loan Documents (other than losses incurred by reason of the failure of Borrower to pay the Indebtedness represented by the Notes) or any action taken or not taken by it as Administrative Agent thereunder, except such as result from its own gross negligence or willful misconduct.  Without limitation on the foregoing, each Lender shall reimburse the Administrative Agent upon demand for that Lender’s Pro Rata Share of any out-of-pocket cost or expense incurred by the Administrative Agent in connection with the negotiation, preparation, execution, delivery, amendment, waiver, restructuring, reorganization (including a bankruptcy reorganization), enforcement or attempted enforcement of the Loan Documents, to the extent that Borrower or any other Party are required by Section 11.3 to pay that cost or expense but fails to do so upon demand.  Nothing in this Section 10.7 shall entitle the Administrative Agent or any indemnitee referred to above to recover any amount from the Lenders if and to the extent that such amount has theretofore been recovered from Borrower.  To the extent that the Administrative Agent or any indemnitee referred to above is later reimbursed such amount by Borrower, it shall return the amounts paid to it by the Lenders in respect of such amount.

10.8    Successor Administrative Agent.  The Administrative Agent may, and at the request of the Requisite Lenders shall, resign as Administrative Agent upon reasonable notice to the Lenders and Borrower effective upon acceptance of appointment by a successor Administrative Agent.  If the Administrative Agent shall resign as Administrative Agent under this Agreement, the Requisite Lenders shall appoint from among the Lenders a successor Administrative Agent for the Lenders, which successor Administrative Agent shall be approved by Borrower (and such approval shall not be unreasonably withheld or delayed).  If no successor Administrative Agent is appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and Borrower, a successor Administrative Agent from among the Lenders.  Upon the acceptance of its appointment as successor Administrative Agent hereunder, such successor Administrative Agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term “Administrative Agent” shall mean such successor Administrative Agent and the retiring Administrative Agent’s appointment, powers and duties as Administrative Agent shall be terminated.  After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Article 10, and Sections 11.3, 11.11 and 11.21, shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.  Notwithstanding the foregoing, if no successor Administrative Agent has accepted appointment as Administrative Agent by the date which is thirty (30) days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Requisite Lenders appoint a successor Administrative Agent as provided for above.

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10.9    No Obligations of Borrower.  Nothing contained in this Article 10 shall be deemed to impose upon Borrower any obligation in respect of the due and punctual performance by the Administrative Agent of its obligations to the Lenders under any provision of this Agreement, and Borrower shall have no liability to the Administrative Agent or any of the Lenders in respect of any failure by the Administrative Agent or any Lender to perform any of its obligations to the Administrative Agent or the Lenders under this Agreement.  Without limiting the generality of the foregoing, where any provision of this Agreement relating to the payment of any amounts due and owing under the Loan Documents provides that such payments shall be made by Borrower to the Administrative Agent for the account of the Lenders, Borrower’s obligations to the Lenders in respect of such payments shall be deemed to be satisfied upon the making of such payments to the Administrative Agent in the manner provided by this Agreement.  In addition, Borrower may rely on a written statement by the Administrative Agent to the effect that it has obtained the written consent of the Requisite Lenders or all of the Lenders, as applicable under Section 11.2, in connection with a waiver, amendment, consent, approval or other action by the Lenders hereunder, and shall have no obligation to verify or confirm the same.

Article 11.
MISCELLANEOUS

11.1    Cumulative Remedies; No Waiver.  The rights, powers, privileges and remedies of the Administrative Agent and the Lenders provided herein or in any Note or other Loan Document are cumulative and not exclusive of any right, power, privilege or remedy provided by Law or equity.  No failure or delay on the part of the Administrative Agent or any Lender in exercising any right, power, privilege or remedy may be, or may be deemed to be, a waiver thereof; nor may any single or partial exercise of any right, power, privilege or remedy preclude any other or further exercise of the same or any other right, power, privilege or remedy.  The terms and conditions of Article 8 hereof are inserted for the sole benefit of the Administrative Agent and the Lenders; the same may be waived in whole or in part, with or without terms or conditions, in respect of any Borrowing without prejudicing the Administrative Agent’s or the Lenders’ rights to assert them in whole or in part in respect of any other Borrowing.

11.2    Amendments; Consents.  No amendment, modification, supplement, extension, termination or waiver of any provision of this Agreement or any other Loan Document, no approval or consent thereunder, and no consent to any departure by Borrower or any other Party therefrom, may in any event be effective unless in writing signed by the Administrative Agent with the written approval of the Requisite Lenders (and, in the case of any amendment, modification or supplement of or to any Loan Document to which Borrower is a Party, signed by Borrower, and, in the case of any amendment, modification or supplement to Article 10, signed by the Administrative Agent), and then only in the specific instance and for the specific purpose given; and, without the approval in writing of all the Lenders, no amendment, modification, supplement, termination, waiver or consent may be effective:

(a)    To amend or modify the principal of, or the amount of principal, principal prepayments or the rate of interest payable on, any Note, or the amount of the Revolving Facility, or the Pro Rata Share of any Lender or the amount of any commitment fee payable to any Lender, or any other fee or amount payable to any Lender (in its capacity as a Lender) under the Loan Documents or to waive an Event of Default consisting of the failure of Borrower to pay when due principal, interest or any fee, or to provide for additional extensions of credit to Borrower by the Lenders pursuant to the Loan Documents;

(b)    To postpone any date fixed for any payment of principal of, prepayment of principal of or any installment of interest on, any Note or any installment of any fee, or to extend the term of the Revolving Facility;

(c)    To amend the provisions of the definition of “Requisite Lenders” or “Maturity Date”;

(d)    To amend or waive Article 8 or this Section 11.2; or

(e)    To amend any provision of this Agreement that expressly requires the consent or approval of all the Lenders.

Any amendment, modification, supplement, termination, waiver or consent pursuant to this Section 11.2 shall apply equally to, and shall be binding upon, all the Lenders and the Administrative Agent.

11.3    Costs and Expenses.  Borrower agrees to pay within five (5) Banking Days after demand, accompanied by an invoice therefor, all reasonable, out-of-pocket expenses (except in the case of the Administrative Agent’s allocated in-house counsel costs described below, which shall not be required to be “out-of-pocket”) of the Administrative Agent (including the reasonable fees and out-of-pocket expenses of counsel to the Administrative Agent (including reasonable allocated costs of in-house counsel employed by the Administrative Agent) and of local counsel, if any, who may be retained by counsel to the Administrative Agent) in connection with:

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(a)    The negotiation, preparation, execution and delivery of this Agreement and of each other Loan Document, including schedules and exhibits, and any amendments, waivers, consents, supplements or other modifications to this Agreement or any other Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby (or thereby) are consummated, provided that, Borrower’s maximum liability for fees and expenses of counsel to the Administrative Agent in connection with the Closing Date shall not exceed $50,000;

(b)    The preparation and review of the form of any document or instrument relevant to this Agreement or any other Loan Document; and

(c)    The preparation of any information or response required with respect to any investigative request or inquiry, approval, findings of suitability or any other response or communication involving a Governmental Agency arising out of this Agreement, any other Loan Document or any Obligation evidenced by the Loan Documents or the participation in any public or investigatory hearing or meeting.

Borrower further agrees to pay, and to save the Administrative Agent, the Issuing Lender and the Lenders harmless from all liability for, any stamp and similar taxes that may be payable in connection with the execution or delivery of this Agreement, the credit extensions made hereunder, or the issuance of the Notes, the Letters of Credit or any other Loan Document.  Borrower also agrees to reimburse the Administrative Agent and, after the occurrence and during the continuance of an Event of Default, the Issuing Lender and each Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys’ fees and legal expenses of counsel and fees and expenses of consultants to the Administrative Agent, the Issuing Lender and the Lenders) incurred by the Administrative Agent, the Issuing Lender or such Lenders in connection with (i) the negotiation of any restructuring or “work-out” with Borrower whether or not consummated, of any Obligations, (ii) the enforcement or attempted enforcement of any Obligations and any matter related thereto and (iii) any bankruptcy of Borrower or any of its Subsidiaries.  Any amount payable to the Administrative Agent or any Lender under this Section 11.3 shall bear interest from the fifth Banking Day following the date of demand, if not then paid, for payment at the Default Rate.

11.4    Nature of Lenders’ Obligations.  The obligations of the Lenders hereunder are several and not joint or joint and several.  Nothing contained in this Agreement or any other Loan Document and no action taken by the Administrative Agent or the Lenders or any of them pursuant hereto or thereto may, or may be deemed to, make the Lenders a partnership, an association, a joint venture or other entity, either among themselves or with  Borrower or any Subsidiary or Affiliate of Borrower.  A default by any Lender will not increase the Commitment of any other Lender or the Pro Rata Share of the Revolving Facility attributable to any other Lender.  Any Lender not in default may, if it desires, assume (in such proportion as the nondefaulting Lenders agree) the obligations of any Lender in default, but no Lender is obligated to do so.

11.5    Survival of Representations and Warranties.  All representations and warranties contained herein or in any other Loan Document, or in any certificate or other writing delivered by or on behalf of any one or more of the Parties to any Loan Document, will survive the making of the Advances hereunder and the execution and delivery of the Notes, and have been or will be relied upon by the Administrative Agent and each Lender, notwithstanding any investigation made by the Administrative Agent or any Lender or on their behalf.

11.6    Notices.  (a)  Except as otherwise expressly provided in the Loan Documents, all notices, requests, demands, directions and other communications provided for hereunder or under any other Loan Document must be in writing and must be mailed,  telecopied, dispatched by commercial courier or delivered to the appropriate party at the address set forth on the signature pages of this Agreement or other applicable Loan Document or, as to any party to any Loan Document, at any other address as may be designated by it in a written notice sent to all other parties to such Loan Document in accordance with this Section.  Except as otherwise expressly provided in any Loan Document, if any notice, request, demand, direction or other communication required or permitted by any Loan Document is given by mail it will be effective on the earlier of receipt or the fourth Banking Day after deposit in the United States mail with first class or airmail postage prepaid; if given by telecopier, when sent; if dispatched by commercial courier, on the scheduled delivery date; or if given by personal delivery, when delivered.

(b)  Notwithstanding the foregoing, Borrower agrees that Administrative Agent may make any material delivered by Borrower to Administrative Agent, as well as any amendments, waivers, consents and other written information, documents, instruments and other materials relating to Borrower, any of its Subsidiaries, or any other materials or matters relating to the Loan Documents or any of the transactions contemplated hereby that Administrative Agent is required or authorized pursuant to the terms hereof or of any Loan Document to provide to Lenders (collectively, the “Communications”), available to Lenders by posting such notices on a Platform.  Borrower acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) a Platform is provided “as is” and “as available” and (iii) neither 

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Administrative Agent nor any of its Affiliates warrants the accuracy, completeness, timeliness, sufficiency, or sequencing of the Communications posted on a Platform.  Administrative Agent and its Affiliates expressly disclaim with respect to a Platform any liability for errors in transmission, incorrect or incomplete downloading, delays in posting or delivery, or problems accessing the Communications posted on such Platform and any liability for any losses, costs, expenses or liabilities that may be suffered or incurred in connection with such Platform.  No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by Administrative Agent or any of its Affiliates in connection with any Platform.

(c)  Each Lender agrees that notice to it (as provided in the next sentence) specifying that any Communication has been posted to a Platform shall for purposes of this Agreement constitute effective delivery to such Lender of such information, documents or other materials comprising such Communication.  Each Lender agrees (i) to notify, on or before the date such Lender becomes a party to this Agreement, Administrative Agent in writing of such Lender’s e-mail address to which a notice may be sent (and from time to time thereafter to ensure that Administrative Agent has on record an effective e-mail address for such Lender) and (ii) that any notice may be sent to such e-mail address.

11.7    Execution of Loan Documents.  Unless the Administrative Agent otherwise specifies with respect to any Loan Document, (a) this Agreement and any other Loan Document may be executed in any number of counterparts and any party hereto or thereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Agreement or any other Loan Document, as the case may be, when taken together will be deemed to be but one and the same instrument and (b) execution of any such counterpart may be evidenced by a telecopier transmission of the signature of such party.  The execution of this Agreement or any other Loan Document by any party hereto or thereto will not become effective until counterparts hereof or thereof, as the case may be, have been executed by all the parties hereto or thereto.

11.8    Binding Effect; Assignment.

(a)    This Agreement and the other Loan Documents to which Borrower is a Party will be binding upon and inure to the benefit of Borrower, the Administrative Agent, each of the Lenders, and their respective successors and assigns, except that Borrower may not assign its rights hereunder or thereunder or any interest herein or therein without the prior written consent of all the Lenders.  Each Lender represents that it is not acquiring its Note with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (subject to any requirement that disposition of such Note must be within the control of such Lender).  Any Lender may at any time pledge its Note or any other instrument evidencing its rights as a Lender under this Agreement to a Federal Reserve Bank, but no such pledge shall release that Lender from its obligations hereunder or grant to such Federal Reserve Bank the rights of a Lender hereunder absent foreclosure of such pledge.

(b)    From time to time following the Closing Date, each Lender may assign to one or more Eligible Assignees all or any portion of its rights and obligations under this Agreement (including all or a portion of its Commitment, the Advances owing to it and the Note or Notes held by it); provided that, subject to subsection (f) below, (i) such Eligible Assignee, if not then a Lender or an Affiliate of the assigning Lender, shall be approved by the Administrative Agent and Borrower (neither of which approvals shall be unreasonably withheld or delayed), (ii) such assignment shall be evidenced by an Assignment and Acceptance, a copy of which shall be furnished to the Administrative Agent as hereinbelow provided, (iii) except in the case of an assignment to an Affiliate of the assigning Lender, to another Lender or of the entire remaining rights and obligations of the assigning Lender under this Agreement, the assignment shall not assign a portion of such assigning Lender’s Commitments and/or Advances owing to such assigning Lender that is equivalent to less than $3,000,000, and (iv) the effective date of any such assignment shall be as specified in the Assignment and Acceptance, but not earlier than the date which is five (5) Banking Days after the date the Administrative Agent has received the Assignment and Acceptance.  Upon the effective date of such Assignment and Acceptance, the Eligible Assignee named therein shall be a Lender for all purposes of this Agreement, with the Commitments and/or Advances therein set forth and, to the extent of such Commitments and/or Advances, the assigning Lender shall be released from its further obligations under this Agreement.  Borrower agrees that it shall execute and deliver (against delivery by the assigning Lender to Borrower of such Lender’s Notes) to such assignee Lender, Notes evidencing that assignee Lender’s Commitments and/or Advances, and to the assigning Lender, Notes evidencing the remaining balance of the Commitments and/or Advances retained by the assigning Lender.

(c)    By executing and delivering an Assignment and Acceptance, the Eligible Assignee thereunder acknowledges and agrees that: (i) other than the representation and warranty that it is the legal and beneficial owner of the rights and obligations hereunder being assigned thereby free and clear of any adverse claim, the assigning Lender has made no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness or sufficiency of this 

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Agreement or any other Loan Document; (ii) the assigning Lender has made no representation or warranty and assumes no responsibility with respect to the financial condition of Borrower or the performance by Borrower of the Obligations; (iii) it has received a copy of this Agreement, together with copies of the most recent financial statements delivered pursuant to Section 7.1 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) it will, independently and without reliance upon the Administrative Agent or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) it appoints and authorizes the Administrative Agent to take such action and to exercise such powers under this Agreement as are delegated to the Administrative Agent by this Agreement; and (vi) it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

(d)    The Administrative Agent shall maintain at the Administrative Agent’s Office a copy of each Assignment and Acceptance delivered to it and a register (the “Register”) of the names and address of each of the Lenders and the Pro Rata Share of the Commitments held by each Lender, giving effect to each Assignment and Acceptance.  The Register shall be available during normal business hours for inspection by Borrower or any Lender upon reasonable prior notice to the Administrative Agent.  After receipt of a completed Assignment and Acceptance executed by any Lender and an Eligible Assignee, and receipt of an assignment fee of $3,500 from such Lender or Eligible Assignee, the Administrative Agent shall, promptly following the effective date thereof, provide to Borrower and the Lenders a revised Schedule 1.1 giving effect thereto.  Borrower, the Administrative Agent and the Lenders shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the Pro Rata Shares of the Revolving Facility listed therein for all purposes hereof, and no assignment or transfer of any Lender’s rights and obligations hereunder shall be effective, in each case unless and until an Assignment and Acceptance effecting the assignment or transfer thereof shall have been accepted by the Administrative Agent and recorded in the Register as provided above.  Prior to such recordation, all amounts owed with respect to the applicable Pro Rata Share of the Revolving Facility shall be owed to the Lender listed in the Register as the owner thereof, and any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Pro Rata Share of the Revolving Facility.

(e)    Each Lender may from time to time grant participations to one or more banks or other financial institutions in or to all or a portion of its rights and/or obligations under this Agreement; provided, however, that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the participating banks or other financial institutions shall not be a Lender hereunder for any purpose except, if the participation agreement so provides, for the purposes of Sections 3.5, 3.6, 11.11 and 11.21 but only to the extent that the cost of such benefits to Borrower does not exceed the cost which Borrower would have incurred in respect of the Lender granting such participation absent the participation, (iv) Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, (v) the participation interest shall be expressed as a percentage of the granting Lender’s Pro Rata Share of the Revolving Facility as it then exists and shall not restrict an increase in the Revolving Facility (or the aggregate Commitments pertaining thereto), or in the granting Lender’s rights and obligations hereunder, so long as the amount of the participation interest is not affected thereby and (vi) the consent of the holder of such participation interest shall not be required for amendments or waivers of provisions of the Loan Documents other than those which (A) extend any Amortization Date, any applicable Maturity Date or any other date upon which any payment of money is due to the Lenders, (B) reduce the rate of interest on the Notes, any fee or any other monetary amount payable to the Lenders, (C) reduce the amount of any installment of principal due under the Notes, or (D) release any Guarantor from its Guaranty.

(f)    Borrower agrees that upon the occurrence and during the continuance of any Event of Default, each Lender shall be entitled to assign its rights hereunder and under the Loan Documents, or grant participation interests in its rights under this Agreement and the Loan Documents, to any Person, in whole or in any part thereof, notwithstanding any provisions contained herein (including those set forth in subsection (b) above) or in any other Loan Document to the contrary, except that, other than (i) assignments by a Lender to an Affiliate of such Lender or to another Lender or (ii) pledges described in the last sentence of subsection (a) above,  no assignment shall be made without the approval of the Administrative Agent.

11.9    Right of Setoff.  If an Event of Default has occurred and is continuing, the Administrative Agent or any Lender (but in each case only with the consent of the Requisite Lenders) may exercise its rights under applicable Laws and, to the extent permitted by applicable Laws, apply any funds in any deposit account maintained with it by Borrower and/or any Property of Borrower in its possession against the Obligations.

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11.10    Sharing of Setoffs.  Each Lender severally agrees that if it, through the exercise of any right of setoff, banker’s lien or counterclaim against Borrower, or otherwise, receives payment of the Obligations held by it that is ratably more than any other Lender, through any means, receives in payment of the Obligations held by that Lender, then, subject to applicable Laws:  (a) the Lender exercising the right of setoff, banker’s lien or counterclaim or otherwise receiving such payment shall purchase, and shall be deemed to have simultaneously purchased, from each of the other Lenders a participation in the Obligations held by the other Lenders and shall pay to the other Lenders a purchase price in an amount so that the share of the Obligations held by each Lender after the exercise of the right of setoff, banker’s lien or counterclaim or receipt of payment shall be in the same proportion that existed prior to the exercise of the right of setoff, banker’s lien or counterclaim or receipt of payment; and (b) such other adjustments and purchases of participations shall be made from time to time as shall be equitable to ensure that all of the Lenders share any payment obtained in respect of the Obligations ratably in accordance with each Lender’s share of the Obligations immediately prior to, and without taking into account, the payment; provided that, if all or any portion of a disproportionate payment obtained as a result of the exercise of the right of setoff, banker’s lien, counterclaim or otherwise is thereafter recovered from the purchasing Lender by Borrower or any Person claiming through or succeeding to the rights of Borrower, the purchase of a participation shall be rescinded and the purchase price thereof shall be restored to the extent of the recovery, but without interest.  Each Lender that purchases a participation in the Obligations pursuant to this Section 11.10 shall from and after the purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased.  Borrower expressly consents to the foregoing arrangements and agrees that any Lender holding a participation in an Obligation so purchased pursuant to this Section 11.10 may exercise any and all rights of setoff, banker’s lien or counterclaim with respect to the participation as fully as if the Lender were the original owner of the Obligation purchased.

11.11    Indemnity by Borrower.  Borrower agrees to indemnify, save and hold harmless the Administrative Agent and each Lender and their respective directors, officers, agents, attorneys and employees (collectively the “Indemnitees”) from and against:  (a) any and all claims, demands, actions or causes of action (except a claim, demand, action, or cause of action for any amount excluded from the definition of “Taxes” in Section 3.10(e)) if the claim, demand, action or cause of action arises out of or relates to (i) any act or omission (or alleged act or omission) of Borrower, any Subsidiary or other Affiliate of Borrower or any partner, officer, director, stockholder,  or other equity interest holder of Borrower relating to the Revolving Facility, (ii) the use or contemplated use of proceeds of any Borrowing, (iii) the relationship of Borrower and the Lenders under this Agreement, or (iv) the Loan Documents or the Revolving Facility in any other manner or aspect; (b) any administrative or investigative proceeding by any Governmental Agency arising out of or related to a claim, demand, action or cause of action described in clause (a) above; and (c) any and all liabilities, losses, reasonable costs or expenses (including reasonable attorneys’ fees and the reasonably allocated costs of attorneys employed by any Indemnitee and disbursements of such attorneys and other professional services) that any Indemnitee suffers or incurs as a result of the assertion of any foregoing claim, demand, action or cause of action; provided that no Indemnitee shall be entitled to indemnification for any liability, loss, cost or expense caused by its own gross negligence or willful misconduct or for any liability, loss, cost or expense asserted against it by another Indemnitee.  If any claim, demand, action or cause of action is asserted against any Indemnitee, such Indemnitee shall promptly notify Borrower, but the failure to so promptly notify Borrower shall not affect Borrower’s obligations under this Section unless such failure materially prejudices Borrower’s right to participate in the contest of such claim, demand, action or cause of action, as hereinafter provided.  Such Indemnitee may (and shall, if requested by Borrower in writing) contest the validity, applicability and amount of such claim, demand, action or cause of action and shall permit Borrower to participate in such contest.  Any Indemnitee that proposes to settle or compromise any claim or proceeding for which Borrower may be liable for payment of indemnity hereunder shall give Borrower written notice of the terms of such proposed settlement or compromise reasonably in advance of settling or compromising such claim or proceeding and shall obtain Borrower’s prior consent (which shall not be unreasonably withheld or delayed).  In connection with any claim, demand, action or cause of action covered by this Section 11.11 against more than one Indemnitee, all such Indemnitees shall be represented by the same legal counsel (which may be a law firm engaged by the Indemnitees or attorneys employed by an Indemnitee or a combination of the foregoing) selected by the Indemnitees, provided, that if such legal counsel determines in good faith that representing all such Indemnitees would or could result in a conflict of interest under Laws or ethical principles applicable to such legal counsel or that a defense or counterclaim is available to an Indemnitee that is not available to all such Indemnitees, then to the extent reasonably necessary to avoid such a conflict of interest or to permit unqualified assertion of such a defense or counterclaim, each affected Indemnitee shall be entitled to separate representation by legal counsel selected by that Indemnitee, with all such legal counsel using reasonable efforts to avoid unnecessary duplication of effort by counsel for all Indemnitees; and further provided that the Administrative Agent (as an Indemnitee) shall at all times be entitled to representation by separate legal counsel (which may be a law firm or attorneys employed by the Administrative Agent or a combination of the foregoing).  Any obligation or liability of Borrower to any Indemnitee under this Section 11.11 shall survive the expiration or termination of this Agreement and the repayment of all Borrowings and the payment and performance of all other Obligations owed to the Lenders.

58

11.12    Nonliability of the Lenders.  Borrower acknowledges and agrees that:

(a)    Any inspections of any Property of Borrower or any Subsidiary of Borrower made by or through the Administrative Agent or the Lenders are for purposes of administration of the Revolving Facility only and Borrower is not entitled to rely upon the same (whether or not such inspections are at the expense of Borrower);

(b)    By accepting or approving anything required to be observed, performed, fulfilled or given to the Administrative Agent or the Lenders pursuant to the Loan Documents, neither the Administrative Agent nor the Lenders shall be deemed to have warranted or represented the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision or condition thereof, and such acceptance or approval thereof shall not constitute a warranty or representation to anyone with respect thereto by the Administrative Agent or the Lenders;

(c)    The relationship between Borrower and the Administrative Agent and the Lenders is, and shall at all times remain, solely that of borrower and lenders; neither the Administrative Agent nor the Lenders shall under any circumstance be construed to be partners or joint venturers of Borrower, any Subsidiary of Borrower or any of their respective Affiliates; neither the Administrative Agent nor the Lenders shall under any circumstance be deemed to be in a relationship of confidence or trust or a fiduciary relationship with Borrower, any Subsidiary of Borrower or any of their respective Affiliates, or to owe any fiduciary duty to Borrower, any Subsidiary of Borrower or any of their respective Affiliates; neither the Administrative Agent nor the Lenders undertake or assume any responsibility or duty to Borrower, any Subsidiary of Borrower or any of their respective Affiliates to select, review, inspect, supervise, pass judgment upon or inform Borrower, any Subsidiary of Borrower or any of their respective Affiliates of any matter in connection with their Property or the operations of Borrower, any Subsidiary of Borrower or any of their respective Affiliates; Borrower, Subsidiary of Borrower and their respective Affiliates shall rely entirely upon their own judgment with respect to such matters; and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by the Administrative Agent or the Lenders in connection with such matters is solely for the protection of the Administrative Agent and the Lenders and neither Borrower nor any other Person is entitled to rely thereon; and

(d)    The Administrative Agent and the Lenders shall not be responsible or liable to any Person for any loss, damage, liability or claim of any kind relating to injury or death to Persons or damage to Property caused by the actions, inaction or negligence of Borrower, any Subsidiary of Borrower and/or any of their respective Affiliates and Borrower hereby indemnifies and holds the Administrative Agent and the Lenders harmless on the terms set forth in Section 11.11 from any such loss, damage, liability or claim.

11.13    No Third Parties Benefited.  This Agreement is made for the purpose of defining and setting forth certain obligations, rights and duties of Borrower, the Administrative Agent and the Lenders in connection with the Revolving Facility, and is made for the sole benefit of Borrower, the Administrative Agent and the Lenders, and the Administrative Agent’s and the Lenders’ successors and assigns.  Except as provided in Sections 11.8 and 11.11, no other Person shall have any rights of any nature hereunder or by reason hereof.

11.14    Confidentiality.  Each Lender agrees to hold any confidential information that it may receive from Borrower pursuant to this Agreement in confidence, except for disclosure:  (a) to other Lenders or Affiliates of a Lender that have agreed to keep such information confidential to the same extent as if they were a party hereto; (b) to legal counsel and accountants for Borrower, any Subsidiary of Borrower or any Lender; (c) to other professional advisors to Borrower or any Subsidiary of Borrower or any Lender, provided that the recipient has accepted such information subject to a confidentiality agreement substantially similar to this Section 11.14; (d) to regulatory officials having jurisdiction over that Lender; (e) as required by Law or legal process, provided that each Lender agrees to notify Borrower of any such disclosures unless prohibited by applicable Laws, or in connection with any legal proceeding to which that Lender and Borrower or any Subsidiary of Borrower are adverse parties; and (f) to another financial institution in connection with a disposition or proposed disposition to that financial institution of all or part of that Lender’s interests hereunder or a participation interest in its Note(s), provided that the recipient has accepted such information subject to a confidentiality agreement substantially similar to this Section 11.14.  For purposes of the foregoing, “confidential information” shall mean any information respecting Borrower or any Subsidiary of Borrower reasonably considered by Borrower to be confidential, other than (i) information previously filed with any Governmental Agency and available to the public, (ii) information previously published in any public medium from a source other than, directly or indirectly, that Lender, and (iii) information previously disclosed by Borrower or such Subsidiary of Borrower to any Person not associated with Borrower or such Subsidiary of Borrower which does not owe a professional duty of confidentiality to Borrower or such Subsidiary of Borrower or which has not executed an appropriate confidentiality agreement with Borrower or such Subsidiary of Borrower.  Nothing in this Section shall be construed to create or give rise to any fiduciary duty on the part of the Administrative Agent or the Lenders to Borrower or any Subsidiary of Borrower.

59

11.15    Further Assurances.  Borrower shall, at its expense and without expense to the Lenders or the Administrative Agent, do, execute and deliver such further acts and documents as the Requisite Lenders or the Administrative Agent from time to time reasonably require for the assuring and confirming unto the Lenders or the Administrative Agent of the rights hereby created or intended now or hereafter so to be, or for carrying out the intention or facilitating the performance of the terms of any Loan Document.

11.16    Integration.  This Agreement, together with the other Loan Documents and the letter agreements referred to in Section 3.3, comprises the complete and integrated agreement of the parties on the subject matter hereof and supersedes all prior agreements, written or oral, on the subject matter hereof.  In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control and govern; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement.  Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof.

11.17    Governing Law.  EXCEPT TO THE EXTENT OTHERWISE PROVIDED THEREIN, EACH LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.  THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN A STATE OR FEDERAL COURT LOCATED IN THE STATE OF CALIFORNIA.  THE PARTIES EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN ANY SUCH COURT, AND THE PARTIES HEREBY WAIVE ANY OBJECTION THEY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION AND HEREBY CONSENT TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY ANY SUCH COURT.  FURTHERMORE, THE PARTIES HEREBY WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT THEY MAY HAVE TO ASSERT THE DOCTRINE OF “FORUM NON CONVENIENS” OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11.16.

11.18    Severability of Provisions.  Any provision in any Loan Document that is held to be inoperative, unenforceable or invalid as to any party or in any jurisdiction shall, as to that party or jurisdiction, be inoperative, unenforceable or invalid without affecting the remaining provisions or the operation, enforceability or validity of that provision as to any other party or in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable.

11.19    Headings.  Article and Section headings in this Agreement and the other Loan Documents are included for convenience of reference only and are not part of this Agreement or the other Loan Documents for any other purpose.

11.20    Time of the Essence.  Time is of the essence of the Loan Documents.

11.21    Foreign Lenders and Participants.  Each Lender, and each holder of a participation interest herein,  that is incorporated or otherwise organized under the Laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia shall deliver to Borrower (with a copy to the Administrative Agent), on or before the Closing Date (or on or before accepting an assignment or receiving a participation interest herein pursuant to Section 11.8, if applicable) two duly completed copies, signed by a Responsible Official, of  Form W-8BEN or W-8ECI (or other equivalent successor form) satisfactory to Borrower and the Administrative Agent that no withholding under the federal income tax laws is required with respect to such Person.  Thereafter and from time to time, each such Person shall (a) promptly submit to Borrower (with a copy to the Administrative Agent), such additional duly completed and signed copies of such form (or such successor form(s) as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and regulations to avoid, or such evidence as is satisfactory to Borrower and the Administrative Agent of any available exemption from, United States withholding taxes in respect of all payments to be made to such Person by Borrower pursuant to this Agreement and (b) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Person, and as may be reasonably necessary (including the re-designation of its Eurodollar Lending Office, if any) to avoid any requirement of applicable Laws that Borrower make any deduction or withholding for taxes from amounts payable to such Person.  In the event that Borrower or the Administrative Agent becomes aware that a participation has been granted pursuant to Section 11.8(e) to a financial institution that is incorporated or otherwise organized under the Laws of a jurisdiction other than the United States of America, any State thereof or the District of Columbia, then, upon request made by Borrower or the Administrative Agent to the Lender that granted such participation, such Lender shall cause such participant financial institution to deliver the same documents and information to Borrower and the Administrative Agent as would be required under this Section if such financial institution were a Lender.

60

11.22    Waiver of Right to Trial by Jury.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

11.23    Purported Oral Amendments.  BORROWER EXPRESSLY ACKNOWLEDGES THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2.  BORROWER AGREES THAT IT WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE ADMINISTRATIVE AGENT OR ANY LENDER THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

11.24    Replacement of Lender.  If any Lender does not consent to a requested waiver or amendment hereof that is consented to by the Requisite Lenders, then Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.8), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(a)    Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 11.8(d),

(b)    such Lender shall have received payment of an amount equal to the outstanding principal of its Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts); and

(c)    such assignment does not conflict with applicable Laws.

No Lender shall be required to make such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling Borrower to require such assignment and delegation cease to apply.

11.25    USA Patriot Act Notice.  Each Lender that is subject to the Patriot Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Patriot Act.

[THIS SPACE INTENTIONALLY LEFT BLANK - 
SIGNATURE PAGES TO FOLLOW]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

	
					
	 
	 
	AMERICAN STATES WATER COMPANY,

	 
	 
	a California corporation

	 
	 
	 

	 
	 
	 
	 

	 
	 
	By
	 
	/s/ Floyd E. Wicks

	 
	 
	 
	Name:
	Floyd E. Wicks

	 
	 
	 
	Title:
	President and Chief Executive Officer

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	By
	 
	/s/ Robert J. Sprowls

	 
	 
	 
	Name:
	Robert J. Sprowls

	 
	 
	 
	Title:
	Sr. Vice President-Finance, Chief Financial Officer, Treasurer and Corporate Secretary

	 
	 
	 

	 
	 
	 

	 
	 
	Address for Borrower:

	 
	 
	 

	 
	 
	630 East Foothill Boulevard

	 
	 
	San Dimas, California 91773-9016

	 
	 
	Attn: Robert J. Sprowls

	 
	 
	Telecopier: (909) 394-1382

	 
	 
	Telephone: (909) 394-3600

	 
	 
	Website: http://www.aswater.com

	 
	 
	With a copy to:

	 
	 
	 

	 
	 
	American States Water Company

	 
	 
	630 East Foothill Boulevard

	 
	 
	San Dimas, California 91773-9016

	 
	 
	Attn: Eva Tang

	 
	 
	Telecopier:  (909) 394-1382

	 
	 
	Telephone:  (909) 394-3600

	
						
	 
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION, 
as Administrative Agent

	 
	 
	 

	 
	 
	 
	 

	 
	 
	By
	 
	/s/ Deborah Moore

	 
	 
	 
	Name:
	Deborah Moore

	 
	 
	 
	Title:
	Administrative Agent

	 
	 
	 

	 
	 
	 

	 
	 
	Address for notices to Administrative Agent for borrowings and payments:

	 
	 
	 

	 
	 
	Wells Fargo Bank, National Association

	 
	 
	201 Third Street, 8th Floor

	 
	 
	San Francisco, California 94103

	 
	 
	Attn: Deborah Moore

	 
	 
	Telecopier:
	 

	 
	 
	Telephone:
	 

	 
	 
	E-mail:
	mooredj@wellsfargo.com

	 
	 
	 

	 
	 
	With a copy to:

	 
	 
	 

	 
	 
	333 South Grand Avenue, Third Floor

	 
	 
	Los Angeles, California 90071

	 
	 
	Attn: Julie Saavedra

	 
	 
	Telecopier:
	 

	 
	 
	Telephone:
	 

	 
	 
	E-mail:
	saavedj@wellsfargo.com

	
						
	 
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION, 
as a Lender

	 
	 
	 

	 
	 
	 
	 

	 
	 
	By
	 
	/s/ John N. Cate

	 
	 
	 
	 
	John N. Cate

	 
	 
	 
	 
	Vice President

	 
	 
	 

	 
	 
	Address:

	 
	 
	 

	 
	 
	333 South Grand Avenue, Third Floor

	 
	 
	Los Angeles, California 90071

	 
	 
	Attn: American States Water Account Officer

	 
	 
	 

	 
	 
	Telecopier:
	 

	 
	 
	Telephone:
	 

	 
	 
	E-mail:
	john.n.cate@wellsfargo.com

	
						
	 
	 
	COBANK, ACB, 
as a Lender

	 
	 
	 

	 
	 
	 
	 

	 
	 
	By
	 
	/s/ David Dombirer

	 
	 
	 
	Name:
	David Dombirer

	 
	 
	 
	Title:
	Vice President

	 
	 
	 

	 
	 
	Address:

	 
	 
	 

	 
	 
	5500 South Quebec St.

	 
	 
	Greenwood Village, Colorado 80111

	 
	 
	Attn:   David Dombirer 
Vice President

	 
	 
	Telecopier:
	 

	 
	 
	Telephone:
	 

	 
	 
	E-mail:
	dombid@cobank.com

	
						
	 
	 
	UNION BANK OF CALIFORNIA, N.A.,

	 
	 
	as a Lender

	 
	 
	 

	 
	 
	 
	 

	 
	 
	By
	 
	/s/ Susan K. Johnson

	 
	 
	 
	Name:
	Susan K. Johnson

	 
	 
	 
	Title:
	Vice President

	 
	 
	 

	 
	 
	 

	 
	 
	Address:

	 
	 
	 

	 
	 
	Energy Capital Services

	 
	 
	445 South Figueroa St., 15th Floor

	 
	 
	Los Angeles, California 90071

	 
	 
	Attn:   Susan K. Johnson 
Vice President

	 
	 
	 

	 
	 
	Telecopier:
	 

	 
	 
	Telephone:
	 

	 
	 
	E-mail:
	susan.johnson@uboc.com

	
						
	 
	 
	COMERICA BANK,

	 
	 
	as a Lender

	 
	 
	 

	 
	 
	 
	 

	 
	 
	By
	 
	/s/ Elise Walker

	 
	 
	 
	Name:
	Elise Walker

	 
	 
	 
	Title:
	Vice President

	 
	 
	 

	 
	 
	Address:

	 
	 
	 

	 
	 
	611 Anton Blvd., MC 4462

	 
	 
	Costa Mesa, California 92626

	 
	 
	Attn: Elise Walker

	 
	 
	Telecopier:
	 

	 
	 
	Telephone:
	 

	 
	 
	E-mail:
	emwalker@comerica.com

	
						
	 
	 
	THE NORTHERN TRUST COMPANY,

	 
	 
	as a Lender

	 
	 
	 

	 
	 
	 
	 

	 
	 
	By
	 
	/s/ John E. Burda

	 
	 
	 
	Name:
	John E. Burda

	 
	 
	 
	Title:
	Vice President

	 
	 
	 

	 
	 
	Address:

	 
	 
	 

	 
	 
	50 S. LaSalle Street

	 
	 
	Chicago, Illinois 60675

	 
	 
	Attn:  John E. Burda

	 
	 
	Telecopier:
	 

	 
	 
	Telephone:
	 

	 
	 
	E-mail:
	John_Burda@notes.ntrs.com

SCHEDULE 1.1 
TO 
CREDIT AGREEMENT

LENDER COMMITMENTS/PRO RATA SHARES

	
							
	Lender
	 
	Pro Rata Share
	 
	Amount of 
Revolving Commitment
	 

	 
	 
	 
	 
	 
	 

	Wells Fargo Bank, National Association   
	 
	32.941176
	%
	$
	28,000,000.00
	 

	 
	 
	 
	 
	 
	 

	CoBank, ACB   
	 
	28.235294
	%
	$
	24,000,000.00
	 

	 
	 
	 
	 
	 
	 

	Union Bank of California, N.A.   
	 
	18.823529
	%
	$
	16,000,000.00
	 

	 
	 
	 
	 
	 
	 

	Comerica Bank   
	 
	14.117647
	%
	$
	12,000,000.00
	 

	 
	 
	 
	 
	 
	 

	The Northern Trust Company   
	 
	5.882353
	%
	$
	5,000,000.00
	 

	 
	 
	 
	 
	 
	 

	Total   
	 
	100
	%
	$
	85,000,000.00
	 

CONSENT, WAIVER AND OMNIBUS AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND RELATED LOAN DOCUMENTS

This Consent, Waiver and Omnibus Amendment to Amended and Restated Credit Agreement and Related Loan Documents (this “Agreement”), dated as of October 11, 2005, is entered into with reference to the Amended and Restated Credit Agreement (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) dated as of June 3, 2005, among American States Water Company, a California corporation (“Borrower”), each lender from time to time a party thereto (each a “Lender” and collectively, the “Lenders”) and Wells Fargo Bank, National Association, as Administrative Agent (in such capacity, the “Administrative Agent”) and Lead Arranger.  Capitalized terms not otherwise defined herein shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise indicated.

RECITALS

This Agreement is made with reference to the following facts:

A.    Pursuant to the terms of the Credit Agreement, the Lenders have made certain credit facilities available to Borrower.

B.    Southern California Water Company, a California corporation and wholly-owned Subsidiary of Borrower (“SCW”) has changed its name (the “Name Change”) to Golden State Water Company, a California corporation (“GSW”).

C.    Pursuant to the terms of that certain Note Purchase Agreement, dated as of October 11, 2005 (the “Note Purchase Agreement”), GSW desires to authorize, issue and sell to CoBank, ACB (“CoBank”), as purchaser, $40,000,000 aggregate principal amount of GSW’s 5.87% Senior Note due December 20, 2028 (the “GSW Note”).

D.    CoBank is a Lender under the Credit Agreement and an agricultural cooperative bank subject to regulation by the Farm Credit Administration.  In order to enter into the transactions contemplated by the Note Purchase Agreement, GSW will be required to, among other things, purchase non-voting participation certificates in CoBank (the “Participation Certificates”) in such amounts and at such times as CoBank may require in accordance with its bylaws and 2005 Capital Plan, each as in effect on the Effective Date (the “Maximum Certificate Purchase Amount”).  CoBank will have a statutory lien (the “Statutory Lien”) on all of the Participation Certificates purchased by GSW to secure GSW’s obligations under the GSW Note.  Transactions contemplated by the Purchase Agreement, the GSW Note, the Participation Certificates and the Statutory Lien are hereinafter referred to as the “Note Purchase Transactions”.

E.    Borrower and GSW now desire that the Lenders (i) amend the Credit Agreement and the other Loan Documents to reflect the Name Change and (ii) consent to the Note Purchase Transactions and waive the provisions of Sections 6.9, 6.10 and 6.14 of the Credit Agreement solely to the extent that such Sections would otherwise prohibit the Note Purchase Transactions.

F.    Subject to the terms and conditions set forth herein, the Lenders are willing to so amend the Loan Documents and so consent and waive such provisions of the Credit Agreement.

G.    Borrower, GSW and the Administrative Agent, acting with the consent of the  Lenders, hereby agree as follows:

Article 12.Omnibus Amendment to Credit Agreement and other the Loan Documents.  Each of the parties hereto hereby agrees that (a) any and all references to Southern California Water Company, a California corporation, or SCW contained in the Credit Agreement and each of the other Loan Documents shall constitute references to Golden State Water Company and GSW, respectively, (b) the definition of SCW is hereby deleted from the Credit Agreement and each of the Loan Documents where applicable and (c) the following definition is hereby added to the Credit Agreement and each of the other Loan Documents where applicable:.

“GSW” means Golden State Water Company, a California corporation, a wholly-owned Subsidiary of Borrower and the successor by name change to Southern California Water Company, a California corporation.

Article 13.Waiver and Consent.  Each of the Lenders hereby (a) consents to the terms of the Note Purchase Transactions as described in the Note Purchase Agreement and the Note, each as in effect as of the date hereof (collectively, the “Note Purchase Transaction Documents”) and (b) waives the provisions of Sections 6.9, 6.10 and 6.14 of the Credit Agreement solely to the extent that, absent such waiver, such provisions would prohibit the Note Purchase Transactions; provided, however, that  none of the waivers or consents contained herein shall permit, or be deemed to permit, GSW to purchase Participation Certificates in an aggregate amount which exceeds the Maximum Certificate Purchase Amount.  The waivers and consents set forth in this Agreement are one-time waivers only and shall be solely with respect to the Sections of the Credit Agreement and the limited transactions described in this Section 1.

Article 14.Effectiveness.  This Agreement shall become effective on the date each of the conditions set forth below shall have been satisfied (the “Effective Date”):

(a)    Documentation  The Administrative Agent shall have received each of the following in form and substance satisfactory to the Administrative Agent:

(i)  duly executed counterparts of this Amendment executed by the parties hereto;

(ii)  a Certificate of a Senior Officer of Borrower certifying that (A) each of the conditions to closing set forth in Section 3 of the  Note Purchase Agreement have been satisfied in accordance with their respective terms, (B) attached thereto are true, correct, complete and duly executed copies of (1) the Note Purchase Transaction Documents,  (2) the provisions of CoBank’s bylaws setting forth the requirement that  GSW purchase the Participation Certificates, (3) CoBank’s 2005 Capital Plan and (4) a copy of the amendment to the Amended and Restated Articles of Incorporation of SCW effecting the Name Change, which amendment shall be in full force and effect not later than 10 days following the Effective Date; and

(iii)  such other assurances, certificates, documents or consents related to the foregoing as the Administrative Agent or any Lender may reasonably request; and

(b)    Fees and Expenses.  Borrower shall have reimbursed Administrative Agent and the Lenders for all of their respective reasonable costs and expenses (including reasonable attorney’s fees and expenses) incurred in connection with the negotiation and drafting of this Agreement and the transaction contemplated hereby.

Article 15.Representations and Warranties.  Except (i) for representations and warranties which expressly speak as of particular date or are no longer true and correct as a result of a change permitted by the Credit Agreement or the other Loan Documents or (ii) as disclosed by Borrower and approved in writing by the Requisite Lenders, Borrower hereby represents and warrants that each representation and warranty made by Borrower in Article 4 of the Credit Agreement (other than Sections 4.4, 4.6 (first sentence), 4.9 and 4.16) are true and correct as of the date hereof as though such representations and warranties were made on and as of the date hereof.  Without in any way limiting the foregoing, Borrower represents and warrants to the Administrative Agent and the Lenders that no Default or Event of Default has occurred and remains continuing or will result from the waivers, consents or transactions set forth herein or contemplated hereby.

Article 16.Confirmation.  In all respects, the terms of the Credit Agreement and the other Loan Documents, in each case as amended, waived or consented to hereby or herein, are hereby confirmed.

[THIS SPACE INTENTIONALLY LEFT BLANK -  
SIGNATURE PAGE TO FOLLOW]

IN WITNESS WHEREOF, Borrower, GSW and the Administrative Agent, acting with the consent of the Lenders, have executed this Agreement as of the date first set forth above by their duly authorized representatives.

	
							
	AMERICAN STATES WATER COMPANY, a California corporation
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and a Lender

	 
	 
	 
	 
	 

	By:
	 
	/s/ Floyd E. Wicks
	 
	By:
	 
	/s/ John Cate

	 
	Name:
	Floyd E.Wicks
	 
	 
	Name:
	John Cate

	 
	Title:
	President & CEO
	 
	 
	Title:
	Vice President

	 
	 
	 
	 
	 

	By:
	 
	/s/ Robert J. Sprowls
	 
	 
	 
	 

	 
	Name:
	Robert. J. Sprowls
	 
	 
	 
	 

	 
	Title:
	Sr. Vice President-Finance, Chief Financial Officer, Treasurer & Corporate Secretary
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	GOLDEN STATE WATER COMPANY, a California corporation, successor by name change to Southern California Water Company, a California corporation
	 
	THE NORTHERN TRUST COMPANY,  
as a Lender

	 
	 
	 
	 

	 
	 
	By:
	 
	/s/ John E. Burda

	 
	 
	 
	Name:
	John E. Burda

	By:
	 
	/s/ Robert J. Sprowls
	 
	 
	Title:
	Vice President

	 
	Name:
	Robert J. Sprowls
	 
	 
	 
	 

	 
	Title:
	Sr. Vice President-Finance, Chief Financial Officer, Treasurer & Corp. Secretary
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	COBANK, ACB,
	 
	COMERICA BANK,

	as a Lender
	 
	as a Lender

	 
	 
	 
	 
	 

	By:
	 
	/s/ David W. Dornbrier
	 
	By:
	 
	/s/ Elise Walker

	 
	Name:
	David W. Dornbrier
	 
	 
	Name:
	Elise Walker

	 
	Title:
	Vice President
	 
	 
	Title
	Vice President

	 
	 
	 
	 
	 

	UNION BANK OF CALIFORNIA, N.A.
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	By:
	 
	/s/ Susan K. Johnson
	 
	 
	 
	 

	 
	Name:
	Susan K. Johnson
	 
	 
	 
	 

	 
	Title:
	Vice President
	 
	 
	 
	 

SECOND AMENDMENT TO AMENDED AND RESTATED 
CREDIT AGREEMENT

THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of August 25, 2008, is entered into with reference to the Amended and Restated Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) dated as of June 3, 2005, by and among AMERICAN STATES WATER COMPANY, a California corporation (“Borrower”), each of the lenders party thereto (each an “Original Lender” and collectively, the “Original Lenders”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and lead arranger.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise stated.

RECITALS

WHEREAS, Borrower has requested that the Credit Agreement be modified as set forth in this Amendment, including, without limitation, that the amount of the Revolving Facility be increased by $30,000,000 and that Borrower be provided with a one-time option to further increase the amount of the Revolving Facility up to $15,000,000.

WHEREAS, the Administrative Agent, the Lenders and Borrower have agreed to make certain changes in the terms and conditions set forth in the Credit Agreement, and have agreed to amend the Credit Agreement to reflect said changes.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:

1.    Section 1.1 – Defined Terms (New).  The following defined terms are hereby added to Section 1.1 in the appropriate alphabetical place:

“Amendment No. 2” means the Second Amendment to Amended and Restated Credit Agreement, dated as of August 25, 2008, among Borrower, each of the Lenders party thereto and the Administrative Agent.

“Amendment No. 2 Effective Date” means the “Effective Date” as defined in Amendment No. 2.

2.    Section 1.1 – Defined Term (Revision).  The definition of the term “Commitment” is hereby amended to read in its entirety as follows:

“Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Advances (expressed as the maximum aggregate amount of the Advances to be made by such Lender hereunder), as such commitment may be (a) reduced from time to time pursuant to Section 2.6, (b) increased pursuant to Section 2.10, and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.8.  The initial amount of each Lender’s Commitment is set forth on Schedule 1.1 or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable.  The aggregate amount of the Lenders’ Commitments on the Amendment No. 2 Effective Date is $115,000,000.

3.    Section 2.10.  Section 2.10 is hereby added to the Credit Agreement and shall read in its entirety as follows:

2.10    Optional Increase to the Commitments.  Borrower may submit a one-time request in writing that the Revolving Facility be increased by increasing the then effective Commitments in an aggregate amount which does not result in the aggregate principal amount of the Commitments being greater than $130,000,000 minus the amount of any permanent reductions to the Commitments which have then occurred prior to the date of any such request pursuant to Section 2.6(a), provided that in connection with any such increase, the interest rates payable with respect to all Commitments (whether or not a part of the increased Commitments) shall be the same (and, if necessary, the Credit Agreement will be amended accordingly).  Any request under this Section 2.10 shall be submitted by Borrower to the Lenders through the Administrative Agent not less than thirty (30) days prior to the proposed increase, specify the proposed effective date and amount of such increase and be accompanied by a Certificate signed by a Senior Officer of Borrower, stating that no Default or Event of Default exists as of the date of the request or will result from the requested increase.  Borrower’s right under this Section 2.10 to increase the aggregate Commitments shall terminate and be of no further effect if not exercised prior to the ninetieth (90th) day preceding the Maturity Date.  The consent of the Lenders shall not be required for an increase in the amount of the Commitments pursuant to this Section 2.10; accordingly, this Section 2.10 shall supersede any provisions in Section 6.10 or 11.2 to the contrary.
(a)    Each Lender may approve or reject a request to participate in an increase in the amount of the Commitments in its sole and absolute discretion and, absent an affirmative written response within five (5) Banking Days after receipt of such request, shall be deemed to have rejected the request.  The rejection of such a request by any number of Lenders shall not affect Borrower’s right to increase the Commitments pursuant to this Section 2.10.

(b)    In responding to a request under this Section 2.10, each Lender that is willing to increase the amount of its Pro Rata Share of the increased Commitments shall specify the amount of the proposed increase which it is willing to assume.  Each consenting Lender shall be entitled to participate ratably (based on its Pro Rata Share of the Commitments before such increase) in any resulting increase in the Commitments, subject to the right of the Administrative Agent to adjust allocations of the increased Commitments so as to result in the amounts of the Pro Rata Shares of the Lenders being in integral multiples of $100,000.

(c)    If the aggregate principal amount offered to be assumed by the consenting Lenders is less than the amount requested or the aggregate principal amount offered to be assumed by the consenting Lenders is less than the amount requested without an increase in the interest rates payable with respect to all Commitments, Borrower may (i) reject the proposed increase in its entirety, (ii) accept the offered amounts, (iii) accept the offered amounts from consenting Lenders not requesting an increase in the interest rates payable with respect to all Commitments, or (iv) designate new lenders who qualify as Eligible Assignees and which are reasonably acceptable to the Administrative Agent as additional Lenders hereunder in accordance with clause (f) of this Section 2.10 (each, a “New Lender”), which New Lenders may assume the amount of the increase in the Commitments that has not been assumed by the consenting Lenders or the amount of the increase in the Commitments that has not been assumed by the consenting Lenders without an increase in the interest rates payable with respect to all Commitments.

(d)    After completion of the foregoing, the Administrative Agent shall give written notification to the Lenders and any New Lenders of the increase to the Commitments which shall thereupon become effective and in connection with such notification the Administrative Agent will distribute to Borrower and the Lenders a revised Schedule 1.1 reflecting the then applicable Pro Rata Shares of the Lenders.

(e)    Each New Lender shall become an additional party hereto as a Lender concurrently with the effectiveness of the proposed increase in the Commitments upon its execution of an instrument of joinder to this Agreement, which is in form and substance reasonably acceptable to the Administrative Agent and which, in any event, contains the representations, warranties, indemnities and other protections afforded to the Administrative Agent and the other Lenders which would be granted or made by an Eligible Assignee by means of the execution of an Assignment and Acceptance.

(f)    Subject to the foregoing, any increase to the Commitments requested under this Section 2.10 shall be effective as of the date proposed by Borrower and shall be in the principal amount equal to (i) the amount which consenting Lenders are willing to assume as increases to their respective Commitments plus (ii) the amount offered by any New Lenders.  Upon the effectiveness of any such increase, each Borrowing outstanding shall be refinanced with new Advances reflecting the adjusted Pro Rata Shares of the Lenders in the Revolving Facility if there is any change thereto and Borrower shall:

(i)    issue replacement Notes to each affected Lender and new Notes to each New Lender (in each case, as may be requested by such Lender), and the percentage of Pro Rata Shares of each Lender will be adjusted to give effect to the increase in the Commitments;

(ii)    execute and deliver to the Administrative Agent such amendments to the Loan Documents as the Administrative Agent may reasonably request relating to such increase; and

(iii)    pay to the existing Lenders any breakage costs which are payable in connection with the refinancing of any Borrowings in the manner contemplated by Section 3.6.

4.    Section 11.7.  Section 11.7 is hereby amended and restated in its entirety and shall read as follows:

11.7    Execution of Loan Documents.  Unless the Administrative Agent otherwise specifies with respect to any Loan Document, (a) this Agreement and any other Loan Document may be executed in any number of counterparts and any party hereto or thereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Agreement or any other Loan Document, as the case may be, when taken together will be deemed to be but one and the same instrument and (b) execution of any such counterpart may be evidenced by telecopier or other electronic means of transmission of the signature of such party.  The execution of this Agreement or any other Loan Document by any party hereto or thereto will not become effective until counterparts hereof or thereof, as the case may be, have been executed by all the parties hereto or thereto.  Any party delivering an executed counterpart of this Agreement or any Loan Document by telecopier or other electronic means of transmission shall also deliver a manually executed counterpart of such document, but failure to do so shall not affect the validity, enforceability, or binding effect of such document.

5.    Schedule 1.1 (Lender Commitments/Pro Rata Shares).  Schedule 1.1 to the Credit Agreement is hereby deleted and replaced with Schedule 1.1 to this Amendment.

6.    Adjusting Purchase Payments.  Revolving Credit Facility Usage as outstanding immediately prior to the effectiveness of this Amendment (the “Existing Usage”) shall remain outstanding after giving effect to this Amendment.  On the Effective Date, the applicable Lenders agree to purchase and sell undivided interests in the Existing Usage (such purchases and sales to be free and clear of Liens created, incurred, assumed or suffered to exist by, through or under the Lenders selling such undivided interests, but otherwise without recourse or warranty of any kind or nature whatsoever) by making or receiving Adjusting Purchase Payments as specified in Exhibit A to this Amendment (the “Adjusting Purchase Payments”) so that the Existing Usage will be properly allocated and owing to the Lenders, as applicable, in accordance with the Pro Rata Shares specified in Exhibit A to this Amendment.  Each Lender making an Adjusting Purchase Payment shall deliver it to the Administrative Agent and the Administrative Agent shall forward such Adjusting Purchase Payments to the Lenders entitled thereto promptly after receipt in accordance with the allocations specified in Exhibit A to this Amendment.  As of the Effective Date, in addition to any other Advances that may be made, each Lender shall be deemed as having Advances outstanding in the amount of its Pro Rata Share of the Existing Usage consisting of outstanding Advances.  In addition, as of the Effective Date, the Lenders shall hold participations in the outstanding Letters of Credit as provided in Section 2.5 in accordance with their Pro Rata Shares.  As of the Effective Date, without giving effect to any Advances to be made on the Effective Date, (a) the outstanding principal balance of all Advances is [[$55,750,000]], and (b) the Aggregate Effective Amount of all Letters of Credit is [[$11,131,000]].

7.    Amendment Fee.  In consideration of the agreements set forth herein, Borrower hereby agrees to pay (a) to the Administrative Agent for the ratable accounts of the Original Lenders, an amendment fee (the “Amendment Fee”) in the amount set forth in a letter agreement heretofore entered into by and between Borrower and the Administrative Agent (the “Fee Letter”), which Amendment Fee shall be non-refundable when paid and is fully-earned as of (and due and payable on) the Effective Date, (b) to the Administrative Agent for the accounts of the Lenders who participate in the increase to the Revolving Facility (the “Revolver Increase”), a fee (the “Increase Fee”) in the amount set forth in the Fee Letter, which Increase Fee shall be non-refundable when paid and is fully-earned as of (and due and payable on) the date of the Revolver Increase, and (c) all other fees set forth in the Fee Letter, as and when due under the terms of the Fee Letter.

8.    Effectiveness.  This Amendment shall become effective on the date the Administrative Agent receives each of the following (the “Effective Date”):

(a)    duly executed counterparts of this Amendment signed by the parties hereto;

(b)    duly executed counterparts of the Fee Letter;

(c)    duly executed Notes for each Lender with a revised or new Commitment, as applicable;

(d)    the Amendment Fee; and

(e)    the Increase Fee.

9.    Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification.  This Amendment and the Credit Agreement shall be read together, as one document.  This Amendment shall constitute a Loan Document.

10.    Borrower hereby remakes all representations and warranties contained in the Credit Agreement (except to the extent such representations and warranties expressly speak as of a prior date) and reaffirms all covenants set forth therein.  Borrower further certifies that as of the date of, and after giving effect to, this Amendment, there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.

[Remainder of page intentionally left blank; signature pages follow.]

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

	
				
	 
	 
	BORROWER:

	 
	 
	 

	 
	 
	 

	 
	 
	AMERICAN STATES WATER COMPANY,

	 
	 
	 

	 
	 
	a California corporation

	 
	 
	 

	 
	 
	 

	 
	 
	By:
	/s/ Robert J. Sprowls

	 
	 
	Name:
	Robert J. Sprowls

	 
	 
	Title:
	Executive Vice President – Finance, Chief Financial Officer, Treasurer & Corporate Secretary

	
				
	 
	 
	ADMINISTRATIVE AGENT:

	 
	 
	 

	 
	 
	 

	 
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	 
	 

	 
	 
	as Administrative Agent

	 
	 
	 

	 
	 
	 

	 
	 
	By:
	/s/ DuVon G. Davis

	 
	 
	Name:
	DuVon G. Davis

	 
	 
	Title:
	Vice President

	
				
	 
	 
	LENDERS:

	 
	 
	 

	 
	 
	 

	 
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	 
	 

	 
	 
	as a Lender

	 
	 
	 

	 
	 
	 

	 
	 
	By:
	/s/ DuVon G. Davis

	 
	 
	Name:
	DuVon G. Davis

	 
	 
	Title:
	Vice President

	
				
	 
	 
	COBANK, ACB,

	 
	 
	 

	 
	 
	as a Lender

	 
	 
	 

	 
	 
	 

	 
	 
	By:
	/s/ David W. Dornbrier

	 
	 
	Name:
	David W. Dornbrier

	 
	 
	Title:
	Vice President

	
				
	 
	 
	UNION BANK OF CALIFORNIA, N.A.,

	 
	 
	 

	 
	 
	as a Lender

	 
	 
	 

	 
	 
	 

	 
	 
	By:
	/s/ Harvey R. Horowitz

	 
	 
	Name:
	Harvey R. Horowitz

	 
	 
	Title:
	Vice President

	
				
	 
	 
	COMERICA BANK,

	 
	 
	 

	 
	 
	as a Lender

	 
	 
	 

	 
	 
	 

	 
	 
	By:
	/s/ Elise Walker

	 
	 
	Name:
	Elise Walker

	 
	 
	Title:
	Vice President

	
				
	 
	 
	THE NORTHERN TRUST COMPANY,

	 
	 
	 

	 
	 
	as a Lender

	 
	 
	 

	 
	 
	 

	 
	 
	By:
	/s/ John E. Burda

	 
	 
	Name:
	John E. Burda

	 
	 
	Title:
	Senior Vice President

EXHIBIT A

ADJUSTING PURCHASE PAYMENTS

[see attached]

SCHEDULE 1.1

LENDER COMMITMENTS/PRO RATA SHARES

	
							
	Lender
	 
	Pro Rata Share
	 
	Commitment Amount
	 

	 
	 
	 
	 
	 
	 

	Wells Fargo Bank, National Association   
	 
	33.0434783
	%
	$
	38,000,000
	 

	 
	 
	 
	 
	 
	 

	CoBank, ACB   
	 
	32.1739130
	%
	$
	37,000,000
	 

	 
	 
	 
	 
	 
	 

	Union Bank of California, N.A.   
	 
	13.9130435
	%
	$
	16,000,000
	 

	 
	 
	 
	 
	 
	 

	Comerica Bank   
	 
	10.4347826
	%
	$
	12,000,000
	 

	 
	 
	 
	 
	 
	 

	The Northern Trust Company   
	 
	10.4347826
	%
	$
	12,000,000
	 

	 
	 
	100
	%
	$
	115,000,000
	 

EXECUTION VERSION

THIRD AMENDMENT TO 
AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of May 27, 2010, is entered into with reference to the Amended and Restated Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) dated as of June 3, 2005, by and among AMERICAN STATES WATER COMPANY, a California corporation (“Borrower”), each of the lenders party thereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and lead arranger.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise stated.

RECITALS

WHEREAS, Borrower has requested that the Credit Agreement be modified as set forth in this Amendment, including, without limitation, that the aggregate Commitments be reduced to $100,000,000 and the maturity date of the Revolving Facility be extended to the date which is three (3) years following the Effective Date hereof.

WHEREAS, the Administrative Agent, the Lenders and Borrower have agreed to make certain changes in the terms and conditions set forth in the Credit Agreement, and have agreed to amend the Credit Agreement to reflect said changes.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:

11.    Section 1.1 – Defined Terms (New).  The following defined terms are hereby added to Section 1.1 in the appropriate alphabetical place:

“Amendment No. 3” means the Third Amendment to Amended and Restated Credit Agreement, dated as of May 27, 2010, among Borrower, each of the Lenders party thereto and the Administrative Agent.

“Amendment No. 3 Effective Date” means the “Effective Date” as defined in Amendment No. 3.

“ASUS” means American States Utility Services, Inc., a California corporation and wholly-owned Subsidiary of Borrower.

“ASUS Water Sale Agreement” means the Water Sale Agreement, dated January 31, 2006, by and between Natomas and ASUS.

“California Water Meter Indebtedness” means the Indebtedness evidenced by the Funding Agreement between the State of California Department of Public Health and Golden State Water Company, Project Number 3410015-006, Data Universal Number 009107873.  As of the Amendment No. 3 Effective Date, the aggregate outstanding principal amount of such Indebtedness is $0.00

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Initial Pricing Period” means the period commencing on the Amendment No. 3 Effective Date and ending on the first Pricing Occurrence to occur thereafter.

“Lending Parties” means, collectively, the Lenders, any Swing Line Lender and any Issuing Lender.

“Natomas” means Natomas Central Mutual Water Company, a California corporation.

“NCSP True-Up Amount” has the meaning set forth in the definition of Net Cash Sales Proceeds.

“Net Cash Sales Proceeds” means, with respect to the Permitted Water Rights Disposition, the Cash proceeds received by or for the account of Borrower from such Disposition, including any cash payments received as deferred payment pursuant to a promissory note, receivable or otherwise (none of which shall defer payment in full, in cash, for a period of greater than one year and each of which shall be in form and substance reasonably satisfactory to the Administrative Agent), but only as and when received in Cash, the Cash proceeds received by or for the account of Borrower and its Subsidiaries from such Disposition, net of (a) any amount required to be paid to any Person owning an interest in the assets disposed of, (b) any amount applied to the repayment of Indebtedness secured by a Lien permitted under Section 6.9 on the asset disposed of, (c) any transfer, income or other taxes paid or reasonably estimated by Borrower to be payable as a result of such Disposition on any gain recognized in connection therewith, (d) professional fees and expenses, fees due to any Governmental Agency, broker’s commissions and other out-of-pocket costs of sale actually paid on an arms-length basis to any Person attributable to such Disposition and (e) any reserves established with respect to liabilities in accordance with GAAP in connection with such Disposition; provided, however, that if the actual taxes due pursuant to clause (c) above (the “Actual Taxes”) are less than the amount used by Borrower pursuant to clause (c) above to calculate the Net Cash Sales Proceeds paid to Borrower in respect of any Disposition, Net Cash Sales Proceeds shall also include an amount equal to (i) Net Cash Sales Proceeds calculated using Actual Taxes less (ii) the Net Cash Sales Proceeds actually paid to Borrower in respect of such Disposition (the “NCSP True-Up Amount”).

“Permitted Water Rights Disposition” means the sale, by ASUS, of all or any portion of the water rights and Settlement Contract Base Supply (as defined in the ASUS Water Sale Agreement) entitlements to divert from the Sacramento River up to 5,000 acre-feet of water per year in years where Natomas receives one hundred percent (100%) of its Base Supply (as defined in the ASUS Water Sale Agreement), purchased, or to be purchased, by ASUS pursuant to the terms of the ASUS Water Rights Agreement; provided that (a) at the time such Disposition is consummated, no Default or Event of Default shall exist or shall result therefrom, (b) the sales price relating to any such Disposition shall be not less than seventy percent (70%) of the net book value (as determined in accordance with GAAP) of the assets sold pursuant to such Disposition, (c) Administrative Agent shall have received a pro forma Compliance Certificate to the effect that after giving pro forma effect to such Disposition (which Disposition shall be deemed to have occurred on the first day of the Rolling Period most recently completed prior to the date of such Disposition (the “Disposition Test Period”), Borrower would not have been in breach of any covenant set forth in Section 6.12 or Section 6.13 for the Disposition Test Period, (d) notwithstanding anything to the contrary in Section 3.1(e), the outstanding principal amount of Advances shall be prepaid (without a corresponding reduction to the Commitments) on or before the second Banking Day following receipt by Borrower or any Subsidiary of Net Cash Proceeds from such Disposition (or, in the case of any NCSP True-Up Amount, on or before the second Banking Day following a determination by Borrower or any Subsidiary that a NCSP True-Up Amount exists) by an amount equal to  the lesser of seventy-five percent (75%) of such Net Cash Sales Proceeds and the outstanding principal amount of all Advances, and (e) such Disposition shall have been completed in accordance with all applicable Laws and upon such other terms as shall be reasonably satisfactory to the Administrative Agent.

“Reserve Requirement” means the stated maximum rate (rounded upwards, as necessary, to the nearest 1/16th of one percent (0.0625%)), as in effect on any date of determination of all reserve requirements (including any marginal, emergency, supplemental, special or other reserves) applicable on such date to any member bank of the Federal Reserve System in respect of “Eurocurrency liabilities” as defined in Regulation D (or any successor category of liabilities under Regulation D) of the FRB as in effect on such day, whether or not applicable to any Lending Party.

12.    Section 1.1 — Defined Term (Revision).  The following defined terms contained in Section 1.1 of the Credit Agreement are hereby amended in full to read as follows:

“Alternate Base Rate” means for any day, the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate for such day plus one-half of one percent (0.50%) and (c) the One Month LIBOR Rate for such day (determined on a daily basis as set forth below) plus one percent (1.00%).  As used in this definition of “Alternate Base Rate”, “One Month LIBOR Rate” means, with respect to any interest rate calculation for a Loan or other Obligation bearing interest at the Alternate Base Rate, a rate per annum equal to the quotient (rounded upward if necessary to the nearest 1/16th of one percent (0.0625%)) of (i) the rate per annum referred to as the BBA (British Bankers Association) LIBOR RATE as reported on Reuters LIBOR page 1, or if not reported by Reuters, as reported by any service selected by Administrative Agent on the applicable day (provided that if such day is not a Eurodollar Banking Day for which a Eurodollar Rate is quoted, the next preceding Eurodollar Banking Day for which a Eurodollar Rate is quoted) at or about 11:00 a.m., London time (or as soon thereafter as practicable), for Dollar deposits being delivered in the London interbank eurodollar currency market for a term of one month commencing on such date of determination, divided by (ii) one minus the Reserve Requirement in effect on such day.  If for any reason rates are not available as provided in clause (i) of the preceding sentence, the rate to be used in clause (i) shall be, at Administrative Agent’s discretion (in each case, rounded upward if necessary to the nearest one-sixteenth (1/16) of one percent (0.0625%)), (1) the rate per annum at which Dollar deposits are offered to the Administrative Agent in the London interbank eurodollar currency market or (2) the rate at which Dollar deposits are offered to the Administrative Agent in, or by Wells Fargo to major banks in, any offshore interbank eurodollar market selected by Administrative Agent, in each case on the applicable day (provided that if such day is not a Eurodollar Banking Day for which Dollar deposits are offered to Administrative Agent in the London interbank eurodollar currency market, the next preceding Eurodollar Banking Day for which Dollar deposits are offered to Administrative Agent in the London interbank eurodollar currency market) at or about 11:00 a.m., London time (or as soon thereafter as practicable) (for delivery on such date of determination) for a one month term.  Each determination by Administrative Agent pursuant to this definition shall be conclusive absent manifest error.

“Applicable Alternate Base Rate Margin” means, with respect to any Alternate Base Rate Advance, for each Pricing Period, the interest rate margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:

	
				
	Applicable 
Pricing 
Level
	 
	Margin
	 

	 
	 
	 
	 

	I
	 
	20.0
	 

	II
	 
	25.0
	 

	III
	 
	75.0
	 

	IV
	 
	150.0
	 

“Applicable Commitment Fee Margin” means, for each Pricing Period, the margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:

	
				
	Applicable 
Pricing 
Level
	 
	Margin
	 

	 
	 
	 
	 

	I
	 
	15.0
	 

	II
	 
	17.5
	 

	III
	 
	25.0
	 

	IV
	 
	35.0
	 

“Applicable Eurodollar Rate Margin” means, with respect to any Eurodollar Rate Advance, for each Pricing Period, the interest rate margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:

	
				
	Applicable 
Pricing 
Level
	 
	Margin
	 

	 
	 
	 
	 

	I
	 
	120.0
	 

	II
	 
	125.0
	 

	III
	 
	175.0
	 

	IV
	 
	250.0
	 

“Applicable Pricing Level” means, (a) for the Initial Pricing Period, Pricing Level II and (b) thereafter, the pricing level set forth below opposite the Debt Rating achieved by Borrower as of the first day of that Pricing Period:

	
			
	Pricing Level
	 
	Debt Rating

	 
	 
	 

	I
	 
	Greater than or equal to A1 / A+

	II
	 
	Less than A1/A+ but greater than or equal to A2 /A

	III
	 
	Less than A2/A but greater than or equal to A3/A-

	IV
	 
	Less than A3/A-

provided that in the event that the then prevailing Debt Ratings are “split ratings”, Borrower will receive the benefit of the higher Debt Rating, unless the split is a “double split rating” (in which case the pricing level applicable to the middle Debt Rating will apply) or a “triple split rating” (in which case the pricing level applicable to the Debt Rating above the Debt Rating applicable to the lowest pricing level will apply).  For purposes hereof, a Debt Rating is only a “split rating” if the Debt Rating applies to a different pricing level.

“Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Advances (expressed as the maximum aggregate amount of the Advances to be made by such Lender hereunder), as such commitment may be (a) reduced from time to time pursuant to Section 2.6, (b) increased pursuant to Section 2.10, and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.8.  The amount of each Lender’s Commitment on the Amendment No. 3 Effective Date is set forth on Schedule 1.1 or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable.  The aggregate amount of the Lenders’ Commitments on the Amendment No. 3 Effective Date is $100,000,000.
“Eurodollar Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three, six or, if made available by each of the Lenders making such Eurodollar Rate Loan, nine or twelve months thereafter, as selected by Borrower in its related Request for Borrowing; provided that (a) any Eurodollar Period that would otherwise end on a day that is not a Eurodollar Banking Day shall be extended to the next succeeding Eurodollar Banking Day unless such Eurodollar Banking Day falls in another calendar month, in which case such Eurodollar Period shall end on the next preceding Banking Day; (b) any Eurodollar Period that begins on the last Eurodollar Banking Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Eurodollar Period) shall end on the last Eurodollar Banking Day of the calendar month at the end of such Eurodollar Period; and (c) no Eurodollar Period for any Advance shall extend beyond the Maturity Date.

“Eurodollar Rate” means for any Eurodollar Period, with respect to a Eurodollar Rate Advance, a rate per annum (rounded upwards, as necessary, to the nearest 1/16th of one percent (0.0625%)) obtained by dividing (a) the rate per annum determined by the Administrative Agent at approximately 11:00 a.m., London time, on the date that is two Eurodollar Banking Days prior to the beginning of such Eurodollar Period by reference to the British Bankers’ Association “Interest Settlement Rates” for deposits in Dollars (as set forth by any service (including Bloomberg, Reuters and Thomson Financial) selected by the Administrative Agent that has been nominated by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rates) in an amount approximately equal to the principal amount to which such Eurodollar Period applies (for delivery on the first day of such Eurodollar Period) with a term equivalent to such Eurodollar Period; provided that, if an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, then “Eurodollar Rate” shall be the interest rate per annum determined by the Administrative Agent to be the average of the rates per annum at which deposits in Dollars in an amount approximately equal to the principal amount to which such Eurodollar Period applies (for delivery on the first day of such Eurodollar Period) with a term equivalent to such Eurodollar Period are offered for such Eurodollar Period by Wells Fargo to major banks in the London interbank offered market in London, England at approximately 11:00 a.m., London time, on the date that is two Eurodollar Banking Days prior to the beginning of such Eurodollar Period by (b) one minus the Reserve Requirement in effect on such date.  Each determination by the Administrative Agent pursuant to this definition shall be conclusive absent manifest error.

“Federal Funds Rate” means for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Banking Day next succeeding such day; provided that (a) if such day is not a Banking Day, then the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Banking Day as so published on the next succeeding Banking Day and (b) if no such rate is so published on such next succeeding Banking Day, then the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of one one-hundredth of one percent (0.01%)) charged to Wells Fargo on such day on such transactions as determined by Administrative Agent.

“Lead Arranger” means Wells Fargo Securities, LLC.

“Maturity Date” means the earlier of (a) May 27, 2013 and (b) the termination or cancellation of the Revolving Facility (and all of the Commitments pertaining thereto) pursuant to the terms of this Agreement.

“Maximum Revolving Credit Amount” means $100,000,000.

“Permitted Capital Asset Indebtedness” means Indebtedness of Borrower and its Subsidiaries consisting of Capital Lease Obligations, the California Water Meter Indebtedness or Indebtedness otherwise incurred to finance the purchase or construction of capital assets (which shall be deemed to exist if the Indebtedness is incurred at or within 90 days before or after the purchase or construction of the capital asset), or to refinance any such Indebtedness; provided that the aggregate principal amount of such Indebtedness shall not exceed $15,000,000 at any one time outstanding (as determined in accordance with GAAP consistently applied).

“Pricing Period” means (a) the Initial Pricing Period and (b) each subsequent period commencing on the date of a Pricing Occurrence and ending on the next Pricing Occurrence to occur.

“Prime Rate” means the per annum rate of interest in effect for such day as publicly announced from time to time by Wells Fargo as its “Prime Rate,” such rate being the rate of interest most recently announced within Wells Fargo at its principal office in San Francisco, California as its “Prime Rate,” with the understanding that Wells Fargo’s “Prime Rate” is one of Wells Fargo’s base rates and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto, and is evidenced by the recording thereof after its announcement in such internal publication or publications as Wells Fargo may designate.  Wells Fargo’s “Prime Rate” is not intended to be the lowest rate of interest charged by Wells Fargo in connection with extensions of credit to borrowers.  Any change in Wells Fargo’s “Prime Rate” as announced by Wells Fargo shall take effect at the opening of business on the day specified in the public announcement of such change.

13.    Section 1.1 — Defined Term (Deleted).  The defined term “Eurodollar Reserve Percentage” is hereby deleted from the Credit Agreement and each of the other Loan Documents.

14.    Section  2.5(a)(ii) - Letters of Credit (Letter of  Credit Sublimit).  The reference to “$20,000,000” contained in Section 2.5(a)(ii) of the Credit Agreement is hereby amended in full to read “$25,000,000”.

15.    Section 2.10 - Optional Increase to the Commitments.  The introductory paragraph of  Section 2.10 of the Credit Agreement is hereby amended in full to read as follows:

“2.10    Optional Increase to the Commitments.  Borrower may submit a request in writing that the Revolving Facility be increased by increasing the then effective Commitments in an aggregate amount which does not result in the aggregate principal amount of the Commitments being greater than $140,000,000 minus the amount of any permanent reductions to the Commitments which have then occurred prior to the date of any such request pursuant to Section 2.6(a), provided that (a) Borrower may make no more than two such requests, (b) the increase requested pursuant to the second such request shall not be effective less than twelve (12) months following the effectiveness of the increase granted pursuant to the first such request, (c) the first such request shall be in an amount of not less than $20,000,000 and integral multiples of $10,000,000 in excess thereof, (d) the second such request shall be in an amount of not less than $10,000,000 and integral multiples of $10,000,000 in excess thereof, and (e) in connection with any such increase, the interest rates payable with respect to all Commitments (whether or not a part of the increased Commitments) shall be the same (and, if necessary, the Credit Agreement will be amended accordingly).  Any request under this Section 2.10 shall be submitted by Borrower to the Lenders through the Administrative Agent not less than thirty (30) days prior to the proposed increase, specify the proposed effective date and amount of such increase and be accompanied by a Certificate signed by a Senior Officer of Borrower, stating that no Default or Event of Default exists as of the date of the request or will result from the requested increase.  Borrower’s right under this Section 2.10 to increase the aggregate Commitments shall terminate and be of no further effect if not exercised prior to the ninetieth (90th) day preceding the Maturity Date.  The consent of the Lenders shall not be required for an increase in the amount of the Commitments pursuant to this Section 2.10; accordingly, this Section 2.10 shall supersede any provisions in Section 6.10 or 11.2 to the contrary.”

16.    Section 3.6 - Eurodollar Costs and Related Matters.  Each reference to “Eurodollar Reserve Percentage” contained in Sections 3.6(a) and 3.6(b)(ii) of the Credit Agreement are hereby amended in full to read “Reserve Requirement”.

17.    Section 6.3 - Dispositions of Property.  Section 6.3 of the Credit Agreement is hereby amended in full to read as follows:

“6.3    Disposition of Property.  Make any Disposition of its Property, whether now owned or hereafter acquired, except (a) Dispositions of obsolete Property or Property with no material remaining useful life, (b) Dispositions in an aggregate amount not to exceed $5,000,000 in any Fiscal Year ending after the Closing Date or $10,000,000 in the aggregate from and after the Closing Date to the Termination Date; provided that (i) at the time of any such Disposition pursuant to clause (b) only, no Default or Event of Default shall exist or shall result from such Disposition and (ii) the sales price relating to a Disposition (pursuant to clause (a) or (b)) shall be paid in Cash and/or Indebtedness or other evidence of an Investment permitted pursuant to Section 6.14(h), (c) Dispositions pursuant to any order of any Governmental Agency in an eminent domain proceeding and any settlement of any such proceeding, (d) a Permitted Water Rights Disposition and (e) as otherwise permitted pursuant to a letter agreement dated May 27, 2010, by and between the Administrative Agent and the Borrower.

18.    Section 6.15 - Operating Leases.  Section 6.15 of the Credit Agreement is hereby amended in full to read as follows:

“6.15    Operating Leases.  Incur any obligation to pay rent under an operating lease in any Fiscal Year if to do so would result in the aggregate obligation of Borrower and its Subsidiaries to pay rent under all operating leases in that Fiscal Year to exceed $6,000,000.”

19.    11.22 - Waiver of Jury Trial.  Section 11.22 of the Credit Agreement is hereby amended in full to read as follows:

“11.22     Waiver of Jury Trial; Judicial Reference.

(a)    WAIVER OF JURY TRIAL.  BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  THE BORROWER HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT.

(b)    JUDICIAL REFERENCE.  TO THE EXTENT THAT THE WAIVER OF JURY TRIAL IN SECTION 11.22(a) IS UNENFORCEABLE, THE PARTIES HERETO DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE OR RETIRED JUDGE APPLYING THE APPLICABLE LAW.  THEREFORE, THE PARTIES HERETO AGREE TO REFER, FOR A COMPLETE AND FINAL ADJUDICATION, ANY AND ALL ISSUES OF FACT OR LAW INVOLVED IN ANY LITIGATION OR PROCEEDING (INCLUDING ALL DISCOVERY AND LAW AND MOTION MATTERS, PRETRIAL MOTIONS, TRIAL MATTERS, AND POST-TRIAL MOTIONS (E.G., MOTIONS FOR RECONSIDERATION, NEW TRIAL AND TO TAX COSTS, ATTORNEY FEES AND PREJUDGMENT INTEREST)) UP TO AND INCLUDING FINAL JUDGMENT, BROUGHT TO RESOLVE ANY DISPUTE (WHETHER SOUNDING IN CONTRACT, TORT, UNDER ANY STATUTE, OR OTHERWISE) BETWEEN THE ADMINISTRATIVE AGENT OR ANY LENDER AND BORROWER ARISING OUT OF, CONNECTED WITH, OR RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE PARTIES IN CONNECTION WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO AND THERETO, TO A JUDICIAL REFEREE WHO SHALL BE APPOINTED UNDER A GENERAL REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638.  THE REFEREE’S DECISION WOULD STAND AS THE DECISION OF THE COURT, WITH JUDGMENT TO BE ENTERED ON HIS STATEMENT OF DECISION IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE COURT.  THE ADMINISTRATIVE AGENT AND THE BORROWER SHALL SELECT A SINGLE NEUTRAL REFEREE, WHO SHALL BE A RETIRED STATE OR FEDERAL JUDGE WITH AT LEAST FIVE YEARS OF JUDICIAL EXPERIENCE IN CIVIL MATTERS.  IN THE EVENT THAT THE AGENT AND THE BORROWER CANNOT AGREE UPON A REFEREE, THE REFEREE SHALL BE APPOINTED BY THE COURT.  BORROWER SHALL BEAR THE FEES AND EXPENSES OF THE REFEREE UNLESS THE REFEREE OTHERWISE PROVIDES IN THE STATEMENT OF DECISION.  EACH PARTY AGREES THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 11.22 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE REFERENCE TO A JUDICIAL REFEREE AS PROVIDED ABOVE.”

20.    Schedule 1.1 (Lender Commitments/Pro Rata Shares).  Schedule 1.1 to the Credit Agreement is hereby amended in full to read as set forth on Annex I to this Amendment.

21.    Adjusting Purchase Payments.  Revolving Credit Facility Usage as outstanding immediately prior to the effectiveness of this Amendment (the “Existing Usage”) shall remain outstanding after giving effect to this Amendment.  On the Effective Date, the applicable Lenders agree to purchase and sell undivided interests in the Existing Usage (such purchases and sales to be free and clear of Liens created, incurred, assumed or suffered to exist by, through or under the Lenders selling such undivided interests, but otherwise without recourse or warranty of any kind or nature whatsoever) by making or receiving Adjusting Purchase Payments as specified in Annex II to this Amendment (the “Adjusting Purchase Payments”) so that the Existing Usage will be properly allocated and owing to the Lenders, as applicable, in accordance with the Pro Rata Shares specified in such Annex II.  Each Lender making an Adjusting Purchase Payment shall deliver it to the Administrative Agent and the Administrative Agent shall forward such Adjusting Purchase Payments to the Lenders entitled thereto promptly after receipt in accordance with the allocations specified such Annex II. As of the Effective Date, in addition to any other Advances that may be made, each Lender shall be deemed as having Advances outstanding in the amount of its Pro Rata Share of the Existing Usage consisting of outstanding Advances.  In addition, as of the Effective Date, the Lenders shall hold participations in the outstanding Letters of Credit as provided in Section 2.5 in accordance with their Pro Rata Shares.  As of the Effective Date, without giving effect to any Advances to be made on the Effective Date, (a) the outstanding principal balance of all Advances is $19,000,000.00, and (b) the Aggregate Effective Amount of all Letters of Credit is $11,081,000.00.

22.    Fees.  In consideration of the agreements set forth herein, Borrower hereby agrees to pay to the Administrative Agent and the Lead Arranger, either for their own account or for the ratable account of the Lenders, as applicable, each of the fees as shall be required by that certain letter agreement, dated April 26, 2010, entered into by and between Borrower, the Administrative Agent and the Lead Arranger (the “Amendment Fee Letter”), in each case, at the times and in the amounts set forth in such Amendment Fee Letter.

23.    Effectiveness.  This Amendment shall become effective on the date that each of the following conditions shall have been satisfied in a manner satisfactory to the Lenders in their sole and absolute discretion (the “Effective Date”):

(a)    The Administrative Agent shall have received all of the following in form and substance satisfactory to the Administrative Agent and its legal counsel:

(i)    duly executed counterparts of this Amendment signed by the parties hereto;

(ii)    duly executed Notes for each Lender with a revised or new Commitment, as applicable;

(iii)    the favorable written legal opinion of O’Melveny & Myers LLP, special counsel to the Borrower; and

(iv)    such other assurances, certificates, documents, consents or opinions as the Administrative Agent and/or any Lender reasonably may require.

(b)    Each of the fees set forth in the Amendment Fee Letter which are due and payable on the Effective Date shall have been paid.

(c)    Borrower shall have paid to the Administrative Agent, for the benefit of Lenders existing immediately prior to the Effective Date, interest in the amount of $9,455.30 and accrued fees in the amount of $12,559.39 owed to such Lenders on the Effective Date.

(d)    The reasonable costs and expenses of the Administrative Agent in connection with the preparation of this Agreement and each of the other Loan Documents prepared in connection therewith payable pursuant to Section 11.3, and invoiced to Borrower prior to the Effective Date, shall have been paid.

(e)    All legal matters relating to the Loan Documents shall be reasonably satisfactory to Bingham McCutchen LLP, special counsel to the Administrative Agent.

24.    Integration; Loan Document.  Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification.  This Amendment and the Credit Agreement shall be read together, as one document.  This Amendment shall constitute a Loan Document.

25.    Representations and Warranties; No Defaults.  Borrower hereby represents that all representations and warranties contained in Article 4 of the Credit Agreement (except to the extent such representations and warranties expressly speak as of a prior date, in which case they were true and correct in all material respects on and as of such earlier date) are and will be true and correct in all material respects on and as of the Amendment No. 3 Effective Date and reaffirms all covenants set forth therein.  Borrower further certifies that as of the date of, and after giving effect to, this Amendment, there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.

26.    Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.

27.    Counterparts.  This Amendment may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Amendment, when taken together, will be deemed to be but one and the same instrument and execution of any such counterpart may be evidenced by telecopier or other electronic means of transmission of the signature of such party.

[Remainder of page intentionally left blank; signature pages follow.]

American States Water Company
Attention:  Robert J. Sprowls and Eva Tang
May 27, 2010
Page

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

	
			
	 
	BORROWER:

	 
	 

	 
	 

	 
	AMERICAN STATES WATER COMPANY,

	 
	 

	 
	a California corporation

	 
	 

	 
	 

	 
	By:
	/s/ EVA G. TANG

	 
	 

	 
	Name: Eva G. Tang

	 
	 

	 
	Title: Senior Vice President-Finance, Chief Financial Officer, Corporate Secretary and Treasurer

Third Amendment to Amended and Restated Credit Agreement

	
			
	 
	ADMINISTRATIVE AGENT:

	 
	 

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	 

	 
	as Administrative Agent

	 
	 

	 
	 

	 
	By:
	/ s/ DuVon G. Davis

	 
	 

	 
	Name:   DuVon G. Davis

	 
	 

	 
	Title: Vice President

Third Amendment to Amended and Restated Credit Agreement

	
			
	 
	LENDERS:

	 
	 

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	 

	 
	as a Lender

	 
	 

	 
	 

	 
	By:
	/s/ DuVon G. Davis

	 
	 

	 
	Name:  DuVon G. Davis

	 
	 

	 
	Title:   Vice PResident

Third Amendment to Amended and Restated Credit Agreement

	
			
	 
	COBANK, ACB,

	 
	 

	 
	as a Lender

	 
	 

	 
	 

	 
	By:
	/s/ David W. Dornbrier

	 
	 

	 
	Name:   David W. Dornbrier

	 
	 

	 
	Title:   Vice President

Third Amendment to Amended and Restated Credit Agreement

	
			
	 
	COMERICA BANK,

	 
	 

	 
	as a Lender

	 
	 

	 
	 

	 
	By:
	/s/ Mark C. Skrzynski

	 
	 

	 
	Name:   Mark C. Skrzynski

	 
	 

	 
	Title:  Corporate Banking Officer

Third Amendment to Amended and Restated Credit Agreement

	
			
	 
	U.S. BANK NATIONAL ASSOCIATION,

	 
	 

	 
	as a Lender

	 
	 

	 
	 

	 
	By:
	/s/ John I. Paul

	 
	 

	 
	Name:   John I. Paul

	 
	 

	 
	Title:   Portfolio Manager

Third Amendment to Amended and Restated Credit Agreement

ANNEX I

SCHEDULE 1.1

LENDER COMMITMENTS/PRO RATA SHARES

	
							
	Lender
	 
	Pro Rata Share
	 
	Commitment Amount
	 

	 
	 
	 
	 
	 
	 

	Wells Fargo Bank, National Association   
	 
	38.0
	%
	$
	38,000,000
	 

	 
	 
	 
	 
	 
	 

	CoBank, ACB   
	 
	35.0
	%
	$
	35,000,000
	 

	 
	 
	 
	 
	 
	 

	Comerica Bank   
	 
	15.0
	%
	$
	15,000,000
	 

	 
	 
	 
	 
	 
	 

	U.S. Bank National Association   
	 
	12.0
	%
	$
	12,000,000
	 

	 
	 
	100.0
	%
	$
	100,000,000
	 

ANNEX II

ADJUSTING PURCHASE PAYMENTS

	
																										
	Banks Making / (Receiving) Adjusting 
Purchase Payments
	 
	Former 
Commitment
	 
	Former Pro Rata 
Share of 
Commitment
	 
	Share of 
Outstanding 
Advances
	 
	New Commitment
	 
	New Pro Rata 
Share of 
Commitment
	 
	Share of 
Outstanding 
Advances
	 
	Adjusting Purchase 
Payment to Pay / 
(Receive)
	 

	Wells Fargo Bank, National Association   
	 
	$
	38,000,000.00
	

	 
	33.04347826
	%
	$
	6,278,260.86
	

	 
	$
	38,000,000.00
	

	 
	38.00000000
	%
	$
	7,220,000.00
	

	 
	$
	941,739.14
	

	 

	CoBank, ACB   
	 
	$
	37,000,000.00
	

	 
	32.17391304
	%
	$
	6,113,043.48
	

	 
	$
	35,000,000.00
	

	 
	35.00000000
	%
	$
	6,650,000.00
	

	 
	$
	536,956.52
	

	 

	Union Bank, N.A.   
	 
	$
	16,000,000.00
	

	 
	13.91304348
	%
	$
	2,643,478.26
	

	 
	$
	—
	

	 
	0.00000000
	%
	$
	—
	

	 
	$
	(2,643,478.26
	

	)

	Comerica Bank   
	 
	$
	12,000,000.00
	

	 
	10.43478261
	%
	$
	1,982,608.70
	

	 
	$
	15,000,000.00
	

	 
	15.00000000
	%
	$
	2,850,000.00
	

	 
	$
	867,391.30
	

	 

	The Northern Trust Company   
	 
	$
	12,000,000.00
	

	 
	10.43478261
	%
	$
	1,982,608.70
	

	 
	$
	—
	

	 
	0.00000000
	%
	$
	—
	

	 
	$
	(1,982,608.70
	

	)

	U.S. Bank National Association   
	 
	$
	—
	

	 
	0.00000000
	%
	$
	—
	

	 
	$
	12,000,000.00
	

	 
	12.00000000
	%
	$
	2,280,000.00
	

	 
	$
	2,280,000.00
	

	 

	 
	 
	$
	115,000,000.00
	

	 
	100.00000000
	%
	$
	19,000,000.00
	

	 
	$
	100,000,000.00
	

	 
	100.00000000
	%
	$
	19,000,000.00
	

	 
	$
	—
	

	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Outstanding Advances =   
	 
	$
	19,000,000.00
	

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

May 27, 2010

American States Water Company 
630 East Foothill Boulevard
San Dimas, California  91773-9016
Attn:  Robert J. Sprowls and Eva Tang

Re:    Permitted CCWC Disposition

Ladies and Gentlemen:

Reference is made to (a) that certain Amended and Restated Credit Agreement (as amended, restated. supplemented or otherwise modified from time to time, the “Credit Agreement”), dated as of June 3, 2005, currently by and among American States Water Company, a California corporation (“Borrower”), each of the lenders from time to time parties thereto (each a “Lender” and collectively, the “Lenders”), Wells Fargo Bank, National Association, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”), and Wells Fargo Securities, LLC, as lead arranger, and (b) the Third Amendment to Amended and Restated Credit Agreement (“Amendment No. 3”), dated as of even date herewith, by and among Borrower, each of the Lenders listed therein and the Administrative Agent.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise stated.

This letter agreement is a Loan Document and is the letter agreement referred to in Section 6.3(e) of the Credit Agreement.

In connection with each of the transactions contemplated by Amendment No. 3 and for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.  In connection with the Dispositions permitted pursuant to Section 6.3, Borrower shall be permitted to make the Permitted CCWC Disposition in accordance with the terms set forth herein and in the Credit Agreement.

2.  The following terms used herein shall have the meanings set forth below:

“CCWC” means Chaparral City Water Company, an Arizona corporation and wholly-owned Subsidiary of Borrower.

“CCWC Disposition Net Cash Sales Proceeds” means, with respect to the Permitted CCWC Disposition, the Cash proceeds received by or for the account of Borrower from such Disposition, including any cash payments received as deferred payment pursuant to a promissory note, receivable or otherwise (none of which shall defer payment in full, in cash, for a period of greater than one year and each of which shall be in form and substance reasonably satisfactory to the Administrative Agent), but only as and when received in Cash, the Cash proceeds received by or for the account of Borrower and its Subsidiaries from such Disposition, net of (a) any amount required to be paid to any Person owning an interest in the assets disposed of, (b) any amount applied to the repayment of Indebtedness secured by a Lien permitted under Section 6.9 on the asset disposed of, (c) any transfer, income or other taxes paid or reasonably estimated by Borrower to be payable as a result of such Disposition on any gain recognized in connection therewith, (d) professional fees and expenses, fees due to any Governmental Agency, broker’s commissions and other out-of-pocket costs of sale actually paid on an arms-length basis to any Person attributable to such Disposition and (e) any reserves established with respect to liabilities in accordance with GAAP in connection with such Disposition; provided, however, that if the actual taxes due pursuant to clause (c) above (the “Actual Taxes”) is less than the amount used by Borrower pursuant to clause (c) above to calculate the CCWC Disposition Net Cash Sales Proceeds paid to Borrower in respect of any Disposition, CCWC Disposition Net Cash Sales Proceeds shall also include an amount equal to (i) CCWC Disposition Net Cash Sales Proceeds calculated using Actual Taxes less (ii) the CCWC Disposition Net Cash Sales Proceeds actually paid to Borrower in respect of such Disposition (the “CCWC Disposition NCSP True-Up Amount”).

“Permitted CCWC Disposition” means the sale of (a) all or substantially all of the assets of CCWC or (b) all or substantially all of the capital stock of CWCC, provided that (i) at the time of delivery of the CWCC Purchase Agreement referred to below and at the time such Disposition is consummated, no Default or Event of Default shall exist or shall result therefrom, (ii) the sales price relating to any such Disposition shall be not less than $20,000,000, no less than fifty percent (50%) of which shall be paid in Cash, (iii) the sales agreement with respect to such Disposition (the “CCWC Purchase Agreement”) shall have been executed and delivered (with a copy delivered to the Administrative Agent) on or prior to December 31, 2010, with such Disposition having been consummated not later than the date which is eighteen (18) months following such execution and delivery of the CCWC Purchase Agreement, (iv) Administrative Agent shall have received a pro forma Compliance Certificate to the effect that after giving pro forma effect to such Disposition (which Disposition shall be deemed to have occurred on the first day of the Rolling Period most recently completed prior to the date of such Disposition (the “Disposition Test Period”), Borrower would not have been in breach of any covenant set forth in Section 6.12 or Section 6.13 for the Disposition Test Period, (v) notwithstanding anything to the contrary in Section 3.1(e), the outstanding principal amount of all Advances shall be prepaid (without a corresponding reduction to the Commitments) on or before the second Banking Day following receipt by Borrower or any Subsidiary of Net Cash Proceeds from such Disposition (or, in the case of any CCWC Disposition NCSP True-Up Amount, on or before the second Banking Day following a determination by Borrower or any Subsidiary that a CCWC Disposition NCSP True-Up Amount exists) by an amount equal to the lesser of seventy-five percent (75%) of such CCWC Disposition Net Cash Sales Proceeds and the outstanding principal amount of all Advances, and (vi) such Disposition shall have been completed in accordance with all applicable Laws and upon such other terms as shall be reasonably satisfactory to the Administrative Agent.

THIS LETTER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.

This letter agreement may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this letter agreement, when taken together, will be deemed to be but one and the same instrument and execution of any such counterpart may be evidenced by telecopier or other electronic means of transmission of the signature of such party.

[Signature page follows]

	
					
	 
	Very truly yours,

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION

	 
	 

	 
	 

	 
	By:
	/s/ Duvon G. Davis

	 
	 
	Name:
	Duvon G. Davis

	 
	 
	Title:
	Vice President

	 
	 

	 
	 

	ACKNOWLEDGED AND AGREED TO
	 

	AS OF THIS 27th DAY OF MAY, 2010
	 

	 
	 

	 
	 

	AMERICAN STATES WATER COMPANY,
	 

	a California corporation
	 

	 
	 

	 
	 

	By:
	/s/ Eva G. Tang
	 

	 
	Name: Eva G. Tang
	 

	 
	Title: SVP- Finance, CFO, Corporate Secretary & Treasurer
	 

Third Amendment to Amended and Restated Credit Agreement

Fourth AMENDMENT TO 
AMENDED AND RESTATED CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of May 23, 2013, is entered into with reference to the Amended and Restated Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) dated as of June 3, 2005, by and among AMERICAN STATES WATER COMPANY, a California corporation (“Borrower”), each of the lenders party thereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and lead arranger.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise stated.

RECITALS

WHEREAS, Borrower has requested that the Credit Agreement be modified as set forth in this Amendment, including, without limitation, that the maturity date of the Revolving Facility be extended to the date which is five (5) years following the Effective Date hereof.

WHEREAS, the Administrative Agent, the Lenders and Borrower have agreed to make certain changes in the terms and conditions set forth in the Credit Agreement, and have agreed to amend the Credit Agreement to reflect said changes.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:

1.    Section 1.1 — Defined Terms (New).  The following defined terms are hereby added to Section 1.1 in the appropriate alphabetical place:

“Amendment No. 4” means the Fourth Amendment to Amended and Restated Credit Agreement, dated as of May 23, 2013, among Borrower, each of the Lenders party thereto and the Administrative Agent.

“Amendment No. 4 Effective Date” means the “Effective Date” as defined in Amendment No. 4.

2.    Section 1.1 — Defined Term (Revision).  The following defined terms contained in Section 1.1 of the Credit Agreement are hereby amended in full to read as follows:

“Applicable Alternate Base Rate Margin” means, with respect to any Alternate Base Rate Advance, for each Pricing Period, the interest rate margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:

	
			
	Applicable 
Pricing 
Level
	 
	Margin

	 
	 
	 

	I
	 
	0.000

	 
	 
	 

	II
	 
	0.000

	 
	 
	 

	III
	 
	0.000

	 
	 
	 

	IV
	 
	0.000

	 
	 
	 

	V
	 
	0.000

“Applicable Commitment Fee Margin” means, for each Pricing Period, the margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:

	
			
	Applicable 
Pricing 
Level
	 
	Margin

	 
	 
	 

	I
	 
	5.0

	 
	 
	 

	II
	 
	7.5

	 
	 
	 

	III
	 
	10.0

	 
	 
	 

	IV
	 
	12.5

	 
	 
	 

	V
	 
	15.0

“Applicable Eurodollar Rate Margin” means, with respect to any Eurodollar Rate Advance, for each Pricing Period, the interest rate margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:

	
			
	Applicable 
Pricing 
Level
	 
	Margin

	 
	 
	 

	I
	 
	55.0

	 
	 
	 

	II
	 
	65.0

	 
	 
	 

	III
	 
	75.0

	 
	 
	 

	IV
	 
	85.0

	 
	 
	 

	V
	 
	95.0

“Applicable Pricing Level” means, for each Pricing Period, the pricing level set forth below opposite the Debt Rating achieved by Borrower as of the first day of that Pricing Period:

	
			
	Pricing Level
	 
	Debt Rating

	 
	 
	 

	I
	 
	Greater than or equal to Aa3 / AA-

	 
	 
	 

	II
	 
	Less than Aa3 / AA- but greater than or equal to A1/A+

	 
	 
	 

	III
	 
	Less than A1/A+ but greater than or equal to A2/A

	 
	 
	 

	IV
	 
	Less than A2/A but greater than or equal to A3/A-

	 
	 
	 

	V
	 
	Less than A3/A-

provided that in the event that the then prevailing Debt Ratings are “split ratings”, Borrower will receive the benefit of the higher Debt Rating, unless the split is a “double split rating” (in which case the pricing level applicable to the middle Debt Rating will apply) or a “triple split rating” (in which case the pricing level applicable to the Debt Rating above the Debt Rating applicable to the lowest pricing level will apply).  For purposes hereof, a Debt Rating is only a “split rating” if the Debt Rating applies to a different pricing level.

“Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Advances (expressed as the maximum aggregate amount of the Advances to be made by such Lender hereunder), as such commitment may be (a) reduced from time to time pursuant to Section 2.6, (b) increased pursuant to Section 2.10, and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.8.  The amount of each Lender’s Commitment on the Amendment No. 4 Effective Date is set forth on Schedule 1.1 or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable.  The aggregate amount of the Lenders’ Commitments on the Amendment No. 4 Effective Date is $100,000,000.

“Maturity Date” means the earlier of (a) May 23, 2018 and (b) the termination or cancellation of the Revolving Facility (and all of the Commitments pertaining thereto) pursuant to the terms of this Agreement.

3.    Section 2.10 - Optional Increase to the Commitments.  The reference to “$140,000,000” contained in the introductory paragraph of Section 2.10 of the Credit Agreement is hereby amended in full to read “$150,000,000”.

4.    Section 4.9 - Litigation.  The first sentence of Section 4.9 of the Credit Agreement is deleted in its entirety and replaced with the following:

Except for (a) any matter fully covered as to subject matter and amount (subject to applicable deductibles and retentions) by insurance for which the insurance carrier has not asserted lack of subject matter coverage or reserved the right to do so, (b) any matter, or series of related matters, involving a claim against Borrower or any of its Subsidiaries, that is reasonably likely to result in a payment by Borrower or any such Subsidiary of less than $1,000,000, (c) matters of an administrative nature involving a claim or charge against Borrower or any of its Subsidiaries of less than $1,000,000, (d) matters before the California Public Utilities Commission involving a claim or charge against Borrower or any of its Subsidiaries which would not reasonably be expected to have a Material Adverse Effect, (e) matters of an administrative nature not involving a claim or charge against Borrower or any Subsidiary of Borrower and (f) matters set forth in Schedule 4.9, there are no actions, suits, proceedings or investigations pending as to which Borrower or any Subsidiary has been served or have received notice or, to the best knowledge of Borrower threatened against or affecting Borrower or any of its Subsidiaries or any Property of any of them before any Governmental Agency.

5.    Section 6.1 - Prepayment of Indebtedness.  Section 6.1 of the Credit Agreement is amended by (a) deleting the “and” immediately preceding clause (c) therein and replacing it with a “,”, (b) deleing the “.” immediately following clause (c) therein and replacing it with an “and” and (c) inserting a new clause (d) as follows:

(d) the prepayment of Indebtedness in Cash without the issuance of additional Indebtedness; provided that no Default or Event of Default shall exist or shall result from such prepayment.

6.    Section 6.3 - Disposition of Property.  Section 6.3 of the Credit Agreement is deleted in its entirety and replaced with the following:

Make any Disposition of its Property, whether now owned or hereafter acquired, except (a) Dispositions of obsolete Property or Property with no material useful life, (b) Dispositions in an aggregate amount not to exceed $5,000,000 in any Fiscal Year ending after the Closing Date or $10,000,000 in the aggregate from and after the Amendment No.4 Effective Date to the Termination Date; provided that (i) at the time of any such Disposition pursuant to clause (b) only, no Default or Event of Default shall exist or shall result from such Disposition and (ii) the sales price relating to a Disposition (pursuant to clause (a) or (b)) shall be paid in Cash and/or Indebtedness or other evidence of an Investment permitted under Section 6.14(h), (c) Dispositions pursuant to any order of any Governmental Agency in an eminent domain proceeding and any settlement of any such proceeding, (d) a Permitted Water Rights Disposition, (e) as otherwise permitted pursuant to a letter agreement dated May 27, 2010, by and between the Administrative Agent and the Borrower, and (f) the sale of any or all of the equity interests owned by Borrower or GSW in the Pomona Valley Protective Association so long as the consideration received for such sale is greater than or equal to the book value of such equity interests as of the Amendment No. 4 Effective Date.

7.    Sections 6.9, 6.10, 6.14 - Sections 6.9, 6.10 and 6.14 of the Credit Agreement are hereby amended by replacing the phrase “suffer to exist” contained in each such section and replacing it with “permit to exist”.

8.    Section 6.14 - Investments and Acquisitions.  Section 6.14 of the Credit Agreement is amended by (a) deleting the reference to $500,000 contained in the proviso to clause (g) and replacing it with $1,000,000, (b) deleting the reference to $500,000 contained in clause (h) and replacing it with $1,000,000, (c) deleting the “and” immediately following clause (h), (d) deleting the “.” immediately following clause (i) and replacing it with a “;” and (e) inserting the new clauses (j), (k), (l), (m) and (n) as follow:

(j)    advances in aid of construction, contributions in aid of construction or similar advances made by GSW in the ordinary course of business;

(k)    other Investments made in the ordinary course of business in an amount not to exceed $1,000,000 in any Fiscal Year; provided that at the time of making such Investment and after giving effect thereto, no Default or Event of Default shall exist or shall result from such Investment;

(l)    Investments made by Borrower and GSW in the Pomona Valley Protective Association prior to June 3, 2005;

(m)    Investments in the form of a promissory note received from Aerojet-General Corporation, as the maker, in favor of Borrower in settlement of litigation in the aggregate amount of $8,000,000 payable ratable over a period of five years commencing in December 2009; and

(n)    Investments in fixed income and equity securities made and to be made by Borrower or any of its Subsidiaries in a manner consistent with past practice and in accordance with Borrower’s investment policy in a Rabbi Trust established to fund GSW’s obligations under a Pension Restoration Plan for executive officers of Borrower and its Subsidiaries.

9.    Section 9.1(l) - Events of Default.  Section 9.1(l) of the Credit Agreement is amended by deleting in its entirety the reference contained therein to “or Chapparal City Water Company”.

10.    Schedule 1.1 (Lender Commitments/Pro Rata Shares).  Schedule 1.1 to the Credit Agreement is hereby amended in full to read as set forth on Annex I to this Amendment.

11.    Schedule 4.9 (Material Litigation).  Schedule 4.9 to the Credit Agreement is hereby amended in full to read as set forth on Annex II to this Amendment.

12.    Upfront Fee.  In consideration of the agreements set forth herein, Borrower hereby agrees to pay to the Administrative Agent, for the ratable account of the Lenders, an upfront fee in an aggregate amount equal to 0.155% of the commitments of each of the Lenders ($155,000) (the “Upfront Fee”).  The entire amount of the Upfront Fee will be fully earned and shall be due and payable in full in cash on the Effective Date.

13.    Effectiveness.  This Amendment shall become effective on the date that each of the following conditions shall have been satisfied in a manner satisfactory to the Lenders in their sole and absolute discretion (the “Effective Date”):

(a)    The Administrative Agent shall have received all of the following in form and substance satisfactory to the Administrative Agent and its legal counsel:

(i)    duly executed counterparts of this Amendment signed by the parties hereto;

(ii)    duly executed Note(s) for the Lender with a revised or new Commitment;

(iii)    the favorable written legal opinion of Winston & Strawn LLP, special counsel to the Borrower;

(iv)    duly executed Assignment and Acceptances from each of CoBank, ACB, Comerica Bank and U.S. Bank National Association assigning their respective interests in the Obligations and Commitments to Wells Fargo Bank, National Association; and

(v)    such other assurances, certificates, documents, consents or opinions as the Administrative Agent and/or any Lender reasonably may require.

(b)    The Upfront Fee which is due and payable on the Effective Date shall have been paid.

(c)    Borrower shall have paid to the Administrative Agent, for the benefit of Lenders existing immediately prior to the Effective Date, interest in the amount of $0 and accrued fees in the amount of $17,267.42 owed to such Lenders on the Effective Date.

(d)    The reasonable costs and expenses of the Administrative Agent in connection with the preparation of this Agreement and each of the other Loan Documents prepared in connection therewith payable pursuant to Section 11.3, and invoiced to Borrower prior to the Effective Date, shall have been paid.

(e)    All legal matters relating to the Loan Documents shall be reasonably satisfactory to Bingham McCutchen LLP, special counsel to the Administrative Agent.

14.    Integration; Loan Document.  Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification.  This Amendment and the Credit Agreement shall be read together, as one document.  This Amendment shall constitute a Loan Document.

15.    Representations and Warranties; No Defaults.  Borrower hereby represents that all representations and warranties contained in Article 4 of the Credit Agreement (except to the extent such representations and warranties expressly speak as of a prior date, in which case they were true and correct in all material respects on and as of such earlier date) are and will be true and correct in all material respects on and as of the Amendment No. 4 Effective Date and reaffirms all covenants set forth therein.  Borrower further certifies that as of the date of, and after giving effect to, this Amendment, there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.

16.    Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.

17.    Counterparts.  This Amendment may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Amendment, when taken together, will be deemed to be but one and the same instrument and execution of any such counterpart may be evidenced by facsimile or other electronic means of transmission of the signature of such party.

[Remainder of page intentionally left blank; signature pages follow.]

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

	
			
	 
	BORROWER:

	 
	 

	 
	 

	 
	AMERICAN STATES WATER COMPANY,

	 
	 

	 
	a California corporation

	 
	 

	 
	 

	 
	By:
	/s/ Robert J. Sprowls

	 
	Name: Robert J. Sprowls

	 
	Title: President & Chief Executive Officer

Fourth Amendment to Amended and Restated Credit Agreement

	
			
	 
	ADMINISTRATIVE AGENT:

	 
	 

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	 

	 
	as Administrative Agent

	 
	 

	 
	 

	 
	By:
	/s/ Duvon G. Davis

	 
	Name: Duvon G. Davis

	 
	Title: Vice President

Fourth Amendment to Amended and Restated Credit Agreement

	
			
	 
	LENDERS:

	 
	 

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	 

	 
	as a Lender

	 
	 

	 
	 

	 
	By:
	/s/ Duvon G. Davis

	 
	Name: Duvon G. Davis

	 
	Title: Vice President

Fourth Amendment to Amended and Restated Credit Agreement

ANNEX I

SCHEDULE 1.1

LENDER COMMITMENTS/PRO RATA SHARES

	
							
	Lender
	 
	Pro Rata Share
	 
	Commitment Amount
	 

	Wells Fargo Bank, National Association   
	 
	100.0
	%
	$
	100,000,000
	 

	 
	 
	100.0
	%
	$
	100,000,000
	 

LIMITED CONSENT

This LIMITED CONSENT (this “Consent”) is entered into as of March 24, 2014 among AMERICAN STATES WATER COMPANY, a California corporation (“Borrower”), each of the lenders party to the Credit Agreement (defined below), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and lead arranger.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise stated.

RECITALS

A.    Borrower, the Lenders and the Administrative Agent are party to that Amended and Restated Credit Agreement dated as of June 3, 2005 (as amended through the date hereof and as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which, the Lenders have made certain credit facilities available to Borrower.

B.    Borrower has requested that the Lenders consent to Borrower being able to repurchase issued and outstanding common shares of Borrower (the “Borrower Securities Repurchase”).

C.    Subject to the terms and conditions set forth herein, the Lenders are willing to so consent to the Borrower Securities Repurchase.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that:

1.    Limited Consent.

(a)    Notwithstanding any provision of the Credit Agreement and any other Loan Document to the contrary (including Sections 6.6, 6.11 and 6.14 of the Credit Agreement), the Requisite Lenders and the Administrative Agent hereby consent to the Borrower Securities Repurchase so long as:  (i) at the time of any repurchase of Securities and after giving effect thereto, no Default or Event of Default has occurred and is continuing; (ii) all Securities purchased pursuant to the Borrower Securities Repurchase are acquired on or before June 30, 2016; and (iii) the aggregate amount of Securities purchased pursuant to the Borrower Securities Repurchase does not exceed the lesser of (A) $50,000,000 and (B) 1,250,000 common shares of the Borrower.

(b)    The consent set forth in this Section 1 shall be limited precisely as written and shall not be deemed (i) to be a consent, waiver or amendment of compliance with any other term or condition of the Credit Agreement or any of the other Loan Documents or to prejudice any right or remedy which the Administrative Agent or any Lender may now have or may have in the future under or in connection with the Credit Agreement or any of the other Loan Documents; (ii) to be an amendment, consent or waiver of any other term or condition of the Credit Agreement or the other Loan Documents, to prejudice any right or remedy which the Administrative Agent or any Lender may now have or may have in the future under or in connection with the Credit Agreement or the other Loan Documents; or (iii) to be a consent to any future amendment, consent or waiver or departure from the terms and conditions of the Credit Agreement or the other Loan Documents.  This Consent is a Loan Document and shall be construed in connection with and as part of the Loan Documents, and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein waived or amended, are hereby ratified and confirmed and shall remain in full force and effect.  This Consent is a consent to the Credit Agreement and the other Loan Documents without any discharge, release or satisfaction of the existing obligations or indebtedness (or any guaranty or collateral security therefor), all of which obligations, indebtedness and security remain outstanding under the Loan Documents.  The Borrower hereby reaffirms its obligations under each Loan Document to which it is a party.
2.    Representations and Warranties; No Defaults.  The Borrower hereby represents that all representations and warranties contained in Article 4 of the Credit Agreement (except to the extent such representations and warranties expressly speak as of a prior date, in which case they were true and correct in all material respects on and as of such earlier date) are and will be true and correct in all material respects on and as of the date of this Consent and reaffirms all covenants set forth therein.  The Borrower further certifies that as of the date of, and after giving effect to, this Consent, there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.

3.    Effectiveness.  This Consent shall become effective upon the satisfaction of each of the following conditions:

(a)    Documentation  The Administrative Agent shall have received a fully executed copy of this Consent and such other certificates or documents related to the Borrower Securities Repurchase as the Administrative Agent may reasonably request.

(b)    Consent Fee.  Receipt by the Administrative Agent of a consent fee of $0, payable in cash, which fee will be fully earned and non-refundable once received.

(c)    Fees and Expenses.  The reasonable costs and expenses of the Administrative Agent in connection with the preparation of this Consent and any other document prepared in connection herewith payable pursuant to Section 11.3, and invoiced to Borrower prior to the date hereof, shall have been paid.

(d)    Other Matters.  All legal matters relating to this Consent and the other Loan Documents shall be reasonably satisfactory to Bingham McCutchen LLP, special counsel to the Administrative Agent.

4.    Governing Law.  THIS CONSENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.

5.    Counterparts.  This Consent may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Consent, when taken together, will be deemed to be but one and the same instrument and execution of any such counterpart may be evidenced by facsimile or other electronic means of transmission of the signature of such party.

[remainder of page intentionally blank]

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

	
			
	 
	BORROWER:

	 
	 

	 
	 

	 
	AMERICAN STATES WATER COMPANY,

	 
	 

	 
	a California corporation

	 
	 

	 
	 

	 
	By:
	/s/ Eva G. Tang

	 
	Name: Eva G. Tang

	 
	Title: Senior Vice President — Finance, Chief Financial Officer, Corporate Secretary and Treasurer

	
			
	 
	ADMINISTRATIVE AGENT:

	 
	 

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	 

	 
	as Administrative Agent

	 
	 

	 
	 

	 
	By:
	/s/ Duvon G. Davis

	 
	Name:
	DuVon G. Davis

	 
	Title:
	Vice President

	 
	 

	 
	 

	 
	LENDERS:

	 
	 

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	 

	 
	as a Lender

	 
	 

	 
	 

	 
	By:
	/s/ Duvon G. Davis

	 
	Name:
	DuVon G. Davis

	 
	Title:
	Vice President

LIMITED CONSENT

This LIMITED CONSENT (this “Consent”) is entered into as of May 20, 2015 among AMERICAN STATES WATER COMPANY, a California corporation (“Borrower”), each of the lenders party to the Credit Agreement (defined below), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and lead arranger.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise stated.

RECITALS

A.    Borrower, the Lenders and the Administrative Agent are party to that Amended and Restated Credit Agreement dated as of June 3, 2005 (as amended through the date hereof and as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which, the Lenders have made certain credit facilities available to Borrower.

B.    Borrower has requested that the Lenders consent to Borrower being able to repurchase issued and outstanding common shares of Borrower (the “Borrower Securities Repurchase”).

C.    Subject to the terms and conditions set forth herein, the Lenders are willing to so consent to the Borrower Securities Repurchase.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that:

6.    Limited Consent.

(a)    Notwithstanding any provision of the Credit Agreement and any other Loan Document to the contrary (including Sections 6.6, 6.11 and 6.14 of the Credit Agreement), the Requisite Lenders and the Administrative Agent hereby consent to the Borrower Securities Repurchase so long as:  (i) at the time of any repurchase of Securities and after giving effect thereto, no Default or Event of Default has occurred and is continuing; (ii) all Securities purchased pursuant to the Borrower Securities Repurchase are acquired on or before June 30, 2017; and (iii) the aggregate amount of Securities purchased pursuant to the Borrower Securities Repurchase does not exceed the lesser of (A) $60,000,000 and (B) 1,200,000 common shares of the Borrower.

(b)    The consent set forth in this Section 1 shall be limited precisely as written and shall not be deemed (i) to be a consent, waiver or amendment of compliance with any other term or condition of the Credit Agreement or any of the other Loan Documents or to prejudice any right or remedy which the Administrative Agent or any Lender may now have or may have in the future under or in connection with the Credit Agreement or any of the other Loan Documents; (ii) to be an amendment, consent or waiver of any other term or condition of the Credit Agreement or the other Loan Documents, to prejudice any right or remedy which the Administrative Agent or any Lender may now have or may have in the future under or in connection with the Credit Agreement or the other Loan Documents; or (iii) to be a consent to any future amendment, consent or waiver or departure from the terms and conditions of the Credit Agreement or the other Loan Documents.  This Consent is a Loan Document and shall be construed in connection with and as part of the Loan Documents, and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein waived or amended, are hereby ratified and confirmed and shall remain in full force and effect.  This Consent is a consent to the Credit Agreement and the other Loan Documents without any discharge, release or satisfaction of the existing obligations or indebtedness (or any guaranty or collateral security therefor), all of which obligations, indebtedness and security remain outstanding under the Loan Documents.  The Borrower hereby reaffirms its obligations under each Loan Document to which it is a party.

7.    Representations and Warranties; No Defaults.  The Borrower hereby represents that all representations and warranties contained in Article 4 of the Credit Agreement (except to the extent such representations and warranties expressly speak as of a prior date, in which case they were true and correct in all material respects on and as of such earlier date) are and will be true and correct in all material respects on and as of the date of this Consent and reaffirms all covenants set forth therein.  The Borrower further certifies that as of the date of, and after giving effect to, this Consent, there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.

8.    Effectiveness.  This Consent shall become effective upon the satisfaction of each of the following conditions:

(a)    Documentation  The Administrative Agent shall have received a fully executed copy of this Consent and such other certificates or documents related to the Borrower Securities Repurchase as the Administrative Agent may reasonably request.

(b)    Consent Fee.  Receipt by the Administrative Agent of a consent fee of $0, payable in cash, which fee will be fully earned and non-refundable once received.

(c)    Fees and Expenses.  The reasonable costs and expenses of the Administrative Agent in connection with the preparation of this Consent and any other document prepared in connection herewith payable pursuant to Section 11.3, and invoiced to Borrower prior to the date hereof, shall have been paid.

(d)    Other Matters.  All legal matters relating to this Consent and the other Loan Documents shall be reasonably satisfactory to Morgan Lewis & Bockius LLP, special counsel to the Administrative Agent.

9.    Governing Law.  THIS CONSENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.

10.    Counterparts.  This Consent may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Consent, when taken together, will be deemed to be but one and the same instrument and execution of any such counterpart may be evidenced by facsimile or other electronic means of transmission of the signature of such party.

[remainder of page intentionally blank]

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

	
			
	 
	BORROWER:

	 
	 

	 
	 

	 
	AMERICAN STATES WATER COMPANY,

	 
	 

	 
	a California corporation

	 
	 

	 
	 

	 
	By:
	/s/ Robert J. Sprowls

	 
	Name:
	Robert J. Sprowls

	 
	Title:
	President and Chief Executive Officer

	
			
	 
	ADMINISTRATIVE AGENT:

	 
	 

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	 

	 
	as Administrative Agent

	 
	 

	 
	 

	 
	By:
	/s/ DuVon G. Davis

	 
	Name:
	DuVon G. Davis

	 
	Title:
	Vice President

	 
	 

	 
	 

	 
	LENDERS:

	 
	 

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	 

	 
	as a Lender

	 
	 

	 
	 

	 
	By:
	/s/ DuVon G. Davis

	 
	Name:
	DuVon G. Davis

	 
	Title:
	Vice President

FIFTH AMENDMENT TO 
AMENDED AND RESTATED CREDIT AGREEMENT

THIS FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of October 26, 2016, is entered into with reference to the Amended and Restated Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) dated as of June 3, 2005, by and among AMERICAN STATES WATER COMPANY, a California corporation (“Borrower”), each of the lenders party thereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and lead arranger.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise stated.

RECITALS

WHEREAS, Borrower has requested that the Credit Agreement be modified as set forth in this Amendment, including, without limitation, that the amount of the Revolving Facility be increased by $50,000,000 (to $150,000,000) on the Effective Date hereof.

WHEREAS, the Administrative Agent, Wells Fargo, as the sole existing Lender as of the date hereof, and Borrower have agreed to make certain changes in the terms and conditions set forth in the Credit Agreement, and have agreed to amend the Credit Agreement to reflect said changes.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:

1.    Section 1.1 — Defined Terms (New).  The following defined terms are hereby added to Section 1.1 in the appropriate alphabetical place:

“Amendment No. 5” means the Fifth Amendment to Amended and Restated Credit Agreement, dated as of October 26, 2016, among Borrower, each of the Lenders party thereto and the Administrative Agent.

“Amendment No. 5 Effective Date” means the “Effective Date” as defined in Amendment No. 5.

2.    Section 1.1 — Defined Terms (Revisions).  The following defined terms contained in Section 1.1 of the Credit Agreement are hereby amended in full to read as follows:

“Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Advances (expressed as the maximum aggregate amount of the Advances to be made by such Lender hereunder), as such commitment may be (a) reduced from time to time pursuant to Section 2.6, (b) increased pursuant to Section 2.10, and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.8.  The amount of each Lender’s Commitment on the Amendment No. 5 Effective Date is set forth on Schedule 1.1 or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable.  The aggregate amount of the Lenders’ Commitments on the Amendment No. 5 Effective Date is $150,000,000.

“Eurodollar Rate” means for any Eurodollar Period, with respect to a Eurodollar Rate Advance, a rate per annum (rounded upwards, as necessary, to the nearest 1/16th of one percent (0.0625%)) obtained by dividing (a) the rate per annum determined by the Administrative Agent at approximately 11:00 a.m., London time, on the date that is two Eurodollar Banking Days prior to the beginning of such Eurodollar Period by reference to the British Bankers’ Association “Interest Settlement Rates” for deposits in Dollars (as set forth by any service (including Bloomberg, Reuters and Thomson Financial) selected by the Administrative Agent that has been nominated by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rates) in an amount approximately equal to the principal amount to which such Eurodollar Period applies (for delivery on the first day of such Eurodollar Period) with a term equivalent to such Eurodollar Period; provided that, if an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, then “Eurodollar Rate” shall be the interest rate per annum determined by the Administrative Agent to be the average of the rates per annum at which deposits in Dollars in an amount approximately equal to the principal amount to which such Eurodollar Period applies (for delivery on the first day of such Eurodollar Period) with a term equivalent to such Eurodollar Period are offered for such Eurodollar Period by Wells Fargo to major banks in the London interbank offered market in London, England at approximately 11:00 a.m., London time, on the date that is two Eurodollar Banking Days prior to the beginning of such Eurodollar Period by (b) one minus the Reserve Requirement in effect on such date.  Each determination by the Administrative Agent pursuant to this definition shall be conclusive absent manifest error.  Notwithstanding the foregoing, in no event shall the Eurodollar Rate be less than 0%.

“Federal Funds Rate” means for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Banking Day next succeeding such day; provided that (a) if such day is not a Banking Day, then the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Banking Day as so published on the next succeeding Banking Day and (b) if no such rate is so published on such next succeeding Banking Day, then the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of one one-hundredth of one percent (0.01%)) charged to Wells Fargo on such day on such transactions as determined by Administrative Agent.  Notwithstanding the foregoing, if the Federal Funds Rate shall be less than 0%, such rate shall be deemed to be 0% for purposes of the Loan Documents.

3.    Schedule 1.1 (Lender Commitments/Pro Rata Shares).  Schedule 1.1 to the Credit Agreement is hereby amended in full to read as set forth on Annex I to this Amendment.

4.    Amendment Fee.  In consideration of the agreements set forth herein, Borrower hereby agrees to pay to the Administrative Agent, for the ratable account of the Lenders, an amendment fee in an aggregate amount equal to $37,500 (which is 0.075% (7.5 basis points) on that portion of the increase in the Commitments of each of the Lenders made pursuant hereto) (the “Amendment Fee”).  The entire amount of the Amendment Fee will be fully earned and shall be due and payable in full in cash on the Effective Date.

5.    Effectiveness.  This Amendment shall become effective on the date that each of the following conditions shall have been satisfied in a manner satisfactory to the Lenders in their sole and absolute discretion (the “Effective Date”):

(a)    The Administrative Agent shall have received all of the following in form and substance satisfactory to the Administrative Agent and its legal counsel:

(i)    duly executed counterparts of this Amendment signed by the parties hereto;

(ii)    duly executed Note(s) for the Lender with a revised or new Commitment;

(iii)    the favorable written legal opinion of Winston & Strawn LLP, special counsel to Borrower; and

(iv)    such other assurances, certificates, documents, consents or opinions as the Administrative Agent and/or any Lender reasonably may require.

(b)    The Amendment Fee which is due and payable on the Effective Date shall have been paid.

(c)    The reasonable costs and expenses of the Administrative Agent in connection with the preparation of this Agreement and each of the other Loan Documents prepared in connection therewith payable pursuant to Section 11.3, and invoiced to Borrower prior to the Effective Date, shall have been paid.

(d)    All legal matters relating to the Loan Documents shall be reasonably satisfactory to McGuireWoods LLP, special counsel to the Administrative Agent.

6.    Integration; Loan Document.  Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification.  This Amendment and the Credit Agreement shall be read together, as one document.  This Amendment shall constitute a Loan Document.

7.    Representations and Warranties; No Defaults.  Borrower hereby represents that all representations and warranties contained in Article 5 of the Credit Agreement (except to the extent such representations and warranties expressly speak as of a prior date, in which case they were true and correct in all material respects on and as of such earlier date) are and will be true and correct in all material respects on and as of the Amendment No. 5 Effective Date and reaffirms all covenants set forth therein.  Borrower further certifies that as of the date of, and after giving effect to, this Amendment, there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.

8.    Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.

9.    Counterparts.  This Amendment may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Amendment, when taken together, will be deemed to be but one and the same instrument and execution of any such counterpart may be evidenced by facsimile or other electronic means of transmission of the signature of such party.

[Remainder of page intentionally left blank; signature pages follow.]

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

	
			
	 
	BORROWER:

	 
	 

	 
	AMERICAN STATES WATER COMPANY,

	 
	a California corporation

	 
	 

	 
	 

	 
	By:
	/s/ Eva G. Tang

	 
	Name:
	Eva G. Tang

	 
	Title:
	Senior Vice President, Chief Financial Officer, Corporate Secretary and Treasurer

Fifth Amendment to Amended and Restated Credit Agreement

	
			
	 
	ADMINISTRATIVE AGENT:

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	as Administrative Agent

	 
	 

	 
	 

	 
	By:
	/s/ DuVon G. Davis

	 
	Name:
	DuVon G. Davis

	 
	Title:
	Vice President

Fifth Amendment to Amended and Restated Credit Agreement

	
			
	 
	LENDERS:

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	as a Lender

	 
	 

	 
	 

	 
	By:
	/s/ DuVon G. Davis

	 
	Name:
	DuVon G. Davis

	 
	Title:
	Vice President

Fifth Amendment to Amended and Restated Credit Agreement

ANNEX I

SCHEDULE 1.1

LENDER COMMITMENTS/PRO RATA SHARES

	
							
	Lender
	 
	Pro Rata Share
	 
	Commitment Amount
	 

	Wells Fargo Bank, National Association   
	 
	100.0
	%
	$
	150,000,000
	 

	 
	 
	100.0
	%
	$
	150,000,000
	 

SIXTH AMENDMENT TO 
AMENDED AND RESTATED CREDIT AGREEMENT

THIS SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of May 23, 2018, is entered into with reference to the Amended and Restated Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) dated as of June 3, 2005, by and among AMERICAN STATES WATER COMPANY, a California corporation (“Borrower”), each of the lenders party thereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and lead arranger.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise stated.

RECITALS

WHEREAS, Borrower has requested that the Credit Agreement be modified as set forth in this Amendment.

WHEREAS, the Administrative Agent, Wells Fargo, as the sole existing Lender as of the date hereof, and Borrower have agreed to make certain changes in the terms and conditions set forth in the Credit Agreement, and have agreed to amend the Credit Agreement to reflect said changes.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:

1.    Section 1.1 — Defined Terms (New).  The following defined terms are hereby added to Section 1.1 in the appropriate alphabetical place:

“Amendment No. 6” means the Sixth Amendment to Amended and Restated Credit Agreement, dated as of May 23, 2018, among Borrower, each of the Lenders party thereto and the Administrative Agent.

“Amendment No. 6 Effective Date” means the “Effective Date” as defined in Amendment No. 6.

2.    Section 1.1 — Defined Terms (Revisions).  The following defined terms contained in Section 1.1 of the Credit Agreement are hereby amended in full to read as follows:

“Applicable Commitment Fee Margin” means, for each Pricing Period, the margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:

	
				
	Applicable 
Pricing 
Level
	 
	Margin
	 

	I
	 
	5.00
	 

	II
	 
	7.25
	 

	III
	 
	10.00
	 

	IV
	 
	12.50
	 

	V
	 
	15.00
	 

“Applicable Eurodollar Rate Margin” means, with respect to any Eurodollar Rate Advance, for each Pricing Period, the interest rate margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:

	
				
	Applicable 
Pricing 
Level
	 
	Margin
	 

	I
	 
	52.50
	 

	II
	 
	62.50
	 

	III
	 
	72.50
	 

	IV
	 
	82.50
	 

	V
	 
	92.50
	 

“Applicable Pricing Level” means, (a) for the Initial Pricing Period, Pricing Level II, and (b) thereafter, the pricing level set forth below opposite the Debt Rating achieved by Borrower as of the first day of that Pricing Period:

	
			
	Pricing Level
	 
	Debt Rating

	I
	 
	Greater than or equal to Aa3 / AA-

	II
	 
	Less than Aa3 / AA- but greater than or equal to A1/A+

	III
	 
	Less than A1/A+ but greater than or equal to A2/A

	IV
	 
	Less than A2/A but greater than or equal to A3/A-

	V
	 
	Less than A3/A-

provided that in the event that the then prevailing Debt Ratings are “split ratings”, Borrower will receive the benefit of the higher Debt Rating, unless the split is a “double split rating” (in which case the pricing level applicable to the middle Debt Rating will apply) or a “triple split rating” (in which case the pricing level applicable to the Debt Rating above the Debt Rating applicable to the lowest pricing level will apply).  For purposes hereof, a Debt Rating is only a “split rating” if the Debt Rating applies to a different pricing level.

“Capital Lease” means, as to any Person, a lease of any Property by that Person as lessee that is, or should be in accordance with GAAP (including Financial Accounting Standards Board Statement No. 13, as amended or superseded from time to time, and/or Accounting Standards Codification 842 “Leases”), recorded as a “capital lease” or as a “financing lease”, as the case may be, on the balance sheet of that Person prepared in accordance with GAAP.

“Initial Pricing Period” means the period commencing on the Amendment No. 6 Effective Date and ending on the first Pricing Occurrence to occur thereafter.

“Maturity Date” means the earlier of (a) May 23, 2023 and (b) the termination or cancellation of the Revolving Facility (and all of the Commitments pertaining thereto) pursuant to the terms of this Agreement.

“Pricing Period” means (a) the Initial Pricing Period and (b) each subsequent period commencing on the date of a Pricing Occurrence and ending on the next Pricing Occurrence to occur.

3.    Section 2.10 - Optional Increase to the Commitments.  The reference to “$150,000,000” contained in the introductory paragraph of Section 2.10 of the Credit Agreement is hereby amended in full to read “$200,000,000”.

4.    Effectiveness.  This Amendment shall become effective on the date that each of the following conditions shall have been satisfied in a manner satisfactory to the Lenders in their sole and absolute discretion (the “Effective Date”):

(a)    The Administrative Agent shall have received all of the following in form and substance satisfactory to the Administrative Agent and its legal counsel:

(i)    duly executed counterparts of this Amendment signed by the parties hereto; and

(ii)    such other assurances, certificates, documents or consents as the Administrative Agent and/or any Lender reasonably may require.

(b)    The Upfront Fee described in that certain letter agreement dated as of May 17, 2018 between the Administrative Agent and Borrower shall have been paid.

(c)    The reasonable costs and expenses of the Administrative Agent in connection with the preparation of this Agreement and each of the other Loan Documents prepared in connection therewith payable pursuant to Section 11.3, and invoiced to Borrower prior to the Effective Date, shall have been paid.

(d)    All legal matters relating to the Loan Documents shall be reasonably satisfactory to McGuireWoods LLP, special counsel to the Administrative Agent.

5.    Integration; Loan Document.  Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification.  This Amendment and the Credit Agreement shall be read together, as one document.  This Amendment shall constitute a Loan Document.

6.    Representations and Warranties; No Defaults.  Borrower hereby represents that all representations and warranties contained in Article 5 of the Credit Agreement (except to the extent such representations and warranties expressly speak as of a prior date, in which case they were true and correct in all material respects on and as of such earlier date) are and will be true and correct in all material respects on and as of the Amendment No. 6 Effective Date and reaffirms all covenants set forth therein.  Borrower further certifies that as of the date of, and after giving effect to, this Amendment, there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.

7.    Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.

8.    Counterparts.  This Amendment may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Amendment, when taken together, will be deemed to be but one and the same instrument and execution of any such counterpart may be evidenced by facsimile or other electronic means of transmission of the signature of such party.

[Remainder of page intentionally left blank; signature pages follow.]

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

	
			
	 
	BORROWER:

	 
	 

	 
	AMERICAN STATES WATER COMPANY,

	 
	a California corporation

	 
	 

	 
	 

	 
	By:
	/s/ Eva G. Tang

	 
	Name:
	Eva G. Tang

	 
	Title:
	Senior Vice President, Chief Financial Officer, Corporate Secretary and Treasurer

Sixth Amendment to Amended and Restated Credit Agreement

	
			
	 
	ADMINISTRATIVE AGENT:

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	as Administrative Agent

	 
	 

	 
	 

	 
	By:
	/s/ DuVon G. Davis

	 
	Name:
	Du Von G. Davis

	 
	Title:
	Senior Vice President

Sixth Amendment to Amended and Restated Credit Agreement

	
			
	 
	LENDERS:

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	as a Lender

	 
	 

	 
	 

	 
	By:
	/s/ DuVon G. Davis

	 
	Name:
	Du Von G. Davis

	 
	Title:
	Senior Vice President

Sixth Amendment to Amended and Restated Credit Agreement

SEVENTH AMENDMENT TO 
AMENDED AND RESTATED CREDIT AGREEMENT

THIS SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of March 28, 2019, is entered into with reference to the Amended and Restated Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) dated as of June 3, 2005, by and among AMERICAN STATES WATER COMPANY, a California corporation (“Borrower”), each of the lenders party thereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and lead arranger.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise stated.

RECITALS

WHEREAS, Borrower has requested that the Credit Agreement be modified as set forth in this Amendment, including, without limitation, that the amount of the Revolving Facility be increased by $50,000,000 (to $200,000,000) on the Effective Date hereof.

WHEREAS, the Administrative Agent, Wells Fargo, as the sole existing Lender as of the date hereof, and Borrower have agreed to make certain changes in the terms and conditions set forth in the Credit Agreement, and have agreed to amend the Credit Agreement to reflect said changes.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:

1.    Section 1.1 — Defined Terms (New).  The following defined terms are hereby added to Section 1.1 in the appropriate alphabetical place:

“Amendment No. 7” means the Seventh Amendment to Amended and Restated Credit Agreement, dated as of March 28, 2019, among Borrower, each of the Lenders party thereto and the Administrative Agent.

“Amendment No. 7 Effective Date” means the “Effective Date” as defined in Amendment No. 7.

2.    Section 1.1 — Defined Terms (Revisions).  The definition of “Commitment” contained in Section 1.1 of the Credit Agreement is hereby amended to read as follows:

“Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Advances (expressed as the maximum aggregate amount of the Advances to be made by such Lender hereunder), as such commitment may be (a) reduced from time to time pursuant to Section 2.6, (b) increased pursuant to Section 2.10, and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.8.  The amount of each Lender’s Commitment on the Amendment No. 7 Effective Date is set forth on Schedule 1.1 or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable.  The aggregate amount of the Lenders’ Commitments on the Amendment No. 7 Effective Date is $200,000,000.

3.    Section 2.10 — Optional Increase to the Commitments.  Section 2.10 to the Credit Agreement is hereby amended to read as follows:

2.10  [Reserved].

4.    Schedule 1.1 (Lender Commitments/Pro Rata Shares).  Schedule 1.1 to the Credit Agreement is hereby amended to read as set forth on Annex I to this Amendment.

5.    Effectiveness.  This Amendment shall become effective on the date that each of the following conditions shall have been satisfied in a manner satisfactory to the Lenders in their sole and absolute discretion (the “Effective Date”):

(a)    The Administrative Agent shall have received all of the following in form and substance satisfactory to the Administrative Agent and its legal counsel:

(i)    duly executed counterparts of this Amendment signed by the parties hereto;

(ii)    a duly executed Note for Wells Fargo, as the sole Lender, reflecting its revised Commitment;

(iii)    updated resolutions of Borrower authorizing the increase in the commitment provided hereunder, the execution and delivery of this Amendment and the amended and restated Note described in the foregoing clause (ii), and such other matters relating hereto as Borrower’s board of directors shall determine; and

(iv)    such other assurances, certificates, documents, consents or opinions as the Administrative Agent and/or any Lender reasonably may require.

(b)    An upfront fee described in that certain letter agreement dated as of March 28, 2019 between the Administrative Agent and Borrower shall have been paid.

(c)    The reasonable costs and expenses of the Administrative Agent in connection with the preparation of this Agreement and each of the other Loan Documents prepared in connection therewith payable pursuant to Section 11.3, and invoiced to Borrower prior to the Effective Date, shall have been paid.

(d)    All legal matters relating to the Loan Documents shall be reasonably satisfactory to McGuireWoods LLP, special counsel to the Administrative Agent.

6.    Integration; Loan Document.  Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification.  This Amendment and the Credit Agreement shall be read together, as one document.  This Amendment shall constitute a Loan Document.

7.    Representations and Warranties; No Defaults.  Borrower hereby represents that all representations and warranties contained in Article 5 of the Credit Agreement (except to the extent such representations and warranties expressly speak as of a prior date, in which case they were true and correct in all material respects on and as of such earlier date) are and will be true and correct in all material respects on and as of the Amendment No. 7 Effective Date and reaffirms all covenants set forth therein.  Borrower further certifies that as of the date of, and after giving effect to, this Amendment, there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.

8.    Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.

9.    Counterparts.  This Amendment may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Amendment, when taken together, will be deemed to be but one and the same instrument and execution of any such counterpart may be evidenced by facsimile or other electronic means of transmission of the signature of such party.

[Remainder of page intentionally left blank; signature pages follow.]

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

	
			
	 
	BORROWER:

	 
	 

	 
	AMERICAN STATES WATER COMPANY,

	 
	a California corporation

	 
	 

	 
	 

	 
	By:
	/s/ Eva G. Tang

	 
	Name:
	Eva G. Tang

	 
	Title:
	Senior Vice President-Finance, Chief Financial Officer, Corporate Secretary and Treasurer

Seventh Amendment to Amended and Restated Credit Agreement

	
			
	 
	ADMINISTRATIVE AGENT:

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	as Administrative Agent

	 
	 

	 
	 

	 
	By:
	/s/ DuVon G. Davis

	 
	Name:
	DuVon G. Davis

	 
	Title:
	Senior Vice President

Seventh Amendment to Amended and Restated Credit Agreement

	
			
	 
	LENDERS:

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	as a Lender

	 
	 

	 
	 

	 
	By:
	/s/ DuVon G. Davis

	 
	Name:
	DuVon G. Davis

	 
	Title:
	Senior Vice President

Seventh Amendment to Amended and Restated Credit Agreement

ANNEX I

SCHEDULE 1.1

LENDER COMMITMENTS/PRO RATA SHARES

	
							
	Lender
	 
	Pro Rata Share
	 
	Commitment Amount
	 

	Wells Fargo Bank, National Association   
	 
	100.0
	%
	$
	200,000,000
	 

	 
	 
	100.0
	%
	$
	200,000,000
	 

EIGHTH AMENDMENT TO 
AMENDED AND RESTATED CREDIT AGREEMENT
THIS EIGHTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of October 31, 2019, is entered into with reference to the Amended and Restated Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) dated as of June 3, 2005, by and among AMERICAN STATES WATER COMPANY, a California corporation (“Borrower”), each of the lenders party thereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and lead arranger.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise stated.
RECITALS
WHEREAS, Borrower has requested that the Credit Agreement be modified as set forth in this Amendment, including, without limitation, that the amount of the Revolving Facility be temporarily increased by $25,000,000 (to $225,000,000) during the “Increased Commitment Period” (as defined below).
WHEREAS, the Administrative Agent, Wells Fargo, as the sole existing Lender as of the date hereof, and Borrower have agreed to make certain changes in the terms and conditions set forth in the Credit Agreement, and have agreed to amend the Credit Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:
1.Section 1.1 – Defined Terms (New).  The following defined terms are hereby added to Section 1.1 in the appropriate alphabetical place:
“Amendment No. 8” means the Eighth Amendment to Amended and Restated Credit Agreement, dated as of October 31, 2019, among Borrower, each of the Lenders party thereto and the Administrative Agent.
“Amendment No. 8 Effective Date” means the “Effective Date” as defined in Amendment No. 8.
“Increased Commitment Period” means the period commencing on the Amendment No. 8 Effective Date and ending on June 30, 2020.
2.    Section 1.1 – Defined Terms (Revisions).  The definitions of “Commitment” and “Maximum Revolving Credit Amount” contained in Section 1.1 of the Credit Agreement are hereby amended to read as follows:
“Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Advances (expressed as the maximum aggregate amount of the Advances to be made by such Lender hereunder), as such commitment may be (a) reduced from time to time pursuant to Section 2.6, (b) increased pursuant to Section 2.10, and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.8.  The amount of each Lender’s Commitment is set forth on Schedule 1.1 or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable.  The aggregate amount of the Lenders’ Commitments on the Amendment No. 8 Effective Date is $225,000,000; provided, however, that such amount at all times other than during the Increased Commitment Period shall be $200,000,000.
"Maximum Revolving Credit Amount" means (a) during the Increased Commitment Period, $225,000,000, and (b) at all other times, $200,000,000.
3.    Schedule 1.1 (Lender Commitments/Pro Rata Shares).  Schedule 1.1 to the Credit Agreement is hereby amended to read as set forth on Annex I to this Amendment.
4.    Effectiveness.  This Amendment shall become effective on the date that each of the following conditions shall have been satisfied in a manner satisfactory to the Lenders in their sole and absolute discretion (the “Effective Date”):
(a)    The Administrative Agent shall have received all of the following in form and substance satisfactory to the Administrative Agent and its legal counsel:
(i)    duly executed counterparts of this Amendment signed by the parties hereto;
(ii)    a duly executed Note for Wells Fargo, as the sole Lender, reflecting its revised Commitment; 
(iii)    updated resolutions of Borrower authorizing the increase in the commitment provided hereunder, the execution and delivery of this Amendment and the amended and restated Note described in the foregoing clause (ii), and such other matters relating hereto as Borrower’s board of directors shall determine; and
(iv)    such other assurances, certificates, documents, consents or opinions as the Administrative Agent and/or any Lender reasonably may require.
(b)    An upfront fee previously agreed to between the Administrative Agent and Borrower shall have been paid.
(c)    The reasonable costs and expenses of the Administrative Agent in connection with the preparation of this Agreement and each of the other Loan Documents prepared in connection therewith payable pursuant to Section 11.3, and invoiced to Borrower prior to the Effective Date, shall have been paid.
(d)    All legal matters relating to the Loan Documents shall be reasonably satisfactory to McGuireWoods LLP, special counsel to the Administrative Agent.
5.    Integration; Loan Document.  Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification.  This Amendment and the Credit Agreement shall be read together, as one document.  This Amendment shall constitute a Loan Document.
6.    Representations and Warranties; No Defaults.  Borrower hereby represents that all representations and warranties contained in Article 5 of the Credit Agreement (except to the extent such representations and warranties expressly speak as of a prior date, in which case they were true and correct in all material respects on and as of such earlier date) are and will be true and correct in all material respects on and as of the Amendment No. 8 Effective Date and reaffirms all covenants set forth therein.  Borrower further certifies that as of the date of, and after giving effect to, this Amendment, there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.
7.    Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.
8.    Counterparts.  This Amendment may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Amendment, when taken together, will be deemed to be but one and the same instrument and execution of any such counterpart may be evidenced by facsimile or other electronic means of transmission of the signature of such party.
[Remainder of page intentionally left blank; signature pages follow.]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first above written.
	
			
	 
	BORROWER:

	 
	 

	 
	AMERICAN STATES WATER COMPANY,

	 
	a California corporation

	 
	 

	 
	 

	 
	By:
	/s/ Eva G. Tang

	 
	Name:
	Eva G. Tang

	 
	Title:
	Senior Vice President-Finance, Chief Financial Officer, Corporate Secretary and Treasurer

	
			
	 
	ADMINISTRATIVE AGENT:

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	as Administrative Agent

	 
	 

	 
	 

	 
	By:
	/s/ DuVon G. Davis

	 
	Name:
	DuVon G. Davis

	 
	Title:
	Senior Vice President

	
			
	 
	LENDERS:

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

	 
	as a Lender

	 
	 

	 
	 

	 
	By:
	/s/ DuVon G. Davis

	 
	Name:
	DuVon G. Davis

	 
	Title:
	Senior Vice President

ANNEX I

SCHEDULE 1.1

LENDER COMMITMENTS/PRO RATA SHARES

	
				
	Lender
	Pro Rata Share
	Commitment Amount

	Wells Fargo Bank, National Association
	100.0
	%
	$   225,000,000 during the Increased Commitment Period
$200,000,000 at all other times

	 
	100.0
	%
	$   225,000,000 or $200,000,000, as applicable

NINTH AMENDMENT TO 
AMENDED AND RESTATED CREDIT AGREEMENT
THIS NINTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of March 16, 2020, is entered into with reference to the Amended and Restated Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) dated as of June 3, 2005, by and among AMERICAN STATES WATER COMPANY, a California corporation (“Borrower”), each of the lenders party thereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and lead arranger.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise stated.
RECITALS
WHEREAS, Borrower has requested that the Credit Agreement be modified as set forth in this Amendment, including, without limitation, that the Increased Commitment Period be extended to and including December 31, 2020 and the amount of the Revolving Facility be temporarily increased by $35,000,000 (to $260,000,000) during the Increased Commitment Period.
WHEREAS, the Administrative Agent, Wells Fargo, as the sole existing Lender as of the date hereof, and Borrower have agreed to make certain changes in the terms and conditions set forth in the Credit Agreement, and have agreed to amend the Credit Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:
1.    Section 1.1 – Defined Terms (New).  The following defined terms are hereby added to Section 1.1 in the appropriate alphabetical place:
“Amendment No. 9” means the Ninth Amendment to Amended and Restated Credit Agreement, dated as of March 16, 2020, among Borrower, each of the Lenders party thereto and the Administrative Agent.
“Amendment No. 9 Effective Date” means the “Effective Date” as defined in Amendment No. 9.
“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate (which may include Term SOFR) that has been selected by Administrative Agent and Borrower pursuant to Section 3.6(g) giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to LIBOR for U.S. dollar-denominated syndicated credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement.
“Benchmark Replacement Adjustment” means, with respect to any replacement of LIBOR with an Unadjusted Benchmark Replacement for each applicable Eurodollar Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Administrative Agent and Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time. 
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Eurodollar Period,” timing and frequency of determining rates and making payments of interest and other administrative matters) that Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Administrative Agent in a manner substantially consistent with market practice (or, if Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if Administrative Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement). 
“Benchmark Replacement Date” means the earlier to occur of the following events with respect to LIBOR: 
(a)in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of LIBOR permanently or indefinitely ceases to provide LIBOR; and 
(b)in the case of clause (c) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein. 
“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to LIBOR: 
(a)a public statement or publication of information by or on behalf of the administrator of LIBOR announcing that such administrator has ceased or will cease to provide LIBOR, permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR; 
(b)a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBOR, a resolution authority with jurisdiction over the administrator for LIBOR or a court or an entity with similar insolvency or resolution authority over the administrator for LIBOR, which states that the administrator of LIBOR has ceased or will cease to provide LIBOR permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR; or 
(c)a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR announcing that LIBOR is no longer representative. 
“Benchmark Transition Start Date” means (a) in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication) and (b) in the case of an Early Opt-in Election, the date specified by Administrative Agent or the Requisite Lenders, as applicable, by notice to Borrower, Administrative Agent (in the case of such notice by the Requisite Lenders) and the Lenders. 
“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to LIBOR and solely to the extent that LIBOR has not been replaced with a Benchmark Replacement, the period (a) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced LIBOR for all purposes hereunder in accordance with Section 3.6(g) and (b) ending at the time that a Benchmark Replacement has replaced LIBOR for all purposes hereunder pursuant to Section 3.6(g).
“Early Opt-in Election” means the occurrence of: 
(a)    (i) a determination by Administrative Agent or (ii) a notification by the Requisite Lenders to Administrative Agent (with a copy to Borrower) that the Requisite Lenders have determined that U.S. dollar-denominated syndicated credit facilities being executed at such time, or that include language similar to that contained in Section. 3.6(g) are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace LIBOR, and 
(b)    (i) the election by Administrative Agent or (ii) the election by the Requisite Lenders to declare that an Early Opt-in Election has occurred and the provision, as applicable, by Administrative Agent of written notice of such election to Borrower and the Lenders or by the Requisite Lenders of written notice of such election to Administrative Agent.
“Federal Reserve Bank of New York’s Website” means the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.
“LIBOR” means, subject to the implementation of a Benchmark Replacement in accordance with Section 3.6(g),
(a)for any interest rate calculation with respect to a Eurodollar Rate Advance, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Eurodollar Period as published by the ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Administrative Agent, at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Eurodollar Period.  If, for any reason, such rate is not so published then “LIBOR” shall be determined by Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to Administrative Agent at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Eurodollar Period for a period equal to such Eurodollar Period, and
(b)for any interest rate calculation with respect to an Alternate Base Rate Advance, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for a Eurodollar Period equal to one month (commencing on the date of determination of such interest rate) as published by ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by Administrative Agent, at approximately 11:00 a.m. (London time) on such date of determination, or, if such date is not a Business Day, then the immediately preceding Business Day.  If, for any reason, such rate is not so published then “LIBOR” for such Alternate Base Rate Advance shall be determined by Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to Administrative Agent at approximately 11:00 a.m. (London time) on such date of determination for a period equal to one month commencing on such date of determination.
Each calculation by Administrative Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest error.  
Notwithstanding the foregoing, (x) in no event shall LIBOR (including any Benchmark Replacement with respect thereto) be less than zero percent (0.00%) and (y) unless otherwise specified in any amendment to this Agreement entered into in accordance with Section 5.8(c), in the event that a Benchmark Replacement with respect to LIBOR is implemented then all references herein to LIBOR shall be deemed references to such Benchmark Replacement.
“LIBOR Rate” means a rate per annum determined by Administrative Agent pursuant to the following formula:
	
		
	LIBOR Rate =
	LIBOR

	 
	1.00- Reserve Requirement

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“SOFR” with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website. 
“Term SOFR” means the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
2.    Section 1.1 – Defined Terms (Revisions).  The definitions of “Alternate Base Rate,” “Commitment,” “Eurodollar Rate,” “Increased Commitment Period,” “Maximum Revolving Credit Amount” and “Reserve Requirement” contained in Section 1.1 of the Credit Agreement are hereby amended to read as follows:
“Alternate Base Rate” means, at any time, the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus one-half of one percent (0.50%) and (c) the LIBOR Rate for a Eurodollar Period of one month plus one percent (1.00)%; each change in the Alternate Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate, the Federal Funds Rate or the One-Month LIBOR Rate, as applicable (provided that clause (c) shall not be applicable during any period in which LIBOR is unavailable or unascertainable).
“Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Advances (expressed as the maximum aggregate amount of the Advances to be made by such Lender hereunder), as such commitment may be (a) reduced from time to time pursuant to Section 2.6, (b) increased pursuant to Section 2.10, and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.8.  The amount of each Lender’s Commitment is set forth on Schedule 1.1 or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable.  The aggregate amount of the Lenders’ Commitments on the Amendment No. 9 Effective Date is $260,000,000; provided, however, that such amount at all times other than during the Increased Commitment Period shall be $200,000,000.
“Eurodollar Rate” means the LIBOR Rate.
“Increased Commitment Period” means the period commencing on the Amendment No. 8 Effective Date and ending on December 31, 2020.
“Maximum Revolving Credit Amount” means (a) from the Amendment No. 8 Effective Date until the day immediately preceding the Amendment No. 9 Effective Date, $225,000,000, (b) during the period commencing on the Amendment No. 9 Effective Date and continuing to and including the last day of the Increased Commitment Period, $260,000,000, and (c) at all other times, $200,000,000.
“Reserve Requirement” means, for any day, the percentage which is in effect for such day as prescribed by the FRB for determining the maximum reserve requirement (including any basic, supplemental or emergency reserves) in respect of eurocurrency liabilities or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.
3.    Section 1.8 - Rates.  The following new Section 1.8 is added to the Credit Agreement.
1.8    Rates.  Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of “LIBOR” or with respect to any rate that is an alternative or replacement for or successor to any such rate (including, without limitation, any Benchmark Replacement) or the effect of any of the foregoing, or of any Benchmark Replacement Conforming Changes.
4.    Section 3.6 (g) – Benchmark Transition Event.  The following new subsection (g) is added to the Credit Agreement:
(g)    Effect of Benchmark Transition Event.  
(i)    Benchmark Replacement. Notwithstanding anything to the contrary herein (including the foregoing subsections of this Section 3.6) or in any other Loan Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, Administrative Agent and Borrower may amend this Agreement to replace LIBOR with a Benchmark Replacement.  Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. on the fifth (5th) Banking Day after Administrative Agent has posted such proposed amendment to all Lenders and Borrower so long the Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Requisite Lenders. Any such amendment with respect to an Early Opt-in Election will become effective on the date that Lenders comprising the Requisite Lenders have delivered to Administrative Agent written notice that such Requisite Lenders accept such amendment. No replacement of LIBOR with a Benchmark Replacement pursuant to this Section 3.6(g) will occur prior to the applicable Benchmark Transition Start Date. 
(ii)    Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement. 
(iii)    Notices; Standards for Decisions and Determinations. Administrative Agent will promptly notify Borrower and the Lenders of (A) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date and Benchmark Transition Start Date, (B) the implementation of any Benchmark Replacement, (C) the effectiveness of any Benchmark Replacement Conforming Changes and (D) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by Administrative Agent or the Lenders pursuant to this Section 3.6(g), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 3.6(g).
(iv)    Benchmark Unavailability Period. Upon Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, Borrower may revoke any request for a Eurodollar Rate Advance of, conversion to or continuation of Eurodollar Rate Advances to be made, converted or continued during any Benchmark Unavailability Period and, failing that, Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Alternate Base Rate Advances. During any Benchmark Unavailability Period, the component of the Alternate Base Rate based upon LIBOR will not be used in any determination of the Alternate Base Rate.
5.    Section 11.2 – Amendments.  The following new paragraph is added to Section 11.2 of the Credit Agreement immediately before the last sentence thereof:
Notwithstanding the foregoing or anything contained herein or any other Loan Document to the contrary, Administrative Agent (and, if applicable, Borrower) may, without the consent of any Lender, enter into amendments or modifications to this Agreement or any of the other Loan Documents or to enter into additional Loan Documents in order to implement any Benchmark Replacement or any Benchmark Replacement Conforming Changes or otherwise effectuate the terms of Section 3.6(g) in accordance with the terms of Section 3.6(g).
6.    Schedule 1.1 (Lender Commitments/Pro Rata Shares).  Schedule 1.1 to the Credit Agreement is hereby amended to read as set forth on Annex I to this Amendment.
7.    Effectiveness.  This Amendment shall become effective on the date that each of the following conditions shall have been satisfied in a manner satisfactory to the Lenders in their sole and absolute discretion (the “Effective Date”):
(a)    The Administrative Agent shall have received all of the following in form and substance satisfactory to the Administrative Agent and its legal counsel:
(i)    duly executed counterparts of this Amendment signed by the parties hereto;
(ii)    a duly executed Note for Wells Fargo, as the sole Lender, reflecting its revised Commitment; 
(iii)    updated resolutions of Borrower authorizing the increase in the commitment provided hereunder, the execution and delivery of this Amendment and the amended and restated Note described in the foregoing clause (ii), and such other matters relating hereto as Borrower’s board of directors shall determine; and
(iv)    such other assurances, certificates, documents, consents or opinions as the Administrative Agent and/or any Lender reasonably may require.
(b)    An upfront fee previously agreed to between the Administrative Agent and Borrower shall have been paid.
(c)    The reasonable costs and expenses of the Administrative Agent in connection with the preparation of this Agreement and each of the other Loan Documents prepared in connection therewith payable pursuant to Section 11.3, and invoiced to Borrower prior to the Effective Date, shall have been paid.
(d)    All legal matters relating to the Loan Documents shall be reasonably satisfactory to McGuireWoods LLP, special counsel to the Administrative Agent.
8.    Integration; Loan Document.  Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification.  This Amendment and the Credit Agreement shall be read together, as one document.  This Amendment shall constitute a Loan Document.
9.    Representations and Warranties; No Defaults.  Borrower hereby represents that all representations and warranties contained in Article 5 of the Credit Agreement (except to the extent such representations and warranties expressly speak as of a prior date, in which case they were true and correct in all material respects on and as of such earlier date) are and will be true and correct in all material respects on and as of the Amendment No. 9 Effective Date and reaffirms all covenants set forth therein.  Borrower further certifies that as of the date of, and after giving effect to, this Amendment, there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.
10.    Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.
11.    Counterparts.  This Amendment may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Amendment, when taken together, will be deemed to be but one and the same instrument and execution of any such counterpart may be evidenced by facsimile or other electronic means of transmission of the signature of such party.
[Remainder of page intentionally left blank; signature pages follow.]

61

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first above written.
	
		
	 
	BORROWER:

AMERICAN STATES WATER COMPANY,
a California corporation

By: /s/ Eva G. Tang _________________   
Name:  Eva G. Tang
Title:  SVP-Finance, CFO, Treasurer & Corporate         Secretary

S-1
Ninth Amendment to Amended and Restated Credit Agreement

	
		
	 
	ADMINISTRATIVE AGENT:

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent

By: /s/ DuVon G. Davis ________________   
Name:  DuVon G. Davis
Title: Senior Vice President

S-2
Ninth Amendment to Amended and Restated Credit Agreement

	
		
	 
	LENDERS:

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Lender

By: /s/ DuVon G. Davis   
Name:  DuVon G. Davis
Title: Senior Vice President

S-3
Ninth Amendment to Amended and Restated Credit Agreement

ANNEX I

SCHEDULE 1.1

LENDER COMMITMENTS/PRO RATA SHARES

	
				
	Lender
	Pro Rata Share
	Commitment Amount

	Wells Fargo Bank, National Association
	100.0
	%
	$260,000,000 during the Increased Commitment Period
$200,000,000 at all other times

	 
	100.0
	%
	$   260,000,000 or $200,000,000, as applicable

S-1
Ninth Amendment to Amended and Restated Credit Agreement

TENTH AMENDMENT TO 
AMENDED AND RESTATED CREDIT AGREEMENT
THIS TENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of June 26, 2020, is entered into with reference to the Amended and Restated Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) dated as of June 3, 2005, by and among AMERICAN STATES WATER COMPANY, a California corporation (“Borrower”), each of the lenders party thereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and lead arranger.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement.  Section references herein are to sections of the Credit Agreement unless otherwise stated.
RECITALS
WHEREAS, Borrower has requested that the Credit Agreement be modified as set forth in this Amendment.
WHEREAS, the Administrative Agent, Wells Fargo, as the sole existing Lender as of the date hereof, and Borrower have agreed to make certain changes in the terms and conditions set forth in the Credit Agreement, and have agreed to amend the Credit Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:
1.    Section 1.1 – Defined Terms (New).  The following defined terms are hereby added to Section 1.1 in the appropriate alphabetical place:
“Amendment No. 10” means the Tenth Amendment to Amended and Restated Credit Agreement, dated as of June 26, 2020, among Borrower, each of the Lenders party thereto and the Administrative Agent.
“Amendment No. 10 Effective Date” means the “Effective Date” as defined in Amendment No. 10.
“BVES” means Bear Valley Electric Service, Inc., a California corporation, a wholly-owned Subsidiary of Borrower.
“Consolidated Net Tangible Assets” means the total amount of Borrower’s and its Subsidiaries’ consolidated total assets (less applicable depreciation, amortization and other valuation reserves and other properly deductible items) after deducting: (a) all current liabilities, excluding (i) the Obligations and (ii) any current liabilities which are by their terms extendible or renewable at the option of the obligor on the liabilities to a time more than 12 months after the time as of which 

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Tenth Amendment to Amended and Restated Credit Agreement

the amount of current liabilities is being computed and (b) all goodwill, trade names, trademarks, patents and other like Intangible Assets, all as set forth on the most recent consolidated balance sheet of Borrower and its Subsidiaries and computed in accordance with GAAP.

2.    Section 1.1 – Defined Terms (Amended and Restated).  The definitions of “Applicable Commitment Fee Margin,” “Applicable Eurodollar Rate Margin,” “Initial Pricing Period,” and “LIBOR,” contained in Section 1.1 of the Credit Agreement are hereby amended to read as follows:
“Applicable Commitment Fee Margin” means, for each Pricing Period, the margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:
	
		
	Applicable 
Pricing 
Level
	Margin

	I
	10.00

	II
	12.50

	III
	15.00

	IV
	17.50

	V
	20.00

“Applicable Eurodollar Rate Margin” means, with respect to any Eurodollar Rate Advance, for each Pricing Period, the interest rate margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:
	
			
	Applicable 
Pricing 
Level
	 
 
Margin
	 

	I
	87.50
	 

	II
	100.00
	 

	III
	112.50
	 

	IV
	125.00
	 

	V
	137.50
	 

“Initial Pricing Period” means the period commencing on the Amendment No. 10 Effective Date and ending on the first Pricing Occurrence to occur thereafter. 
“LIBOR” means, subject to the implementation of a Benchmark Replacement in accordance with Section 3.6(g),

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(a)    for any interest rate calculation with respect to a Eurodollar Rate Advance, the rate of interest per annum (rounded upwards, as necessary, to the nearest 1/16th of one percent (0.0625%)) determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Eurodollar Period as published by the ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Administrative Agent, at approximately 11:00 a.m. (London time) two (2) Eurodollar Banking Days prior to the first day of the applicable Eurodollar Period.  If, for any reason, such rate is not so published then “LIBOR” shall be determined by Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to Administrative Agent at approximately 11:00 a.m. (London time) two (2) Eurodollar Banking Days prior to the first day of the applicable Eurodollar Period for a period equal to such Eurodollar Period, and
(b)    for any interest rate calculation with respect to an Alternate Base Rate Advance, the rate of interest per annum (rounded upwards, as necessary, to the nearest 1/16th of one percent (0.0625%)) determined on the basis of the rate for deposits in Dollars for a Eurodollar Period equal to one month (commencing on the date of determination of such interest rate) as published by ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by Administrative Agent, at approximately 11:00 a.m. (London time) on such date of determination, or, if such date is not a Business Day, then the immediately preceding Business Day.  If, for any reason, such rate is not so published then “LIBOR” for such Alternate Base Rate Advance shall be determined by Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to Administrative Agent at approximately 11:00 a.m. (London time) on such date of determination for a period equal to one month commencing on such date of determination.
Each calculation by Administrative Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest error.  
Notwithstanding the foregoing, (x) in no event shall LIBOR (including any Benchmark Replacement with respect thereto) be less than zero percent (0.00%) and (y) unless otherwise specified in any amendment to this Agreement entered into in accordance with Section 5.8(c), in the event that a Benchmark Replacement with respect to LIBOR is implemented then all references herein to LIBOR shall be deemed references to such Benchmark Replacement.
3.    Section 1.1 – Defined Term (Revised).  The definition of “Permitted Encumbrances” contained in Section 1.1 of the Credit Agreement is hereby amended to add a new subsection (s) to read as follows:
(s)  Liens consisting of pledges or deposits to secure obligations under agreements with the Automated Power Exchange and other obligations under power purchase agreements and statutory 

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liens on all equity in CoBank, ACB required from time to time in connection with Indebtedness permitted pursuant to Section 6.10(f).
4.    Section 6.10 – Indebtedness and Guaranty Obligations.  Section 6.10 of the Credit Agreement is hereby amended to read as follows: 
6.10    Indebtedness and Guaranty Obligations.  Create, incur or assume any Indebtedness or Guaranty Obligation if an Event of Default has occurred and is continuing or if, after giving effect thereto, Borrower would not be in compliance with the provisions of Section 6.12 or Section 6.13 or an Event of Default would otherwise occur.  Notwithstanding the foregoing, Borrower shall not permit any Subsidiary to create, incur, assume or permit to exist any Indebtedness or Guaranty Obligation, except: 
(a)    Permitted Acquisition Indebtedness,
(b)    Permitted Capital Asset Indebtedness, 
(c)    existing Indebtedness set forth on Schedule 6.10(b), 
(d)    Indebtedness owed to Borrower or a wholly-owned Subsidiary, 
(e)    unsecured term Indebtedness of GSW (i.e., not revolving credit) that (i) either has a longer weighted average life than the Borrowings hereunder or satisfies the requirements of Section 6.1, (ii) to the extent that a Governmental Agency has regulatory jurisdiction over the issuance of such Indebtedness of GSW, the issuance of such Indebtedness is permitted by such regulatory jurisdiction, and (iii) is incurred in the ordinary course of business of GSW, is substantially consistent with the prior practices of GSW, and is provided by any Person or Governmental Agency under a credit agreement or facility substantially similar thereto,
(f)    unsecured Indebtedness of BVES that (i) BVES is permitted to incur by the Governmental Agency or Agencies, as applicable, having regulatory jurisdiction over BVES, (ii) is incurred in the ordinary course of business of BVES, and (iii) does not exceed at any time outstanding an aggregate amount of $125,000,000 (and for purposes of computing compliance with the foregoing, all then undrawn commitments under any revolving credit facility shall be deemed incurred and outstanding Indebtedness); provided, however, that in no event shall the aggregate amount of Indebtedness incurred pursuant to this subsection (f) exceed at any time outstanding ten percent (10%) of Consolidated Net Tangible Assets, and
(g)    other unsecured Indebtedness in the aggregate principal amount not to exceed $1,000,000.

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5.    Effectiveness.  This Amendment shall become effective on the date that each of the following conditions shall have been satisfied in a manner satisfactory to the Lenders in their sole and absolute discretion (the “Effective Date”):
(a)    The Administrative Agent shall have received all of the following in form and substance satisfactory to the Administrative Agent and its legal counsel:
(i)    duly executed counterparts of this Amendment signed by the parties hereto; and
(ii)    such other assurances, certificates, documents, consents or opinions as the Administrative Agent and/or any Lender reasonably may require.
(b)    The reasonable costs and expenses of the Administrative Agent in connection with the preparation of this Agreement and each of the other Loan Documents prepared in connection therewith payable pursuant to Section 11.3, and invoiced to Borrower prior to the Effective Date, shall have been paid.
(c)    All legal matters relating to the Loan Documents shall be reasonably satisfactory to McGuireWoods LLP, special counsel to the Administrative Agent.
6.    Integration; Loan Document.  Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification.  This Amendment and the Credit Agreement shall be read together, as one document.  This Amendment shall constitute a Loan Document.
7.    Representations and Warranties; No Defaults.  Borrower hereby represents that all representations and warranties contained in Article 5 of the Credit Agreement (except to the extent such representations and warranties expressly speak as of a prior date, in which case they were true and correct in all material respects on and as of such earlier date) are and will be true and correct in all material respects on and as of the Amendment No. 10 Effective Date and reaffirms all covenants set forth therein.  Borrower further certifies that as of the date of, and after giving effect to, this Amendment, there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.
8.    Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN CALIFORNIA.
9.    Counterparts.  This Amendment may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Amendment, when taken together, will be deemed to be but one and the same instrument and execution of any such counterpart may be evidenced by facsimile or other electronic means of transmission of the signature of such party.
[Remainder of page intentionally left blank; signature pages follow.]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first above written.
	
		
	 
	BORROWER:

AMERICAN STATES WATER COMPANY,
a California corporation

By: _/s/ Eva. G. Tang_____________   
Name:  Eva G. Tang
Title:  SVP-Finance, CFO, Treasurer & Corporate         Secretary

	
		
	 
	ADMINISTRATIVE AGENT:

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent

By: /s/ DuVon G. Davis_________________   
Name:  DuVon G. Davis
Title: Senior Vice President

	
		
	

	LENDERS:

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Lender

By: /s/ DuVon G. Davis_________________   
Name:  DuVon G. Davis
Title: Senior Vice President

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