Document:

Exhibit 10.3

                                   SJW CORP.

                                NOTE AGREEMENT

                          Dated as of June 30, 2011

                     Re:  $50,000,000 4.35% Senior Notes

                              Due June 30, 2021

                              TABLE OF CONTENTS

SECTION        HEADING                                         PAGE

SECTION 1.     DESCRIPTION OF NOTES; COMMITMENT.                  1
Section 1.1.   Description of Notes                               1
Section 1.2.   Commitment; Closing Date                           1
SECTION 2.     PAYMENT OF NOTES.                                  2
Section 2.1.   Payments                                           2
Section 2.2.   Optional Prepayment                                2
Section 2.3.   Notice of Optional Prepayments                     2
Section 2.4.   Application of Prepayments                         2
Section 2.5.   Direct Payment                                     2
SECTION 3.     REPRESENTATIONS.                                   3
Section 3.1.   Representations of the Company                     3
Section 3.2.   Representations of the Purchasers                  3
SECTION 4.     CLOSING CONDITIONS.                                5
Section 4.1.   Conditions                                         5
Section 4.2.   Waiver of Conditions                               6
SECTION 5.     COMPANY COVENANTS.                                 6
Section 5.1.   Corporate Existence                                6
Section 5.2.   Insurance                                          7
Section 5.3.   Taxes; Compliance with Laws                        7
Section 5.4.   Maintenance                                        7
Section 5.5.   Nature of Business                                 7
Section 5.6.   Minimum Net Worth                                  7
Section 5.7.   Total Debt to Capitalization                       8
Section 5.8.   Limitation on Liens                                8
Section 5.9.   Mergers, Consolidation, Etc.                       9
Section 5.10.  Investments                                       10
Section 5.11.  Sale of Assets                                    11
Section 5.12.  Acquisition of Notes                              12
Section 5.13.  Covenant to Secure Equally                        12
Section 5.14.  Reports and Rights of Inspection                  12
Section 5.15.  Terrorism Sanctions Regulations                   14
SECTION 6.     EVENTS OF DEFAULT AND REMEDIES THEREFOR.          15
Section 6.1.   Events of Default                                 15
Section 6.2.   Notice to Holders                                 16
Section 6.3.   Acceleration of Maturities                        16
Section 6.4.   Rescission of Acceleration                        17
SECTION 7.     AMENDMENTS, WAIVERS AND CONSENTS.                 17
Section 7.1.   Consent Required                                  17
Section 7.2.   Solicitation of Holders                           18
Section 7.3.   Effect of Amendment or Waiver                     18
SECTION 8.     INTERPRETATION OF AGREEMENT; DEFINITIONS.         18
Section 8.1.   Definitions                                       18
Section 8.2.   Accounting Principles                             26
Section 8.3.   Directly or Indirectly                            27
SECTION 9.     MISCELLANEOUS.                                    27
Section 9.1.   Registered Notes                                  27
Section 9.2.   Exchange of Notes                                 28
Section 9.3.   Loss, Theft, Etc. of Notes                        28
Section 9.4.   Expenses, Stamp Tax Indemnity                     28
Section 9.5.   Powers and Rights Not Waived: Remedies Cumulative 29
Section 9.6.   Notices                                           29
Section 9.7.   Successors and Assigns                            29
Section 9.8.   Survival of Covenants and Representations         29
Section 9.9.   Severability                                      29
Section 9.10.  Governing Law                                     30
Section 9.11.  Captions                                          30
Section 9.12.  Payments Due on Non-Business Days                 30
Section 9.13.  Confidential Information                          30

                          ATTACHMENTS TO NOTE AGREEMENT:
Schedule I   -   Purchaser Schedule
Schedule II  -   Subsidiaries of the Company
Schedule III -   Use of Proceeds
Schedule IV  -   Liens
Schedule V   -   Indebtedness
Exhibit A    -   Form of 4.35% Senior Notes, Due June 30, 2021
Exhibit B    -   Representations and Warranties
Exhibit C    -   Form of Closing Certificate of the Company
Exhibit D    -   Description of Special Counsel's Closing Opinion
Exhibit E    -   Description of Closing Opinion of Counsel to the Company

                           SJW CORP.

                     110 West Taylor Street
                   San Jose, California 95110

                        NOTE AGREEMENT

               Re:  $50,000,000 4.35% Senior Notes

                       Due June 30, 2011
              _____________________________________

To each of the Purchasers named in Schedule I hereto
                                                           Dated as of
                                                         June 30, 2011
Ladies and Gentlemen:

     The undersigned, SJW CORP., a California corporation (the"Company"),
agrees with each of the purchasers whose names appear at the end hereof
(each, a "Purchaser" and, collectively, the "Purchasers") as follows:
Section 1.	DESCRIPTION OF NOTES; COMMITMENT.

     Section 1.1.  Description of Notes.  The Company will authorize
the issue and sale of $50,000,000 aggregate principal amount of its 4.35%
 Senior Notes, Due June 30, 2021 (the "Notes") to be dated the date of
issue, to bear interest from such date at the rate of 4.35% per annum, to
be payable as to interest in semiannual payments on the thirtieth day of
each June and December in each year (commencing December 30, 2011) and
payable as to interest and principal at maturity, and to bear interest on
overdue principal (including any overdue optional prepayment of
principal) and Make-Whole Amount, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the Default Rate
after the date due, whether by acceleration or otherwise, until paid.
The Notes will mature on June 30, 2021, and be substantially in the form
attached hereto as Exhibit A.  Interest on the Notes shall be computed on
the basis of a 360-day year of twelve 30-day months.  The Notes shall be
issued in Authorized Denominations of principal.  The Notes are not
subject to prepayment or redemption at the option of the Company prior to
their expressed maturity dates except on the terms and conditions and in
the amounts and with the Make-Whole Amount, if any, set forth in Section
2.  The term "Notes" as used herein shall include each Note delivered
pursuant to this Agreement by the Company to the Purchasers named in
Schedule I.  Capitalized terms used and not otherwise defined herein
shall have the meanings set forth for such terms in Section 8.1.

     Section 1.2.  Commitment; Closing Date.  Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to each
Purchaser and each Purchaser agrees to purchase from the Company, on
the Closing Date referred to below, Notes in the aggregate principal
amount set opposite such Purchaser's name in Schedule I at a price of
100% of the principal amount thereof.  The Purchasers' obligations
hereunder are several and not joint obligations and no Purchaser shall
have any liability to any Person for the performance or non performance
of any obligation by any other Purchaser hereunder.

     Delivery of the Notes will be made at the offices of Baker Botts
L.L.P., 2001 Ross Avenue, Dallas, Texas, 75201, against payment therefor
in Federal Reserve or other funds current and immediately available at
the office of XXXX, Reference: Senior Notes Funding, in the amount of the
purchase price, at 9:00 A.M., San Francisco time, on June 30, 2011, or
such later date (not later than July 15, 2011) as shall mutually be
agreed upon by the Company and each Purchaser (the "Closing Date").  The
Notes delivered to the Purchasers on the Closing Date will be delivered
to such Purchaser in the form of a single registered Note for the full
mount of such Purchaser's purchase (unless multiple Notes in different
Authorized Denominations are specified by such Purchaser), registered in
such Purchaser's name or in the name or names of such nominee or nominees
as such Purchaser may specify, all as such Purchaser may specify at
any time prior to the Closing Date.

Section 2.	PAYMENT OF NOTES.

     Section 2.1.  Payments.  Except as set forth in Section 2.2, the
Notes are not subject to any prepayment or redemption prior to their
express maturity date.

     Section 2.2.  Optional Prepayment.  Upon compliance with Section 2.3
the Company shall have the privilege, at any time and from time to time,
of prepaying the outstanding Notes, either in whole or in part (but if in
part, in a minimum principal amount of $100,000) by payment of the
principal amount of the Notes, or portion thereof to be prepaid, and
accrued interest thereon to the date of such prepayment, together with a
premium equal to the Make-Whole Amount.

     Section 2.3.  Notice of Optional Prepayments.  The Company will give
notice of any prepayment of the Notes pursuant to Section 2.2 to each
holder thereof not less than 30 days nor more than 60 days before the
date fixed for such optional prepayment specifying (i) such date,
(ii) the principal amount of the holder's Notes to be prepaid on such
date, (iii) that, if applicable, a Make-Whole Amount will be payable,
(iv) the date when such Make-Whole Amount will be calculated, (v) the
estimated Make-Whole Amount, and (vi) the accrued interest applicable to
the prepayment.  Notice of prepayment having been so given, the aggregate
principal amount of the Notes specified in such notice, together with
ccrued interest thereon and the Make-Whole Amount, if any, payable with
respect thereto shall become due and payable on the prepayment
date specified in said notice.  Not later than two Business Days prior to
the prepayment date specified in such notice, the Company shall provide
each holder of a Note written notice of the amount of any Make-Whole
Amount payable in connection with such prepayment and a reasonably
detailed computation of the Make-Whole Amount.

     Section 2.4.  Application of Prepayments.  All partial prepayments
shall be applied on all outstanding Notes ratably in accordance with the
unpaid principal amounts thereof.

     Section 2.5.  Direct Payment.  Notwithstanding anything to the
contrary contained in this Agreement or the Notes, in the case of any
Note owned by any Purchaser or such Purchaser's nominee or owned by any
subsequent Institutional Holder which has given written notice to the
Company requesting that the provisions of this Section 2.5 shall apply,
the Company will punctually pay (or cause to be paid) when due the
principal thereof, interest thereon and Make-Whole Amount, if any, due
with respect to said principal, and all other amounts payable to such
Purchaser, such Purchaser's nominee or such Institutional Holder of any
Note pursuant to this Agreement or such Note, without any presentment of
such Note, directly to such Purchaser or such Purchaser's nominee or to
such subsequent Institutional Holder at such Purchaser's address or such
Purchaser's nominee's address set forth in Schedule I hereto or such
other address as such Purchaser, such Purchaser's nominee or such
subsequent Institutional Holder may from time to time designate in
writing to the Company or, if a bank account with a bank located in the
United States is designated for such Purchaser or such Purchaser's
nominee on Schedule I hereto or in any written notice to the Company from
such Purchaser, from such Purchaser's nominee or from any such subsequent
Institutional Holder, the Company will make such payments in immediately
available federal funds to such bank account, marked for attention as
indicated, or in such other manner or to such other account in any bank
located in the United States as such Purchaser, such Purchaser's nominee
or any such subsequent Institutional Holder may from time to time direct
in writing.

Section 3.	REPRESENTATIONS.

     Section 3.1.  Representations of the Company.  The Company
represents and warrants that all representations and warranties with
respect to the Company and its Subsidiaries set forth in Exhibit B
attached hereto are true and correct as of the date hereof and are
incorporated herein by reference with the same force and effect as though
herein set forth in full.

      Section 3.2.	Representations of the Purchasers.  Each Purchaser
severally represents, and in entering into this Agreement the Company
understands, that each Purchaser is acquiring Notes for the purpose of
investment and not with a view to the distribution thereof, and that such
Purchaser has no present intention of selling, negotiating or otherwise
disposing of any of the Notes; it being understood, however, that the
disposition of such Purchaser's property shall at all times be and remain
within such Purchaser's control.  Each Purchaser further represents that
at least one of the following statements is an accurate representation as
to each source of funds (a "Source") to be used by such Purchaser to pay
the purchase price of the Notes to be purchased by such Purchaser
hereunder:

     (a)  the Source is an "insurance company general account" (as the
term is defined in the United States Department of Labor's Prohibited
Transaction Exemption ("PTE") 95-60) in respect of which the reserves and
liabilities (as defined by the annual statement for life insurance
companies approved by the NAIC (the "NAIC Annual Statement")) for the
general account contract(s) held by or on behalf of any employee benefit
plan together with the amount of the reserves and liabilities for the
general account contract(s) held by or on behalf of any other employee
benefit plans maintained by the same employer (or affiliate thereof as
defined in PTE 95-60) or by the same employee organization in the general
account do not exceed 10% of the total reserves and liabilities of the
general account (exclusive of separate account liabilities) plus surplus
as set forth in the NAIC Annual Statement filed with such Purchaser's
state of domicile; or

     (b)  the Source is a separate account that is maintained solely in
connection with such Purchaser's fixed contractual obligations under
which the amounts payable, or credited, to any employee benefit plan (or
its related trust) that has any interest in such separate account (or to
any participant or beneficiary of such plan (including any annuitant))are
not affected in any manner by the investment performance of the separate
account; or

      (c)  the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 or (ii) a bank collective
investment fund, within the meaning of the PTE 91-38 and, except as such
Purchaser has disclosed to the Company in writing pursuant to this
paragraph (c), no employee benefit plan or group of plans maintained by
the same employer or employee organization beneficially owns more than
10% of all assets allocated to such pooled separate account or collective
investment fund; or

      (d)  the Source constitutes assets of an "investment fund" (within
the meaning of Part VI of PTE 84-14 (the "QPAM Exemption")) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part VI of the QPAM Exemption), no employee benefit plan's assets that
are managed by the QPAM in such investment fund, when combined
with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
Part VI(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization and managed by such QPAM, represent more than 20%
of the total client assets managed by such QPAM, the conditions of Part
I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM maintains an ownership
interest in the Company that would cause the QPAM and the Company to be
"related" within the meaning of Part VI(h) of the QPAM Exemption and (i)
the identity of such QPAM and (ii) the names of any employee benefit
plans whose assets in the investment fund, when combined with the assets
of all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Part VI(c)(1) of the
QPAM Exemption) of such employer or by the same employee
organization, represent 10% or more of the assets of such investment
fund, have been disclosed to the Company in writing pursuant to this
paragraph (d); or

      (e)	the Source constitutes assets of a "plan(s)" (within the
meaning of section IV of PTE 96-23 (the "INHAM Exemption")) managed by an
"in-house asset manager" or "INHAM" (within the meaning of Part IV of the
INHAM exemption), the conditions of Part I(a), (g) and (h) of the INHAM
Exemption are satisfied, neither the INHAM nor a person controlling or
controlled by the INHAM (applying the definition of "control" in section
IV(d) of the INHAM Exemption) owns a 5% or more interest in the Company
and (i) the identity of such INHAM and (ii) the name(s) of the employee
benefit plan(s) whose assets constitute the Source have been disclosed to
the Company in writing pursuant to this paragraph (e); or

      (f)  the Source is a governmental plan; or

      (g)  the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit
plans, each of which has been identified to the Company in writing
pursuant to this paragraph (g); or

      (h)  the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.

     As used in this Section 3.2 the terms "employee benefit plan,"
"governmental plan," and "separate account" shall have the respective
meanings assigned to such terms in section 3 of ERISA.

Section 4.  CLOSING CONDITIONS.

      Section 4.1.  Conditions.  Each Purchaser's obligation to purchase
Notes on the Closing Date shall be subject to the performance by the
Company of its agreements hereunder which by the terms hereof are to be
performed at or prior to the time of delivery of the Notes and to the
following further conditions precedent:

      (a)  Notes.  On the Closing Date, such Purchaser or such
Purchaser's special counsel shall have received a duly executed Note or
Notes registered in such Purchaser's name or such other name or names as
such Purchaser may have designated pursuant to Section 1.2 and in the
aggregate principal amounts set forth opposite such Purchaser's name in
Schedule I.

      (b)  Closing Certificates.  Such Purchaser shall have received a
certificate, dated the Closing Date, of the Company, signed by the
President or a Vice President thereof, the truth and accuracy of which
shall be a condition to such Purchaser's obligation to purchase the Notes
proposed to be sold to such Purchaser and to the effect set forth in
Exhibit C hereto.  Such Purchaser shall have also received a certificate
of the Secretary of the Company dated as of the Closing Date (i)
attaching resolutions of its Board of Directors evidencing approval of
this Agreement and the Notes and the transactions contemplated by this
Agreement, and the execution, delivery and performance thereof, and
authorizing certain officers to execute and deliver the same, and
certifying that such resolutions were duly and validly adopted and have
not since been amended, revoked or rescinded, and (ii) certifying that no
dissolution or liquidation proceedings as to the Company have been
commenced or are contemplated.

      (c)  Legal Opinions.  Such Purchaser shall have received (i) from
Baker Botts L.L.P., special counsel for the Purchasers, and (ii) Morgan,
Lewis & Bockius LLP, counsel to the Company, their respective opinions,
dated the Closing Date, in form and substance satisfactory to such
Purchaser, and covering the matters set forth in Exhibits D and E,
respectively, hereto.

      (d)  No Adverse Change.  There shall have been no material adverse
change in the business or condition, financial or otherwise, of the
Company since December 31, 2010.

      (e)  Governmental Approvals.  On or prior to the Closing Date, all
approvals, authorizations and consents, if any, of all governmental
bodies (including courts) having jurisdiction with respect to the
transactions contemplated hereby shall have been obtained and
shall be in full force and effect.

      (f)  Legal Investment.  The Notes shall on the Closing Date
qualify as a legal investment for such Purchaser under any laws
regulating investments to which such Purchaser may be subject (without
reference to any provision which permits the making of an investment
without restriction as to the character of the particular investment),
and such Purchaser shall have received such evidence as such Purchaser
may reasonably request to establish compliance with this condition.

      (g)  Private Placement Number.  The Company shall have obtained, at
its expense, a Private Placement Number for the Notes from S&P.

      (h)  Satisfactory Proceedings.  All proceedings taken in connection
with the transactions contemplated by this Agreement, and all documents
necessary to the consummation thereof, shall be satisfactory in form and
substance to such Purchaser and such Purchaser's special counsel, and
such Purchaser shall have received a copy (executed or certified as may
be appropriate) of all legal documents or proceedings taken in connection
with the consummation of said transactions.  If any provision of this
Agreement requires the certification, representation or warranty of the
existence or nonexistence of any particular fact or implies as a
condition the existence or nonexistence of such fact, then such Purchaser
shall be free to require the establishment to such Purchaser's
satisfaction of the existence or nonexistence of any such fact.

      (i)  Payment of Special Counsel Fees.  The Company shall have paid,
on or before the Closing Date, the reasonable fees, charges and
disbursements of the Purchasers' special counsel to the extent reflected
in a statement of such counsel rendered to the Company at least one
Business Day prior to the Closing Date.

      (j)  Organizational Documents; Authorized Signatories.  Such
Purchaser shall have received (i) the Articles of Incorporation of the
Company as amended to date and certified as of a recent date by the
Secretary of State of California, and (ii) the bylaws of the Company
certified by the Secretary of the Company.  Such Purchaser shall have
also received an incumbency certificate signed by the Secretary and one
other officer of the Company, certifying as to the names, titles and true
signatures of the officers of the Company authorized to execute this
Agreement and the Notes.

     Section 4.2.  Waiver of Conditions.  If on the Closing Date the
Company fails to tender to each Purchaser the Notes to be issued to such
Purchaser on such date or if the conditions specified in Section 4.1 have
not been fulfilled, such Purchaser may thereupon elect to be relieved of
all further obligations under this Agreement.  Without limiting the
foregoing, if the conditions specified in Section 4.1 have not been
fulfilled, such Purchaser may waive compliance by the Company with any
such condition to such extent as such Purchaser may in such Purchaser's
sole discretion determine.  Nothing in this Section 4.2 shall operate to
relieve the Company of any of its obligations hereunder or to waive any
of such Purchaser's rights against the Company.

Section 5.  COMPANY COVENANTS.

     From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note, except as agreed to in writing by the
Required Holder(s):

     Section 5.1.  Corporate Existence.  The Company will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its corporate (or
equivalent) existence, material rights, licenses, permits and franchises;
provided that nothing in this Section 5.1 shall prevent the dissolution,
liquidation, abandonment or termination of the existence of any
Subsidiary, or the rights or franchises of any Subsidiary or the Company,
if such abandonment or termination would not have a Material Adverse
Effect.

     Section 5.2.  Insurance.  The Company will, and will cause each of
its Subsidiaries to, maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and
businesses against such casualties and contingencies, of such types, on
such terms and in such amounts as is customary in the case of entities of
established reputations engaged in the same or a similar business and
similarly situated.

      Section 5.3.  Taxes; Compliance with Laws.  The Company will, and
will cause each of its Subsidiaries to, pay and discharge promptly all
taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profits or in respect of its property, prior to the
time penalties would attach thereto, as well as lawful claims for labor,
materials and supplies or otherwise which, if unpaid, could become a Lien
or charge upon such properties or any part thereof; provided, however,
that neither the Company nor any Subsidiary shall be required to pay and
discharge or to cause to be paid and discharged any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
subject to an active challenge or contest initiated in good faith for
which adequate reserves have been established in accordance with
generally accepted accounting principles.  The Company will, and will
cause each of its Subsidiaries to, comply with all laws, ordinances or
governmental rules or regulations to which each of them is subject,
including, without limitation, environmental laws, and will
obtain and maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of their
respective businesses, in each case to the extent necessary to ensure
that non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations
could not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.

     Section 5.4.  Maintenance.  The Company will, and will cause each of
its Subsidiaries to, at all times maintain and preserve all property used
or useful in its business in good working order and condition, and from
time to time make, or cause to be made, all needful and proper repairs,
renewals and replacements thereto, so that the business carried on in
connection therewith may be properly conducted at all times, except to
the extent that the failure to do so would not have a Material Adverse
Effect.

     Section 5.5.  Nature of Business.  Neither the Company nor any Water
Subsidiary will engage in any business if, as a result, the general
nature of the business (including but not limited to water reclamation
and sewage treatment), taken on a consolidated basis, which would then be
engaged in by the Company and its Water Subsidiaries would be
substantially changed from the general nature of the business engaged in
by the Company and its Water Subsidiaries on the Closing Date.

      Section 5.6.  Minimum Net Worth.  The Company will not permit, at
any time, Adjusted Net Worth to be less than $175,000,000 plus the sum of
30% of positive Adjusted Net Income in each fiscal quarter commencing
with the fiscal quarter ending ended June 30, 2011.

     Section 5.7.  Total Debt to Capitalization.  The Company will not
permit, at any time, Total Debt to exceed 66-2/3% of Capitalization.

     Section 5.8.  Limitation on Liens.  The Company will not, and will
not permit any Water Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien on its or their property or assets,
whether now owned or hereafter acquired, or upon any income or profits
therefrom, or transfer any property for the purpose of subjecting the
same to the payment of obligations in priority to the payment of its or
their general creditors, or acquire or agree to acquire, or permit any
Water Subsidiary to acquire, any property or assets upon conditional
sales agreements or other title retention devices, without making
effective provisions whereby all of the Notes shall be directly secured
equally and ratably with all of the other obligations secured thereby
(and providing to the holders of the Notes an opinion satisfactory in
form and substance to the holders of the Notes from counsel satisfactory
to the holders of the Notes to the effect that the Notes are so secured)
except:

     (a)  Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics and
materialmen, provided that payment thereof is not at the time required by
Section 5.3;

     (b)  Liens of or resulting from any judgment or award, the time for
the appeal or petition for rehearing of which shall not have expired, or
in respect of which the Company or a Subsidiary shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in respect
of which a stay of execution pending such appeal or proceeding for review
shall have been secured;

     (c)  Liens incidental to the conduct of business or the ownership
of properties and assets (including but not limited to warehousemen's and
attorneys' liens and statutory landlords' liens) and specific Liens
including but not limited to pledges of Securities to secure deposits,
and other Liens incurred in the ordinary course of business and not in
connection with the borrowing of money, provided in each case the
obligation secured is not overdue or, if overdue, is being
contested in good faith by appropriate actions or proceedings the effect
of which is to stay or prevent enforcement of such Lien;

     (d)  minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities
of the Company and its Subsidiaries or which customarily exist on
properties of corporations or other business entities engaged in similar
activities and similarly situated and which do not in any event,
individually or in the aggregate, materially impair their use in the
operation of the business of the Company and its  Subsidiaries;

     (e)	Liens existing on fixed assets at the time of acquisition
thereof by the Company or a Subsidiary or Liens existing on fixed assets
owned by a business entity at the time such entity is acquired by the
Company or a Subsidiary, provided that (i) any such Lien shall attach
only to the fixed assets so acquired or to the fixed assets owned by the
business entity so acquired, as the case may be, (ii) the Lien and the
Indebtedness secured thereby shall not have been incurred in
contemplation of the acquisition, and (iii) all Indebtedness secured by
any such Lien shall have been incurred within the applicable limitations
of Section 5.7;

     (f)  in the event of a consolidation or merger of the Company in
compliance with Section 5.9(c) where the surviving corporation is not the
Company (the surviving corporation being the "Acquiring Corporation"),
Liens existing on assets of the Acquiring Corporation and its
subsidiaries at the time of the consolidation or merger, as the case may
be, so long as (i) the Lien shall attach only to the assets to which the
Lien was attached at the time of the consolidation or merger, and (ii)
the Lien and the Indebtedness secured thereby shall not have been
incurred in contemplation of such consolidation or merger;

     (g)  Liens securing Indebtedness of a Subsidiary to San Jose Water
Company or the Company;

     (h)  Liens existing as of the Closing Date and reflected in Schedule
IV hereto;

     (i)  Liens incurred after the Closing Date given to secure the
payment of the purchase price incurred in connection with the acquisition
of fixed assets useful and intended to be used in carrying on the
business of the Company or a Subsidiary, including Capitalized Leases,
provided that (i) the Lien shall attach solely to the fixed assets
purchased, (ii) at the time of acquisition of such fixed assets, the
aggregate amount remaining unpaid on all Indebtedness secured by Liens on
such fixed assets whether or not assumed by the Company or a Subsidiary
shall not exceed an amount equal to 100% of the lesser of the total
purchase price or fair market value at the time of acquisition of such
fixed assets (as determined in good faith by the Board of Directors of
the Company), (iii) the aggregate of all amounts so financed outstanding
at any time on and after the Closing Date by the Company and its
Subsidiaries shall not exceed the greater of (A) $10,000,000 or (B) 10%
of Consolidated Net Worth, and (iv) all such Indebtedness shall have
been incurred within the applicable limitations provided in Section 5.7;

     (j)  Liens on the property of San Jose Water Company securing its
mortgage bonds issued pursuant to a mortgage bond indenture or other
governing instrument, provided, that (A) such mortgage bond indenture or
governing instrument shall have been consented to in writing by the
Required Holder(s) and (B) provision shall have been made concurrently
with the issuance of any such mortgage bonds for the Notes to be equally
and ratably secured by the Lien securing such mortgage bonds; and

     (k)  renewals and extensions of Liens permitted pursuant to clauses
(a) through (j) of this Section 5.8 given to secure the renewal,
extension or replacement of the Indebtedness secured thereby without
increase in the principal amount of such Indebtedness outstanding at the
time of such renewal, extension or replacement, which Liens attach solely
to the property theretofore securing such Indebtedness.

     Section  5.9.  Mergers, Consolidation, Etc.  The Company will not,
and will not permit any Water Subsidiary to merge or consolidate with or
into any other Person or convey, transfer or lease substantially all of
its assets to any Person, except that:

     (a)  any Water Subsidiary may merge or consolidate with or into the
Company; provided that the Company is the continuing or surviving
corporation;

     (b)  any Water Subsidiary may merge or consolidate with or into a
Wholly Owned Subsidiary; provided that such Wholly Owned Subsidiary is
the continuing or surviving corporation;

     (c)  the Company may consolidate or merge with any other corporation
if (A) (i) the Company shall be the continuing or surviving corporation
or (ii) the continuing or surviving corporation is a solvent corporation
duly organized and existing under the laws of any state of the United
States of America or the District of Columbia, with substantially all of
its assets located and substantially all of its operations conducted
within the United States of America, and such continuing or surviving
corporation expressly assumes, by a written agreement satisfactory
in form and substance to the Required Holder(s) (which agreement may
require, in connection with such assumption, the delivery of such
opinions of counsel as the Required Holder(s) may require), the
obligations of the Company under this Agreement and the Notes, including
all covenants contained herein and therein, and such successor or
acquiring entity shall succeed to and be substituted for the Company with
the same effect as if it had been named herein as a party hereto and (B)
no Default or Event of Default exists before or after such merger or
consolidation; and

     (d)  any Water Subsidiary may merge or consolidate with any other
Person; provided that, immediately after giving effect to such merger or
consolidation (I) a Subsidiary of which the Company owns directly or
indirectly at least 95% of all of the equity interests thereof shall be
the continuing or surviving Person and (II) no Default or Event of
Default exists before or after such merger or consolidation. No such
conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor
corporation from its liability under this Agreement or the Notes.

      Section 5.10.  Investments.  The Company will not, and will not
permit any Water Subsidiary to, make or have outstanding any Investments,
other than:

     (a)  Investments by the Company and its Subsidiaries in and to
Subsidiaries, including any Investment in a corporation which
concurrently with such Investment, will become a Subsidiary;

     (b)  Investments in direct obligations of the United States of
America or any agency or instrumentality of the United States of America,
the payment or guarantee of which constitutes a full faith and credit
obligation of the United States of America, in either case, maturing in
12 months or less from the date of acquisition thereof;

     (c)  Investments in certificates of deposit maturing within one year
from the date of acquisition thereof, issued by a bank or trust company
organized under the laws of the United States or any state thereof,
having capital, surplus and undivided profits aggregating at least
$200,000,000 and whose long-term certificates of deposit are, at the time
of acquisition thereof, rated "A" or better by S&P or "A2" or better by
Moody's;

     (d)  Investments in commercial paper maturing in 270 days or less
from the date of issuance which, at the time of acquisition by the
Company or any Subsidiary, is accorded the highest rating by S&P or
Moody's or is issued by a corporation organized under the laws of the
United States or any state thereof with outstanding corporate debt
obligations which are rated "AA" or better by S&P, or "Aa2" or better by
Moody's;

     (e)  receivables arising from the sale of goods and services in the
ordinary course of business of the Company and its Subsidiaries;

     (f)  Investments in Securities received in settlement of any
Indebtedness arising in the ordinary course of business of the Company or
any Subsidiary, provided that the aggregate amount of all such
Investments at any time outstanding shall not exceed the greater of (A)
$5,000,000 or (B) 5% of Consolidated Net Worth;

     (g)  Investments in (i) money market mutual funds, (ii) mutual funds
invested primarily in corporate debt obligations which are rated "AA" or
better by S&P or "Aa2" or better by Moody's, and (iii) corporate debt
obligations rated "AA" or better by S&P or "Aa2" or better by Moody's, or
preferred stock of any such Person; provided, that in no event shall (x)
any such corporate debt obligations held outside a mutual fund be in the
form of adjustable or variable rate securities  and (y) more than 5% of
the assets of any such mutual fund be in the form of adjustable or
variable rate securities; and provided, further, that the aggregate of
all Investments referred to in this Section 5.10(g) shall not exceed 7.5%
of Consolidated Net Worth; and

     (h)  other Investments (in addition to those permitted by the
foregoing provisions of this Section 5.10), provided that at the time of
acquisition thereof the aggregate amount of all such other Investments
owned by the Company and its Subsidiaries shall not exceed an amount
equal to 10% of Consolidated Net Worth.

     In addition to the foregoing restrictions, the Company will not, and
will not permit any Subsidiary to, make any Investments, other than
Investments described in clauses (a) through (f) of this Section 5.10,
if, after giving effect thereto, a Default or an Event of Default shall
have occurred and be continuing.

     In valuing any Investments for the purpose of applying the
limitations set forth in this Section 5.10, such Investments shall be
taken at the original cost thereof, without allowance for any subsequent
write-offs or appreciation or depreciation therein, but less any amount
repaid or recovered on account of capital or principal, except that for
purposes of computing Consolidated Net Worth, Investments shall be valued
in accordance with generally accepted accounting principles.

     For purposes of this Section 5.10, at any time when a corporation or
other business entity becomes a Water Subsidiary, all Investments of such
corporation or other business entity at such time shall be deemed to have
been made by such corporation or other business entity, as a Water
Subsidiary, at such time.

     Section 5.11.  Sale of Assets.  The Company will not, and will not
permit any Subsidiary to, Transfer, or agree or otherwise commit to
Transfer, any of its Utility Assets (including the equity interests in
any Water Subsidiary) except that:

     (a)  any Subsidiary may Transfer Utility Assets to the Company or a
Wholly Owned Subsidiary; and

     (b)  the Company or any Subsidiary may Transfer Utility Assets other
than as set forth in the preceding clause (a); provided that (I) before
and after such Transfer no Default or Event of Default shall exist; (II)
the value of such Utility Assets (valued at the greater of net book value
or Fair Market Value), together with all other Utility Assets of the
Company and its Subsidiaries disposed of during the immediately preceding
12 calendar months, shall not exceed 10% of the value of Utility Assets
as at the end of the then most recently ended fiscal year of the Company;
and (III) the value of such Utility Assets (valued at the greater of net
book value or Fair Market Value), together with all other Utility Assets
of the Company and its Subsidiaries disposed of on or after the date
hereof, shall not exceed 25% of the value of Utility Assets as at the end
of the then most recently ended fiscal year of the Company. The
provisions of this Section 5.11 shall not apply or operate to prevent any
Transfer of Utility Assets of any Subsidiary if within 180 days after the
effective date of such sale or other disposition, such Subsidiary
reinvests such net proceeds in other Utility Assets of such
Subsidiary which are not encumbered by Liens which are not permitted
hereunder and which are to be used by, or are useful to, such Subsidiary
in its normal business activities, provided that if the Utility Assets as
Transferred were unencumbered, the Utility Assets purchased with such net
proceeds shall be unencumbered.

     Section 5.12.  Acquisition of Notes.  Neither the Company nor any
Subsidiary or Affiliate, directly or indirectly, may acquire or make any
offer to acquire any Notes unless an offer has been made to acquire
Notes, pro rata, from all holders of the Notes at the same time and upon
the same terms.  In case the Company, any Subsidiary or any Affiliate
acquires any Notes, such Notes shall immediately thereafter be cancelled
and no Notes shall be issued in substitution therefor.  Without limiting
the foregoing, upon the purchase or other acquisition of any Notes by
the Company, any Subsidiary or any Affiliate, such Notes shall no longer
be outstanding for purposes of any section of this Agreement relating to
the taking by the holders of the Notes of any actions with respect
thereto.

     Section 5.13.  Covenant to Secure Equally.  The Company will not
create or assume any Lien upon any of its property or assets, whether now
owned or hereafter acquired (unless prior written consent to the creation
or assumption thereof shall have been obtained from the Required
Holder(s)), unless simultaneously with the creation or assumption
thereof, the Company makes or causes to be made effective provision
whereby the obligations of the Company hereunder will be secured by such
Lien equally and ratably with any and all other Indebtedness thereby
secured; provided, that the creation and maintenance of such equal and
ratable Lien shall not in any way limit or modify the right of the
holders of the Notes to enforce the provisions of Section 5.8.

     Section 5.14.  Reports and Rights of Inspection.  The Company will
keep, and will cause each Subsidiary to keep, proper books of record and
account in which full and correct entries will be made of all dealings or
transactions of, or in relation to, the business and affairs of the
Company or such Subsidiary, in accordance with generally accepted
accounting principles consistently applied (except for changes disclosed
in the financial statements furnished to holders of the Notes pursuant to
this Section 5.14 and concurred in by the independent public accountants
referred to in Section 5.14(b) hereof), and will furnish to each
Purchaser so long as such Purchaser is the holder of any Note and to each
other Institutional Holder of any then outstanding Note (herein, together
with such Purchaser called "an Entitled Holder") (in duplicate if so
specified below or otherwise requested):

     (a)  Quarterly Statements.  As soon as practicable and in any event
within 45 days after the end of each quarterly fiscal period (except the
last) of each fiscal year, copies of consolidated statements of income,
cash flows and a consolidated statement of shareholders'
equity of the Company and its Subsidiaries for the period from the
beginning of the current fiscal year to the end of such quarterly period,
and a consolidated balance sheet of the Company and its Subsidiaries as
at the end of such quarterly period, setting forth in each case in
comparative form figures for the corresponding period in the preceding
fiscal year, all in reasonable detail and satisfactory in form to the
Required Holder(s) and certified by an authorized financial officer of
the Company, subject to changes resulting from year-end adjustments;
provided, however, that delivery pursuant to clause (c) below of copies
of the Quarterly Report on Form 10-Q of the Company for such quarterly
period filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this clause (a).

     (b)  Annual Statements.  As soon as practicable and in any event
within 90 days after the close of each fiscal year of the Company, copies
of consolidated statements of income, cash flows and a consolidated
statement of shareholders' equity of the Company and its Subsidiaries
for such year, and a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such year, setting forth in each case in
comparative form corresponding consolidated figures from the preceding
annual audit, all in reasonable detail and satisfactory in form to the
Required Holder(s) and reported on by independent public accountants of
recognized national standing selected by the Company whose report shall
be without limitation as to the scope of the audit and reasonably
satisfactory in substance to the Required Holder(s); provided, however,
that delivery pursuant to clause (c) below of copies of the Annual Report
on Form 10-K of the Company for such fiscal year filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (b).

     (c)  Public Filings and Other Reports.  Promptly upon transmission
thereof, copies of all such financial statements, proxy statements,
notices and reports as it shall send to its public stockholders and
copies of all registration statements (without exhibits) and all reports
which it files with the Securities and Exchange Commission (or any
governmental body or agency succeeding to the functions of the Securities
and Exchange Commission);

     (d)  Audit Reports.  Promptly upon receipt thereof, a copy of each
other management report submitted to the Company or San Jose Water
Company by independent accountants in connection with any annual, interim
or special audit made by them of the books of the Company or San Jose
Water Company;

     (e)  Officer's Certificates.

     (1)  Together with each delivery of financial statements required by
clauses (a) and (b) above, the Company will deliver to each Entitled
Holder an Officer's Certificate demonstrating (with computations in
reasonable detail) compliance by the Company and its Subsidiaries with
the provisions of Sections 5.6, 5.7, 5.8, 5.10 and 5.11 and stating that
there exists no Event of Default or Default, or, if any Event of Default
or Default exists, specifying the nature and period of existence thereof
and what action the Company proposes to take with respect thereto.
Together with each delivery of financial statements required by clause
(b) above, the Company will deliver to each Entitled Holder a certificate
or letter of such accountants stating that, in making the audit necessary
for their report on such financial statements, they have obtained no
knowledge of any Event of Default or Default, or, if they have obtained
knowledge of any Event of Default or Default, specifying the nature and
period of existence thereof.  Such accountants, however, shall not be
liable to anyone by reason of their failure to obtain knowledge of any
Event of Default or Default which would not be disclosed in the course of
an audit conducted in accordance with generally accepted auditing
standards;

     (2)  As soon as practicable and in any event within five days after
any officer of the Company obtaining knowledge (I) of any condition or
event which, in the opinion of management of the Company, could have a
Material Adverse Effect, (II) that any Person has given any notice from
any Person to the Company or any of its Subsidiaries or taken any other
action with respect to a claimed Default or Event of Default, or (III) of
any regulatory proceeding which may have a Material Adverse Effect, an
Officer's Certificate specifying the nature and period of existence of
any such condition or event, or specifying the notice given or action
taken by such Person and the nature of any such claimed Default, Event of
Default or condition, or specifying the details of such proceeding,
litigation or dispute and what action the Company or any of its
Subsidiaries has taken, is taking or proposes to take with respect
thereto; The Company also covenants that immediately, and in no event
later than five Business Days, after any Responsible Officer obtains
knowledge of an Event of Default or Default, it will deliver to each
Entitled Holder an Officer's Certificate specifying the nature and period
of existence thereof and what action the Company has taken, is taking or
proposes to take with respect thereto; and

     (f)  Requested Information.  With reasonable promptness, such other
data and information as any Entitled Holder may reasonably request.
Without limiting the foregoing, the Company will permit each Entitled
Holder of any then outstanding Note (or such Persons as such Entitled
Holder may designate), (A) at such Entitled Holders' expense if no
Default or Event of Default exists, and (B) at the Company's expense
if a Default or Event of Default does exist, to visit and inspect any of
the properties of the Company and its Subsidiaries, to examine the
corporate (or equivalent) books and financial records of the Company and
its Subsidiaries and make copies thereof or extracts therefrom and to
discuss the affairs, finances and accounts of any of such Persons with
the principal officers of the Company and its independent public
accountants, all at such reasonable times and as often as such Entitled
Holder or Holders, as the case may be, may reasonably request.

     Section 5.15.  Terrorism Sanctions Regulations.  The Company will
not and will not permit any Controlled Entity to (a) become a Blocked
Person or (b) have any investments in or engage in any dealings or
transactions with any Blocked Person if such investments, dealings or
transactions would cause any holder of a Note to be in violation of any
laws or regulations that are applicable to such holder.

     Section 6.  EVENTS OF DEFAULT AND REMEDIES THEREFOR.

     Section 6.1.  Events of Default.  Any one or more of the following
shall constitute an "Event of Default" as such term is used herein:

     (a)  Default shall occur in the payment of interest on any Note when
the same shall have become due and such default shall continue for more
than 10 days; or

     (b)  Default shall occur in the making of any payment of the
principal of any Note or Make-Whole Amount, if any, thereon at the
expressed or any accelerated maturity date or at any date fixed for
prepayment; or

     (c)  Default shall be made in the payment as and when the same shall
become due and payable (whether by lapse or time, by declaration, by call
for redemption or otherwise) of the principal of or interest on any
Indebtedness (other than the Notes) of the Company or any Subsidiary for
borrowed money, in an aggregate amount exceeding $5,000,000, and such
default shall continue beyond the period of grace, if any, allowed with
respect thereto; or

     (d)  Default or the happening of any event shall occur under any
indenture, agreement or other instrument under which any Indebtedness of
the Company or any Subsidiary for borrowed money, in an aggregate amount
exceeding $5,000,000 may be issued, and such default or event shall
continue for a period of time sufficient to permit the acceleration of
the maturity of any Indebtedness of the Company or any Subsidiary
outstanding thereunder; or
     (e)  Default shall occur in the observance or performance of any
covenant or agreement contained in Section 5.6 through Section 5.11,
other than any such default which is cured no later than five days after
such default shall first become known to any Responsible Officer of the
Company; or

     (f)  Default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied within 30 days
after such default shall first become known to any Responsible Officer of
the Company; or

     (g)  Any representation or warranty made by the Company herein, or
made by the Company in any statement or certificate furnished by the
Company in connection with the consummation of the issuance and delivery
of the Notes or furnished by the Company pursuant hereto, is untrue in
any material respect as of the date of the issuance or making thereof; or

     (h)  (1) The Company or any Subsidiary becomes insolvent or is
generally not paying its debts as they become due or (2) the Company or
any Subsidiary makes an assignment for the benefit of creditors, causes
or suffers an order of relief to be entered with respect to it under
applicable Federal bankruptcy law or applies for or consents to the
appointment of a custodian, liquidator, trustee or receiver for the
Company or such Subsidiary or for the major part of the
property of either; or

     (i)  Final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 is or are outstanding against the
Company or any Subsidiary or against any property or assets of either and
any one of such judgments has remained unpaid, unvacated, unbonded or
unstayed by appeal or otherwise for a period of 60 days from the date of
its entry; or

     (j)  A custodian, liquidator, trustee or receiver is appointed for
the Company or any Subsidiary or for the major part of the property of
either and is not discharged within 60 days after such appointment; or

     (k)  Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Subsidiary and, if instituted against the
Company or any Subsidiary, are consented to or are not dismissed within
60 days after such institution; or

     (l)  Except as consented to by the Required Holder(s) in writing,
the Company shall cease to own, directly, at least 95% of the Voting
Stock of San Jose Water Company (or any successor corporation or other
business entity resulting from a consolidation or merger of San Jose
Water Company with such other corporation or other business entity
pursuant to Sections 5.9(a), 5.9(b) or 5.9(d)).

     Section 6.2.  Notice to Holders.  When any Event of Default
described in the foregoing Section 6.1 has occurred, or if the holder of
any Note or of any other evidence of Indebtedness of the Company or any
Subsidiary for borrowed money gives any notice or takes any other action
with respect to a claimed default, the Company agrees to give notice
within three Business Days of such event to all holders of the Notes then
outstanding.

     Section 6.3.  Acceleration of Maturities.

     (a)  When any Event of Default described in clauses (h)(2), (j), or
(k) of Section 6.1 has occurred with respect to the Company or San Jose
Water Company, then all outstanding Notes shall immediately become due
and payable, without presentment, demand or notice of any kind, all of
which are hereby expressly waived.

     (b)	When any other Event of Default has occurred and is
continuing, the Required Holder(s) may, by notice to the Company, declare
the entire principal and all interest accrued on all Notes to be, and all
Notes shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived.

     (c)	When any Event of Default described in clause (a) or (b) of
Section 6.1 has occurred and is continuing, any holder or holders of
Notes at the time outstanding affected by such Event of Default may, at
any time at its or their option, by notice or notices to the
Company, declare all the Notes held by it or them to be immediately due
and payable, without any presentment, demand, protest or other notice of
any kind, all of which are hereby expressly waived.  Upon the Notes
becoming due and payable as a result of any Event of Default as
aforesaid, the Company will forthwith pay to the holders of the Notes the
entire principal and interest accrued on the Notes and, to the extent not
prohibited by applicable law, an amount as liquidated damages for the
loss of the bargain evidenced hereby (and not as a penalty) equal to the
Make-Whole Amount.  No course of dealing on the part of the holder or
holders of any Notes nor any delay or failure on the part of any holder
of Notes to exercise any right shall operate as a waiver of such right or
otherwise prejudice such holder's rights, powers and remedies.  The
Company further agrees, to the extent permitted by law, to pay to the
holder or holders of the Notes all costs and expenses incurred by them in
the collection of any Notes upon any default hereunder or thereon,
including reasonable compensation to such holder's or holders' attorneys
for all services rendered in connection therewith.  The Company
acknowledges, and the parties hereto agree, that each holder of a Note
has the right to maintain its investment in the Notes free from repayment
by the Company (except as herein specifically provided for) and that the
provision for payment of a Make-Whole Amount by the Company in the event
that the Notes are prepaid or are accelerated as a result of an Event of
Default, is intended to provide compensation for the deprivation of such
right under such circumstances

     Section 6.4.  Rescission of Acceleration.  The provisions of Section
6.3 are subject to the condition that if the principal of and accrued
interest on all or any outstanding Notes have been declared immediately
due and payable pursuant to Section 6.3(b) or (c), the Required Holder(s)
may, by written instrument filed with the Company, rescind and annul such
declaration and the consequences thereof, provided that at the time such
declaration is annulled and rescinded:

     (a)  no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement;

     (b)  all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal,
interest or Make-Whole Amount on the Notes which has become due and
payable solely by reason of such declaration under Section 6.3) shall
have been duly paid; and

     (c)  each and every other Default and Event of Default shall have
been made good, cured or waived pursuant to Section 7.1; and provided
further, that no such rescission and annulment shall extend to or affect
any subsequent Default or Event of Default or impair any right consequent
thereto.

     Section 7.  AMENDMENTS, WAIVERS AND CONSENTS.

     Section 7.1.  Consent Required.  Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be
amended or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), if
the Company shall have obtained the consent in writing of the Required
Holder(s); provided that without the written consent of the holders of
all of the Notes then outstanding, no such amendment or waiver shall be
effective (i) which will change the time of payment of the principal of
or the interest on any Note or change the principal amount thereof or
change the rate of interest thereon, or (ii) which will change any of the
provisions with respect to optional prepayments, or (iii) which will
change the percentage of holders of the Notes required to consent to any
such amendment or waiver of any of the provisions of this Section 7 or
Section 6.

     Section 7.2.  Solicitation of Holders.  So long as there are any
Notes outstanding, the Company will not solicit, request or negotiate for
or with respect to any proposed waiver or amendment of any of the
provisions of this Agreement or the Notes unless each holder of Notes
(irrespective of the amount of Notes then owned by it) shall be informed
thereof by the Company and shall be afforded the opportunity of
considering the same and shall be supplied by the Company with sufficient
information to enable it to make an informed decision with respect
thereto.  The Company will not, directly or indirectly, pay or cause to
be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any holder of Notes as consideration for
or as an inducement to entering into by any holder of Notes of any waiver
or amendment of any of the terms and provisions of this Agreement or the
Notes unless such remuneration is concurrently offered, on the same
terms, ratably to the holders of all Notes then outstanding.

      Section 7.3.  Effect of Amendment or Waiver.  Any such amendment
or waiver shall apply equally to all of the holders of the Notes and
shall be binding upon them, upon each future holder of any Note and upon
the Company, whether or not such Note shall have been marked to indicate
such amendment or waiver.  No such amendment or waiver shall extend to or
affect any obligation not expressly amended or waived or impair any right
consequent thereon.

     Section 8.  INTERPRETATION OF AGREEMENT; DEFINITIONS.

     Section 8.1.  Definitions. Unless the context otherwise requires,
the terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to
both the singular and plural forms of any of the terms herein defined:

     "Authorized Denominations" shall mean minimum denominations of
$1,000,000 and minimum increments of $100,000 for amounts in excess of
$1,000,000.

     "Adjusted Net income" shall mean, for any period, with respect to
the Company's Water Subsidiaries, cumulative net income earned during
such period, as determined in accordance with generally accepted
accounting principles.

     "Adjusted Net Worth" shall mean, as at any time of determination
thereof, the consolidated stockholders' equity of the Company and its
Subsidiaries at such time, excluding the effect of accumulated other
comprehensive income or loss, as determined in accordance with
generally accepted accounting principles.

     "Affiliate" shall mean any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is
under common control with, the Company, (ii) which beneficially owns or
holds 5% or more of any class of the Voting Stock of the Company or (iii)
5% or more of the Voting Stock (or in the case of a Person which is not a
corporation, 5% or more of the equity interest) of which is beneficially
owned or held by the Company.  The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of
Voting Stock, by contract or otherwise.

     "Agreement" shall mean this Note Agreement dated as of June 30,
2011, as amended or otherwise modified from time to time.

     "Anti-Money Laundering Laws" is defined in item 22(c) of Exhibit B.

     "Blocked Person" is defined in item 22(a) of Exhibit B.

     "Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in New York or California are required by law to
close or are customarily closed.

     "Capitalization" shall mean, as at any time of determination
thereof, the sum of (i) Net Worth and (ii) Total Debt.

     "Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a balance sheet of
the lessee in accordance with generally accepted accounting principles.

     "Capitalized Lease Obligations" shall mean, with respect to any
Person, any Rentals which, under generally accepted accounting
principles, would be required to be capitalized on the books of such
Person, taken at the amount thereof accounted for as indebtedness (net of
interest expense) in accordance with generally accepted accounting
principles.

     "Closing Date" shall have the meaning set forth in Section 1.2.

     "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time
to time.

     "Company" shall mean SJW Corp., a California corporation, and any
Person who succeeds to all, or substantially all, of the assets and
business of SJW Corp..

     "Confidential Information" shall have the meaning set forth in
Section 9.13.

     "consolidated" shall mean the consolidation of the accounts of the
Company and its Subsidiaries in accordance with generally accepted
accounting principles, including principles of consolidation, consistent
with those applied in the preparation of the consolidated financial
statements referred to in Section 5.14(b) or, if no such statements have
been so delivered, the most recent audited financial statements referred
to in item 4(a) of Exhibit B attached hereto.

     "Consolidated Net Worth" shall mean as of any date the aggregate
amount of the capital stock accounts (less treasury stock), retained
earnings and surplus of the Company and its Subsidiaries after deducting
Minority Interests to the extent included in the capital stock accounts
of the Company, all as determined on a consolidated basis for the Company
and its Subsidiaries.

     "Controlled Entity" means any of the Subsidiaries of the Company and
any of their or the Company's respective Controlled Affiliates. As used
in this definition, "Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.

     "Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both,
constitute an Event of Default.

     "Default Rate" means a rate of interest equal to 6.35%.

     "Environmental Laws" means any statute, law, ordinance, rule or
regulation of any local, state or federal authority having jurisdiction
over any property of the Company or of its Subsidiaries or any portion
thereof, regulating or imposing liability concerning the release or
disposal of any hazardous waste or toxic substance or relating to
pollution or protection of the environment, including, but not limited
to: (a) the Federal Water Pollution Control Act, as amended; (b) the
Federal Resource Conservation and Recovery Act, as amended; (c) the
Comprehensive Environmental Response Compensation and Liability Act, as
amended; (d) the Toxic Substance Control Act, as amended; (e) the Clean
Air Act, as amended; and (f) any similar law.

     "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to
time.  References to sections of ERISA shall be construed to also refer
to any successor sections.

     "ERISA Affiliate" means any Person, trade or business (whether or
not incorporated) that is treated as a single employer together with the
Company under section 414 of the Code.

     "Event of Default" shall have the meaning set forth in Section 6.1.

     "Fair Market Value"  shall mean, at any time with respect to any
property of any kind or character, the sale value of such property that
would be realized in an arm's-length sale at such time between an
informed and willing buyer and an informed and willing seller, under no
compulsion to buy or sell, respectively.

     "Governmental Authority" means
          (a)  the government of:
            (i)  the United States of America or any state or other
political subdivision thereof, or
            (ii)  any other jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary, or
          (b)  any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.

     "Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing, or in effect
guaranteeing, any Indebtedness, dividend or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred
through an agreement, contingent or otherwise, by such Person: (i) to
purchase such Indebtedness or obligation or any property or assets
constituting security therefor, (ii) to advance or supply funds (x) for
the purchase or payment of such Indebtedness or obligation, (y) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such
Indebtedness or obligation, (iii) to lease property or to purchase
Securities or other property or services primarily for the purpose of
assuring the owner of such Indebtedness or obligation of the
ability of the primary obligor to make payment of the Indebtedness or
obligation, or (iv) otherwise to assure the owner of the Indebtedness or
obligation of the primary obligor against loss in respect thereof.  For
the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be
deemed to be Indebtedness equal to the principal amount of such
Indebtedness for borrowed money which has been guaranteed, and a Guaranty
in respect of any other obligation or liability or any dividend shall be
deemed to be Indebtedness equal to the maximum aggregate amount of such
obligation, liability or dividend.

     "Hazardous Material" means any hazardous or toxic material,
substance or waste which is defined by those or similar terms and is
regulated as such under any applicable Environmental Law.

     "Indebtedness" shall mean, with respect to any Person and without
duplication,
       (i)  its liabilities for borrowed money, including those
evidenced by notes, bonds, debentures and similar instruments, and its
redemption obligations in respect of mandatorily Redeemable Preferred
Stock;
       (ii)  its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created or
arising under any conditional sale or other title retention agreement
with respect to any such property);
       (iii)  all its Capitalized Lease Obligations;
       (iv)  all liabilities secured by any Lien with respect to any
property owned by such Person or payable out of the proceeds of the
production of property or assets owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
       (v)  its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks and other financial institutions (whether or not representing
obligations for borrowed money);
       (vi)  Swaps of such Person;
       (vii)  Preferred Stock of Subsidiaries owned by Persons other than
such Person or a Wholly Owned Subsidiary of such Person; and
       (viii)  all its Guaranties with respect to liabilities of a type
described in any of clauses (i) through (vii) hereof. Indebtedness of any
Person shall include all obligations of such Person of the character
described in the immediately preceding clauses (i) through (viii) to the
extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished
under generally accepted accounting principles.

     "Institutional Holder" shall mean any "qualified institutional
buyer," as defined in Rule 144A promulgated under the Securities Exchange
Act of 1934, as said Rule may from time to time be amended.

     "Institutional Investor" means (a) any holder of a Note, (b) any
bank, trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance
company, any broker or dealer, or any other similar financial institution
or entity, regardless of legal form, and (c) any Related Fund of any
holder of any Note.

     "Investments" shall mean all investments, in cash or by delivery of
property made, directly or indirectly in any Person, whether by
acquisition of shares of capital stock, indebtedness or other obligations
or Securities or by loan, advance, capital contribution or otherwise;
provided, however, that "Investments" shall not mean or include routine
investments in property to be used or consumed in the ordinary course of
business.

     "Lien" shall mean any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the security interest lien arising from
a mortgage, encumbrance, pledge, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes, but, excluding in
the case of any Water Subsidiary, rights, reserved to or vested in any
municipality or public authority as an incident of any franchise,
grant, license or permit of the Company or any Water Subsidiary, as the
case may be, whether by the terms of any franchise, grant, license or
permit or provision of law or otherwise.  The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions
and encumbrances (including, with respect to stock, stockholder
agreements, voting trust agreements, buyback agreements and all similar
arrangements) affecting property.  For the purposes of this Agreement,
the Company or a Subsidiary shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional sale
agreement, Capitalized Lease or other arrangement pursuant to which title
to the property has been retained by or vested in some other Person for
security purposes and such retention or vesting shall constitute a Lien.

     "Make-Whole Amount" shall mean, in connection with any prepayment
under Section 2.2 or acceleration of the Notes, the excess, if any, of
(i) the aggregate present value as of the date of such prepayment or such
acceleration of each dollar of principal being prepaid or accelerated and
the amount of interest (exclusive of interest accrued to the date of
prepayment or acceleration) that would have been payable in respect of
such dollar of principal being prepaid or accelerated if such prepayment
or such acceleration had not occurred, determined by discounting (on the
same periodic basis as that on which interest on the Notes is payable)
such amounts at the Reinvestment Rate from the respective dates on which
they would have been payable to the date of prepayment, over (ii) 100% of
the principal amount of the outstanding Notes being prepaid or
accelerated.  If the Reinvestment Rate is equal to or higher than 4.35%,
the Make-Whole Amount shall be zero.  For purposes of any determination
of the Make-Whole Amount:

     "Reinvestment Rate" shall mean the Treasury Rate plus 0.50%.

     "Determination Date" shall mean the date that is two Business Days
before the date fixed for a prepayment pursuant to a notice required by
Section 2.3 or an acceleration.

     "Treasury Rate" shall mean the yield on actively traded on the run
United States Treasury securities having a maturity (rounded to the
nearest month) corresponding to the Remaining Life of the Notes as
reported on page "PX1" of the Bloomberg Financial Markets Services Screen
at 11:00 a.m., Central Standard Time on the Determination Date, or, if
not available, the arithmetic mean of the yields for the two columns
under the heading "Week Ending" published in the Statistical Release
under the caption "Treasury Constant Maturities" for the maturity
(rounded to the nearest month) corresponding to the Remaining Life of the
Notes.  If no maturity exactly corresponds to such Remaining
Life of the Notes, yields on the actively traded on the run United States
Treasury securities for the published maturity next longer than the
Remaining Life of the Notes and for the published maturity next shorter
than the Remaining Life of the Notes shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be
interpolated from such yields on a straight-line basis, rounding to the
nearest month.

     "Remaining Life of the Notes" shall mean, as of the Determination
Date, the number of years (calculated to the nearest one-twelfth) which
will elapse between the date of the prepayment or acceleration and the
maturity date of the Notes.

     "Statistical Release" shall mean the then most recently published
statistical release designated "H.15" or any successor publication which
is published weekly by the Federal Reserve System and which establishes
yields on actively traded U.S. Government Securities adjusted to constant
maturities or, if such statistical release is not published at the time
of any determination hereunder, then such other reasonably comparable
index which shall be designated by the Required Holder(s).

     "Material Adverse Effect" shall mean (i) a material adverse effect
on the business, assets, liabilities, operations or financial condition,
of the Company and its Subsidiaries, taken as a whole, (ii) material
impairment of the Company's ability to perform any of its respective
obligations under this Agreement and the Notes or (iii) material
impairment of the validity or enforceability of the rights of, or the
benefits available to, the holders of any of the Notes under this
Agreement or the Notes.

     "Minority Interests" shall mean any shares of stock of any class of
a Subsidiary (other than directors' qualifying shares as required by law)
that are not owned by the Company and/or one or more of its Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests
constituting preferred stock at the voluntary or involuntary liquidating
value of such preferred stock, whichever is greater, and by valuing
Minority Interests constituting common stock at the book value of capital
and surplus applicable thereto adjusted, if necessary, to reflect any
changes from the book value of such common stock required by the
foregoing method of valuing Minority Interests in preferred stock.

     "Moody's" shall mean Moody's Investors Services, Inc.

     "Multiemployer Plan" means any Plan that is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA).

     "NAIC" means the National Association of Insurance Commissioners or
any successor thereto.

     "Net Worth" shall mean, as at any time of determination thereof,
the consolidated stockholders' equity of the Company and its
Subsidiaries.
     "OFAC" is defined in item 22(a) of Exhibit B.
     "OFAC Listed Person" is defined in item 22(a) of Exhibit B.
     "OFAC Sanctions Program" means any economic or trade sanction that
OFAC is responsible for administering and enforcing.  A list of OFAC
Sanctions Programs may be found at
http://www.ustreas.gov/offices/enforcement/ofac/programs/.

     "Officer's Certificate" shall mean a certificate signed in the name
of the Company by its President, one of its Vice Presidents or its
Treasurer.

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

     "Person" shall mean an individual, partnership, corporation, trust
or unincorporated organization, and a government or agency or political
subdivision thereof.

     "Plan" means an "employee benefit plan" (as defined in section 3(3)
of ERISA) subject to Title I of ERISA that is or, within the preceding
five years, has been established or maintained, or to which contributions
are or, within the preceding five years, have been made or required to be
made, by the Company or any ERISA Affiliate or with respect to which the
Company or any ERISA Affiliate may have any liability

     "Preferred Stock" shall mean any class of capital stock of a
corporation that is preferred over any other class of capital stock of
such corporation as to the payment of dividends or the payment of any
amount upon liquidation or dissolution of such corporation.

     "Purchaser" shall have the meaning set forth in Section 1.1.

     "Redeemable" shall mean, with respect to the capital stock of any
Person, each share of such Person's capital stock that is:

       (i)  redeemable, payable or required to be purchased or otherwise
retired or extinguished, or convertible into Indebtedness of such Person
(A) at a fixed or determinable date, whether by operation of sinking fund
or otherwise, (B) at the option of any Person other than such Person, or
(C) upon the occurrence of a condition not solely within the control of
such Person; or

       (ii)  convertible into other Redeemable capital stock or other
equity interests.

     "Related Fund" means, with respect to any holder of any Note, any
fund or entity that (i) invests in Securities or bank loans, and (ii) is
advised or managed by such holder, the same investment advisor as such
holder or by an affiliate of such holder or such investment advisor.

      "Rentals" shall mean and include, 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.

     "Reportable Event" shall have the same meaning as in ERISA.

     "Required Holder(s)" shall mean, at any time, holders of at least
66-2/3% in aggregate principal amount of the outstanding Notes at such
time.

     "Responsible Officer" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of
the Company or any other officer of the Company involved principally in
its financial administration or its controllership function.

     "S&P" shall mean Standard & Poor's Rating Services (a division of
McGraw Hill Companies, Inc.).

     "San Jose Water Company" shall mean the San Jose Water Company, a
California corporation (and any successors thereto).

     "Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.

     "SJWTX" shall mean SJWTX, Inc., a Texas corporation (and any
successors thereto).

     "Subsidiary" shall mean, as to any Person, any corporation,
association or other business entity in which such Person or one or more
of its Subsidiaries or such Person and one or more of its Subsidiaries
owns sufficient equity or voting interests to enable it or them (as a
group) ordinarily, in the absence of contingencies, to elect a majority
of the directors (or Persons performing similar functions) of such
entity, and any partnership or joint venture if more than a 50% interest
in the profits or capital thereof is owned by such Person or one or more
of its Subsidiaries or such Person and one or more of its Subsidiaries
(unless such partnership can and does ordinarily take major business
actions without the prior approval of such Person or one or more of its
Subsidiaries).  Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the
Company.

     "SVO" means the Securities Valuation Office of the NAIC or any
successor to such Office.

     "Swaps" shall mean, with respect to any Person, payment obligations
with respect to interest rate swaps, currency swaps, commodity swaps and
similar obligations obligating such Person to make payments, whether
periodically or upon the happening of a contingency.  For the purposes of
this Agreement, the amount of the obligation under any Swap shall be the
amount determined in respect thereof as of the end of the then most
recently ended fiscal quarter of such Person, based on the assumption
that such Swap had terminated at the end of such fiscal quarter, and in
making such determination, if any agreement relating to such Swap
provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment
of amounts by and to such Person, then in each such case, the amount of
such obligation shall be the net amount so determined.

      "Total Debt" shall mean the consolidated Indebtedness of the
Company and its Subsidiaries.

      "Transfer" shall mean, with respect to any item, the sale,
exchange, conveyance, lease, transfer or other disposition of such item.

     "Utility Assets" shall mean the stock (or equivalent equity
interests) of, and assets owned by, Water Subsidiaries.

     "Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or Persons
performing similar functions).

     "Water Subsidiaries" shall mean SJWTX, San Jose Water Company, and
each other Subsidiary that owns any material water distribution and/or
sewage collection assets.

     "Wholly Owned Subsidiary" shall mean any Subsidiary, all of the
stock or other equity security of every class (other than a de minimus
number of directors' qualifying shares) of which is, at the time as of
which any determination is being made, owned by the Company either
directly or through Wholly Owned Subsidiaries, and which has outstanding
no options, warrants, rights or other securities entitling the holder
thereof (other than the Company or a Wholly Owned Subsidiary) to acquire
shares of capital stock or other equity interests of such Person.

     Section 8.2.  Accounting Principles.  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 purposes of this Agreement, the same shall be
done in accordance with generally accepted accounting principles, to the
extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.

      If after the date of this Agreement (a) any change shall occur in
generally accepted accounting principles in effect on the date of this
Agreement (a "GAAP Change") which results in a change in any computation
or definition used in calculating compliance by the Company with any
covenant in Sections 5.6 through 5.11 and which, in the good faith
judgment of the chief financial officer of the Company has had or may
have a material effect on the ability of the Company to comply with one
or more such covenants (the "Affected Covenants") and (b) the Purchasers
shall receive within 90 days after the effective date of such GAAP Change
(the "Effective Date") a written notice from the Company (i) describing
the GAAP Change and (ii) setting forth in reasonable detail (including
detailed calculations) why the GAAP Change has had or may have a material
effect on the ability of the Company to comply with the Affected
Covenants and confirming the good faith judgment of the chief financial
officer of the Company with respect thereto, such Purchaser agrees upon
such Purchaser's receipt of such notice to enter into good faith
negotiations with the Company for an amendment to this Agreement of the
Affected Covenants so as to place the parties, insofar as possible, in
the same relative position as if the GAAP Change had not occurred.  If
notice of a GAAP Change has been given then during the period from the
Effective Date of the GAAP Change until the effective date of an
amendment to this Agreement with respect thereto, the Company shall
calculate compliance with the Affected Covenants as though such GAAP
Change had not occurred and if no such amendment to this Agreement shall
become effective within one year from the Effective Date of such GAAP
Change, the Company shall continue to calculate compliance with the
Affected Covenants as though such GAAP Change had not occurred.

      For purposes of determining compliance with the financial covenants
contained in this Agreement, any election by the Company to measure any
financial liability using fair value (as permitted by Accounting Standard
Codification Topic No. 825-10-25 - Fair Value Option or any similar
accounting standard) shall be disregarded and such determination shall be
made as if such election had not been made.

     Section 8.3.  Directly or Indirectly.  Where any provision in this
Agreement refers to action to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable
whether the action in question is taken directly or indirectly by such
Person.

     Section 9.  MISCELLANEOUS.

     Section 9.1.  Registered Notes.  The Company shall cause to be
kept at its principal office a register for the registration and transfer
of the Notes (hereinafter called the "Note Register"), and the Company
will register or transfer or cause to be registered or transferred, as
hereinafter provided and under such reasonable regulations as it may
prescribe, any Note issued pursuant to this Agreement.

      At any time and from time to time the registered holder of any Note
which has been duly registered as hereinabove provided may transfer such
Note upon surrender thereof at the principal office of the Company duly
endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of such Note or its attorney duly authorized in
writing.

     The Person in whose name any registered Note shall be registered
shall be deemed and treated as the owner and holder thereof for all
purposes of this Agreement.  Payment of or on account of the principal,
Make-Whole Amount, if any, and interest on any registered Note shall be
made to or upon the written order of such registered holder.

     Section 9.2.  Exchange of Notes.  At any time and from time to
time, upon not less than 10 days' notice to that effect given by the
holder of any Note initially delivered or of any Note substituted
therefor pursuant to Section 9.1, this Section 9.2 or Section 9.3, and,
upon surrender of such Note at its office, the Company will deliver in
exchange therefor, without expense to such holder, except as set forth
below, a Note for the same aggregate principal amount as the then unpaid
principal amount of the Note so surrendered, or Notes in the denomination
of $100,000 or any amount in excess thereof as such holder shall specify,
dated as of the date to which interest has been paid on the Note so
surrendered or, if such surrender is prior to the payment of any interest
thereon, then dated as of the date of issue, payable to such Person or
Persons, or registered assigns, as may be designated by such holder, and
otherwise of the same form and tenor as the Notes so surrendered for
exchange.

     Section 9.3.  Loss, Theft, Etc. of Notes.  Upon receipt of
evidence satisfactory to the Company of the loss, theft, mutilation or
destruction of any Note, and in the case of any such loss, theft or
destruction upon delivery of a bond of indemnity in such form and amount
as shall be reasonably satisfactory to the Company, or in the event of
such mutilation upon surrender and cancellation of the Note, the Company
will make and deliver without expense to the holder thereof, a new Note,
of like tenor, in lieu of such lost, stolen, destroyed or mutilated Note.
If the Purchaser or any subsequent Institutional Holder is the owner of
any such lost, stolen or destroyed Note, then the affidavit of an
authorized officer of such owner, setting forth the fact of loss, theft
or destruction and of its ownership of such Note at the time of such
loss, theft or destruction shall be accepted as satisfactory evidence
thereof and no further indemnity shall be required as a condition to the
execution and delivery of a new Note other than the written agreement of
such owner to indemnify the Company.

     Section 9.4.  Expenses, Stamp Tax Indemnity.  Whether or not the
transactions herein contemplated shall be consummated, the Company agrees
to pay directly all the Purchasers' reasonable out-of-pocket expenses
incurred by the Purchasers and each other holder of a Note in connection
with the preparation, execution and delivery of this Agreement and the
transactions contemplated hereby, including but not limited to the
reasonable charges and disbursements of Baker Botts L.L.P. , the
Purchasers' special counsel, duplicating and printing costs and charges
for shipping the Notes, adequately insured to each Purchaser at such
Purchaser's home office or at such other place as such Purchaser may
designate, and all such expenses relating to any amendment, waivers or
consents pursuant to the provisions hereof, including, without
limitation, any amendments, waivers, or consents resulting from any work-
out, renegotiation or restructuring relating to the performance by the
Company of its obligations under this Agreement and the Notes.  The
Company also agrees that it will pay and save each Purchaser harmless
against any and all liability with respect to stamp and other taxes, if
any, which may be payable or which may be determined to be payable in
connection with the execution and delivery of this Agreement or the
Notes, whether or not any Notes are then outstanding.  The Company agrees
to protect and indemnify each Purchaser against any liability for any and
all brokerage fees and commissions payable or claimed to be payable to
any Person in connection with the transactions contemplated by this
Agreement.

     Section 9.5.  Powers and Rights Not Waived: Remedies Cumulative.
No delay or failure on the part of the holder of any Note in the exercise
of any power or right shall operate as a waiver thereof; nor shall any
single or partial exercise of the same preclude any other or further
exercise thereof, or the exercise of any other power or right, and the
rights and remedies of the holder of any Note are cumulative to, and are
not exclusive of, any rights or remedies any such holder would otherwise
have.

     Section 9.6.  Notices.  All communications provided for hereunder
shall be in writing and, if to the Purchasers, delivered or mailed
prepaid by registered or certified mail or overnight air courier, or by
facsimile communication, in each case addressed to such Purchaser at such
Purchaser's address appearing on Schedule I to this Agreement or such
other address as such Purchaser or the subsequent holder of any Note
initially issued to such Purchaser may designate to the Company in
writing, and if to the Company, delivered or mailed by registered or
certified mail or overnight air courier, or by facsimile communication,
to the Company at 110 West Taylor Street, San Jose, California 95110,
Attention: Chief Financial Officer or to such other address as the
Company may in writing designate to each Purchaser or to a subsequent
holder of the Note initially issued to such Purchaser; provided, however,
that a notice to such Purchaser by overnight air courier shall only be
effective if delivered to such Purchaser at a street address designated
for such purpose in Schedule I, and a notice to such Purchaser by
facsimile communication shall only be effective if made by confirmed
transmission to such Purchaser at a telephone number designated for such
purpose in Schedule I (with an original by overnight air courier
delivered to such Purchaser the day next following such facsimile
communication), or, in either case, as such Purchaser or a subsequent
holder of any Note initially issued to such Purchaser may designate to
the Company in writing.

     Section 9.7.  Successors and Assigns.  This Agreement shall be
binding upon the Company and its successors and assigns and shall inure
to each Purchaser's benefit and to the benefit of such Purchaser's
successors and assigns, including each successive holder or holders of
any Notes.

      Section 9.8.  Survival of Covenants and Representations.  All
covenants, representations and warranties made by the Company herein and
in any certificates delivered pursuant hereto, whether or not in
connection with the Closing Date, shall survive the closing and the
delivery of this Agreement and the Notes.

     Section 9.9.  Severability.  Should any part of this Agreement
for any reason be declared invalid or unenforceable, such decision shall
not affect the validity or enforceability of any remaining portion, which
remaining portion shall remain in force and effect as if this Agreement
had been executed with the invalid or unenforceable portion thereof
eliminated and it is hereby declared the intention of the parties hereto
that they would have executed the remaining portion of this Agreement
without including therein any such part, parts or portion which may,
for any reason, be hereafter declared invalid or unenforceable.

     Section 9.10.  Governing Law.  This Agreement and the Notes
issued and sold hereunder shall be governed by and construed in
accordance with California law.

     Section 9.11.  Captions.  The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall
not affect the meaning or construction of any of the provisions hereof.

     Section 9.12.  Payments Due on Non-Business Days.  Anything in
this Agreement or the Notes to the contrary notwithstanding, any payment
of principal of or Make-Whole Amount or interest on any Note that is due
on a date other than a Business Day shall be made on the next
succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business
Day; provided that if the maturity date of any Note is a date other than
a Business Day, the payment otherwise due on such maturity date shall
be made on the next succeeding Business Day and shall include the
additional days elapsed in the computation of interest payable on such
next succeeding Business Day.

     Section 9.13.  Confidential Information.  For the purposes of
this Section 9.13, "Confidential Information" means information delivered
to any Purchaser by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to
this Agreement that is proprietary in nature and that was clearly marked
or labeled or otherwise adequately identified (including in any cover
correspondence or transmittal) when received by such Purchaser as being
confidential information of the Company or such Subsidiary, provided that
such term does not include information that (a) was publicly known or
otherwise known to such Purchaser prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by
such Purchaser or any Person acting on such Purchaser's behalf, (c)
otherwise becomes known to such Purchaser other than through disclosure
by the Company or any Subsidiary or (d) constitutes financial statements
delivered to such Purchaser under Section 5.14 that are otherwise
publicly available.  Each Purchaser will maintain the confidentiality of
such Confidential Information in accordance with procedures adopted by
such Purchaser in good faith to protect confidential information of third
parties delivered to such Purchaser, provided that such Purchaser may
deliver or disclose Confidential Information to (i) its directors,
officers, employees, agents, attorneys, trustees and affiliates (to the
extent such disclosure reasonably relates to the administration of the
investment represented by its Notes), (ii) its auditors, financial
advisors and other professional advisors who agree to hold confidential
the Confidential Information substantially in accordance with the terms
of this Section 9.13, (iii) any other holder of any Note, (iv) any
Institutional Investor to which it sells or offers to sell such Note or
any part thereof or any participation therein (if such Person has agreed
in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 9.13), (v) any Person from which
it offers to purchase any Security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information
to be bound by the provisions of this Section 9.13), (vi) any federal or
state regulatory authority having jurisdiction over such Purchaser, (vii)
the NAIC or the SVO or, in each case, any similar organization, or any
nationally recognized rating agency that requires access to information
about such Purchaser's investment portfolio, or (viii) any other Person
to which such delivery or disclosure may be necessary or appropriate (w)
to effect compliance with any law, rule, regulation or order applicable
to such Purchaser, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which such Purchaser is
a party or (z) if an Event of Default has occurred and is continuing, to
the extent such Purchaser may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under such Purchaser's Notes and
this Agreement.  Each holder of a Note, by its acceptance of a Note, will
be deemed to have agreed to be bound by and to be entitled to the
benefits of this Section 9.13 as though it were a party to this
Agreement.  On reasonable request by the Company in connection with the
delivery to any holder of a Note of information required to be delivered
to such holder under this Agreement or requested by such holder (other
than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the
provisions of this Section 9.13.

          In the event that as a condition to receiving access to
information relating to the Company or its Subsidiaries in connection
with the transactions contemplated by or otherwise pursuant to this
Agreement, any Purchaser is required to agree to a confidentiality
undertaking (whether through Intralinks or otherwise) which is different
from the terms of this Section 9.13, the terms of this Section 9.13
shall, as between such Purchaser and the Company, supersede the terms of
any such other confidentiality undertaking.

        [Remainder of Page Intentionally Blank; Signature Pages Follow]

     The execution hereof by you shall constitute a contract between us
for the uses and purposes hereinabove set forth, and this Agreement may
be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.

                                    SJW CORP.
                                    By /s/ W. Richard Roth
                                       -----------------------
                                    Name:  W. Richard Roth
                                    Title: Chief Executive Officer and
                                           President

Accepted as of June 30, 2011.

                                    THE PRUDENTIAL INSURANCE COMPANY OF
                                      AMERICA
                                    By /s/ Brian E. Lemons
                                       -----------------------
                                    Name:  Brian E. Lemons
                                    Title: Vice President

                                   EXHIBIT A

                                   SJW CORP.
                              4.35% Senior Note,
                                Due June 30, 2021
No. R-_____                                               June 30, 2011
$____________________	                                PPN [__________]

     SJW CORP., a California corporation (the "Company"), for value
received, hereby promises to pay to
                              or registered assigns
                          on the 30th day of June, 2021
                             the principal amount of

and to pay interest (computed on the basis of a 360-day year of twelve
30-day months) on the principal amount from time to time remaining unpaid
hereon at the rate of 4.35% per annum from the date hereof until
maturity, payable semiannually on the thirtieth day of each June and
December in each year commencing the June 30 or December 30 next
succeeding the date hereof, and at maturity.  The Company agrees to pay
interest on overdue principal (including any overdue optional prepayment
of principal) and Make-Whole Amount, if any, and (to the extent
legally enforceable) on any overdue installment of interest, at the
Default Rate after the due date, whether by acceleration or otherwise,
until paid.  Both the principal hereof and interest hereon are payable at
the principal office of the Company in San Jose, California in coin or
currency of the United States of America which at the time of payment
shall be legal tender for the payment of public and private debts.

     This Note is one of the 4.35% Senior Notes, due June 30, 2021 (the
"Notes") of the Company in the aggregate principal amount of $50,000,000
issued or to be issued under and pursuant to the terms and provisions of
the Note Agreement dated as of June 30, 2011 (the "Note Agreement"),
entered into by the Company with the original Purchaser therein referred
to and this Note and the holder hereof are entitled equally and ratably
with the holders of all other Notes outstanding under the Note Agreement
to all the benefits provided for thereby or referred to therein.
Reference is hereby made to the Note Agreement for a statement of such
rights and benefits.  Capitalized terms used and not otherwise defined
herein have the meanings specified in the Note Agreement.

     This Note and the other Notes outstanding under the Note Agreement
may be declared due prior to their expressed maturity dates and certain
prepayments are permitted to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreement.

     The Notes are not subject to prepayment or redemption at the option
of the Company prior to their expressed maturity dates except on the
terms and conditions and in the amounts and with the Make-Whole Amount,
if any, set forth in the Note Agreement.

     This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the
Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of this Note or its attorney
duly authorized in writing.  Payment of or on account of principal, Make-
Whole Amount, if any, and interest on this Note shall be made only to or
upon the order in writing of the registered holder.

     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH CALIFORNIA LAW.
                                    SJW CORP.

                                    By ---------------------------
                                       Its

                                   EXHIBIT B

                       REPRESENTATIONS AND WARRANTIES

     SJW CORP., a California corporation (the "Company"), represents and
warrants to each purchaser (each, a "Purchaser" and, collectively, the
"Purchasers") of its Notes referred to below as follows:

     1.  Definitions.  Unless otherwise defined, the defined terms
used in these representations and warranties have the meanings specified
in the Note Agreement dated as of June 30, 2011 (the "Agreement"),
between the Company and The Prudential Insurance Company of America,
relating to the purchase by the Purchasers of the 4.35% Senior Notes, Due
June 30, 2021 (the "Notes") of the Company in the aggregate principal
amount of $50,000,000.

     2.  Subsidiaries.  The Company has no Subsidiaries except as
described on Schedule II to the Agreement.

     3.  Corporate Organization and Authority.   The Company:

      (a)  is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;

      (b)  has all requisite power and authority and all necessary
licenses and permits to own and operate its properties and to carry on
its business as now conducted and as presently proposed to be conducted;

      (c)  is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the property owned or leased
by it makes such licensing or qualification necessary;

      (d)  does not require any governmental or regulatory permits to
enter into the Agreement or issue the Notes, including without limitation
any permit or authorization issued by the California Department of Health
Services and the California Department of Water Resources; and

      (e)  except as have been obtained and are in effect, does not
require any governmental or regulatory permits to operate its business,
including without limitation any permit or authorization issued by the
California Department of Health Services and the California Department of
Water Resources.

     4.  Financial Statements.

      (a)  The consolidated balance sheets of the Company and its
Subsidiaries as of December 31 in each of the years 2009 and 2010 and the
statements of income and cash flows for the fiscal years ended on said
dates, audited by KPMG LLP have been prepared in accordance with
generally accepted accounting principles consistently applied except
as therein noted, are correct and complete and present fairly the
financial position of the Company and its Subsidiaries on a consolidated
basis as of such dates and the results of its operations and changes in
its financial position or cash flows for such periods.
      (b)  Since December 31, 2010 there has been no change in the
condition, financial or otherwise, of the Company and its Subsidiaries as
shown on the consolidated balance sheet as of such date, except changes
in the ordinary course of business, none of which, individually or in the
aggregate, has been materially adverse.

     5.  Indebtedness.  Schedule V to the Agreement correctly describes
all Indebtedness of the Company and each of the Subsidiaries outstanding
on March 31, 2011.  Since such date, no other Indebtedness (except for
changes in the amount of Indebtedness under the Wells Fargo Credit
Agreement, including any renewals, extensions or modifications thereto
(not to exceed $3,000,000.00) has been incurred or entered into and since
March 31, 2011, there has been no material change in the amount of
Indebtedness outstanding.

     6.  Full Disclosure.  Neither the financial statements referred
to in item 4 hereof nor the Agreement nor any other written statement
furnished by or on behalf of the Company to any Purchaser in connection
with the negotiation of the Agreement or the negotiation and sale of the
Notes, contains any untrue statement of a material fact or omits a
material fact necessary to make the statements contained therein or
herein not misleading.  There is no fact peculiar to the Company or any
Subsidiary which has not been disclosed to any Purchaser in writing which
materially affects adversely nor, so far as the Company can now foresee,
could, individually or in the aggregate, materially affect adversely the
properties, business, prospects, profits or condition (financial or
otherwise) of the Company or any Subsidiary or the ability of the Company
to comply with and perform the terms of the Agreement or the Notes.

     7.  Pending Litigation.  There are no proceedings pending or, to
the knowledge of the Company threatened, against or affecting the Company
or any Subsidiary in any court or before any governmental authority or
arbitration board or tribunal or regulatory agency which could reasonably
be expected to, individually or in the aggregate, materially and
adversely affect the properties, business, prospects, profits or
condition (financial or otherwise) of the Company or any Subsidiary or
the ability of the Company to comply with or perform its obligations
under the Agreement or the Notes.

     8.  Title to Properties.  The Company and each Subsidiary has
good and marketable title in fee simple (or its equivalent under
applicable law) to all parcels of real property and has good title to all
the other material items of property it purports to own, including that
reflected in the most recent balance sheet referred to in item 4 hereof,
except as sold or otherwise disposed of in the ordinary course of
business and except for Liens permitted by the Agreement.

     9.  Patents and Trademarks.  The Company and each Subsidiary owns
or possesses all the patents, trademarks, trade names, service marks,
copyrights, licenses and water and other rights with respect to the
foregoing necessary for the present and planned future conduct of its
business, without any known conflict with the rights of others.

     10.  Transaction is Legal, Authorized and Enforceable.  The
issuance and sale of the Notes and the execution and delivery of the
Agreement by the Company and performance by the Company and compliance of
the Company with, all of the provisions of the Notes and the Agreement:

      (a)  are within the legal and corporate powers and authority of
the Company;

      (b)  will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict with
or result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, the Articles of
Incorporation or By-laws of the Company or any indenture or other
agreement or instrument to which the Company is a party or by which it
may be bound or to which it may be subject or result in the imposition of
any Lien or encumbrance on any property of the Company; and

      (c)  have been duly authorized, executed and delivered by the
Company pursuant to proper corporate action on the part of the Company
(no action by any of the stockholders of the Company being required by
law, by the Articles of Incorporation or By-laws of the Company or
otherwise), and the Agreement and the Notes constitute the legal, valid
and binding obligations, contracts and agreements of the Company
enforceable in accordance with their respective terms.

      11.  No Defaults.  If the transactions contemplated by the
Agreement were in effect on the date of the Agreement, no Default or
Event of Default would have occurred and be continuing.  Neither the
Company nor any Subsidiary is in default in the payment of principal or
interest on any Indebtedness nor is in default under any instrument or
instruments or agreements under and subject to which any Indebtedness has
been issued, and no event has occurred and is continuing under the
provisions of any such instrument or agreement which with the lapse of
time or the giving of notice, or both, would constitute a default or an
event of default thereunder, except for any amount or amounts, which,
individually or in the aggregate, may equal $100,000 or less.

     12.  Governmental Consent.  Neither the nature of the Company or
any Subsidiary nor of any of their respective businesses or properties,
nor any relationship between the Company or any Subsidiary and any other
Person, nor any circumstance in connection with the offer, issue, sale or
delivery of the Notes or the execution and delivery of the Agreement are
such as to require any consent, approval or authorization of, or filing,
registration or qualification with, any regulatory body, state, Federal
or local on the part of the Company or any Subsidiary as a condition to
the execution, delivery and performance of the Notes or the Agreement.

     13.  Taxes.  All tax returns required to be filed by the Company
and each Subsidiary have, in fact, been filed, and all taxes,
assessments, fees and other governmental charges upon the Company or any
Subsidiary, or upon any of their respective properties, income or
franchises, which are shown to be due and payable in such returns have
been paid.  For all taxable years ending on or before December 31, 2007,
the Federal income tax liability of the Company and the
Subsidiaries has been satisfied and either the period of limitations on
assessment of additional Federal income tax has expired or the Company or
the applicable Subsidiary has entered into an agreement with the Internal
Revenue Service closing conclusively the total tax liability for the
taxable year.  The Company does not know of any proposed additional tax
assessment against it or any of its Subsidiaries or any of their
respective properties and no material controversy in respect of
additional Federal or state income taxes due since said date is pending
or to the knowledge of the Company is threatened.  The provisions for
taxes on the books of the Company  and the Subsidiaries are adequate for
all open years, and for its current fiscal year.

     14.  Use of Proceeds.  The net proceeds from the sale of the Notes
will be used for the purposes specified on Schedule III to the Agreement.
None of the transactions contemplated in the Agreement or the Notes
(including, without limitation thereof, the use of proceeds from the
issuance of the Notes) will violate or result in a violation of Section 7
of the Securities Exchange Act of 1934, as amended, or any regulation
issued pursuant thereto, including, without limitation, Regulations U, T
and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter II.  Neither the Company nor any Subsidiary owns or intends to
carry or purchase any "margin stock" within the meaning of said
Regulation U.  None of the proceeds from the sale of the Notes will be
used to purchase, directly or indirectly, or refinance any borrowing the
proceeds of which were used to purchase, directly or indirectly, any
"security" within the meaning of the Securities Exchange Act of 1934, as
amended.

     15.  Private Offering.  Neither the Company nor any agent on
behalf thereof has, directly or indirectly, offered or will offer the
Notes or any similar Security or has solicited or will solicit an offer
to acquire the Notes or any similar Security from or has otherwise
approached or negotiated or will approach or negotiate in respect of the
Notes or any such similar Security with any Person other than the
Purchasers and not more than 14 other institutional investors, each of
whom was offered a portion of the Notes or such similar Security
at private sale for investment.  Neither the Company nor any agent on
behalf thereof has, directly or indirectly, offered or will offer the
Notes or any such similar Security or has, directly or indirectly,
solicited or will solicit an offer to acquire the Notes or any such
similar Security from any Person so as to bring the issuance and sale of
the Notes or such similar Security within the provisions of Section 5 of
the Securities Act of 1933, as amended.

     16.  ERISA.

      (a)  Relationship of Vested Benefits to Pension Plan Assets.  The
present value of all benefits vested under all Plans maintained by the
Company or any ERISA Affiliate which are subject to part 3 of Title I of
ERISA or Title IV of ERISA, as from time to time in effect, did not,
as of the last annual valuation date, exceed the value of the assets of
the Plans allocable to such vested benefits by more than $35,000,000 in
the case of any single plan and by more than $51,000,000 in the aggregate
for all Plans.

      (b)  Prohibited Transactions.  Neither any of the Plans nor any
trusts created thereunder, nor any trustee or administrator thereof, has
engaged in a "prohibited transaction", as such term is defined in ERISA
or Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), which could subject the Company or any Subsidiary to a material
tax or penalty on prohibited transactions imposed by said Section 4975.

      The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is
subject to the prohibitions of section 406(a) of ERISA or in connection
with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D)
of the Code.  The representation by the Company to each Purchaser in
the previous sentence is made in reliance upon and subject to the
accuracy of such Purchaser's representation in the second sentence of
Section 3.2 of the Agreement as to the sources of the funds used to pay
the purchase price of the Notes to be purchased by such Purchaser.

      (c)  Reportable Events.  Neither any of the Plans nor any such
trusts have been terminated, nor have any steps been instituted
toterminate any Plan, nor have there been any Reportable Events since the
effective date of ERISA that could result in a material liability to the
Company or any Subsidiary.

      (d)  Plan Funding Requirements.  None of the Plans that are
subject to Section 302 of ERISA have incurred any "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA for Plan
years prior to 2010 (whether or not waived), and each such Plan has
satisfied the "minimum funding standard", as such term is defined in
Section 302 of ERISA, since the effective date of ERISA.

      (e)  Other ERISA Matters.  Each Plan complies in all material
respects with all applicable statutes and governmental rules and
regulations, and neither the Company nor any ERISA Affiliate has
withdrawn from any Plan or Multiemployer Plan.  No condition exists or
event or transaction has occurred in connection with any Plan which could
result in the incurrence by the Company or any ERISA Affiliate of any
material liability, fine or penalty, individually or in the aggregate.
Neither the Company nor any ERISA Affiliate has any contingent liability
with respect to any post-retirement "employee welfare benefit plan" (as
such term is defined in ERISA) for medical and insurance post-retirement
non-pension benefits and severance plans deemed to constitute welfare
plans in the applicable regulations of the Department of Labor.

     17.  Compliance with Law.  The Company and each Subsidiary:  (a)
is not in violation of any laws, ordinances, governmental rules or
regulations to which it is subject, nor (b) has failed to obtain any
licenses, permits, franchises or other governmental authorizations
necessary to the ownership of its property or to the conduct of its
business which violation or failure to obtain might, individually or in
the aggregate, materially adversely affect the business, prospects,
profits, properties or condition (financial or otherwise) of the Company
or any Subsidiary, or impair the ability of the Company to observe or
perform its obligations under the Notes or the Agreement.  Neither the
Company nor any Subsidiary is in default with respect to any order of
any court or governmental authority or any regulatory agency or any
arbitration board or panel.

     18.  Compliance with Environmental Laws.  Neither the Company nor
any Subsidiary is in violation of any applicable Federal, state or local
laws, statutes, rules, regulations or ordinances relating to public
health, safety or the environment, including, without limitation,
relating to releases, discharges, emissions or disposal to air, water,
land or ground water, to the withdrawal or use of ground water, to the
use, handling or disposal of polychlorinated biphenyls (PCBs), asbestos
or urea formaldehyde, to the treatment, storage, disposal or management
of hazardous substances (including, without limitation, petroleum, crude
oil or any fraction thereof, or other hydrocarbons), pollutants or
contaminants, to exposure to toxic, hazardous or other controlled,
prohibited or regulated substances which violation could, individually or
in the aggregate, have a Material Adverse Effect.  Neither the Company
nor any Subsidiary has any liability or class of liability under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. Section 9601 et seq.), or the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 6901
et seq.).

     19.  Restrictions on the Company and Subsidiaries.  Neither the
Company nor any Subsidiary is a party to any contract or agreement, or
subject to any charter or other corporate restriction, which,
individually or in the aggregate, materially and adversely affects the
business of the Company or any Subsidiary.  Neither the Company nor any
Subsidiary is a party to any contract or agreement or subject to any
charter or other corporate restriction which prohibits the execution,
delivery, performance and observance by the Company of the Notes or the
Agreement.  Neither the Company nor any Subsidiary is a party to any
agreement which would result or cause at any time in the future (upon the
happening of a contingency or otherwise) any of its property, whether now
owned or hereafter acquired, to be subject to a Lien not permitted by the
Agreement.

     20.  Investment Company Act.  Neither the Company nor any
Subsidiary is, or is directly or indirectly controlled by, or acting on
behalf of any Person which is, an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.

     21.  Public Utility Holding Company Act, Etc.  Neither the Company
nor any Subsidiary is subject to regulation the Public Utility Holding
Company Act of 2005, as amended, the ICC Termination Act of 1995, as
amended, or the Federal Power Act, as amended.

     22.  Foreign Assets Control Regulations, Etc.
      (a)  Neither the Company nor any Controlled Entity is (i) a Person
whose name appears on the list of Specially Designated Nationals and
Blocked Persons published by the Office of Foreign Assets Control, U.S.
Department of Treasury ("OFAC") (an "OFAC Listed Person") or (ii) a
department, agency or instrumentality of, or is otherwise controlled by
or acting on behalf of, directly or indirectly, (x) any OFAC Listed
Person or (y) any Person, entity, organization, foreign country or regime
that is subject to any OFAC Sanctions Program  (each OFAC Listed Person
and each other Person, entity, organization and government of a country
described in clause (ii), a "Blocked Person").

      (b)  No part of the proceeds from the sale of the Notes hereunder
constitutes or will constitute funds obtained on behalf of any Blocked
Person or will otherwise be used, directly by the Company or indirectly
through any Controlled Entity, in connection with any investment in, or
any transactions or dealings with, any Blocked Person.

      (c)  To the Company's actual knowledge after making due inquiry,
neither the Company nor any Controlled Entity (i) is under investigation
by any Governmental Authority for, or has been charged with, or convicted
of, money laundering, drug trafficking, terrorist-related activities or
other money laundering predicate crimes under any applicable law
(collectively, "Anti-Money Laundering Laws"), (ii) has been assessed
civil penalties under any Anti-Money Laundering Laws or (iii) has had any
of its funds seized or forfeited in an action under any Anti-Money
Laundering Laws. The Company has taken reasonable measures appropriate to
the circumstances (in any event as required by applicable law) to ensure
that the Company and each Controlled Entity is and will continue to be in
compliance with all applicable current and future Anti-Money Laundering
Laws.

      (d)  No part of the proceeds from the sale of the Notes hereunder
will be used, directly or indirectly, for any improper payments to any
governmental official or employee, political party, official of a
political party, candidate for political office, official of any public
international organization or anyone else acting in an official capacity,
in order to obtain, retain or direct business or obtain any improper
advantage.  The Company has taken reasonable measures appropriate to the
circumstances (in any event as required by applicable law) to ensure
that the Company and each Controlled Entity is and will continue to be in
compliance with all applicable current and future anti-corruption laws
and regulations.

                                EXHIBIT C

                                SJW CORP.
                       CERTIFICATE WITH RESPECT TO
                      REPRESENTATIONS AND WARRANTIES
     The undersigned, on behalf of SJW CORP., a California corporation
(the "Company"), certify that they are the President and Secretary of the
Company, and that, as such, they are duly authorized to execute this
certificate in the name and on behalf of the Company, and further certify
that:

      a.  The Company is a party to a Note Agreement dated as of June
30, 2011 (the "Agreement") regarding the issuance and sale of the
Company's $50,000,000 4.35% Senior Notes, due June 30, 2021 (the
"Notes").

      b.  This certificate is being delivered pursuant to Section
4.1(b) of the Agreement.  Terms used in this certificate which are not
defined shall have the meanings defined in the Agreement.

      c.  The Agreement and the Notes have been duly authorized,
executed and delivered by the Company on the date hereof and constitute
the legal, valid and binding obligations of the Company, enforceable in
accordance with their respective terms.

      d.  The representations and warranties with respect to the
Company and its Subsidiaries as set forth in Exhibit B to the Agreement
are true and correct as though made at and as of this date.

      f.  The Company has performed and complied with all agreements and
conditions in the Agreement which are required to be performed or
complied with by the company before or at the date hereof.

DATED:  June __, 2011.
                                    SJW CORP.

                                    -------------------------
                                    By
                                      Its

                                    -------------------------
                                    By
                                      Its

                           EXHIBIT D

           DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION

                              EXHIBIT E

         DESCRIPTION OF CLOSING OPINION OF COUNSEL TO THE COMPANY

     The closing opinion of Morgan, Lewis & Bockius LLP, counsel to the
Company, called for by Section 4.1(c) of the Agreement, shall be dated
the Closing Date and addressed to the Purchasers, shall be satisfactory
in form and substance to the Purchasers and shall be to the following
effect:

Ladies and Gentlemen:
     We have acted as counsel to SJW Corp., a California corporation
(the "Company"), in connection with the authorization by the Company of
$50,000,000 in aggregate principal amount of its Senior Notes due June
30, 2021 (the "Notes"), which are being purchased by you and which are
issued under the Note Agreement dated as of June 30, 2011 between the
Company and you (the "Agreement").  This opinion is being furnished
pursuant to Section 4.1(c) of the Agreement and with the understanding
that you are purchasing the Notes in reliance on the opinions expressed
herein.  Capitalized terms used but not defined herein have the meanings
given such terms in the Agreement.

     We are of the opinion that:
      (1)  The Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of California
and has the corporate power and authority to conduct the activities in
which it is now engaged;
      (2)  The execution and delivery by the Company of the Agreement
and the Notes, and the performance by the Company of its obligations
under the Agreement and the Notes, are within the Company's corporate
powers and have been duly authorized by all requisite corporate action on
the part of the Company;
      (3)  The Company has duly executed and delivered the Agreement and
the Notes;
      (4)  Each of the Agreement and the Notes constitutes a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms;
      (5)  The execution and delivery by the Company of the Agreement
and the Notes, and compliance by the Company with the respective
provisions thereof, (i) will not result in a breach or default (or give
rise to any right of termination, cancellation or acceleration) under any
agreements or instruments by the Company for borrowed money,  (ii) will
not violate any of the provisions of the Company's Articles of
Incorporation or the Company's By-Laws, (iii) will not result in the
creation or imposition of any Lien on any asset of the Company, (iv) will
not violate any applicable federal or California state law, statute, rule
or regulation, and (v) will not require any consent, approval, permit,
waiver or license from or filing with any court, public body,
governmental authority or the United States of America or the State of
California, including the California Public Utilities Commission;
      (6)  The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Agreement do not require registration
under the Securities Act of 1933, as amended, qualification under the
California Corporate Securities Law of 1968, as amended, or the
qualification of an indenture under the Trust Indenture Act of 1939, as
amended;
      (7)  The issuance of the Notes and the use of the proceeds of the
sale of the Notes in accordance with the provisions of and as
contemplated by the Agreement (including, without limitation, the
representations and warranties set forth in the Agreement) do not violate
Regulation T, U or X of the Board of Governors of the Federal Reserve
System;
      (8)  The Company is not required to be registered as an
"investment company" under the Investment Company Act of 1940, as
amended;
      (9)  The Company is not a "holding company" or a "public-utility
company" within the meaning of the Public Utility Holding Company Act of
2005, as amended;
      (10)  The Company does not require any governmental or regulatory
permits to operate its business, enter into the Agreement or issue the
Notes, including without limitation any permit or authorization issued by
the California Department of Health Services and California Department of
Water Resources; and
      (11)  There are no actions, suits or proceedings pending or
threatened against the Company that relate to any of the transactions
contemplated by the Agreement and the Notes, at law or in equity, before
any arbitrator or before or by any governmental department, commission,
board, bureau, agency or instrumentality.

     This opinion is delivered solely to you and for your benefit in
connection with the transactions contemplated by the Agreement and may
not be relied upon by you for any other purpose or furnished or referred
to, or relied upon, by any other person or entity (other than
subsequent transferees of the Notes who have acquired Notes in accordance
with the terms of the Agreement) for any reason without our prior written
consent.

     Notwithstanding the preceding paragraph of this opinion, each of
the Purchasers and their permitted transferees may furnish a copy of this
opinion (i) to its independent auditors and attorneys if required in the
performance of professional services for such Purchaser or transferee,
(ii) to any state or federal authority, or independent insurance board or
body, having regulatory jurisdiction over such Purchaser or transferee,
including without limitation anyone using the information to rate or
classify such Purchaser or transferee or the Notes, and (iii) pursuant to
order or legal process of any court or governmental agency.

     In addition, the Purchasers' counsel, Baker Botts L.L.P., may rely
on and refer to this opinion in providing their opinion to the Purchasers
in connection with this transaction.

Very truly yours,

MORGAN, LEWIS & BOCKIUS LLPExhibit 10.4

        SJW CORP. ANNOUNCES SALE OF $50 MILLION SENIOR NOTES

     SAN JOSE, Calif.--(BUSINESS WIRE)--SJW Corp. (NYSE:SJW) today
announced the sale of $50 Million in aggregate principle amount of its
4.35% Senior Notes to an institutional investor in a private placement
transaction.

     The senior notes are unsecured and will mature on June 30, 2021.
Interest on the senior notes will accrue and be payable semi-annually in
arrears on December 30 and June 30 commencing on December 30, 2011 at the
rate of 4.35%.

     "The credit worthiness of SJW Corp. coupled with a historically low
interest rate environment presented us with the opportunity to secure
funding for our future financing needs at a very attractive price," said
W. Richard Roth, SJW Corp. President and Chief Executive Officer.  "Our
$50 Million sale of privately placed senior notes provides the company
with a long-term, competitively priced and cost effective source of
financing."

     SJW Corp. is a publicly traded holding company headquartered in San
Jose, California.  SJW Corp. is the parent company of San Jose Water
Company, SJWTX, Inc., Texas Water Alliance Limited, and SJW Land Company.
Together, San Jose Water Company and SJWTX, Inc. provide regulated and
nonregulated water service to more than one million people in San Jose,
California and nearby communities and in Canyon Lake, Texas and nearby
communities.  SJW Land Company owns and operates commercial real estate
investments.

    This press release may contain certain forward-looking statements
including but not limited to statements relating to SJW Corp.'s plans,
strategies, objectives, expectations and intentions, which are made
pursuant to the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995.  These forward-looking statements involve
known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of SJW Corp. to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.  SJW Corp.
undertakes no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00191-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00191-of-00352.parquet"}]]