Document:

Trust Indenture - PEDFA & Manufacturers & Traders Trust Co, As Trustee

    
      

    

     

     

    

     

    TRUST
      INDENTURE

     

    

     

    between

     

    

     

    YORK
      COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY,

    as
      Issuer

    

     

    and

     

    

     

    MANUFACTURERS
      AND TRADERS TRUST COMPANY,

    as
      Trustee

    

     

    Dated
      as
      of October 1, 2006

     

    

     

     

     

    

    $10,500,000

    YORK
      COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

    Exempt
      Facilities Revenue Bonds

    Series
      2006

    (The
      York
      Water Company Project)

    

    

    
      
        
          950597.7
            10/31/06

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    TABLE
      OF CONTENTS

     

     

    ARTICLE
      I
      - DEFINITIONS

     

    Section
      1.1. Definitions.

    Section
      1.2. Certain
      Rules of Interpretation.

     

    ARTICLE
      II - THE BONDS

     

    Section
      2.1. Authorized
      Amount and Issuance of Bonds; Disposition of Bond Proceeds.

    Section
      2.2. Terms
      of
      the Bonds.

    Section
      2.3. Reserved.

    Section
      2.4. Reserved.

    Section
      2.5. Form
      of
      Bonds; Execution; Bonds Equally and Ratably Secured;

    Limited
      Obligation of the Issuer.

    Section
      2.6. Authentication

    Section
      2.7. Registration,
      Transfer and Exchange.

    Section
      2.8. Mutilated,
      Destroyed, Lost or Stolen Bonds.

    Section
      2.9. Payments
      of Principal, Redemption Price and Interest; Persons Entitled
      Thereto.

    Section
      2.10. Temporary
      Bonds.

    Section
      2.11. Cancellation
      of Surrendered Bonds.

    Section
      2.12. Acts
      of
      Registered Owners; Evidence of Ownership.

    Section
      2.13. Book
      Entry System.

    Section
      2.14. Payments
      to Cede & Co.; Payments to Beneficial Owners.

     

    ARTICLE
      III
      - Debt
      Service Fund and Construction Fund

     

    Section
      3.1. Establishment
      of Funds and Accounts.

    Section
      3.2. Debt
      Service Fund.

    Section
      3.3. Return
      of
      Moneys from Non-Presentment of Bonds.

    Section
      3.4. Construction
      Fund.

    Section
      3.5. Debt
      Service Fund Moneys to be Held for All Registered Owners, With
      Certain

    Exceptions.

    Section
      3.6. Additional
      Accounts and Subaccounts.

     

    ARTICLE
      IV
      - Investments,
      Tax Covenants

     

    Section
      4.1. Investment
      of Funds.

    Section
      4.2. Arbitrage Bond Covenant.

    Section
      4.3. Covenants
      Regarding Tax Exemption.

     

    ARTICLE
      V
      - REDEMPTION OF BONDS

     

    Section
      5.1. Bonds
      Subject to Redemption.

    Section
      5.2. Selection
      of Bonds for Redemption.

    Section
      5.3. Notice
      of
      Redemption.

    Section
      5.4. Effect
      of
      Redemption.

    Section
      5.5. Purchase
      in Lieu of Redemption.

     

    ARTICLE
      VI - REPRESENTATIONS AND COVENANTS OF THE ISSUER

     

    Section
      6.1. General
      Limitation; Issuer’s Representation.

    Section
      6.2. Payment
      of Bonds and Performance of Covenants.

    Section
      6.3. Enforcement
      of the Loan Agreement.

    Section
      6.4. No
      Personal Liability.

    Section
      6.5. Exemption
      from Federal Income Taxation.

    Section
      6.6. Corporate
      Existence; Compliance with Laws.

    Section
      6.7. Filings.

    Section
      6.8. Further
      Assurances.

    Section
      6.9. Inspection
      of Books.

     

    ARTICLE
      VII - EVENTS OF DEFAULT AND REMEDIES

     

    Section
      7.1. Events
      of
      Default Defined.

    Section
      7.2. Acceleration
      and Annulment Thereof.

    Section
      7.3. Legal
      Proceedings by Trustee.

    Section
      7.4. Discontinuance
      of Proceedings by Trustee.

    Section
      7.5. Registered
      Owners May Direct Proceedings.

    Section
      7.6. Limitations
      on Actions by Registered Owners.

    Section
      7.7. Trustee
      May Enforce Rights Without Possession of Bonds.

    Section
      7.8. Remedies
      Not Exclusive.

    Section
      7.9. Delays
      and Omissions Not to Impair Rights.

    Section
      7.10. Application
      of Moneys.

    Section
      7.11. Trustee’s
      Right to Receiver.

    Section
      7.12. Trustee
      and Registered Owners Entitled to All Remedies.

    Section
      7.13. Waiver
      of
      Past Defaults.

     

    ARTICLE
      VIII
      - The
      Trustee

     

    Section
      8.1. Certain
      Duties and Responsibilities of Trustee.

    Section
      8.2. Notice
      if
      Event of Default Occurs or Notice if Taxability Occurs.

    Section
      8.3. Certain
      Rights of Trustee.

    Section
      8.4. Not
      Responsible for Recitals or Issuance of Bonds.

    Section
      8.5. May
      Hold
      Bonds.

    Section
      8.6. Money
      Held in Trust.

    Section
      8.7. Corporate
      Trustee Required; Eligibility.

    Section
      8.8. Resignation
      and Removal of Trustee; Appointment of Successor.

    Section
      8.9. Acceptance
      of Appointment by Successor Trustee.

    Section
      8.10. Merger,
      Conversion, Consolidation or Succession to Business.

    Section
      8.11. Fees,
      Charges and Expenses of Trustee.

     

    ARTICLE
      IX - AMENDMENTS AND SUPPLEMENTS

     

    Section
      9.1. Amendments
      and Supplements Without Registered Owners’ Consent.

    Section
      9.2. Amendments
      With Company and Registered Owners’ Consent.

    Section
      9.3. Amendments
      to Loan Agreement.

    Section
      9.4. Right
      to
      Payment.

     

    ARTICLE
      X
      - DEFEASANCE

     

    Section
      10.1. Defeasance.

    Section
      10.2. Effect
      of
      Defeasance.

     

    ARTICLE
      XI - MISCELLANEOUS PROVISIONS

     

    Section
      11.1. Limitations
      on Recourse; Immunity of Certain Persons.

    Section
      11.2. No
      Rights
      Conferred on Others.

    Section
      11.3. Illegal,
      Etc. Provisions Disregarded.

    Section
      11.4. Substitute
      Publication of Notice.

    Section
      11.5. Mailed
      Notice.

    Section
      11.6. Governing
      Law.

    Section
      11.7. Successors
      and Assigns.

    Section
      11.8. Action
      by
      Company.

    Section
      11.9. Headings
      and Subheadings for Convenience Only.

    Section
      11.10. Counterparts.

    Section
      11.11. Additional
      Notices to Rating Agencies.

    Section
      11.12. Insurance
      Provisions.

    

    
      
        
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          950597.7 10/31/06

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    This
      Trust Indenture, dated as of October 1, 2006 (the “Indenture”) between the YORK
      COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, (the “Issuer”), a public
      instrumentality of the Commonwealth of Pennsylvania (the “Commonwealth”) and a
      public body corporate and politic organized and existing under the Pennsylvania
      Economic Development Financing Law, as amended (as defined herein, the “Act”)
      and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York state chartered bank
      with trust powers duly organized and existing under the laws of the State of
      New
      York with a corporate trust office in Harrisburg, Pennsylvania, as Trustee
      (the
“Trustee”),

     

    W
      I T N E S S E T H :

     

    WHEREAS,
      the Act declares that there is a critical need for the production of water
      suitable for public use and consumption, that in order to insure continuing
      supplies of water resources at reasonable rates, it is necessary to provide
      additional means of financing projects directed to such production, and that
      to
      protect the health, safety and general welfare of the people of the Commonwealth
      and to further encourage economic development and efficiency within the
      Commonwealth by providing basic services and facilities, it is necessary to
      provide additional or alternative means of financing facilities for the
      furnishing of water; and

    

    WHEREAS,
      the Issuer is authorized to enter into agreements providing for the loan
      financing of “projects” within the meaning of the Act that promote any of the
      public purposes set forth in the Act; and

    

    WHEREAS,
      the Issuer has determined to issue $10,500,000 aggregate principal amount of
      its
      Exempt Facilities Revenue Bonds, Series 2006 (The York Water Company Project)
      (the “Bonds”) to provide funds to loan to The York Water Company (the “Company”)
      for the financing of (i) a portion of the Company’s 2006 Capital Budget,
      including, but not limited to the design, acquisition, construction,
      improvement, renovation, equipping and installation of (a) various structures,
      including distribution buildings, booster stations, pumping stations, and
      various plant and ancillary buildings, (b) spillway upgrades, standpipes,
      transmission and distribution mains, service lines, meters, fire hydrants,
      and
      pumping, water treatment and purification equipment, and (c) various other
      capital improvements, replacements and equipment for the Company’s water system
      located throughout York County, Pennsylvania, and (ii) the payment of all or
      a
      portion of the costs of issuance of the Bonds (the "Project"); and

     

    WHEREAS,
      the Issuer has entered into a Loan Agreement dated as of
      October 1, 2006 (including any supplements and amendments thereto, the
“Loan Agreement”) with the Company providing for the loan by the Issuer to the
      Company of the proceeds of the Bonds for such purpose and the repayment of
      such
      loan by the Company; and

     

    WHEREAS,
      the Bonds and the interest thereon are and shall be payable from and secured
      by
      a lien on and pledge of the Installment Loan Payments (as hereinafter defined)
      to be made by the Company pursuant to the Loan Agreement in amounts sufficient
      to pay at maturity or redemption the principal of, premium, if any, and interest
      on the Bonds when due; and

     

    WHEREAS,
      Financial Guaranty Insurance Company, a New York stock insurance company, or
      any
      successor thereto (the “Bond Insurer”), has agreed to issue its municipal bond
      new issue insurance policy (the “Bond Insurance Policy”) unconditionally and
      irrevocably guaranteeing the payment when due of the principal of and interest
      on the Bonds in accordance with the Bond Insurance Policy; and

     

    WHEREAS,
      all things necessary to make the Bonds, when issued, executed and delivered
      by
      the Issuer and authenticated by the Trustee pursuant to this Indenture, the
      valid, legal and binding special obligations of the Issuer, and to constitute
      this Indenture a valid pledge of certain income and hereinafter defined Revenues
      of the Issuer for the payment of the principal of, premium, if any, and interest
      on the Bonds authenticated and delivered under this Indenture, have been
      performed and the creation, execution and delivery of this Indenture, and the
      creation, execution and issuance of the Bonds, subject to the terms hereof,
      have
      in all respects been duly authorized; 

     

    NOW,
      THEREFORE, THIS INDENTURE WITNESSETH:

     

    That
      the
      Issuer in consideration of the premises, of the acceptance by the Trustee of
      the
      trusts hereby created, of the mutual covenants herein contained and of the
      purchase and acceptance of the Bonds by the Owners thereof, and for other
      valuable consideration, the receipt of which is hereby acknowledged, and in
      order to secure the payment of the principal of, premium, if any, and interest
      on the Bonds according to their tenor and effect, and the performance and
      observance by the Issuer of all the covenants and conditions herein and therein
      contained (a) has executed and delivered this Indenture and (b) has
      agreed to sell, assign, transfer, set over and pledge, and by these presents
      does hereby sell, assign, transfer, set over and pledge unto Manufacturers
      and
      Traders Trust Company, Harrisburg, Pennsylvania, as Trustee, and to its
      successors in trust and its assigns forever, to the extent provided in this
      Indenture, all of the right, title and interest of the Issuer in and to the
      Loan
      Agreement (except for the Unassigned Issuer’s Rights as defined in the Loan
      Agreement), and all the Revenues of the Issuer, and amounts on deposit in the
      Construction Fund and Debt Service Fund as hereinafter in this Indenture
      provided (collectively, the “Trust Estate”); provided, however, that nothing in
      the Bonds or in this Indenture shall be construed as pledging the faith or
      credit or taxing power of the Commonwealth, the County of York or any other
      political subdivision of the Commonwealth, nor shall this Indenture or the
      Bonds
      constitute a general obligation of the Issuer, or a debt of the Commonwealth,
      the County of York or any political subdivision thereof; 

     

    TO
      HAVE
      AND TO HOLD
      the same
      unto the Trustee and its successors in trust forever; 

     

    IN
      TRUST
      NEVERTHELESS,
      upon
      the terms and trusts herein set forth for the benefit and security of those
      who
      shall hold or own the Bonds issued hereunder, or any of them, without preference
      of any of said Bonds over any others thereof by reason of priority in the time
      of the issue or negotiation thereof or by reason of the date or maturity
      thereof, or for any other reason whatsoever, except as otherwise provided
      herein; 

     

    IT
      IS
      HEREBY COVENANTED,
      declared and agreed by and between the parties hereto, that all such Bonds
      are
      to be issued, authenticated as required by this Indenture, and delivered and
      that all property subject or to become subject hereto, including the Revenues,
      is to be held and applied upon and subject to the further covenants, conditions,
      uses and trusts hereinafter set forth; and the Issuer, for itself and its
      successors, does hereby covenant and agree to and with the Trustee and its
      successors in trust, for the benefit of those who shall hold all of the Bonds,
      or any of them, as follows:

     

    ARTICLE
      I  

     

    Definitions

     

    Section
      1.1.  Definitions. 

     

    Terms
      used in this Indenture with the initial letter capitalized shall have the
      meanings specified in this Section 1.1 or if not defined in this
      Section 1.1, shall have the meanings specified in the recitals or other
      provisions of the Indenture as applicable. All words and terms used in this
      Indenture and not defined herein shall, if defined in the Loan Agreement, have
      the meaning set forth therein. The words “hereof,” “herein,” “hereto,” “hereby,”
and “hereunder” (except in the Form of Bond) refer to the entire Indenture. All
      words and terms importing the singular number shall, where the context requires,
      import the plural number and vice versa.

     

    “Act”
      means the Pennsylvania Economic Development Financing Law (Act of
      August 23, 1967 P. L. 251, No. 102), as amended. The Act is codified at 73
      P.S. § 371 et seq.

     

    “Act
      of
      Bankruptcy” means any of the following events:

     

    (i)  The
      Company (or any Person obligated, as guarantor or otherwise, to make payments
      under the Loan Agreement) shall (a) apply for or consent to the appointment
      of, or the taking of possession by, a receiver, custodian, trustee, liquidator
      or the like of the Company (or any such other Person obligated, as a guarantor
      or otherwise, to make payments under the Loan Agreement) or of all or any
      substantial part of its property, (b) commence a voluntary case under the
      United States Bankruptcy Code, as now or hereafter in effect and including
      any
      amendments thereto, or (c) file a petition seeking to take advantage of any
      other law relating to bankruptcy, insolvency, reorganization, winding-up or
      composition or adjustment of debts; or

     

    (ii)  A
      proceeding or case shall be commenced in any court of competent jurisdiction,
      seeking (a) the liquidation, reorganization, dissolution, winding-up, or
      composition or adjustment of debts, of the Company (or any Person obligated,
      as
      guarantor or otherwise, to make payments under the Loan Agreement), (b) the
      appointment of a trustee, receiver, custodian, liquidator or the like of the
      Company (or any Person obligated, as a guarantor or otherwise, to make payments
      under the Loan Agreement) or of all or any substantial part of its property,
      or
      (c) similar relief in respect of the Company (or any such other Person
      obligated, as a guarantor or otherwise, to make payments under the Loan
      Agreement) under any law relating to bankruptcy, insolvency, reorganization,
      winding-up or composition or adjustment of debts.

     

    “Administrative
      Expenses” means fees and expenses of the Trustee and the Issuer including,
      without limitation, the reasonable fees and expenses of their counsel and other
      professional advisors.

     

    “Authorized
      Representative” means (i) in the case of the Issuer, each person at the time
      designated to act on behalf of the Issuer by the most recent written certificate
      furnished to the Company and the Trustee containing the specimen signature
      of
      such person and signed on behalf of the Issuer by its Secretary or Assistant
      Secretary; and (ii) with respect to each person at the time designated to act
      on
      behalf of any other Person (e.g., the Company or the Trustee), by written
      certificate furnished to the Trustee containing the specimen signature of such
      other person and signed on behalf of such person, in case of a partnership
      by
      each of its general partners (or any other person authorized to sign on behalf
      of such Partnership) and in the case of a corporation by a person authorized
      by
      such corporation to deliver such certificates.

     

    “Authorized
      Denominations” means, $5,000 and any whole multiple thereof.

     

    “Beneficial
      Owners” means the owners of beneficial interests in the Bonds while Bonds are
      held by a Securities Depository.

     

    “Bond
      Counsel” means any firm of nationally recognized bond counsel selected by the
      Issuer and not unsatisfactory to the Trustee or the Company.

     

    “Bond
      Documents” means the Financing Documents and all other agreements, certificates,
      documents and instruments delivered in connection with any of the Financing
      Documents.

     

    “Bond
      Insurance Policy” means the municipal bond new issue insurance policy issued by
      the Bond Insurer that guarantees payment of principal of and interest on the
      Bonds.

     

    “Bond
      Insurer” means Financial Guaranty Insurance Company, a New York stock insurance
      company, or any successor thereto.

     

    “Bond
      Obligations” means the Debt Service due and payable and to become due and
      payable, and any other amounts which may be owed by the Company to, or on behalf
      of, the Issuer or the Trustee under the Bond Documents.

     

    “Bond
      Resolution” means the resolution of the governing body of the Issuer adopted on
      October 3, 2006, authorizing the issuance of the Bonds.

     

    “Bonds”
      means the York County Industrial Development Authority’s Exempt Facilities
      Revenue Bonds, Series 2006 (The York Water Company Project) authorized
      hereunder.

     

    “Business
      Day” means any day which is not (a) a Saturday, a Sunday or in the City of New
      York, New York, or the city in which the corporate trust operations office
      of
      the Trustee or any duly appointed Paying Agent or the office of the Trustee
      at
      which this Indenture is being administered is located, a day on which banks
      are
      authorized or required by law or executive order to be closed, or (b) a day
      on which the New York Stock Exchange is closed.

     

    “Code”
      means the Internal Revenue Code of 1986, as amended.

     

    “Construction
      Fund” means the fund of that name created pursuant to Section 3.1
      hereof.

     

    “Dated
      Date” means October 27, 2006 with respect to the Bonds.

     

    “Debt
      Service” means the principal of, premium, if any, and interest on the
      Bonds.

     

    “Debt
      Service Fund” means the special fund of that name created pursuant to
      Section 3.1 hereof.

     

    “Department”
      means the Department of Community and Economic Development of the
      Commonwealth.

     

    “Determination
      of Taxability” means a Final Determination by the Internal Revenue Service or by
      a court of competent jurisdiction in the United States that, as a result of
      failure by the Company to observe or perform any covenant, condition or
      agreement on its part to be observed or performed under the Loan Agreement
      or as
      a result of the inaccuracy of any representation or agreement made by the
      Company under the Loan Agreement, the interest payable on any Bond is includable
      in the gross income of the Registered Owner or Beneficial Owner of such Bond
      (other than a Registered Owner or Beneficial Owner who is a “substantial user”
of the Project or a “related person” within the meaning of Section 147(a)
      of the Code).

     

    “DTC”
      means The Depository Trust Company, acting as Securities Depository, as set
      forth in Section 2.13 hereof.

     

    “DTC
      Participant” shall have the meaning assigned from time to time by DTC when used
      by DTC in reference to a “DTC Participant.”

     

    “Event
      of
      Default” means any of the events described in Section 7.1
      hereof.

     

    “Favorable
      Opinion of Bond Counsel” means an opinion of Bond Counsel addressed to the
      Issuer and the Trustee to the effect that the action proposed to be taken is
      authorized or permitted by the laws of the Commonwealth and this Indenture
      and
      will not, in and of itself, adversely affect any exclusion of interest on the
      Bonds from gross income of the owners thereof for federal income tax
      purposes.

     

    “Final
      Determination” means, with respect to a private letter ruling or a technical
      advice memorandum of the Internal Revenue Service, written notice thereof in
      a
      proceeding in which the Company had an opportunity to participate and,
      otherwise, means written notice of a determination from which no further right
      of appeal exists or from which no appeal is timely filed with the next level
      of
      administrative or judicial review in a proceeding to which the Company was
      a
      party or in which the Company had the opportunity to participate.

     

    “Financing
      Documents” means this Indenture, the Loan Agreement, the Tax Documents and the
      Bonds.

     

    “Government
      Obligations” means any one or more of the following:

     

    (i)  Securities
      that are direct obligations of the United States of America or securities the
      timely payment of whose principal and interest is unconditionally guaranteed
      by
      the full faith and credit of the United States of America, trust receipts or
      other evidence of a direct claim upon the instruments described above, including
      but not limited to CATS (Certificates of Accrual on Treasury Securities), TIGRS
      (Treasury Investment Growth Receipts) and Government Trust Certificates;
      or

     

    (ii)  To
      the
      extent permitted by law for the particular investment contemplated, pre-refunded
      municipal obligations meeting the conditions set forth in (a) through (e) below:
      

     

    (a)  the
      municipal obligations are (i) not subject to redemption prior to maturity or
      (ii) the trustee for such municipal obligations has been given irrevocable
      instructions concerning their calling and redemption and the issuer of such
      municipal obligations has covenanted not to redeem such bonds other than as
      set
      forth in such instructions; and

     

    (b)  the
      municipal obligations are secured by cash or non-callable United States
      Government Obligations that may be applied only to interest, principal and
      premium payments of such municipal obligations; and

     

    (c)  the
      principal of and interest on such United States Government Obligations (plus
      any
      cash in an escrow fund) are sufficient to meet all of the liabilities of the
      municipal obligations; and

     

    (d)  the
      cash
      and/or United States Government Obligations serving as security for the
      municipal obligations are held by an escrow agent or trustee; and

     

    (e)  the
      United States Government Obligations are not available to satisfy any other
      claims, including those against the trustee or escrow agent.

     

    “Indenture”
      means this Trust Indenture dated as of October 1, 2006, as hereafter amended
      and
      supplemented by any Supplemental Indenture.

     

    “Interest
      Payment Date” means, with respect to the Bonds, April 1 and October 1 of each
      year, commencing April 1, 2007.

     

    “Investment
      Securities” means and includes any of the following securities on which neither
      the Company nor any of its subsidiaries is the obligor: (a) Government
      Obligations or obligations of any United States Government Related Entity
      or obligations guaranteed or insured as to principal and interest by the
      United States of America or any United States Government Related Entity; “United
      States Government-Related Entity” shall mean the Export-Import Bank of the
      United States, Farmers Home Administration, Federal Housing Administration,
      General Services Administration, Government National Mortgage Association,
      Federal National Mortgage Association, each Federal Home Loan Bank, Federal
      Home
      Loan Mortgage Corporation, each Federal Land Bank, each Federal Intermediate
      Credit Bank, Banks for Cooperatives and the Farm Credit System and The Student
      Loan Marketing Association; (b) obligations of a state, a territory, or a
      possession of the United States, or any political subdivision of any of the
      foregoing or of the District of Columbia as described in Section 103 of the
      Code, and rated not less than “A2” by Moody’s or “A” by another Nationally
      Recognized Statistical Rating Organization (“NRSRO”); split rated investments
      where one of the ratings falls below the minimum rating set forth above are
      not
      permitted; (c) domestic and eurodollar time deposits, overnight deposits,
      certificates of deposit and banker’s acceptances (i) maintained at or issued by
      any office or branch of any bank or trust company organized or licensed under
      the laws of the United States of America or any state thereof which bank or
      trust company has capital, surplus and undivided profits of at least
      $500,000,000, or (ii) maintained at or issued by any bank organized under
      the laws of a jurisdiction outside of the United States of America provided
      that
      the long term securities of such bank or trust company are rated A or higher
      (A2
      in the case of Moody’s) by at least one NRSRO, in each case maturing not more
      than 360 days from the date of acquisition thereof; split rated investments
      where one of the ratings falls below the minimum rating set forth above are
      not
      permitted; (d) commercial paper and other instruments that are rated, or that
      are issued or guaranteed by an issuer that is rated, in the highest, short
      term
      category by at least two NRSROs (A-1 shall be deemed to be the highest short
      term rating for Standard and Poor’s) and maturing not more than 270 days from
      the date of acquisition thereof; (e) corporate notes and bonds rated “A” or
      higher (A2 in the case of Moody’s) by two or more NRSROs maturing not more than
      364 days from the date of acquisition thereof; split ratings where one of the
      ratings falls below the minimum rating set forth above are not permitted;
      (f) repurchase and reverse repurchase agreements with any bank (or a
      broker-dealer subsidiary of affiliate of such bank), provided such bank has
      combined capital, surplus and undivided profits of at least $500,000,000, or
      any
      primary dealer of United States government securities provided that the
      collateral is limited to the investments described in (a) above; (g) shares
      of
      any money market mutual fund registered with the Securities and Exchange
      Commission as an investment company under the Investment Advisors Act of 1940,
      as amended, including any such fund which is managed by the Trustee or one
      of
      its affiliates or subsidiaries, including, without limitation, any mutual fund
      for which the Trustee or an affiliate of the Trustee serves as investment
      manager, administrator, shareholder servicing agent, and/or custodian or
      subcustodian, notwithstanding that (i) the Trustee or an affiliate of the
      Trustee receives fees from such funds for services rendered, (ii) the Trustee
      charges and collects fees for services rendered pursuant to this Indenture,
      which fees are separate from the fees received from such funds, and (iii)
      services performed for such funds and pursuant to this Indenture may at times
      duplicate those provided to such funds by the Trustee or its affiliates; and
      (h) as otherwise permitted by Commonwealth law for such funds.

     

    “Issue
      Date” means the date on which the Bonds are first authenticated and delivered to
      the initial purchasers against payment therefor.

     

    “Loan
      Agreement” means the Loan Agreement dated as of October 1, 2006 between the
      Issuer and the Company, as hereafter amended and supplemented by any
      Supplemental Loan Agreement.

     

    “Moody’s”
      means Moody’s Investors Service, Inc., a corporation organized and existing
      under the laws of the State of Delaware, its successors and their assigns,
      and,
      if such corporation shall be dissolved or liquidated or shall no longer perform
      the functions of a securities rating agency, “Moody’s” shall be deemed to refer
      to any other nationally recognized securities rating agency designated by the
      Company by written notice to the Trustee and the Issuer.

     

    “Outstanding”
      when used with reference to Bonds means all Bonds authenticated and delivered
      under this Indenture as of the time in question, except:

     

    (a)  All
      Bonds
      theretofore canceled or required to be canceled under Section 2.11
      hereof;

     

    (b)  Bonds
      for
      the payment or redemption of which provision has been made in accordance with
      Article X hereof; provided that, if such Bonds are being redeemed, the
      required notice of redemption shall have been given or provision satisfactory
      to
      the Trustee shall have been made therefor; and

     

    (c)  Bonds
      in
      substitution for which other Bonds have been authenticated and delivered
      pursuant to Article II hereof.

     

    In
      determining whether the Registered Owners of a requisite aggregate principal
      amount of Bonds Outstanding have concurred in any request, demand,
      authorization, direction, notice, consent or waiver under the provisions hereof,
      Bonds which are owned of record by the Company or any affiliate thereof shall
      be
      disregarded and deemed not to be Outstanding hereunder for the purpose of any
      such determination (except that, in determining whether the Trustee shall be
      protected in relying upon any such request, demand, authorization, direction,
      notice, consent or waiver, only Bonds which the Trustee knows to be so owned
      or
      held shall be disregarded) unless all Bonds are owned by the Company or any
      affiliate thereof, in which case such Bonds shall be considered outstanding
      for
      the purpose of such determination. For the purpose of this definition, an
“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 and “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.

     

    “Paying
      Agent” means, initially, the Trustee and any successor.

     

    “Person”
      means an individual, a corporation, a partnership, an association, a joint
      stock
      company, a trust, any unincorporated organization, a governmental body or a
      political subdivision, a municipal corporation, public corporation or any other
      group or organization of individuals.

     

    “Rating
      Agency” means Moody’s or S&P.

     

    “Rebate
      Fund” means the separate fund, if any, created pursuant to the Tax Documents at
      the request of the Company and held by the Trustee but not as part of the Trust
      Estate under this Indenture.

     

    “Register”
      means the registration books of the Issuer described in Section 2.7(a)
      hereof.

     

    “Registered
      Owner” or “Bondholder” or “Owner” means the Person in whose name any Bond is
      registered pursuant to Section 2.7(a) hereof.

     

    “Regular
      Record Date” means, with respect to the Bonds, the close of business on the
      fifteenth day of the month immediately preceding the Interest Payment
      Date.

     

    “Regulations”
      means the applicable proposed, temporary or final Income Tax Regulations
      promulgated under the Code, as such regulations may be amended or supplemented
      from time to time.

     

    “Revenues
      of the Issuer” or “Revenues” means and includes all payments by or on behalf of
      the Company, including specifically the Installment Loan Payments, under the
      Loan Agreement to be paid into the Debt Service Fund and all receipts of the
      Trustee credited against such payments, but not including payments with respect
      to the indemnification or reimbursement of certain expenses of the Trustee
      under
      Section 6.5 of the Loan Agreement and of the Issuer under Sections 6.6, 7.1
      and 8.3 of the Loan Agreement or under any other guaranty or indemnification
      agreement.

     

    “S&P”
      means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
      Companies, Inc., a corporation organized and existing under the laws of the
      State of New York, its successors and their assigns, and, if such corporation
      shall be dissolved or liquidated or shall no longer perform the functions of
      a
      securities rating agency, “S&P” shall be deemed to refer to any other
      nationally recognized securities rating agency designated by the Company, by
      notice to the Issuer and the Trustee.

     

    “Securities
      Depository” means any “clearing agency” registered under Section 17A of the
      Securities Exchange Act of 1934, as amended.

     

    “Special
      Mandatory Redemption” means any redemption of Bonds made pursuant to
      Section 5.1(b) hereof.

     

    “Special
      Record Date” means the Special Record Date established by the Trustee pursuant
      to Section 2.9(b)(iii) hereof with respect to payment of overdue
      interest.

     

    “Supplemental
      Indenture” means any supplement to this Indenture delivered pursuant to
      Article IX hereof.

     

    “Supplemental
      Loan Agreement” means any supplement to the Loan Agreement entered into pursuant
      to Section 9.3 hereof.

     

    “Tax
      Documents” means the Tax Certificate as to Arbitrage and Instructions as to
      Compliance with Provisions of Section 103(a) of the Internal Revenue Code of
      1986, as amended, of the Company and the Issuer, dated as of the issuance date
      of the Bonds, and such other documents as Bond Counsel may require to be
      executed and delivered in connection with the issuance of the Bonds relating
      to
      their tax status under the Code. 

     

    “Trust
      Estate” means the trust estate as defined in the granting clauses in this
      Indenture.

     

    “Underwriting
      Agreement” means, with respect to the Bonds, the Purchase Contract dated October
      18, 2006 among the Issuer, the Company and Janney Montgomery Scott LLC, as
      underwriter, providing for the purchase and sale of the Bonds.

     

    “United
      States Government Obligations” means direct obligations of, or obligations the
      full and timely payment of which are unconditionally guaranteed by, the United
      States of America.

     

    Section
      1.2.  Certain
      Rules of Interpretation.

     

    (a)  The
      definitions set forth in Article I and in the Loan Agreement shall be
      equally applicable to both the singular and plural forms of the terms therein
      defined and shall cover all genders.

     

    (b)  “Herein,”
      “hereby,” “hereunder,” “hereof,” “hereinbefore,” “hereinafter” and other
      equivalent words refer to this Indenture and not solely to the particular
      Article, Section or Subdivision hereof in which such word is used.

     

    (c)  Reference
      herein to an article number (e.g.,
      Article IV) or a section number (e.g.,
      Section 6.2) shall be construed to be a reference to the designated article
      number or section number hereof unless the context or use clearly indicates
      another or different meaning or intent.

     

    (d)  Words
      of
      the masculine gender shall mean and include correlative words of the feminine
      and neuter genders and words importing the singular number shall mean and
      include the plural number and vice versa.

     

    (e)  Words
      importing persons shall include firms, associations, partnerships (including
      limited partnerships), trusts, corporations and other legal entities, including
      public bodies, as well as natural persons.

     

    (f)  Any
      headings preceding the text of the several Articles and Sections of this
      Indenture, and any table of contents appended to copies hereof, shall be solely
      for convenience of reference and shall not constitute a part of this Indenture,
      nor shall they affect its meaning, construction or effect.

     

    (g)  References
      to statutes or regulations are to be construed as including all statutory or
      regulatory provisions consolidating, amending or replacing the statute or
      regulation referred to; and references to agreements and other contractual
      instruments shall be deemed to include any exhibits and appendices attached
      thereto and all amendments, supplements and other modifications to such
      instruments, but only to the extent such amendments, supplements and other
      modifications are not prohibited by the terms of this Indenture.

     

    (h)  Whenever
      in this Indenture, the Issuer, the Company or the Trustee is named or referred
      to, it shall include, and shall be deemed to include, its respective successors
      and assigns whether so expressed or not. All of the covenants, stipulations,
      obligations and agreements by or on behalf of, and other provisions for the
      benefit of, the Issuer, the Company and the Trustee contained in this Indenture
      shall inure to the benefit of such respective successors and assigns, bind
      and
      shall, inure to the benefit of any officer, board, commission, authority, agency
      or instrumentality to whom or to which there shall be transferred by or in
      accordance with law any right, power or duty of the Issuer or of its successors
      or assigns, the possession of which is necessary or appropriate in order to
      comply with any such covenants, stipulations, obligations, agreements or other
      provisions of this Indenture.

     

    (i)  Every
      “request,” “order,” “demand,” “application,” “appointment,” “notice,”
“statement,” “certificate,” “consent,” “direction” or similar action hereunder
      by persons referred to herein shall, unless the form thereof is specifically
      provided, be in writing and signed by an Authorized Representative of the person
      giving it.

     

    ARTICLE
      II  

     

    The
      Bonds

     

    Section
      2.1.  Authorized
      Amount and Issuance of Bonds; Disposition of Bond Proceeds. 

     

    Upon
      the
      execution and delivery of this Indenture, the Issuer shall execute the Bonds
      and
      deliver them to the Trustee for authentication. At the written direction of
      the
      Issuer, the Trustee shall authenticate the Bonds, and deliver them to the
      purchasers thereof upon receipt by the Trustee of the amount due the Issuer
      for
      the initial delivery of the Bonds pursuant to the terms of the Underwriting
      Agreement by wire transfer of immediately available funds. The proceeds of
      the
      Bonds shall be deposited by the Trustee in a settlement account and disbursed
      or
      transferred as follows: (a) transfer to the Debt Service Fund, established
      pursuant to Section 3.1 hereof, a sum equal to the accrued interest, if
      any, paid by the initial purchasers of the Bonds; (b) disburse amounts set
      forth in a Closing Statement executed by the Issuer and the Company to pay
      Costs
      of Issuance of the Bonds; and (c) transfer to the Construction Fund,
      established pursuant to Section 3.1 hereof, the balance of the proceeds
      received from the initial purchasers of the Bonds. The total principal amount
      of
      the Bonds that may be issued hereunder is hereby expressly limited to
      $10,500,000, except as provided in Section 2.8 hereof.

     

    Section
      2.2.  Terms
      of the Bonds. 

     

    The
      Bonds
      shall be designated “York County Industrial Development Authority Exempt
      Facilities Revenue Bonds, Series 2006 (The York Water Company Project)” and
      shall be issuable only as fully registered Bonds without coupons in Authorized
      Denominations. Unless the Issuer shall otherwise direct, the Bonds shall be
      numbered separately from 1 upward. The Bonds shall be dated as of October 27,
      2006 and shall mature, subject to prior redemption upon the terms and conditions
      hereinafter set forth, on October 1, 2036. The Bonds shall bear interest at
      the
      rate of four and three-fourths percent (4.75%) per annum, from and including
      the
      date thereof until payment of the principal or redemption price thereof shall
      have been made or provided for in accordance with the provisions hereof, whether
      at maturity, upon redemption or otherwise. Each Bond shall bear interest on
      overdue principal and premium, if any, and, to the extent permitted by law,
      on
      overdue interest at the rate of interest borne by the Bonds.

    

    Optional
      Redemption.
      The
      Bonds shall be subject to redemption by the Issuer, at the direction of the
      Company, on or after October 1, 2016, in whole or in part at any time, in
      Authorized Denominations, at a redemption price of 100% of the principal amount
      redeemed plus accrued interest, if any, to the redemption date.

    

    Special
      Mandatory Redemption.
      The
      Bonds are also subject to Special Mandatory Redemption as set forth in Section
      5.1(b) hereof.

    

    Section
      2.3.  Reserved. 

     

    Section
      2.4.  Reserved. 

     

    Section
      2.5.  Form
      of Bonds; Execution; Bonds Equally and Ratably Secured; Limited Obligation
      of
      the Issuer. 

     

    (a)  The
      Bonds
      shall be substantially in the form of Exhibit A attached to this Indenture
      and
      made a part hereof, with appropriate insertions, deletions and modifications
      to
      reflect the terms of the Bonds. The Bonds shall be executed on behalf of the
      Issuer with the manual or facsimile signature of its Chairman or Vice Chairman
      and attested by the manual or facsimile signature of its Secretary or Assistant
      Secretary, and shall have impressed or imprinted thereon the official seal
      of
      the Issuer or a facsimile thereof. All authorized facsimile signatures shall
      have the same force and effect as if manually signed. In case any official
      whose
      signature or a facsimile of whose signature shall appear on the Bonds shall
      cease to be such official before the delivery of such Bonds, such signature
      or
      such facsimile shall nevertheless be valid and sufficient for all purposes,
      the
      same as if such official had remained in office until delivery.

     

    (b)  The
      Bonds
      shall be equally and ratably secured under the Indenture, except as otherwise
      expressly provided herein. The Bonds, together with premium, if any, and
      interest thereon, shall be special, limited obligations of the Issuer secured
      by
      the Trust Estate and payable solely from the Revenues (except to the extent
      paid
      out of moneys attributable to the Bond proceeds or the income from the temporary
      investment thereof) and shall be a valid claim of the respective owners thereof
      only against the Debt Service Fund and the Construction Fund and the Revenues,
      which Revenues shall be used for no other purpose than to pay the principal
      of,
      and premium, if any, and interest on, the Bonds, except as may be otherwise
      expressly authorized in this Indenture. The
      Bonds are limited obligations of the Issuer and are payable solely from amounts
      payable by the Company under the Loan Agreement and any funds held under the
      Indenture and available for such payment. Neither the Commonwealth of
      Pennsylvania, the County of York nor any political subdivision thereof is or
      shall be obligated to pay the principal of or premium, if any, or interest
      on
      the Bonds, and the Bonds shall not be deemed an obligation of the Commonwealth
      of Pennsylvania, the County of York or any political subdivision thereof.
      Neither the faith and credit nor the taxing power of the Commonwealth of
      Pennsylvania, the County of York or any political subdivision thereof is pledged
      to the payment of the principal of or premium,
      if
      any, or the interest on the Bonds. The Issuer has no taxing
      power.

     

    (c)  All
      covenants, promises, agreements, duties and obligations of the Issuer set forth
      in the Financing Documents shall be solely the covenants, promises, agreements,
      duties and obligations of the Issuer and shall not be deemed to be, or be,
      the
      covenants, promises, agreements, duties or obligations of any member, officer,
      employee or agent of the Issuer or the Commonwealth in his or her individual
      capacity, and no recourse shall be had for the payment of the principal of,
      or
      interest on the Bonds or any other amount payable hereunder or in connection
      herewith, or for any claim based hereon or on the Bonds or the Loan Agreement,
      against any such member, officer, employee or agent in his or her individual
      capacity.

     

    Section
      2.6.  Authentication 

     

    No
      Bonds
      shall be valid for any purpose hereunder until the certificate of authentication
      printed thereon is duly executed by the manual signature of an authorized
      signatory of the Trustee, acting as authenticating agent. Such authentication
      or
      registration shall be proof that the Registered Owner is entitled to the benefit
      of the trusts hereby created. The certificate of the Trustee may be executed
      by
      any person authorized by the Trustee, and it shall not be necessary that the
      same authorized person sign the certificates of authentication of all Bonds.
      

     

    Section
      2.7.  Registration,
      Transfer and Exchange.

     

    (a)  The
      ownership of each Bond shall be recorded in the registration books of the
      Issuer, which books shall be kept by the Trustee, acting as bond registrar,
      at
      its designated corporate trust operations office and shall contain such
      information as is necessary for the proper discharge of the duties of the
      Trustee hereunder.

     

    (b)  Bonds
      may
      be transferred or exchanged as follows: Any Bond may be transferred if endorsed
      for such transfer by the Registered Owner thereof and surrendered by such
      Registered Owner or his duly appointed attorney to the Trustee at its designated
      corporate trust operations office, whereupon the Trustee shall authenticate
      and
      deliver to the transferee a new Bond or Bonds in the same denominations as
      the
      Bond surrendered for transfer or in different Authorized Denominations equal
      in
      the aggregate to the principal amount of the surrendered Bond.

     

    (i)  Any
      Bond
      or Bonds may be exchanged for one or more Bonds and in the same principal
      amount, but in a different Authorized Denomination or Authorized Denominations.
      Each Bond so to be exchanged shall be surrendered by the Registered Owner
      thereof or his duly appointed attorney to the Trustee at its designated
      corporate trust operations office, whereupon a new Bond or Bonds shall be
      authenticated and delivered to the Registered Owner.

     

    (ii)  In
      the
      case of any Bond properly surrendered for partial redemption, the Trustee shall
      authenticate and deliver a new Bond in exchange therefor, such new Bond to
      be in
      an Authorized Denomination equal to the unredeemed principal amount of the
      surrendered Bond without cost to the Owner; provided that, at its option, the
      Trustee may certify the amount and date of partial redemption upon the partial
      redemption certificate, if any, printed on the surrendered Bond and return
      such
      surrendered Bond to the Registered Owner in lieu of an exchange.

     

    (iii)  No
      additional resolutions need be adopted by the governing body of the Issuer
      or
      any other body or person so as to accomplish the foregoing conversion and
      exchange or replacement of any Bond or portion thereof, and the Trustee shall
      provide for the completion, authentication, and delivery of the substitute
      Bonds
      in the manner prescribed herein.

     

    Except
      as
      provided in subparagraph (iii) above, the Trustee shall not be required to
      effect any transfer or exchange during the fifteen (15) days immediately
      preceding the date of mailing of any notice of redemption or at any time
      following the mailing of any such notice in the case of Bonds selected for
      such
      redemption. No charge shall be imposed upon Registered Owners in connection
      with
      any transfer or exchange, except for taxes or governmental charges related
      thereto. No transfers or exchanges shall be valid for any purposes hereunder
      except as provided above.

     

    Section
      2.8.  Mutilated,
      Destroyed, Lost or Stolen Bonds. 

     

    (a)  If
      any
      Bond is mutilated, lost, stolen or destroyed, the Registered Owner thereof
      shall
      be entitled to the issuance of a substitute Bond provided that:

     

    (i)  in
      all
      cases, the Registered Owner must provide indemnity to the Issuer, the Company
      and the Trustee satisfactory to each such party to be indemnified against any
      and all claims arising out of or otherwise related to the issuance of substitute
      Bonds pursuant to this Section;

     

    (ii)  in
      the
      case of a mutilated Bond the Registered Owner shall surrender the Bond to the
      Trustee for cancellation; and

     

    (iii)  in
      the
      case of a lost, stolen or destroyed Bond, the Registered Owner shall provide
      evidence, satisfactory to the Trustee, of the ownership and the loss, theft
      or
      destruction of the affected Bond.

     

    Upon
      compliance with the foregoing, a new Bond of like tenor and denomination,
      executed by the Issuer, shall be authenticated by the Trustee and delivered
      to
      the Registered Owner, all at the expense of the Registered Owner to whom the
      substitute Bond is delivered. Notwithstanding the foregoing, the Trustee shall
      not be required to authenticate and deliver any substitute for a Bond which
      has
      been called for redemption or which has matured or is about to mature and,
      in
      any such case, the principal or redemption price then due or becoming due shall
      be paid by the Trustee in accordance with the terms of the mutilated, lost,
      stolen or destroyed Bond without substitution therefor.

     

    (b)  Every
      Bond issued pursuant to this Section 2.8 shall constitute an additional
      contractual obligation of the Issuer, whether or not the Bond alleged to have
      been destroyed, lost or stolen 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 Bonds duly issued hereunder.

     

    (c)  All
      Bonds
      shall be held and owned upon the express condition that the foregoing provisions
      are exclusive with respect to the replacement or payment of mutilated,
      destroyed, lost or stolen Bonds, and shall preclude any and all other rights
      or
      remedies, unless expressly inconsistent with any law or statute existing or
      hereafter enacted with respect to the replacement or payment of negotiable
      instruments, investments or other securities without their surrender.

     

    Section
      2.9.  Payments
      of Principal, Redemption Price and Interest; Persons Entitled
      Thereto. 

     

    

    (a)  The
      principal or redemption price of each Bond shall be payable in lawful money
      of
      the United States of America upon surrender of such Bond to the designated
      corporate trust operations office of the Trustee, initially in Harrisburg,
      Pennsylvania. Such payments shall be made to the Registered Owner of the Bond
      so
      surrendered, as shown on the registration books maintained by the Trustee on
      the
      date of payment.

     

    (b)  Each
      Bond
      shall bear interest and be payable in lawful money of the United States of
      America as to interest as follows:

     

    (i)  Each
      Bond
      shall bear interest (A) from the date of authentication, if authenticated
      on an Interest Payment Date to which interest has been paid or duly provided
      for, or (B) from the last preceding Interest Payment Date to which interest
      has been paid or duly provided for (or the Dated Date if no interest thereon
      has
      been paid) in all other cases.

     

    (ii)  Subject
      to the provisions of subparagraph (iii) below, the interest due on any Bond
      on any Interest Payment Date shall be paid to the Registered Owner of such
      Bond
      as shown on the registration books kept by the Trustee as of the Regular Record
      Date. The amount of interest payable on any Interest Payment Date shall be
      computed on the basis of a 360-day year of twelve (12) 30-day
      months.

     

    (iii)  If
      the
      funds available under this Indenture are insufficient on any Interest Payment
      Date to pay the interest then due, the Regular Record Date shall no longer
      be
      applicable with respect to the Bonds. If sufficient funds for the payment of
      such overdue interest thereafter become available, the Trustee shall immediately
      establish a special interest payment date for the payment of the overdue
      interest and a Special Record Date (which shall be a Business Day) for
      determining the Registered Owners entitled to payments. Notice of such date
      so
      established shall be mailed by the Trustee to each Owner at least ten (10)
      days
      prior to the Special Record Date, but not more than thirty (30) days prior
      to
      the special interest payment date. The overdue interest shall be paid on the
      special interest payment date to the Registered Owners, as shown on the
      registration books kept by the Trustee as of the close of business on the
      Special Record Date.

     

    (c)  Interest
      due at the maturity or redemption of the Bonds shall be paid only upon
      presentation and surrender of Bonds at the corporate trust operations office
      of
      the Trustee in Harrisburg, Pennsylvania or such other office as may be
      designated by the Trustee in writing to the Issuer, the Company and the Owners
      of the Bonds. 

     

    (d)  All
      Bonds
      issued hereunder are and are to be, to the extent provided in this Indenture,
      equally and ratably secured by this Indenture without preference, priority
      or
      distinction on account of the actual time or times of the authentication,
      delivery or maturity of the Bonds so that, subject as aforesaid, all Bonds
      at
      any time Outstanding hereunder shall have the same right, lien and preference
      under and by virtue of this Indenture and shall all be equally and ratably
      secured hereby with like effect as if they had all been executed, authenticated
      and delivered simultaneously on the date hereof, whether the same, or any of
      them, shall actually be disposed of at such date, or whether they, or any of
      them, shall be disposed of at some future date.

     

    Section
      2.10.  Temporary
      Bonds. 

     

    Pending
      preparation of definitive Bonds, the Issuer may issue, in lieu of definitive
      Bonds, one or more temporary printed or typewritten Bonds in Authorized
      Denominations, of substantially the tenor recited above. At the written request
      of the Issuer, the Trustee shall authenticate definitive Bonds in exchange
      for
      and upon surrender of an equal principal amount of temporary Bonds. Until so
      exchanged, temporary Bonds shall have the same rights, remedies and security
      hereunder as definitive Bonds. Temporary Bonds shall be numbered consecutively
      upward from TR-1.

     

    Section
      2.11.  Cancellation
      of Surrendered Bonds. 

     

    The
      Trustee shall cancel (a) all Bonds surrendered for transfer or exchange,
      for payment at maturity or for redemption (unless the surrendered Bond is to
      be
      partially redeemed and the Trustee elects to return the Bond, certified as
      to
      the partial redemption, to the Registered Owner thereof pursuant to
      Section 2.7(b)(ii)), and (b) all Bonds purchased at the direction of
      the Company and surrendered to the Trustee for cancellation. The Trustee shall
      deliver to the Issuer a certificate of cancellation in respect of all Bonds
      canceled in accordance with this Section.

     

    Section
      2.12.  Acts
      of Registered Owners; Evidence of Ownership. 

     

    Any
      action to be taken by Registered Owners may be evidenced by one or more
      concurrent written instruments of similar tenor signed or executed by such
      Registered Owners in person or by an agent appointed in writing. The fact and
      date of the execution by any Person of any such instrument may be proved by
      acknowledgment before a notary public or other officer empowered to take
      acknowledgments or by an affidavit of a witness to such execution. Any action
      by
      the Registered Owner of any Bond shall bind all future Registered Owners of
      the
      same Bond in respect of anything done or suffered by the Issuer or the Trustee
      in pursuance thereof.

     

    Section
      2.13.  Book
      Entry System. 

     

    (a)  DTC
      will
      act as Securities Depository for the Bonds. The Bonds shall be initially issued
      in the form of a single fully registered Bond registered in the name of Cede
      & Co. (DTC’s partnership nominee). So long as Cede & Co. is the
      Registered Owner of the Bonds, as nominee of DTC, references herein to
      Registered Owners, Bondholders or holders or Owners of the Bonds shall mean
      Cede
& Co. and shall not mean the beneficial owners of the Bonds.

     

    (b)  The
      ownership interest of each of the Beneficial Owners of the Bonds will be
      recorded through the records of a DTC Participant. Transfers of beneficial
      ownership interests in the Bonds which are registered in the name of Cede &
Co. will be accompanied by book entries made by DTC and, in turn, by the DTC
      Participants who act on behalf of the Beneficial Owners of the
      Bonds.

     

    (c)  With
      respect to Bonds registered in the name of Cede & Co., DTC’s partnership
      nominee, the Issuer and the Trustee shall have no responsibility or obligation
      to any DTC Participant or to any person on behalf of whom such a DTC Participant
      holds an interest in the Bonds, except as provided in this Indenture. Without
      limiting the immediately preceding sentence, the Issuer and the Trustee shall
      have no responsibility or obligation with respect to (i) the accuracy of
      the records of DTC, Cede & Co. or any DTC Participant with respect to any
      ownership interest in the Bonds, (ii) the delivery to any DTC Participant
      or any other person, other than a Bondholder, as shown on the registration
      books, of any notice with respect to the Bonds, including any notice of
      redemption, or (iii) the payment to any DTC Participant or any other
      person, other than a Registered Owner, as shown in the registration books of
      any
      amount with respect to principal of, premium, if any, or interest on, the
      Bonds.

     

    (d)  Notwithstanding
      any other provisions of this Indenture to the contrary, the Issuer and the
      Trustee shall be entitled to treat and consider the person in whose name each
      Bond is registered in the registration books as the absolute owner of such
      Bond
      for the purpose of payment of principal, premium, if any, and interest with
      respect to such Bond, for the purpose of giving notices of redemption and other
      matters with respect to such Bond, for the purpose of registering transfers
      with
      respect to such Bond, and for all other purposes whatsoever. The Trustee shall
      pay all principal of, premium, if any, and interest on the Bonds only to or
      upon
      the order of the respective owners, as shown in the registration books as
      provided in this Indenture, or their respective attorneys duly authorized in
      writing, and all such payments shall be valid and effective to fully satisfy
      and
      discharge the Issuer’s obligations with respect to payment of principal of,
      premium, if any, and interest on, the Bonds to the extent of the sum or sums
      so
      paid.

     

    (e)  No
      person
      other than a Registered Owner, as shown in the registration books, shall receive
      a Bond certificate evidencing the obligation of the Issuer to make payments
      of
      principal, premium, if any, and interest, pursuant to this
      Indenture.

     

    (f)  Any
      provision of this Indenture permitting or requiring the delivery of Bonds shall,
      while the book-entry system is in effect, be satisfied by the notation on the
      books of DTC or a DTC Participant, if applicable, of the transfer of the
      Beneficial Owner’s interest in such Bond.

     

    (g)  So
      long
      as the book-entry system is in effect, the Trustee and the Issuer shall comply
      with the terms of the Letter of Representations, a copy of which is attached
      hereto as Exhibit B and made a part hereof, or an alternate Letter of
      Representations as required by DTC.

     

    (h)  DTC
      may
      determine to discontinue providing its service with respect to the Bonds at
      any
      time by giving reasonable written notice and all relevant information on the
      Beneficial Owners of the Bonds to the Issuer or the Trustee. If there is no
      successor Securities Depository appointed by the Issuer, the Trustee shall
      authenticate and deliver Bonds to the Beneficial Owners thereof in accordance
      with the information respecting the Beneficial Owners provided to the Trustee
      by
      DTC, but without any liability on the part of the Issuer or the Trustee for
      the
      accuracy of such information. The Issuer, at the direction of the Company,
      may
      determine not to continue participation in the system of book entry transfers
      through DTC (or a successor Securities Depository) at any time by giving
      reasonable written notice to DTC (or a successor Securities Depository) and
      the
      Trustee. In such event, the Issuer shall execute and deliver to the Trustee,
      and
      the Trustee shall authenticate and deliver the Bonds to the Beneficial Owners
      thereof in accordance with the information respecting the Beneficial Owners
      provided to the Trustee by DTC, but without any liability on the part of the
      Issuer or the Trustee for the accuracy of such information. 

     

    The
      Chairman or Vice Chairman of the Issuer is hereby authorized to execute any
      additional Letter of Representations or similar document necessary from time
      to
      time to continue or provide for the DTC book-entry system.

     

    Section
      2.14.  Payments
      to Cede & Co.; Payments to Beneficial Owners. 

     

    (a)  Notwithstanding
      any other provision of this Indenture to the contrary, so long as any Bond
      is
      registered in the name of Cede & Co., as nominee of DTC, all payments with
      respect to principal of, premium, if any, and interest on, such Bond and all
      notices with respect to such Bond shall be made and given, respectively,
      pursuant to DTC’s rules and procedures.

     

    (b)  Payments
      by the DTC Participants to Beneficial Owners will be governed by standing
      instructions and customary practices, as is now the case with municipal
      securities held for the accounts of customers in bearer form or registered
      in
“street name,” and will be the responsibility of such DTC Participant and not of
      DTC, the Trustee or the Issuer, subject to any statutory and regulatory
      requirements as may be in effect from time to time.

     

    ARTICLE
      III  

     

    Debt
      Service Fund and Construction Fund

     

    Section
      3.1.  Establishment
      of Funds and Accounts. 

     

    The
      Issuer hereby establishes with the Trustee trust funds designated the Debt
      Service Fund and the Construction Fund.

     

    Section
      3.2.  Debt
      Service Fund. 

     

    Moneys
      in
      the Debt Service Fund shall be held in trust for the Bondholders and, except
      as
      otherwise expressly provided herein, shall be used solely for the payment of
      the
      interest on the Bonds and for the payment of principal of or premium, if any,
      on
      the Bonds upon maturity, whether stated or accelerated, or upon redemption
      thereof pursuant to Article V hereof. The Issuer hereby authorizes and
      directs the Trustee, and the Trustee hereby agrees, to withdraw and make
      available at its designated office sufficient funds (to the extent available)
      from the Debt Service Fund to pay the principal of, premium, if any, and
      interest on the Bonds as the same become due and payable, which authorization
      and direction the Trustee hereby accepts.

     

    Section
      3.3.  Return
      of Moneys from Non-Presentment of Bonds. 

     

    In
      the
      event any Bond shall not be presented for payment when the principal thereof
      becomes due, either at maturity, at the date fixed for redemption thereof,
      or
      otherwise, and is not thereafter presented for payment, any funds which shall
      be
      held for the payment of such principal or redemption price and which remain
      unclaimed by the Owner of the Bond not presented for payment for a period of
      two
      (2) years after such due date thereof, shall, upon request in writing by the
      Company to the Trustee, and subject to applicable unclaimed property or similar
      law of the Commonwealth, be paid by the Trustee to the Company. The owners
      of
      the Bonds for which the related deposit was made shall thereafter be limited
      to
      a claim against the Company for such moneys without interest thereon and only
      to
      the extent the related deposit was repaid to the Company.

     

    Section
      3.4.  Construction
      Fund. 

     

    The
      net
      proceeds of the sale of the Bonds, after deposit of any accrued interest thereon
      in the Debt Service Fund and payment of Costs of Issuance pursuant to
      Section 2.1 hereof, shall be deposited by the Trustee in the Construction
      Fund and shall be used to pay Project Costs as provided in Section 3.2 of
      the Loan Agreement. The Trustee shall disburse moneys from the Construction
      Fund
      upon receipt of requisitions signed by the Company substantially in the form
      attached to this Indenture as Exhibit C. Any amounts remaining after delivery
      of
      the certificate of completion pursuant to Section 3.3 of the Loan Agreement
      shall be used by the Trustee as provided in Section 3.3 of the Loan
      Agreement.

     

    Section
      3.5.  Debt
      Service Fund Moneys to be Held for All Registered Owners, With Certain
      Exceptions. 

     

    Until
      applied as herein provided, moneys and investments held in the Debt Service
      Fund
      shall be held in trust for the benefit of the Registered Owners of all
      Outstanding Bonds, except that on and after the date on which the interest
      on or
      principal or redemption price of any particular Bond or Bonds is due and payable
      from the Debt Service Fund, the unexpended balance of the amount deposited
      or
      reserved in such fund for the making of such payments shall, to the extent
      necessary therefor, be held for the benefit of the Registered Owner or
      Registered Owners entitled thereto.

     

    Section
      3.6.  Additional
      Accounts and Subaccounts. 

     

    At
      the
      written request of the Company, the Trustee shall establish and maintain
      additional accounts or subaccounts within the Debt Service Fund or Construction
      Fund as the Company may reasonably request; provided that (a) in each case,
      the
      written request of the Company shall set forth in reasonable detail the sources
      of deposits into and disbursements from the account or subaccount to be
      established, and (b) in each case, the sources of deposits into and
      disbursements from the account or subaccount to be established shall be limited
      to the sources of deposits permitted or required to be made into and the
      disbursements permitted or required to be made from the fund or account within
      which it is to be established.

     

    ARTICLE
      IV  

     

    Investments,
      Tax Covenants

     

    Section
      4.1.  Investment
      of Funds. 

     

    Pending
      disbursement of the amounts on deposit in the Debt Service Fund (other than
      any
      moneys held by the Trustee to pay the principal of, premium, if any, or interest
      which has previously become payable with respect to the Bonds which shall only
      be invested as provided below in the next succeeding paragraph) and the
      Construction Fund as provided herein, the Trustee is hereby directed to invest
      and reinvest such amounts in Investment Securities promptly upon receipt of,
      and, subject to the limitations set forth in this Article, in accordance with
      the written instructions of the Company. In the event no such instructions
      are
      received by the Trustee, such amounts shall be invested in Investment Securities
      described in clause (g) of the definition thereof, pending receipt of such
      investment instructions. All such investments, as well as the investments
      described in the next succeeding paragraph, shall be credited to the fund (and
      account and subaccount therein) from which the money used to acquire such
      investments shall have come, and all income and profits on such investments
      shall be credited to, and all losses thereon shall be charged against, such
      fund
      (and account and subaccount therein). As amounts invested are needed for
      disbursement from the Debt Service Fund or the Construction Fund, the Trustee
      shall cause a sufficient amount of the investments credited to that fund to
      be
      redeemed or sold and converted into cash to the credit of that fund (and account
      and subaccount therein). The Trustee shall not be liable or responsible for
      any
      loss resulting from any such investment or reinvestment or redemption or sale
      as
      herein authorized; except that the Trustee shall be liable for any loss
      resulting from its willful or grossly negligent failure, within a reasonable
      time after receiving the direction from the Company to make any investment
      or
      reinvestment in the manner provided for herein at the Company’s direction. If
      the Trustee is unable, after reasonable effort and within a reasonable time,
      to
      make any such investment or reinvestment, it shall so notify the Company in
      writing and thereafter the Trustee shall be relieved of all responsibility
      with
      respect thereto. The Trustee may make any and all such investments through
      its
      own investment department or that of its affiliates or
      subsidiaries.

     

    Notwithstanding
      anything to the contrary contained herein, any moneys held by the Trustee to
      pay
      the principal of, premium, if any, or interest which has previously become
      payable with respect to the Bonds shall only be invested by the Trustee
      overnight in United States Government Obligations or other Investment Securities
      rated AAA or Aaa by each Rating Agency then rating the Bonds as directed in
      writing by the Company.

     

    The
      Company by its execution of the Loan Agreement covenants to restrict the
      investment of money in the funds created under this Indenture in such manner
      and
      to such extent, if any, as may be necessary, after taking into account
      reasonable expectations at the time the Bonds are delivered to their original
      purchaser, so that the Bonds will not constitute arbitrage bonds under
      Section 148 of the Code and the Regulations, and the Trustee hereby agrees
      to comply with the Company’s written instructions with respect to the investment
      of money in the funds created under this Indenture so long as such instructions
      conform to the requirements of the Indenture.

     

    Notwithstanding
      the foregoing, the Company will not direct the Trustee to make investments
      under
      this Indenture that conflict with or exceed the limitations set forth in the
      Tax
      Documents. The Trustee shall have no responsibility with respect to the
      compliance by the Company or the Issuer with respect to any covenant herein
      regarding investments made in accordance with this Article, other than to use
      its best reasonable efforts to comply with instructions from the Company
      regarding such investments. Since the investments permitted by this Section
      have
      been included at the request of the Company and the making of such investments
      will be subject to the Company’s written direction, the Issuer and the Trustee
      specifically disclaim and shall not have any obligation to the Company for
      any
      loss arising from, or tax consequences of, investments pursuant to the
      provisions of this Section. Confirmations are not required from the Trustee
      for
      permitted investments included in a monthly statement rendered by the Trustee,
      and no statement need be rendered by the Trustee for any fund or account if
      no
      investment or income accrual activity occurred in such fund or account during
      such month.

     

    Section
      4.2.  Arbitrage Bond Covenant. 

     

    With
      respect to the authority to invest funds granted in this Indenture, the Issuer
      hereby covenants with the Bondholders that, subject to the Company’s direction
      of the investment of funds, it will make no use of the proceeds of the Bonds,
      or
      any other funds which may be deemed to be proceeds of the Bonds pursuant to
      Section 148 of the Code, which would cause the Bonds to be “arbitrage
      bonds” within the meaning of such Section. 

     

    The
      Trustee shall provide such information as the Company may reasonably request
      in
      writing to enable the Company to calculate the amount of earnings on the moneys
      held under this Indenture. 

     

    Section
      4.3.  Covenants
      Regarding Tax Exemption. 

     

    The
      Issuer covenants to refrain from any action which would adversely affect, or
      to
      take such action as is reasonable and available and within its control to
      assure, the treatment of the Bonds as obligations described in
      Section 103(a) of the Code, the interest on which is not included in the
“gross income” of the holder (other than the income of a “substantial user” of
      the Project or a “related person” within the meaning of Section 147(a) of
      the Code) for purposes of federal income taxation. 

     

    ARTICLE
      V  

     

    Redemption
      of Bonds

     

    Section
      5.1.   Bonds
      Subject to Redemption. 

     

    (a)  Optional
      Redemption.
      The
      Bonds are subject to optional redemption as set forth in Section 2.2 hereof.
      

     

    (b)  Special
      Mandatory Redemption of the Bonds.
      The
      Bonds are subject to Special Mandatory Redemption prior to maturity not later
      than 180 days after the Company has notice or actual knowledge of the occurrence
      of a Determination of Taxability at a redemption price equal to 100% of the
      principal amount thereof, plus accrued interest, if any, to the redemption
      date.
      Any such Special Mandatory Redemption shall be in whole unless the Company
      delivers to the Trustee an opinion of Bond Counsel that redemption of a portion
      of the Bonds Outstanding would have the result that interest payable on the
      Bonds remaining Outstanding after such redemption would not be includable for
      federal income tax purposes in the gross income of any Owner or Beneficial
      Owner
      of a Bond (other than an Owner or Beneficial Owner who is a “substantial user”
of the Project or a “related person” within the meaning of Section 147(a)
      of the Code and the applicable regulations thereunder), and in such event the
      Bonds or portions thereof (in Authorized Denominations) shall be redeemed at
      such times and in such amounts as Bond Counsel shall so direct in such opinion.
      

     

    If
      the
      Trustee receives written notice from any Owner stating that (i) the Owner
      has been notified in writing by the Internal Revenue Service that it proposes
      to
      include the interest on any Bond in the gross income of such Owner for the
      reasons stated in the definition of “Determination of Taxability” set forth
      herein or any other proceeding has been instituted against such Owner which
      may
      lead to a Final Determination, and (ii) such Owner will afford the Company
      the opportunity to contest the same, either directly or in the name of the
      Owner, and until a conclusion of any appellate review, if sought, then the
      Trustee shall promptly give notice thereof to the Company and the Issuer and
      to
      the Owners of Bonds then Outstanding. If the Trustee thereafter receives written
      notice of a Final Determination, the Trustee shall make demand for prepayment
      of
      the unpaid Installment Loan Payments under the Loan Agreement or necessary
      portions thereof from the Company and give notice of the Special Mandatory
      Redemption of the appropriate amount of Bonds on the earliest practicable date
      within the required period of 180 days. In taking any action or making any
      determination under this Section 5.1(b), the Trustee may rely on an opinion
      of counsel.

     

    Section
      5.2.  Selection
      of Bonds for Redemption. 

     

    In
      the
      event that fewer than all Bonds subject to redemption are to be redeemed, Bonds
      shall be selected by the Trustee for redemption by lot. In the case of Bonds
      of
      varying Authorized Denominations, each Bond shall be treated as representing
      that number of Bonds which is obtained by dividing the face amount thereof
      by
      the minimum Authorized Denomination applicable to such Bond. In no event shall
      there remain outstanding in the name of any Owner, a Bond in an amount less
      than
      the minimum Authorized Denomination. 

     

    Section
      5.3.  Notice
      of Redemption. 

     

    The
      Company must deliver written notice by facsimile or first class mail to the
      Issuer and the Trustee of its intention to prepay the amounts due under the
      Loan
      Agreement and its request that the Bonds be called for redemption at least
      forty-five (45) days prior to the proposed redemption date (or such lesser
      period as is acceptable to the Trustee). Unless previously delivered to the
      Trustee and the Issuer, any such notice from the Company relating to Special
      Mandatory Redemption shall be accompanied by a certificate as to the occurrence
      of the event or events on which any Special Mandatory Redemption is based.
      The
      Trustee shall cause notice of any redemption of Bonds hereunder to be given
      to
      the Registered Owners of all Bonds to be redeemed at the registered addresses
      appearing in the registration books kept for such purpose pursuant to
      Article II hereof. Each such notice shall (i) be given by facsimile or
      by first class mail at least thirty (30) days prior to the redemption date,
      (ii) identify the Bonds to be redeemed (specifying the CUSIP numbers, if
      any, assigned to the Bonds), (iii) specify the redemption date and the
      redemption price, and (iv) state that on the redemption date the Bonds
      called for redemption will be payable at the designated corporate trust
      operations office of the Trustee, that from that date interest will cease to
      accrue, and that no representation is made as to the accuracy or correctness
      of
      the CUSIP numbers printed therein or on the Bonds. No defect affecting any
      Bond,
      whether in the notice of redemption or mailing thereof (including any failure
      to
      mail such notice), shall affect the validity of the redemption proceedings
      for
      any other Bonds. The Trustee shall also send a notice of prepayment or
      redemption by first class mail to the Registered Owner of any Bond who has
      not
      sent such Bond in for redemption sixty (60) days after the redemption
      date.

     

    In
      addition, the Trustee shall give notice of redemption of Bonds by facsimile
      or
      by mail, first class postage prepaid, at least thirty (30) days prior to a
      redemption date to each registered Securities Depository and to any national
      information service that disseminates redemption notices. Any notice sent to
      registered securities depositories or such national information services shall
      be sent so that they are received at least two (2) days prior to the general
      mailing or publication date of such notice. The Trustee may give such other
      notice or notices as may be recommended in releases, letters, pronouncements
      or
      other writings of the Securities and Exchange Commission and the Municipal
      Securities Rulemaking Board. No defect in or delay or failure in giving any
      recommended notice described in this paragraph shall in any manner affect the
      notice of redemption described in the preceding paragraph of this
      Section 5.3 and any notice mailed as provided in the preceding paragraph of
      this Section 5.3 shall be conclusively presumed to have been duly given,
      whether or not the Registered Owner receives the notice.

     

    With
      respect to any notice of optional redemption of Bonds, unless upon the giving
      of
      such notice such Bonds shall be deemed to have been paid within the meaning
      of
      Article X hereof, such notice shall state that such redemption shall be
      conditional upon the receipt by the Trustee on or prior to the date fixed for
      such redemption of moneys sufficient to pay the principal of, and premium,
      if
      any, and interest on, such Bonds to be redeemed, and that if such moneys shall
      not have been so received said notice shall be of no force and effect and the
      Issuer shall not be required to redeem such Bonds. In the event that such notice
      of redemption contains such a condition and such moneys are not so received,
      the
      redemption shall not be made and the Trustee shall within a reasonable time
      thereafter give notice to all Owners of Outstanding Bonds, in the manner in
      which the notice of redemption was given, that such moneys were not so
      received.

     

    Section
      5.4.  Effect
      of Redemption. 

     

    If
      the
      redemption price of the Bonds has been paid to the Trustee in immediately
      available funds on or before the redemption date, then interest thereon will
      cease to accrue, and the Registered Owners will have no rights with respect
      to
      such Bonds nor will they be entitled to the benefits of the Indenture except
      to
      receive payment of the redemption price thereof and unpaid interest accrued
      to
      the date fixed for redemption.

     

    Section
      5.5.  Purchase
      in Lieu of Redemption. 

     

    Notwithstanding
      anything to the contrary contained herein, the Company may elect to purchase
      from the Owners any Bonds that have been called for redemption under
      Section 5.1 hereof on the redemption date by giving the Trustee and the
      Issuer written notice at least two (2) Business Days prior to the date the
      Bonds
      are to be redeemed, provided that Bonds so purchased shall be retired and not
      remarketed. The principal amount of Bonds to be redeemed on the applicable
      redemption date shall be reduced by the amount of Bonds so
      purchased.

     

    ARTICLE
      VI  

     

    Representations
      and Covenants of the Issuer

     

    Section
      6.1.  General
      Limitation; Issuer’s Representation. 

     

    The
      representations and covenants of the Issuer herein and in any proceeding,
      document or certification incidental to issuance of the Bonds shall not create
      a
      pecuniary liability of the Issuer, except to the extent of the Trust Estate.
      The
      Issuer represents and covenants that it has made no pledge, assignment or other
      conveyance of its rights, title and interest in the Trust Estate except to
      the
      Trustee as provided herein.

     

    Section
      6.2.  Payment
      of Bonds and Performance of Covenants. 

     

    The
      Issuer shall, but only out of the Revenues, promptly pay the principal of,
      premium, if any, and interest on the Bonds at the place, on the dates and in
      the
      manner provided in the Bonds. The Issuer shall promptly perform and observe
      all
      of its other covenants, undertakings and obligations set forth in the Financing
      Documents.

     

    Section
      6.3.  Enforcement
      of the Loan Agreement. 

     

    The
      Loan
      Agreement, a duly executed counterpart of which has been filed with the Trustee,
      sets forth the covenants and obligations of the Company, including provisions
      that the Loan Agreement may only be amended with the written consent of the
      Trustee, and reference is hereby made to the Loan Agreement for a statement
      of
      such covenants and obligations of the Company. Subject to Section 6.4
      hereof and the enforcement of Unassigned Issuer’s Rights by the Issuer, the
      Trustee may enforce against the Company or any Person any rights of the Issuer
      or obligations of the Company under or arising from the Bonds or the Loan
      Agreement, whether or not the Issuer is in default hereunder or under the Bonds,
      but the Trustee shall not be deemed to have thereby assumed the obligations
      of
      the Issuer under the Loan Agreement. The Issuer shall fully cooperate with
      the
      Trustee in the enforcement by the Trustee of any such rights.

     

    Section
      6.4.  No
      Personal Liability. 

     

    No
      member, officer or employee of the Issuer, including any person executing this
      Indenture or the Bonds and no individual employee or agent of the Company shall
      be liable personally on the Bonds or be subject to any personal liability for
      any reason relating to the issuance of the Bonds.

     

    Section
      6.5.  Exemption
      from Federal Income Taxation. 

     

    The
      Issuer will not knowingly take any action, or omit to take any action, which
      action or omission will adversely affect the exclusion from gross income for
      federal income tax purposes of interest on the Bonds, and in the event of such
      action or omission will promptly, upon receiving knowledge thereof, take all
      lawful actions, based on advice of counsel and at the expense of the Company,
      as
      may rescind or otherwise negate such action or omission. 

     

    Section
      6.6.  Corporate
      Existence; Compliance with Laws. 

     

    The
      Issuer shall maintain its corporate existence; shall use its best efforts to
      maintain and renew all its rights, powers, privileges and franchises; and shall
      comply with all valid and applicable laws, rules, regulations, orders,
      requirements and directions of any legislative, executive, administrative or
      judicial body relating to the Issuer’s participation in the financing of the
      Project, the issuance of the Bonds or its execution, delivery and performance
      of
      this Indenture and the Loan Agreement.

     

    Section
      6.7.  Filings. 

     

    The
      Issuer shall cause this Indenture or financing statements relating hereto to
      be
      filed, in such manner and at such places as may be required by law fully to
      protect the security of the Registered Owners and the right, title and interest
      of the Trustee in and to the Trust Estate or any part thereof. From time to
      time, the Trustee may, but shall not be required to, obtain an opinion of
      counsel setting forth what, if any, actions by the Issuer or Trustee should
      be
      taken to preserve such security. The Issuer shall execute or cause to be
      executed any and all further instruments as shall reasonably be requested by
      the
      Trustee for such protection of the interests of the Registered Owners and shall
      furnish satisfactory evidence to the Trustee of filing and refiling of such
      instruments and of every additional instrument which shall be necessary to
      preserve the lien of the Indenture upon the Trust Estate or any part thereof
      until the principal or redemption price of, and interest on the Bonds issued
      hereunder shall have been paid in full. The Issuer shall cause to be prepared,
      and the Trustee shall execute or join in the execution of, any such further
      or
      additional instrument and file or join in the filing thereof at such time or
      times and in such place or places as it may be advised by an opinion of counsel
      to preserve the lien of this Indenture upon the Trust Estate or any part thereof
      until the aforesaid principal or redemption price and interest shall have been
      paid.

     

    Section
      6.8.  Further
      Assurances. 

     

    Except
      to
      the extent otherwise provided in this Indenture, the Issuer shall not enter
      into
      any contract or take any action by which the rights of the Trustee or the
      Registered Owners may be impaired and shall, from time to time, execute and
      deliver such further instruments and take such further action as may be required
      to carry out the purposes of this Indenture.

     

    Section
      6.9.  Inspection
      of Books. 

     

    All
      books
      and records, if any, in the Issuer’s possession relating to the Project and the
      amounts derived from the Project shall, upon written request and at all
      reasonable times, be open to inspection by such accountants or other agents
      as
      the Trustee may from time to time designate.

     

    ARTICLE
      VII  

     

    Events
      of
      Default and Remedies

     

    Section
      7.1.  Events
      of Default Defined. 

     

    (a)  Each
      of
      the following shall be an Event of Default hereunder:

     

    (i)  Payment
      of any installment of interest, principal, or premium, if any, on the Bonds
      is
      not made when due and payable; or

     

    (ii)  An
      Act of
      Bankruptcy shall occur; or

     

    (iii)  Failure
      by the Issuer to observe or perform any covenant, condition or agreement on
      its
      part to be observed or performed under this Indenture, other than as referred
      to
      in (i) above, for a period of 30 days after written notice is given to the
      Issuer, specifying such failure and requesting that it be remedied, by the
      Trustee; provided, however, that if the failure stated in the notice is such
      that it can be remedied but not within such 30-day period, it shall not
      constitute an Event of Default if the default, in the judgment of the Trustee
      in
      reliance upon advice of counsel, is correctable without material adverse effect
      on the Bondholders and if corrective action is instituted by the Issuer within
      such period and is diligently pursued until the default is remedied; or

     

    (iv)  The
      occurrence of an Event of Default under the Loan Agreement; or

     

    (v)  Failure
      by the Issuer to comply with the Act; 

     

    (b)  The
      Trustee shall promptly notify the Issuer and the Company in writing of the
      occurrence of any Event of Default after it receives written notice or has
      actual knowledge of such occurrence. In
      determining whether a payment default has occurred or whether a payment on
      the
      Bonds has been made under this Indenture, no effect shall be given to payments
      made under the Bond Insurance Policy. The
      Bond Insurer shall receive immediate notice of any payment default and notice
      of
      any other default known to the Trustee or the Issuer within 30 days of the
      Trustee’s or the Issuer’s knowledge thereof.

     

    (c)  Force
      Majeure.
      The
      provisions of Section 7.1(a)(iii) hereof and Section 8.1(b)(vi) of the
      Loan Agreement are subject to the following limitations: if by reason of acts
      of
      God; strikes, lockouts or other industrial disturbances; acts of public enemies;
      orders of any kind of the Government of the United States or of the Commonwealth
      or any department, agency, political subdivision, court or official of any
      of
      them, or any civil or military authority; insurrections; riots; epidemics;
      landslides; lightning; earthquakes; volcanoes; fires; hurricanes; tornadoes;
      storms; blue northers; floods; washouts; droughts; restraint of government
      and
      people; civil disturbances; explosions; breakage or accident to machinery;
      partial or entire failure of utilities; or any cause or event not reasonably
      within the control of either the Company or the Issuer, the Company is unable
      in
      whole or in part to carry out any one or more of its agreements or obligations
      contained in the Loan Agreement (other than its obligations under
      Sections 6.4 through 6.6, 6.10, 7.1, 7.2 and 8.3 thereof) or the Issuer is
      unable in whole or in part to carry out any one or more of its agreements or
      obligations contained in this Indenture (other than its obligations to pay
      the
      principal of, and premium, if any, and interest on the Bonds as herein
      provided), neither the Company nor the Issuer shall be deemed in default by
      reason of not carrying out said agreement or agreements or performing said
      obligation or obligations during the continuance of such inability. Both the
      Company and the Issuer shall make reasonable efforts to remedy with all
      reasonable dispatch the cause or causes preventing them from carrying out their
      respective agreements; provided, that the settlement of strikes, lockouts and
      other industrial disturbances shall be entirely within the discretion of the
      Company, and the Company shall not be required to make settlement of strikes,
      lockouts and other disturbances by acceding to the demands of the opposing
      party
      or parties when such course is in the judgment of the Company unfavorable to
      the
      Company.

     

    Section
      7.2.  Acceleration
      and Annulment Thereof. 

     

    (a)  Upon
      the
      occurrence of an Event of Default described in Section 7.1(a)(ii) hereof, the
      principal of all Bonds then Outstanding, together with accrued interest thereon,
      shall automatically become due and payable immediately without any declaration
      of acceleration by the Trustee, anything in this Indenture to the contrary
      notwithstanding. Upon the occurrence of any other Event of Default hereunder
      the
      Trustee may, and upon the written direction of the Registered Owners of 25%
      or
      more in principal amount of the Bonds then Outstanding and (subject to the
      provisions of Section 8.1(b) hereof) receipt of indemnity to its sole
      satisfaction shall, by notice in writing to the Issuer and the Company declare
      the principal of all Bonds then Outstanding to be immediately due and payable,
      and upon such declaration, the said principal, together with interest accrued
      thereon, shall become due and payable immediately, anything in this Indenture
      or
      in the Bonds to the contrary notwithstanding; provided, however, that no such
      declaration shall be made if the Company cures such Event of Default prior
      to
      the date of the declaration. Upon any acceleration hereunder (whether automatic
      or by declaration), all payments due under the Loan Agreement shall
      automatically become immediately due and payable and the Trustee shall promptly
      exercise such rights as it may have under the Loan Agreement.

     

    Promptly
      following any declaration of acceleration (or promptly after the Trustee has
      knowledge of an automatic acceleration), the Trustee shall cause to be mailed
      notice of such acceleration by first class mail to each Owner of a Bond at
      his
      last address appearing on the registration books of the Trustee. Any defect
      in
      or failure to give such notice of such acceleration shall not affect the
      validity of such acceleration.

     

    (b)  If
      after
      the principal then due on the Bonds has been declared to be due and payable,
      and
      the redemption price then due and all arrears of interest upon the Bonds are
      caused to be paid by the Issuer, and the Issuer also causes to be performed
      all
      other things in respect to which it may have been in default hereunder and
      causes to be paid by the Company or otherwise the reasonable charges of the
      Trustee and the Registered Owners, plus reasonable attorney’s fees, or any such
      default is waived as provided in Section 7.13 hereof, then, and in every
      such case, the Trustee may or, upon the direction in writing of the Registered
      Owners of a majority in principal amount of the Bonds then Outstanding, shall
      annul such declaration and its consequences and such annulment shall be binding
      upon the Trustee, the Issuer and upon all Registered Owners of Bonds issued
      hereunder. No such annulment shall extend to or affect any subsequent default
      or
      impair any right or remedy consequent thereon.

     

    (c)  Any
      acceleration of the Bonds or any annulment thereof shall be subject to the
      prior
      written consent of the Bond Insurer (if it has not failed to comply with its
      payment obligations under the Bond Insurance Policy).

     

    Section
      7.3.  Legal
      Proceedings by Trustee. 

     

    If
      any
      Event of Default has occurred and is continuing, the Trustee in its discretion
      may, and upon the written request of the Registered Owners of 25% or more in
      principal amount of the Bonds then Outstanding and receipt of indemnity to
      its
      sole satisfaction shall, in its own name;

     

    (a)  By
      mandamus, or other suit, action or proceeding at law or in equity, enforce
      all
      rights of the Registered Owners, including the right to require the Issuer
      or
      the Company to carry out any other agreements with, or for the benefit of,
      the
      Registered Owners;

     

    (b)  Bring
      suit upon the Bonds;

     

    (c)  By
      action
      or suit in equity require the Issuer to account as if it were the trustee of
      an
      express trust for the Registered Owners; and

     

    (d)  By
      action
      or suit in equity enjoin any acts or things which may be unlawful or in
      violation of the rights of the Registered Owners.

     

    Section
      7.4.  Discontinuance
      of Proceedings by Trustee. 

     

    If
      any
      proceeding taken by the Trustee on account of any default is discontinued or
      is
      determined adversely to the Trustee, then the Issuer, the Trustee, the Company
      and the Registered Owners shall be restored to their former positions and rights
      hereunder as though no such proceeding had been taken.

     

    Section
      7.5.  Registered
      Owners May Direct Proceedings. 

     

    The
      Registered Owners of a majority in principal amount of the Bonds then
      Outstanding hereunder shall have the right to direct the method and place of
      conducting all remedial proceedings by the Trustee hereunder; provided that
      the
      Trustee shall have the right to decline to follow any such direction if the
      Trustee, upon advice of counsel, determines that the action so directed may
      not
      be lawfully taken or if the Trustee in good faith determines that the action
      so
      directed might involve the Trustee in personal liability or might unduly
      prejudice the interests of the Registered Owners not parties to such direction,
      it being understood that the Trustee has no duty to ascertain whether or not
      such actions so directed are unduly prejudicial to such Registered
      Owners.

     

    Section
      7.6.  Limitations
      on Actions by Registered Owners. 

     

    No
      Registered Owner shall have any right to pursue any remedy hereunder unless
      (a) the Trustee shall have been given written notice of an Event of Default
      or the Trustee is deemed to have notice as provided in Section 8.3(h),
      (b) the Registered Owners of at least 25% in principal amount of the Bonds
      then Outstanding shall have requested the Trustee, in writing, to exercise
      the
      powers hereinabove granted or to pursue such remedy in its or their name or
      names, (c) the Trustee shall have been offered indemnity satisfactory to it
      against costs, expenses and liabilities, and (d) the Trustee shall have
      failed to comply with such request within a reasonable time; it being understood
      and intended that no one or more Registered Owners shall have any right in
      any
      manner whatsoever to affect, disturb or prejudice the lien of this Indenture
      by
      its, his or their action or to enforce any right hereunder except in the manner
      herein provided, and that all proceedings at law or in equity shall be
      instituted, had and maintained in the manner herein provided and for the equal
      and ratable benefit of the owners of all Bonds then Outstanding. Nothing
      contained in this Indenture, however, shall affect or impair the right of any
      Registered Owner to enforce the payment of the principal of, premium, if any,
      and interest on any Bond at and after the maturity thereof, or the obligation
      of
      the Issuer to cause the payment of the principal of, premium, if any, and
      interest on each of the Bonds issued hereunder to the respective owners thereof
      on the date, at the place, from the source and in the manner in the Bonds
      expressed.

     

    Section
      7.7.  Trustee
      May Enforce Rights Without Possession of Bonds. 

     

    All
      rights under this Indenture and the Bonds may be enforced by the Trustee without
      the possession of any Bonds or the production thereof at the trial or other
      proceedings relative thereto, and any proceeding instituted by the Trustee
      shall
      be brought in its name for the ratable benefit of the Registered Owners of
      the
      Bonds.

     

    Section
      7.8.  Remedies
      Not Exclusive. 

     

    Except
      as
      limited under Section 11.1 of this Indenture, no remedy herein conferred is
      intended to be exclusive of any other remedy or remedies, and each remedy is
      in
      addition to every other remedy given hereunder or now or hereafter existing
      at
      law or in equity or by statute.

     

    Section
      7.9.  Delays
      and Omissions Not to Impair Rights. 

     

    No
      delay
      or omission in respect of exercising any right or power accruing upon any
      default shall impair such right or power or be a waiver of such default, and
      every remedy given by this Article may be exercised from time to time and as
      often as may be deemed expedient.

     

    Section
      7.10.  Application
      of Moneys. 

     

    All
      moneys received by the Trustee pursuant to any right given or action taken
      under
      the provisions of this Article shall, after payment of costs, expenses,
      liabilities and advances paid, incurred or made or anticipated by the Trustee
      in
      the collection of such moneys and of the expenses, liabilities and advances
      incurred or made by the Trustee, be deposited in the Debt Service Fund; and
      all
      moneys in the Debt Service Fund (other than moneys held for the payment of
      a
      particular Bond) shall be applied, as follows:

     

    (a)  Unless
      the principal of all of the Bonds shall have become or shall have been declared
      due and payable, all such moneys shall be applied:

     

    First
      -
      to the payment to the persons entitled thereto of all interest then due on
      the
      Bonds or if the amount available shall not be sufficient for such purpose,
      then
      to the payment ratably, to the persons entitled thereto without any
      discrimination or privilege; and

     

    Second
      -
      to the payment to the persons entitled thereto of the unpaid principal of any
      of
      the Bonds which shall have become due (other than Bonds matured, or called
      for
      redemption for the payment of which moneys and/or Government Obligations are
      held pursuant to this Indenture), in the order of their due dates, with interest
      on such Bonds from the respective dates upon which they become due and, if
      the
      amount available shall not be sufficient to pay in full Bonds due on any
      particular date, together with such interest, then to the payment ratably,
      according to the amount of principal due on such date, to the persons entitled
      thereto without any discrimination or privilege.

     

    (b)  If
      the
      principal of all the Bonds shall have become due or shall have been declared
      due
      and payable, all such moneys shall be applied to the payment of the principal
      and the interest then due and unpaid upon the Bonds (other than installments
      of
      interest, and amounts of principal of Bonds matured or called for redemption,
      for the payment of which moneys and/or Government Obligations are held pursuant
      to this Indenture) without preference or priority of principal over interest
      or
      of interest over principal, or of any installment of interest over any other
      installment of interest, or of any Bond over any other Bond, ratably, according
      to the amounts due respectively for principal and interest, to the persons
      entitled thereto without any discrimination or privilege. 

     

    (c)  If
      the
      principal of all the Bonds shall have been declared due and payable, and if
      such
      declaration shall thereafter have been rescinded and annulled under the
      provisions of this Article, then, subject to the provisions of paragraph (b)
      of
      this Section in the event that the principal of all the Bonds shall later become
      due or be declared due and payable, the moneys shall be applied in accordance
      with the provisions of paragraph (a) of this Section. 

     

    Whenever
      moneys are to be applied pursuant to the provisions of this Section, such moneys
      shall be applied as soon as practicable as the Trustee shall in good faith
      determine having due regard to the amount of such moneys available for
      application and the likelihood of additional moneys becoming available for
      such
      application in the future. Whenever the Trustee shall apply such funds, it
      shall
      fix the date (which shall be the date of acceleration of the Bonds or if there
      shall not have been an acceleration, such date as shall be determined by the
      Trustee) upon which such application is to be made and upon such date interest
      on the amounts of principal to be paid on such dates shall cease to accrue.
      The
      Trustee shall give such notice as it may deem appropriate of the deposit with
      it
      of any such moneys and of the fixing of any such date, and shall not be required
      to make payment to the holder of any Bond until such Bond shall be presented
      to
      the Trustee.

    

    Section
      7.11.  Trustee’s
      Right to Receiver. 

     

    The
      Trustee shall be entitled as of right to the appointment of a receiver; and
      the
      Trustee, the Registered Owners and any receiver so appointed shall have such
      rights and powers and be subject to such limitations and restrictions as are
      permitted by law.

     

    Section
      7.12.  Trustee
      and Registered Owners Entitled to All Remedies. 

     

    It
      is the
      purpose of this Article to make available to the Trustee and the Registered
      Owners all lawful remedies; but should any remedy herein granted be held
      unlawful, the Trustee and the Registered Owners shall nevertheless be entitled
      to every other remedy provided by law. It is further intended that, insofar
      as
      lawfully possible, the provisions of this Article shall apply to and be binding
      upon any trustee or receiver who may be appointed hereunder.

     

    Section
      7.13.  Waiver
      of Past Defaults. 

     

    Subject
      to the prior written consent of the Bond Insurer, the Registered Owners of
      not
      less than a majority in principal amount of the Outstanding Bonds may on behalf
      of the Registered Owners of all the Bonds (by written notice thereof to the
      Issuer and the Trustee) waive any past default hereunder and its consequences,
      except a default (1) in the payment of the principal of, redemption
      premium, if any, or interest on, any Bond unless prior to such waiver or
      rescission, all arrears of principal or interest, or both, as the case may
      be,
      and all expenses of the Trustee, in connection with such default shall have
      been
      paid or provided for; or (2) in respect of a covenant or provision hereof
      which under Article IX cannot be modified or amended without the consent of
      the Registered Owner of each Outstanding Bond. Upon any such waiver, such
      default shall cease to exist, and any Event of Default arising therefrom shall
      be deemed to have been cured, for every purpose of this Indenture; but no such
      waiver shall extend to any subsequent or other default or impair any right
      consequent thereon. 

     

    Section
      7.14.  Bond
      Insurer Deemed Sole Holder of Insured Bonds

     

    (a)  For
      all purposes of the provisions herein governing events of default and remedies,
      except the giving of notice of default to Bondholders, the Bond Insurer shall
      be
      deemed to be the sole holder of the Bonds it has insured for so long as it
      has
      not failed to comply with its payment obligations under the Bond Insurance
      Policy.

     

    (b)  The
      Bond Insurer shall be included as a party in interest and as a party entitled
      to
      (i) notify the Issuer, the Trustee or any applicable receiver of the occurrence
      of an Event of Default and (ii) request the Trustee or receiver to intervene
      in
      judicial proceedings that affect the Bonds or the security therefor. The Trustee
      or receiver shall be required to accept notice of default from the Bond
      Insurer.

     

    ARTICLE
      VIII  

     

    The
      Trustee

     

    Section
      8.1.  Certain
      Duties and Responsibilities of Trustee. 

     

    (a)  The
      Trustee accepts the trusts hereby created and agrees to perform the duties
      herein required of it upon the terms and conditions hereof. The Trustee shall
      have the right, power and authority, at all times, to do all things not
      inconsistent with the express provisions of this Indenture which it may deem
      necessary or advisable in order to: (i) enforce the provisions of this
      Indenture, (ii) take any action with respect to any Event of Default,
      (iii) institute, appear in or defend any suit or other proceeding with
      respect to an Event of Default, or (iv) protect the interests of the Owners
      of any Outstanding Bonds. The Trustee shall be responsible only for performing
      those duties of the Trustee specifically provided for herein and no implied
      duties or liabilities shall be read into this Indenture against the
      Trustee.

     

    (b)  The
      permissive rights of the Trustee to do things enumerated in this Indenture
      shall
      not be construed as a duty and, except as provided in the next succeeding
      sentence in respect of the period during the continuance of an Event of Default,
      the Trustee shall not be liable for any action reasonably taken or omitted
      to be
      taken by it in good faith and reasonably believed by it to be within the
      discretion or power conferred upon it hereby, or be responsible other than
      for
      its own gross negligence or willful misconduct. In case an Event of Default
      has
      occurred and is continuing of which the Trustee has been notified as provided
      in
      Section 8.3(h) or of which it is deemed to have notice pursuant to such
      Section, 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 man would exercise under the circumstances in the conduct of his
      own affairs.

     

    (c)  The
      Trustee shall not be required to give any bond or surety in respect of the
      execution of its rights and duties under this Indenture.

     

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

     

    (i)  this
      subsection shall not be construed to limit the effect of subsection (a) of
      this
      Section;

     

    (ii)  the
      Trustee shall not be liable for any error of judgment made in good faith by
      its
      officers, unless it shall be proved that the Trustee was grossly negligent
      in
      ascertaining the pertinent facts;

     

    (iii)  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 any direction of the Registered
      Owners of at least 25% or not less than a majority in aggregate principal amount
      of the Outstanding Bonds permitted to be given by them under this Indenture
      except as otherwise provided herein; and

     

    (iv)  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, satisfactory to the Trustee in its sole discretion, against
      such risk or liability is not assured to it. 

     

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

     

    (f)  Except
      as
      otherwise expressly provided by the provisions of this Indenture, the Trustee
      shall not be obligated and may not be required to give or furnish any notice,
      demand, report, request, reply, statement, advice or opinion to any Holder
      or
      any other Person, and the Trustee shall not incur any liability for its failure
      or refusal to give or furnish the same unless obligated or required to do so
      by
      the express provisions hereof. 

     

    (g)  In
      acting
      or omitting to act pursuant to the provisions of the Loan Agreement, the Trustee
      shall be entitled to all of the rights and immunities accorded to it under
      this
      Indenture, including but not limited to those set out in this Article VIII.
      

     

    (h)  Notwithstanding
      any provisions of this Indenture to the contrary, the Trustee shall not be
      liable or responsible for the accuracy of any calculation or determination
      which
      may be required in connection with or for the purpose of complying with Section
      148 of the Code, including, without limitation, the calculation of amounts
      required to be paid to the United States under the provisions of Section 148
      of
      the Code, the maximum amount which may be invested in “nonpurpose obligations”
as defined in the Code and the fair market value of any investments made
      hereunder, and the sole obligation of the Trustee with respect to the
      investments of funds hereunder shall be to invest the moneys received by the
      Trustee as provided herein pursuant to the written instructions of the Borrower.
      

     

    (i)  The
      Trustee will report to the Bondholders and to the Internal Revenue Service
      for
      each calendar year the amount of any “reportable payments” during such year with
      respect to payments on the Bonds.

     

    Section
      8.2.  Notice
      if Event of Default Occurs or Notice if Taxability Occurs. 

     

    The
      Trustee shall give written notice as soon as possible (and in any event within
      three (3) Business Days) to the Registered Owners (with copies to the parties
      to
      the Financing Documents) of the occurrence of any Event of Default hereunder
      after the Trustee acquires actual knowledge thereof, unless such default shall
      have been cured or waived; provided, however, that, in the case of an Event
      of
      Default of the character described in Section 7.1(a)(iii), the Trustee
      shall be protected in withholding such notice if and so long as the Trustee
      in
      good faith determines that the withholding of such notice is in the interest
      of
      the Registered Owners. The Trustee shall also give to the parties to the
      Financing Documents and the Registered Owners written notice within five (5)
      Business Days of receipt by it of any notification from the Internal Revenue
      Service that the interest on the Bonds is, or may be, subject to federal income
      taxation.

     

    Section
      8.3.  Certain
      Rights of Trustee. 

     

    Except
      as
      otherwise provided in Section 8.1:

     

    (a)  the
      Trustee may conclusively rely upon, 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
      or
      other paper or document believed by it to be genuine and to have been signed
      or
      presented by the proper party or parties and any action taken by the Trustee
      pursuant to this Indenture upon the request, authority or consent of any
      Registered Owner (determined at the time of such request, authority or consent)
      shall be conclusive and binding upon all future owners of the same Bond and
      any
      Bonds issued in exchange therefor;

     

    (b)  any
      request or direction of the Issuer or the Company mentioned herein shall be
      sufficiently evidenced by a writing signed by an Authorized Representative
      and
      any resolution of the Issuer may be sufficiently evidenced by a copy of such
      resolution certified by an Authorized Representative; 

     

    (c)  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 is herein specifically
      prescribed) may, in the absence of bad faith on its part, rely upon a
      certificate of an Authorized Representative;

     

    (d)  before
      the Trustee acts or refrains from acting, it may consult with counsel, engineers
      or other experts as may be appropriate, and the written advice of such counsel,
      engineers or other experts as may be appropriate 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;

     

    (e)  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
      Registered Owners pursuant to this Indenture, unless such Registered Owners
      shall have offered to the Trustee security or indemnity acceptable to the
      Trustee in its sole discretion against the costs, expenses and liabilities
      which
      might be incurred by it in compliance with such request or direction and such
      action may be lawfully taken;

     

    (f)  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 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, upon reasonable notice and during regular business hours, and subject,
      further to the Company’s safety and confidentiality requirements to examine the
      books, records and premises of the Company and the books and records of the
      Issuer concerning the Bonds personally or by agent or attorney;

     

    (g)  the
      Trustee may execute any of the trusts or powers hereunder or perform any duties
      hereunder either directly or indirectly or by or through agents or attorneys
      provided that the Trustee shall not be responsible for any misconduct or
      negligence on the part of any agent or attorney reasonably appointed by it
      hereunder in good faith; and

     

    (h)  the
      Trustee shall not be required to take notice or be deemed to have notice of
      any
      default hereunder unless the Trustee shall be specifically notified of such
      default in writing by the Issuer, the Company or the Owners of a majority in
      principal amount of the Outstanding Bonds, and in the absence of such notice
      the
      Trustee may conclusively assume there is no default; provided, however, that
      the
      Trustee shall be required to take and be deemed to have notice of its failure
      to
      receive the moneys necessary to make payments when due of the Bond
      Obligations.

     

    Section
      8.4.  Not
      Responsible for Recitals or Issuance of Bonds. 

     

    Except
      for the Trustee's certificate of authentication signed on the Bonds, the Trustee
      assumes no responsibility for correctness of the terms set forth herein or
      in
      the Bonds. The Trustee makes no representations as to the validity or
      sufficiency of this Indenture, except that the Trustee represents that said
      Indenture has been duly authorized, executed and delivered by the Trustee and
      constitutes a legal, valid and binding obligation of the Trustee in accordance
      with the terms hereof, except as its enforceability may be subject to
      (i) the exercise of judicial discretion in accordance with general
      equitable principles; and (ii) applicable bankruptcy, insolvency,
      reorganization, moratorium and other laws for the relief of debtors heretofore
      or hereafter enacted to the extent that the same may be constitutionally
      applied. Further, the Trustee makes no representations as to the validity or
      sufficiency of the Bonds. The Trustee shall not be accountable for the use
      or
      application by the Issuer or the Company of Bonds or the proceeds thereof.
      The
      Trustee shall not be bound to ascertain or inquire as to the performance or
      observance of any covenant, condition or agreement on the part of the Issuer
      or
      the Company under the Loan Agreement (except as provided in Section 8.3(h)
      hereof), but the Trustee may require of the Issuer or the Company full
      information and advice as to the performance on such covenants, conditions
      and
      agreements.

     

    Section
      8.5.  May
      Hold Bonds. 

     

    The
      Trustee or any other agent of the Issuer or the Company, in its individual
      or
      any other capacity, may become the owner of Bonds and may otherwise deal with
      the Issuer or the Company with the same rights it would have if it were not
      Trustee or such other agent. The Trustee may in good faith buy, sell, own,
      hold
      and deal in any of the Bonds and may join in any action which any Registered
      Owners may be entitled to take with like effect. The Trustee may also engage
      in
      or be interested in financial or other transactions with the Company and the
      Issuer; provided that such transactions are not in conflict with its duties
      under this Indenture.

     

    Section
      8.6.  Money
      Held in Trust. 

     

    All
      money
      deposited from time to time in the Debt Service Fund and the Construction Fund
      shall be held in trust for the benefit of the Owners but, except as provided
      in
      Article X of this Indenture, need not be segregated from other funds held
      in trust under this Indenture by the Trustee, but shall be segregated at all
      times from all funds of the Issuer or the Trustee not held by the Trustee under
      this Indenture. The Trustee shall be under no liability for interest on any
      money received by it hereunder except as otherwise provided in this
      Indenture.

     

    Section
      8.7.  Corporate
      Trustee Required; Eligibility. 

     

    There
      shall at all times be a Trustee hereunder which shall be a corporation or
      association organized and doing business under the laws of the United States
      of
      America or of any state that is either a trust company or a bank in good
      standing in the Commonwealth, authorized under such laws to exercise trust
      powers and authorized under the Act to act as Trustee hereunder, having a
      combined capital, surplus and undivided profits of at least $100,000,000,
      subject to supervision or examination by federal or state authority. If such
      corporation publishes reports of condition at least annually, pursuant to law
      or
      to the requirements of the aforesaid supervising or examining authority, then
      for the purpose of this Section, the combined capital and surplus of such
      corporation 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
      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
      8.8.  Resignation
      and Removal of Trustee; Appointment of Successor. 

     

    (a)  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 under Section 8.9 of this
      Indenture.

     

    (b)  The
      Trustee may resign at any time by giving written notice thereof to the other
      parties to the Financing Documents. If an instrument of acceptance by a
      successor Trustee shall not have been delivered to the resigning Trustee within
      thirty (30) days after the giving of such notice of resignation, the resigning
      Trustee may petition any court of competent jurisdiction for the appointment
      of
      a successor Trustee.

     

    (c)  The
      Trustee may be removed at any time by the Owners of a majority in aggregate
      principal amount of the Outstanding Bonds, or so long as no Event of Default
      or
      no event which with the passage of time or the giving of notice or both would
      constitute an Event of Default is then in existence, by the Company, in either
      case by an instrument in writing delivered to the parties to the Financing
      Documents not less than fifteen (15) days prior to the intended effective date
      of the removal.

     

    (d)  If
      at any
      time: (i) the Trustee shall cease to be eligible under Section 8.7 of
      this Indenture or under applicable law and shall fail to resign after written
      request therefor as a result thereof by any party to a Financing Document or
      by
      a Registered Owner who has been a bona fide Owner for at least six (6) months,
      or (ii) 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, (x) the Company or the Issuer may
      remove the Trustee, or (y) any Registered Owner who has been a bona fide
      Owner for at least six (6) months may, on behalf of himself and all others
      similarly situated, petition any court of competent jurisdiction for the removal
      of the Trustee and the appointment of a successor Trustee.

     

    (e)  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, the Issuer, with the prior
      consent of the Company, if any, shall promptly appoint a successor Trustee.
      If,
      within sixty (60) days after such resignation, removal or incapability, or
      the
      occurrence of such resignation, removal or incapability, or the occurrence
      of
      such vacancy, a successor Trustee shall be appointed by the Owners of a majority
      in aggregate principal amount of the Outstanding Bonds and notice of acceptance
      of such appointment is delivered to the parties to the Financing Documents,
      the
      successor Trustee so appointed shall, forthwith upon its acceptance of such
      appointment, become the successor Trustee and supersede the successor Trustee
      appointed by the Issuer. The Trustee shall assign all its interests hereunder
      to
      the successor Trustee. If no successor Trustee shall have been so appointed
      by
      the Issuer or the Registered Owners and accepted appointment in the manner
      hereinafter provided, any Registered Owner who has been a bona fide Registered
      Owner for at least six (6) months may, on behalf of himself and all other Owners
      similarly situated, petition any court of competent jurisdiction for the
      appointment of a successor Trustee.

     

    (f)  The
      Issuer, at the expense of the Company, shall give prompt notice of each
      resignation and each removal of the Trustee and each appointment of a successor
      Trustee by mailing written notice of such event to the Registered Owners and
      to
      the parties to the Financing Documents. Each notice shall include the name
      of
      the successor Trustee and the address of its corporate trust operations
      office.

     

    Section
      8.9.  Acceptance
      of Appointment by Successor Trustee. 

     

    Every
      successor Trustee appointed hereunder shall execute, acknowledge and deliver
      to
      the parties to the Financing Documents, including 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 request
      of
      the Issuer or the successor Trustee, such retiring Trustee shall, upon payment
      of its charges and expenses by the Company, execute and deliver an instrument
      prepared by the successor Trustee 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. Upon request of any such successor Trustee,
      the
      Issuer 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. 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
      8.10.  Merger,
      Conversion, Consolidation or Succession to Business. 

     

    Any
      corporation or association into which the Trustee may be merged or converted
      or
      with which it may be consolidated, or any corporation or association resulting
      from any merger, conversion or consolidation to which the Trustee shall be
      a
      party, or any corporation or association succeeding to all or substantially
      all
      of 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, to the extent operative, without the execution
      or
      filing of any paper or any further act on the part of any of the parties
      hereto.

     

    Section
      8.11.  Fees,
      Charges and Expenses of Trustee. 

     

    Pursuant
      to the provisions of Section 6.5 and 8.3 of the Loan Agreement, the Trustee
      shall be entitled to be paid by the Company reasonable compensation for its
      services rendered hereunder and to reimbursement for its actual out-of-pocket
      expenses (including reasonable counsel fees) necessarily incurred in connection
      therewith. The Company may, without creating a default hereunder, contest in
      good faith the necessity for and the reasonableness of any such services and
      expenses after making payment therefor. The Company, the Issuer and the
      Bondholders agree that the Trustee shall have a lien for the foregoing
      compensation, expenses and fees upon the Trust Estate (other than moneys held
      for the payment of particular Bonds whether or not such payment is then due
      and
      owing) and, upon an Event of Default hereunder, the Trustee shall have a right
      of payment prior to payment to the Bondholders on account of principal of,
      premium, if any, and interest on any Bond as provided in Section 7.10
      hereof.

     

    The
      Issuer shall require the Company, pursuant to the Loan Agreement, to indemnify
      and hold harmless the Trustee against any liabilities which the Trustee may
      incur in the exercise and performance of its powers and duties hereunder, under
      the Loan Agreement and any other agreement referred to herein which are not
      due
      to the Trustee’s gross negligence or willful misconduct, and for any fees and
      expenses of the Trustee to the extent funds are not available under this
      Indenture as provided in the preceding paragraph for the payment thereof. The
      rights of the Trustee under this Section shall survive the payment in full
      of
      the Bonds and the discharge of this Indenture. The Trustee acknowledges that
      the
      requirement set forth in this paragraph has been satisfied by the Issuer and
      agrees that in the event the Company fails to perform its obligations under
      the
      Loan Agreement relating to such undertaking, the Trustee will make no claim
      against the Issuer with respect thereto.

     

    When
      the
      Trustee incurs expenses or renders services after an Event of Default as a
      result of an Act of Bankruptcy of the Company, the expenses and the compensation
      for services (including the fees and expenses of its agents and counsel) are
      intended to constitute expenses of administration of the bankruptcy estate
      under
      applicable bankruptcy law.

     

    ARTICLE
      IX  

     

    Amendments
      and Supplements

     

    Section
      9.1.  Amendments
      and Supplements Without Registered Owners’ Consent. 

     

    This
      Indenture may be amended or supplemented from time to time, without the consent
      of the Registered Owners by a Supplemental Indenture authorized by a certified
      resolution of the Issuer filed with the Trustee, for one or more of the
      following purposes:

     

    (a)  to
      add
      additional covenants of the Issuer or to surrender any right or power herein
      conferred upon the Issuer; or

     

    (b)  to
      cure
      any ambiguity or to cure, correct or supplement any defective (whether because
      of any inconsistency with any other provision hereof or otherwise) provision
      of
      this Indenture in such manner as shall not be inconsistent with this Indenture
      and shall not impair the security hereof or adversely affect the Registered
      Owners; or

     

    (c)  to
      provide procedures permitting Registered Owners to utilize an uncertificated
      system of registration for Bonds or for the issuance of Bonds pursuant to a
      book
      entry system with a Securities Depository or other entity; or

     

    (d)  to
      modify, alter, amend, supplement or restate this Indenture in any and all
      respects necessary, desirable or appropriate in order to satisfy the
      requirements of any Rating Agency which may from time to time provide a rating
      on the Bonds, or in order to obtain or retain such rating on the Bonds as is
      deemed necessary by the Company; or

     

    (e)  to
      make
      any change which, in the judgment of the Trustee, does not adversely affect
      the
      rights or security of the Registered Owners.

     

    In
      determining compliance with this Section, the Trustee may request such
      certificates and opinions of counsel as it deems necessary and may rely
      conclusively on such certificates and opinions in the absence of negligence
      or
      willful misconduct.

     

    Section
      9.2.  Amendments
      With Company and Registered Owners’ Consent.

     

    (a)  Consent
      of Majority.
      

     

    With
      the
      written consent of the Company, the parties to this Indenture may enter into
      Indentures supplemental to this Indenture or amendments to this Indenture
      modifying, adding to or eliminating any of the provisions hereof but, if such
      supplement or amendment is not of the character described in Section 9.1,
      only with the consent of the Registered Owners of not less than a majority
      of
      the aggregate principal amount of the Outstanding Bonds, but subject to the
      limitations of Section 9.2(b). 

     

    (b)  Consent
      of All Bondholders.
      

     

    Notwithstanding
      the foregoing, no supplement or amendment to this Indenture shall, without
      the
      consent of the Registered Owner of each Outstanding Bond so affected, (i) extend
      the maturity date of any Bond, or reduce the rate or extend the time of payment
      of interest thereon, or reduce the principal amount thereof, or reduce any
      premium payable upon the redemption thereof, or extend or reduce the amount
      of
      any mandatory redemption requirement, (ii) deprive such Registered Owner of
      the
      lien hereof on the Revenues pledged hereunder and on the Trust Estate, (iii)
      decrease the amounts payable by the Company under Section 6.4 of the Loan
      Agreement, (iv) reduce the aggregate principal amount of Bonds the Registered
      Owners of which are required to approve any such supplement or amendment to
      this
      Indenture, (v) increase the percentage of the aggregate principal amount of
      Bonds the Registered Owners of which are required to direct the Trustee to
      accelerate the maturity of the Bonds, or (vi) provide a privilege or priority
      of
      any Bond over any other Bond. 

     

    (c)  Effective
      Date of Amendment.
      

     

    The
      Trustee shall establish a record date for purposes of approval of any such
      amendment or supplement described in subsections (a) and (b) of this
      Section 9.2, and shall cause notice of such record date and such proposed
      amendment to be given to the Owners in the same manner as notices of redemption
      are given by the Trustee. Such notice shall briefly set forth the nature of
      the
      proposed amendment and shall state that copies thereof are on file at the
      designated office of the Trustee for inspection by all Registered Owners. If,
      within sixty (60) days (or such longer period as shall be prescribed by the
      Company in a written notice to the Trustee and the Issuer) following the mailing
      of such notice, the Registered Owners of the requisite aggregate principal
      amount of the Bonds Outstanding at the time of the record date established
      for
      such purpose shall have consented to and approved such amendment, no Registered
      Owner of any Bond shall have any right to object to any of the terms and
      provisions contained therein, or the operation thereof, or in any manner to
      question the propriety of the execution thereof, or to enjoin or restrain the
      parties to such amendment from adopting the same or from taking any action
      pursuant to the provisions thereof. Upon receipt of the consent of the
      Registered Owners of the requisite aggregate principal amount of the Bonds
      Outstanding, the Issuer and the Trustee may execute such amendment.

     

    The
      consent of a Registered Owner shall be evidenced by an instrument executed
      by
      such Registered Owner, delivered to the Trustee, which instrument shall refer
      to
      the proposed amendment described in said notice and shall specifically consent
      to and approve such amendment. Any consent given by a Registered Owner as of
      such record date shall be irrevocable for a period of six (6) months from the
      date such consent is given, and shall be conclusive and binding upon all future
      Registered Owners of the same Bond during such period. Such consent may be
      revoked at any time after six (6) months from the date such consent was given
      by
      such Registered Owner or by a successor in title, by filing written notice
      thereof with the Issuer, the Company and the Trustee, but such revocation shall
      not be effective if the Registered Owners of the requisite aggregate principal
      amount of the Bonds Outstanding have, prior to the attempted revocation,
      consented to and approved such amendment. 

     

    Notwithstanding
      any provision herein to the contrary, no amendment to this Indenture which
      affects the rights or obligations of the Trustee shall be effective against
      the
      Trustee without its written consent.

     

    Section
      9.3.  Amendments
      to Loan Agreement. 

     

    The
      Loan
      Agreement may be amended by written agreement of the Issuer and the Company
      and
      with the written consent of the Trustee, provided that no amendment may be
      made
      which would adversely affect the rights of some but less than all Outstanding
      Bonds without the consent of (a) the Registered Owners of not less than a
      majority in aggregate principal amount of the Bonds then Outstanding and
      (b) the Registered Owners of not less than a majority in aggregate
      principal amount of the Bonds so affected; and no amendment may be made which
      would (i) decrease the amounts payable under the Loan Agreement as
      Installment Loan Payments; (ii) change any date of payment or prepayment
      provisions under the Loan Agreement; or (iii) change the amendment
      provisions of the Loan Agreement without the consent of all of the Registered
      Owners of the Bonds adversely affected thereby, and provided further that the
      Loan Agreement may be amended by written agreement of the Issuer and the Company
      and with the written consent of the Trustee, but not the Owners, in order to
      make conforming changes with respect to amendments made to this Indenture
      pursuant to Section 9.1(d) or (e).

     

    Section
      9.4.  Right
      to Payment. 

     

    Notwithstanding
      any other provisions in this Indenture to the contrary, the right of the Owner
      of any Bond to receive payment of the principal of, and the premium, if any,
      and
      interest on, such Bond, on or after the respective due dates expressed herein,
      or to institute suit for the enforcement of any such payment on or after such
      respective dates, will not be impaired or affected without the consent of such
      Owner.

     

    ARTICLE
      X  

     

    Defeasance

     

    Section
      10.1.  Defeasance. 

     

    If
      the
      Issuer or Company shall pay or cause to be paid, or there shall be otherwise
      paid or provision for payment made to or for the Owners from time to time of
      the
      Bonds, the principal of, premium, if any, and interest due or to become due
      thereon on the dates and in the manner stipulated therein, and shall pay or
      cause to be paid to the Trustee all sums of money due or to become due according
      to the provisions hereof and if all other liabilities of the Company under
      the
      Loan Agreement shall have been satisfied, then these presents and the estate
      and
      rights hereby granted shall cease, determine and be void, whereupon the lien
      of
      this Indenture shall be canceled and discharged (except with respect to moneys
      held by the Trustee hereunder for the payment of Bonds as aforesaid, and the
      rights and immunities of the Issuer and the Trustee hereunder), and upon written
      request of the Issuer or the Company, the Trustee shall execute and deliver
      to
      the Issuer such instruments in writing as shall be required by the Issuer or
      the
      Company to cancel and discharge the lien hereof and thereof, and reconvey,
      release, assign and deliver unto the Issuer and the Company, respectively,
      the
      estate, right, title and interest in and to any and all property conveyed,
      assigned or pledged to the Trustee or otherwise subject to the lien of this
      Indenture.

     

    Any
      Bond
      shall be deemed to be paid within the meaning of this Section 10.1 when
      payment of the principal of and premium, if any, on such Bond, plus interest
      thereon to the due date thereof (whether such due date be by reason of maturity
      or upon redemption prior to maturity as provided in this Indenture or
      otherwise), either (i) shall have been made or caused to be made in accordance
      with the terms thereof, or (ii) shall have been provided by irrevocably
      depositing with the Trustee, in trust for the benefit of and subject to a
      security interest in favor of the owner of such Bond, and irrevocably setting
      aside exclusively for such payment on such due date, (1) moneys sufficient
      to make such payment, or (2) Government Obligations (provided that in the
      opinion of Bond Counsel delivered to the Trustee and the Issuer such deposit
      of
      Government Obligations will not adversely affect the exclusion from gross income
      for federal income tax purposes of interest on the Bonds or cause any of the
      Bonds to be classified as “arbitrage bonds” within the meaning of
      Section 148 of the Code) maturing as to principal and interest in such
      amounts and on such dates as will (together with any moneys held under clause
      (1)), in the written opinion to the Trustee from a firm of certified public
      accountants not unsatisfactory to the Trustee, provide sufficient moneys without
      reinvestment to make such payment, and if all necessary and proper fees,
      compensation and expenses of the Trustee pertaining to the Bonds with respect
      to
      which such deposit is made and all other liabilities of the Company under the
      Loan Agreement shall have been paid or the payment thereof provided for to
      the
      satisfaction of the Trustee. At such time as a Bond shall be deemed to be paid
      hereunder, as aforesaid, it shall no longer be secured by or entitled to the
      benefits of this Indenture, except for the purposes set forth in
      Sections 2.7 and 2.8 hereof and any such payment from such moneys or
      Government Obligations on the date or dates specified at the time of such
      deposit.

     

    Notwithstanding
      the foregoing, in the case of Bonds which are to be redeemed prior to the
      maturity date, no deposit under clause (ii) of the immediately preceding
      paragraph shall be deemed a payment of such Bonds as aforesaid until proper
      notice of redemption of such Bonds shall have been previously given in
      accordance with Article V hereof, or until the Company, on behalf of the
      Issuer, shall have given the Trustee, in form satisfactory to the Trustee,
      irrevocable written instructions:

     

    (a)  stating
      the redemption date when the principal (and premium, if any) of each such Bond
      is to be paid (which may be any redemption date permitted by this Indenture);
      and

     

    (b)  to
      call
      for redemption pursuant to this Indenture any Bonds to be redeemed prior to
      the
      maturity date pursuant to (a) hereof.

     

    In
      the
      case of Bonds which are not to be redeemed within the next succeeding sixty
      (60)
      days, the Trustee shall mail, as soon as practicable, in the manner prescribed
      by Article V hereof, a notice to the Owners of such Bonds that the deposit
      required by (ii) above has been made with the Trustee and that said Bonds are
      deemed to have been paid in accordance with this Section 10.1 and stating
      the redemption or maturity date upon which moneys are to be available for the
      payment of the redemption price on or principal of said Bonds.

     

    Any
      moneys so deposited with the Trustee as provided in this Section 10.1 may
      at the written direction of the Company also be invested and reinvested in
      Government Obligations, maturing in the written opinion of a firm of certified
      public accountants delivered and not unsatisfactory to the Trustee in the
      amounts and on the dates as hereinbefore set forth, and all income from all
      Government Obligations in the hands of the Trustee pursuant to this
      Section 10.1 which, in the written opinion to the Trustee from a firm of
      certified public accountants not unsatisfactory to the Trustee, is not required
      for the payment of the Bonds and interest and premium, if any, thereon with
      respect to which such moneys are deposited, shall be deposited in the Debt
      Service Fund as and when collected for use and application as are other moneys
      deposited in that fund.

     

    Anything
      in Article IX hereof to the contrary notwithstanding, if moneys or
      Government Obligations have been deposited or set aside with the Trustee
      pursuant to this Section 10.1 for the payment of the principal of, premium,
      if any, and interest on the Bonds and the principal of, premium, if any, and
      interest on such Bonds shall not have in fact been actually paid in full, no
      amendment to the provisions of this Section 10.1 shall be made without the
      consent of the Owner of each of the Bonds affected thereby.

     

    If
      an
      agreement with a Securities Depository as described in Section 2.13 hereof
      is then in effect and such agreement provides for the Company to obtain a CUSIP
      number in the event of a partial refunding or redemption of the Bonds and the
      authentication of a new Bond for the refunded or redeemed Bonds, then the
      Company shall comply with the provisions of such agreement.

     

    Section
      10.2.  Effect
      of Defeasance. 

     

    Notwithstanding
      anything stated to the contrary in this Article, no defeasance hereunder shall
      relieve the Trustee of any duty with respect to, or discharge or terminate
      the
      provisions hereof with respect to, the payment, transfer, purchase, exchange,
      registration or redemption of Bonds.

     

    ARTICLE
      XI  

     

    Miscellaneous
      Provisions

     

    Section
      11.1.  Limitations
      on Recourse; Immunity of Certain Persons. 

     

    No
      recourse shall be had for any claim based on this Indenture or the Bonds against
      any past, present or future member, officer, official or employee of the Issuer,
      either directly or through the Issuer or any such successor body, under any
      constitutional provision, statute or rule of law or by the enforcement of any
      assessment or penalty or otherwise, all such liability and all such claims
      being
      hereby expressly waived and released as a condition of, and as consideration
      for, the execution of this Indenture and the issuance of the Bonds. The Bonds
      are payable solely from the Revenues pledged hereunder and other moneys held
      by
      the Trustee hereunder for such purpose. The Issuer shall be conclusively deemed
      to have complied with all of its covenants and other obligations hereunder,
      including but not limited to those set forth in Articles III and VI hereof,
      upon requiring the Company in the Loan Agreement to agree to perform such Issuer
      covenants and other obligations (excepting only any approvals or consents
      permitted or required to be given by the Issuer hereunder, and any exceptions
      to
      the performance by the Company of the Issuer’s covenants and other obligations
      hereunder, as may be contained in the Loan Agreement). However, nothing
      contained in any such agreement in the Loan Agreement shall prevent the Issuer
      from time to time, in its discretion, from performing any such covenants or
      other obligations. The Issuer shall have no liability for any failure to
      fulfill, or breach by the Company of, the Company’s obligations under the Bonds,
      this Indenture, the Loan Agreement, or otherwise, including without limitation
      the Company’s obligation to fulfill the Issuer’s covenants and other obligations
      under this Indenture.

     

    Section
      11.2.  No
      Rights Conferred on Others. 

     

    Nothing
      herein contained shall confer any right upon any Person other than the parties
      hereto, the Company and the Registered Owners of the Bonds.

     

    Section
      11.3.  Illegal,
      Etc. Provisions Disregarded. 

     

    If
      any
      term or provision of this Indenture or the Bonds or the application thereof
      for
      any reason or circumstances shall to any extent be held invalid or
      unenforceable, the remaining provisions or the application of such term or
      provision to persons and situations other than those as to which it is held
      invalid or unenforceable, shall not be affected thereby, and each term and
      provision hereof and thereof shall be valid and enforced to the fullest extent
      permitted by law.

     

    Section
      11.4.  Substitute
      Publication of Notice. 

     

    If
      for
      any reason it shall be impossible to make publication of any notice required
      hereby in a newspaper or newspapers, then such publication in lieu thereof
      as
      shall be made with the approval of the Trustee shall constitute a sufficient
      publication of such notice.

     

    Section
      11.5.  Mailed
      Notice. 

     

    All
      notices required or authorized to be given to the Company, the Issuer and the
      Trustee pursuant to this Indenture shall be in writing and shall be given as
      provided herein or delivered by hand or overnight courier service or mailed
      by
      first class, registered or certified mail, return receipt requested, postage
      prepaid, or sent by telecopy with evidence of receipt confirmed to the sender,
      to the following address:

     

    (a)  to
      the
      Company, to:

     

    The
      York
      Water Company

    130
      East
      Market Street

    Box
      15089

    York,
      PA
      17405-7089

    Attention:
      President and CEO

    Telecopy
      No. (717) 852-0058

    

    (b)  to
      the
      Issuer, to:

     

    York
      County Industrial Development Authority

    144
      Roosevelt Avenue

    York,
      PA
      17404

    Attention:
      Secretary

    Telecopy
      No. (717) 843-8837

    

    (c)  to
      the
      Trustee, to:

     

    Manufacturers
      and Traders Trust Company

    213
      Market Street

    Harrisburg,
      PA 17101

    Attention:
      Corporate Trust Department

    Telecopy
      No. (717) 231-2615

    

    or
      to
      such other addresses as may from time to time be furnished to the parties,
      effective upon the receipt of notice thereof given as set forth
      above.

     

    Section
      11.6.  Governing
      Law. 

     

    This
      Indenture shall be governed, in all respects including validity, interpretation
      and effect by, and shall be enforceable in accordance with, the laws of the
      United States of America and of the Commonwealth.

     

    Section
      11.7.  Successors
      and Assigns. 

     

    All
      the
      covenants, promises and agreements in this Indenture contained by or on behalf
      of the Issuer or by or on behalf of the Trustee shall bind and inure to the
      benefit of their respective successors and assigns, whether so expressed or
      not.

     

    Section
      11.8.  Action
      by Company. 

     

    Any
      requirement imposed by this Indenture or the Loan Agreement on the Issuer may,
      if not performed by the Issuer, be performed by the Company and such performance
      by the Company shall constitute compliance with the requirements of this
      Indenture or the Loan Agreement as if performed by the Issuer.

     

    Section
      11.9.  Headings
      and Subheadings for Convenience Only. 

     

    The
      table
      of contents and descriptive headings and subheadings in this Indenture are
      inserted for convenience only and shall not control or affect the meaning or
      construction of any of the provisions hereof.

     

    Section
      11.10.  Counterparts. 

     

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

     

    Section
      11.11.  Additional
      Notices to Rating Agencies. 

     

    The
      Trustee hereby agrees that if at any time (a) there is a change in the
      Trustee (b) there are any amendments to the Indenture or the Loan Agreement
      or (c) all or any part of the principal of the Bonds is paid, the Trustee
      shall use its best efforts to promptly give notice as provided in
      Section 11.5 hereof of any such event to each Rating Agency then
      maintaining a rating on the Bonds, which notice in the case of an event
      described in clause (b) above shall include a copy of any such amendment.
      The agreement contained in this paragraph is made as a matter of courtesy and
      accommodation only and the Trustee shall have no liability to any person for
      any
      failure to comply therewith.

     

    Section
      11.12.  Insurance
      Provisions.

     

    The
      following provisions shall apply to the Bonds so long as the principal and
      interest on the Bonds are guaranteed by Bond Insurer through the Bond Insurance
      Policy; provided that the following provisions shall not be applicable upon
      the
      failure of the Bond Insurer to pay or perform under the Bond Insurance Policy
      or
      upon the bankruptcy or insolvency of the Bond Insurer:

    

    (a)  Notices.
      

     

    (i)  The
      notice addresses for the Bond Insurer and the Fiscal Agent, as defined below,
      are as follows: 

     

    (1)  Bond
      Insurer:

     

    Financial
      Guaranty Insurance Company

    125
      Park Avenue

    New
      York, New York 10017

    Attention:
      Risk Management 

    

    (2)  Fiscal
      Agent:

     

    U.S.
      Bank Trust National Association

    100
      Wall Street 

    19th
      Floor

    New
      York, New York 10005 

    Attention:
      Corporate Trust Department

    

    (ii)  Reporting
      Requirements.
      The
      Bond
      Insurer shall be provided with the following:

     

    (1)  Notice
      of
      the redemption, other than mandatory sinking fund redemption, of any of the
      Bonds, or of any advance refunding of the Bonds, including the principal amount
      and maturities thereof;

     

    (2)  Notice
      of
      the downgrading by any rating agency of the Company’s underlying rating, or the
      underlying rating on the Bonds or any parity obligations, to “non-investment
      grade”;

     

    (3)  Notice
      of
      any material events pursuant to Rule 15c2-12 under the Securities Exchange
      Act
      of 1934, as amended; and

     

    (4)  Such
      additional information as the Bond Insurer may reasonably request from time
      to
      time. 

     

    (b)  Amendments
      and Supplements.
      Any amendment or supplement to the Indenture or the Loan Agreement shall be
      subject to the prior written consent of the Bond Insurer. Any rating agency
      rating the Bonds must receive notice of each amendment and a copy thereof at
      least 15 days in advance of its execution or adoption. The Bond Insurer shall
      be
      provided with a full transcript of all proceedings relating to the execution
      of
      any such amendment or supplement.

     

    (c)  Defeasance
      Provisions.
      Notwithstanding the provisions of Article X of this Indenture, Bonds will not
      be
      defeased by making investments except as provided below, and to the extent
      permitted under the applicable laws of the Commonwealth:

     

    Only
      cash, direct non-callable obligations of the United States of America and
      securities fully and unconditionally guaranteed as to the timely payment of
      principal and interest by the United States of America, to which direct
      obligation or guarantee the full faith and credit of the United States of
      America has been pledged, Refcorp interest strips, CATS, TIGRS, STRPS, or
      defeased municipal bonds rated AAA by S&P or Aaa by Moody’s (or any
      combination of the foregoing) shall be used to effect defeasance of the Bonds
      unless the Bond Insurer otherwise approves. In the event of an advance
      refunding, the Company shall cause to be delivered (i) a verification report
      of
      an independent nationally recognized certified public accountant verifying
      the
      sufficiency of the escrow deposit agreement (which shall be acceptable in form
      and substance to the Bond Insurer); (ii) an opinion of nationally recognized
      bond counsel addressed to the Bond Insurer to the effect that the Bonds are
      no
      longer Outstanding under the Indenture; and (iii) a certificate of discharge
      of
      the Trustee with respect to the Bonds, each verification and defeasance shall
      be
      acceptable in form and substance to the Bond Insurer, and shall be addressed
      to
      the Issuer, the Company, the Trustee and the Bond Insurer. The Bond Insurer
      shall be provided with final drafts of the above-referenced documentation prior
      to the funding of the escrow. The Bonds shall be deemed Outstanding unless
      and
      until they are in fact paid and retired or the above criteria are met. If a
      forward supply contract is employed in connection with the refunding, (i) such
      verification report shall expressly state that the adequacy of the escrow to
      accomplish the refunding relies solely on the initial escrowed investments
      and
      the maturing principal thereof and interest income thereon and does not assume
      performance under or compliance with the forward supply contract, and (ii)
      the
      applicable escrow agreement shall provide that in the event of any discrepancy
      or difference between the terms of the forward supply contract and the escrow
      agreement (or the authorizing document, if no separate escrow agreement is
      utilized), the terms of the escrow agreement or authorizing document, if
      applicable, shall be controlling.

    

    (d)  Third
      Party Beneficiary.
      The
      Bond Insurer is hereby explicitly recognized as being a third-party beneficiary
      hereunder with the power to enforce any right, remedy or claim conferred, given
      or granted hereunder.

     

    (e)  Investment
      Securities.
      Notwithstanding the definition of Investment Securities contained in Article
      I
      of this Indenture, the following obligations (together with those set forth
      in
      subparagraph (c) above) will constitute Investment Securities for all purposes
      other than defeasance, to the extent permitted under the applicable laws of
      the
      Commonwealth:

     

    (i)  Direct
      obligations of the United States of America and securities fully and
      unconditionally guaranteed as to the timely payment of principal and interest
      by
      the United States of America (“U.S. Government Securities”).

     

    (ii)  Direct
      obligations*
      of the
      following federal agencies which are fully guaranteed by the full faith and
      credit of the United States of America:

     

    (1)  Export-Import
      Bank of the United States - Direct obligations and fully guaranteed certificates
      of beneficial interest

     

    (2)  Federal
      Housing Administration - debentures

     

    (3)  General
      Services Administration - participation certificates

     

    (4)  Government
      National Mortgage Association (“GNMAs”) - guaranteed mortgage-backed securities
      and guaranteed participation certificates 

     

    (5)  Small
      Business Administration - guaranteed participation certificates and guaranteed
      pool certificates

     

    (6)  U.S.
      Department of Housing & Urban Development - local authority
      bonds

     

    (7)  U.S.
      Maritime Administration - guaranteed Title XI financings

     

    (8)  Washington
      Metropolitan Area Transit Authority - guaranteed transit bonds

     

    (iii)  Direct
      obligations* of the following federal agencies which are not fully guaranteed
      by
      the faith and credit of the United States of America:

     

    (1)  Federal
      National Mortgage Association (“FNMAs”) - senior debt obligations rated Aaa by
      Moody’s and AAA by S&P

     

    (2)  Federal
      Home Loan Mortgage Corporation (“FHLMCs”) - participation certificates and
      senior debt obligations rated Aaa by Moody’s and AAA by S&P

     

    (3)  Federal
      Home Loan Banks - consolidated debt obligations

     

    (4)  Student
      Loan Marketing Association - debt obligations

     

    (5)  Resolution
      Funding Corporation - debt obligations

    

      *
        The
        following are explicitly excluded from the securities enumerated in (ii)
        and
        (iii):

       

      	(i)  	
              All
                derivative obligations, including without limitation inverse floaters,
                residuals, interest-only, principal-only and range
                notes;

            

      	(ii)  	
              Obligations
                that have a possibility of returning a zero or negative yield if
                held to
                maturity;

            

      	(iii)  	
              Obligations
                that do not have a fixed par value or those whose terms do not promise
                a
                fixed dollar amount at maturity or call date;
                and

            

      	(iv)  	
              Collateralized
                Mortgage-Backed Obligations
                (“CMOs”).

            

    

     

     

    (iv)  Direct,
      general obligations of any state of the United States of America or any
      subdivision or agency thereof whose uninsured and unguaranteed general
      obligation debt is rated, at the time of purchase, A2 or better by Moody’s and A
      or better by S&P, or any obligation fully and unconditionally guaranteed by
      any state, subdivision or agency whose uninsured and unguaranteed general
      obligation debt is rated, at the time of purchase, A2 or better by Moody’s and A
      or better by S&P.

     

    (v)  Commercial
      paper (having original maturities of not more than 270 days) rated, at the
      time
      of purchase, P-1 by Moody’s and A-1 or better by S&P.

     

    (vi)  Certificates
      of deposit, savings accounts, deposit accounts or money market deposits in
      amounts that are continuously and fully insured by the Federal Deposit Insurance
      Corporation (“FDIC”), including the Bank Insurance Fund and the Savings
      Association Insurance Fund.

     

    (vii)  Certificates
      of deposit, deposit accounts, federal funds or bankers’ acceptances (in each
      case having maturities of not more than 365 days following the date of purchase)
      of any domestic commercial bank or United States branch office of a foreign
      bank, provided that such bank’s short-term certificates of deposit are rated P-1
      by Moody’s and A-1 or better by S&P (not considering holding company
      ratings). 

     

    (viii)  Investments
      in money-market funds rated AAAm or AAAm-G by S&P.

     

    (ix)  State-sponsored
      investment pools rated AA- or better by S&P.

     

    (x)  Repurchase
      agreements that meet the following criteria:

     

    (1)  A
      master
      repurchase agreement or specific written repurchase agreement, substantially
      similar in form and substance to the Public Securities Association or Bond
      Market Association master repurchase agreement, governs the
      transaction.

     

    (2)  Acceptable
      providers shall consist of (i) registered broker/dealers subject to Securities
      Investors’ Protection Corporation (“SIPC”) jurisdiction or commercial banks
      insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured
      and unguaranteed rating of A3/P-1 or better by Moody’s and A-/A-1 or better by
      S&P, or (ii) domestic structured investment companies approved by the Bond
      Insurer and rated Aaa by Moody’s and AAA by S&P.

     

    (3)  The
      repurchase agreement shall require termination thereof if the counterparty’s
      ratings are suspended, withdrawn or fall below A3 or P-1 from Moody’s, or A- or
      A-1 from S&P. Within ten (10) days, the counterparty shall repay the
      principal amount plus any accrued and unpaid interest on the
      investments.

     

    (4)  The
      repurchase agreement shall limit acceptable securities to U.S. Government
      Securities and to the obligations of GNMA, FNMA or FHLMC described in (ii)(4),
      (iii)(1) and (iii)(2) above. The fair market value of the securities in relation
      to the amount of the repurchase obligation, including principal and accrued
      interest, is equal to a collateral level of at least 104% for U.S. Government
      Securities and 105% for GNMAs, FNMAs or FHLMCs. The repurchase agreement shall
      require (i) the Trustee or the Agent (as defined below) to value the collateral
      securities no less frequently than weekly, (ii) the delivery of additional
      securities if the fair market value of the securities is below the required
      level on any valuation date, and (iii) liquidation of the repurchase securities
      if any deficiency in the required percentage is not restored within two (2)
      business days of such valuation. 

     

    (5)  The
      repurchase securities shall be delivered free and clear of any lien to the
      “Trustee” or to an independent third party acting solely as agent (“Agent”) for
      the Trustee, and such Agent is (i) a Federal Reserve Bank, or (ii) a bank which
      is a member of the FDIC and which has combined capital, surplus and undivided
      profits or, if appropriate, a net worth, of not less than $50 million, and
      the
      Trustee shall have received written confirmation from such third party that
      such
      third party holds such securities, free and clear of any lien, as agent for
      the
      Trustee.

     

    (6)  A
      perfected first security interest in the repurchase securities shall be created
      for the benefit of the Trustee, and the issuer and the Trustee shall receive
      an
      opinion of counsel as to the perfection of the security interest in such
      repurchase securities and any proceeds thereof.

     

    (7)  The
      repurchase agreement shall have a term of one year or less, or shall be due
      on
      demand.

     

    (8)  The
      repurchase agreement shall establish the following as events of default, the
      occurrence of any of which shall require the immediate liquidation of the
      repurchase securities, unless the Bond Insurer directs otherwise:

     

    (a) insolvency
      of the broker/dealer or commercial bank serving as the counterparty under the
      repurchase agreement;

    

    (b) failure
      by the counterparty to remedy any deficiency in the required collateral level
      or
      to satisfy the margin maintenance call under item (x)(4) above; or

    

    (c) failure
      by the counterparty to repurchase the repurchase securities on the specified
      date for repurchase.

    

    (xi)  Investment
      agreements (also referred to as guaranteed investment contracts) that meet
      the
      following criteria:

     

    (1)  A
      master
      agreement or specific written investment agreement governs the
      transaction.

     

    (2)  Acceptable
      providers of uncollateralized investment agreements shall consist of (i)
      domestic FDIC-insured commercial banks, or U.S. branches of foreign banks,
      rated
      at least Aa2 by Moody’s and AA by S&P; (ii) domestic insurance companies
      rated Aaa by Moody’s and AAA by S&P; and (iii) domestic structured
      investment companies approved by the Bond Insurer and rated Aaa by Moody’s and
      AAA by S&P.

     

    (3)  Acceptable
      providers of collateralized investment agreements shall consist of (i)
      registered broker/dealers subject to SIPC jurisdiction, if such broker/dealer
      has an uninsured, unsecured and unguaranteed rating of A1 or better by Moody’s
      and A+ or better by S&P; (ii) domestic FDIC-insured commercial banks, or
      U.S. branches of foreign banks, rated at least A1 by Moody’s and A+ by S&P;
      (iii) domestic insurance companies rated at least A1 by Moody’s and A+ by
      S&P; and (iv) domestic structured investment companies approved by the Bond
      Insurer and rated Aaa by Moody’s and AAA by S&P. Required collateral levels
      shall be as set forth in (xi)(6) below.

     

    (4)  The
      investment agreement shall provide that if the provider’s ratings fall below Aa3
      by Moody’s or AA- by S&P, the provider shall within ten (10) days either (i)
      repay the principal amount plus any accrued interest on the investment; or
      (ii)
      deliver Permitted Collateral as provided below.

     

    (5)  The
      investment agreement must provide for termination thereof if the provider’s
      ratings are suspended, withdrawn or fall below A3 from Moody’s or A- from
      S&P. Within ten (10) days, the provider shall repay the principal amount
      plus any accrued interest on the agreement, without penalty.

     

    (6)  The
      investment agreement shall provide for the delivery of collateral described
      in
      (i) or (ii) below (“Permitted Collateral”) which shall be maintained at the
      following collateralization levels at each valuation date:

     

    (i)  U.S.
      Government Securities at 104% of principal plus accrued interest;
      or

     

    (ii)  Obligations
      of GNMA, FNMA or FHLMC (described in (ii)(4), (iii)(1) and (iii)(2) above) at
      105% of principal and accrued interest.

     

    (7)  The
      investment agreement shall require the Trustee or Agent to determine the market
      value of the Permitted Collateral not less than weekly and notify the investment
      agreement provider on the valuation day of any deficiency. Permitted Collateral
      may be released by the Trustee to the provider only to the extent that there
      are
      excess amounts over the required levels. Market value, with respect to
      collateral, may be determined by any of the following methods:

     

    (i)  the
      last
      quoted “bid” price as shown in Bloomberg, Interactive Data Systems, Inc.,
The
      Wall Street Journal
      or
      Reuters;

     

    (ii)  valuation
      as performed by a nationally recognized pricing service, whereby the valuation
      method is based on a composite average of various bid prices; or

     

    (iii)  the
      lower
      of two bid prices by nationally recognized dealers. Such dealers or their parent
      holding companies shall be rated investment grade and shall be market makers
      in
      the securities being valued.

     

    (8)  Securities
      held as Permitted Collateral shall be free and clear of all liens and claims
      of
      third parties, held in a separate custodial account and registered in the name
      of the Trustee or the Agent.

     

    (9)  The
      provider shall grant the Trustee or the Agent a perfected first security
      interest in any collateral delivered under an investment agreement. For
      investment agreements collateralized initially and in connection with the
      delivery of Permitted Collateral under (xi)(6) above, the Trustee and the Bond
      Insurer shall receive an opinion of counsel as to the perfection of the security
      interest in the collateral. 

     

    (10)  The
      investment agreement shall provide that moneys invested under the agreement
      must
      be payable and putable at par to the Trustee without condition, breakage fee
      or
      other penalty, upon not more than two (2) business days’ notice, or immediately
      on demand for any reason for which the funds invested may be withdrawn from
      the
      applicable fund or account established under the authorizing document, as well
      as the following:

     

    (i)  In
      the
      event of a deficiency in the debt service account;

     

    (ii)  Upon
      acceleration after an event of default;

     

    (iii)  Upon
      refunding of the bonds in whole or in part;

     

    (iv)  Reduction
      of the debt service reserve requirement for the bonds; or

     

    (v)  If
      a
      determination is later made by a nationally recognized bond counsel that
      investments must be yield-restricted.

     

    Notwithstanding
      the foregoing, the agreement may provide for a breakage fee or other penalty
      that is payable in arrears and not as a condition of a draw by the Trustee
      if
      the issuer’s obligation to pay such fee or penalty is subordinate to its
      obligation to pay debt service on the bonds and to make deposits to the debt
      service reserve fund. 

    

    (11)  The
      investment agreement shall establish the following as events of default, the
      occurrence of any of which shall require the immediate liquidation of the
      investment securities, unless:

     

    (i)  Failure
      of the provider or the guarantor (if any) to make a payment when due or to
      deliver Permitted Collateral of the character, at the times or in the amounts
      described above;

     

    (ii)  Insolvency
      of the provider or the guarantor (if any) under the investment
      agreement;

     

    (iii)  Failure
      by the provider to remedy any deficiency with respect to required Permitted
      Collateral;

     

    (iv)  Failure
      by the provider to make a payment or observe any covenant under the
      agreement;

     

    (v)  The
      guaranty (if any) is terminated, repudiated or challenged; or

     

    (vi)  Any
      representation of warranty furnished to the Trustee or the issuer in connection
      with the agreement is false or misleading.

     

    (12)  The
      investment agreement must incorporate the following general
      criteria:

     

    (i)  “Cure
      periods” for payment default shall not exceed two (2) business
      days;

     

    (ii)  The
      agreement shall provide that the provider shall remain liable for any deficiency
      after application of the proceeds of the sale of any collateral, including
      costs
      and expenses incurred by the Trustee or the Bond Insurer;

     

    (iii)  Neither
      the agreement or guaranty agreement, if applicable, may be assigned (except
      to a
      provider that would otherwise be acceptable under these guidelines) or amended
      without the prior consent of the Bond Insurer;

     

    (iv)  If
      the
      investment agreement is for a debt service reserve fund, reinvestments of funds
      shall be required to bear interest at a rate at least equal to the original
      contract rate.

     

    (v)  The
      provider shall be required to immediately notify the Bond Insurer and the
      Trustee of any event of default or any suspension, withdrawal or downgrade
      of
      the provider’s ratings;

     

    (vi)  The
      agreement shall be unconditional and shall expressly disclaim any right of
      set-off or counterclaim;

     

    (vii)  The
      agreement shall require the provider to submit information reasonably requested
      by the Bond Insurer, including balance invested with the provider, type and
      market value of collateral and other pertinent information.

     

    (xii)  Forward
      delivery agreements in which the securities delivered mature on or before each
      interest payment date (for debt service or debt service reserve funds) or draw
      down date (construction funds) that meet the following criteria:

     

    (1)  A
      specific written investment agreement governs the transaction.

     

    (2)  Acceptable
      providers shall be limited to (i) any registered broker/dealer subject to the
      Securities Investors’ Protection Corporation jurisdiction, if such broker/dealer
      or bank has an uninsured, unsecured and unguaranteed obligation rated A3/P-1
      or
      better by Moody’s and A-/A-1 or better by S&P; (ii) any commercial bank
      insured by the FDIC, if such bank has an uninsured, unsecured and unguaranteed
      obligation rated A3/P-1 or better by Moody’s and A-/A-1 or better by S&P;
      and (iii) domestic structured investment companies approved by the Bond Insurer
      and rated Aaa by Moody’s and AAA by S&P.

     

    (3)  The
      forward delivery agreement shall provide for termination or assignment (to
      a
      qualified provider hereunder) of the agreement if the provider’s ratings are
      suspended, withdrawn or fall below A3 or P-1 from Moody’s or A- or A-1 from
      S&P. Within ten (10) days, the provider shall fulfill any obligations it may
      have with respect to shortfalls in market value. There shall be no breakage
      fee
      payable to the provider in such event.

     

    (4)  Permitted
      securities shall include the investments listed in 1, 2 and 3
      above.

     

    (5)  The
      forward delivery agreement shall include the following provisions:

     

    (i)  The
      permitted securities must mature at least one (1) business day before a debt
      service payment date or scheduled draw. The maturity amount of the permitted
      securities must equal or exceed the amount required to be in the applicable
      fund
      on the applicable valuation date.

     

    (ii)  The
      agreement shall include market standard termination provisions, including the
      right to terminate for the provider’s failure to deliver qualifying securities
      or otherwise to perform under the agreement. There shall be no breakage fee
      or
      penalty payable to the provider in such event.

     

    (iii)  Any
      breakage fees shall be payable only on debt service payment dates and shall
      be
      subordinated to the payment of debt service and debt service reserve fund
      replenishments.

     

    (iv)  The
      provider must submit at closing a bankruptcy opinion to the effect that upon
      any
      bankruptcy, insolvency or receivership of the provider, the securities will
      not
      be considered to be a part of the provider’s estate, and otherwise acceptable to
      the Bond Insurer.

     

    (v)  The
      agreement may not be assigned (except to a provider that would otherwise be
      acceptable under these guidelines) or amended without the prior written consent
      of the Bond Insurer.

     

    (xiii)  Forward
      delivery agreements in which the securities delivered mature after the funds
      may
      be required but provide for the right of the issuer or the Trustee to put the
      securities back to the provider under a put, guaranty or other hedging
      arrangement, only with the prior written consent of the Bond
      Insurer.

     

    (xiv)  Maturity
      of investments shall be governed by the following:

     

    (1)  Investments
      of monies (other than reserve funds) shall be in securities and obligations
      maturing not later than the dates on which such monies will be needed to make
      payments. 

     

    (2)  Investments
      shall be considered as maturing on the first date on which they are redeemable
      without penalty at the option of the holder or the date on which the Trustee
      may
      require their repurchase pursuant to repurchase agreements.

     

    (3)  Investments
      of monies in reserve funds not payable upon demand shall be restricted to
      maturities of five years or less.

     

    (f)  Claim
      Procedure.
      So long
      as the Bond Insurance Policy remains in full force and effect, the following
      provisions shall apply to the Bonds:

     

    (i)  If,
      on
      the third day preceding any interest payment date for the Bonds there is not
      on
      deposit with the Trustee sufficient moneys available to pay all principal of
      and
      interest on the Bonds due on such date, the Trustee shall immediately notify
      the
      Bond Insurer and U.S. Bank Trust National Association, New York, New York or
      its
      successor as its Fiscal Agent (the “Fiscal Agent”) of the amount of such
      deficiency. If, by said interest payment date, the Issuer has not provided
      the
      amount of such deficiency, the Trustee shall simultaneously make available
      to
      the Bond Insurer and to the Fiscal Agent the registration books for the Bonds
      maintained by the Trustee. In addition: 

     

    (1)  The
      Trustee shall provide the Bond Insurer with a list of the Bondholders entitled
      to receive principal or interest payments from the Bond Insurer under the terms
      of the Bond Insurance Policy and shall make arrangements for the Bond Insurer
      and its Fiscal Agent (1) to mail checks or drafts to Bondholders entitled to
      receive full or partial interest payments from the Bond Insurer and (2) to
      pay
      principal of the Bonds surrendered to the Fiscal Agent by the Bondholders
      entitled to receive full or partial principal payments from the Bond Insurer;
      and

     

    (2)  The
      Trustee shall, at the time it makes the registration books available to the
      Bond
      Insurer pursuant to (i) above, notify Bondholders entitled to receive the
      payment of principal of or interest on the Bonds from the Bond Insurer (1)
      as to
      the fact of such entitlement, (2) that the Bond Insurer will remit to them
      all
      or part of the interest payments coming due subject to the terms of the Bond
      Insurance Policy, (3) that, except as provided in paragraph (ii) below, in
      the
      event that any Bondholder is entitled to receive full payment of principal
      from
      the Bond Insurer, such Bondholder must tender his Bond with the instrument
      of
      transfer in the form provided on the Bond executed in the name of the Bond
      Insurer, and (4) that, except as provided in paragraph (ii) below, in the event
      that such Bondholder is entitled to receive partial payment of principal from
      the Bond Insurer, such Bondholder must tender his Bond for payment first to
      the
      Trustee, which shall note on such Bond the portion of principal paid by the
      Trustee, and then, with an acceptable form of assignment executed in the name
      of
      the Bond Insurer, to the Fiscal Agent, which will then pay the unpaid portion
      of
      principal to the Bondholder subject to the terms of the Bond Insurance Policy.
      

     

    (ii)  In
      the
      event that the Trustee has notice that any payment of principal of or interest
      on a Bond has been recovered from a Bondholder pursuant to the United States
      Bankruptcy Code by a trustee in bankruptcy in accordance with the final,
      nonappealable order of a court having competent jurisdiction, the Trustee shall,
      at the time it provides notice to the Bond Insurer, notify all Bondholders
      that
      in the event that any Bondholder’s payment is so recovered, such Bondholder will
      be entitled to payment from the Bond Insurer to the extent of such recovery,
      and
      the Trustee shall furnish to the Bond Insurer its records evidencing the
      payments of principal of and interest on the Bonds which have been made by
      the
      Trustee and subsequently recovered from Bondholders, and the dates on which
      such
      payments were made. 

     

    (iii)  The
      Bond
      Insurer shall, to the extent it makes payment of principal of or interest on
      the
      Bonds, become subrogated to the rights of the recipients of such payments in
      accordance with the terms of the Bond Insurance Policy and, to evidence such
      subrogation, (i) in the case of subrogation as to claims for past due interest,
      the Trustee shall note the Bond Insurer’s rights as subrogee on the registration
      books maintained by the Trustee upon receipt from the Bond Insurer of proof
      of
      the payment of interest thereon to the Bondholders of such Bonds and (ii) in
      the
      case of subrogation as to claims for past due principal, the Trustee shall
      note
      the Bond Insurer’s rights as subrogee on the registration books for the Bonds
      maintained by the Trustee upon receipt of proof of the payment of principal
      thereof to the Bondholders of such Bonds. Notwithstanding anything in this
      authorizing document or the Bonds to the contrary, the Trustee shall make
      payment of such past due interest and past due principal directly to the Bond
      Insurer to the extent that the Bond Insurer is a subrogee with respect thereto.
      

     

    (g)  Reimbursement
      of Expenses.
      The
      Company shall pay or reimburse the Bond Insurer for any and all charges, fees,
      costs, and expenses that the Bond Insurer may reasonably pay or incur in
      connection with the following: (i) the administration, enforcement, defense,
      or
      preservation of any rights or security hereunder or under any other transaction
      document; (ii) the pursuit of any remedies hereunder, under any other
      transaction document, or otherwise afforded by law or equity, (iii) any
      amendment, waiver, or other action with respect to or related to the Loan
      Agreement or any other transaction document whether or not executed or
      completed; (iv) the violation by the Company of any law, rule, or regulation
      or
      any judgment, order or decree applicable to it; (v) any advances or payments
      made by the Bond Insurer to cure defaults of the Company under the transaction
      documents; or (vi) any litigation or other dispute in connection with the Loan
      Agreement, any other transaction document, or the transactions contemplated
      hereby or thereby, other than amounts resulting from the failure of the Bond
      Insurer to honor its payment obligations under the Policy. The Bond Insurer
      reserves the right to charge a reasonable fee as a condition to executing any
      amendment, waiver, or consent proposed in respect of the Indenture, the Loan
      Agreement or any other transaction document. The obligations of the Company
      to
      the Bond Insurer shall survive discharge and termination of the Indenture and
      the Loan Agreement.

     

    (h)  Reorganization.

     

    (i)  The
      Company agrees that, in the event of a Reorganization, unless otherwise
      consented to by the Bond Insurer, the obligations of the Company under, and
      in
      respect of, the Bonds, the Indenture, and the Loan Agreement shall be assumed
      by, and shall become direct and primary obligations of, a Regulated Utility
      Company. The
      Company shall have delivered to the Bond Insurer a certificate of the president,
      any vice president or the treasurer and an opinion of counsel acceptable to
      the
      Bond Insurer each stating that such Reorganization complies with this
      section.

     

    (ii)  For
      purposes of paragraph (i) above, the following terms not otherwise defined
      herein, shall have the following meanings: 

     

    “Regulated
      Utility Company” means
      a
      corporation, partnership, limited partnership, joint venture, limited liability
      company, limited liability partnership or other entity engaged in the
      transmission and distribution of water, and which is regulated by the applicable
      public service commissions in all of the states which comprise its service
      area.

    

    “Reorganization” means
      any
      reorganization of the Company or its affiliates, or any transfer of a
      substantial portion of the assets of the Company, in each case as a result
      of
      which any of the Company ceases to be a Regulated Utility Company.

    

    (i)  Assignment
      of Loan Agreement.
      The
      Company shall not assign the Loan Agreement or any of its duties or obligations
      thereunder without the prior written consent of the Bond Insurer.

     

    
      
        --

        950597.7 10/31/06

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      Issuer and Trustee have caused this Indenture of Trust to be executed in their
      respective corporate names and caused their respective corporate seals to be
      hereunto affixed and attested by their respective duly authorized officers
      or
      representatives, as of the day first above written.

     

     

    
      	 	 	 
	 	
              YORK
                COUNTY INDUSTRIAL DEVELOPMENT
                AUTHORITY

            
	 
Attest:	 
 	 
 
	
              By:
                /s/J. Kenetha Hansen

            	By:  	/s/John
              W.
              Krout 
	 J.
              Kenetha Hansen	John
              W. Krout 
	 Assistant
              Secretary	Chairman

    

     

     

    
      	 	 	 
	 	
              
                MANUFACTURERS
                  AND TRADERS TRUST
                  COMPANY, as Trustee

              

            
	 
Attest:	 
 	 
 
	
              By:
                /s/Adnan Ahmad

            	By:  	/s/Bernard
              V.
              Kelly, Jr.
	 Adnan
              Ahmad	Bernard
              V. Kelly, Jr. 
	 Corporate
              Trust Officer	Vice
              President, Corporate Trust Officer

    

    

    

    
      
         

      

    

    
      
        
          950597.7
            10/31/06Exhibit 10.1 - Term Loan Agreement

    Exhibit
      10.1

     

    
 

    TERM
      LOAN AGREEMENT

    

    

    

    dated
      as of October 31, 2006

    

    

    

    among

    

    

    

    SEMCO
      ENERGY, INC.,

    

    

    

    THE
      FINANCIAL INSTITUTIONS PARTY HERETO AS LENDERS,

    

    

    

    and

    

    

    

    UNION
      BANK OF CALIFORNIA, N.A., as Administrative Agent

    

    

    
      
        
          
            

            600198569v6

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

     

     

    
      	
              TABLE
                OF CONTENTS

            
	
               

            	 	 	 	
              Page

            
	SECTION
              1.  	DEFINITIONS  	
              1

            
	 	1.1 	Definitions  	
              1

            
	 	1.2 	Other
              Interpretive Provisions  	
              16

            
	SECTION
              2.  	COMMITMENTS
              OF THE LENDERS; BORROWING AND CONVERSION
              PROCEDURES  	
              17

            
	 	2.1 	Commitments  	
              17

            
	 	2.2 	Loan
              Procedures  	
              17

            
	 	 	2.2.1 	Various
              Types of Loans 	
              17

            
	 	 	2.2.2 	Borrowing
              Procedures 	
              18

            
	 	 	2.2.3 	Conversion
              and Continuation Procedures 	
              18

            
	 	2.3 	Commitments
              Several 	
              19

            
	 	2.4 	Certain
              Conditions 	
              19

            
	SECTION
              3.  	EVIDENCING
              OF LOANS  	
              19

            
	 	3.1 	Notes 	
              19

            
	 	3.2 	Recordkeeping 	
              19

            
	SECTION
              4.  	INTEREST  	
              20

            
	 	4.1 	Interest
              Rates  	
              20

            
	 	4.2 	Interest
              Payment Dates 	
              20

            
	 	4.3 	Setting
              and Notice of LIBOR Rates 	
              20

            
	 	4.4 	Computation
              of Interest 	
              20

            
	SECTION
              5. 	FEE 	
              21

            
	 	5.1 	Arrangement
              Fee  	
              21

            
	SECTION
              6. 	PREPAYMENTS
              AND REPAYMENT 	
              21

            
	 	6.1 	Prepayments 	
              21

            
	 	6.2 	Manner
              of Prepayments 	
              21

            
	 	6.3 	Repayment 	
              21

            
	SECTION
              7. 	MAKING
              AND PRORATION OF PAYMENTS; SETOFF; TAXES 	
              21

            
	 	7.1 	Making
              of Payments  	
              21

            
	 	7.2 	Application
              of Certain Payments 	
              21

            
	 	7.3 	Due
              Date Extension 	
              22

            
	 	7.4 	Setoff 	
              22

            
	 	7.5 	Proration
              of Payments 	
              22

            
	 	7.6 	Taxes 	
              22

            
	SECTION
              8. 	INCREASED
              COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS 	
              24

            
	 	8.1 	Increased
              Costs 	
              24

            
	 	8.2 	Basis
              for Determining Interest Rate Inadequate or Unfair 	
              25

            
	 	8.3 	Changes
              in Law Rendering LIBOR Loans Unlawful 	
              25

            
	 	8.4 	Funding
              Losses 	
              26

            
	 	8.5 	Right
              of Lenders to Fund through Other Offices 	
              26

            
	 	8.6 	Discretion
              of Lenders as to Manner of Funding 	
              26

            
	 	8.7 	Mitigation
              of Circumstances; Replacement of Lenders 	
              26

            
	 	8.8 	Conclusiveness
              of Statements; Survival of Provisions 	
              27

            
	SECTION
              9.  	REPRESENTATIONS
              AND WARRANTIES  	
              27

            
	 	9.1 	Organization;
              Power  	
              27

            

    

     

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          600198569v6

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	9.2 	Authorization;
              No Conflict 	
              28

            
	 	9.3 	Validity
              and Binding Nature 	
              28

            
	 	9.4 	Financial
              Condition 	
              28

            
	 	9.5 	No
              Material Adverse Change 	
              28

            
	 	9.6 	Litigation 	
              28

            
	 	9.7 	Ownership
              of Properties; Liens 	
              28

            
	 	9.8 	Pension
              Plans 	
              28

            
	 	9.9 	Investment
              Company Act 	
              29

            
	 	9.10 	Regulation
              U 	
              29

            
	 	9.11 	Taxes;
              Tax Shelter Registration 	
              29

            
	 	9.12 	Solvency;
              etc. 	
              30

            
	 	9.13 	Environmental
              Matters 	
              30

            
	 	9.14 	Insurance 	
              31

            
	 	9.15 	Information 	
              31

            
	 	9.16 	Intellectual
              Property 	
              32

            
	 	9.17 	Labor
              Matters 	
              32

            
	 	9.18 	No
              Default 	
              32

            
	 	9.19 	Compliance
              with Laws  	
              32

            
	SECTION
              10.  	AFFIRMATIVE
              COVENANTS  	
              32

            
	 	10.1 	Reports,
              Certificates and Other Information  	
              32

            
	 	 	10.1.1 	Annual
              Report 	
              32

            
	 	 	10.1.2 	Interim
              Reports 	
              33

            
	 	 	10.1.3 	Compliance
              Certificates 	
              33

            
	 	 	10.1.4 	Reports
              to the SEC and to Shareholders; Regulatory Bodies 	
              33

            
	 	 	10.1.5 	Notice
              of Default, Litigation and ERISA Matters 	
              33

            
	 	 	10.1.6 	Management
              Reports 	
              34

            
	 	 	10.1.7 	Projections 	
              34

            
	 	 	10.1.8 	Junior
              Capital Notices 	
              34

            
	 	 	10.1.9 	Securitizations 	
              35

            
	 	 	10.1.10 	Other
              Information 	
              35

            
	 	10.2 	Books,
              Records and Inspections 	
              35

            
	 	10.3 	Maintenance
              of Property; Insurance 	
              35

            
	 	10.4 	Compliance
              with Laws; Payment of Taxes and Liabilities 	
              36

            
	 	10.5 	Maintenance
              of Existence, etc. 	
              36

            
	 	10.6 	Use
              of Proceeds 	
              36

            
	 	10.7 	Employee
              Benefit Plans 	
              36

            
	 	10.8 	Environmental
              Matters 	
              37

            
	 	10.9 	Tax
              Shelter Registration 	
              37

            
	 	10.10 	Further
              Assurances 	
              37

            
	 	10.11 	Guaranty
              Event 	
              37

            
	 	10.12 	Maintain
              Debt Rating 	
              38

            
	 	10.13 	Subordinated
              Debt 	
              38

            
	SECTION
              11.  	NEGATIVE
              COVENANTS 	
              38

            
	 	11.1 	Debt 	
              38

            
	 	11.2 	Liens 	
              39

            
	 	11.3 	Hedging
              Agreeements 	
              40

            

    

     

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          600198569v6

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	11.4 	Restricted
              Payments; Subordinated Debt	
              40

            
	 	11.5 	Mergers,
              Consolidations, Acquisitions, Sales 	
              41

            
	 	11.6 	Transactions
              with Affiliates 	
              42

            
	 	11.7 	Inconsistent
              Agreements 	
              42

            
	 	11.8 	Business
              Activities; Issuance of Equity 	
              43

            
	 	11.9 	Investments 	
              43

            
	 	11.10 	Restriction
              of Amendments to Certain Documents 	
              44

            
	 	11.11 	Fiscal
              Year 	
              44

            
	 	11.12 	Financial
              Covenants 	
              45

            
	 	 	11.12.1 	Minimum
              Interest Coverage Ratio 	
              45

            
	 	 	11.12.2 	Maximum
              Leverage Ratio 	
              45

            
	 	 	11.12.3 	Minimum
              Consolidated Net Worth 	
              45

            
	 	11.13 	Cancellation
              of Debt; More Favorable Terms 	
              45

            
	SECTION
              12.  	CONDITIONS
              OF LENDING 	
              46

            
	 	12.1 	Conditions
              to Effectiveness 	
              46

            
	 	 	12.1.1 	Notes 	
              46

            
	 	 	12.1.2 	Authorization
              Documents 	
              46

            
	 	 	12.1.3 	Consents,
              etc. 	
              46

            
	 	 	12.1.4 	Opinions
              of Counsel 	
              46

            
	 	 	12.1.5 	Payment
              of Fees 	
              47

            
	 	 	12.1.6 	Income
              Statements, Balance Sheets and Cash Flow Statements 	
              47

            
	 	 	12.1.7 	Financial
              Statements 	
              47

            
	 	 	12.1.8 	Search
              Results; Lien Terminations 	
              47

            
	 	 	12.1.9 	Closing
              Certificate 	
              47

            
	 	 	12.1.10 	Other 	
              47

            
	 	12.2 	Conditions to
              Funding 	
              47

            
	 	 	12.2.1 	Notice
              of Borrowing 	
              47

            
	 	 	12.2.2 	Letter
              of Direction 	
              48

            
	 	 	12.2.3 	Certificate 	
              48

            
	SECTION
              13.  	EVENTS
              OF DEFAULT AND THEIR EFFECT  	
              48

            
	 	13.1 	Events
              of Default 	
              48

            
	 	 	13.1.1 	Non-Payment
              of the Loans, etc. 	
              48

            
	 	 	13.1.2 	Default
              on Other Debt 	
              48

            
	 	 	13.1.3 	Bankruptcy,
              Insolvency, etc. 	
              48

            
	 	 	13.1.4 	Non-Compliance
              with Loan Documents 	
              49

            
	 	 	13.1.5 	Representations;
              Warranties 	
              49

            
	 	 	13.1.6 	Pension
              Plans 	
              49

            
	 	 	13.1.7 	Judgments 	
              49

            
	 	 	13.1.8 	Invalidity
              of Subordination Provisions, etc. 	
              50

            
	 	 	13.1.9 	Change
              of Control 	
              50

            
	 	13.2 	Effect
              of Event of Default 	
              50

            
	SECTION
              14.  	THE
              ADMINISTRATIVE AGENT  	
              50

            
	 	14.1 	Appointment
              and Authorization 	
              50

            
	 	14.2 	Delegation
              of Duties 	
              51

            
	 	14.3 	Exculpation
              of Administrative Agent 	
              51

            
	 	14.4 	Reliance
              by Administrative Agent 	
              51

            

    

     

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      	 	14.5 	Notice
              of Default 	
              52

            
	 	14.6 	Credit
              Decision 	
              52

            
	 	14.7 	Indemnification 	
              53

            
	 	14.8 	Administrative
              Agent in Individual Capacity 	
              53

            
	 	14.9 	Successor
              Administrative Agent 	
              53

            
	 	14.10 	Administrative
              Agent May File Proofs of Claim 	
              54

            
	SECTION
              15.  	GENERAL 	
              55

            
	 	15.1 	Waiver;
              Amendments 	
              55

            
	 	15.2 	Confirmations 	
              55

            
	 	15.3 	Notices 	
              55

            
	 	15.4 	Computations 	
              56

            
	 	15.5 	Costs,
              Expenses and Taxes 	
              56

            
	 	15.6 	Assignments;
              Participations 	
              56

            
	 	 	15.6.1 	Assignments 	
              56

            
	 	 	15.6.2 	Participations 	
              57

            
	 	15.7 	Register 	
              58

            
	 	15.8 	GOVERNING
              LAW 	
              58

            
	 	15.9 	Confidentiality 	
              58

            
	 	15.10 	Severability 	
              59

            
	 	15.11 	Nature
              of Remedies 	
              59

            
	 	15.12 	Entire
              Agreement; Amendment and Restatement 	
              59

            
	 	15.13 	Counterparts 	
              59

            
	 	15.14 	Successors
              and Assigns 	
              60

            
	 	15.15 	Captions 	
              60

            
	 	15.16 	USA
              PATRIOT Act Notice  	
              60

            
	 	15.17 	INDEMNIFICATION BY
              THE COMPANY 	
              60

            
	 	15.18 	Nonliability
              of Lenders 	
              61

            
	 	15.19 	FORUM
              SELECTION AND CONSENT TO JURISDICTION 	
              62

            
	 	15.20 	WAIVER
              OF JURY TRIAL 	
              62

            

    

    

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            600198569v6

          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        
          	
                  ANNEXES

                
	 	 
	Annex
                  A 	Lenders
                  and Pro Rata Shares 
	Annex
                  B 	Addresses
                  for Notice 
	 	 
	 	 
	
                  SCHEDULES

                
	 	 
	Schedule
                  9.6 	Legal
                  Proceedings 
	Schedule
                  9.13 	Environmental
                  Matters
	Schedule
                  9.14 	Insurance
	Schedule
                  9.17 	Labor
                  Matters
	Schedule
                  10.14 	Existing
                  Subordinated Debt
	Schedule
                  11.1 	Existing
                  Debt
	Schedule
                  11.2 	Existing
                  Liens
	Schedule
                  11.9 	Investments
	 	 
	 	 
	
                  EXHIBITS

                
	 	 
	Exhibit
                  A 	 Form
                  of Note
	Exhibit
                  B	 Form
                  of Compliance Certificate
	Exhibit
                  C	 Form
                  of Assignment Agreement
	Exhibit
                  D	 Form
                  of Notice of Borrowing
	Exhibit
                  E	 Form
                  of Notice of Conversion/Continuation
	Exhibit
                  F	 Investment
                  Policy

        

      

       

    

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          600198569v6

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    TERM
      LOAN
      AGREEMENT

    

    

    

    This
      Term
      Loan Agreement, dated as of October 31, 2006 (this “Agreement”),
      is
      entered into among SEMCO ENERGY, INC. (the “Company”),
      the
      financial institutions that are or may from time to time become parties hereto
      as lenders (together with their respective successors and assigns, the
“Lenders”)
      and
      UNION BANK OF CALIFORNIA, N.A., a national banking association (in its
      individual capacity, “UBOC”),
      as
      administrative agent for the Lenders.

    

    The
      Company has requested that the Administrative Agent and the Lenders make a
      term
      loan facility available to the Company, and the Administrative Agent and the
      Lenders have agreed to do so upon the terms and conditions below.

    

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

    

    

    
      	SECTION
              1.  	
              DEFINITIONS.

            

    

    

    1.1  Definitions.
      When
      used herein the following terms shall have the following meanings:

    

    Acquired
      Debt
      means
      mortgage Debt or purchase money Debt or Debt with respect to Capital Leases
      of a
      Person existing at the time such Person became a Subsidiary or Debt assumed
      by
      the Company or a Subsidiary of the Company pursuant to an Acquisition permitted
      hereunder (and not created or incurred in connection with or in anticipation
      of
      such Acquisition).

    

    Acquisition
      means
      any transaction or series of related transactions for the purpose of or
      resulting, directly or indirectly, in (a) the acquisition of all or
      substantially all of the assets of a Person, or of all or substantially all
      of
      any business or division of a Person, (b) the acquisition of in excess of
      50% of the Capital Securities of any Person, or otherwise causing any Person
      to
      become a Subsidiary, or (c) a merger or consolidation or any other
      combination with another Person (other than a Person that is already a
      Subsidiary).

    

    Administrative
      Agent
      means
      UBOC in its capacity as administrative agent for the Lenders hereunder and
      any
      successor thereto in such capacity.

    

    Affected
      Loan
      - see
Section
      8.3.

    

    Affiliate
      of any
      Person means (a) any other Person which, directly or indirectly, controls
      or is controlled by or is under common control with such Person, (b) any
      officer or director of such Person and (c) with respect to any Lender, any
      entity administered or managed by such Lender or an Affiliate or investment
      advisor thereof and which is engaged in making, purchasing, holding or otherwise
      investing in commercial loans. A Person shall be deemed to be “controlled by”
another Person if the latter Person possesses, directly or indirectly, power
      to
      direct or cause the direction of the management and policies of the former
      Person, whether by contract or otherwise. Unless expressly stated otherwise
      herein, neither the Administrative Agent nor any Lender shall be deemed an
      Affiliate of any Affiliated Party.

     

     

    
      
        
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    Affiliated
      Party
      means
      any of the Company and its Subsidiaries.

    

    Agreement
      - see
      the Preamble.

    

    Applicable
      Margin
      means,
      (a) from the Closing Date to the fourth anniversary thereof, (i) for LIBOR
      Loans, 1.5% and (ii) for Base Rate Loans, 0.5% and (b) from and after the
      fourth anniversary of the Closing Date, (i) for LIBOR Loans, 3.0% and
      (ii) for Base Rate Loans, 2.0%

    

    Assignee
      - see
Section
      15.6.1(a).

    

    Assignment
      Agreement
      - see
Section
      15.6.1(a).

    

    Attorney
      Costs
      means,
      with respect to any Person, all reasonable fees and charges of any counsel
      to
      such Person, the reasonable allocable cost of internal legal services of such
      Person if outside counsel is not used, all reasonable out-of-pocket
      disbursements of such internal counsel (if outside counsel is not used) and
      all
      court costs and similar legal expenses.

    

    Base
      Rate
      means at
      any time the greater of (a) the Federal Funds Rate plus 0.5% and
      (b) the Reference Rate.

    

    Base
      Rate Loan
      means
      any Loan which bears interest at or by reference to the Base Rate.

    

    Business
      Day
      means
      any day on which UBOC is open for commercial banking business in Los Angeles
      and, in the case of a Business Day which relates to a LIBOR Loan, on which
      dealings are carried on in the London interbank Eurodollar market.

    

    Capitalized
      Rentals
      of any
      Person means as of the date of any determination thereof the amount at which
      the
      aggregate Rentals due and to become due under all Capital Leases under which
      such Person is a lessee would be reflected as a liability on a Consolidated
      balance sheet of such Person in accordance with GAAP.

    

    Capital
      Lease
      means,
      with respect to any Person, any lease of (or other agreement conveying the
      right
      to use) any real or personal property by such Person that, in conformity with
      GAAP, is accounted for as a capital lease on the balance sheet of such
      Person.

    

    Capital
      Securities
      means,
      with respect to any Person, all shares, interests, participations or other
      equivalents (however designated, whether voting or nonvoting) of such Person’s
      capital, whether now outstanding or issued or acquired after the Closing Date,
      including common shares, preferred shares, preference shares, membership
      interests in a limited liability company, limited or general partnership
      interests in a partnership or any other equivalent of such ownership
      interest.

     

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    Cash
      Equivalent Investment
      means,
      at any time, any Investment made in accordance with the investment policy
      attached hereto as Exhibit F, as such policy may be amended or otherwise
      modified from time to time with the approval of the Board of Directors of the
      Company, upon delivery of such amendment or modification to the Administrative
      Agent, provided,
      however,
      that no
      Investment with (a) a tenor longer than one calendar year (unless such
      Investment is subject to a put exercisable by the holder of such Investment
      within one calendar year) and (b) a Rating Agencies’ rating of lower than
      BBB+/Baa1 shall be deemed a Cash Equivalent Investment hereunder.

    

    CERCLA -
      see
Section
      9.13(a).

    

    Closing
      Date
      - see
      Section 12.1.

    

    Code
      means
      the Internal Revenue Code of 1986.

    

    Commitment
      means,
      as to any Lender, such Lender’s commitment to make its initial Loan under this
      Agreement. The amount of each Lender’s commitment to make its initial Loan is
      set forth on Annex
      A.

    

    Company
      - see
      the Preamble.

    

    Compliance
      Certificate
      means a
      Compliance Certificate in substantially the form of Exhibit B.

    

    Consolidated
      or
Consolidating
      means,
      when used with reference to any financial term in this Agreement, the aggregate
      for two or more Persons of the amounts signified by such term for all such
      Persons determined on a consolidated (or consolidating) basis in accordance
      with
      GAAP, applied on a consistent basis. Unless otherwise specified herein,
“Consolidated” and “Consolidating” shall refer to Company and its
      Subsidiaries.

    

    Consolidated
      Adjusted Funded Debt
      means
      all Consolidated Funded Debt, minus Guaranteed Amounts to the extent included
      in
      determining such Consolidated Funded Debt, plus Additional Funded Debt;
provided,
      however,
      that
      (a) no Funded Debt shall for purposes of this definition be included as
      Consolidated Funded Debt if money sufficient to pay such Funded Debt in full
      (either on the date of maturity expressed therein or on such earlier date as
      such Funded Debt may be called for redemption) shall be held in trust for such
      purpose by the trustee or proper depository under the instrument pursuant to
      which such Funded Debt was issued, and (b) in the event of the issuance of
      Funded Debt (“New
      Funded Debt”),
      for
      purposes of this definition there shall be excluded from Consolidated Funded
      Debt at the time of such issuance and thereafter:

    

    (i) existing
      Funded Debt which is paid in full substantially concurrently with the issuance
      of the New Funded Debt and out of proceeds therefrom; and

    

    (ii) existing
      Funded Debt which is paid out of the proceeds from the issuance of the New
      Funded Debt in compliance with the following:

     

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          600198569v6

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (A) on
      the
      date of the issuance of the New Funded Debt (the “Issuance
      Date”)
      an
      amount from the proceeds sufficient to pay such existing Funded Debt in full
      if
      called for redemption as hereinafter described shall be deposited in an escrow
      account (the “Escrow
      Account”)
      with a
      third party selected by the Company with written instructions from the Company
      that the proceeds shall be used for such purpose;

    

    (B) not
      later
      than the 30th day following the Issuance Date, such existing Funded Debt shall
      be called for redemption on a date which is not later than the 70th day
      following the Issuance Date; and

    

    (C) on
      a date
      which is not later than the 70th day following the Issuance Date, such existing
      Funded Debt shall be paid in full from the proceeds deposited in the Escrow
      Account.

    

    As
      used
      in this definition, the term “Additional
      Funded Debt”
means
      at any time an amount equal to the excess, if any, of (a) the lowest daily
      average of the smallest aggregate principal amount of Consolidated Current
      Debt
      minus Guaranteed Amounts to the extent included in determining such Consolidated
      Current Debt outstanding on each day for any period of 30 consecutive days
      during the 12-month period immediately preceding the date of determination,
      over
      (b) $10,000,000.

    

    Consolidated
      Adjusted Total Capitalization
      means,
      as of the date of any determination thereof, the sum of (a) the aggregate
      principal amount of Consolidated Adjusted Funded Debt then outstanding, plus
      (b) Consolidated Net Worth.

    

    Consolidated
      Current Debt
      means
      all Current Debt of the Company and its Subsidiaries determined on a
      Consolidated basis eliminating intercompany items.

    

    Consolidated
      Funded Debt
      means
      all Funded Debt of the Company and its Subsidiaries determined on a Consolidated
      basis eliminating intercompany items.

    

    Consolidated
      Net Income
      for any
      period means the net income of the Company and its Subsidiaries for such period
      determined on a Consolidated basis but excluding all noncash charges taken
      by
      the Company in accordance with GAAP under Statement of Financial Accounting
      Standards (“FAS”)
      No. 142 or FAS No. 144 during such period and less other proper
      charges (including taxes on income), determined on a Consolidated basis, but
      excluding in any event:

    

    (a)  any
      gains
      or losses on the sale or other disposition of Investments or fixed or capital
      assets, and any taxes on such excluded gains and any tax deductions or credits
      on account of any such excluded losses;

    

    (b)  the
      proceeds of any life insurance policy;

     

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          600198569v6

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)  net
      earnings and losses of any Subsidiary accrued prior to the date it became a
      Subsidiary;

    

    (d)  net
      earnings and losses of any corporation (other than a Subsidiary), substantially
      all the assets of which have been acquired in any manner by the Company or
      any
      Subsidiary, realized by such corporation prior to the date of such
      acquisition;

    

    (e)  net
      earnings and losses of any corporation (other than a Subsidiary) with which
      the
      Company or a Subsidiary shall have consolidated or which shall have merged
      into
      or with the Company or a Subsidiary prior to the date of such consolidation
      or
      merger;

    

    (f)  net
      earnings of any business entity (other than a Subsidiary) in which the Company
      or any Subsidiary has an ownership interest unless such net earnings shall
      have
      actually been received by the Company or such Subsidiary in the form of cash
      distributions;

    

    (g)  any
      portion of the net earnings of any Subsidiary which for any reason is
      unavailable for payment of dividends to the Company or any other
      Subsidiary;

    

    (h)  earnings
      resulting from any reappraisal, revaluation or write-up of assets;

    

    (i)  any
      deferred or other credit representing any excess of the equity in any Subsidiary
      at the date of acquisition thereof over the amount invested in such
      Subsidiary;

    

    (j)  any
      gain
      arising from the acquisition of any securities of the Company or any
      Subsidiary;

    

    (k)  any
      reversal of any contingency reserve, except to the extent that provision for
      such contingency reserve shall have been made from income arising during such
      period, and any gain or loss resulting from accounting method changes;
      and

    

    (l)  any
      items
      other than those described in clauses (a) through (k) above of this
      definition which are properly classified under GAAP as extraordinary
      items.

    

    Consolidated
      Net Worth
      means,
      as of the date of any determination thereof, the stockholders’ capital and
      surplus of the Company and its Subsidiaries determined on a Consolidated basis,
      and which shall include (whether or not includible under GAAP) the principal
      amount of the Junior Capital, adding back (a) an amount equal to all noncash
      charges, less any tax deductions or credits on account of such charges, taken
      by
      the Company in accordance with GAAP under FAS No. 142 or FAS No. 144
      after December 31, 2004 and (b) the noncash charge incurred on December 31,
      2006 and posted to accumulated comprehensive income, less any tax credits to
      accumulated comprehensive income on account of such charge, as a result of
      the
      adoption of FAS No. 158.

    

    Consolidated
      Operating Income
      means,
      as of the date of any determination thereof, the operating income of the Company
      and its Subsidiaries determined on a Consolidated basis as shown on the
      financial statements delivered to the Administrative Agent and the Lenders
      pursuant to Sections 10.1.1 and 10.1.2 of this Agreement, as applicable, but
      (a) excluding from the calculation hereof, whether or not otherwise
      includable under GAAP, all pre-tax gains or losses from the sale of assets
      permitted under this Agreement, and (b) adding back an amount equal to all
      pre-tax noncash charges, taken by the Company in accordance with GAAP under
      FAS
      No. 142 or FAS No. 144. Acquisitions by the Company or any of its
      Subsidiaries made in compliance with this Agreement shall be given pro
      forma
      effect
      in calculation of Consolidated Operating Income.

     

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          600198569v6

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Consolidated
      Storage Income
      means
      the “Storage Income” of the Company and its Subsidiaries on a Consolidated
      basis, as shown under the heading “Other Income” on the Company’s Consolidated
      statement of operations delivered to the Administrative Agent and the Lenders
      pursuant to the requirements of Sections 10.1.1 and 10.1.2 of this
      Agreement.

    

    Controlled
      Group
      means
      all members of a controlled group of corporations, all members of a controlled
      group of trades or businesses (whether or not incorporated) under common control
      and all members of an affiliated service group which, together with the Company
      or any of its Subsidiaries, are treated as a single employer under Section
      414
      of the Code or Section 4001 of ERISA.

    

    Credit
      Party
      means
      any of the Company and the Guarantors.

    

    Current
      Debt
      of any
      Person means as of the date of any determination thereof (a) all Debt of
      such Person for borrowed money other than Funded Debt of such Person and
      (b) Guaranty Obligations of such Person relating to the Current Debt of
      others.

    

    Debt
      of any
      Person means, without duplication, (a) all indebtedness of such Person for
      borrowed money, whether or not evidenced by bonds, debentures, notes or similar
      instruments, (b) all obligations of such Person as lessee under Capital
      Leases which have been or should be recorded as liabilities on a balance sheet
      of such Person in accordance with GAAP, (c) all obligations of such Person
      to pay the deferred purchase price of property or services (excluding trade
      accounts payable in the ordinary course of business), (d) all Debt secured
      by a Lien on the property of such Person, whether or not such Debt shall have
      been assumed by such Person; provided that if such Person has not assumed or
      otherwise become liable for such Debt, such Debt shall be measured at the fair
      market value of such property securing such Debt at the time of determination,
      (e) all obligations, contingent or otherwise, with respect to the face
      amount of all letters of credit (whether or not drawn), bankers’ acceptances and
      similar obligations issued for the account of such Person, (f) all Guaranty
      Obligations relating to the Debt of other Persons or the payment of dividends
      or
      distributions on the Capital Securities of any Person and (g) all Debt of
      any partnership of which such Person is a general partner except where the
      only
      asset which may be used as a source of repayment is such Person’s partnership
      interest in the partnership obligated on the Debt.

    

    Disposal
      (including, correlatively, “Disposed”) has the meaning specified in RCRA;
provided
      that in
      the event that RCRA is amended so as to broaden or narrow the meaning of any
      term defined thereby, such broader or narrower meaning shall apply as of the
      effective date of such amendment; and provided,
      further,
      that to
      the extent that the laws of a state wherein any affected property lies establish
      a meaning for “Disposal” which is broader than is specified in RCRA, such
      broader meaning shall apply.

     

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    Dollar
      and the
      sign “$”
mean
      lawful money of the United States of America.

    

    Environmental
      Claims
      means
      all claims, however asserted, by any governmental, regulatory or judicial
      authority or other Person alleging potential liability or responsibility for
      violation of any Environmental Law, or for Release or injury to the
      environment.

    

    Environmental
      Laws
      means
      all present or future federal, state or local laws, statutes, common law duties,
      rules, regulations, ordinances and codes, together with all administrative
      or
      judicial orders, consent agreements, directed duties, requests, licenses,
      authorizations and permits of, and agreements with, any governmental authority,
      in each case relating to any matter arising out of or relating to public health
      and safety, or pollution or protection of the environment or workplace,
      including any of the foregoing relating to the presence, use, production,
      generation, handling, transport, treatment, storage, Disposal, distribution,
      discharge, emission, Release, threatened Release, control or cleanup of any
      Hazardous Substance.

    

    Environmental
      Matter
      means
      any matter arising out of or relating to pollution or protection of the
      environment or workplace, including any of the foregoing relating to the
      presence, use, production, generation, handling, transport, treatment, storage,
      Disposal, distribution, discharge, Release, control or cleanup of any Hazardous
      Substance.

    

    ERISA
      means
      the Employee Retirement Income Security Act of 1974.

    

    Event
      of Default
      means
      any of the events described in Section 13.1.

    

    Excluded
      Taxes
      means
      taxes based upon, or measured by, a Lender’s or the Administrative Agent’s (or a
      branch of a Lender’s or the Administrative Agent’s) overall net income, overall
      net receipts, or overall net profits (including franchise taxes imposed in
      lieu
      of such taxes), but only to the extent such taxes are imposed by a taxing
      authority (a) in a jurisdiction in which such Lender or the Administrative
      Agent is organized, (b) in a jurisdiction which such Lender’s or the
      Administrative Agent’s principal office is located, or (c) in a
      jurisdiction in which such Lender’s or the Administrative Agent’s lending office
      (or branch) in respect of which payments under this Agreement are made is
      located.

    

    Federal
      Funds Rate
      means,
      for any day, a fluctuating interest rate equal for each day during such period
      to the weighted average of the rates on overnight federal funds transactions
      with members of the Federal Reserve System arranged by federal funds brokers,
      as
      published for such day (or, if such day is not a Business Day, for the next
      preceding Business Day) by the Federal Reserve Bank of New York, or, if such
      rate is not so published for any day which is a Business Day, the average of
      the
      quotations for such day on such transactions received by the Administrative
      Agent from three federal funds brokers of recognized standing selected by the
      Administrative Agent. The Administrative Agent’s determination of such rate
      shall be binding and conclusive absent manifest error.

     

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          600198569v6

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Fiscal
      Quarter
      means a
      fiscal quarter of a Fiscal Year.

    

    Fiscal
      Year
      means
      the fiscal year of the Company and its Subsidiaries, which period shall be
      the
      12-month period ending on December 31 of each year. Any reference to a
      Fiscal Year with a number corresponding to any calendar year (e.g.,
“Fiscal
      Year 2005”) refers to the Fiscal Year ending on December 31 of such
      calendar year.

    

    FRB
      means
      the Board of Governors of the Federal Reserve System or any successor
      thereto.

    

    Funded
      Debt
      of any
      Person means, without duplication, (a) all Debt of such Person for borrowed
      money or which has been incurred in connection with the acquisition of assets,
      in each case having a final maturity of one or more than one year from the
      date
      of origin thereof (or which is renewable or extendible at the option of the
      obligor for a period or periods more than one year from the date of origin),
      including (i) all principal payments in respect thereof that are required to
      be
      made within one year from the date of any determination of Funded Debt, whether
      or not the obligation to make such payments shall constitute a current liability
      of the obligor under GAAP, and (ii) any Debt or off-balance-sheet obligations
      incurred pursuant to a Securitization Transaction (whether by a Special Purpose
      Subsidiary or otherwise), provided, however, that Funded Debt shall not include
      (A) Junior Capital, (B) loans outstanding under the Revolving Credit
      Agreement and the aggregate amount of Debt relating to any Permitted
      Securitizations (provided, however, that the aggregate principal amount excluded
      pursuant to this clause (B) shall not exceed the lesser of (1) $155,000,000
      or
      (2) the amount of such loans and Debt excluded from “Funded Debt” under the
      comparable provisions of the Revolving Credit Agreement), or (C) any notes
      of such Person evidencing Debt of such Person which when issued constitute
      a
      current liability of such Person under GAAP, (b) all Capitalized Rentals of
      such Person, and (c) all Off Balance Sheet Liabilities of such
      Person.

    

    Funding
      Date
      - see
      Section 12.2.

    

    GAAP
      means
      generally accepted accounting principles set forth from time to time in the
      opinions and pronouncements of the Accounting Principles Board and the American
      Institute of Certified Public Accountants and statements and pronouncements
      of
      the Financial Accounting Standards Board (or agencies with similar functions
      of
      comparable stature and authority within the U.S. accounting profession) and
      the SEC, which are applicable to the circumstances as of the date of
      determination.

    

    Gas
      Related Business
      means
      any business permitted under Sections 10.5 and 11.8 hereof involving the
      purchase, distribution, sale, storage and/or transport of natural
      gas.

    

    Group
      - see
Section
      2.2.1.

    

    Guaranteed
      Amounts
      means as
      of any date the aggregate amounts of Debt of others guaranteed by the Company
      and/or any of its Subsidiaries determined on a Consolidated basis.

     

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          600198569v6

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Guarantor
      means
      any Subsidiary of the Company which shall hereafter execute and deliver a
      Guaranty (or a joinder thereto) with respect to the Obligations.

    

    Guaranty
      means
      any Guaranty (and any joinders thereto) of the Obligations of the Company,
      in
      form and substance reasonably acceptable to the Administrative Agent and the
      Required Lenders, that may be hereafter executed and delivered by one or more
      Subsidiaries of the Company.

    

    Guaranty
      Event
      means
      the execution by one or more Subsidiaries of a guaranty, or a joinder to a
      guaranty, of (a) any obligations of the Company under the Revolving Credit
      Agreement or (b) any of the Senior Notes. 

    

    Guaranty
      Obligation
      means
      (a) a guaranty, (b) an endorsement, (c) a contingent agreement to purchase
      or to
      furnish funds for the payment or maintenance of, or otherwise to be or become
      contingently liable under or with respect to, the Debt, other obligations,
      net
      worth, working capital or earnings of any Person, (d) a guarantee of the payment
      of dividends or other distributions upon the Capital Securities of any Person,
      (e) an agreement to purchase, sell or lease (as lessee or lessor) real property,
      products, materials, supplies or services primarily for the purpose of enabling
      a debtor to make payment of such debtor’s obligations or (f) an agreement to
      assure a creditor against loss, including causing a bank or other financial
      institution to issue a letter of credit or other similar instrument for the
      benefit of another Person, but excluding endorsements for collection or deposit
      in the ordinary course of business.

    

    Hazardous
      Substance
      means
      (a) any petroleum or petroleum product, radioactive material, asbestos in
      any form that is or could become friable, urea formaldehyde foam insulation,
      dielectric fluid containing levels of polychlorinated biphenyls, radon gas
      and
      mold; (b) any chemical, material, pollutant or substance defined as or
      included in the definition of “hazardous substances,” “hazardous waste,”
“hazardous materials,” “extremely hazardous substances,” “restricted hazardous
      waste,” “toxic substances,” “toxic pollutants,” “contaminants,” “pollutants” or
      words of similar import, under any applicable Environmental Law; and
      (c) any other chemical, material or substance, the exposure to or Release
      of which is prohibited, limited or regulated by any governmental authority
      or
      for which any duty or standard of care is imposed pursuant to any Environmental
      Law.

    

    Hedging
      Agreement
      means
      any interest rate, currency or commodity swap agreement, cap agreement or collar
      agreement, or any other agreement or arrangement designed to protect a Person
      against fluctuations in interest rates, currency exchange rates or commodity
      prices.

    

    Hedging
      Obligation
      means,
      with respect to any Person, any liability of such Person under any Hedging
      Agreement. The amount of any Person’s obligation in respect of any Hedging
      Obligation shall be deemed to be the incremental obligation that would be
      reflected in the financial statements of such Person in accordance with
      GAAP.

    

    Indemnified
      Liabilities
      - see
Section
      15.17.

     

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    Interest
      Coverage Ratio
      means
      (a) the sum of the Consolidated Operating Income and the Consolidated Storage
      Income of the Company and its Subsidiaries divided by (b) the sum of all
      interest paid or payable in cash on any Debt of the Company or any Subsidiary,
      including all interest, dividends and distributions paid or payable in cash
      on
      the Junior Capital.

    

    Interest
      Period
      means,
      as to any LIBOR Loan, the period commencing on the date such Loan is borrowed
      or
      continued as, or converted into, a LIBOR Loan and ending on the date one, two,
      three or six months thereafter as selected by the Company pursuant to
Section
      2.2.2
      or
2.2.3,
      as the
      case may be; provided
      that:

    

    (a)  if
      any
      Interest Period would otherwise end on a day that is not a Business Day, such
      Interest Period shall be extended to the following Business Day unless the
      result of such extension would be to carry such Interest Period into another
      calendar month, in which event such Interest Period shall end on the preceding
      Business Day;

    

    (b)  any
      Interest Period that begins on a day for which there is no numerically
      corresponding day in the calendar month at the end of such Interest Period
      shall
      end on the last Business Day of the calendar month at the end of such Interest
      Period; and

    

    (c)  the
      Company may not select any Interest Period for a Loan which would extend beyond
      the scheduled Maturity Date.

    

    Investment
      means,
      with respect to any Person, any investment in another Person, whether by
      acquisition of any debt security or Capital Security, by making any loan or
      advance (excluding the extension of trade credit in the ordinary course of
      business), by becoming obligated with respect to a contingent liability in
      respect of obligations of such other Person (other than travel and similar
      advances to employees in the ordinary course of business) or by making an
      Acquisition.

    

    IRS
      means
      the Internal Revenue Service of the United States of America.

    

    Junior
      Capital
      means,
      without duplication (a) Subordinated Debt, (b) the Trust Preferred
      Securities, and such other trust preferred securities which may be issued by
      unconsolidated capital trust subsidiaries of the Company from time to time,
      (c) the Series B Preferred Stock and (d) all other preferred
      stock or preference stock issued by the Company that by its terms ranks junior
      to the Series B Preferred Stock.

    

    Lenders
      - see
      the Preamble.

    

    Lender
      Party
      - see
Section
      15.17.

    

    LIBOR
      Loan
      means
      any Loan which bears interest at a rate determined by reference to the LIBOR
      Rate.

     

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    LIBOR
      Office
      means
      with respect to any Lender the office or offices of such Lender which shall
      be
      making or maintaining the LIBOR Loans of such Lender hereunder. A LIBOR Office
      of any Lender may be, at the option of such Lender, either a domestic or foreign
      office.

    

    LIBOR
      Rate
      means,
      with respect to any Group of LIBOR Loans for any Interest Period, (a) the rate
      of interest per
      annum
      at which
      deposits in Dollars are offered in the London interbank market at approximately
      11:00 a.m., London time, on the date that is two (2) Business Days prior to
      the
      commencement of such Interest Period, as determined by reference to the British
      Bankers’ Association Interest Settlement Rates for deposits in Dollars (as set
      forth by the Bloomberg Information Service or any successor thereto or any
      other
      service selected by the Administrative Agent which has been nominated by the
      British Bankers’ Association as an authorized information vendor for the purpose
      of displaying such rates) for a period equal to such Interest Period (provided
      that, to the extent that an interest rate is not ascertainable pursuant to
      the
      foregoing provisions of this definition, the “LIBOR Rate” with respect to such
      Group of LIBOR Loans for such Interest Period shall be the rate per
      annum
      at which
      Dollar deposits of $5,000,000 and for a maturity comparable to such Interest
      Period would be offered to the Administrative Agent in the London interbank
      market at approximately 12:00 noon, London time, on the date that is two (2)
      Business Days prior to the beginning of such Interest Period), divided by
      (b) a number determined by subtracting from 1.00 the then stated maximum
      reserve percentage for determining reserves to be maintained by member banks
      of
      the Federal Reserve System for Eurocurrency funding or liabilities as defined
      in
      Regulation D (or any successor category of liabilities under Regulation D),
      such rate to remain fixed for such Interest Period. The Administrative Agent’s
      determination of the LIBOR Rate shall be conclusive, absent manifest
      error.

    

    Lien
      means,
      with respect to any Person, any interest granted by such Person in any real
      or
      personal property, asset or other right owned or being purchased or acquired
      by
      such Person (including an interest in respect of a Capital Lease) which secures
      payment or performance of any obligation and shall include any Mortgage, lien,
      encumbrance, title retention lien, charge or other security interest of any
      kind, whether arising by contract, as a matter of law, by judicial process
      or
      otherwise.

    

    Loan
      means a
      term loan made by a Lender to the Company pursuant to Section 2.1, including
      any
      tranche into which such Loan is divided pursuant to Section 2.2.1.

    

    Loan
      Documents
      means
      this Agreement, the Notes, the Subordination Agreements, any Guaranties and
      all
      documents, instruments and agreements delivered in connection with the
      foregoing.

    

    Margin
      Stock
      means
      any “margin stock” as defined in Regulation U.

    

    Material
      Adverse Effect
      means
      (a) a material adverse change in, or a material adverse effect upon, the
      financial condition, operations, assets, business, or properties of the
      Affiliated Parties taken as a whole, (b) a material impairment of the
      ability of any Credit Party to perform any of the Obligations under any Loan
      Document or (c) a material adverse effect upon any substantial portion of
      the assets of the Credit Parties, taken as a whole, or upon the legality,
      validity, binding effect or enforceability against any Credit Party of any
      Loan
      Document.

     

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    Maturity
      Date
      means
      the earlier to occur of (a) June 30, 2016 and (b) the date, if any, on
      which the Loans are accelerated pursuant to Section
      13.2.

    

    Moody’s
      means
      Moody’s Investors Service, Inc., and any successor thereto.

    

    Mortgage
      means a
      mortgage, deed of trust, leasehold mortgage, leasehold deed of trust or similar
      instrument granting a Lien on real property.

    

    Multiemployer
      Pension Plan
      means a
      multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which the
      Company or any other member of the Controlled Group may have any
      liability.

    

    New
      Capital Adjustment
      means
      that amount to be added to the minimum Consolidated Net Worth required to be
      maintained under Section
      11.12.3
      consisting of an amount equal to one hundred percent (100%) of the proceeds
      of
      each New Capital Offering conducted by the Company or any of its Subsidiaries
      on
      or after June 30, 2005, net of costs of issuance on a cumulative basis,
      less the aggregate principal amount (excluding any capitalized interest) of
      any
      Junior Capital which is retired, prepaid or redeemed in connection with a New
      Capital Offering.

    

    New
      Capital Offering
      means
      the issuance and sale for cash or other consideration, on and after
      June 30, 2005, by the Company or any of its Subsidiaries of additional
      Capital Securities or other equity interests or of Junior Capital.

    

    Non-U.S.
      Participant
      - see
Section
      7.6(d).

    

    Note
      means a
      promissory note substantially in the form of Exhibit A.

    

    Notice
      of Borrowing
      - see
Section
      2.2.2.

    

    Notice
      of Conversion/Continuation
      - see
Section
      2.2.3(b).

    

    Obligations
      means
      all obligations (monetary (including post-petition interest, allowed or not)
      or
      otherwise) of any Affiliated Party under this Agreement and any other Loan
      Document, including Attorney Costs, all in each case howsoever created, arising
      or evidenced, whether direct or indirect, absolute or contingent, now or
      hereafter existing, or due or to become due.

    

    OFAC
      - see
Section
      10.4.

    

    Off
      Balance Sheet Liability
      of a
      Person means (a) any repurchase obligation or liability of such Person with
      respect to accounts or notes receivable sold by such Person and (b) any
      liability under any so-called “synthetic lease” or “tax ownership operating
      lease” transaction entered into by such Person.

     

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    Participant
      - see
Section
      15.6.2.

    

    PBGC
      means
      the Pension Benefit Guaranty Corporation and any entity succeeding to any or
      all
      of its functions under ERISA.

    

    Pension
      Plan
      means a
“pension plan,” as such term is defined in Section 3(2) of ERISA, which is
      subject to Title IV of ERISA or the minimum funding standards of ERISA (other
      than a Multiemployer Pension Plan), and as to which the Company or any member
      of
      the Controlled Group may have any liability, including any liability by reason
      of having been a substantial employer within the meaning of Section 4063 of
      ERISA at any time during the preceding five years, or by reason of being deemed
      to be a contributing sponsor under Section 4069 of ERISA.

    

    Permitted
      Lien
      means a
      Lien expressly permitted hereunder pursuant to Section
      11.2.

    

    Permitted
      Securitization
      means a
      Securitization Transaction effected in accordance with the following
      requirements:

    

    (a) Such
      Securitization Transaction will not result in the aggregate principal amount
      of
      Debt at any time issued and outstanding in respect of Permitted Securitizations
      being in excess of $155,000,000, less (i) the aggregate revolving credit
      commitment under the Revolving Credit Agreement and (ii) any term loans from
      time to time outstanding thereunder (giving effect to any permanent reduction
      in
      such commitment or prepayment of such term loans made simultaneously with the
      closing of such Securitization Transaction);

    

    (b) At
      such
      time as the Company or a Subsidiary makes the initial transfer or encumbrance
      of
      accounts receivable (each such transfer or encumbrance, whether or not the
      initial one, herein called a “disposition”)
      to a
      Special Purpose Subsidiary in connection with the closing of such Securitization
      Transaction, the Company or such Subsidiary shall itself actually receive
      (substantially contemporaneously with such disposition) cash in connection
      with
      such Securitization Transaction in an amount based on normal and customary
      advance rates (and taking into account typical deductions for market-based,
      arms-length securitization transactions);

    

    (c) Each
      disposition pursuant to such Securitization Transaction shall be without
      recourse to the Company or any of its Subsidiaries (except for customary
      clean-up call provisions and customary representations and warranties relating
      to the Company’s or any Subsidiary’s accounts receivable subject to such
      disposition) and otherwise on normal and customary terms and conditions for
      comparable asset-based securitization transactions;

    

    (d) Such
      Securitization Transaction shall be structured on the basis of the issuance
      of
      nonrecourse (to the Company or its Subsidiaries other than the applicable
      Special Purpose Subsidiary) debt securities by a Special Purpose Subsidiary;
      and

    

    (e) Both
      immediately before and immediately after each disposition pursuant to such
      Securitization Transaction, no Unmatured Event of Default or Event of Default
      (whether or not related to such disposition) shall have occurred and be
      continuing.

     

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    Person
      means
      any natural person, corporation, partnership, trust, limited liability company,
      association, governmental authority or unit, or any other entity, whether acting
      in an individual, fiduciary or other capacity.

    

    Pro
      Rata Share
      means
      with respect to a Lender’s obligation to make Loans and receive payments of
      principal, interest, fees, costs, and expenses with respect thereto,
      (a) prior to the funding of the Loans, the percentage obtained by dividing
      (i) such Lender’s Commitment by (ii) the Total Commitment and
      (b) from and after the funding of the Loans, the percentage obtained by
      dividing (i) the aggregate unpaid principal amount of such Lender’s Loans
      by (ii) the aggregate unpaid principal amount of all Loans.

    

    Rating
      Agencies
      means
      Moody’s and S&P, or such other rating agencies acceptable to the Required
      Lenders in their sole discretion.

    

    RCRA
      - see
Section
      9.13(a).

    

    Reference
      Rate
      means
      the variable rate of interest per
      annum
      established by UBOC from time to time as its “reference rate.” Such “reference
      rate” is set by UBOC as a general reference rate of interest, taking into
      account such factors as UBOC may deem appropriate, it being understood that
      many
      of UBOC’s commercial or other loans are priced in relation to such rate, that it
      is not necessarily the lowest or best rate actually charged to any customer
      and
      that UBOC may make various commercial or other loans at rates of interest having
      no relationship to such rate. For purposes of this Agreement, each change in
      the
      Reference Rate shall be effective as of the opening of business on the date
      announced as the effective date of any change in such “reference rate.” UBOC
      shall not be obligated to give notice of any change in the Reference
      Rate.

    

    Regulation D
      means
      Regulation D of the FRB.

    

    Regulation U
      means
      Regulation U of the FRB.

    

    Regulatory
      Body
      means
      any federal or state board, commission, department or other regulatory body
      in
      the United States of America (or any foreign or international equivalent
      thereof) which regulates the distribution, transportation or storage of natural
      gas, or other material lines of business in which the Company or any of its
      Subsidiaries is engaged from time to time.

    

    Release
      has the
      meaning specified in CERCLA; provided
      that in
      the event that CERCLA is amended so as to broaden or narrow the meaning of
      any
      term defined thereby, such broader or narrower meaning shall apply as of the
      effective date of such amendment; and provided,
      further,
      that to
      the extent that the laws of a state wherein any affected property lies establish
      a meaning for “Release” which is broader than is specified in CERCLA, such
      broader meaning shall apply.

    

    Rentals
      means
      and includes as of the date of any determination thereof all fixed payments
      (including as such all payments which the lessee is obligated to make to the
      lessor on termination of the lease or surrender of the property) payable by
      the
      Company or a Subsidiary, as lessee or sublessee under a lease of real or
      personal property, but shall be exclusive of any amounts required to be paid
      by
      the Company or a Subsidiary (whether or not designated as rents or additional
      rents) on account of maintenance, repairs, insurance, taxes and similar charges.
      Fixed rents under any so-called “percentage leases” shall be computed solely on
      the basis of the minimum rents, if any, required to be paid by the lessee
      regardless of sales volume or gross revenues.

     

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    Replacement
      Lender
      - see
Section
      8.7(b).

    

    Required
      Lenders
      means,
      at any time, Lenders whose Pro Rata Shares equal or exceed 51%.

    

    Revolving
      Credit Agreement
      means
      the Second Amended and Restated Credit Agreement dated as of September 15,
      2005
      among the Company, the financial institutions from time to time party thereto
      as
      lenders, LaSalle Bank Midwest National Association, as administrative agent,
      National City Bank of the Midwest, as syndication agent, and U.S. Bank, N.A.,
      as
      documentation agent (including any modification, restatement, refinancing or
      replacement of said Agreement, in whole or in part).

    

    S&P
      means
      Standard & Poor’s Ratings Group, a division of The McGraw-Hill
      Companies, Inc., and any successor thereto.

    

    SEC
      means
      the Securities and Exchange Commission or any other governmental authority
      succeeding to any of the principal functions thereof.

    

    Securitization
      Transaction
      means a
      transaction composed of (a) a transfer of, or grant of a lien on, accounts
      receivable by the Company or any Subsidiary to a Special Purpose Subsidiary
      or
      other special-purpose or limited-purpose entity and (b) the issuance (whether
      by
      such Special Purpose Subsidiary or other special-purpose or limited
      purpose-entity or any other Person) of (i) debt or securities secured directly
      or indirectly by interests in such accounts receivable or (ii) trust or
      comparable certificates or other securities directly or indirectly evidencing
      interests in such accounts receivable.

    

    Senior
      Notes
      means
      the notes described in Schedule 11.1, any additional notes issued by the Company
      after the date hereof that are pari
      passu
      with or
      senior to such notes and any Debt replacing or refinancing any of the
      aforementioned notes.

    

    Senior
      Officer
      means,
      with respect to any Affiliated Party, any of the chief executive officer, the
      chief financial officer, the chief operating officer or the treasurer of such
      Affiliated Party.

    

    Series B
      Preferred Stock
      means
      the Company’s 5% Series B Convertible Cumulative Preferred
      Stock.

    

    Special
      Purpose Subsidiary
      means
      any wholly owned Subsidiary of the Company established for the sole purpose
      of
      effecting a Securitization Transaction and otherwise established and operated
      in
      accordance with customary industry practice, including any entity that
      constitutes a Qualifying Special Purpose Subsidiary under FASB Statement
      140.

     

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    Subordinated
      Debt
      means
      (a) the Company’s existing unsecured subordinated debt identified on
Schedule
      10.14
      and
      (b) any other unsecured Debt of the Company which has subordination terms,
      covenants and default provisions which have been approved in writing by the
      Required Lenders.

    

    Subordination
      Agreements
      means
      all subordination agreements executed by holders of Subordinated Debt in favor
      of the Administrative Agent and the Lenders from time to time.

    

    Subsidiary
      means,
      with respect to any Person, a corporation, partnership, limited liability
      company or other entity of which such Person owns, directly or indirectly,
      such
      number of outstanding Capital Securities as have more than 50% of the ordinary
      voting power for the election of directors or other managers of such
      corporation, partnership, limited liability company or other entity; provided,
      however, in the case of the Company, “Subsidiary” shall not include any
      unconsolidated capital trust subsidiary of the Company. Unless the context
      otherwise requires, each reference to one or more Subsidiaries herein shall
      be a
      reference to one or more Subsidiaries of the Company.

    

    Taxes
      means
      any and all present and future taxes, duties, levies, imposts, deductions,
      assessments, charges or withholdings, and any and all liabilities (including
      interest and penalties and other additions to taxes) with respect to the
      foregoing, but excluding Excluded Taxes.

    

    Total
      Commitment
      means
      $55,000,000.

    

    Trust
      Preferred Securities
      means
      the trust-preferred securities issued by SEMCO Capital Trust I, a wholly-owned
      Subsidiary of the Company, under the SEMCO Capital Trust I Amended and Restated
      Trust Agreement dated as of April 19, 2000 and the related documents and
      instruments.

    

    type
      - see
Section
      2.2.1.

    

    UBOC
      - see
      the Preamble.

    

    Unmatured
      Event of Default
      means
      any event that, if it continues uncured, will, with the lapse of time or notice
      or both, constitute an Event of Default.

    

    Withholding
      Certificate
      - see
Section
      7.6(d).

    

    1.2  Other
      Interpretive Provisions

    

    (a)  The
      meanings of defined terms are equally applicable to the singular and plural
      forms of the defined terms.

     

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    (b)  Section,
      Annex,
      Schedule
      and
Exhibit
      references are to this Agreement unless otherwise specified.

    

    (c)  The
      term
“including” is not limiting and means “including without
      limitation.”

    

    (d)  In
      the
      computation of periods of time from a specified date to a later specified date,
      the word “from” means “from and including,” the words “to” and “until” each mean
“to but excluding,” and the word “through” means “to and
      including.”

    

    (e)  Unless
      otherwise expressly provided herein, (i) references to agreements
      (including this Agreement and the other Loan Documents) and other contractual
      instruments shall be deemed to include all subsequent amendments, restatements,
      supplements and other modifications thereto, but only to the extent such
      amendments, restatements, supplements and other modifications are not prohibited
      by the terms of any Loan Document, and (ii) references to any statute or
      regulation shall be construed as including all statutory and regulatory
      provisions amending, replacing, supplementing or interpreting such statute
      or
      regulation.

    

    (f)  This
      Agreement and the other Loan Documents may use several different limitations,
      tests or measurements to regulate the same or similar matters. All such
      limitations, tests and measurements are cumulative and each shall be performed
      in accordance with its terms.

    

    (g)  This
      Agreement and the other Loan Documents are the result of negotiations among,
      and
      have been reviewed by counsel to, the Administrative Agent, the Company, the
      Lenders and the other parties thereto and are the products of all parties.
      Accordingly, the Loan Documents shall not be construed against the
      Administrative Agent or the Lenders merely because of the Administrative Agent’s
      or the Lenders’ involvement in their preparation.

    

    

    
      	SECTION
              2.  	
              COMMITMENTS
                OF THE LENDERS; BORROWING
                AND CONVERSION PROCEDURES.

            

    

    

    2.1  Commitments.
      On and
      subject to the terms and conditions of this Agreement, each of the Lenders,
      severally and for itself alone, agrees to make a single initial Loan to the
      Company on the date requested by the Company pursuant to Section 2.2.2, but
      in
      any event not later than the 45th day after the Closing Date, in the amount
      equal to such Lender’s Pro Rata Share of the Total Commitment. The Commitments
      shall terminate upon the earlier to occur of (a) the making of the initial
      Loans
      hereunder and (b) 5:00 p.m., Los Angeles time, on the 45th day after the Closing
      Date.

    

    2.2  Loan
      Procedures.

    

    2.2.1  Various
      Types of Loans.
      Each
      Loan shall be divided into one or more tranches, each of which shall be either
      a
      Base Rate Loan or a LIBOR Loan (each a “type”
of
      Loan), as the Company shall specify in the related notice of borrowing or
      conversion pursuant to Section 2.2.2 or 2.2.3. LIBOR Loans having the same
      Interest Period are sometimes called a “Group”
or
      collectively “Groups.”
Base
      Rate Loans and LIBOR Loans may be outstanding at the same time, provided that
      not more than seven (7) different Groups of LIBOR Loans shall be
      outstanding at any one time. All borrowings, conversions and repayments of
      Loans
      shall be effected so that each Lender will have a ratable share (according
      to
      its Pro Rata Share) of all types and Groups of Loans.

     

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    2.2.2  Borrowing
      Procedures.
      The
      Company shall give written notice to the Administrative Agent substantially
      in
      the form of Exhibit D (the “Notice
      of Borrowing”)
      of the
      borrowing of the initial Loans, not later than (a) in the case of a
      borrowing of Base Rate Loans, 11:00 a.m., Los Angeles time, on the proposed
      date
      of such borrowing and (b) in the case of a borrowing of LIBOR Loans, 11:00
      a.m., Los Angeles time, at least two Business Days prior to the proposed date
      of
      such borrowing. Such notice shall be effective upon receipt by the
      Administrative Agent, shall be irrevocable, and shall specify the date and
      type
      of borrowing and, in the case of a borrowing of LIBOR Loans, the initial
      Interest Period therefor. Promptly upon receipt of such notice, the
      Administrative Agent shall advise each Lender thereof. Not later than noon,
      Los
      Angeles time, on the date of the proposed borrowing of initial Loans, each
      Lender shall provide the Administrative Agent at the office specified by the
      Administrative Agent with immediately available funds covering such Lender’s Pro
      Rata Share of such borrowing and, so long as the Administrative Agent has not
      received written notice that the conditions precedent set forth in Section
      12
      with respect to such borrowing have not been satisfied, the Administrative
      Agent
      shall pay over the funds received by the Administrative Agent to the Company
      on
      the requested borrowing date. The borrowing shall be on a Business Day and
      shall
      be in the amount of the Total Commitment.

    

    2.2.3  Conversion
      and Continuation Procedures.

    

    (a)  Subject
      to Section 2.2.1, the Company may, upon irrevocable written notice to the
      Administrative Agent in accordance with clause (b) below:

    

    (i) elect,
      as
      of any Business Day, to convert any Loans (or any part thereof in an aggregate
      amount not less than $500,000 or a higher integral multiple of $100,000) into
      Loans of the other type; or

    

    (ii) elect,
      as
      of the last day of the applicable Interest Period, to continue any LIBOR Loans
      having Interest Periods expiring on such day (or any part thereof in an
      aggregate amount not less than $1,000,000 or a higher integral multiple of
      $500,000) for a new Interest Period;

    

    provided
      that after giving effect to any prepayment, conversion or continuation, the
      aggregate principal amount of each Group of LIBOR Loans shall be at least
      $1,000,000 and an integral multiple of $500,000.

    

    (b)  The
      Company shall give written notice (each such written notice, a “Notice
      of Conversion/Continuation”)
      substantially in the form of Exhibit E
      or
      telephonic notice (followed immediately by a Notice of Conversion/Continuation)
      to the Administrative Agent of each proposed conversion or continuation not
      later than (i) in the case of conversion into Base Rate Loans, 11:00 a.m.,
      Los Angeles time, on the proposed date of such conversion and (ii) in the
      case of conversion into or continuation of LIBOR Loans, 11:00 a.m., Los Angeles
      time, at least three Business Days prior to the proposed date of such conversion
      or continuation, specifying in each case (A) the proposed date of conversion
      or
      continuation, (B) the aggregate amount of Loans to be converted or continued,
      (C) the type of Loans resulting from the proposed conversion or continuation
      and
      (D) in the case of conversion into, or continuation of, LIBOR Loans, the
      duration of the requested Interest Period therefor.

     

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    (c)  If
      the
      Company has failed to select timely a new Interest Period to be applicable
      to
      any LIBOR Loan pursuant to Section
      2.2(b)(ii),
      the
      Company shall be deemed to have elected to continue such LIBOR Loan as a LIBOR
      Loan having an Interest Period of one month.

    

    (d)  The
      Administrative Agent will promptly notify each Lender of its receipt of a notice
      of conversion or continuation pursuant to this Section
      2.2.3
      or, if
      no timely notice is provided by the Company, of the details of any automatic
      conversion.

    

    (e)  Any
      conversion of a LIBOR Loan on a day other than the last day of an Interest
      Period therefor shall be subject to Section
      8.4.

    

    2.3  Commitments
      Several.
      The
      failure of any Lender to make its initial Loan on the requested date shall
      not
      relieve any other Lender of its obligation (if any) to make its initial Loan
      on
      such date, but no Lender shall be responsible for the failure of any other
      Lender to make any Loan to be made by such other Lender.

    

    2.4  Certain
      Conditions.
      Notwithstanding any other provision of this Agreement, no Lender shall have
      an
      obligation to make any Loan, or to permit the continuation of or any conversion
      into any LIBOR Loan, if an Event of Default or Unmatured Event of Default
      exists.

    

    

    
      	SECTION
              3.  	
              EVIDENCING
                OF LOANS.

            

    

    

    3.1  Notes.
      The
      Loans of each Lender shall be evidenced by a Note, with appropriate insertions,
      payable to the order of such Lender in a face principal amount equal to such
      Lender’s Commitment or, if the Commitments have terminated, such Lender’s
      Loans.

    

    3.2  Recordkeeping.
      The
      Administrative Agent, on behalf of each Lender, shall record in its records
      the
      date and amount of each Loan made by each Lender, each repayment or conversion
      thereof and, in the case of each LIBOR Loan, the dates on which each Interest
      Period for such Loan shall begin and end. The aggregate unpaid principal amount
      so recorded shall be rebuttably presumptive evidence of the principal amount
      of
      the Loans owing and unpaid. The failure to so record any such amount or any
      error in so recording any such amount shall not, however, limit or otherwise
      affect the Obligations of the Company hereunder or under any Note to repay
      the
      principal amount of the Loans hereunder, together with all interest accruing
      thereon.

     

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      	SECTION
              4.  	
              INTEREST.

            

    

    

    4.1  Interest
      Rates.
      The
      Company promises to pay interest on the unpaid principal amount of each Loan
      for
      the period commencing on the date of such Loan until such Loan is paid in full
      as follows:

    

    (a)  at
      all
      times while a Loan is a Base Rate Loan, at a rate per
      annum
      equal to
      the sum of the Base Rate from time to time in effect plus the Applicable Margin
      from time to time in effect; and

    

    (b)  at
      all
      times while a Loan is a LIBOR Loan, at a rate per
      annum
      equal to
      the sum of the LIBOR Rate applicable to each Interest Period for such Loan
      plus
      the Applicable Margin from time to time in effect;

    

    provided,
      at any
      time an Event of Default exists, if the Required Lenders so request, the
      interest rate applicable to each Loan shall be increased by 2% per
      annum
      (and, in
      the case of Obligations not bearing interest, such Obligations shall bear
      interest at the rate applicable to Base Rate Loans plus 2% per
      annum);
      provided further
      that
      such increase may thereafter be rescinded by the Required Lenders,
      notwithstanding Section
      15.1.
      Notwithstanding the foregoing, upon the occurrence of an Event of Default under
      Section
      13.1.1
      or
13.1.3,
      such
      increase shall occur automatically.

    

    4.2  Interest
      Payment Dates.
      Accrued
      interest on each Base Rate Loan shall be payable in arrears on the last day
      of
      each calendar month and at maturity. Accrued interest on each LIBOR Loan shall
      be payable on the last day of each Interest Period relating to such Loan (and,
      in the case of a LIBOR Loan with an Interest Period in excess of three months,
      on the three-month anniversary of the first day of such Interest Period), upon
      a
      prepayment of such Loan, and at maturity. After maturity, and at any time an
      Event of Default exists, accrued interest on all Loans shall be payable on
      demand.

    

    4.3  Setting
      and Notice of LIBOR Rates.
      The
      applicable LIBOR Rate for each Interest Period shall be determined by the
      Administrative Agent, and notice thereof shall be given by the Administrative
      Agent promptly to the Company and each Lender. Each determination of the
      applicable LIBOR Rate by the Administrative Agent shall be conclusive and
      binding upon the parties hereto, in the absence of demonstrable error. The
      Administrative Agent shall, upon written request of the Company or any Lender,
      deliver to the Company or such Lender a statement showing the computations
      used
      by the Administrative Agent in determining any applicable LIBOR Rate
      hereunder.

    

    4.4  Computation
      of Interest.
      Interest shall be computed for the actual number of days elapsed on the basis
      of
      a year of 360 days for LIBOR Loans, and on the basis of a year of 365/366 days
      for Base Rate Loans. The applicable interest rate for each Base Rate Loan shall
      change simultaneously with each change in the Base Rate.

     

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      	SECTION
              5.  	
              FEE.

            

    

    

    5.1  Arrangement
      Fee.
      On the
      date hereof, the Company will pay to UBOC an arrangement fee in the amount
      agreed to by the Company and UBOC pursuant to the letter from UBOC to the
      Company dated October 27, 2006 and countersigned by the Company on October
      27,
      2006.

    

    

    
      	SECTION
              6.  	
              PREPAYMENTS
                AND REPAYMENT.

            

    

    

    6.1  Prepayments.
      The
      Company may from time to time prepay the Loans in whole or in part; provided
      that the Company shall give the Administrative Agent (which shall promptly
      advise each Lender) notice thereof not later than the third Business Day before
      the day of such prepayment (which shall be a Business Day), specifying the
      Loans
      to be prepaid and the date and amount of prepayment. Any such partial prepayment
      shall be in an amount equal to $1,000,000 or a higher integral multiple of
      $500,000.

    

    6.2  Manner
      of Prepayments.
      Any
      partial prepayment of a Group of LIBOR Loans shall be subject to the proviso
      to
      Section 2.2.3(a). Any prepayment of a LIBOR Loan on a day other than the last
      day of an Interest Period therefor shall include accrued interest on the
      principal amount being repaid and shall be subject to Section 8.4. Except as
      otherwise provided by this Agreement, all principal payments in respect of
      the
      Loans shall be applied first, to repay outstanding Base Rate Loans and then
      to
      repay outstanding LIBOR Rate Loans in direct order of Interest Period
      maturities.

    

    6.3  Repayment.
      The
      Company shall repay the Loans of each Lender in full on the Maturity
      Date.

    

    

    
      	SECTION
              7.  	
              MAKING
                AND PRORATION OF PAYMENTS; SETOFF;
                TAXES.

            

    

    

    7.1  Making
      of Payments.
      All
      payments of principal or interest on the Notes, and of fees, shall be made
      by
      the Company to the Administrative Agent in immediately available funds at the
      office specified by the Administrative Agent, not later than 10:00 a.m., Los
      Angeles time, on the date due; and funds received after that hour shall be
      deemed to have been received by the Administrative Agent on the following
      Business Day. The Administrative Agent shall promptly remit to each Lender
      its
      share of all such payments received in collected funds by the Administrative
      Agent for the account of such Lender. All payments under Section 8.1 shall
      be
      made by the Company directly to the Lender entitled thereto without setoff,
      counterclaim or other defense.

    

    7.2  Application
      of Certain Payments.
      So long
      as no Unmatured Event of Default or Event of Default has occurred and is
      continuing, (a) payments matching specific scheduled payments then due
      shall be applied to those scheduled payments and (b) voluntary prepayments
      shall be applied as set forth in Section 6.2. After the occurrence and during
      the continuance of an Event of Default, all amounts collected or received by
      the
      Administrative Agent or any Lender as proceeds from the sale of, or other
      realization upon, all or any part of the assets of the Affiliated Parties shall
      be applied as the Administrative Agent shall determine in its discretion.
      Concurrently with each remittance to any Lender of its share of any such
      payment, the Administrative Agent shall advise such Lender as to the application
      of such payment.

     

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    7.3  Due
      Date Extension.
      If any
      payment of principal or interest with respect to any of the Loans, or of any
      fees, falls due on a day which is not a Business Day, then such due date shall
      be extended to the immediately following Business Day and, in the case of
      principal, additional interest shall accrue and be payable for the period of
      any
      such extension.

    

    7.4  Setoff.
      The
      Company agrees that the Administrative Agent and each Lender have all rights
      of
      setoff and bankers’ lien provided by applicable law, and in addition thereto,
      the Company agrees that at any time any Event of Default exists, the
      Administrative Agent and each Lender may apply to the payment of any Obligations
      of the Company hereunder, whether or not then due, any and all balances,
      credits, deposits, accounts or moneys of the Company then or thereafter with
      the
      Administrative Agent or such Lender.

    

    7.5  Proration
      of Payments.
      If any
      Lender shall obtain any payment or other recovery (whether voluntary,
      involuntary, by application of offset or otherwise, on account of principal
      of
      or interest on any Loan, but excluding (a) any payment pursuant to Section
      8.7 or 15.6 and (b) payments of interest on any Affected Loan) in excess of
      its applicable Pro Rata Share of payments and other recoveries obtained by
      all
      Lenders on account of principal of and interest on the Loans then held by them,
      then such Lender shall purchase from the other Lenders such participations
      in
      the Loans held by them as shall be necessary to cause such purchasing Lender
      to
      share the excess payment or other recovery ratably with each of them; provided
      that if all or any portion of the excess payment or other recovery is thereafter
      recovered from such purchasing Lender, the purchase shall be rescinded and
      the
      purchase price restored to the extent of such recovery.

    

    7.6  Taxes.

    

    (a)  All
      payments made by the Company hereunder or under any other Loan Document shall
      be
      made without setoff, counterclaim, or other defense. To the extent permitted
      by
      applicable law, all payments hereunder or under any other Loan Document
      (including any payment of principal, interest, or fees) to, or for the benefit,
      of any Person shall be made by the Company free and clear of and without
      deduction or withholding for, or on account of, any Taxes now or hereinafter
      imposed by any taxing authority.

    

    (b)  If
      the
      Company makes any payment hereunder or under any other Loan Document in respect
      of which it is required by applicable law to deduct or withhold any Taxes,
      the
      Company shall increase the payment hereunder or under such other Loan Document
      such that after the reduction for the amount of Taxes withheld (and any taxes
      withheld or imposed with respect to the additional payments required under
      this
Section
      7.6(b)),
      the
      amount paid to the Lenders or the Administrative Agent equals the amount that
      was payable hereunder or under such other Loan Document without regard to this
      Section
      7.6(b).
      To the
      extent the Company withholds any Taxes on payments hereunder or under any other
      Loan Document, the Company shall pay the full amount deducted to the relevant
      taxing authority within the time allowed for payment under applicable law and
      shall deliver to the Administrative Agent within 30 days after it has made
      payment to such authority a receipt issued by such authority (or other evidence
      satisfactory to the Administrative Agent) evidencing the payment of all amounts
      so required to be deducted or withheld from such payment.

     

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    (c)  If
      any
      Lender or the Administrative Agent is required by law to make any payment of
      Taxes on or in relation to any amount received or receivable hereunder or under
      any other Loan Document, or any Tax is assessed against a Lender or the
      Administrative Agent with respect to any amount received or receivable hereunder
      or under any other Loan Document, the Company will indemnify such Person against
      (i) such Tax (and any reasonable counsel fees and expenses associated with
      such Tax) and (ii) any taxes imposed as a result of the receipt of the
      payment under this Section
      7.6(c).
      A
      certificate prepared in good faith as to the amount of such payment by such
      Lender or the Administrative Agent shall, absent manifest error, be final,
      conclusive, and binding on all parties.

    

    (d)  (i)
       Each Lender that is not a United States person within the meaning of Code
      Section 7701(a)(30) (a “Non-U.S.
      Participant”)
      shall,
      as a condition precedent to becoming a Lender hereunder, deliver to the Company
      and the Administrative Agent on or prior to the Closing Date (or in the case
      of
      a Lender that is an Assignee, on the date of the assignment to such Lender)
      two
      accurate and complete original signed copies of IRS Form W-8BEN, W-8ECI, or
      W-8IMY (or any successor or other applicable form prescribed by the IRS)
      certifying to such Lender’s entitlement to a complete exemption from United
      States withholding tax on interest payments to be made hereunder or any Loan.
      If
      a Lender that is a Non-U.S. Participant is claiming a complete exemption from
      withholding on interest pursuant to Section 871(h) or 881(c) of the Code, the
      Lender shall deliver (along with two accurate and complete original signed
      copies of IRS Form W-8BEN) a certificate in form and substance reasonably
      acceptable to the Administrative Agent (any such certificate, a “Withholding
      Certificate”).
      In
      addition, each Lender that is a Non-U.S. Participant agrees that, from time
      to
      time after the Closing Date (or in the case of a Lender that is an Assignee,
      after the date of the assignment to such Lender), when a lapse in time (or
      change in circumstances) renders a prior certificate hereunder obsolete or
      inaccurate in any material respect, such Lender shall, to the extent permitted
      under applicable law, deliver to the Company and the Administrative Agent two
      new accurate and complete original signed copies of an IRS Form W-8BEN, W-8ECI,
      or W-8IMY (or any successor or other applicable forms prescribed by the IRS),
      and if applicable, a new Withholding Certificate, to confirm or establish the
      entitlement of such Lender or the Administrative Agent to an exemption from,
      or
      reduction in, United States withholding tax on interest payments to be made
      hereunder on any Loan.

    

    (ii)  Each
      Lender that is not a Non-U.S. Participant (other than any such Lender which
      is
      taxed as a corporation for U.S. federal income tax purposes) shall provide
      two properly completed and duly executed copies of IRS Form W-9 (or any
      successor or other applicable form) to the Company and the Administrative Agent
      certifying that such Lender is exempt from United States backup withholding
      tax.
      To the extent that a form provided pursuant to this Section
      7.6(d)(ii)
      is
      rendered obsolete or inaccurate in any material respect as a result of a change
      in circumstances with respect to the status of a Lender, such Lender shall,
      to
      the extent permitted by applicable law, deliver to the Company and the
      Administrative Agent revised forms necessary to confirm or establish the
      entitlement to such Lender’s and the Administrative Agent’s exemption from
      United States backup withholding tax.

     

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    (iii)  The
      Company shall not be required to pay additional amounts to a Lender, or
      indemnify any Lender, under this Section
      7.6
      to the
      extent that such obligations would not have arisen but for the failure of such
      Lender to comply with Section 7.6(d) or any Taxes applicable to a Lender on
      the
      date that such Lender became a Lender hereunder.

    

    (iv)  Each
      Lender agrees to indemnify the Administrative Agent and hold the Administrative
      Agent harmless for the full amount of any and all present or future Taxes and
      related liabilities (including penalties, interest, additions to tax and
      expenses, and any Taxes imposed by any jurisdiction on amounts payable to the
      Administrative Agent under this Section
      7.6)
      which
      are imposed on or with respect to principal, interest or fees payable to such
      Lender hereunder and which are not paid by the Company pursuant to this
Section
      7.6,
      whether
      or not such Taxes or related liabilities were correctly or legally asserted.
      This indemnification shall be made within 30 days from the date the
      Administrative Agent makes written demand therefor.

    

    

    
      	SECTION
              8.  	
              INCREASED
                COSTS; SPECIAL PROVISIONS FOR LIBOR
                LOANS.

            

    

    

    8.1  Increased
      Costs.

    

    (a)  If,
      after
      the date hereof, the adoption of, or any change in, any applicable law, rule
      or
      regulation, or any change in the interpretation or administration of any
      applicable law, rule or regulation by any governmental authority, central bank
      or comparable agency charged with the interpretation or administration thereof,
      or compliance by any Lender with any request or directive (whether or not having
      the force of law) of any such authority, central bank or comparable agency:
      (i) shall impose, modify or deem applicable any reserve (including any
      reserve imposed by the FRB, but excluding any reserve included in the
      determination of the LIBOR Rate pursuant to Section 4),
      special deposit or similar requirement against assets of, deposits with or
      for
      the account of, or credit extended by any Lender; or (ii) shall impose on
      any Lender any other condition affecting its LIBOR Loans, its Note or its
      obligation to make LIBOR Loans; and the result of anything described in
      clauses (i) and (ii) above is to increase the cost to (or to impose a cost
      on) such Lender (or any LIBOR Office of such Lender) of making or maintaining
      any LIBOR Loan, or to reduce the amount of any sum received or receivable by
      such Lender (or its LIBOR Office) under this Agreement or under its Note with
      respect thereto, then upon demand by such Lender (which demand shall be
      accompanied by a statement setting forth the basis for such demand and a
      calculation of the amount thereof in reasonable detail, a copy of which shall
      be
      furnished to the Administrative Agent), the Company shall pay directly to such
      Lender such additional amount as will compensate such Lender for such increased
      cost or such reduction, so long as such amounts have accrued on or after the
      day
      which is 100 days prior to the date on which such Lender first made demand
      therefor.

    

    (b)  If
      any
      Lender shall reasonably determine that any change in, or the adoption or
      phase-in of, any applicable law, rule or regulation regarding capital adequacy,
      or any change in the interpretation or administration thereof by any
      governmental authority, central bank or comparable agency charged with the
      interpretation or administration thereof, or the compliance by any Lender or
      any
      Person controlling such Lender with any request or directive regarding capital
      adequacy (whether or not having the force of law) of any such authority, central
      bank or comparable agency, has or would have the effect of reducing the rate
      of
      return on such Lender’s or such controlling Person’s capital as a consequence of
      such Lender’s obligations hereunder to a level below that which such Lender or
      such controlling Person could have achieved but for such change, adoption,
      phase-in or compliance (taking into consideration such Lender’s or such
      controlling Person’s policies with respect to capital adequacy) by an amount
      deemed by such Lender or such controlling Person to be material, then from
      time
      to time, upon demand by such Lender (which demand shall be accompanied by a
      statement setting forth the basis for such demand and a calculation of the
      amount thereof in reasonable detail, a copy of which shall be furnished to
      the
      Administrative Agent), the Company shall pay to such Lender such additional
      amount as will compensate such Lender or such controlling Person for such
      reduction so long as such amounts have accrued on or after the day which is
      100
      days prior to the date on which such Lender first made demand
      therefor.

     

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    8.2  Basis
      for Determining Interest Rate Inadequate or Unfair.
      If

    

    (a)  the
      Administrative Agent reasonably determines (which determination shall be binding
      and conclusive on the Company) that by reason of circumstances affecting the
      interbank LIBOR market adequate and reasonable means do not exist for
      ascertaining the applicable LIBOR Rate; or

    

    (b)  the
      Required Lenders advise the Administrative Agent that the LIBOR Rate as
      determined by the Administrative Agent will not adequately and fairly reflect
      the cost to such Lenders of maintaining or funding LIBOR Loans for any Interest
      Period (taking into account any amount to which such Lenders may be entitled
      under Section
      8.1)
      or that
      the making or funding of LIBOR Loans has become impracticable as a result of
      an
      event occurring after the date of this Agreement which in the opinion of such
      Lenders materially affects such Loans;

    

    then
      the
      Administrative Agent shall promptly notify the other parties thereof and, so
      long as such circumstances shall continue, (i) no Lender shall be under any
      obligation to make LIBOR Loans or convert any Base Rate Loans into LIBOR Loans
      and (ii) on the last day of the current Interest Period for each LIBOR
      Loan, such Loan shall, unless then repaid in full, automatically convert to
      a
      Base Rate Loan.

    

    8.3  Changes
      in Law Rendering LIBOR Loans Unlawful.
      If any
      change in, or the adoption of any new, law or regulation, or any change in
      the
      interpretation of any applicable law or regulation by any governmental or other
      regulatory body charged with the administration thereof, should make it (or
      in
      the good faith judgment of any Lender cause a substantial question as to whether
      it is) unlawful for any Lender to make, maintain or fund LIBOR Loans, then
      such
      Lender shall promptly notify each of the other parties hereto and, so long
      as
      such circumstances shall continue, (a) such Lender shall have no obligation
      to make LIBOR Loans or convert any Base Rate Loan into a LIBOR Loan (but shall
      make Base Rate Loans concurrently with the making of or conversion of Base
      Rate
      Loans into LIBOR Loans by the Lenders which are not so affected, in each case
      in
      an amount equal to the amount of LIBOR Loans which would be made or converted
      into by such Lender at such time in the absence of such circumstances) and
      (b) on the last day of the current Interest Period for each LIBOR Loan of
      such Lender (or, in any event, on such earlier date as may be required by the
      relevant law, regulation or interpretation), such LIBOR Loan shall, unless
      then
      repaid in full, automatically convert to a Base Rate Loan. Each Base Rate Loan
      made by a Lender which, but for the circumstances described in the foregoing
      sentence, would be a LIBOR Loan (an “Affected
      Loan”)
      shall
      remain outstanding for the period corresponding to the Group of LIBOR Loans
      of
      which such Affected Loan would be a part absent such circumstances.

     

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    8.4  Funding
      Losses.
      The
      Company hereby agrees that, upon demand by any Lender (which demand shall be
      accompanied by a statement setting forth the basis for the amount being claimed,
      a copy of which shall be furnished to the Administrative Agent), the Company
      will indemnify such Lender against any net loss or expense which such Lender
      may
      sustain or incur (including any net loss or expense incurred by reason of the
      liquidation or reemployment of deposits or other funds acquired by such Lender
      to fund or maintain any LIBOR Loan but excluding the loss of the Applicable
      Margin), as reasonably determined by such Lender, as a result of (a) any
      payment, prepayment or conversion of any LIBOR Loan of such Lender on a date
      other than the last day of an Interest Period for such Loan (including any
      conversion pursuant to Section 8.3) or (b) any failure of the Company to
      borrow, convert or continue any LIBOR Loan on a date specified therefor in
      a
      notice of borrowing, conversion or continuation pursuant to this Agreement.
      For
      this purpose, all notices to the Administrative Agent pursuant to this Agreement
      shall be deemed to be irrevocable.

    

    8.5  Right
      of Lenders to Fund through
      Other Offices.
      Each
      Lender may, if it so elects, fulfill its commitment as to any LIBOR Loan by
      causing a foreign branch or Affiliate of such Lender to make such Loan; provided
      that in such event for the purposes of this Agreement such Loan shall be deemed
      to have been made by such Lender, and the obligation of the Company to repay
      such Loan shall nevertheless be to such Lender and shall be deemed held by
      it,
      to the extent of such Loan, for the account of such branch or
      Affiliate.

    

    8.6  Discretion
      of Lenders as to Manner of Funding.
      Notwithstanding any provision of this Agreement to the contrary, each Lender
      shall be entitled to fund and maintain its funding of all or any part of its
      Loans in any manner it sees fit, it being understood, however, that for the
      purposes of this Agreement all determinations hereunder shall be made as if
      such
      Lender had actually funded and maintained each LIBOR Loan during each Interest
      Period for such Loan through the purchase of deposits having a maturity
      corresponding to such Interest Period and bearing an interest rate equal to
      the
      LIBOR Rate for such Interest Period.

    

    8.7  Mitigation
      of Circumstances; Replacement of Lenders.

    

    (a)  Each
      Lender shall promptly notify the Company and the Administrative Agent of any
      event of which it has knowledge which will result in, and will use reasonable
      commercial efforts available to it (and not, in such Lender’s sole judgment,
      otherwise materially disadvantageous to such Lender) to mitigate or avoid,
      (i) any obligation by the Company to pay any amount pursuant to
Section
      7.6
      or
8.1
      or
      (ii) the occurrence of any circumstances described in Section
      8.2
      or
8.3
      (and, if
      any Lender has given notice of any such event described in clause (i) or
      (ii) above and thereafter such event ceases to exist, such Lender shall
      promptly so notify the Company and the Administrative Agent). Without limiting
      the foregoing, each Lender will designate a different funding office if such
      designation will avoid (or reduce the cost to the Company of) any event
      described in clause (i) or (ii) above and such designation will not,
      in such Lender’s sole judgment, be otherwise materially disadvantageous to such
      Lender.

     

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    (b)  If
      the
      Company becomes obligated to pay additional amounts to any Lender pursuant
      to
Section
      7.6
      or
8.1,
      or any
      Lender gives notice of the occurrence of any circumstances described in
Section
      8.2
      or
8.3,
      the
      Company may designate another lender which is reasonably acceptable to the
      Administrative Agent in its reasonable discretion (such other bank being called
      a “Replacement
      Lender”)
      to
      purchase the Loans of such Lender and such Lender’s rights hereunder, without
      recourse to or warranty (except as set forth in the applicable Assignment
      Agreement) by, or expense to, such Lender, for a purchase price equal to the
      outstanding principal amount of the Loans payable to such Lender plus any
      accrued but unpaid interest on such Loans and all accrued but unpaid fees owed
      to such Lender and any other amounts payable to such Lender under this
      Agreement, and to assume all the obligations of such Lender hereunder, and,
      upon
      such purchase and assumption (pursuant to an Assignment Agreement), such Lender
      shall no longer be a party hereto or have any rights hereunder (other than
      rights with respect to indemnities and similar rights applicable to such Lender
      prior to the date of such purchase and assumption) and shall be relieved from
      all obligations to the Company hereunder, and the Replacement Lender shall
      succeed to the rights and obligations of such Lender hereunder.

    

    8.8  Conclusiveness
      of Statements; Survival of Provisions.
      Determinations and statements of any Lender pursuant to Section 8.1, 8.2, 8.3
      or
      8.4 shall be conclusive absent demonstrable error. Lenders may use reasonable
      averaging and attribution methods in determining compensation under Sections
      8.1
      and 8.4, and the provisions of such Sections shall survive repayment of the
      Obligations, cancellation of any Notes and termination of this
      Agreement.

    

    

    
      	SECTION
              9.  	
              REPRESENTATIONS
                AND WARRANTIES.

            

    

    

    To
      induce
      the Administrative Agent and the Lenders to enter into this Agreement and to
      induce the Lenders to make Loans, the Company represents and warrants to the
      Administrative Agent and the Lenders that:

    

    9.1  Organization;
      Power.
      Each
      Affiliated Party is validly existing and in good standing under the laws of
      its
      jurisdiction of organization, has all requisite power and authority to carry
      on
      its business as now conducted and is duly qualified to do business in each
      other
      jurisdiction where, because of the nature of its activities or properties,
      such
      qualification is required, except for such jurisdictions where the failure
      to so
      qualify would not reasonably be expected to have a Material Adverse
      Effect.

     

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    9.2  Authorization;
      No Conflict.
      The
      execution, delivery and performance by each Affiliated Party of each Loan
      Document to which it is a party, and the consummation of the transactions
      contemplated thereby, are within such Affiliated Party’s legal powers, have been
      duly authorized by all necessary legal action and do not and will not
      (a) require any consent or approval of any governmental agency or authority
      (other than any consent or approval which has been obtained and is in full
      force
      and effect), (b) conflict with (i) any provision of law the violation
      of which would reasonably be expected to have a Material Adverse Effect,
      (ii) the charter, bylaws or other organizational documents of any
      Affiliated Party or (iii) any agreement, indenture, instrument or other
      document, or any judgment, order or decree, which is binding upon any Affiliated
      Party or any of their respective properties the violation of which would
      reasonably be expected to have a Material Adverse Effect or (c) require, or
      result in, the creation or imposition of any Lien on any asset of any Affiliated
      Party.

    

    9.3  Validity
      and Binding Nature.
      Each
      Loan Document to which any Affiliated Party is a party has been duly executed
      and delivered by such Person and is the legal, valid and binding obligation
      of
      such Person, enforceable against such Person in accordance with its terms,
      subject to bankruptcy, insolvency and similar laws affecting the enforceability
      of creditors’ rights generally and to general principles of equity.

    

    9.4  Financial
      Condition.
      The
      audited Consolidated financial statements of the Company and its Subsidiaries
      as
      at December 31, 2005 and the unaudited Consolidated financial statements of
      the
      Company and its Subsidiaries as at June 30, 2006, copies of each of which
      have been delivered to each Lender, were prepared in accordance with GAAP
      (subject, in the case of such unaudited statements, to the absence of footnotes
      and to normal year-end adjustments) and present fairly the Consolidated
      financial condition of the Company and its Subsidiaries as at such dates and
      the
      results of their operations for the periods then ended.

    

    9.5  No
      Material Adverse Change.
      Since
      December 31, 2005, there has been no material adverse change in the financial
      condition, operations, assets, business, or properties of the Affiliated Parties
      taken as a whole.

    

    9.6  Litigation.
      No
      litigation (including derivative actions), arbitration proceeding or
      governmental investigation or proceeding is pending or, to the Company’s
      knowledge, threatened against any Affiliated Party which would reasonably be
      expected to have a Material Adverse Effect, except as set forth in Schedule
      9.6.

    

    9.7  Ownership
      of Properties; Liens.
      Each
      Affiliated Party owns, to the extent needed for operation of its business,
      good
      and, in the case of real property, marketable title to all of its properties
      and
      assets, real and personal, tangible and intangible, of any nature whatsoever
      (including patents, trademarks, trade names, service marks and copyrights),
      free
      and clear of all Liens except Permitted Liens.

    

    9.8  Pension
      Plans.

    

    (a)  During
      the twelve-consecutive-month period prior to the date of the execution and
      delivery of this Agreement or the making of any Loan, (i) no steps have
      been taken to terminate any Pension Plan and (ii) no contribution failure
      has occurred with respect to any Pension Plan sufficient to give rise to a
      Lien
      under Section 302(f) of ERISA. No condition exists or event or transaction
      has
      occurred with respect to any Pension Plan which could result in the incurrence
      by the Company of any material liability, fine or penalty.

     

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    (b)  (i) All
      contributions (if any) have been made to any Multiemployer Pension Plan that
      are
      required to be made by the Company or any other member of the Controlled Group
      under the terms of the plan or of any collective bargaining agreement or by
      applicable law; (ii) other than withdrawal from and withdrawal liabilities
      under the Teamsters Central States Pension Fund, which would not reasonably
      be
      expected to have a Material Adverse Effect, neither the Company nor any member
      of the Controlled Group has withdrawn or partially withdrawn from any
      Multiemployer Pension Plan, incurred any withdrawal liability with respect
      to
      any such plan or received notice of any claim or demand for withdrawal liability
      or partial withdrawal liability from any such plan, and no condition has
      occurred which, if continued, might result in a withdrawal or partial withdrawal
      from any such plan; and (iii) neither the Company nor any member of the
      Controlled Group has received any notice that any Multiemployer Pension Plan
      is
      in reorganization, that increased contributions may be required to avoid a
      reduction in plan benefits or the imposition of any excise tax, that any such
      plan is or has been funded at a rate less than that required under Section
      412
      of the Code, that any such plan is or may be terminated, or that any such plan
      (other than the Teamsters Central States Pension Fund) is or may become
      insolvent.

    

    9.9  Investment
      Company Act.
      No
      Affiliated Party is an “investment company” or a company “controlled” by an
“investment company” or a “subsidiary” of an “investment company,” within the
      meaning of the Investment Company Act of 1940.

    

    9.10  Regulation
      U.
      No
      Affiliated Party is engaged principally, or as one of its important activities,
      in the business of extending credit for the purpose of purchasing or carrying
      Margin Stock.

    

    9.11  Taxes;
      Tax Shelter Registration.

    

    (a)  Each
      Affiliated Party has timely filed all tax returns and reports required by law
      to
      have been filed by it and has paid all taxes and governmental charges due and
      payable with respect to each such return, except any such taxes or charges
      which
      are being diligently contested in good faith by appropriate proceedings and
      for
      which adequate reserves in accordance with GAAP have been set aside on its
      books. The Affiliated Parties have made adequate reserves on their books and
      records in accordance with GAAP for all taxes that have accrued but which are
      not yet due and payable. No Affiliated Party has participated in any transaction
      (that relates to a year of the taxpayer which is still open under the applicable
      statute of limitations) which is a “reportable transaction” within the meaning
      of Treasury Regulation Section 1.6011-4(b)(2) (irrespective of the date when
      the
      transaction was entered into).

    

    (b)  No
      Affiliated Party intends to treat any of the transactions contemplated by any
      Loan Document as being a “reportable transaction” within the meaning of Treasury
      Regulation Section 1.6011-4. 
       

    

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    9.12  Solvency,
      etc.
      On the
      Closing Date, and immediately prior to and after giving effect to the borrowing
      hereunder and the use of the proceeds thereof, with respect to each Credit
      Party, individually, (a) the fair value of its assets is greater than the
      amount of its liabilities (including disputed, contingent and unliquidated
      liabilities) as such value is established and liabilities evaluated,
      (b) the present fair saleable value of its assets is not less than the
      amount that will be required to pay the probable liability on its debts as
      they
      become absolute and matured, (c) it is able to realize upon its assets and
      pay its debts and other liabilities (including disputed, contingent and
      unliquidated liabilities) as they mature in the normal course of business,
      (d) it does not intend to, and does not believe that it will, incur debts
      or liabilities beyond its ability to pay as such debts and liabilities mature
      and (e) it is not engaged in business or a transaction, and is not about to
      engage in business or a transaction, for which its property would constitute
      unreasonably small capital.

    

    9.13  Environmental
      Matters.

    

    (a)  No
      Violations.
      Except
      as set forth on Schedule
      9.13,
      neither
      the Company nor any Subsidiary, nor any operator of any property of the Company
      or any Subsidiary, is in violation, or alleged violation, of any judgment,
      decree, order, law, permit, license, rule or regulation pertaining to any
      Environmental Matter, including any arising under the Resource Conservation
      and
      Recovery Act of 1976 (“RCRA”),
      the
      Comprehensive Environmental Response, Compensation and Liability Act of 1980
      (“CERCLA”)
      or any
      other Environmental Law, which individually or in the aggregate otherwise would
      reasonably be expected to have a Material Adverse Effect.

    

    (b)  Notices.
      Except
      as set forth on Schedule
      9.13
      and for
      matters arising after the Closing Date, in each case none of which would, singly
      or in the aggregate, reasonably be expected to have a Material Adverse Effect,
      neither the Company nor any Subsidiary has received notice from any federal,
      state or local governmental authority: (i) that any one of them has been
      identified by the U.S. Environmental Protection Agency as a potentially
      responsible party under CERCLA with respect to a site listed on the National
      Priorities List, 40 C.F.R. Part 300 Appendix B; (ii) that any
      Hazardous Substance which any one of them has generated, transported or Disposed
      of has been found at any site at which a federal, state or local agency or
      other
      third party has conducted a remedial investigation, removal or other response
      action pursuant to any Environmental Law; (iii) that the Company or any
      Subsidiary must conduct a remedial investigation, removal, response action
      or
      other activity pursuant to any Environmental Law; or (iv) of any
      Environmental Claim, in each case that would reasonably be expected to result
      in
      a liability to the Company that would reasonably be expected to have a Material
      Adverse Effect.

    

    (c)  Handling
      of Hazardous Substances.
      Except
      as set forth on Schedule
      9.13
      as of
      the Closing Date, (i) no portion of the real property or other asset of the
      Company or any Subsidiary has been used by the Company or any Subsidiary or,
      to
      the best knowledge of the Company, by any third party for the handling,
      processing, storage or Disposal of any Hazardous Substance except in accordance
      in all material respects with applicable Environmental Laws; and no underground
      tank or other underground storage receptacle for any Hazardous Substance is
      located on any such property; (ii) in the course of any activity conducted
      by the Company, any Subsidiary or the operator of any real property of the
      Company or any Subsidiary, no Hazardous Substance has been generated or is
      being
      used on any such property except in accordance in all material respects with
      applicable Environmental Laws; (iii) there has been no Release or, to the
      best knowledge of the Company, threatened Release of any Hazardous Substance
      upon, into or from any real property or other asset of the Company or any
      Subsidiary, which Release singly or in the aggregate with each other such
      Release would reasonably be expected to have a material adverse effect on the
      value of such real property or asset (provided that with respect to any Release
      or threatened Release which occurred prior to the ownership, occupancy or use
      of
      such property or asset, as applicable, by the Company or any Subsidiary, such
      representation is given to the best knowledge of the Company); (iv) to the
      best knowledge of the Company, there has been no Release on, upon, from or
      into
      any real property in the vicinity of any real property or other asset of the
      Company or any Subsidiary which, through soil or groundwater contamination,
      may
      have come to be located on, and which would reasonably be expected to have
      a
      Material Adverse Effect; and (v) any Hazardous Substance generated by the
      Company or any Subsidiary has been transported offsite only by properly licensed
      carriers and delivered only to treatment or disposal facilities maintaining
      valid permits as required under applicable Environmental Laws, which
      transporters and facilities to the best knowledge of the Company have been
      and
      are operating in compliance in all material respects with such permits and
      applicable Environmental Laws.

     

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    9.14  Insurance.
      Set
      forth on Schedule 9.14 is a complete and accurate summary of the property and
      casualty insurance program of the Affiliated Parties as of the Closing Date
      (including the names of all insurers, policy numbers, expiration dates, amounts
      and types of coverage, annual premiums, exclusions, deductibles, self-insured
      retention, and a description in reasonable detail of any self-insurance program,
      retrospective rating plan, fronting arrangement or other risk assumption
      arrangement involving any Affiliated Party). Each Affiliated Party and its
      properties are insured with financially sound and reputable insurance companies
      which are not Affiliates of the Affiliated Parties, in such amounts, with such
      deductibles and covering such risks as are customarily carried by companies
      engaged in similar businesses and owning similar properties in localities where
      such Affiliated Parties operate.

    

    9.15  Information.
      (a) The Company’s annual report on Form 10-K for the fiscal year ended at
      December 31, 2005 and the Company’s quarterly report on Form 10-Q for the
      fiscal quarter ended on June 30, 2006, copies of which have been furnished
      by the Company to the Administrative Agent and the Lenders, did not, as of
      the
      respective dates such Form 10-K and Form 10-Q were filed with the SEC, contain
      any untrue statement of a material fact or omit to state a material fact
      necessary to make the statements therein, in light of the circumstances under
      which they were made, not misleading, (b) from the date of filing of the
      Company’s quarterly report on Form 10-Q for the fiscal quarter ended on
      June 30, 2006 through the date hereof, the Company has not filed a current
      report on Form 8-K with the SEC, except for those filed on August 7, 2006 and
      August 22, 2006, and, as of the date hereof, no event or condition exists which
      would require such a filing by the Company pursuant to the Securities Exchange
      Act of 1934, except for any such event or condition which has heretofore been
      disclosed in writing to the Lenders by delivery to the Lenders of a Form 8-K
      prior to or contemporaneously with the filing thereof, and (c) any
      projections or forecasts heretofore or contemporaneously herewith furnished
      in
      writing by any Affiliated Party to the Administrative Agent or any Lender
      pursuant hereto or in connection herewith are based on good faith estimates
      and
      assumptions believed by the Affiliated Parties to be reasonable as of the date
      of the applicable projections or forecasts or have otherwise been prepared
      in
      good faith by the Affiliated Parties.

     

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    9.16  Intellectual
      Property.
      Each
      Affiliated Party owns and possesses, or has a license or other right to use,
      all
      patents, patent rights, trademarks, trademark rights, trade names, trade name
      rights, service marks, service mark rights and copyrights as are necessary
      for
      the conduct of the businesses of the Affiliated Parties, without any
      infringement upon rights of others which would reasonably be expected to have
      a
      Material Adverse Effect.

    

    9.17  Labor
      Matters.
      Except
      as set forth on Schedule 9.17, as of the Closing Date no Affiliated Party is
      subject to any labor or collective bargaining agreement. There is no existing
      or
      threatened strike, lockout or other labor dispute involving any Affiliated
      Party
      that singly or in the aggregate with each other such strike, lockout or other
      labor dispute would reasonably be expected to have a Material Adverse
      Effect.

    

    9.18  No
      Default.
      No
      Event of Default or Unmatured Event of Default exists or would result from
      the
      incurrence by any Affiliated Party of any Debt hereunder or under any other
      Loan
      Document.

    

    9.19  Compliance
      with
      Laws.
      The
      nature and transaction of the Company’s business and operations and the use of
      its properties and assets do not, and during the term of the Loans shall not,
      violate or conflict with any applicable law, statute, ordinance, rule,
      regulation or order of any kind or nature, including the provisions of the
      Fair
      Labor Standards Act or any zoning, land use, building, noise abatement,
      occupational health and safety or other laws, any building permit or any
      condition, grant, easement, covenant, condition or restriction, whether recorded
      or not, except such as would not reasonably be expected to have a Material
      Adverse Effect.

    

    

    
      	SECTION
              10.  	
              AFFIRMATIVE
                COVENANTS.

            

    

    

    Until
      the
      expiration or termination of the Commitments and thereafter until all
      Obligations hereunder and under the other Loan Documents are paid in full,
      the
      Company agrees that, unless at any time the Required Lenders shall otherwise
      expressly consent in writing, it will:

    

    10.1  Reports,
      Certificates and Other Information.
      Furnish
      or make available to the Administrative Agent and each Lender (which, in the
      case of the information described in Sections 10.1.1, 10.1.2 and 10.1.4(a),
      may
      be by posting to the Company’s website, provided that the Company simultaneously
      notifies the Administrative Agent and each Lender of such posting):

    

    10.1.1  Annual
      Report.
      Promptly when available and in any event within 105 days after the close of
      each
      Fiscal Year, a copy of the annual audit report of the Company and its
      Subsidiaries for such Fiscal Year, including therein Consolidated balance sheets
      and statements of earnings and cash flows of the Company and its Subsidiaries
      as
      at the end of such Fiscal Year, certified without adverse reference to going
      concern value and without qualification by independent auditors of recognized
      standing selected by the Company and reasonably acceptable to the Administrative
      Agent, together with a written statement from such accountants to the effect
      that, in making the examination necessary for the signing of such annual audit
      report by such accountants, nothing came to their attention that caused them
      to
      believe that the Company was not in compliance with any provision of Section
      11.1, 11.3, 11.4 or 11.12 of this Agreement insofar as any such provision
      relates to accounting matters or, if something has come to their attention
      that
      caused them to believe that the Company was not in compliance with any such
      provision, describing such noncompliance in reasonable detail.

     

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    10.1.2  Interim
      Reports.
      Promptly when available and in any event within 60 days after the end of each
      Fiscal Quarter (except the last Fiscal Quarter of each Fiscal Year),
      Consolidated (and Consolidating, upon the request of the Administrative Agent)
      balance sheets of the Company and its Subsidiaries as of the end of such Fiscal
      Quarter, together with Consolidated statements of earnings and cash flows for
      such Fiscal Quarter and for the period beginning with the first day of such
      Fiscal Year and ending on the last day of such Fiscal Quarter.

    

    10.1.3  Compliance
      Certificates.
      Contemporaneously with the furnishing of a copy of each annual audit report
      pursuant to Section 10.1.1 and each set of quarterly statements pursuant to
      Section 10.1.2, a duly completed Compliance Certificate, with appropriate
      insertions, dated the date of such annual report or such quarterly statements
      and signed by a Senior Officer of the Company, containing (a) a computation
      of each of the financial ratios and restrictions set forth in Section 11.12
      and
      to the effect that such officer has not become aware of any Event of Default
      or
      Unmatured Event of Default that has occurred and is continuing or, if there
      is
      any such event, describing it and the steps, if any, being taken to cure it
      and
      (b) a written statement as to whether a Guaranty Event has
      occurred.

    

    10.1.4  Reports
      to the
      SEC
      and to Shareholders; Regulatory Bodies.

    

    (a)  Promptly
      upon the filing or sending thereof, a copy of each regular, periodic or special
      report of any Affiliated Party filed with the SEC, a copy of each registration
      statement of any Affiliated Party filed with the SEC (other than on Form S-8)
      and a copy of each proxy statement or other communication made to security
      holders generally; and

    

    (b)  Promptly
      upon request by the Administrative Agent, a copy of each regular, periodic
      or
      special report of the Company or any Subsidiary filed with any Regulatory Body,
      and a copy of each rate or similar application of the Company or any Subsidiary
      filed with any Regulatory Body.

    

    10.1.5  Notice
      of Default, Litigation and ERISA Matters.
      Promptly upon becoming aware of any of the following, written notice describing
      the same and the steps being taken by the Company or the Subsidiary affected
      thereby with respect thereto:

    

    (a)  the
      occurrence of an Event of Default or an Unmatured Event of Default;

     

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    (b)  any
      litigation, arbitration or governmental investigation or proceeding not
      previously disclosed by the Company to the Lenders which has been instituted
      or,
      to the knowledge of the Company, is threatened against any Affiliated Party
      or
      to which any of the properties of any thereof is subject and which would
      reasonably be expected to have a Material Adverse Effect;

    

    (c)  the
      institution of any step by any member of the Controlled Group or any other
      Person to terminate any Pension Plan, or the failure of any member of the
      Controlled Group to make a required contribution to any Pension Plan (if such
      failure is sufficient to give rise to a Lien under Section 302(f) of ERISA)
      or
      to any Multiemployer Pension Plan, or the taking of any action with respect
      to a
      Pension Plan which could result in the requirement that the Company furnish
      a
      bond or other security to the PBGC or such Pension Plan, or the occurrence
      of
      any event with respect to any Pension Plan or Multiemployer Pension Plan which
      could result in the incurrence by any member of the Controlled Group of any
      material liability, fine or penalty (including any claim or demand for
      withdrawal liability or partial withdrawal from any Multiemployer Pension Plan),
      or any material increase in the contingent liability of the Company with respect
      to any post-retirement welfare benefit plan or other employee benefit plan
      of
      the Company or another member of the Controlled Group, or any notice that any
      Multiemployer Pension Plan is in reorganization, that increased contributions
      may be required to avoid a reduction in plan benefits or the imposition of
      an
      excise tax, that any such plan is or has been funded at a rate less than that
      required under Section 412 of the Code, that any such plan is or may be
      terminated, or that any such plan is or may become insolvent; or

    

    (d)  any
      other
      event (including (i) any violation of any Environmental Law or the
      assertion of any Environmental Claim or (ii) the enactment or effectiveness
      of any law, rule or regulation) which would reasonably be expected to have
      a
      Material Adverse Effect.

    

    10.1.6  Management
      Reports.
      Promptly upon receipt thereof, a copy of each detailed financial or management
      report submitted to the Company by independent auditors in connection with
      each
      annual or interim audit made by such auditors of the books of the
      Company.

    

    10.1.7  Projections.
      As soon
      as practicable, and in any event not later than 105 days after the commencement
      of each Fiscal Year, financial projections for the Company and its Subsidiaries
      for such Fiscal Year (including quarterly operating and cash-flow budgets)
      prepared in a manner consistent with the projections delivered by the Company
      to
      other bank lenders immediately prior to the Closing Date or otherwise in a
      manner reasonably satisfactory to the Administrative Agent.

    

    10.1.8  Junior
      Capital Notices.
      Promptly following receipt or sending by any Affiliated Party, a copy of each
      material notice (including, in any event, each notice of default or
      acceleration) received from any holder or trustee of, under or with respect
      to
      any Junior Capital or sent by the Company or any other Affiliated Party to
      any
      holder or trustee of, under or with respect to any Junior Capital.

     

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    10.1.9  Securitizations.
      With
      respect to each Permitted Securitization, (a) promptly following the initial
      closing thereof, copies of all documentation relating to such Permitted
      Securitization and (b) promptly following the delivery or receipt by any
      Affiliated Party of any notice relating to such Permitted Securitization, a
      copy
      of such notice.

    

    10.1.10  Other
      Information.
      Promptly from time to time, such other information concerning the Affiliated
      Parties as any Lender or the Administrative Agent may reasonably
      request.

    

    10.2  Books,
      Records and Inspections.
      (a)
      Keep, and cause each other Affiliated Party to keep, its books and records
      in
      accordance with sound business practices sufficient to allow the preparation
      of
      financial statements in accordance with GAAP; (b) permit, and cause each
      other Affiliated Party to permit, any Lender or the Administrative Agent or
      any
      representative thereof to, at any reasonable time and with reasonable notice,
      taking into the account the potential effect on the business and operations
      of
      such Affiliated Party (or at any time without notice if an Event of Default
      exists), inspect the properties and operations of the Affiliated Parties, all
      such inspections to be at the inspecting Lender’s or the Administrative Agent’s
      expense, unless an Event of Default exists at the time such inspection is made
      (in which case such inspections shall be at the Company’s expense), provided,
      however, that the Administrative Agent may make an inspection of the Affiliated
      Parties’ properties and operations as set forth in this clause (b) at the
      Company’s expense not more than once during each 12-month period regardless of
      whether an Event of Default exists at the time such inspection is made;
      (c) permit and cause each other Affiliated Party to permit, at any
      reasonable time and with reasonable notice, taking into account the potential
      effect on the business operations of the Affiliated Parties (or at any time
      without notice if an Event of Default exists), any Lender or the Administrative
      Agent or any representative thereof to visit any or all of any Affiliated
      Party’s offices, to discuss its financial matters with its officers and its
      independent auditors (and the Company hereby authorizes such independent
      auditors to discuss such financial matters with any Lender or the Administrative
      Agent or any representative thereof), and to examine (and, at the expense of
      the
      Affiliated Parties, photocopy extracts from) any of its books or other
      records.

    

    10.3  Maintenance
      of Property; Insurance.

    

    (a)  Keep,
      and
      cause each other Affiliated Party to keep, all property useful and necessary
      in
      the business of the Affiliated Parties in good working order and condition,
      ordinary wear and tear excepted.

    

    (b)  Maintain,
      and cause each other Affiliated Party to maintain, with responsible insurance
      companies, such insurance coverage as may be required by any law or governmental
      regulation or court decree or order applicable to it and such other insurance,
      to such extent and against such hazards and liabilities, as is customarily
      maintained by companies similarly situated, and, upon request of the
      Administrative Agent or any Lender, furnish to the Administrative Agent or
      such
      Lender a certificate setting forth in reasonable detail the nature and extent
      of
      all insurance maintained by the Affiliated Parties.

     

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    10.4  Compliance
      with Laws; Payment of Taxes and Liabilities.
      (a) Comply, and cause each other Affiliated Party to comply, in all
      material respects with all applicable laws, rules, regulations, decrees, orders,
      judgments, licenses and permits, except where failure to comply would not
      reasonably be expected to have a Material Adverse Effect; (b) without
      limiting clause (a) above, ensure, and cause each other Affiliated Party to
      ensure, that no Person who owns a controlling interest in or otherwise controls
      an Affiliated Party is or shall be (i) listed on the Specially Designated
      Nationals and Blocked Person List maintained by the Office of Foreign Assets
      Control (“OFAC”),
      Department of the Treasury, and/or any other similar lists maintained by OFAC
      pursuant to any authorizing statute, Executive Order or regulation or
      (ii) a Person designated under Section 1(b), (c) or (d) of Executive
      Order No. 13224 (September 23, 2001), any related enabling legislation
      or any other similar Executive Order, (c) without limiting clause
      (a) above, comply, and cause each other Affiliated Party to comply, with
      all applicable Bank Secrecy Act and anti-money laundering laws and regulations
      of which they are aware and (d) pay, and cause each other Affiliated Party
      to pay, prior to delinquency, all taxes and other governmental charges against
      it or any of its assets, as well as claims of any kind which, if unpaid, could
      become a Lien on any of its property, provided that the foregoing shall not
      require any Affiliated Party to pay any such tax or charge so long as it is
      contesting the validity thereof in good faith by appropriate proceedings and
      has
      set aside on its books adequate reserves with respect thereto in accordance
      with
      GAAP and, in the case of a claim which could become a Lien on any assets, such
      contest proceedings are staying the foreclosure of such Lien or the sale of
      any
      portion of the assets to satisfy such claim.

    

    10.5  Maintenance
      of Existence, etc.
      Maintain
      and preserve, and (subject to Section 11.5) cause each other Affiliated Party
      to
      maintain and preserve, (a) its existence and good standing in the
      jurisdiction of its organization and (b) its qualification to do business
      and good standing in each other jurisdiction where the nature of its business
      makes such qualification necessary (other than such jurisdictions in which
      the
      failure to be qualified or in good standing would not reasonably be expected
      to
      have a Material Adverse Effect).

    

    10.6  Use
      of
      Proceeds.
      Use the
      proceeds of the Loans solely to prepay a portion of the Company’s outstanding
      8.00% Senior Notes Due 2016; and not use or permit any proceeds of any Loan
      to
      be used, either directly or indirectly, for the purpose, whether immediate,
      incidental or ultimate, of “purchasing or carrying” any Margin Stock in
      violation of Regulation U.

    

    10.7  Employee
      Benefit Plans.

    

    (a)  Maintain,
      and cause each other member of the Controlled Group to maintain, each Pension
      Plan in substantial compliance with all applicable requirements of law and
      regulations except for such noncompliance as would not reasonably be expected
      to
      have a Material Adverse Effect.

    

    (b)  Make,
      and
      cause each other member of the Controlled Group to make, on a timely basis,
      all
      required contributions to each Multiemployer Pension Plan.

    

    (c)  Not,
      and
      not permit any other member of the Controlled Group to, (i) seek a waiver
      of the minimum funding standards of ERISA, (ii) terminate or withdraw from
      any Pension Plan or Multiemployer Pension Plan or (iii) take any other
      action with respect to any Pension Plan that would reasonably be expected to
      entitle the PBGC to terminate, impose liability in respect of, or cause a
      trustee to be appointed to administer, any Pension Plan, unless the actions
      or
      events described in clauses (i), (ii) and (iii) would not individually or
      in the aggregate have a Material Adverse Effect.

     

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    10.8  Environmental
      Matters.
      (a) If
      any Release or threatened Release or other Disposal of a Hazardous Substance
      shall occur or shall have occurred on any real property or other asset of any
      Affiliated Party, cause the prompt containment and removal of such Hazardous
      Substance and the remediation of such real property or other asset as necessary
      to comply in all material respects with all Environmental Laws and to preserve
      the value of such real property or other asset, except where the failure to
      take
      such action would not reasonably be expected to have a Material Adverse Effect;
      (b) without limiting the generality of the foregoing, comply, and cause
      each other Affiliated Party to comply, with each federal and state judicial
      or
      administrative order (which is either final and nonappealable or which has
      not
      been stayed) requiring the performance at any real property of any Affiliated
      Party of any activity in response to the Release or threatened Release of a
      Hazardous Substance; and (c) to the extent that the transportation of a
      Hazardous Substance is permitted by this Agreement, dispose of, and cause its
      Subsidiaries to dispose of, such Hazardous Substance or any other waste only
      at
      licensed disposal facilities operating in compliance with Environmental Laws,
      except where the failure to take such action would not reasonably be expected
      to
      have a Material Adverse Effect.

    

    10.9  Tax
      Shelter Registration.
      Notify
      the Administrative Agent of any action (or the intention to take an action)
      inconsistent with the representation in Section 9.11(b); provided further that,
      (a) if the Company so notifies the Administrative Agent, the Company
      acknowledges and agrees that the Administrative Agent and the Lenders may treat
      the transactions contemplated hereby (or any single transaction contemplated
      hereby) as part of a transaction that is subject to Treasury Regulation Section
      301.6112-1, and the Administrative Agent and such Lender, as applicable, may
      maintain the lists and other regulations required by such Treasury Regulation,
      (b) to the extent the Administrative Agent or a Lender determines to maintain
      such list, each Affiliated Party shall cooperate with the Administrative Agent
      and the Lenders in obtaining the information required under such Treasury
      Regulation and (c) within 10 days after notifying the Administrative Agent
      under
      this Section 10.9, the Company shall deliver to the Administrative Agent a
      duly
      completed copy of IRS Form 8886 or any successor form.

    

    10.10  Further
      Assurances.
      After
      the occurrence of a Guaranty Event, take, and cause each other Affiliated Party
      to take, such actions as are necessary or as the Administrative Agent or the
      Required Lenders may reasonably request from time to time to ensure that the
      Obligations of each Affiliated Party under the Loan Documents are guaranteed
      by
      those Subsidiaries required to deliver a Guaranty pursuant to the terms of
      this
      Agreement, including the execution and delivery of the Guaranty and any joinder
      agreements thereto, and other related ancillary documents reasonably requested
      by the Administrative Agent such as authorization documents and
      opinions.

    

    10.11  Guaranty
      Event.
      Simultaneously with the occurrence of each Guaranty Event, cause each Subsidiary
      executing a guaranty, or a joinder to a guaranty, triggering such Guaranty
      Event
      to execute and deliver to the Administrative Agent (a) a Guaranty and (b)
      certificates, resolutions, formation documents and opinions of counsel with
      respect to each such Subsidiary substantially similar to those being delivered
      to the recipients of the guaranty, or the joinder to a guaranty, triggering
      such
      Guaranty Event or otherwise in form and substance reasonably satisfactory to
      the
      Administrative Agent.

     

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    10.12  Maintain
      Debt Rating.
      Use
      reasonable commercial efforts to cause the Rating Agencies to maintain, on
      an
      ongoing basis, a debt rating of the Company’s long-term, publicly traded,
      non-credit-enhanced senior unsecured Debt (whether or not such Debt is then
      outstanding).

    

    10.13  Subordinated
      Debt.
      Cause
      (a) the subordination provisions of any Subordinated Debt outstanding from
      time
      to time to be enforceable against the holders of such Subordinated Debt by
      the
      Administrative Agent and the Lenders and (b) all Obligations to constitute
      senior Debt entitled to the benefits of the subordination provisions contained
      in any Subordinated Debt outstanding from time to time.

    

    
      	SECTION
              11.  	
              NEGATIVE
                COVENANTS

            

    

    

    Until
      the
      expiration or termination of the Commitments and thereafter until all
      Obligations hereunder and under the other Loan Documents are paid in full,
      the
      Company agrees that, unless at any time the Required Lenders shall otherwise
      expressly consent in writing, it will:

    

    11.1  Debt.
      Not,
      and not permit any other Affiliated Party to, create, incur, assume or suffer
      to
      exist any Debt, except:

    

    (a)  Obligations
      under this Agreement and the other Loan Documents;

    

    (b)  Debt
      secured by Liens permitted by Section 11.2(e), and extensions, renewals and
      refinancings thereof; provided that the aggregate amount of all such Debt
      secured by Liens permitted by Section 11.2(e) at any time outstanding shall
      not
      exceed $15,000,000;

    

    (c)  (i) Debt
      of the Company to any Subsidiary and (ii) Debt of any Subsidiary to the
      Company or another Subsidiary, provided, however, that the aggregate principal
      amount of Debt of any foreign Subsidiaries to the Company or to any domestic
      Subsidiaries outstanding from time to time shall not, when incurred, be in
      excess of an amount equal to twenty percent (20%) of Consolidated Net Worth
      as
      of the Company’s most recent Fiscal Year end;

    

    (d)  Subordinated
      Debt;

    

    (e)  Debt
      described on Schedule
      11.1
      and any
      extension, renewal or refinancing thereof so long as the principal amount
      thereof is not increased and no Default or Unmatured Event of Default shall
      have
      occurred and be continuing or would result therefrom;

     

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    (f)  contingent
      liabilities arising with respect to customary indemnification obligations in
      favor of sellers in connection with Acquisitions permitted under Section 11.5
      and purchasers in connection with dispositions permitted under Section
      11.5;

    

    (g)  Acquired
      Debt assumed in Acquisitions permitted under Section
      11.5;
      and

    

    (h)  Debt
      incurred in connection with a Permitted Securitization, and customary clean-up
      call provisions in connection with any Permitted Securitization;
      and

    

    (i)  other
      unsecured Debt, in addition to the Debt listed above, in an aggregate
      outstanding amount not at any time exceeding an amount equal to twenty percent
      (20%) of Consolidated Net Worth as of the Company’s most recent Fiscal Year end,
      provided that at the time of incurring such Debt, no Default or Unmatured Event
      of Default shall have occurred and be continuing or would result
      therefrom.

    

    11.2  Liens.
      Not,
      and not permit any other Affiliated Party to, create or permit to exist any
      Lien
      on any of its real or personal properties, assets or rights of whatsoever nature
      (whether now owned or hereafter acquired), except:

    

    (a)  Liens
      for
      taxes or other governmental charges not at the time delinquent or thereafter
      payable without penalty or being contested in good faith by appropriate
      proceedings and, in each case, for which it maintains adequate
      reserves;

    

    (b)  Liens
      arising in the ordinary course of business (such as (i) Liens of carriers,
      warehousemen, mechanics and materialmen and other similar Liens and
      (ii) Liens in the form of deposits or pledges incurred in connection with
      worker’s compensation, unemployment compensation and other types of social
      security (excluding Liens arising under ERISA) or in connection with surety
      bonds, bids, performance bonds and similar obligations) for sums not overdue
      or
      being contested in good faith by appropriate proceedings and not involving
      any
      advances or borrowed money or the deferred purchase price of property or
      services and, in each case, for which it maintains adequate
      reserves;

    

    (c)  Liens
      described on Schedule
      11.2
      as of
      the Closing Date;

    

    (d)  cash
      deposits made with or pledged to gas suppliers of the Affiliated Parties,
      provided that the obligation to post such cash deposits arises under gas
      contracts entered into by the Company or such Subsidiary in the ordinary course
      of business and the amount of gas purchased pursuant to such contracts does
      not
      exceed the greater of (i) the requirements established by the applicable
      regulatory authorities (as in effect from time to time) with jurisdiction over
      the Affiliated Parties or (ii) ten (10) billion cubic
      feet;

    

    (e)  subject
      to the limitation set forth in Section
      11.1(b),
      (i) Liens arising in connection with Capital Leases (and attaching only to
      the property being leased), (ii) Liens existing on property at the time of
      the acquisition thereof by any Affiliated Party (and not created in
      contemplation of such acquisition) and (iii) Liens that constitute purchase
      money security interests on any property securing debt incurred for the purpose
      of financing all or any part of the cost of acquiring such property,
provided
      that any
      such Lien attaches to such property within 60 days of the acquisition thereof
      and attaches solely to the property so acquired;

     

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    (f)  Liens
      in
      favor of customs and revenue authorities arising as a matter of law to secure
      payment of customs duties in connection with the importation of inventory or
      other goods;

    

    (g)  attachments,
      appeal bonds, judgments and other similar Liens which do not constitute Events
      of Default hereunder;

    

    (h)  easements,
      rights of way, restrictions, minor defects or irregularities in title and other
      similar Liens not interfering in any material respect with the ordinary conduct
      of the business of any Affiliated Party;

    

    (i)  any
      Lien
      on accounts receivable or proceeds thereof that are the subject of a transfer
      or
      encumbrance pursuant to a Permitted Securitization; and

    

    (j)  the
      replacement, extension or renewal of any Lien permitted by clause (c) above
      upon or in the same property subject thereto arising out of the extension,
      renewal or replacement of the Debt secured thereby (without increase in the
      amount thereof).

    

    11.3  Hedging
      Agreements.
      Not,
      and not permit any other Affiliated Party to, enter into any Hedging Agreement
      except for Hedging Agreements used solely as a part of its normal business
      operations as a risk management strategy and/or hedge against changes resulting
      from market operations in accordance with its customary policies and not as
      a
      means to speculate for investment purposes on trends and shifts in financial
      or
      commodities markets.

    

    11.4  Restricted
      Payments; Subordinated Debt.
      Not,
      and not permit any other Affiliated Party to, (a) make any distribution to
      any holders of its Capital Securities or of the Junior Capital, (b) repay,
      prepay, defease, purchase or redeem any of its Capital Securities or Junior
      Capital, (c) pay any management fees or similar fees to any of its
      equityholders, or (d) set aside funds for any of the foregoing.
      Notwithstanding the foregoing, (i) any Subsidiary may pay dividends or make
      other distributions to the Company or to a Subsidiary, provided that no domestic
      Subsidiaries shall pay dividends or make other distributions to any foreign
      Subsidiaries in excess of $10,000,000 in the aggregate amount during any Fiscal
      Year and no Guarantor shall pay dividends or make other distributions to any
      Subsidiary except Subsidiaries which are also Guarantors, (ii) so long as
      no Event of Default or Unmatured Event of Default exists or would result
      therefrom, the Company may make, pay, declare or authorize any dividend, payment
      or other distribution in respect of any class of its Capital Securities or
      any
      dividend, payment or distribution in connection with the redemption, purchase,
      retirement or other acquisition, directly or indirectly, of any shares of its
      Capital Securities, to the extent in each case payable solely in shares of
      Capital Securities of the Company, (iii) the Company may make, pay, declare
      or authorize any dividend, payment or other distribution in respect of any
      class
      of its Capital Securities or any dividend, payment or distribution in connection
      with the redemption, purchase, retirement or other acquisition, directly or
      indirectly, of any shares of its Capital Securities, provided, however, that
      immediately before and after giving effect to such dividend, payment or other
      distribution, no Event of Default or Unmatured Event of Default shall exist
      or
      shall have occurred and be continuing and that the Company, both before and
      after giving effect (on a pro
      forma
      basis)
      to the payment of such dividends or distributions shall be in compliance with
      the financial covenants set forth in Section 11.12 of this Agreement,
      (iv) the Company may prepay, purchase, redeem or defease Subordinated Debt
      with the proceeds of a New Capital Offering, in each case issued in accordance
      with the terms of this Agreement, provided that no Unmatured Event of Default
      or
      Event of Default has occurred and is continuing, and (v) the Company may
      make any payment of regularly scheduled interest or of principal at maturity
      under any of the Trust Preferred Securities, if the Company has provided not
      less than five (5) Business Days prior written notice to the Administrative
      Agent of its intent to make such payment, accompanied by a certification (which
      is true and correct when given) that both before and after giving effect to
      such
      payment (and taking into account the making thereof), no Unmatured Event of
      Default or Event of Default has occurred and is continuing (or will occur as
      of
      the last day of the next succeeding reporting period) and that such payment
      would be permitted under the terms of this Agreement.

     

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    11.5  Mergers,
      Consolidations, Acquisitions, Sales.
      Not,
      and not permit any other Affiliated Party to, (a) be a party to any merger
      or consolidation, or purchase or otherwise acquire all or substantially all
      of
      the assets or any Capital Securities of any class of, or any partnership or
      joint venture interest in, any other Person, (b) sell, transfer, convey or
      lease all or any substantial part of its assets or Capital Securities (including
      the sale of Capital Securities of any Subsidiary) except for sales of inventory
      in the ordinary course of business, or (c) sell or assign with or without
      recourse any receivables, except for (i) any such merger, consolidation,
      sale, transfer, conveyance, lease or assignment of or by any Subsidiary into
      the
      Company or into any domestic Subsidiary, provided, however, that any merger
      or
      consolidation between a Guarantor and another Subsidiary shall only be permitted
      if the survivor of the merger remains subject to the obligations set forth
      in
      the Guaranty to which the Guarantor was originally subject; (ii) any such
      purchase or other acquisition by the Company or any Subsidiary of the assets
      or
      Capital Securities of any Subsidiary (provided, however, that the aggregate
      net
      book value of any assets transferred or sold by (A) the Guarantors to any
      other Subsidiaries shall not be in excess of $5,000,000 for any Fiscal Year
      and
      (B) the Company and any domestic Subsidiaries to any foreign Subsidiaries
      shall not be in excess of $10,000,000 for any Fiscal Year); (iii) sales and
      dispositions of assets (including the Capital Securities of Subsidiaries but
      excluding the Capital Securities of any Guarantor) for at least fair market
      value (as determined by the Board of Directors of the Company) so long as the
      net book value of all assets sold or otherwise disposed of in any Fiscal Year
      does not exceed 10% of the net book value of the Consolidated assets of the
      Affiliated Parties as of the last day of the preceding Fiscal Year, except
      to
      the extent the proceeds of such sales or dispositions are used to purchase
      comparable replacement assets within 180 days following the date of such sale
      or
      disposition (or if within 180 days following the date of such sale or
      disposition the Company has entered into a binding purchase order or contract
      for such purchase, within 360 days following the date of such sale or
      disposition); and (iv) any Acquisition by the Company or any domestic
      Subsidiary where:

    

    (A)
       the
      business or division acquired is for use, or the Person acquired is principally
      engaged, in the Gas Related Businesses engaged in by the Affiliated Parties
      on
      the Closing Date;

     

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    (B)
       immediately
      before and after giving effect to such Acquisition, no Event of Default or
      Unmatured Event of Default shall exist;

    

    (C) the
      aggregate consideration to be paid by the Affiliated Parties (including any
      Debt
      assumed or issued in connection therewith, the amount thereof to be calculated
      in accordance with GAAP) in connection with such Acquisition (or any series
      of
      related Acquisitions) is not more than $50,000,000 and shall not exceed
      $150,000,000 in total for all Acquisitions from September 15, 2005 until the
      scheduled Maturity Date, provided, however, that the limitations on such
      consideration specified under this clause shall not apply during such periods
      as
      the Company maintains senior unsecured debt ratings of BBB- and Baa3 or better
      from S&P and Moody’s, respectively, and provided, further, no Event of
      Default shall be deemed to occur or be continuing if the Company has paid more
      than $150,000,000 in consideration for Acquisitions during the period when
      the
      limitations contained in this clause (C) were lifted but subsequently
      re-imposed so long as the Company does not make any further Acquisitions while
      the limitations are re-imposed;

    

    (D) immediately
      after giving effect to such Acquisition, the Company is in pro
      forma
      compliance with all the financial ratios and restrictions set forth in Section
      11.12 ;

    

    (E) in
      the
      case of the Acquisition of any Person, the Board of Directors of such Person
      has
      approved such Acquisition;

    

    (F) reasonably
      prior to such Acquisition, the Administrative Agent shall have received complete
      executed or conformed copies of each material document, instrument and agreement
      to be executed in connection with such Acquisition together with all lien search
      reports and lien release letters and other documents as the Administrative
      Agent
      may require to evidence the termination of Liens on the assets or business
      to be
      acquired; and

    

    (G) not
      less
      than ten Business Days prior to such Acquisition, the Administrative Agent
      shall
      have received an acquisition summary with respect to the Person and/or business
      or division to be acquired, such summary to include a reasonably detailed
      description thereof (including financial information) and operating results
      (including financial statements for the most recent 12 month period for which
      they are available and as otherwise available), the terms and conditions,
      including economic terms, of the proposed Acquisition, and the Company’s
      calculation of pro
      forma
      net
      operating income relating thereto.

    

    11.6  Transactions
      with Affiliates.
      Not,
      and not permit any other Affiliated Party to, enter into, or cause, suffer
      or
      permit to exist, any transaction, arrangement or contract with any of its other
      Affiliates (other than the Affiliated Parties) which is on terms which are
      less
      favorable than are obtainable from any Person which is not one of its
      Affiliates.

    

    11.7  Inconsistent
      Agreements.
      Not,
      and not permit any other Affiliated Party to, enter into any agreement
      containing any provision which would (a) be violated or breached by the
      borrowing by the Company hereunder or by the performance by any Affiliated
      Party
      of any of its Obligations hereunder or under any other Loan Document, or
      (b) create or permit to exist or become effective any encumbrance or
      restriction on the ability of any Subsidiary (other than a Special Purpose
      Subsidiary in connection with a Permitted Securitization) to (i) pay
      dividends or make other distributions to the Company or any other Subsidiary,
      or
      pay any Debt owed to the Company or any other Subsidiary, (ii) make loans
      or advances to any Affiliated Party or (iii) transfer any of its assets or
      properties to any Affiliated Party, other than (A) customary restrictions
      and conditions contained in agreements relating to the sale of all or a
      substantial part of the assets of any Subsidiary pending such sale, provided
      that such restrictions and conditions apply only to the Subsidiary to be sold
      and such sale is permitted hereunder, (B) restrictions or conditions
      imposed by any agreement relating to purchase money Debt, Capital Leases, Junior
      Capital and other Debt permitted by this Agreement, (C) customary
      provisions in leases and other contracts restricting the assignment thereof,
      (D) Liens securing Debt otherwise permitted to be incurred under the
      provisions of Section 11.2 hereof that limit the right of the debtor to dispose
      of the assets subject to such Liens, (E) provisions with respect to the
      disposition or distribution of assets or property in joint venture agreements,
      asset sale agreements, stock sale agreements and other similar agreements
      entered into in the ordinary course of business and (F) restrictions on
      deposits (to the extent permitted hereunder) imposed by customers under
      contracts entered into in the ordinary course of business.

     

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    11.8  Business
      Activities; Issuance of Equity.
      Not,
      and not permit any other Affiliated Party to, engage in any line of business
      other than the businesses engaged in on the date hereof and businesses
      reasonably related and incidental thereto; and not permit any Subsidiary to
      issue any Capital Securities other than any issuance by a Subsidiary to the
      Company or another Subsidiary in accordance with Section 11.4, except to the
      extent such issuance would fit within the basket set forth for asset sales
      pursuant to Section 11.5(c)(iii) of this Agreement.

    

    11.9  Investments.
      Not,
      and not permit any other Affiliated Party to, make or permit to exist any
      Investment in any other Person, except the following:

    

    (a)  Investments
      by (i) the Company or any of its domestic Subsidiaries in any of the
      Company’s foreign Subsidiaries, provided that the aggregate amount of such
      Investments shall not be in excess of an amount equal to twenty percent (20%)
      of
      Consolidated Net Worth as of the Company’s most recent Fiscal Year end, tested
      as of the date the applicable Investment is made, (ii) the Company in any
      of its domestic Subsidiaries or (iii) any Subsidiary in any of its domestic
      Subsidiaries;

    

    (b)  Investments
      constituting Debt permitted by Section
      11.1
      or
      Hedging Agreements permitted by Section
      11.3;

    

    (c)  contingent
      liabilities constituting Debt permitted by Section
      11.1
      or Liens
      permitted by Section
      11.2;

    

    (d)  Cash
      Equivalent Investments;

    

    (e)  bank
      deposits in the ordinary course of business and cash deposits with gas suppliers
      of the Company, provided that the obligation to post such cash deposits arises
      under gas contracts entered into by the Company in the ordinary course of
      business and the amount of gas purchased pursuant to such contracts does not
      exceed the greater of (i) the requirements established by the applicable
      regulatory authorities (as in effect from time to time) with jurisdiction over
      the Company or (ii) ten (10) billion cubic feet;

     

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    (f)  Investments
      in securities of account debtors received pursuant to any plan of reorganization
      or similar arrangement upon the bankruptcy or insolvency of such account
      debtors;

    

    (g)  Investments
      to consummate Acquisitions permitted by Section
      11.5;

    

    (h)  Investments
      listed on Schedule
      11.9
      as of
      the Closing Date;

    

    (i)  joint
      ventures that are principally engaged in Gas Related Businesses, provided
      however, that the aggregate amount invested in such joint ventures shall not
      exceed an amount equal to twenty percent (20%) of Consolidated Net Worth as
      of
      the Company’s most recent Fiscal Year end, tested as of the date the applicable
      investment is made;

    

    (j)  any
      Investment in a Subsidiary (including any Special Purpose Subsidiary) from
      and
      after the date hereof consisting of (i) a disposition of specific accounts
      receivable pursuant to a Permitted Securitization and the resultant Debt issued
      by a Special Purpose Subsidiary as part of such Permitted Securitization, in
      each case to the extent constituting an Investment, and (ii) the repurchase
      or
      replacement from and after the date hereof of accounts receivable pursuant
      to
      any representation and warranty or clean-up call provision included in a
      Permitted Securitization; and

    

    (k)  other
      Investments not set forth above which are not, in the aggregate, in excess
      of
      $5,000,000;

    

    provided
      that
      (x) any Investment which when made complies with the requirements of the
      definition of the term “Cash
      Equivalent Investment”
may
      continue to be held notwithstanding that such Investment if made thereafter
      would not comply with such requirements; (y) no Investment otherwise
      permitted by clause (b), (c), (g), (i)  or (j) shall be permitted to
      be made if, immediately before or after giving effect thereto, any Event of
      Default or Unmatured Event of Default exists; and (z) in valuing any Investment
      for the purpose of applying the limitations set forth in this Section
      11.9
      (except
      as otherwise expressly provided herein), such Investment shall be taken at
      the
      original cost thereof, without allowance for any subsequent write-offs or
      appreciation or depreciation, but less any amount repaid or recovered on account
      of capital or principal.

    

    11.10  Restriction
      of Amendments to Certain Documents.
      Not
      amend or otherwise modify, or waive any rights under, any document relating
      to
      the Junior Capital or any Permitted Securitization if, in any case, such
      amendment, modification or waiver could be adverse to the interests of the
      Lenders or would reasonably be expected to have a Material Adverse
      Effect.

    

    11.11  Fiscal
      Year.
      Not
      change its Fiscal Year or that of any Affiliated Party.

     

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    11.12  Financial
      Covenants.

    

    11.12.1  Minimum
      Interest Coverage Ratio.
      Not
      permit the Interest Coverage Ratio for any period of four consecutive Fiscal
      Quarters ending on the last day of a Fiscal Quarter to be less than as
      follows:

    

    
      	
              Period

            	
              Interest
                Coverage Ratio

            
	
              Each
                Fiscal Quarter through September 30, 2007

            	
              1.25
                to 1.00

            
	
              Each
                Fiscal Quarter thereafter

            	
              1.30
                to 1.00

            

    

     

    11.12.2  Maximum
      Leverage Ratio.
      Not
      permit, as of the last day of any Fiscal Quarter, the ratio of
      (a) Consolidated Adjusted Funded Debt to (b) Consolidated Adjusted
      Total Capitalization to be more than sixty-five percent (65%).

    

    11.12.3  Minimum
      Consolidated Net Worth.
      Not
      permit the Consolidated Net Worth, as of the last day of any Fiscal Quarter,
      to
      be less than an amount equal to (a) the Net Worth Base Amount, plus
      (b) the New Capital Adjustment through the date of
      determination.

    

    Net
      Worth Base Amount
      means
      $225,000,000 plus 50% of Consolidated Net Income (if positive) earned during
      each Fiscal Year, commencing with Fiscal Year 2005, provided, however, that
      for
      Fiscal Year 2005, Consolidated Net Income for purposes of this Section 11.12.3
      shall be calculated to include only the last three fiscal quarters of such
      Fiscal Year.

    

    11.13  Cancellation
      of Debt; More Favorable Terms.

    

    (a)  Not,
      and
      not permit any other Affiliated Party to, cancel any claim or debt owing to
      it
      (except from another Affiliated Party), except for reasonable consideration
      or
      in the ordinary course of business, and except for the cancellation of debts
      or
      claims not to exceed $10,000,000 in any Fiscal Year.

    

    (b)  Not
      enter
      into any amendment or other modification of the senior notes set forth on
Schedule
      11.1
      or any
      additional senior notes issued on a pari
      passu
      basis
      with the Obligations from time to time or any related loan documentation for
      such senior notes or any refinancing of such senior notes if such amendment
      or
      modification shall include, or be issued pursuant to any amendment or other
      agreement which includes, (i) financial covenants (other than
      incurrence-type covenants which permit the Affiliated Parties to take specified
      actions only if certain financial tests are met) or event of default provisions
      (other than any event of default provisions which are comparable to Sections
      13.1.1,
      13.1.4
      and
13.1.5
      hereof)
      which are more restrictive than or substantially different from the financial
      covenants and default provisions set forth in this Agreement unless, prior
      to
      entering into any such amendment, the Company notifies the Administrative Agent
      and the Lenders of its intent to enter into any such amendment and, if the
      Required Lenders determine that some or all of the financial covenants or
      default provisions set forth in such amendment are more favorable to the lender
      thereunder than the covenants or default provisions set forth in this Agreement
      (“More
      Favorable Terms”),
      and
      that the Required Lenders desire that this Agreement be further amended to
      incorporate the More Favorable Terms, the Company shall, within thirty days
      following receipt from Administrative Agent of notice that the Required Lenders
      have made the foregoing determination, enter into an amendment to this Agreement
      incorporating, on terms and conditions acceptable to the Required Lenders,
      the
      More Favorable Terms, or (ii) a covenant or agreement requiring any of the
      Subsidiaries of the Company to guaranty the senior notes described above or
      any
      refinancing of such senior notes, unless prior to or simultaneously with the
      grant of such guaranty, such Subsidiaries shall execute and deliver a Guaranty
      for the benefit of the Administrative Agent and the Lenders, together with
      such
      resolutions, opinions, certificates and other documents as the Administrative
      Agent may reasonably request, each in form and substance reasonably acceptable
      to the Administrative Agent.

     

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      	SECTION
              12.  	
              CONDITIONS
                OF LENDING.

            

    

    

    12.1  Conditions
      to Effectiveness.
      The
      effectiveness of this Agreement is subject to the conditions precedent that
      the
      Administrative Agent shall have received all of the following, each duly
      executed by the appropriate Person, dated the Closing Date (or such earlier
      date
      as shall be satisfactory to the Administrative Agent) and in form and substance
      satisfactory to the Administrative Agent (and the date on which all such
      conditions precedent have been satisfied or waived in writing by the
      Administrative Agent and the Lenders is called the “Closing
      Date”):

    

    12.1.1  Notes.
      A Note
      for each Lender.

    

    12.1.2  Authorization
      Documents.
      For
      each Affiliated Party executing and delivering Loan Documents, such Person’s
      (a) charter (or similar formation document), certified by the appropriate
      governmental authority; (b) good standing certificates in its state of
      incorporation (or formation) and in each other state in which it is qualified
      as
      a foreign corporation and which is requested by the Administrative Agent;
      (c) bylaws (or similar governing document); (d) resolutions of its
      board of directors (or similar governing body) approving and authorizing such
      Person’s execution, delivery and performance of the Loan Documents to which it
      is party and the transactions contemplated thereby; and (e) signature and
      incumbency certificates of its officers executing any of the Loan Documents
      (it
      being understood that the Administrative Agent and each Lender may conclusively
      rely on each such certificate until formally advised by a like certificate
      of
      any changes therein), all certified by such Person’s secretary or an assistant
      secretary (or similar officer) as being in full force and effect without
      modification.

    

    12.1.3  Consents,
      etc.
      Certified copies of all documents evidencing any necessary corporate or
      partnership action, consents and governmental approvals (if any) required for
      the execution, delivery and performance by the Affiliated Parties of the
      documents referred to in this Section 12.

    

    12.1.4  Opinions
      of Counsel.
      Opinions of counsel for each Affiliated Party party to the Loan
      Documents.

     

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    12.1.5  Payment
      of Fees.
      Evidence of payment by the Company of all accrued and unpaid fees, costs and
      expenses of the Administrative Agent, to the extent then due and payable,
      including all Attorney Costs of the Administrative Agent to the extent
      invoiced prior to the Closing Date, plus such additional amounts of Attorney
      Costs as shall constitute the Administrative Agent’s reasonable estimate of
      Attorney Costs incurred or to be incurred by the Administrative Agent through
      the funding proceedings (provided that such estimate shall not thereafter
      preclude final settling of accounts between the Company and the Administrative
      Agent).

    

    12.1.6  Income
      Statements, Balance Sheets and Cash Flow Statements.
      Projected income statements, balance sheets and cash flow statements prepared
      by
      the Company and giving effect to the transactions contemplated by this Agreement
      and the use of proceeds therefrom, in each case in form and substance acceptable
      to the Administrative Agent.

    

    12.1.7  Financial
      Statements.
      Audited
      Consolidated financial statements for the Company and its Subsidiaries for
      Fiscal Years 2003, 2004 and 2005 and unaudited interim Consolidated financial
      statements for the Company and its Subsidiaries for the Fiscal Quarters ended
      on
      March 31, 2006 and June 30, 2006, in each case in form and substance acceptable
      to the Administrative Agent.

    

    12.1.8  Search
      Results; Lien Terminations.
      Certified copies of Uniform Commercial Code search reports from the Secretary
      of
      State of Michigan dated a date reasonably near to the Closing Date, listing
      all
      effective financing statements which name the Company (under its present name)
      as debtor, together with (a) copies of such financing statements, and
      (b) such Uniform Commercial Code termination statements as the
      Administrative Agent may reasonably request with respect to Liens other than
      Permitted Liens.

    

    12.1.9  Closing
      Certificate.
      A
      certificate executed by a Senior Officer on behalf of the Company certifying
      as
      to the matters set forth in Sections 12.2.3(a) and (b).

    

    12.1.10  Other.
      Such
      other documents as the Administrative Agent or any Lender may reasonably
      request.

    

    12.2  Conditions
      to Funding.
      The
      obligation of each Lender to make its Loan on the Funding Date is subject to
      the
      further conditions precedent that (a) the Closing Date shall have occurred,
      (b)
      the statements set forth in Sections 12.2.3(a) and (b) shall be true and correct
      on the Funding Date, both before and after giving effect to the making of the
      Loans, and (c) the Administrative Agent shall have received the following,
      each
      duly executed by the appropriate Person, dated the date specified below and
      otherwise in form and substance satisfactory to the Administrative Agent (and
      the date on which all such conditions precedent have been satisfied or waived
      in
      writing by the Administrative Agent and the Lenders is called the “Funding
      Date”):

    

    12.2.1  Notice
      of Borrowing.
      A
      Notice of Borrowing dated and otherwise in accordance with Section
      2.2.2.

     

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    12.2.2  Letter
      of Direction.
      A
      letter of direction containing funds-flow information with respect to the
      proceeds of the Loans on the Funding Date.

    

    12.2.3  Certificate.
      A
      certificate dated the Funding Date executed by a Senior Officer on behalf of
      the
      Company certifying that, both before and after giving effect to the making
      of
      the Loans, the following statements shall be true and correct (it being
      understood that the request by the Company for the making of the Loans shall
      be
      deemed to constitute a representation and warranty by the Company that the
      conditions precedent set forth in this Section 12.2.3 will be satisfied at
      the
      time of the making of the Loans), together with such other documents as the
      Administrative Agent or any Lender may reasonably request in support
      thereof:

    

    (a)  the
      representations and warranties of each Affiliated Party set forth in this
      Agreement and the other Loan Documents are true and correct in all respects
      with
      the same effect as if made on the Funding Date (except to the extent stated
      to
      relate to a specific earlier date, in which case such representations and
      warranties shall be true and correct as of such earlier date) and except for
      changes therein occurring in the ordinary course of business and which do not
      violate this Agreement; and

    

    (b)  no
      Event
      of Default or Unmatured Event of Default has occurred and is
      continuing.

    

    

    
      	SECTION
              13.  	
              EVENTS
                OF DEFAULT AND THEIR EFFECT.

            

    

    

    13.1  Events
      of Default.
      Each of
      the following shall constitute an Event of Default under this
      Agreement:

    

    13.1.1  Non-Payment
      of the Loans, etc.
      Default
      in the payment when due of the principal of any Loan; or default, and
      continuance thereof for five days, in the payment when due of any interest,
      fee
      or other amount payable by the Company hereunder or under any other Loan
      Document.

    

    13.1.2  Default
      on
      Other
      Debt.
      Any
      default shall occur under the terms applicable to any Debt of any Affiliated
      Party (other than the Obligations) in an aggregate amount (for all such Debt
      so
      affected and including undrawn committed or available amounts and amounts owing
      to all creditors under any combined or syndicated credit arrangement) exceeding
      $10,000,000 and shall continue beyond any applicable notice, grace or cure
      period, and such default shall (a) consist of the failure to pay such Debt
      when due, whether by acceleration or otherwise, or (b) accelerate the
      maturity of such Debt or permit the holder or holders thereof, or any trustee
      or
      agent for such holder or holders, to cause such Debt to become due and payable
      (or require any Affiliated Party to purchase or redeem such Debt or post cash
      collateral in respect thereof) prior to its expressed maturity.

    

    13.1.3  Bankruptcy,
      Insolvency, etc.
      Any
      Affiliated Party becomes insolvent or generally fails to pay, or admits in
      writing its inability or refusal to pay, debts as they become due; or any
      Affiliated Party applies for, consents to, or acquiesces in the appointment
      of a
      trustee, receiver or other custodian for such Affiliated Party or any property
      thereof, or makes a general assignment for the benefit of creditors; or, in
      the
      absence of such application, consent or acquiescence, a trustee, receiver or
      other custodian is appointed for any Affiliated Party or for a substantial
      part
      of the property of any thereof and is not discharged within 60 days; or any
      bankruptcy, reorganization, debt arrangement, or other case or proceeding under
      any bankruptcy or insolvency law, or any dissolution or liquidation proceeding,
      is commenced in respect of any Affiliated Party, and if such case or proceeding
      is not commenced by such Affiliated Party, it is consented to or acquiesced
      in
      by such Affiliated Party, or remains for 60 days undismissed; or any Affiliated
      Party takes any action to authorize, or in furtherance of, any of the
      foregoing.

     

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    13.1.4  Non-Compliance
      with
      Loan
      Documents.
      (a) Failure by any Affiliated Party to comply with or to perform any
      covenant set forth in Section 10.1.5, 10.5 or 10.9 or Section 11; or
      (b) failure by any Affiliated Party to comply with or to perform any other
      provision of this Agreement or any other Loan Document (and not constituting
      an
      Event of Default under any other provision of this Section 13) and continuance
      of such failure described in this clause (b)  for 30 days following the
      earlier to occur of (i) the obtaining of actual knowledge by the Company or
      any Subsidiary of such default or (ii) the receipt of written notice by any
      senior officer of the Company of such default; provided, in each case that
      an
      Event of Default arising from a breach of any of Sections 10.1.1 through 10.1.4
      or 10.1.9 shall be deemed to have been cured upon delivery of the required
      item;
      and provided, further, that the Event of Default arising solely due to a breach
      of Section 10.1.5(a) shall be deemed cured upon the earlier of (A) the
      giving of notice as required by that Section and (B) the date upon which
      the Event of Default or Unmatured Event of Default giving rise to the notice
      obligation has been cured or waived.

    

    13.1.5  Representations;
      Warranties.
      Any
      representation or warranty made by any Affiliated Party herein or in any other
      Loan Document is breached or is false or misleading in any material respect,
      or
      any schedule, certificate, financial statement, report, notice or other writing
      furnished by any Affiliated Party to the Administrative Agent or any Lender
      in
      connection herewith is false or misleading in any material respect on the date
      as of which the facts therein set forth are stated or certified.

    

    13.1.6  Pension
      Plans.
      (a) Any Person institutes steps to terminate a Pension Plan if as a result
      of such termination the Company or any member of the Controlled Group could
      be
      required to make a contribution to such Pension Plan, or could incur a liability
      or obligation to such Pension Plan, in excess of $5,000,000; (b) a
      contribution failure occurs with respect to any Pension Plan sufficient to
      give
      rise to a Lien under Section 302(f) of ERISA; or (c) there shall occur any
      withdrawal or partial withdrawal from a Multiemployer Pension Plan and the
      withdrawal liability (without unaccrued interest) to Multiemployer Pension
      Plans
      as a result of such withdrawal (including any outstanding withdrawal liability
      that the Company or any member of the Controlled Group has incurred on the
      date
      of such withdrawal) exceeds $5,000,000.

    

    13.1.7  Judgments.
      One or
      more final judgments which exceed an aggregate of $5,000,000 shall be rendered
      against any Affiliated Party and shall not have been paid, discharged or vacated
      or had execution thereof stayed pending appeal within 30 days after entry or
      filing of such judgment(s).

     

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    13.1.8  Invalidity
      of Subordination Provisions, etc.
      (a) Any subordination provision in any document or instrument governing
      Subordinated Debt aggregating $5,000,000 or more, or any subordination provision
      in any guaranty by any Subsidiary of any Subordinated Debt aggregating
      $5,000,000 or more, shall cease to be in full force and effect, or (b) any
      Affiliated Party or any other Person (including the holder of any applicable
      Subordinated Debt) shall contest in any manner the validity, binding nature
      or
      enforceability of any such provision.

    

    13.1.9  Change
      of Control.
      (a) Any
      Person or group of Persons (within the meaning of Section 13 or 14 of the
      Securities Exchange Act of 1934) shall acquire beneficial ownership (within
      the
      meaning of Rule 13d-3 promulgated under such Act) of more than 35% of the
      outstanding securities (on a fully diluted basis and taking into account any
      securities or contract rights exercisable, exchangeable or convertible into
      equity securities) of the Company having voting rights in the election of
      directors under normal circumstances; (b) a majority of the members of the
      Board of Directors of the Company shall cease to be Continuing Members;
      (c) any “change of control” shall occur under any documents or agreements
      relating to the Junior Capital; or (d) the Company shall no longer hold,
      either directly or indirectly, 100% of the Capital Securities of any Guarantor.
      For purposes of the foregoing clause (b), “Continuing
      Member”
means
      a
      member of the Board of Directors of the Company who either (i) was a member
      of the Company’s Board of Directors on September 14, 2005 and has been such
      continuously thereafter or (ii) became a member of such Board of Directors
      after September 14, 2005 and whose election or nomination for election was
      approved by a vote of the majority of the Continuing Members then members of
      the
      Company’s Board of Directors.

    

    13.2  Effect
      of Event of Default.
      If any
      Event of Default described in Section 13.1.3 shall occur in respect of the
      Company, the Commitments shall immediately terminate (if not previously
      terminated) and all Obligations hereunder shall become immediately due and
      payable, all without presentment, demand, protest or notice of any kind; and,
      if
      any other Event of Default shall occur and be continuing, the Administrative
      Agent may (and, upon the written request of the Required Lenders shall) declare
      the Commitments to be terminated in whole or in part and/or declare all or
      any
      part of the Obligations to be due and payable, whereupon the Commitments shall
      immediately terminate (or be reduced, as applicable) and/or the Obligations
      hereunder shall become immediately due and payable (in whole or in part, as
      applicable), all without presentment, demand, protest or notice of any
      kind.

    

    

    
      	SECTION
              14.  	
              THE
                ADMINISTRATIVE AGENT.

            

    

    

    14.1  Appointment
      and Authorization.
      Each
      Lender hereby irrevocably (subject to Section 14.9) appoints, designates and
      authorizes the Administrative Agent to take such action on its behalf under
      the
      provisions of this Agreement and each other Loan Document and to exercise such
      powers and perform such duties as are expressly delegated to it by the terms
      of
      this Agreement or any other Loan Document, together with such powers as are
      reasonably incidental thereto. Notwithstanding any provision to the contrary
      contained elsewhere in this Agreement or in any other Loan Document, the
      Administrative Agent shall not have any duty or responsibility except those
      expressly set forth herein, nor shall the Administrative Agent have or be deemed
      to have any fiduciary relationship with any Lender or participant, and no
      implied covenants, functions, responsibilities, duties, obligations or
      liabilities shall be read into this Agreement or any other Loan Document or
      otherwise exist against the Administrative Agent. Without limiting the
      generality of the foregoing sentence, the use of the term “agent” herein and in
      other Loan Documents with reference to the Administrative Agent is not intended
      to connote any fiduciary or other implied (or express) obligations arising
      under
      agency doctrine of any applicable law. Instead, such term is used merely as
      a
      matter of market custom, and is intended to create or reflect only an
      administrative relationship between independent contracting
      parties.

     

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    14.2  Delegation
      of Duties.
      The
      Administrative Agent may execute any of its duties under this Agreement or
      any
      other Loan Document by or through agents, employees or attorneys-in-fact and
      shall be entitled to advice of counsel and other consultants or experts
      concerning all matters pertaining to such duties. The Administrative Agent
      shall
      not be responsible for the negligence or misconduct of any agent or
      attorney-in-fact that it selects in the absence of gross negligence or willful
      misconduct.

    

    14.3  Exculpation
      of Administrative Agent.
      Neither
      the Administrative Agent nor any of its directors, officers, employees or agents
      shall (a) be liable for any action taken or omitted to be taken by any of
      them under or in connection with this Agreement or any other Loan Document
      or
      the transactions contemplated hereby (except to the extent resulting from its
      own gross negligence or willful misconduct in connection with its duties
      expressly set forth herein as determined by a final, nonappealable judgment
      by a
      court of competent jurisdiction), or (b) be responsible in any manner to
      any Lender or participant for any recital, statement, representation or warranty
      made by any Affiliated Party or any Affiliate of the Company, or any officer
      thereof, contained in this Agreement or in any other Loan Document, or in any
      certificate, report, statement or other document referred to or provided for
      in,
      or received by the Administrative Agent under or in connection with, this
      Agreement or any other Loan Document, or the validity, effectiveness,
      genuineness, enforceability or sufficiency of this Agreement or any other Loan
      Document (or the creation, perfection or priority of any Lien or security
      interest therein), or for any failure of the Company or any other party to
      any
      Loan Document to perform its Obligations hereunder or thereunder. The
      Administrative Agent shall not be under any obligation to any Lender to
      ascertain or to inquire as to the observance or performance of any of the
      agreements contained in, or conditions of, this Agreement or any other Loan
      Document, or to inspect the properties, books or records of the Company or
      any
      of the Company’s Subsidiaries or Affiliates.

    

    14.4  Reliance
      by Administrative Agent.
      The
      Administrative Agent shall be entitled to rely, and shall be fully protected
      in
      relying, upon any writing, communication, signature, resolution, representation,
      notice, consent, certificate, electronic mail message, affidavit, letter,
      telegram, facsimile, telex or telephone message, statement or other document
      or
      conversation believed by it to be genuine and correct and to have been signed,
      sent or made by the proper Person or Persons, and upon advice and statements
      of
      legal counsel (including counsel to the Company), independent accountants and
      other experts selected by the Administrative Agent. The Administrative Agent
      shall be fully justified in failing or refusing to take any action under this
      Agreement or any other Loan Document unless it shall first receive such advice
      or concurrence of the Required Lenders (or all Lenders if such action
      specifically requires the approval of all Lenders under this Agreement) as
      it
      deems appropriate and, if it so requests, confirmation from the Lenders of
      their
      obligation to indemnify the Administrative Agent against any and all liability
      and expense which may be incurred by it by reason of taking or continuing to
      take any such action. The Administrative Agent shall in all cases be fully
      protected in acting, or in refraining from acting, under this Agreement or
      any
      other Loan Document in accordance with a request or consent of the Required
      Lenders (or all Lenders if such action specifically requires the approval of
      all
      Lenders under this Agreement), and such request and any action taken or failure
      to act pursuant thereto shall be binding upon each Lender. For purposes of
      determining compliance with the conditions specified in Section 12.1, each
      Lender that has signed this Agreement shall be deemed to have consented to,
      approved or accepted, or to be satisfied with, each document or other matter
      required thereunder to be consented to or approved by, or acceptable or
      satisfactory to, a Lender unless the Administrative Agent shall have received
      written notice from such Lender prior to the proposed Closing Date specifying
      its objection thereto.

     

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    14.5  Notice
      of Default.
      The
      Administrative Agent shall not be deemed to have knowledge or notice of the
      occurrence of any Event of Default or Unmatured Event of Default, except
      defaults in the payment of principal, interest and fees required to be paid
      to
      the Administrative Agent for the account of the Lenders, unless the
      Administrative Agent shall have received written notice from a Lender or the
      Company referring to this Agreement, describing such Event of Default or
      Unmatured Event of Default and stating that such notice is a “notice of
      default.” The Administrative Agent will notify the Lenders of its receipt of any
      such notice. The Administrative Agent shall take such action with respect to
      such Event of Default or Unmatured Event of Default as may be requested by
      the
      Required Lenders in accordance with Section 13; provided that unless and until
      the Administrative Agent has received any such request, the Administrative
      Agent
      may (but shall not be obligated to) take such action, or refrain from taking
      such action, with respect to such Event of Default or Unmatured Event of Default
      as it shall deem advisable or in the best interest of the Lenders.

    

    14.6  Credit
      Decision.
      Each
      Lender acknowledges that the Administrative Agent has not made any
      representation or warranty to it, and that no act by the Administrative Agent
      hereafter taken, including any consent and acceptance of any assignment or
      any
      review of the affairs of the Affiliated Parties, shall be deemed to constitute
      any representation or warranty by the Administrative Agent to any Lender as
      to
      any matter, including whether the Administrative Agent has disclosed material
      information in its possession. Each Lender represents to the Administrative
      Agent that it has, independently and without reliance upon the Administrative
      Agent and based on such documents and information as it has deemed appropriate,
      made its own appraisal of and investigation into the business, prospects,
      operations, property, financial and other condition and creditworthiness of
      the
      Affiliated Parties, and made its own decision to enter into this Agreement
      and
      to extend credit to the Company hereunder. Each Lender also represents that
      it
      will, independently and without reliance upon the Administrative Agent and
      based
      on such documents and information as it shall deem appropriate at the time,
      continue to make its own credit analysis, appraisals and decisions in taking
      or
      not taking action under this Agreement and the other Loan Documents, and to
      make
      such investigations as it deems necessary to inform itself as to the business,
      prospects, operations, property, financial and other condition and
      creditworthiness of the Company. Except for notices, reports and other documents
      expressly herein required to be furnished to the Lenders by the Administrative
      Agent, the Administrative Agent shall not have any duty or responsibility to
      provide any Lender with any credit or other information concerning the business,
      prospects, operations, property, financial or other condition or
      creditworthiness of the Company which may come into the possession of the
      Administrative Agent.

     

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    14.7  Indemnification.
      Whether
      or not the transactions contemplated hereby are consummated, each Lender shall
      indemnify upon demand the Administrative Agent and its directors, officers,
      employees and agents (to the extent not reimbursed by or on behalf of the
      Company and without limiting the obligation of the Company to do so), according
      to its applicable Pro Rata Share, from and against any and all Indemnified
      Liabilities (as hereinafter defined); provided that no Lender shall be liable
      for any payment to any such Person of any portion of the Indemnified Liabilities
      to the extent determined by a final, nonappealable judgment by a court of
      competent jurisdiction to have resulted from the applicable Person’s own gross
      negligence or willful misconduct. No action taken in accordance with the
      directions of the Required Lenders (or all Lenders for actions specifically
      requiring the consent of all Lenders under this Agreement) shall be deemed
      to
      constitute gross negligence or willful misconduct for purposes of this Section.
      Without limitation of the foregoing, each Lender shall reimburse the
      Administrative Agent upon demand for its ratable share of any costs or
      out-of-pocket expenses (including Attorney Costs and Taxes) incurred by the
      Administrative Agent in connection with the preparation, execution, delivery,
      administration, modification, amendment or enforcement (whether through
      negotiations, legal proceedings or otherwise) of, or legal advice in respect
      of
      rights or responsibilities under, this Agreement, any other Loan Document,
      or
      any document contemplated by or referred to herein, to the extent that the
      Administrative Agent is not reimbursed for such expenses by or on behalf of
      the
      Company. The undertaking in this Section shall survive repayment of the Loans,
      cancellation of the Notes, termination of this Agreement and the resignation
      or
      replacement of the Administrative Agent.

    

    14.8  Administrative
      Agent in Individual Capacity.
      UBOC
      and its Affiliates may make loans to, issue letters of credit for the account
      of, accept deposits from, acquire equity interests in and generally engage
      in
      any kind of banking, trust, financial advisory, underwriting or other business
      with the Affiliated Parties and Affiliates as though UBOC were not the
      Administrative Agent hereunder and without notice to or consent of any Lender.
      Each Lender acknowledges that, pursuant to such activities, UBOC or its
      Affiliates may receive information regarding the Company or its Affiliates
      (including information that may be subject to confidentiality obligations in
      favor of the Company or such Affiliate) and acknowledges that the Administrative
      Agent shall be under no obligation to provide such information to the Lenders.
      With respect to their Loans (if any), UBOC and its Affiliates shall have the
      same rights and powers under this Agreement as any other Lender and may exercise
      the same as though UBOC were not the Administrative Agent, and the terms
“Lender” and “Lenders” include UBOC and its Affiliates, to the extent
      applicable, in their individual capacities.

    

    14.9  Successor
      Administrative Agent.
      The
      Administrative Agent may resign as Administrative Agent upon 30 days’ notice to
      the Lenders. If the Administrative Agent resigns under this Agreement, the
      Required Lenders shall, with (so long as no Event of Default exists) the consent
      of the Company (which shall not be unreasonably withheld or delayed), appoint
      from among the Lenders a successor agent for the Lenders. If no successor 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 the Company, a successor agent from among the Lenders.
      Upon
      the acceptance of its appointment as successor agent hereunder, such successor
      agent shall succeed to all the rights, powers and duties of the retiring
      Administrative Agent and the term “Administrative Agent” shall mean such
      successor 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 Section 14 and Sections 15.5 and 15.16 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. If no successor agent has accepted
      appointment as Administrative Agent by the date which is 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 Required Lenders appoint a successor
      agent as provided for above.

     

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    14.10  Administrative
      Agent May File Proofs of Claim.
      In case
      of the pendency of any receivership, insolvency, liquidation, bankruptcy,
      reorganization, arrangement, adjustment, composition or other judicial
      proceeding relative to any Affiliated Party, the Administrative Agent
      (irrespective of whether the principal of any Loan shall then be due and payable
      as herein expressed or by declaration or otherwise and irrespective of whether
      the Administrative Agent shall have made any demand on the Company) shall be
      entitled and empowered, by intervention in such proceeding or
      otherwise:

    

    (a)  to
      file
      and prove a claim for the whole amount of the principal and interest owing
      and
      unpaid in respect of the Loans, and all other Obligations that are owing and
      unpaid and to file such other documents as may be necessary or advisable in
      order to have the claims of the Lenders and the Administrative Agent (including
      any claim for the reasonable compensation, expenses, disbursements and advances
      of the Lenders and the Administrative Agent and their respective agents and
      counsel and all other amounts due the Lenders and the Administrative Agent
      under
Sections
      5,
      15.5
      and
15.16)
      allowed
      in such judicial proceedings; and

    

    (b)  to
      collect and receive any monies 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
      Lender to make such payments to the Administrative Agent and, in the event
      that
      the Administrative Agent shall consent to the making of such payments directly
      to the Lenders, to pay to the Administrative Agent any amount due for the
      reasonable compensation, expenses, disbursements and advances of the
      Administrative Agent and its agents and counsel, and any other amounts due
      the
      Administrative Agent under Sections 5,
      15.5
      and
15.16.

    

    Nothing
      contained herein shall be deemed to authorize the Administrative Agent to
      authorize or consent to or accept or adopt on behalf of any Lender any plan
      of
      reorganization, arrangement, adjustment or composition affecting the Obligations
      or the rights of any Lender or to authorize the Administrative Agent to vote
      in
      respect of the claim of any Lender in any such proceeding.

     

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      	SECTION
              15.  	
              GENERAL.

            

    

    

    15.1  Waiver;
      Amendments.
      No
      delay on the part of the Administrative Agent or any Lender in the exercise
      of
      any right, power or remedy shall operate as a waiver thereof, nor shall any
      single or partial exercise by any of them of any right, power or remedy preclude
      other or further exercise thereof, or the exercise of any other right, power
      or
      remedy. No amendment, other modification or waiver of, or consent with respect
      to, any provision of this Agreement or any other Loan Document shall in any
      event be effective unless the same shall be in writing and acknowledged by
      Lenders having aggregate Pro Rata Shares of not less than the aggregate Pro
      Rata
      Shares expressly designated herein with respect thereto or, in the absence
      of
      such designation as to any provision of this Agreement, by the Required Lenders,
      and then any such amendment, modification, waiver or consent shall be effective
      only in the specific instance and for the specific purpose for which given.
      No
      amendment, modification, waiver or consent shall (a) extend or increase the
      Commitment of any Lender without the written consent of such Lender,
      (b) extend the date scheduled for payment of any principal of or interest
      on the Loans or any fees payable hereunder without the written consent of each
      Lender directly affected thereby, (c) reduce the principal amount of any
      Loan, the rate of interest thereon or any fees payable hereunder, without the
      consent of each Lender directly affected thereby, or (d) release any party
      from its obligations under a Guaranty (except in connection with the permitted
      sale of the applicable Guarantor, in which case the Administrative Agent may
      release the applicable Guarantor), change the definition of Required Lenders,
      change any provision of this Section 15.1 or reduce the aggregate Pro Rata
      Share
      required to effect an amendment, other modification, waiver or consent, without,
      in each case, the written consent of all Lenders. No provision of Section 14
      or
      any other provision of this Agreement affecting the Administrative Agent in
      its
      capacity as such shall be amended, modified or waived without the consent of
      the
      Administrative Agent.

    

    15.2  Confirmations.
      The
      Company and each holder of a Note agree from time to time, upon written request
      received by it from the other, to confirm to the other in writing (with a copy
      of each such confirmation to the Administrative Agent) the aggregate unpaid
      principal amount of the Loans then outstanding under such Note.

    

    15.3  Notices.
      Except
      as otherwise provided in Section 2.2.3, all notices hereunder shall be in
      writing (including facsimile transmission) and shall be sent to the applicable
      party at its address shown on Annex B or at such other address as such
      party may, by written notice received by the other parties, have designated
      as
      its address for such purpose. Notices sent by facsimile transmission shall
      be
      deemed to have been given when sent; notices sent by mail shall be deemed to
      have been given three Business Days after the date when sent by registered
      or
      certified mail, postage prepaid; and notices sent by hand delivery or overnight
      courier service shall be deemed to have been given when received. For purposes
      of Section 2.2.3, the Administrative Agent shall be entitled to rely on
      telephonic instructions from any Person that the Administrative Agent in good
      faith believes is an authorized officer or employee of the Company, and the
      Company shall hold the Administrative Agent and each other Lender harmless
      from
      any loss, cost or expense resulting from any such reliance.

     

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    15.4  Computations.
      Where
      the character or amount of any asset or liability or item of income or expense
      is required to be determined, or any consolidation or other accounting
      computation is required to be made, for the purpose of this Agreement, such
      determination or calculation shall, to the extent applicable and except as
      otherwise specified in this Agreement, be made in accordance with GAAP,
      consistently applied; provided that if the Company notifies the Administrative
      Agent that the Company wishes to amend any covenant in Section 10 or 11 (or
      any related definition) to eliminate or to take into account the effect of
      any
      change in GAAP on the operation of such covenant (or if the Administrative
      Agent
      notifies the Company that the Required Lenders wish to amend Section 10 or
      11 (or any related definition) for such purpose), then the Company’s compliance
      with such covenant shall be determined on the basis of GAAP in effect
      immediately before the relevant change in GAAP became effective, until either
      such notice is withdrawn or such covenant (or related definition) is amended
      in
      a manner satisfactory to the Company and the Required Lenders.

    

    15.5  Costs,
      Expenses and Taxes.
      The
      Company agrees to pay on demand all reasonable and documented out-of-pocket
      costs and expenses of the Administrative Agent (including Attorney Costs and
      any
      Taxes) in connection with the preparation, execution, syndication, delivery
      and
      administration (including the costs of Intralinks (or other similar service),
      if
      applicable) of this Agreement, the other Loan Documents and all other documents
      provided for herein or delivered or to be delivered hereunder or in connection
      herewith (including any amendment, supplement or waiver to any Loan Document),
      whether or not the transactions contemplated hereby or thereby shall be
      consummated, and all reasonable out-of-pocket costs and expenses (including
      Attorney Costs and any Taxes) incurred by the Administrative Agent and each
      Lender after an Event of Default in connection with the collection of the
      Obligations or the enforcement of this Agreement the other Loan Documents or
      any
      such other documents or during any workout, restructuring or negotiations in
      respect thereof. In addition, the Company agrees to pay, and to save the
      Administrative Agent and the Lenders harmless from all liability for, any fees
      of the Company’s auditors in connection with any reasonable exercise by the
      Administrative Agent and the Lenders of their rights pursuant to Section 10.2.
      All Obligations provided for in this Section 15.5 shall survive repayment of
      the
      Loans, cancellation of the Notes and termination of this Agreement.

    

    15.6  Assignments;
      Participations.

    

    15.6.1  Assignments.

    

    (a)  Any
      Lender may at any time assign to one or more Persons (any such Person, an
“Assignee”)
      all or
      any portion of such Lender’s Commitment or Loans, with the prior written consent
      of the Administrative Agent and, so long as no Event of Default exists, the
      Company (which consents shall not be unreasonably withheld or delayed and shall
      not be required for an assignment by a Lender to a Lender or an Affiliate of
      a
      Lender). Except as the Administrative Agent may otherwise agree, any such
      assignment shall be in a minimum aggregate amount equal to $5,000,000 or, if
      less, the remaining Commitment or Loans held by the assigning Lender. The
      Company and the Administrative Agent shall be entitled to continue to deal
      solely and directly with such Lender in connection with the interests so
      assigned to an Assignee until the Administrative Agent shall have received
      and
      accepted an effective assignment agreement in substantially the form of
Exhibit C
      hereto
      (an “Assignment
      Agreement”)
      executed, delivered and fully completed by the applicable parties thereto and
      a
      processing fee of $3,500. No assignment may be made to any Person if at the
      time
      of such assignment the Company would be obligated to pay any greater amount
      under Section
      7.6
      or
8
      to the
      Assignee than the Company is then obligated to pay to the assigning Lender
      under
      such Sections (and if any assignment is made in violation of the foregoing,
      the
      Company will not be required to pay such greater amount). Any attempted
      assignment not made in accordance with this Section
      15.6.1
      shall be
      treated as the sale of a participation under Section
      15.6.2.

     

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    (b)  From
      and
      after the date on which the conditions described above have been met with
      respect to an Assignee, (i) such Assignee shall be deemed automatically to
      have become a party hereto and, to the extent that rights and obligations
      hereunder have been assigned to such Assignee pursuant to the applicable
      Assignment Agreement, shall have the rights and obligations of a Lender
      hereunder and (ii) the assigning Lender, to the extent that rights and
      obligations hereunder have been assigned by it pursuant to such Assignment
      Agreement, shall be released from its rights (other than its indemnification
      rights) and obligations hereunder. Upon the request of the Assignee (and, as
      applicable, the assigning Lender) pursuant to an effective Assignment Agreement,
      the Company shall execute and deliver to the Administrative Agent for delivery
      to the Assignee (and, as applicable, the assigning Lender) a Note in the
      principal amount of the Assignee’s Loans or Pro Rata Share of the Total
      Commitment, as applicable (and, as applicable, a Note in the principal amount
      of
      the Loans or the Pro Rata Share of the Total Commitment, as applicable, retained
      by the assigning Lender). Each such Note shall be dated the effective date
      of
      such assignment. Upon receipt by the assigning Lender of such Note, the
      assigning Lender shall return to the Company any prior Note held by
      it.

    

    (c)  Any
      Lender may at any time pledge or assign a security interest in all or any
      portion of its rights under this Agreement to secure obligations of such Lender,
      including any pledge or assignment to secure obligations to a Federal Reserve
      Bank, and this Section shall not apply to any such pledge or assignment of
      a
      security interest; provided
      that no
      such pledge or assignment of a security interest shall release a Lender from
      any
      of its obligations hereunder or substitute any such pledgee or assignee for
      such
      Lender as a party hereto.

    

    15.6.2  Participations.
      Any
      Lender may at any time sell to one or more Persons participating interests
      in
      its Commitment or Loans (any such Person, a “Participant”).
      In
      the event of a sale by a Lender of a participating interest to a Participant,
      (a) such Lender’s obligations hereunder shall remain unchanged for all
      purposes, (b) the Company and the Administrative Agent shall continue to
      deal solely and directly with such Lender in connection with such Lender’s
      rights and obligations hereunder and (c) all amounts payable by the Company
      shall be determined as if such Lender had not sold such participation and shall
      be paid directly to such Lender. No Participant other than an Affiliate of
      a
      Lender shall have any direct or indirect voting rights hereunder except with
      respect to any event described in Section 15.1 expressly requiring the unanimous
      vote of all Lenders or, as applicable, all affected Lenders. Each Lender agrees
      to incorporate the requirements of the preceding sentence into each
      participation agreement which such Lender enters into with any Participant
      which
      is not an Affiliate of a Lender. The Company agrees that if amounts outstanding
      under this Agreement are due and payable (as a result of acceleration or
      otherwise), each Participant shall be deemed to have the right of setoff in
      respect of its participating interest in amounts owing under this Agreement
      to
      the same extent as if the amount of its participating interest were owing
      directly to it as a Lender under this Agreement; provided that such right of
      setoff shall be subject to the obligation of each Participant to share with
      the
      Lenders, and the Lenders agree to share with each Participant, as provided
      in
      Section 7.5. The Company also agrees that each Participant shall be entitled
      to
      the benefits of Section 7.6 or 8 as if it were a Lender (provided that on the
      date of the participation no Participant shall be entitled to any greater
      compensation pursuant to Section 7.6 or 8 than would have been paid to the
      participating Lender on such date if no participation had been sold and that
      each Participant complies with Section 7.6(d) as if it were an
      Assignee).

     

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    15.7  Register.
      The
      Administrative Agent shall maintain a copy of each Assignment Agreement
      delivered and accepted by it and a register (the “Register”)
      for
      the recordation of names and addresses of the Lenders and the Commitment of
      each
      Lender from time to time and whether such Lender is the original Lender or
      the
      Assignee. No assignment shall be effective unless and until the related
      Assignment Agreement is accepted and registered in the Register. All records
      of
      transfer of a Lender’s interest in the Register shall be conclusive, absent
      manifest error, as to the ownership of the interests in the Loans. The
      Administrative Agent shall not incur any liability of any kind with respect
      to
      any Lender with respect to the maintenance of the Register.

    

    15.8  GOVERNING
      LAW.
      THIS
      AGREEMENT AND EACH NOTE SHALL BE CONTRACTS MADE UNDER AND GOVERNED BY THE
      INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO
      BE
      PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
      PRINCIPLES.

    

    15.9  Confidentiality.
      The
      Administrative Agent and each Lender agree to use commercially reasonable
      efforts (equivalent to the efforts the Administrative Agent or such Lender
      applies to maintain the confidentiality of its own confidential information)
      to
      maintain as confidential all information provided to them by any Affiliated
      Party and designated as confidential, except that the Administrative Agent
      and
      each Lender may disclose such information (a) to Persons employed or
      engaged by the Administrative Agent or such Lender in evaluating, approving,
      structuring or administering the Loans and the Commitments, provided that such
      Persons are bound by, or agree in writing to be bound by, this Section 15.9
      or
      are otherwise required to maintain confidentiality as set forth herein;
      (b) to any assignee or participant or potential assignee or participant
      that has agreed to comply with the covenant contained in this Section 15.9
      (and
      any such assignee or participant or potential assignee or participant may
      disclose such information to Persons employed or engaged by them as described
      in
      clause (a) above); (c) as required or requested by any federal or
      state regulatory authority or examiner, or any insurance industry association,
      or as reasonably believed by the Administrative Agent or such Lender to be
      compelled by any court decree, subpoena or legal or administrative order or
      process; (d) as, on the advice of the Administrative Agent’s or such
      Lender’s counsel, is required by law; (e) in connection with the exercise
      of any right or remedy under the Loan Documents or in connection with any
      litigation to which the Administrative Agent or such Lender is a party;
      (f) to any nationally recognized rating agency that requires access to
      information about a Lender’s investment portfolio in connection with ratings
      issued with respect to such Lender; (g) to any Affiliate of the
      Administrative Agent or any Lender who may provide bank products to the
      Affiliated Parties, provided such Affiliates are bound by or agree in writing
      to
      be bound by this Section 15.9 or are otherwise required to maintain
      confidentiality as set forth herein; or (h) that ceases to be confidential
      through no fault of the Administrative Agent or any Lender. Notwithstanding
      the
      foregoing, the Company consents to the publication by the Administrative Agent
      or any Lender of a tombstone or similar advertising material relating to the
      financing transactions contemplated by this Agreement, and the Administrative
      Agent reserves the right to provide to industry trade organizations information
      necessary and customary for inclusion in league table measurements.
      Notwithstanding anything in this Agreement or any other Loan Document to the
      contrary, any information with respect to the “tax treatment” or “tax structure”
(in each case, within the meaning of Treasury Regulation Section 1.6011-4)
      of
      the transactions contemplated hereby shall not be confidential, and the
      Administrative Agent and the Lenders and other parties hereto may disclose
      without limitation of any kind any information that is provided to the
      Administrative Agent or the Lenders with respect to such “tax treatment” or “tax
      structure” (in each case, within the meaning of Treasury Regulation Section
      1.6011-4); provided, that to the extent any Loan Document contains information
      that relates to such “tax treatment” or “tax structure” and contains other
      information, this paragraph shall only apply to the information regarding such
      “tax treatment” or “tax structure.”

     

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    15.10  Severability.
      Whenever possible each provision of this Agreement shall be interpreted in
      such
      manner as to be effective and valid under applicable law, but if any provision
      of this Agreement shall be prohibited by or invalid under applicable law, such
      provision shall be ineffective to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provision or the remaining provisions
      of this Agreement.

    

    15.11  Nature
      of Remedies.
      All
      obligations of the Company and rights of the Administrative Agent and the
      Lenders expressed herein or in any other Loan Document shall be in addition
      to
      and not in limitation of those provided by applicable law. No failure to
      exercise and no delay in exercising, on the part of the Administrative Agent
      or
      any Lender, any right, remedy, power or privilege hereunder, shall operate
      as a
      waiver thereof; nor shall any single or partial exercise of any right, remedy,
      power or privilege hereunder preclude any other or further exercise thereof
      or
      the exercise of any other right, remedy, power or privilege.

    

    15.12  Entire
      Agreement; Amendment and Restatement.
      This
      Agreement, together with the other Loan Documents, embodies the entire agreement
      and understanding among the parties hereto and supersedes all prior or
      contemporaneous agreements and understandings of such Persons, oral or written,
      relating to the subject matter hereof and thereof (except as relates to the
      fee
      described in Section 5) and any prior arrangements made with respect to the
      payment by the Company of (or any indemnification for) any fees, costs or
      expenses payable to or incurred (or to be incurred) by or on behalf of the
      Administrative Agent or the Lenders.

    

    15.13  Counterparts.
      This
      Agreement may be executed in any number of counterparts and by the different
      parties hereto on separate counterparts and each such counterpart shall be
      deemed to be an original, but all such counterparts shall together constitute
      but one and the same Agreement. Receipt of an executed signature page to this
      Agreement by facsimile or other electronic transmission shall constitute
      effective delivery thereof. Electronic records of executed Loan Documents
      maintained by the Lenders shall deemed to be originals.

     

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    15.14  Successors
      and Assigns.
      This
      Agreement shall be binding upon the Company, the Lenders and the Administrative
      Agent and their respective successors and assigns, and shall inure to the
      benefit of the Company, the Lenders and the Administrative Agent and the
      successors and assigns of the Lenders and the Administrative Agent. No other
      Person shall be a direct or indirect legal beneficiary of, or have any direct
      or
      indirect cause of action or claim in connection with, this Agreement or any
      of
      the other Loan Documents. The Company may not assign or transfer any of its
      rights or Obligations under this Agreement without the prior written consent
      of
      the Administrative Agent and each Lender.

    

    15.15  Captions.
      Section
      captions used in this Agreement are for convenience only and shall not affect
      the construction of this Agreement.

    

    15.16  USA
      PATRIOT Act Notice.
      The
      Administrative Agent (for itself and not on behalf of any Lender) and each
      Lender subject to Title III of the Uniting and Strengthening America by
      Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
      of
      2001 (Public Law 107-56) (the “Patriot
      Act”)
      hereby
      notify the Company that, pursuant to the requirements of the Patriot Act, they
      are required to obtain, verify and record information that identifies the
      Company, which information includes the name and address of the Company and
      other information that will allow them to identify the Company in accordance
      with the Patriot Act.

    

    15.17  INDEMNIFICATION
      BY THE COMPANY.
      IN CONSIDERATION OF THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY THE
      ADMINISTRATIVE AGENT AND THE LENDERS AND THE AGREEMENT TO EXTEND THE COMMITMENTS
      PROVIDED HEREUNDER, THE COMPANY HEREBY AGREES TO INDEMNIFY, EXONERATE AND HOLD
      HARMLESS THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH OF THE OFFICERS,
      DIRECTORS, EMPLOYEES, AFFILIATES AND AGENTS OF THE ADMINISTRATIVE AGENT AND
      EACH
      LENDER (EACH A “LENDER
      PARTY”)
      FROM AND AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, LOSSES,
      LIABILITIES, DAMAGES AND EXPENSES, INCLUDING ATTORNEY COSTS (COLLECTIVELY,
      THE
“INDEMNIFIED
      LIABILITIES”),
      INCURRED BY THE LENDER PARTIES OR ANY OF THEM AS A RESULT OF, OR ARISING OUT
      OF,
      OR RELATING TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF CAPITAL
      SECURITIES, PURCHASE OF ASSETS OR OTHER SIMILAR TRANSACTION FINANCED OR PROPOSED
      TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITH THE PROCEEDS
      OF
      ANY OF THE LOANS, (B) THE USE, HANDLING, RELEASE, EMISSION, DISCHARGE,
      TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS SUBSTANCE AT
      ANY
      PROPERTY OWNED OR LEASED BY ANY AFFILIATED PARTY, (C) ANY VIOLATION OF ANY
      ENVIRONMENTAL LAW WITH RESPECT TO CONDITIONS AT ANY PROPERTY OWNED OR LEASED
      BY
      ANY AFFILIATED PARTY OR THE OPERATIONS CONDUCTED THEREON, (D) THE
      INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY
      AFFILIATED PARTY OR ANY OF ITS PREDECESSORS IS ALLEGED TO HAVE DIRECTLY OR
      INDIRECTLY DISPOSED OF ANY HAZARDOUS SUBSTANCE OR (E) THE EXECUTION,
      DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN
      DOCUMENT BY ANY OF THE LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED
      LIABILITIES ARISING ON ACCOUNT OF THE APPLICABLE LENDER PARTY’S GROSS NEGLIGENCE
      OR WILLFUL MISCONDUCT AS DETERMINED BY A COURT OF COMPETENT JURISDICTION. IF
      AND
      TO THE EXTENT THAT THE FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY
      REASON, THE COMPANY HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE
      PAYMENT AND SATISFACTION OF EACH OF THE INDEMNIFIED LIABILITIES WHICH IS
      PERMISSIBLE UNDER APPLICABLE LAW. ALL OBLIGATIONS PROVIDED FOR IN THIS SECTION
      15.17 SHALL SURVIVE REPAYMENT OF THE LOANS, CANCELLATION OF THE NOTES, ANY
      MODIFICATION, RELEASE OR DISCHARGE OF THE GUARANTY AND TERMINATION OF THIS
      AGREEMENT.

     

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    15.18  Nonliability
      of Lenders.
      The
      relationship between the Company, on the one hand, and the Lenders and the
      Administrative Agent, on the other hand, shall be solely that of borrower and
      lender. Neither the Administrative Agent nor any Lender has any fiduciary
      relationship with or duty to any Affiliated Party arising out of or in
      connection with this Agreement or any of the other Loan Documents, and the
      relationship between the Affiliated Parties, on the one hand, and the
      Administrative Agent and the Lenders, on the other hand, in connection herewith
      or therewith is solely that of debtor and creditor. Neither the Administrative
      Agent nor any Lender undertakes any responsibility to any Affiliated Party
      to
      review or inform any Affiliated Party of any matter in connection with any
      phase
      of any Affiliated Party’s business or operations. The Company agrees, on behalf
      of itself and each other Affiliated Party, that neither the Administrative
      Agent
      nor any Lender shall have liability to any Affiliated Party (whether sounding
      in
      tort, contract or otherwise) for losses suffered by any Affiliated Party in
      connection with, arising out of, or in any way related to the transactions
      contemplated and the relationship established by the Loan Documents, or any
      act,
      omission or event occurring in connection therewith, unless it is determined
      in
      a judgment by a court of competent jurisdiction that such losses resulted from
      the gross negligence or willful misconduct of the party from which recovery
      is
      sought. NO
      LENDER PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS
      OF
      ANY INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR
      INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT, NOR SHALL
      ANY LENDER PARTY HAVE ANY LIABILITY WITH RESPECT TO, AND THE COMPANY, ON BEHALF
      OF ITSELF AND EACH OTHER AFFILIATED PARTY, HEREBY WAIVES, RELEASES AND AGREES
      NOT TO SUE FOR, ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO
      THIS
      AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ARISING OUT OF ITS ACTIVITIES IN
      CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE CLOSING DATE).
      The
      Company acknowledges that it has been advised by counsel in the negotiation,
      execution and delivery of this Agreement and the other Loan Documents to which
      it is a party. No joint venture is created hereby or by the other Loan Documents
      or otherwise exists by virtue of the transactions contemplated hereby among
      the
      Lenders or among the Guarantors and the Lenders.

     

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    15.19  FORUM
      SELECTION AND CONSENT TO JURISDICTION.
      ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
      AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
      EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
      DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT NOTHING
      IN
      THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT
      FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION.
      EACH
      OF THE COMPANY, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY EXPRESSLY AND
      IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
      AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
      FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH OF THE COMPANY,
      THE ADMINISTRATIVE AGENT AND THE LENDERS FURTHER IRREVOCABLY CONSENTS TO THE
      SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
      WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH OF THE COMPANY, THE ADMINISTRATIVE
      AGENT AND THE LENDERS HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
      EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
      THE
      LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
      ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
      FORUM.

    

    15.20  WAIVER
      OF JURY TRIAL.
      EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY (A) WAIVES
      ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
      ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT OR ANY
      AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
      FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
      LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND
      (B)
      AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
      NOT
      BEFORE A JURY.

    

    

    

    [signature
      page follows]

    

     

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    The
      parties hereto have caused this Agreement to be duly executed and delivered
      by
      their duly authorized officers as of the date first set forth
      above.

     

    
      	 	 	 
	 	SEMCO
              ENERGY, INC.
	 
 	 
 	 
 
	
            	By:  	/s/ Michael
              V. Palmeri
	 	
              

            
	 	
              Michael
                V. Palmeri

              Senior
                Vice President, Chief 

               
                Financial Officer and Treasurer

            

    

     

    
      	 	 	 
	 	
              UNION
                BANK OF CALIFORNIA, N.A., as 

              Administrative
                Agent and as a Lender

            
	 
 	 
 	 
 
	 	By:  	/s/ Dennis
              G. Blank
	 	
              

            
	 	
              Name:  Dennis
                G. Blank

              Title: 
                Vice President 

            

    

    

     

    
 

    S-1

    
      
        
          
            

            
              600198569v6

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

    

    ANNEX
      A

    LENDERS
      AND PRO RATA SHARES

    

    

    

    
      	
              Lender

            	
              Commitment
                Amount

            	
              Pro
                Rata Share

            
	
              Union
                Bank of California, N.A.

            	
              $55,000,000.00

            	
              100%

            
	
              TOTALS

            	
              $55,000,000.00

            	
              100%

            

    

    

    

    
      
        
          
            

            
              600198569v6

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

    

    ANNEX
      B

    ADDRESSES
      FOR NOTICE

    

    

    

    
      	
              Party

            	
              Address

            
	
              SEMCO
                Energy, Inc.

            	
              1411
                Third Street, Suite A

              Port
                Huron, Michigan 48060

              Attention:
                Chief Financial Officer

            
	
              Union
                Bank of California, N.A.

            	
              445
                South Figueroa Street, 15th
                Floor

              Los
                Angeles, California 90071

              Attention:
                Energy Capital Services

            

    

     

     

     

      
        600198569v6

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