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Exhibit 10.19C  

 
 

WAIVER AND SECOND AMENDMENT TO
  AMENDED AND RESTATED CREDIT AGREEMENT    
    

        THIS WAIVER AND SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this "Waiver and Amendment"), dated as of November 8, 2004, is entered into by
and between SOUTHWEST WATER COMPANY, a Delaware corporation (the "Borrower"), and UNION BANK OF CALIFORNIA, N.A., a national banking association (the "Bank"), with reference to the following facts: 

RECITALS  

        A.    The
Borrower and the Bank are parties to the Amended and Restated Credit Agreement, dated as of July 7, 2004, as amended by the Waiver and First Amendment to
Amended and Restated Credit Agreement, dated as of September 29, 2004 (collectively, the "Credit Agreement"), pursuant to which the Bank provided the Borrower with revolving loan, term loan,
and standby letter of credit facilities. 

        B.    The
Borrower currently is in default under Section 7.01(c) of the Credit Agreement due to the Borrower's breach of
the maximum Debt covenant set forth in clauses (ii) and (iv) of Section 6.02(e) of the Credit Agreement as a result of:
(a) the aggregate outstanding principal balance of secured indebtedness of Tecon exceeding $14,674,649.36 following the closing of the Tecon Acquisition and consisting of secured term loans and
not bond indebtedness, as provided in the Credit Agreement; (b) the Borrower's assumption or incurrence of $800,000 of Debt in connection with a Permitted Acquisition completed in the fiscal
quarter of the Borrower ended September 30, 2004; and (c) the Borrower's reclassification of $170,000 of economic development bond obligations as Debt (such defaults hereinafter are
referred to collectively as the "Existing Events of Default"). 

        C.    The
Borrower has requested that the Bank waive the Existing Events of Default and make certain modifications to the Credit Agreement to facilitate the Borrower's future
compliance with the Credit Agreement. 

        D.    The
Bank is willing to grant such accommodations to the Borrower as set forth below. 

        NOW,
THEREFORE, the parties hereby agree as follows: 

        1.    Defined Terms.    Any and all initially-capitalized terms used in this Waiver and Amendment (including, without
limitation, in the recitals hereto) without definition shall have the respective meanings assigned thereto in the Credit Agreement. 

        2.    Waiver of Existing Events of Default.    The Bank hereby waives the Existing Events of Default. Such waiver by
the Bank shall constitute a one-time waiver of only the Existing Events of Default and shall not constitute a waiver of any breach of clause (ii) or (iv) of  Section 6.02(e) of the Credit
Agreement on any other occasion. 

        3.    Amendments to Debt Negative Covenant.    

        A.    Amendment to Tecon Secured Bond Indebtedness
Covenant.    Section 6.02(e) of the Credit Agreement is hereby amended by deleting the word "bond" and the
reference to "$14,674,649.36" set forth in clause (ii) thereof and by substituting therefor a reference to "$15,750,000". 

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        B.    Addition of Basket for Acquisition—Related
Debt.    Section 6.02(e) of the Credit Agreement is hereby further amended and supplemented by adding the
following at the end of clause (vii) and before the proviso which follows clause (vii): 

        ",
and (viii) indebtedness assumed or incurred in connection with any acquisition either: (a) detailed on Schedule 6.02(e) or (b) arising from a Permitted
Acquisition, the sum of which shall not exceed a principal amount of $7,000,000 in the aggregate outstanding at any time for the Borrower and its Subsidiaries" 

        4.    Amendments to Schedules.    Schedules 5.01(f),  5.01(i), 6.02(d) and 6.02(e) to the Credit Agreement are
hereby amended to read in full as set forth on Schedules 5.01(f), 5.01(i),  6.02(d) and 6.02(e), respectively, to this Waiver and Amendment. 

        5.    Conditions Precedent.    The effectiveness of this Waiver and Amendment shall be subject to the prior
satisfaction of each of the following conditions: 

        (a)    Execution and Delivery of this Waiver and Amendment.    The Bank shall have received this Waiver and Amendment,
duly executed by the Borrower; and 

        (b)    Execution and Delivery of Waiver and Amendment to BofA Loan Documents.    The Bank shall have received a waiver
and amendment to the BofA Loan Documents, duly executed by the Borrower and Bank of America and in form and substance reasonably satisfactory to the Bank. 

        6.    Governing Law.    The validity of this Waiver and Amendment, its construction, interpretation and enforcement,
and the rights of the parties hereunder, shall be governed by, and construed in accordance with, the internal laws (as opposed to the conflicts of law principles) of the State of California. 

        7.    Counterparts.    This Waiver and Amendment may be executed in multiple counterparts and by different parties on
separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute but one and the same instrument. 

        8.    Otherwise Not Affected.    In the event of any conflict or inconsistency between the Credit Agreement and the
provisions of this Waiver and Amendment, the provisions of this Waiver and Amendment shall govern. Except to the extent set forth herein, the Credit Agreement shall remain unaltered and in full force
and effect. 

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        IN
WITNESS WHEREOF, the parties hereto have executed this Waiver and Amendment by their respective duly authorized officers as of the date first above written. 

	 	 	The Borrower:
	

 	
 	

SOUTHWEST WATER COMPANY,

a Delaware corporation
	

    	
 	

 	

 
	 	 	By	/s/  RICHARD SHIELDS      
 Richard Shields

Chief Financial Officer
	

    	
 	

 	

 
	 	 	The Bank:
	

 	
 	

UNION BANK OF CALIFORNIA, N.A.,

a national banking association
	

    	
 	

 	

 
	 	 	By	/s/  GREGORY DUBNANSKY      
 Gregory Dubnansky

Vice President

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SCHEDULE 5.01(f)—LITIGATION  

None
other than as reported on Form 10-Q of Borrower for the quarter ended June 30, 2004, and Form 10-K of Borrower for the year ended December 31,
2003. 

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SCHEDULE 5.01(i)—ENVIRONMENTAL MATTERS  

See
Form 10-Q of Borrower for the quarter ended June 30, 2004, and Form 10-K of Borrower for the year ended December 31, 2003. 

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SCHEDULE 6.02(d)—LIENS  

None
except as disclosed in the consolidated financial statements of Borrower for the quarter ended June 30, 2004, and Form 10-K of Borrower for the year ended
December 31, 2003. 

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SCHEDULE 6.02(e)—OTHER SECURED DEBT  

None
other than as reported on Form 10-Q of Borrower for the quarter ended June 30, 2004. 

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Exhibit 10.19D  

 
 

THIRD AMENDMENT TO
  AMENDED AND RESTATED CREDIT AGREEMENT    
    

        THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment"), dated as of December 15, 2004, is entered into by and between SOUTHWEST
WATER COMPANY, a Delaware corporation (the "Borrower"), and UNION BANK OF CALIFORNIA, N.A., a national banking association (the "Bank"), with reference to the following facts: 

RECITALS  

        A.    The
Borrower and the Bank are parties to the Amended and Restated Credit Agreement, dated as of July 7, 2004, as amended by that certain Waiver and First Amendment
to Amended and Restated Credit Agreement, dated as of September 29, 2004, and that certain Waiver and Second Amendment to Amended and Restated Credit Agreement, dated as of November 8,
2004 (collectively, the "Credit Agreement"), pursuant to which the Bank provides the Borrower with revolving loan, term loan and standby letter of credit facilities. 

        B.    The
Borrower and the Bank wish to amend the Credit Agreement to revise the deadline for the repayment of the principal balance of the Term Loan in the event of a bond
offering by NMUI. 

        NOW,
THEREFORE, the parties hereby agree as follows: 

        1.    Defined Terms.    Any and all initially-capitalized terms used in this Amendment (including, without limitation,
in the recitals hereto) without definition shall have the respective meanings assigned thereto in the Credit Agreement. 

        2.    Amendment to Term Loan Repayment Provision.    Section 2.03 of the Credit Agreement is hereby amended so
that the second sentence thereof shall read in full as follows: 

        "The
entire principal balance of the Term Loan, together with all accrued and unpaid interest thereon, shall be due and payable in full no later than 90 days after the completion
and funding of the anticipated bond offering by NMUI." 

        3.    Amendment to Debt Covenant.    Section 6.02(e) of the Credit Agreement is hereby amended to read in full
as follows: 

        "(e)    Debt.    Create, incur, assume or permit to exist, or permit any Subsidiary to create,
incur, assume or permit to exist, any indebtedness or liabilities resulting from borrowings, loans or advances, whether matured or unmatured, liquidated or unliquidated, joint or several, secured or
unsecured, except for (i) Debt incurred pursuant to the Convertible Debentures in a principal amount not to exceed $18,000,000 outstanding at any time, (ii) following the closing of the
Tecon Acquisition, the secured indebtedness of Tecon which as of the closing of the Tecon Acquisition shall be in an aggregate outstanding principal balance not exceeding $15,750,000 and which when
repaid may not be reborrowed, (iii) secured indebtedness for purchase money financing of equipment which is permitted under Section 6.02(d)(iv) in a principal amount not to exceed
an aggregate of $2,000,000 outstanding at any time, (iv) other secured Debt identified on Schedule 6.02(e) not to exceed the applicable amount indicated on such schedule, (v) the
Term Loan, (vi) the Additional Revolving Loan (as defined in the BofA Loan Documents), (vii) unsecured senior funded bank debt in a principal amount not to exceed $40,000,000 outstanding
at any time in the aggregate for the Borrower and its Subsidiaries (including, without limitation, unsecured senior funded bank debt incurred pursuant to the Loan Documents and the BofA Loan
Documents, and excluding the undrawn face amount of the Capistrano Letter of 

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Credit);
provided that the only unsecured senior funded debt of the Subsidiaries which may be outstanding shall be (i) unsecured bank
indebtedness of NMUI in an aggregate principal amount not to exceed $4,000,000 at any one time and (ii) other unsecured senior funded debt in a principal amount not to exceed $500,000
outstanding at any time in the aggregate for all Subsidiaries, (viii) indebtedness assumed or incurred in connection with any acquisition either: (a) detailed on Schedule 6.02(e);
or (b) arising from a Permitted Acquisition, the sum of which shall not exceed a principal amount of $7,000,000 in the aggregate outstanding at any time for the Borrower and its Subsidiaries,
(ix) intercompany Debt between the Borrower and its majority-owned Subsidiaries, and (x) secured bonds in an aggregate face amount of not more than $15,000,000 issued by Suburban on or
about October 11, 2004 and secured bonds in an aggregate face amount of not more than $12,000,000 issued by NMUI after the date of this Amendment." 

        4.    Conditions Precedent.    The effectiveness of this Amendment shall be subject to the prior satisfaction of each
of the following conditions: 

        (a)    Execution and Delivery of this Amendment.    The Bank shall have received this Amendment, duly executed by the
Borrower; and 

        (b)    Execution of Acknowledgement by BofA Regarding Intercreditor Agreement.    Bank of America shall have duly
executed the Acknowledgment Regarding Intercreditor Agreement attached to this Amendment. 

        5.    Governing Law.    The validity of this Amendment, its construction, interpretation and enforcement, and the
rights of the parties hereunder, shall be governed by, and construed in accordance with, the internal laws (as opposed to the conflicts of law principles) of the State of California. 

        6.    Counterparts.    This Amendment may be executed in multiple counterparts and by different parties on separate
counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute but one and the same instrument. 

        7.    Otherwise Not Affected.    In the event of any conflict or inconsistency between the Credit Agreement and the
provisions of this Amendment, the provisions of this Amendment shall govern. Except to the extent set forth herein, the Credit Agreement shall remain unaltered and in full force and effect. 

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        8.     IN
WITNESS WHEREOF, the parties hereto have executed this Amendment by their respective duly authorized officers as of the date first above written. 

	 	 	The Borrower:
	

 	
 	

SOUTHWEST WATER COMPANY,

a Delaware corporation
	

    	
 	

 	

 
	 	 	By	/s/  RICHARD SHIELDS      
 Richard Shields

Chief Financial Officer
	

    	
 	

 	

 
	 	 	The Bank:
	

 	
 	

UNION BANK OF CALIFORNIA, N.A.,

a national banking association
	

    	
 	

 	

 
	 	 	By	/s/  GREGORY DUBNANSKY      
 Gregory Dubnansky

Vice President

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ACKNOWLEDGMENT REGARDING INTERCREDITOR AND PLEDGE AGREEMENTS  

        The undersigned, in its capacity as a party to each of (i) the Intercreditor Agreement, dated as of July 14, 2004, by and among the undersigned,
Union Bank of California, N.A. and Union Bank of California, N.A., as Collateral Agent (the "Intercreditor Agreement"), and (ii) the Pledge and Collateral Agency Agreement, dated as of
July 14, 2004, by and among Southwest Water Company, the undersigned, Union Bank of California, N.A. and Union Bank of California, N.A., as Collateral Agent (the "Pledge Agreement"), hereby
acknowledges and consents to the modifications to the Credit Agreement contained in the attached Amendment and agrees that both the Intercreditor Agreement and the Pledge Agreement shall remain in
full force and effect notwithstanding the Amendment. 

	 	 	BANK OF AMERICA, N.A.
	

    	
 	

 	

 	

 
	 	 	By:	/s/  MATTHEW KOENIG      

	 	 	Name:	MATTHEW KOENIG

	 	 	Title:	Senior Vice President

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THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

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