Document:

EXHIBIT 10.2

                                                                                                                                                                                        

TRUST INDENTURE

between

YORK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY,

as Issuer

and

MANUFACTURERS AND TRADERS TRUST COMPANY,

as Trustee

Dated as of July 1, 2015

                                                                                                                                                                                        

$10,000,000

YORK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

Exempt Facilities Revenue Bonds, Series 2015

(The York Water Company Project)

TABLE OF CONTENTS

ARTICLE I DEFINITIONS  

Section 1.1.Definitions.                                                                                                                                                                                    

Section 1.1.Certain Rules of Interpretation.                                                                                                                                                                                    

ARTICLE II THE BONDS  

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

Section 2.2.Terms of the Bonds.                                                                                                                                                                                    

Section 2.3.Reserved.                                                                                                                                                                                    

Section 2.4.Reserved.                                                                                                                                                                                    

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

Section 2.6.Authentication.                                                                                                                                                                                    

Section 2.7.Registration, Transfer and Exchange.                                                                                                                                                                                    

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

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

Section 2.10.Temporary Bonds.                                                                                                                                                                                    

Section 2.11.Cancellation of Surrendered Bonds.                                                                                                                                                                                    

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

Section 2.13.Book Entry System.                                                                                                                                                                                    

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

ARTICLE III DEBT SERVICE FUND AND CONSTRUCTION FUND  

Section 3.1.Establishment of Funds and Accounts.                                                                                                                                                                                    

Section 3.2.Debt Service Fund.                                                                                                                                                                                    

Section 3.3.Return of Monies from Non‐Presentment of Bonds.

Section 3.4.Construction Fund.                                                                                                                                                                                    

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

Section 3.6.Additional Accounts and Subaccounts.                                                                                                                                                                                    

ARTICLE IV INVESTMENTS, TAX COVENANTS  

Section 4.1.Investment of Funds.                                                                                                                                                                                    

Section 4.2.Arbitrage Bond Covenant.                                                                                                                                                                                    

Section 4.3.Covenants Regarding Tax Exemption.                                                                                                                                                                                    

ARTICLE V REDEMPTION OF BONDS  

Section 5.1.Bonds Subject to Redemption.                                                                                                                                                                                    

Section 5.2.Selection of Bonds for Redemption.                                                                                                                                                                                    

Section 5.3.Notice of Redemption.                                                                                                                                                                                    

Section 5.4.Effect of Redemption.                                                                                                                                                                                    

Section 5.5.Reserved.                                                                                                                                                                                    

Section 5.6.Purchase in Lieu of Redemption.                                                                                                                                                                                    

ARTICLE VI REPRESENTATIONS AND COVENANTS OF THE ISSUER  

Section 6.1.General Limitation; Issuer's Representation.                                                                                                                                                                                    

Section 6.2.Payment of Bonds and Performance of Covenants.                                                                                                                                                                                    

Section 6.3.Enforcement of the Loan Agreement.                                                                                                                                                                                    

Section 6.4.No Personal Liability.                                                                                                                                                                                    

Section 6.5.Exemption from Federal Income Taxation.                                                                                                                                                                                    

Section 6.6.Corporate Existence; Compliance with Laws.                                                                                                                                                                                    

Section 6.7.Filings.                                                                                                                                                                                    

Section 6.8.Further Assurances.                                                                                                                                                                                    

Section 6.9.Inspection of Books.                                                                                                                                                                                    

ARTICLE VII EVENTS OF DEFAULT AND REMEDIES  

Section 7.1.Events of Default Defined.                                                                                                                                                                                    

Section 7.2.Acceleration and Annulment Thereof.                                                                                                                                                                                    

Section 7.3.Legal Proceedings by Trustee.                                                                                                                                                                                    

Section 7.4.Discontinuance of Proceedings by Trustee.                                                                                                                                                                                    

Section 7.5.Registered Owners May Direct Proceedings.                                                                                                                                                                                    

Section 7.6.Limitations on Actions by Registered Owners.                                                                                                                                                                                    

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

Section 7.8.Remedies Not Exclusive.                                                                                                                                                                                    

Section 7.9.Delays and Omissions Not to Impair Rights.                                                                                                                                                                                    

Section 7.10.Application of Monies.                                                                                                                                                                                    

Section 7.11.Trustee's Right to Receiver.                                                                                                                                                                                    

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

Section 7.13.Waiver of Past Defaults.                                                                                                                                                                                    

ARTICLE VIII THE TRUSTEE  

Section 8.1.Certain Duties and Responsibilities of Trustee.                                                                                                                                                                                    

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

Section 8.3.Certain Rights of Trustee.                                                                                                                                                                                    

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

Section 8.5.May Hold Bonds.                                                                                                                                                                                    

Section 8.6.Money Held in Trust.                                                                                                                                                                                    

Section 8.7.Corporate Trustee Required; Eligibility.                                                                                                                                                                                    

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

Section 8.9.Acceptance of Appointment by Successor Trustee.                                                                                                                                                                                    

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

Section 8.11.Fees, Charges and Expenses of Trustee.                                                                                                                                                                                    

ARTICLE IX AMENDMENTS AND SUPPLEMENTS  

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

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

Section 9.3.Amendments to Loan Agreement.                                                                                                                                                                                    

Section 9.4.Right to Payment.                                                                                                                                                                                    

ARTICLE X DEFEASANCE  

Section 10.1.Defeasance.                                                                                                                                                                                    

Section 10.2.Effect of Defeasance.                                                                                                                                                                                    

ARTICLE XI MISCELLANEOUS PROVISIONS  

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

Section 11.2.No Rights Conferred on Others.                                                                                                                                                                                    

Section 11.3.Illegal, Etc. Provisions Disregarded.                                                                                                                                                                                    

Section 11.4.Substitute Publication of Notice.                                                                                                                                                                                    

Section 11.5.Mailed Notice.                                                                                                                                                                                    

Section 11.6.Governing Law.                                                                                                                                                                                    

Section 11.7.Successors and Assigns.                                                                                                                                                                                    

Section 11.8.Action by Company.                                                                                                                                                                                    

Section 11.9.Headings and Subheadings for Convenience Only.                                                                                                                                                                                    

Section 11.10.Counterparts.                                                                                                                                                                                    

Section 11.11.Additional Notices to Rating Agencies.                                                                                                                                                                                    

Exhibit  A                          —            Form of Bond

Exhibit  B                          —            Letter of Representations to DTC

Exhibit C                          —            Form of Requisition

This Trust Indenture, dated as of July 1, 2015 (the "Indenture") between the YORK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (the "Issuer"), a public body and a body corporate and politic exercising public powers of the Commonwealth of Pennsylvania (the "Commonwealth") as an instrumentality thereof, is organized under the Pennsylvania Economic Development Financing Law (formerly known as the Pennsylvania Industrial and Commercial Development Authority Law) (Act of August 23, 1967, P.L. 251), as amended and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York state chartered bank with trust powers duly organized and existing under the laws of the State of New York with a corporate trust office in Harrisburg, Pennsylvania, as Trustee (the "Trustee"),

W I T N E S S E T H :

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

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

WHEREAS, the Pennsylvania Economic Development Financing Authority has issued $7,300,000 aggregate principal amount of its Exempt Facilities Revenue Bonds, Series A of 2004 (The York Water Company Project) (the "2004A Bonds") to provide funds to loan to The York Water Company (the "Company"); and

WHEREAS, at the request of the Company the Issuer has determined to issue $10,000,000 aggregate principal amount of its Exempt Facilities Revenue Bonds, Series 2015 (The York Water Company Project) (the "Bonds") in order to finance the costs of a project consisting of: (i) the refinancing of all of the 2004A Bonds; (ii) financing a portion of the Company's 2015 Capital Budget, including, but not limited to the design, acquisition, construction, improvement, renovation, equipping and installation of (a) various structures, including booster stations, wellhouses, pumping stations, lift stations, standpipes and water treatment facilities, (b) transmission and distribution mains, service lines, meters and pumping, water treatment and purification equipment, and (c) various other capital improvements and equipment for the Company's water system located throughout York and Adams Counties, Pennsylvania; and (iii) the payment of the costs of issuance of the Bonds (the "Project"); and

WHEREAS, the Issuer has entered into a Loan Agreement dated as of July 1, 2015 (including any supplements and amendments thereto, the "Loan Agreement") with the Company providing for the loan by the Issuer to the Company of the proceeds of the Bonds for such purpose and the repayment of such loan by the Company; and

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

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

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

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

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

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

ARTICLE I  

 DEFINITIONS

Section 1.1.                          Definitions.

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

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

"Act of Bankruptcy" means any of the following events:

	
(i)

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

	
(ii)

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

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

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

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

"Beneficial Owners" means the Person who has the right to sell, transfer or otherwise dispose of an interest in a Bond and the right to receive the proceeds therefrom, as well as the interest and principal payable to the holder thereof. A determination of beneficial ownership in the Bonds will be subject to the rules, regulations and procedures governing DTC and DTC Participants.

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

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

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

"Bond Resolution" means the resolution of the governing body of the Issuer adopted on May 5, 2015, authorizing the issuance of the Bonds.

"Bonds" means the York County Industrial Development Authority Exempt Facilities Revenue Bonds, Series 2015 (The York Water Company Project) authorized hereunder.

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

"Code" means the Internal Revenue Code of 1986, as amended.

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

"Dated Date" means the date of delivery of the Bonds.

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

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

"Department" means the Department of Community and Economic Development of the Commonwealth.

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

"Disqualified Contractor" means a Person which has been suspended or debarred by the Commonwealth under its Contractor Responsibility Program, Management Directive 215.9, as amended or replaced by a successive directive rule, regulation or statute from time to time or has been convicted by a court of competent jurisdiction of a crime for which a term of imprisonment of one year or more could have been imposed, and any Person controlled by a Person which has been so suspended, debarred or convicted.

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

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

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

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

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

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

"Government Obligations" means any one or more of the following:

	
(i)

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

	
(ii)

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

	
(a)

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

	
(b)

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

	
(c)

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

	
(d)

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

	
(e)

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

"Indenture" means this Trust Indenture dated as of July 1, 2015, as hereafter amended and supplemented by any Supplemental Indenture.

"Interest Payment Date" means, with respect to the Bonds, June 1 and December 1 of each year, commencing December 1, 2015.

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

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

"Loan Agreement" means the Loan Agreement dated as of July 1, 2015 between the Issuer and the Company, as hereafter amended and supplemented by any Supplemental Loan Agreement.

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

	
(a)

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

	
(b)

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

	
(c)

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

In determining whether the Registered Owners of a requisite aggregate principal amount of Bonds Outstanding have concurred in any request, demand, authorization, direction, notice, consent or waiver under the provisions hereof, Bonds which are owned of record by the Company or any affiliate thereof shall be disregarded and deemed not to be Outstanding hereunder for the purpose of any such determination (except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Trustee knows to be so owned or held shall be disregarded) unless all Bonds are owned by the Company or any affiliate thereof, in which case such Bonds shall be considered outstanding for the purpose of such determination.  For the purpose of this definition, an "affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person and "control," when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

"Paying Agent" means, initially, the Trustee and any successor.

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

"Rating Agency" means S&P.

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

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

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

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

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

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

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

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

"Settlement Account" shall mean the Settlement Account established by the Trustee as provided in Section 2.1

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

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

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

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

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

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

"Underwriting Agreement" means, with respect to the Bonds, the Bond Purchase Agreement dated July 8, 2015 among the Issuer, the Company and PNC Capital Markets LLC, as underwriter, providing for the purchase and sale of the Bonds.

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

Section 1.1.                          Certain Rules of Interpretation.

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

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

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

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

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

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

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

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

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

 

ARTICLE II  

 THE BONDS

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

Upon the execution and delivery of this Indenture, the Issuer shall execute the Bonds and deliver them to the Trustee for authentication.  At the written direction of the Issuer, the Trustee shall authenticate the Bonds, and deliver them to the purchasers thereof upon receipt by the Trustee of the amount due the Issuer for the initial delivery of the Bonds pursuant to the terms of the Underwriting Agreement by wire transfer of immediately available funds.  The proceeds of the Bonds shall be deposited by the Trustee in the Settlement Account hereby created by the Trustee and applied pursuant to the terms of a Closing Statement among the Issuer, the Company and the Trustee dated on or prior to the date of issuance and delivery of the Bonds.  Any remaining amount or reserves held in the Settlement Account, after disbursement of the amounts set forth in the Closing Statement, for a period of sixty (60) days shall be disbursed from the Settlement Account to the Debt Service Fund to be used as described in Section 3.1 hereof.  The total principal amount of the Bonds that may be issued hereunder is hereby expressly limited to $10,000,000, except as provided in Section 2.8 hereof.

Section 2.2.                          Terms of the Bonds.

The Bonds shall be designated "York County Industrial Development Authority Exempt Facilities Revenue Bonds, Series 2015 (The York Water Company Project)" and shall be issuable only as fully registered Bonds without coupons in Authorized Denominations.  Unless the Issuer shall otherwise direct, the Bonds shall be numbered separately from 1 upward.  The Bonds shall be dated as of the Dated Date and shall mature, subject to prior redemption upon the terms and conditions hereinafter set forth herein.  The Bonds shall bear interest at the rate provided therein, from and including the date thereof until payment of the principal or redemption price thereof shall have been made or provided for in accordance with the provisions hereof, whether at maturity, upon redemption or otherwise.  Each Bond shall bear interest on overdue principal and premium, if any, and, to the extent permitted by law, on overdue interest at the rate of interest borne by the Bonds.

Optional Redemption.  The Bonds are subject to redemption by the Issuer, at the direction of the Company, on or after June 1, 2025, in whole or in part, at any time, in Authorized Denominations, at a redemption price equal to 100% of the outstanding principal amount thereof, together with accrued interest, if any, to the redemption date.

Mandatory Redemption.  The Bonds are subject to mandatory redemption prior to maturity, selected by lot, at a redemption price equal to 100% of the principal amount thereof, plus interest accrued thereon to the date fixed for redemption, on June 1 of each of the years in the principal amounts as follows:

Term Bond Maturing 2029:

	
Year

	
Amount

	
2026

	
$330,000

	
2027

	
340,000

	
2028

	
355,000

	
2029*

	
370,000

                                                    

*Final Maturity

Term Bond Maturing 2032:

	
Year

	
Amount

	
2030

	
$385,000

	
2031

	
400,000

	
2032*

	
420,000

                                                    

*Final Maturity

Term Bond Maturing 2035:

	
Year

	
Amount

	
2033

	
$435,000

	
2034

	
455,000

	
2035*

	
470,000

                                                    

*Final Maturity

Term Bond Maturing 2038:

	
Year

	
Amount

	
2036

	
$495,000

	
2037

	
515,000

	
2038*

	
535,000

                                                    

*Final Maturity

Term Bond Maturing 2042:

	
Year

	
Amount

	
2039

	
$560,000

	
2040

	
585,000

	
2041

	
610,000

	
2042*

	
640,000

                                                    

*Final Maturity

Term Bond Maturing 2045:

	
Year

	
Amount

	
2043

	
$670,000

	
2044

	
700,000

	
2045*

	
730,000

                                                    

*Final Maturity

If Bonds subject to mandatory redemption as set forth above are selected for optional redemption at any time, the principal amount of such Bonds redeemed pursuant to such optional redemption shall be credited against the mandatory redemption requirements for the Bonds in such manner as the Company shall determine.

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

Section 2.3.                          Reserved.

Section 2.4.                          Reserved.

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

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

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

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

Section 2.6.                          Authentication.

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

Section 2.7.                          Registration, Transfer and Exchange.

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

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

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

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

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

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

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

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

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

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

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

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

(b)            Every Bond issued pursuant to this Section 2.8 shall constitute an additional contractual obligation of the Issuer, whether or not the Bond alleged to have been destroyed, lost or stolen shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Bonds duly issued hereunder.

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

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

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

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

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

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

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

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

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

Section 2.10.                          Temporary Bonds. 

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

Section 2.11.                          Cancellation of Surrendered Bonds. 

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

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

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

Section 2.13.                          Book Entry System.

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

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

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

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

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

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

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

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

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

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

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

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

 

ARTICLE III  

DEBT SERVICE FUND AND CONSTRUCTION FUND

Section 3.1.                          Establishment of Funds and Accounts.

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

Section 3.2.                          Debt Service Fund.

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

Section 3.3.                          Return of Monies from Non‐Presentment of Bonds.

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

Section 3.4.                          Construction Fund.

A portion of the Bonds in the amount of $2,155,745.39 shall be deposited by the Trustee in the Construction Fund and shall be used to pay Project Costs as provided in Section 3.2 of the Loan Agreement.  The Trustee shall disburse moneys from the Construction Fund upon receipt of requisitions signed by the Company substantially in the form attached to this Indenture as Exhibit C.  Any amounts remaining after delivery of the certificate of completion pursuant to Section 3.3 of the Loan Agreement shall be used by the Trustee as provided in Section 3.3 of the Loan Agreement.

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

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

Section 3.6.                          Additional Accounts and Subaccounts.

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

ARTICLE IV  

 INVESTMENTS, TAX COVENANTS

Section 4.1.                          Investment of Funds.

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

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

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

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

Section 4.2.                          Arbitrage Bond Covenant.

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

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

Section 4.3.                          Covenants Regarding Tax Exemption.

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

ARTICLE V  

 REDEMPTION OF BONDS

Section 5.1.                          Bonds Subject to Redemption.

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

(b)            Mandatory Redemption.  The Bonds are subject to mandatory redemption as set forth in Section 2.2 hereof.

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

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

Section 5.2.                          Selection of Bonds for Redemption.

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

Section 5.3.                          Notice of Redemption.

The Company must deliver written notice by facsimile or first class mail to the Issuer and the Trustee of its intention to prepay the amounts due under the Loan Agreement and its request that the Bonds be called for redemption at least thirty (30) days prior to the proposed redemption date (or such lesser period as is acceptable to the Trustee).  Unless previously delivered to the Trustee and the Issuer, any such notice from the Company relating to Special Mandatory Redemption shall be accompanied by a certificate as to the occurrence of the event or events on which any Special Mandatory Redemption is based.  The Trustee shall cause notice of any redemption of Bonds hereunder to be given to the Registered Owners of all Bonds to be redeemed at the registered addresses appearing in the registration books kept for such purpose pursuant to Article II hereof.  Each such notice shall (i) be given by facsimile or by first class mail at least twenty (20) days prior to the redemption date, (ii) identify the Bonds to be redeemed (specifying the CUSIP numbers, if any, assigned to the Bonds), (iii) specify the redemption date and the redemption price, and (iv) state that on the redemption date the Bonds called for redemption will be payable at the designated corporate trust operations office of the Trustee, that from that date interest will cease to accrue, and that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Bonds.  No defect affecting any Bond, whether in the notice of redemption or mailing thereof (including any failure to mail such notice), shall affect the validity of the redemption proceedings for any other Bonds.  The Trustee shall also send a notice of prepayment or redemption by first class mail to the Registered Owner of any Bond who has not sent such Bond in for redemption sixty (60) days after the redemption date.

In addition, the Trustee shall give notice of redemption of Bonds by facsimile or by mail, first class postage prepaid, at least twenty (20) days prior to a redemption date to each registered Securities Depository and to any national information service that disseminates redemption notices.  Any notice sent to registered securities depositories or such national information services shall be sent so that they are received at least two (2) days prior to the general mailing or publication date of such notice.  The Trustee may, but shall not be required to, give such other notice or notices as may be recommended in releases, letters, pronouncements or other writings of the Securities and Exchange Commission and the Municipal Securities Rulemaking Board.  No defect in or delay or failure in giving any recommended notice described in this paragraph shall in any manner affect the notice of redemption described in the preceding paragraph of this Section 5.3 and any notice mailed as provided in the preceding paragraph of this Section 5.3 shall be conclusively presumed to have been duly given, whether or not the Registered Owner receives the notice.

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

Section 5.4.                          Effect of Redemption.

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

Section 5.5.                          Reserved.

Section 5.6.                          Purchase in Lieu of Redemption.

Notwithstanding anything to the contrary contained herein, the Company may elect to purchase from the Owners any Bonds that have been called for redemption under Section 5.1 hereof on the redemption date by giving the Trustee and the Issuer written notice at least two (2) Business Days prior to the date the Bonds are to be redeemed.  The principal amount of Bonds to be redeemed on the applicable redemption date shall be reduced by the amount of Bonds so purchased.  Prior to the date that any such purchased Bonds are sold by the Company, the Company shall receive a Favorable Opinion of Bond Counsel.

ARTICLE VI  

 REPRESENTATIONS AND COVENANTS OF THE ISSUER

Section 6.1.                          General Limitation; Issuer's Representation.

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

Section 6.2.                          Payment of Bonds and Performance of Covenants.

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

Section 6.3.                          Enforcement of the Loan Agreement.

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

Section 6.4.                          No Personal Liability.

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

Section 6.5.                          Exemption from Federal Income Taxation.

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

Section 6.6.                          Corporate Existence; Compliance with Laws.

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

Section 6.7.                          Filings.

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

Section 6.8.                          Further Assurances.

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

Section 6.9.                          Inspection of Books.

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

ARTICLE VII  

 EVENTS OF DEFAULT AND REMEDIES

Section 7.1.                          Events of Default Defined.

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

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

(ii)            An Act of Bankruptcy shall occur; or

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

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

(b)            The Trustee shall promptly notify the Issuer and the Company in writing of the occurrence of any Event of Default after it receives written notice or has actual knowledge (as it relates to Section 7.1(a)(i) of such occurrence.

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

Section 7.2.                          Acceleration and Annulment Thereof.

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

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

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

Section 7.3.                          Legal Proceedings by Trustee.

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

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

(b)            Bring suit upon the Bonds;

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

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

Section 7.4.                          Discontinuance of Proceedings by Trustee.

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

Section 7.5.                          Registered Owners May Direct Proceedings.

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

Section 7.6.                          Limitations on Actions by Registered Owners.

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

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

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

Section 7.8.                          Remedies Not Exclusive.

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

Section 7.9.                          Delays and Omissions Not to Impair Rights.

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

Section 7.10.                          Application of Monies.

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

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

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

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

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

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

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

Section 7.11.                          Trustee's Right to Receiver.

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

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

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

Section 7.13.                          Waiver of Past Defaults.

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

ARTICLE VIII  

 THE TRUSTEE

Section 8.1.                          Certain Duties and Responsibilities of Trustee.

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

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

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

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

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

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

(iii)            the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with any direction of the Registered Owners of at least 25% or not less than a majority in aggregate principal amount of the Outstanding Bonds permitted to be given by them under this Indenture except as otherwise provided herein; and

(iv)            no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity, satisfactory to the Trustee in its sole discretion, against such risk or liability is not assured to it.

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

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

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

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

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

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

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

Section 8.3.                          Certain Rights of Trustee.

Except as otherwise provided in Section 8.1:

(a)            the Trustee may conclusively rely upon, and shall be protected in acting or refraining from acting upon, any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties and any action taken by the Trustee pursuant to this Indenture upon the request, authority or consent of any Registered Owner (determined at the time of such request, authority or consent) shall be conclusive and binding upon all future owners of the same Bond and any Bonds issued in exchange therefor;

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

(c)            whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, rely upon a certificate of an Authorized Representative;

(d)            before the Trustee acts or refrains from acting, it may consult with counsel, engineers or other experts as may be appropriate, and the written advice of such counsel, engineers or other experts as may be appropriate shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(e)            the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Registered Owners pursuant to this Indenture, unless such Registered Owners shall have offered to the Trustee security or indemnity acceptable to the Trustee in its sole discretion against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction and such action may be lawfully taken;

(f)            the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled, upon reasonable notice and during regular business hours, and subject, further to the Company's safety and confidentiality requirements to examine the books, records and premises of the Company relating to the Bonds and the books and records of the Issuer concerning the Bonds personally or by agent or attorney;

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

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

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

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

Section 8.5.                          May Hold Bonds.

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

Section 8.6.                          Money Held in Trust.

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

Section 8.7.                          Corporate Trustee Required; Eligibility.

There shall at all times be a Trustee hereunder which shall be a corporation or association organized and doing business under the laws of the United States of America or of any state that is either a trust company or a bank in good standing in the Commonwealth, authorized under such laws to exercise trust powers and authorized under the Act to act as Trustee hereunder, having a combined capital, surplus and undivided profits of at least $100,000,000, subject to supervision or examination by federal or state authority and shall not be a Disqualified Contractor.  If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

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

(a)            No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 8.9 of this Indenture.

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

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

(d)            If at any time:  (i) the Trustee shall cease to be eligible under Section 8.7 of this Indenture or under applicable law and shall fail to resign after written request therefor as a result thereof by any party to a Financing Document or by a Registered Owner who has been a bona fide Owner for at least six (6) months, or (ii) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (x) the Company or the Issuer may remove the Trustee, or (y) any Registered Owner who has been a bona fide Owner for at least six (6) months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

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

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

Section 8.9.                          Acceptance of Appointment by Successor Trustee.

Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the parties to the Financing Documents, including the retiring Trustee, an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Issuer or the successor Trustee, such retiring Trustee shall, upon payment of its charges and expenses, including the charges and expenses of its counsel, by the Company, execute and deliver an instrument prepared by the successor Trustee transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.  Upon request of any such successor Trustee, the Issuer shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.  No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

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

Any corporation or association into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation or association resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or association succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, to the extent operative, without the execution or filing of any paper or any further act on the part of any of the parties hereto.

Section 8.11.                          Fees, Charges and Expenses of Trustee.

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

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

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

ARTICLE IX  

 AMENDMENTS AND SUPPLEMENTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 9.3.                          Amendments to Loan Agreement.

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

Section 9.4.                          Right to Payment.

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

ARTICLE X  

 DEFEASANCE

Section 10.1.                          Defeasance.

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

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

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

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

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

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

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

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

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

Section 10.2.                          Effect of Defeasance.

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

ARTICLE XI  

 MISCELLANEOUS PROVISIONS

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

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

Section 11.2.                          No Rights Conferred on Others.

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

Section 11.3.                          Illegal, Etc. Provisions Disregarded.

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

Section 11.4.                          Substitute Publication of Notice.

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

Section 11.5.                          Mailed Notice.

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

(a)            to the Company, to:

The York Water Company

130 East Market Street

York, PA   17401

Attention:  CFO

Telecopy No.:  (717) 852‐0058

(b)            to the Issuer, to:

York County Industrial Development Authority

144 Roosevelt Ave

York, PA  17401

Attention:  Kenetha Hansen, Assistant Secretary

Telecopy No. ( 717) 843-8837

(c)            to the Trustee, to:

Manufacturers and Traders Trust Company

213 Market Street

Harrisburg, PA   17101

Attention:  Corporate Trust Department

Telecopy No.:  (717) 231‐2615

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

Section 11.6.                          Governing Law.

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

Section 11.7.                          Successors and Assigns.

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

Section 11.8.                          Action by Company.

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

Section 11.9.                          Headings and Subheadings for Convenience Only.

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

Section 11.10.                                        Counterparts.

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

Section 11.11.                                        Additional Notices to Rating Agencies.

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

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

YORK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

By: /s/Jack R. Kay                                                                                                  

Chair

[Seal]

Attest:

By: /s/J. Kenetha Hansen                                                                                    

  (Assistant) Secretary

MANUFACTURERS AND TRADERS TRUST

COMPANY, as Trustee

By: /s/Stevie Blackston II                                                                                                  

AVP                                                                                                  

 

Exhibit A

(FORM OF BOND)

[The following legend shall appear so long as the Book Entry System described in Section 2.13 of the Indenture has not been discontinued.]

This Bond is subject to a Book Entry System of Registration under which, except as specifically provided otherwise in the Indenture (hereinafter defined), Cede & Co., as nominee of The Depository Trust Company, a New York corporation ("DTC"), will be the Registered Owner and will hold this Bond on behalf of the Beneficial Owner hereof.  By acceptance of a confirmation of purchase, delivery or transfer, the Beneficial Owner of this Bond shall be deemed to have agreed to such arrangement.  Cede & Co., as Registered Owner of this Bond, shall be treated as the Owner of this Bond for all purposes.

Unless this Bond is presented by an Authorized Representative of DTC to the Trustee for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an Authorized Representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an Authorized Representative of DTC), any transfer, pledge, or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the Registered Owner hereof, Cede & Co., has an interest herein.

UNITED STATES OF AMERICA

YORK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

Exempt Facilities Revenue Bonds

Series 2015

(The York Water Company Project)

No. R‐1 $_____________

	
Interest Rate

	
Dated Date

	
Maturity Date

	
CUSIP

	 	 	 	 

Registered Owner:                                        CEDE & CO.

Principal Amount:                                        _____________ DOLLARS

YORK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (the "Issuer"), a public instrumentality of the Commonwealth of Pennsylvania and a body corporate and politic organized and existing under the Pennsylvania Economic Development Financing Law, as amended (the "Act"), for value received, hereby  promises to pay, but solely from the sources hereinafter set forth, to the Registered Owner named above or registered assigns, on the Maturity Date specified above (unless this Bond shall have been previously called for redemption in whole or in part and payment of the redemption price shall have been duly made or provided for) the Principal Amount shown above upon surrender of this Bond at the designated corporate trust office of the Trustee (hereinafter defined) and to pay interest thereon, but solely from such sources, at the Interest Rate per annum shown above on June 1 and December 1 of each year, commencing December 1, 2015 (each an "Interest Payment Date").  This Bond shall bear interest from the date of authentication if authenticated on an Interest Payment Date to which interest has been paid or duly provided for, otherwise from the last preceding Interest Payment Date to which interest has been paid or duly provided for or from the Dated Date if no interest hereon has been paid.  The principal or redemption price of this Bond (or of a portion of this Bond in the case of a partial redemption) is payable to the Registered Owner hereof at the corporate trust office of Manufacturers and Traders Trust Company, Harrisburg, Pennsylvania, or the designated office of its successor as trustee (the "Trustee").  Interest shall be paid to the Registered Owner hereof whose name appears on the registration books kept by the Trustee as of the Regular Record Date by check drawn on the Trustee and mailed on the applicable interest payment date to such Registered Owner, or at the option of any Registered Owner, by wire transfer of immediately available funds to such wire transfer address of a bank in the United States as such Registered Owner shall specify in writing to the Trustee no later than the Record Date for such payment.  The Regular Record Date for any Interest Payment Date shall be the close of business on the fifteenth day of the month immediately preceding the Interest Payment Date.  Any interest which is not timely paid or duly provided for shall cease to be payable to the Holder as of the Regular Record Date, and shall be payable to the Holder in whose name this Bond is registered at the close of business on a Special Record Date to be fixed by the Trustee for the payment of such overdue interest.  Notice of the Special Record Date shall be mailed to Holders not less than ten (10) days prior thereto.

This Bond is one of the Issuer's duly authorized Exempt Facilities Revenue Bonds, Series 2015 (The York Water Company Project) aggregating $10,000,000 original principal amount (the "Bonds"), issued under and pursuant to the Act and laws of the Commonwealth, and the Trust Indenture dated as of July 1, 2015 (together with any supplements or amendments thereto, the "Indenture"), between the Issuer and the Trustee.  The Bonds are issued for the purpose of loaning the proceeds thereof to The York Water Company (the "Company") in order to finance the costs of a project consisting of: (i) the refinancing of all of the Pennsylvania Economic Development Financing Authority's Exempt Facilities Revenue Bonds, Series A of 2004 (The York Water Company Project) issued for the benefit of the Company; (ii) financing a portion of the Company's 2015 Capital Budget, including, but not limited to the design, acquisition, construction, improvement, renovation, equipping and installation of (a) various structures, including booster stations, wellhouses, pumping stations, lift stations, standpipes and water treatment facilities, (b) transmission and distribution mains, service lines, meters and pumping, water treatment and purification equipment, and (c) various other capital improvements and equipment for the Company's water system located throughout York and Adams Counties, Pennsylvania; and (iii) the payment of the costs of issuance of the Bonds (the "Project").  Pursuant to a Loan Agreement dated as of July 1, 2015 (together with any supplements or amendments thereto, the "Loan Agreement") between the Issuer and the Company, the Company has agreed to make payments to the Trustee, on behalf of the Issuer, in amounts and at the time sufficient to pay the principal of, redemption premium, if any, and interest on the Bonds as and when due.

Capitalized terms used in this Bond which are not defined herein but which are defined in the Indenture or the Loan Agreement shall have the respective meanings set forth in the Indenture or the Loan Agreement.

Reference is made to the Indenture for provisions concerning the rights of the Registered Owners and the rights and obligations of the Issuer, the Company and the Trustee.  The acceptance of the terms and conditions of the foregoing documents, including amplifications and qualifications of the provisions hereof and thereof, each of which is on file at the corporate trust office of the Trustee in Harrisburg, Pennsylvania, is an explicit and material part of the consideration of the Issuer's issuance hereof and each Registered Owner hereof by acceptance of this Bond accepts and assents to all such terms and conditions as if fully set forth herein.

REDEMPTION

Optional Redemption.  The Bonds are subject to redemption by the Issuer, at the direction of the Company, on or after June 1, 2025, in whole or in part, at any time, in Authorized Denominations, at a redemption price equal to 100% of the outstanding principal amount thereof, together with accrued interest, if any, to the redemption date.

Mandatory Redemption.  The Bonds are subject to mandatory redemption prior to maturity, selected by lot, at a redemption price equal to 100% of the principal amount thereof, plus interest accrued thereon to the date fixed for redemption, on June 1 of each of the years in the principal amounts as follows:

Term Bond Maturing 2029:

	
Year

	
Amount

	
2026

	
$330,000

	
2027

	
340,000

	
2028

	
355,000

	
2029*

	
370,000

                                                    

*Final Maturity

Term Bond Maturing 2032:

	
Year

	
Amount

	
2030

	
$385,000

	
2031

	
400,000

	
2032*

	
420,000

                                                    

*Final Maturity

Term Bond Maturing 2035:

	
Year

	
Amount

	
2033

	
$435,000

	
2034

	
455,000

	
2035*

	
470,000

                                                    

*Final Maturity

Term Bond Maturing 2038:

	
Year

	
Amount

	
2036

	
$495,000

	
2037

	
515,000

	
2038*

	
535,000

                                                    

*Final Maturity

Term Bond Maturing 2042:

	
Year

	
Amount

	
2039

	
$560,000

	
2040

	
585,000

	
2041

	
610,000

	
2042*

	
640,000

                                                    

*Final Maturity

Term Bond Maturing 2045:

	
Year

	
Amount

	
2043

	
$670,000

	
2044

	
700,000

	
2045*

	
730,000

                                                    

*Final Maturity

If Bonds subject to mandatory redemption as set forth above are selected for optional redemption at any time, the principal amount of such Bonds redeemed pursuant to such optional redemption shall be credited against the mandatory redemption requirements for the Bonds in such manner as the Company shall determine.

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

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

Notice of Redemption.  The Trustee shall cause notice of any redemption of Bonds hereunder to be given to the Registered Owners of all Bonds to be redeemed at the registered addresses appearing in the registration books kept for such purpose pursuant to the Indenture.  Each such notice shall (i) be given by facsimile or by first class mail at least twenty (20) days prior to the redemption date, (ii) identify the Bonds to be redeemed (specifying the CUSIP numbers, if any, assigned to the Bonds), (iii) specify the redemption date and the redemption price, and (iv) state that on the redemption date the Bonds called for redemption will be payable at the designated corporate trust operations office of the Trustee, that from that date interest will cease to accrue, and that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Bonds.  No defect affecting any Bond, whether in the notice of redemption or mailing thereof (including any failure to mail such notice), shall affect the validity of the redemption proceedings for any other Bonds.  The Trustee shall also send a notice of prepayment or redemption by first class mail to the Registered Owner of any Bond who has not sent such Bond in for redemption sixty (60) days after the redemption date.

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

Purchase in Lieu of Redemption.  In the manner and subject to the conditions provided in the Indenture, the Company may elect to purchase any Bonds that have been called for redemption hereof on the redemption date by giving the Trustee and the Issuer written notice at least two (2) Business Days prior to the date the Bonds are to be redeemed.  The principal amount of Bonds to be redeemed on the applicable redemption date shall be reduced by the amount of Bonds so purchased.  Prior to the date that any such purchased Bonds are sold by the Company, the Company shall receive a Favorable Opinion of Bond Counsel.

DEFAULT

In case an Event of Default as defined in the Indenture shall have occurred, the principal of all Bonds then Outstanding under the Indenture may become due and payable prior to their scheduled maturity date.

GENERAL PROVISIONS

The Bonds are and will be equally and ratably secured, to the extent provided in the Indenture, by the Installment Loan Payments to be received by the Trustee from the Company under the Loan Agreement and other amounts payable by the Company under the Loan Agreement.  The Issuer has pledged and assigned to the Trustee as security for the payment of the Bonds all other rights, title and interest of the Issuer in (a) the Loan Agreement (except for the indemnification rights, consent rights and expense reimbursement rights contained therein), and (b) all amounts on deposit from time to time in the various funds created in, and subject to the conditions set forth, in the Indenture.

No Registered Owner shall have any right to pursue any remedy under the Indenture unless (a) the Trustee shall have been given written notice of an Event of Default; (b) the Registered Owners of at least 25% in principal amount of the Bonds then Outstanding shall have requested the Trustee, in writing, to exercise the powers granted in the Indenture or to pursue such remedy in its or their name or names; (c) the Trustee shall have been offered indemnity satisfactory to it against costs, expenses and liabilities; and (d) the Trustee shall have failed to comply with such request within a reasonable time.

The Bonds are being issued by means of a book entry system, with actual bond certificates evidencing ownership of the Bonds immobilized at The Depository Trust Company, New York, New York (the "Securities Depository"), or its successor as Securities Depository.  Transfers of beneficial ownership of the Bonds shall be effected on the records of the Securities Depository and its participants pursuant to the rules and procedures established by the Securities Depository.  So long as the Bonds are issued in book‐entry form, actual bond certificates are not available for distribution to the beneficial owners and the principal, redemption premium (if any), purchase price and interest on the Bonds are payable to Cede & Co., as nominee of the Securities Depository.  Transfer of principal, redemption premium (if any) and interest payments to participants of the Securities Depository is the responsibility of the Securities Depository; transfers of principal, redemption premium (if any) and interest to beneficial owners of the Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of beneficial owners.  The Issuer and the Trustee are not responsible or liable for maintaining, supervising or reviewing the records maintained by the Securities Depository, its participants or persons acting through such participants.  If the Bonds are no longer registered to a Securities Depository or its nominee:  (a) this Bond may be registered as transferred only upon the registration books kept for that purpose at the designated corporate trust office of the Trustee by the registered owner hereof in person, or by his or her attorney duly authorized in writing, upon presentation and surrender to the Trustee of this Bond duly endorsed for registration of transfer or accompanied by an assignment duly executed by the registered owner or his or her attorney duly authorized in writing, and thereupon a new registered certificate, in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor; and (b) this Bond may be exchanged by the registered owner hereof or his or her duly authorized attorney upon presentation at the designated corporate trust office of the Trustee for an equal aggregate principal amount of Bonds of the same maturity and in any Authorized Denomination in the manner, subject to the conditions and upon payment of charges, if any, provided in the Indenture.

Except in the case of a partial redemption and in connection with the remarketing of Bonds purchased by the Company, the Trustee shall not be obligated to effect any such exchange or transfer of Bonds during the fifteen (15) days immediately preceding the date of mailing of any notice of redemption or at any time following the mailing of any such notice in the case of Bonds selected for such redemption.

The Indenture and the Loan Agreement may be modified or amended only with the consent, with certain exceptions as described in the Indenture, of the Registered Owners of not less than a majority, or in certain instances 100%, in aggregate principal amount of all Bonds Outstanding under the Indenture.

Reference is hereby made to the Indenture and the Loan Agreement, copies of which are on file with the Trustee, for the provisions, among others, with respect to the nature and extent of the rights, duties and obligations of the Issuer, the Company, the Trustee and the Registered Owners of the Bonds.  The Registered Owner of this Bond, by the acceptance hereof, is deemed to have agreed and consented to the terms and provisions of the Indenture and the Loan Agreement.

The Issuer and the Trustee shall be entitled to treat and consider the Person in whose name this Bond is registered in the registration books the absolute owner of this Bond for the purpose of payment of principal, premium, if any, and interest with respect to this Bond, for the purpose of giving notices of redemption and other matters with respect to this Bond, for the purpose of registering transfers with respect to this Bond, and for all other purposes whatsoever.

No recourse shall be had for the payment of the principal of or interest on this Bond, or for any claim based hereon, against any member, officer or employee, past, present or future, of the Issuer or of any successor body, as such, either directly or through the Issuer or through any such successor body, under any constitutional provision, statute or rule of law, or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, and all such liability of such members, officers or employees is released as a condition of and as consideration for the execution and issuance of this Bond.

Whenever the due date for payment of interest on or principal of this Bond shall be a Saturday, Sunday or a day on which banking institutions in the Commonwealth of Pennsylvania are authorized by law to close (a "Holiday"), then the payment of such interest or principal need not be made on such date, but may be made on the succeeding day which is not a Holiday, with the same force and effect as if made on the due date for payment of principal or interest.

This Bond is a limited obligation of the Issuer and is payable solely from amounts payable by the Company under the Loan Agreement and any funds held under the Indenture and available for such payment.  Neither the Commonwealth of Pennsylvania, nor any political subdivision thereof is or shall be obligated to pay the principal of or premium, if any, or interest on this Bond, and this Bond shall not be deemed an obligation of the Commonwealth of Pennsylvania, or any political subdivision thereof.  Neither the faith and credit nor the taxing power of the Commonwealth of Pennsylvania, or any political subdivision thereof is pledged to the payment of the principal of or premium, if any, or the interest on this Bond.  The Issuer has no taxing power.

This Bond shall not be entitled to any right or benefit under the Indenture, or be valid or become obligatory for any purpose, until this Bond shall have been authenticated by execution by the Trustee, acting as authenticating agent, of the certificate of authentication inscribed hereon.

IN WITNESS WHEREOF, the York County Industrial Development Authority has caused this Bond to be executed in its name by the manual or facsimile signature of its Chair as of the Dated Date set forth above.

YORK COUNTY INDUSTRIAL

DEVELOPMENT  AUTHORITY

By:                                                                                                  

Chair

[Seal]

Attest:

                                                                      

(Assistant) Secretary

CERTIFICATE OF AUTHENTICATION

This Bond is one of the Bonds described in the within‐mentioned Indenture.

Date of Authentication:                                                                                    MANUFACTURERS AND TRADERS TRUST

COMPANY, as Trustee

By:                                                                                                  

Authorized Signatory

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto  

Please insert Social Security or

Taxpayer Identification Number of Transferee

                                                                      

/                                                                      \

                                                                                                                                                                          

(Please print or typewrite name and address, including zip code of Transferee)

                                                                                                                                                                          

the within Bond and all rights thereunder, and hereby irrevocably constitutes and

,

appoints attorney to register the transfer of the within Bond on the books kept for

registration thereof, with full power of substitution in the premises.

Dated:                                                                      

Signature Guaranteed:

	
_______________________________

	 	
_________________________________

	
 

Notice:  Signature (s) must be guaranteed by an eligible guarantor institution participating in a securities transfer association recognized signature guarantee program.

 

	 	
 

Notice:  The Signature above must correspond with the name of the Registered Owner as it appears upon the front of this Bond in every particular, without alteration or enlargement or any change whatsoever

EXHIBIT B

DTC LETTER OF REPRESENTATION

See Tab 29

EXHIBIT C

FORM OF REQUISITION

YORK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

EXEMPT FACILITIES REVENUE BONDS, SERIES 2015

(THE YORK WATER COMPANY PROJECT)

FORM OF REQUISITION

Requisition No. _____________________

Date:  _____________________________

Manufacturers and Traders Trust Company,

    as Trustee

Harrisburg, PA  17101

Ladies and Gentlemen:

All capitalized terms used herein shall have the meanings set forth in the Trust Indenture dated as of July 1, 2015 (the "Indenture") between the York County Industrial Development Authority and Manufacturers and Traders Trust Company, as trustee.

You are hereby directed, pursuant to Section 3.4 of the Indenture, to make the following advances from the Construction Fund under the Indenture:

	
Name and Address

of Payee

	
Amount to

be Paid

	
Purpose of

Payment

	 	 	 
	 	 	 

The undersigned Authorized Company Representative(s) hereby certifies that each of these obligations has been properly incurred, is for Project Costs, is a proper charge against the Construction Fund in accordance with the provisions of the Loan Agreement, the Tax Documents and the Indenture and each amount requisitioned is due and unpaid and has not been the basis of any previous requisition.  To the extent the ultimate payee is not The York Water Company (the "Company"), the amount requisitioned will be transferred to such third party immediately upon receipt.  The undersigned further certifies that there is no Event of Default now existing and he/she has no knowledge of any vendors', mechanics' or other liens, conditional sales contracts, chattel mortgages, leases of personalty, title retention agreements or security interests which should be satisfied or discharged before the payments as requisitioned herein are made or which will not be discharged by such payment.

THE YORK WATER COMPANY

By:                                                                                                  

Authorized Company RepresentativeExhibit - 10.1

Exhibit 10.1

FIRSTENERGY CORP.

AMENDED AND RESTATED

EXECUTIVE DEFERRED COMPENSATION PLAN

Effective as of November 1, 2015

TABLE OF CONTENTS
	
				
	 
	 
	Page

	ARTICLE 1 - PURPOSE
	1
	

	 
	1.1 Purpose
	1
	

	 
	 
	 

	ARTICLE 2 -DEFINITIONS    
	2
	

	 
	2.1 Account
	2
	

	 
	2.2 Administrative Committee
	2
	

	 
	2.3 Beneficiary
	2
	

	 
	2.4 Board
	2
	

	 
	2.5 Change in Control
	3
	

	 
	2.6 Code
	6
	

	 
	2.7 Company
	6
	

	 
	2.8 Compensation Committee    
	7
	

	 
	2.9 Deferral Election
	7
	

	 
	2.10 Disability
	7
	

	 
	2.11 Effective Date
	7
	

	 
	2.12 Elected Deferred Compensation
	8
	

	 
	2.13 ERISA
	8
	

	 
	2.14 Employer
	8
	

	 
	2.15 Initial Eligible Payment Date
	8
	

	 
	2.16 Interest Rate
	8
	

	 
	2.17 Participant
	8
	

	 
	2.18 Participation Agreement
	9
	

	 
	2.19 Pension Plan
	9
	

	 
	2.20 Performance-Based Compensation
	9
	

	 
	2.21 Performance Share Award
	9
	

	 
	2.22 Plan
	9
	

	 
	2.23 Restricted Stock Unit Award
	9
	

	 
	2.24 Restricted Stock Unit Account
	9
	

	 
	2.25 Retirement
	10
	

	 
	2.26 Retirement Account
	10
	

	 
	2.27 Retirement Stock Account
	10
	

	 
	2.28 Separation from Service
	10
	

	 
	2.29 Short-Term Incentive Award
	10
	

	 
	2.30 Service Period
	11
	

	 
	2.31 Stock Account
	11
	

	 
	2.32 Unforeseeable Emergency
	11
	

	 
	 
	 

	ARTICLE 3 —PARTICIPATION AND DEFERRAL COMMITMENTS
	11
	

	 
	3.1 Eligibility and Participation
	11
	

	 
	3.2 Deferral Elections
	12
	

i

	
				
	 
	3.3 Commencement, Duration and Modification of Deferral Election
	13
	

	 
	 
	 

	ARTICLE 4 —ACCOUNTS
	14
	

	 
	4.1 Elected Deferred Compensation
	14
	

	 
	4.2 Retirement Account
	15
	

	 
	4.3 Stock Account and Restricted Stock Unit Account
	16
	

	 
	4.4 Retirement Stock Account
	16
	

	 
	4.5 Deferred Compensation Benefit
	16
	

	 
	4.6 Amounts Transferred from the GPU Companies Deferred Compensation Plan and Nonqualified Pension Plan
	16
	

	 
	4.7 Vesting of Accounts
	17
	

	 
	4.8 Statement of Accounts
	17
	

	 
	 
	 

	ARTICLE 5 —DISTRIBUTION OF DEFERRED COMPENSATION BENEFITS
	18
	

	 
	5.1 Retirement Benefit
	18
	

	 
	5.2 Death Benefit
	19
	

	 
	5.3 Disability Benefit
	20
	

	 
	5.4 Separation from Service Benefit for Reasons Other Than Retirement, Disability or Death—Retirement Account
	21
	

	 
	5.5 Stock Account Distributions
	21
	

	 
	5.6 Accelerated Distribution
	23
	

	 
	5.7 Financial Hardship Distributions
	24
	

	 
	5.8 Withholding; Payroll Taxes
	25
	

	 
	5.9 Commencement of Payments
	25
	

	 
	5.10 Payment to Guardian
	26
	

	 
	5.11 Small Accounts
	26
	

	 
	 
	 

	ARTICLE 6 —SUPPLEMENTAL PENSION BENEFIT
	26
	

	 
	6.1 Eligibility and Participation
	26
	

	 
	6.2 Retirement Benefit
	27
	

	 
	6.3 Death Benefit
	28
	

	 
	 
	 

	ARTICLE 7 —BENEFICIARY DESIGNATION
	29
	

	 
	7.1 Beneficiary Designation
	29
	

	 
	7.2 Amendments
	30
	

	 
	7.3 No Beneficiary Designation or Death of Beneficiary with respect to Deferred Compensation Benefit
	30
	

	 
	7.4 Beneficiary Designation or Death of Beneficiary with respect to Supplemental Pension Benefit
	30
	

	 
	7.5 Effect of Payment
	30
	

	 
	 
	 

	ARTICLE 8 —ADMINISTRATION
	30
	

	 
	8.1 Administrative Committee; Duties
	30
	

ii

	
				
	 
	8.2 Agents
	32
	

	 
	8.3 Indemnity of Committees
	32
	

	 
	8.4 Participating Employers
	32
	

	 
	 
	 

	ARTICLE 9 —CLAIMS PROCEDURE
	32
	

	 
	9.1 Claim
	32
	

	 
	9.2 Initial Claim Review
	32
	

	 
	9.3 Review of Claim
	33
	

	 
	9.4 Review of Claims on and after a Change in Control
	35
	

	 
	 
	 

	ARTICLE 10 —AMENDMENT AND TERMINATION OF PLAN
	35
	

	 
	10.1 Right to Amend
	35
	

	 
	10.2 Right to Terminate
	36
	

	 
	10.3 Distribution of Benefits on Plan Termination
	36
	

	 
	 
	 

	ARTICLE 11 —MISCELLANEOUS
	37
	

	 
	11.1 Unfunded Plan
	37
	

	 
	11.2 Liability for Benefits
	37
	

	 
	11.3 Unsecured General Creditor
	38
	

	 
	11.4 Obligations to Employer
	38
	

	 
	11.5 Nonassignability
	38
	

	 
	11.6 Not a Contract of Employment
	38
	

	 
	11.7 Protective Provisions
	39
	

	 
	11.8 Captions
	39
	

	 
	11.9 Governing Law
	39
	

	 
	11.10 Validity
	39
	

	 
	11.11 Notice
	39
	

	 
	11.12 Successors
	39
	

	 
	11.13 Code Section 409A
	40
	

	 
	 
	 

	APPENDIX A
	A-1

iii

FIRSTENERGY CORP.

AMENDED AND RESTATED

EXECUTIVE DEFERRED COMPENSATION PLAN

ARTICLE 1—PURPOSE
1.1        Purpose
The purpose of this FirstEnergy Corp. Amended and Restated Executive Deferred Compensation Plan is to provide current tax planning opportunities as well as supplemental funds for retirement, death, disability or other separation of employment for key executives. The Plan is part of an integrated executive compensation program that is intended to attract, retain, and motivate certain key executives who are in positions to make significant contributions to the operation and profitability of Employers for the benefit of stockholders and customers.

This Plan was amended and restated effective as of January 1, 2005 in order to comply with Code Section 409A and supersedes all prior versions of the Plan.  The Plan is further amended and restated to make certain clarifications under Code Section 409A with respect to amounts earned, credited or accrued after December 31, 2004 and, effective as of January 1, 2011, to eliminate the twenty percent (20%) Stock Premium for compensation deferred into the Stock Account of the Plan.  The Plan was further amended (a) effective as January 1, 2012, to amend the definition of “Change in Control” with respect to compensation deferred or accrued on or after January 1, 2012 (“Amendment No. 1”), (b) effective as of January 1, 2012, to remove the Participants’ ability to make subsequent deferrals of their supplemental pension benefits (“Amendment No. 2”), (c) effective as of January 1, 2013, to allow Participants to defer the settlement of restricted stock units under the Plan (“Amendment No. 3”), and (d) effective as of January 1, 2014, to allow Participants to defer “performance-based compensation” at a date that is no later than six months prior to the end of the compensation’s performance period (“Amendment No. 4”).

The Plan was amended and restated, effective as of January 1, 2014, to incorporate Amendments Nos. 1 through 4 and superseded all prior versions of the Plan (the “2014 Amendment and Restatement”).  In addition, the 2014 Amendment and Restatement amended the Plan (a) to provide that (i) dividends accrued after May 17, 2014 in a Participant’s Stock Account or Restricted Stock Unit Account, and (ii) Short-Term Incentive Awards deferred into a Participant’s Stock Account after January 1, 2014 shall be paid in cash, (b) to exclude Short-Term Incentive Award payments from the supplemental pension benefits for individuals who become Participants after January 1, 2014 and (c) to change the effective date of any amendments to the Plan to thirty (30) days after the Company provides notice to the Participants of the amendment. 

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The Plan was amended effective as of February 23, 2015 to provide that (a) performance shares deferred into a Participant’s stock account on or after February 23, 2015 will be paid in cash instead of common stock, and (b) with respect to future deferrals, if a Participant elects to receive a distribution of his or her stock account following a three-year deferral period and the Participant terminates employment prior to the end of such three-year deferral period, then the Stock Account distribution will be paid in cash in accordance with the payment terms of the Participant’s Retirement Account (“2015 Amendment No. 1”).  The Plan is now amended and restated, effective as of November 1, 2015, to incorporate 2015 Amendment No. 1 (the “2015 Amendment and Restatement”).  The 2015 Amendment and Restatement also amends the Plan to provide that for deferrals made on or after November 1, 2015, (a) deferrals to the Stock Account will be held in the Stock Account until the Participant’s Separation from Service or death, which effectively eliminates the 3-year deferral option, and (b) deferrals of restricted stock units are to  be held in a Stock Account rather than a separate Restricted Stock Unit Account, to simplify administration of the Plan. 

ARTICLE 2—DEFINITIONS
For the purposes of this Plan, the following terms shall have the meanings indicated, unless the content clearly indicates otherwise:
2.1        Account
“Account” means the interest of a Participant in the Plan as represented by the hypothetical bookkeeping entries kept by Employer. A separate Account shall be established for each Participant and as may otherwise be required.

2.2        Administrative Committee
“Administrative Committee” means the committee appointed to administer the Plan pursuant to Article 8.

2.3        Beneficiary
“Beneficiary” means the person, persons or entity (including, without limitation any trustee) last designated by a Participant to receive the benefits specified in this Plan pursuant to Section 7.3 or 7.4 of the Plan in the event of the Participant’s death.

2.4        Board
“Board” means the Board of Directors of the Company.

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2.5        Change in Control
“Change in Control” means:

(x) for amounts deferred or accrued under the Plan before January 1, 2012:

1.     An acquisition by any Person (as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto (the ‘Exchange Act’) and as used in Sections 13(d) and 14(d) thereof, including a ‘group’ as defined in section 13(d) thereof) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) (twenty-five percent (25%) if such Person proposes any individual for election to the Board of Directors or any member of the Board is the representative of such Person) or more of either (i) the then outstanding shares of common stock of the Company (‘Outstanding Company Common Stock’), or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (‘Outstanding Company Voting Securities’); provided, however, that the following acquisitions will not constitute a Change in Control:

(a)     Any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege);

(b)     Any acquisition by the Company;

(c)     Any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or

(d)     Any acquisition by any corporation pursuant to a reorganization, merger, or consolidation if, following such reorganization, merger, or consolidation, the conditions described in clauses 3(a), 3(b) and 3(c) of Subsection (x) of this Section 2.5 are satisfied;

2.     Individuals who, as of the date hereof, constitute the Board (the ‘Incumbent Board’) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
 
3.     Consummation of a reorganization, merger, or consolidation or sale or other disposition of all or substantially all of the assets of the Company, in each case, unless, following such reorganization, merger, or consolidation or sale or other disposition of assets:

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(a)     More than seventy-five percent (75%) of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, consolidation, or acquiring such assets and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger, consolidation, or sale or other disposition of assets in substantially the same proportions as their ownership, immediately prior to such reorganization, merger, consolidation, or sale or other disposition of assets, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be;

(b)     No Person (excluding the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such reorganization, merger, consolidation, or sale or other disposition of assets, and any Person beneficially owning, immediately prior to such reorganization, merger, consolidation, or sale or other disposition of assets, directly or indirectly, twenty-five percent (25%) or more of the Outstanding Company Common Stock or Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, twenty-five percent (25%) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, or consolidation or acquiring such assets or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors; and

(c)     At least a majority of the members of the Board of Directors of the corporation resulting from such reorganization, merger, or consolidation or acquiring such assets were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger, consolidation or sale or other disposition of assets; or

4.     Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

However, in no event will a Change in Control be deemed to have occurred, with respect to a Participant, if the Participant is part of a purchasing group which consummates the Change in Control transaction. The Participant will be deemed ‘part of a purchasing group’ for purposes of the preceding sentence if the Participant is an equity participant or has agreed to become an equity participant in the purchasing company or group (excluding passive ownership of less than five percent (5%) of the voting securities of the purchasing company or ownership of equity participation in the purchasing company or group which is otherwise not deemed to be significant, as determined prior to the Change in Control by a majority of the nonemployee continuing members of the Board of Directors); and 

(y) for amounts deferred or accrued (i.e., earned) under the Plan on or after January 1, 2012:

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1.     An acquisition by any Person, directly or indirectly, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) immediately after which such Person has beneficial ownership of twenty-five percent (25%) or more of either: (i)  the Outstanding Company Common Stock, or (ii) the Outstanding Company Voting Securities; provided, however, that the following acquisitions of beneficial ownership of Outstanding Company Common Stock or Outstanding Company Voting Securities shall not constitute a Change in Control:

(a)     Any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege, unless the security being so converted was itself acquired directly from the Company);

(b)     Any acquisition by the Company;

(c)     Any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or

(d)     Any acquisition pursuant to a reorganization, merger, or consolidation involving the Company or any direct or indirect wholly-owned subsidiary of the Company, whether or not the Company is the surviving corporation in such transaction (any of the foregoing, a ‘Reorganization’ for purposes of this Subsection (y)), if, following such Reorganization, the conditions described in clause (3) of Subsection (y) of this Section 2.5 below are satisfied;
 
2.     Individuals who, as of January 1, 2012, constitute the Board (the ‘Incumbent Board’) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director subsequent to January 1, 2012 whose election, or nomination for election by the Company’s shareholders, is approved by a vote of at least a majority of the Directors then comprising the Incumbent Board shall be considered as a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (within the meaning of solicitations subject to Rule 14a-12(c) of Regulation 14A promulgated under the Exchange Act or any successor rule) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;
        
3.     Consummation of a (A) Reorganization or (B) sale or disposition of all or substantially all of the assets of the Company in one transaction or a series of related transactions (determined on a consolidated basis), other than in connection with a sale-leaseback or other arrangement resulting in the continued utilization of such assets by the Company (a ‘Major Asset Disposition’), unless in each case following such Reorganization or Major Asset Disposition (either, a ‘Major Corporate Event’) each of the following conditions is met:

(a)     The Outstanding Company Voting Securities immediately prior to such Major Corporate Event represent (either by remaining outstanding or by converting into or being exchanged for voting securities of the surviving corporation) at least sixty percent (60%) of the 

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combined voting power of the surviving corporation (including a corporation which, as a result of such Major Corporate Event, owns the Company or all or substantially all of the assets of the Company) outstanding immediately after such Major Corporate Event;

(b)     No Person (excluding the Company, any employee benefit plan (or related trust) of the Company or the resulting or acquiring corporation resulting from such Major Corporate Event, and any Person beneficially owning, immediately prior to such Major Corporate Event, directly or indirectly, twenty-five percent (25%) or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, immediately after consummation of such Major Corporate Event, twenty-five percent (25%) or more of, respectively, the then-outstanding shares of common stock of the resulting or acquiring corporation in such Major Corporate Event, or the combined voting power of the then-outstanding voting securities of such resulting or acquiring corporation that are entitled to vote generally in the election of directors; and

(c)     At least a majority of the members of the board of directors of the corporation resulting from such Major Corporate Event were members of the Incumbent Board at the time of the execution of the initial agreement providing for such Major Corporate Event; or

4.     Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
 
However, in no event will a Change in Control be deemed to have occurred, with respect to a Participant, if the Participant is part of a purchasing group which consummates the Change in Control transaction. The Participant shall be deemed ‘part of a purchasing group’ for purposes of the preceding sentence if the Participant is an equity participant or has agreed to become an equity participant in the purchasing company or group (excluding passive ownership of less than five percent (5%) of the voting securities of the purchasing company or ownership of equity participation in the purchasing company or group which is otherwise not deemed to be significant, as determined prior to the Change in Control by a majority of the nonemployee continuing members of the Board).

2.6        Code
“Code” means the Internal Revenue Code of 1986, as amended together with all rules and regulations promulgated thereunder.

2.7        Company
“Company” means FirstEnergy Corp., an Ohio corporation, or any successor to the business thereto.

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2.8        Compensation Committee
“Compensation Committee” means the Compensation Committee of the Board of Directors of the Company.

2.9        Deferral Election
“Deferral Election” means a commitment by a Participant to defer a portion of his or her base salary, Short-Term Incentive Award, Performance Share Award and/or Restricted Stock Unit Award pursuant to this Plan.

2.10        Disability
“Disability” means:

(a)        Solely with respect to Account balances that were accrued and vested as of December 31, 2004 and earnings, gains, and losses credited thereto after that date, a physical or mental condition such that a Participant is entitled to receive a monthly disability pension payment under the Pension Plan, except that a Participant need not have completed ten (10) years of Eligibility Service, as defined by the Pension Plan; and
(b)        Solely with respect to Account balances that accrue and/or vest after December 31, 2004 and earnings, gains and losses credited thereto after that date, a physical or mental condition in which the Participant:  
(i)        Is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or
(ii)        Is by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company, or
(iii)        Is determined to be totally disabled by the Social Security Administration or the Railroad Retirement Board.
2.11        Effective Date
This Plan is effective as of September 28, 1985, amended and restated as of May 17, 2004 and it is amended and restated as of January 1, 2005 unless specifically stated otherwise herein.

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2.12        Elected Deferred Compensation
“Elected Deferred Compensation” means the amount of base salary, Short-Term Incentive Award, Performance Share Award and Restricted Stock Unit Award that a Participant elects to defer pursuant to a Deferral Election.

2.13        ERISA
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

2.14        Employer
“Employer” means the Company and any affiliated or subsidiary entity as defined in Code Section 414(b) and (c) except that in applying Code Section 1563 “50 percent” shall be substituted for “80 percent.”

2.15        Initial Eligible Payment Date
“Initial Eligible Payment Date” means, (i) with respect to a Short-Term Incentive Award or a Performance Share Award deferred prior to November 1, 2015, the third (3rd) anniversary of the date on which such Short-Term Incentive Award or Performance Share Award is first credited to its respective Stock Account, and (ii) with respect to a Restricted Stock Unit Award deferred prior to November 1, 2015, the date specified in the Participation Agreement applicable to the deferral of such Restricted Stock Unit Award.

2.16        Interest Rate
“Interest Rate” means the annual equivalent of the average of the Moody’s Average Long-Term Corporate Bond Yield Index for the twelve (12) consecutive month period ending on October 31 of the calendar year immediately preceding the Service Period to which the Interest Rate applies, as published by Moody’s Investors Service, Inc., or any successor thereto, or a substantially similar index if such index is no longer published.
  
2.17        Participant
“Participant” means any key executive who is an employee of any Employer and who has been notified that he has been selected to participate in this Plan pursuant to either Article 3 or Article 6 of this Plan. For purposes of the Deferred Compensation Benefit portion of this Plan, such an employee is a Participant only if he or she files a Participation Agreement with the Administrative Committee. Any employee who had amounts transferred from the GPU Companies Compensation Plan in accordance with Section 4.6 shall be a Participant as of the date of such transfer.

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2.18        Participation Agreement
“Participation Agreement” means the agreement, whether written or provided through electronic means, in which a Participant makes a Deferral Election and makes elections regarding the time and/or manner in which amounts shall be distributed from the Plan. In order for a Deferral Election to be effective for a Service Period, the Participation Agreement must be submitted by a Participant to the Administrative Committee or its delegates prior to the commencement of the Service Period in which the Elected Deferred Compensation is earned, except as otherwise provided with respect to Performance-Based Compensation pursuant to Section 3.3(a).

2.19        Pension Plan
“Pension Plan” means the FirstEnergy Corp. Pension Plan as amended.

2.20        Performance-Based Compensation
“Performance-Based Compensation” means any Performance Share Award, Restricted Stock Unit Award or Short-Term Incentive Award that is “performance-based compensation” within the meaning of Treasury Regulation 1.409A-2(a)(8).”

2.21         Performance Share Award
“Performance Share Award” means those earned and vested Performance Share awards granted under Article 9 of the FirstEnergy Corp. 2007 Incentive Plan, the FirstEnergy Corp. 2015 Incentive Compensation Plan or any similar equity-based incentive plan adopted by the Company.

2.22        Plan
“Plan” means this FirstEnergy Corp. Executive Deferred Compensation Plan as set forth in this document and as the same may be amended from time to time.

2.23        Restricted Stock Unit Award
“Restricted Stock Unit Award” means a restricted stock unit award granted under the FirstEnergy Corp. 2007 Incentive Plan, the FirstEnergy Corp. 2015 Incentive Compensation Plan or any similar equity-based incentive plan adopted by the Company, whether payable in stock or cash under its original terms.

2.24         Restricted Stock Unit Account
“Restricted Stock Unit Account” means the Account separately established for crediting deferrals of Restricted Stock Unit Awards made prior to November 1, 2015, pursuant to Section 4.3 of this Plan. 

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2.25        Retirement
“Retirement” means Separation from Service on or after age fifty-five (55) except due to death and entitled to receive a benefit under the Pension Plan.

2.26        Retirement Account
“Retirement Account” means the Account established pursuant to Section 4.2 of this Plan.

2.27        Retirement Stock Account
“Retirement Stock Account” means the Account established pursuant to Section 4.4 of this Plan.

2.28        Separation from Service
“Separation from Service” means with respect to any employee, the “separation from service” within the meaning of Code Section 409A, of the employee with the Company and all Employers, for any reason, including without limitation, quit, discharge, retirement, leave of absence (including military leave, sick leave, or other bona fide leave of absence such as temporary employment by the government if the period of such leave exceeds the greater of six months, or the period for which the employee’s right to reemployment is provided either by statute or by contract) or permanent decrease in service to a level that is no more than twenty percent (20%) of its prior level. For this purpose, whether a Separation from Service has occurred is determined based on whether it is reasonably anticipated that no further services will be performed by the employee after a certain date or that the level of bona fide services the employee will perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services if the employee has been providing services for less than 36 months).

2.29        Short-Term Incentive Award
“Short-Term Incentive Award” means any vested awards earned under a FirstEnergy annual cash incentive plan or program, as determined by the Committee, as in effect and as amended from time to time. 

2.30        Service Period
“Service Period” means, with respect to a Participant’s base salary and Short-Term Incentive Award, the twelve (12) consecutive month period commencing January 1 of the year in which such base salary or Short-Term Incentive Award is earned; provided, however, that the Service Period with respect to the initial year of eligibility pursuant to Section 3.1(c) of the Plan shall mean the period prescribed by the Company, commencing after an eligible employee becomes eligible to participate in the Plan under Section 3.1(c) and ending on the next following December 31.

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“Service Period” means, with respect to a Restricted Stock Unit Award or a Performance Share Award, the period commencing January 1 prior to the granting of the award and ending at the conclusion of the performance period for such Restricted Stock Unit Award or Performance Share Award; provided, however, that the Service Period with respect to the initial year of eligibility pursuant to Section 3.1(c) of the Plan shall mean the period prescribed by the Company, commencing after an eligible employee becomes eligible to participate in the Plan under Section 3.1(c) and ending on the conclusion of the performance period for such Restricted Stock Unit Award or Performance Share Award.

With respect to only a Restricted Stock Unit Award granted in 2012, the Service Period for such award shall mean the period commencing January 1, 2013 and ending at the conclusion of the such award’s performance period.

2.31         Stock Account
“Stock Account” means the Account established pursuant to Section 4.3 of this Plan.

2.32        Unforeseeable Emergency
“Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse or the Participant’s Beneficiary or dependent (as defined in Code Section 152 without regard to sections 152(b)(1), (b)(2) and (d)(1)(B)); loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

ARTICLE 3—PARTICIPATION AND DEFERRAL COMMITMENTS

3.1        Eligibility and Participation
(a)        Eligibility.  The Chief Executive Officer of the Company, or his or her designee, may designate any key executive who is an employee of any Employer as eligible to participate in the Plan as of the first (1st) day of the month following the employee’s date of hire or promotion, and, with respect to deferrals of any Short-Term Incentive Award and/or Performance Share Award that is earned during a Service Period that ends prior to January 1, 2011 and that otherwise would have been payable no later than December 31, 2011, to receive Stock Premiums in accordance with Section 4.3.  
(b)        Participation. In general, an eligible employee may elect to participate in the Plan by filing with the Administrative Committee a Participant Agreement prior to the Service Period in which the employee is eligible to participate, except as set forth in subsection (c) below.  The Participation Agreement shall be irrevocable as of the December 31 immediately preceding the Service Period.  Notwithstanding the foregoing, an eligible employee may elect to defer any award of Performance-Based Compensation by filing with the Administrative Committee a Participant Agreement prior to the date that is six months before the end of the award’s respective performance period, subject to Section 3.3(a), and such Participation 

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Agreement will become irrevocable as of the date that is six months before the end of such performance period.
(c)        Initial Year of Eligibility.  An eligible employee who is designated as eligible to participate pursuant to Section 3.1(a) and whose date of hire or promotion is on or prior to September 30 of any calendar year may elect to participate in the Plan by filing with the Administrative Committee a Participation Agreement within thirty (30) days after the date the eligible employee becomes eligible to participate in the Plan and within the period prescribed by the Administrative Committee.  Such Participation Agreement will be effective on the date prescribed by the Administrative Committee with respect to compensation paid for services to be performed after such date and through the December 31 of such Service Period. The Participation Agreement shall be irrevocable as of the earlier of (i) the thirtieth (30th) day following the employee’s eligibility date (i.e., the first (1st) of the month following the employee’s date of hire or promotion, provided the employee is designated as eligible pursuant to Section 3.1(a) of the Plan) or (ii) the date prescribed by the Administrative Committee following the employee’s eligibility date.  In the event an employee previously participated in this Plan, such employee may not elect to participate under this subsection unless he or she has not been eligible to participate for at least the twenty-four (24) month period immediately preceding the most recent date of eligibility.
(d)        A Participation Agreement shall not be considered to be revocable merely because the employee or his or her Employer may make an election to change the time and form of payment or the employee may accelerate the time of payment of a Deferred Compensation Benefit but only to the extent such a change is permitted by this Plan.
3.2        Deferral Elections
A Participant may elect in the Participation Agreement to defer any or all of the following:

(a)        Salary Deferral.  A Participant may elect to defer a percentage of base salary earned and otherwise payable for the Service Period. The amount to be deferred shall be stated as a whole percentage and, effective January 1, 2002, shall not be more than fifty percent (50%) of base salary.
(b)    Short-Term Incentive Award and/or Performance Share Award Deferral.  A Participant may elect to defer a percentage of his or her Short-Term Incentive Award and/or Performance Share Award that is earned during the Service Period and otherwise payable in the year following the Service Period. The amount to be deferred must be stated as a whole percentage and shall not be more than one hundred percent (100%) of such Award, less any taxes or other amounts that may be required to be withheld.  
(c)     Restricted Stock Unit Award.  With respect to a Restricted Stock Unit Award granted in 2013 and thereafter, a participant may elect to defer a percentage of his or her Restricted Stock Unit Award that is earned during its respective Service Period and otherwise payable, if at all, at the conclusion of its respective vesting period.  The amount deferred must be 

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stated as a whole percentage and shall not be more than one hundred percent (100%) of such award, less any taxes or other amounts that may be required to be withheld.  
Solely with respect to a Restricted Stock Unit Award that is granted in 2012, a participant may elect to defer a percentage of such Restricted Stock Unit Award that is earned during its respective Service Period and otherwise payable, if at all, at the conclusion of the vesting period for the award; provided, however, that the only eligible portion for deferral of such award is the portion of the award that is paid  subject to the achievement of performance factors.  Any portion of a Restricted Stock Unit Award granted in 2012 that is earned  only upon the satisfaction of service requirements shall not be eligible for deferral. The amount deferred for any Restricted Stock Unit Award granted in 2012 must be stated as a whole percentage and will apply only to the portion of such Restricted Stock Unit Award that is subject to the achievement of performance factors, less any taxes or other amounts that may be required to be withheld.  

3.3        Commencement, Duration and Modification of Deferral Election
(a)        Commencement.  Except as provided in Section 3.1(c), a Deferral Election made with respect to the deferral of base salary or any Restricted Stock Unit Award, Performance Share Award or Short-Term Incentive Award that is not Performance-Based Compensation shall become effective on the first (1st) day of the Service Period immediately following the date a Participation Agreement for such Deferral Election is filed with the Administrative Committee.  A Deferral Election made with respect to any award that is Performance-Based Compensation may become effective on or before the date that is six months before the end of the award’s respective performance period, provided that, except as provided in Section 3.1(c), the Participant making such election performs services continuously from the later of the beginning of the performance period or the date the performance criteria are established through the date an election is made; provided, further, that in no event may an election to defer such award of Performance-Based Compensation be made after the compensation underlying such award has become readily ascertainable.
(b)        Duration of Deferral Election.  A Deferral Election shall remain in effect for one (1) Service Period only.
(c)        Modification Due to Unforeseeable Emergency or Hardship Distribution.  A Deferral Election shall be irrevocable, except that the Administrative Committee may permit a Participant to cancel the remainder of the Deferral Election for a Service Period upon a finding, based upon uniform standards established by the Administrative Committee, that the Participant has suffered an Unforeseeable Emergency or is qualified to receive a hardship distribution pursuant to Code Section 1.401(k)-1(d)(3). If the Administrative Committee grants a cancellation, the Participant shall not be permitted to make a Deferral Election in the same Service Period.   Any further Deferral Election shall be made in accordance with Section 3.1(b). 

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ARTICLE 4—ACCOUNTS
4.1        Elected Deferred Compensation
A Participant’s Elected Deferred Compensation shall be credited to the Participant’s Account as of the date such amount would have otherwise been paid to such Participant.

4.2        Retirement Account
(a)        Establishing a Retirement Account.  A Participant may establish an annual Retirement Account on and after January 1, 2005 which shall be maintained solely for recordkeeping purposes, by making a Deferral Election.
(b)        Maximum Deferral.  A Participant may elect to defer up to fifty percent (50%) of base salary and up to one hundred percent (100%) of the Short-Term Incentive Award into the Retirement Account.
(c)        Earnings
(i)        Any amounts credited to a Retirement Account prior to January 1, 2013 shall be credited with earnings equal to the Interest Rate plus three (3) percentage points. Effective January 1, 2013, any amounts credited to a Retirement Account that is established after December 31, 2012 shall be credited with earnings equal to the Interest Rate plus one (1) percentage point. The maximum Interest Rate shall be twelve percent (12%).  
(ii)        Commencing January 1, 2008, the Company may, in its sole discretion, permit Participants to elect from among a series of hypothetical investment options, including the option described in paragraph (i) above, which are selected by the Administrative Committee and to which the Participants’ Elected Deferred Compensation shall be credited. If the Company permits investment option elections by Participants, the Participants’ Accounts shall be credited daily with earnings, gains and losses as if such Accounts were invested in one (1) or more Plan investment options, as selected by the Participants. Investment options may be changed or provided from time to time by the Administrative Committee in its sole discretion.
(iii)        Participants may change the options into which Elected Deferred Compensation is credited and may change the allocation of existing Account balances which elections shall become effective as of the first (1st) day of the month following the date such election is submitted to the Administrative Committee.
(d)        Earnings for Senior Management Retirees.  The Retirement Account of any Member of senior management who retired before July 1, 1998 shall be credited with the greater of:
(i)        The Interest Rate plus four (4) percentage points, or
(ii)        The equivalent of a twelve percent (12%) annual yield.  

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4.3        Stock Account and Restricted Stock Unit Account
(a)        Establishing a Stock Account.  A Participant may establish an annual Stock Account, which shall be maintained solely for recordkeeping purposes, by making a Deferral Election.  A separate Restricted Stock Unit Account shall be maintained for deferrals credited with respect to Restricted Stock Unit Awards made prior to November 1, 2015.
(b)        Maximum Deferral. A Participant may elect to defer up to one hundred percent (100%) of the Short-Term Incentive Award into the Stock Account.  A Participant may also elect to defer up to one hundred percent (100%) of a Performance Share Award into the Stock Account.   For deferrals made prior to November 1, 2015, a Participant may also elect to defer up to one hundred percent (100%) of the Restricted Stock Unit Award into the Restricted Stock Unit Account; provided that, with respect to a Restricted Stock Unit Award granted in 2012, a participant may defer into the Restricted Stock Unit Account only the portion of such award that is subject to the achievement of performance factors.  For deferrals made after November 1, 2015, any deferrals of Restricted Stock Unit Awards will be made to the Participant’s Stock Account.
(c)        Stock Premium.  With respect to deferrals of any Short-Term Incentive Award and/or Performance Share Award that is earned during a Service Period that ends prior to January 1, 2011 and that otherwise would have been payable no later than December 31, 2011, amounts deferred into the Stock Account shall be credited with an amount equal to twenty percent (20%) of the amount deferred into the Stock Account. Such premium shall be credited as of the date the corresponding Elected Deferred Compensation is credited to the Stock Account.
(d)        Stock Units and Earnings.  Amounts deferred into the Stock Account shall be converted into units of Company common stock. Except as provided in the following sentence, the number of stock units credited to the Stock Account shall be determined by dividing the amount deferred into the Stock Account, plus, with respect to deferrals of any Short-Term Incentive Award and/or Performance Share Award that is earned during a Service Period that ends prior to January 1, 2011 and that otherwise would have been payable no later than December 31, 2011, the Stock Premium described in (c) above, by the average daily closing price of Company common stock during February of the Service Period in which the Elected Deferred Compensation is credited to the Account.  For Restricted Stock Unit deferrals made after November 1, 2015, the number of stock units credited to the Stock Account shall be determined by the number of whole and fractional Restricted Stock Units that a Participant has elected to defer as calculated at the time of vesting of the Restricted Stock Unit Award.
Amounts deferred into the Restricted Stock Unit Account shall be units of the Company’s common stock.  The number of stock units credited to the Restricted Stock Unit Account shall be determined by the number of whole and fractional shares that a Participant has elected to defer as calculated at the time of vesting of the Restricted Stock Unit Award.
(e)        Dividends.  Additional stock units shall be credited to each Stock Account and Restricted Stock Unit Account at the time dividend payments are made to Company shareholders. The number of additional units credited shall be based on the number of units in 

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the Stock Account and Restricted Stock Unit Account, the dividend rate and the market price of Company stock at the close of that business day.
(f)        Automatic Cessation of Stock Premium and Dividends Paid in Common Stock.
(i)        The crediting of the 20% stock premium in Company common stock ceased on January 1, 2011 with respect to deferrals of any Short-Term Incentive Award and/or Performance Share Award that were earned during a Service Period that commenced on or after January 1, 2011 and that  otherwise would have been payable later than December 31, 2011.  
(ii)        The crediting of the dividends under Section 4.3(e) in Company common stock ceased on May 17, 2014; provided, however, that, for the avoidance of doubt, the dividend equivalent feature in Section 4.3(e) of this Plan shall continue with respect to dividend equivalents that accrue after May 17, 2014 and are payable in cash.
4.4        Retirement Stock Account
(a)        Establishing a Retirement Stock Account.  Effective January 1, 2002, a Retirement Stock Account may be established for a Participant who has elected to defer receipt of his or her Stock Account pursuant to Section 5.5 of this Plan solely for recordkeeping purposes and shall be credited with earnings, gains, losses and dividends in the same manner as the Stock Account.
(b)        Transfer to Retirement Account.  Upon Separation from Service or death the value of the Participant’s Retirement Stock Account and Restricted Stock Unit Account shall be transferred to the Participant’s Retirement Account as of the date of Separation from Service or death and paid in cash pursuant to Article 5 of this Plan.
4.5        Deferred Compensation Benefit
The aggregate balances of a Participant’s Retirement Account, Stock Account, Restricted Stock Unit Account and Retirement Stock Account shall be the Participant’s “Deferred Compensation Benefit.”

4.6        Amounts Transferred from the GPU Companies Deferred Compensation Plan and Nonqualified Pension Plan

(a)        Deferred Compensation Amounts.  As of November 7, 2001, certain account balances from the GPU Companies Deferred Compensation Plan were transferred to this Plan in conjunction with the merger of GPU, Inc. into the Company. As of such date, the transferred balances shall be credited in a Retirement Account for each such former employee of the GPU Companies and shall be credited with earnings in the same manner as all other Retirement Accounts.
(b)        Nonqualified Pension Plan Amounts.  As of November 7, 2001, the accrued benefit associated with certain GPU nonqualified pension plans were transferred to this 

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Plan in conjunction with the merger of GPU, Inc. into the Company. Each such former employee affected by this transfer shall be entitled to receive an increase in such employee’s benefit equal to ten percent (10%) of the benefit, so that, when benefits are paid, they will be ten percent (10%) greater than the amount that otherwise would have been paid had the benefit been paid under the GPU Companies nonqualified pension plans.
4.7        Vesting of Accounts
Each Participant shall be vested in the amounts credited to such Participant’s Accounts as follows:

(a)        Elected Deferred Compensation.  A Participant shall be one hundred percent (100%) vested at all times in his Elected Deferred Compensation and any gains or losses thereon regardless of the Account to which such amounts are credited.
(b)        Stock Premium.  A Stock Premium, and any earnings gains or losses thereon became one hundred percent (100%) vested on:
(i)        the Initial Eligible Payment Date for the related Elected Deferred Compensation, provided the Participant was either:
a)        Employed by an Employer on the Initial Eligible Payment Date, or
b)        Had a Separation from Service on or after reaching age sixty (60);
(ii)        the death of the Participant;
(iii)        a Separation from Service of the Participant due to one (1) of the following events:
a)        his or her Disability;
b)        involuntary termination under conditions where the Participant becomes eligible for and elects to accept an Employer severance benefit; or
(iv)        a Change in Control. 
4.8        Statement of Accounts
The Administrative Committee shall submit to each Participant, after the close of each calendar year and at such other times as determined by the Administrative Committee, a statement setting forth the balance to the credit of the Accounts maintained for a Participant.

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ARTICLE 5—DISTRIBUTION OF DEFERRED COMPENSATION BENEFITS

5.1        Retirement Benefit
(a)        Benefit.  Upon a Participant’s Retirement, the Participant shall be paid a Deferred Compensation Benefit equal to the amount of the Participant’s Retirement Account earned by the Participant to the date such amount is distributed, including any balance transferred from the Participant’s Retirement Stock Accounts, Stock Accounts and Restricted Stock Unit Accounts.
(b)        Form of Benefit.  The Participant may make an election in his or her Participation Agreement to receive benefits from the Retirement Account in the following manner:
(i)        A lump-sum payment; and/or
(ii)        Monthly installments over a period of up to three hundred (300) months. The amount of the installment shall be redetermined January 1 of each year based upon a crediting rate determined by the Administrative Committee in its discretion (based on the then current earnings crediting rate under Section 4.2(c)(i) of the Plan or another crediting rate established by the Administrative Committee), the remaining Retirement Account balance, and the remaining number of payment periods.  
(c)        Election Regarding Time of Payment.  A Participant may make an election in his or her Participation Agreement to defer commencement of payment of the Retirement Account to the later of Retirement or a specified date, but the specified date shall not be later than the first (1st) day of the month following the Participant’s seventieth (70th) birthday.
(d)        Default Form of Benefit.  If the Participant makes no election as to the manner in which benefits shall be distributed prior to the commencement of Service Period, the Employer shall pay benefits in a lump-sum payment.
(e)        Grandfathered Election Right.  Solely with respect to Account balances accrued and vested as of December 31, 2004 and earnings, gains and losses credited thereon after that date, a Participant may amend his or her elections regarding the form of benefit and time of payment up to ninety (90) days prior to Retirement.
(f)        Changing Date or Form of Payment.  Subject to the Administrative Committee’s discretion and solely with respect to Account balances that accrue and/or vest after December 31, 2004 including deemed earnings, gains and losses credited thereon after that date, a Participant may amend his or her elections regarding the form of benefit and time of payment on Retirement provided:
(i)    Such election is submitted to the Committee in writing at least twelve (12) months prior to the date any amount is to be distributed from the Plan;

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(ii)    Such election shall not take effect until twelve (12) months after it is submitted to the Committee in writing; and
(iii)    The payment of the benefits shall not commence until at least five (5) years from the date such payment would otherwise have been made.  
(g)        Transition Election Right.  Notwithstanding the above, distribution elections made with respect to Deferral Elections made between January 1, 2005 and December 31, 2007 had to be changed no later than December 31, 2007 in accordance with Code Section 409A.
5.2        Death Benefit
(a)        Benefit.  Upon a Participant’s death, the Participant’s Beneficiary shall be paid a Deferred Compensation Benefit equal to the amount of the Participant’s Retirement Account, Stock Account, Restricted Stock Unit Account and Retirement Stock Account earned by the Participant to the date such amount is distributed to the Participant’s Beneficiary. If a Participant dies prior to Separation from Service, such amounts shall be paid to the Beneficiary in the form elected by the Participant and in accordance with Section 5.5 of this Plan.
(b)        Form of Payment.  Each Participant may make an election in his or her Participation Agreement to have his or her death benefits paid in any manner described in Section 5.1(b).
(c)        Grandfathered Election Right.  Solely with respect to Account balances accrued and vested as of December 31, 2004 and earnings, gains and losses credited thereon after that date, the Participant may change such distribution election by filing a new election with the Administrative Committee at any time prior to such Participant’s death.
(d)        Changing Form of Payment.  Solely with respect to Account balances that accrue and/or vest after December 31, 2004 including deemed earnings, gains and losses credited thereon after that date, a Participant may amend his or her elections regarding the form of benefit on death provided:
(i)    Such election is submitted to the Committee in writing at least twelve (12) months prior to the date any amount is to be distributed from the Plan; and
(ii)     Such election shall not take effect until twelve (12) months after it is submitted to the Committee in writing.
(e)        Transition Election Right.  A Participant had to have changed distribution elections made with respect to Deferral Elections between January 1, 2005 and December 31, 2007 no later than December 31, 2007 in accordance with Code Section 409A. Such elections made at any time thereafter shall become effective twelve (12) months after such election is filed with the Administrative Committee.

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(f)        Installment Payments.  If a Participant dies after Retirement and while receiving installment payments of such benefit, such amounts shall continue to be paid to the Beneficiary in the same manner.
(g)        Deferral Not Effective.  If the Participant elected to defer commencement of Retirement benefits pursuant to Section 5.1(c) and dies prior to the commencement thereof, upon the Participant’s death such election to defer commencement of Retirement benefit payments shall become null and void and payments will commence immediately to the Beneficiary in the form elected by the Participant.  
5.3        Disability Benefit

(a)        Benefit.  Upon a Participant’s Disability, the Participant shall be paid a Deferred Compensation Benefit equal to the amount of the Participant’s Retirement Account, Stock Account, Restricted Stock Unit Account and any balance transferred from the Retirement Stock Account, Restricted Stock Unit Accounts or Stock Accounts earned by the Participant through the date such amount is distributed to the Participant.
(b)        Form of Payment  
(i)        Retirement Account.  Each Participant may make an election in his or her Participation Agreement to have his or her Disability benefits paid in any manner described in Section 5.1(b).
(ii)        Stock Account and Restricted Stock Unit Account.  A Participant shall not be entitled to make an election for distribution of his or her Stock Account or the Restricted Stock Unit Account upon a Disability.  Any Stock Account or Restricted Stock Unit Account benefit shall be paid pursuant to Section 5.5 of the Plan at the time and in the form prescribed by Section 5.5 based upon a distribution event described in Section 5.5.
(c)        Grandfathered Election Right.  Solely with respect to Account balances accrued and vested as of December 31, 2004 and earnings, gains and losses credited thereon after that date, such election may be changed by the Participant at any time prior to Disability, and the Participant chooses to receive benefits in the same manner as described in Section 5.1(b) of the Plan.
(d)        Changing Form of Payment.  Solely with respect to Account balances that accrue and/or vest after December 31, 2004 including deemed earnings, gains and losses credited thereon after that date, a Participant may amend his or her elections regarding the form of benefit on Disability provided:
(i)        Such election is submitted to the Committee in writing at least twelve (12) months prior to the date any amount is to be distributed from the Plan; and
(ii)        Such election shall not take effect until twelve (12) months after it is submitted to the Committee in writing.

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(e)        Transition Election Right.  Notwithstanding the above, distribution elections made with respect to Deferral Elections made between January 1, 2005 and December 31, 2007 had to have been changed no later than December 31, 2007 in accordance with Code Section 409A.
5.4        Separation from Service Benefit for Reasons Other Than Retirement, Disability or Death—Retirement Account

(a)        Benefit.  Upon a Participant’s Separation from Service prior to his or her Retirement, Disability or death, the Participant shall be paid a Deferred Compensation Benefit equal to the amount of the Participant’s Retirement Account, Stock Account, Restricted Stock Unit Account and any balance transferred from the Retirement Stock Account, Restricted Stock Unit Accounts or Stock Accounts earned by the Participant through the date such amount is distributed to the Participant.
(b)        Form of Payment.
(i)        Retirement Account.  The benefit under this Section shall be paid to the Participant in a lump-sum.
(ii)        Stock Account and Restricted Stock Unit Account.  A benefit shall be paid from the Stock Account or the Restricted Stock Unit Account pursuant to Section 5.5 of the Plan.
(c)        Grandfathered Election Right.  Notwithstanding the above, effective January 1, 2002 and solely with respect to Account balances accrued and vested as of December 31, 2004 including earnings, gains and losses credited thereon after that date, any Participant who has been involuntarily terminated under conditions where the Participant becomes eligible for and elects to accept an Employer severance benefit, may irrevocably elect at least thirty (30) days prior to the date of Separation from Service to receive three (3) installment payments, the first to be paid as soon as administratively feasible following the Participant’s date of Separation from Service and on January 1 of each of the next two (2) years. The amount of the installment shall be redetermined January 1 of each year based upon the then current earnings crediting rate under Section 4.2(c) of the Plan, the remaining Retirement Account balance, and the remaining number of payments.
5.5        Stock Account Distributions
(a)        Deferrals Made on or after November 1, 2015.  With respect to amounts deferred on or after November 1, 2015, such amounts, including any dividends or dividend equivalents credited thereto, shall be held in the Stock Account until the Participant’s Separation from Service, Disability or death, at which point such amounts shall be transferred to a Retirement Account and paid in cash pursuant to the Participant’s elections or Plan provisions related to the distribution of such Retirement Account under Section 5.1 (Retirement), 5.2 (Death), 5.3 (Disability) or 5.4 (Separation from Service other than Retirement, Death or Disability) of this Plan, as applicable. 

21

(b)         Deferrals Made before November 1, 2015.  With respect to amounts deferred prior to November 1, 2015, such amounts, including any dividends or dividend equivalents credited thereto, shall be administered in accordance with the following provisions:
(i)         Benefit of Participant Employed on Initial Eligible Payment Date or with a Separation from Service on or after Age Sixty.  With respect to balances that accrue in a Stock Account prior to January 1, 2016, an Employer shall pay a Participant who is employed by any Employer on his or her Initial Eligible Payment Date or who has a Separation from Service on or after age sixty (60) a Deferred Compensation Benefit equal to the amount of the Participant’s Stock Account earned by the Participant while he or she was employed by such Employer, including the Stock Premium, in Company common stock; provided that payments made with respect to (i) any dividend equivalents that accrue pursuant to Section 4.3(e) of the Plan after May 17, 2014; (ii) Short-Term Incentive Awards deferred after January 1, 2014; and (iii) Performance Shares that are deferred after November 1, 2015 shall, in each case, be paid in cash. Commencing January 1, 2002, a Participant may elect in his or her Participation Agreement to defer receipt of such payment to the Participant’s date of Separation from Service or death. If such an election is made, such Stock Account balance, including the Stock Premium, shall be transferred to a Retirement Stock Account or held in the Stock Account until Separation from Service or death and then transferred to a Retirement Account and paid in cash pursuant to the Participant’s elections or Plan provisions, whichever is applicable, under Sections 5.1, 5.2, 5.3 or 5.5 of this Plan.
(ii)        Benefit of Participant with Separation from Service prior to Age Sixty.  Commencing January 1, 2002, if a Participant with a Stock Account balance that has not reached its Initial Eligible Payment Date has a Separation from Service for any reason, including death or Disability prior to age sixty (60), such vested balance shall be transferred to a Retirement Account and paid in cash pursuant to the Participant’s elections or Plan provisions, whichever is applicable, under Article 5 of this Plan.  
(iii)         Benefit of Participant with Separation from Service on or after Age Sixty.  Commencing January 1, 2002 and with respect to account balances in a Stock Account that accrue prior to January 1, 2016, if a Participant with a Stock Account balance that has not reached its Initial Eligible Payment Date has a Separation from Service for any reason including death or Disability on or after age sixty (60), such Stock Account, including the Stock Premium, shall be payable on the earlier of the date the Stock Premium becomes fully vested or the Initial Eligible Payment Date. A Participant may make an election each year in a Participation Agreement to receive the Stock Account, including the Stock Premium, either in the form of Company common stock or in cash and paid pursuant to the Participant’s elections or Plan provisions, whichever is applicable, under Article 5 of this Plan; provided that, notwithstanding the Participant’s election, payments made with respect to (i) any dividend equivalents that accrue pursuant to Section 4.3(e) of the Plan after May 17, 2014; (ii) Short-Term Incentive Awards that are deferred after January 1, 2014; and (iii) Performance Shares that are deferred after January 1, 2015 shall, in each case, be paid in cash. If the Participant does not make an election prior to the Commencement of the Service Period, such Stock Accounts shall be paid in the form of Company common stock; provided that payments made with respect to (i) any dividend equivalents that accrue pursuant to Section 4.3(e) of the Plan after M

22

ay 17, 2014; (ii) Short-Term Incentive Awards that are deferred after January 1, 2014; and (iii) Performance Shares that are deferred after January 1, 2015 shall, in each case, be paid in cash.  
(iv)        Benefits payable from Restricted Stock Unit Accounts. With respect to any Restricted Stock Unit Account, unless a Participant elects otherwise pursuant to this Section 5.5(b)(iv) or Section 5.5(b)(v), a Participant who is employed by any Employer on the respective Initial Eligible Payment Date for such Restricted Stock Unit Account shall receive a Deferred Compensation Benefit equal to the amount of such Restricted Stock Unit Account in Company common stock upon the Initial Eligible Payment Date; provided that payments made with respect to any dividend equivalents that accrue pursuant to Section 4.3(e) of the Plan after May 17, 2014 shall be paid in cash.  Notwithstanding the foregoing, if a Participant’s Separation from Service or death occurs prior to the respective Initial Eligible Payment Date, the balance of the Restricted Stock Unit Account shall be transferred to the Retirement Account for the applicable Service Period and paid in accordance with the elections made for such Retirement Account in the applicable Participant Agreement or, if applicable, under the provisions of the Plan.
A Participant may elect in the Participation Agreement applicable to a Restricted Stock Unit Account to receive a distribution of such Restricted Stock Unit Account upon his or her Separation from Service or death.  If such an election is made, the balance of such Restricted Stock Unit Account shall be credited to the Restricted Stock Unit Account until the Participant’s Separation from Service or death and then transferred to the Retirement Account established for the applicable Service Period and paid in cash pursuant to the Participant’s election with respect to such Retirement Account or the relevant Plan provisions, whichever is applicable, under Sections 5.1, 5.2, 5.3, or 5.5 of this Plan.
(v)         Changing Date or Form of Payment.  Subject to the Administrative Committee’s discretion and solely with respect to Restricted Stock Unit Account balances, including deemed earnings, gains and losses credited thereon, a Participant may amend his or her elections regarding the timing of the payment in a manner that is consistent with the requirements of Treasury Regulation § 1.409A-2(b), provided:
		
	1.
	 such election is submitted to the Committee in writing at least twelve (12) months prior to the date any amount is to be distributed from the Plan; and

		
	2.
	such election shall not take effect until twelve (12) months after it is submitted to the Committee in writing; and

		
	3.
	the payment of the benefits shall not commence until at least five (5) years from the date such payment would otherwise have been made.  

5.6        Accelerated Distribution
Notwithstanding anything to the contrary herein and solely with respect to Accounts that are accrued and vested as of December 31, 2004 including earnings, gains and losses credited thereon after that date, at any time, a Participant (or the Participant’s Beneficiary in case of the death of the Participant) may request a distribution of his or her vested Account balance. Each 

23

Employer by whom the Participant was employed shall pay a Plan benefit equal to the amount of the Participant’s Retirement Account earned by the Participant during the Participant’s employment with such Employer. Such vested balance shall be reduced by ten percent (10%), which amount shall be forfeited by the Participant.

Such request must be made in writing in a form and manner specified by the Administrative Committee. The distribution to the Participant or Beneficiary shall be made as soon as administratively feasible in a lump-sum. The amount distributed from the Stock Account and the Retirement Stock Account shall be paid in Company common stock; provided that payments made with respect to any dividend equivalents that accrue pursuant to Section 4.3(e) of the Plan after May 17, 2014 shall be paid in cash. Such distribution shall completely discharge the Administrative Committee and the Employers from all liability with respect to the Participant’s or Beneficiary’s Accounts.

If the Participant is an employee of an Employer when the distribution is made, the Participant shall not make a Deferral Election until January 1 of the second calendar year following the calendar year in which the Participant receives such distribution.

Notwithstanding the foregoing, if a Participant who is required to file reports under Section 16 of the Securities Exchange Act of 1934 requests an accelerated distribution of his Stock Account and/or the Retirement Stock Account, the request must be approved by the Compensation Committee.

5.7        Financial Hardship Distributions
(a)        Distribution upon an Unforeseeable Emergency.  Notwithstanding any other provision of the Plan and solely with respect to Account balances that accrue and vest after December 31, 2004 including deemed earnings, gains and losses credited thereon after that date, payment from the Participant’s Accounts may be made to the Participant, in the sole discretion of the Administrative Committee, due to an Unforeseeable Emergency.
(b)        Termination of Deferral Election.  If such a distribution is made, the Participant’s Deferral Election for the Service Period in which the distribution is made shall be void and such Participant shall not be eligible to make a Deferral Election until the next Service Period.  
(c)        Maximum Amount of Distribution.  Such payment shall not exceed the amount reasonably necessary to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution after taking into account the extent to which such Unforeseeable Emergency is or may be relieved through cancellation of the Participant’s Deferral Election, reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets, to the extent such liquidation would not itself cause severe financial hardship. However, the determination of amounts necessary to satisfy the Unforeseeable Emergency is not required to take into account an available distribution or loan from a qualified plan, any additional compensation that is available under another nonqualified 

24

deferred compensation plan, including a grandfathered nonqualified deferred compensation plan, but has not actually been paid.
(d)        Payment Form and Source.  Payment shall be made in a single lump-sum within thirty (30) days after the date the request for a distribution is approved by the Administrative Committee. Distributions shall be made first from the Retirement Account, then from any Retirement Stock Account and then from any Stock Account and Restricted Stock Unit Account, excluding the Stock Premium.
5.8        Withholding; Payroll Taxes
An Employer paying a benefit shall withhold from payments made hereunder to the Participant or any Beneficiary, any amounts required to be withheld by applicable law. An Employer may withhold from either deferred or nondeferred compensation any amounts required to be withheld by the Federal Insurance Contributions Act (FICA), the Federal Unemployment Tax Act (FUTA), or any state income tax provision, or any other applicable law. All Plan administration expenses incurred by an Employer or the Administrative Committee shall be borne by the Company.  
5.9        Commencement of Payments
(a)        Commencement Date.  Except for a distribution upon an Unforeseeable Emergency as provided in Section 5.7 and for grandfathered benefits as provided in subsection (e) below, payment of benefits shall commence as soon as administratively feasible following the event giving rise to a distribution but not later than ninety (90) days following the date of the event giving rise to the distribution. A Participant shall not have a right to designate the taxable year of payment other than by an election that is otherwise permitted by this Plan.
(b)        Specified Employee.  Notwithstanding subsection (a), a Participant who is a specified employee as defined in Code Section 409A(a)(2)(B)(i) on his date of Separation from Service (except due to death) shall not receive a distribution of any amount under this Plan, whether a Deferred Compensation Benefit or a Supplemental Pension Benefit, that is accrued and/or vested after December 31, 2004 including earnings, gains and losses credited thereon after that date before the date which is six (6) months after the date of Separation from Service.
(c)        Delay in Payment.  In the event a distribution must be delayed as required in subsection (b):
(i)        If the payment with respect to a Deferred Compensation Benefit is a lump-sum, such lump-sum shall continue to be credited with earnings, gains and losses pursuant to Section 4.2(c) until the actual date of distribution.  If the payment with respect to a Deferred Compensation benefit is in installments, the earnings and amount of each installment shall be determined under Section 5.1(b)(ii).
(ii)         If the benefit with respect to a Deferred Compensation Benefit is to be paid in installments or with respect to a Supplemental Pension Benefit is to be paid as an annuity, the first payment shall include an amount equal to the sum of the monthly payments 

25

which would have been paid to the Participant but for the payment deferral mandated pursuant to subsection (b).  In addition, with respect to the Supplemental Pension Benefit, such first payment shall include an amount of interest equal to such rate specified by the Administrative Committee from time to time on the amount of the delayed payments, calculated in accordance with rules set forth by the Administrative Committee, which, effective January 1, 2010 and until subsequently revised, is a calculation based on the aggregate sum of the interest rate multiplied by the number of days each delayed monthly payment is held by the Company due to the mandated deferral. 
(d)        All payments shall be made as of the first (1st) day of the month.
(e)        Grandfathered Commencement Date.  Solely with respect to benefits under this Plan accrued and vested as of December 31, 2004 and earnings, gains and losses credited thereon after that date, payment of benefits shall commence as soon as administratively feasible following the event giving rise to a distribution.  
5.10        Payment to Guardian
If a Plan benefit is payable to a minor or a person declared incompetent or to a person incapable of handling the disposition of property, the Administrative Committee may direct payment of such Plan benefit to the guardian, legal representative or person having the care and custody of such minor or incompetent person. The Administrative Committee may require proof of incompetence, minority, incapacity or guardianship as it may deem appropriate prior to distribution of the Plan benefit. Such distribution shall completely discharge the Administrative Committee and the Employer from all liability with respect to such benefit.

5.11        Small Accounts
Notwithstanding anything herein to the contrary and solely with respect to Account balances that are accrued and vested as of December 31, 2004, including earnings, gains and losses credited thereon after that date, in the event the Participant’s Account balance that will be paid in installments is less than one hundred thousand dollars ($100,000) on the date payments commence, and such Participant has elected to receive installment payments over a period of more than one hundred eighty (180) months, such election shall become null and void and the Participant shall receive such benefit in monthly installments over one hundred eighty (180) months.

ARTICLE 6—SUPPLEMENTAL PENSION BENEFIT

6.1        Eligibility and Participation
(a)         In General.  The Chief Executive Officer of the Company, or his or her designee, may designate any key executive who is an employee of any Employer as eligible to receive the benefit described in this Article (“Supplemental Pension Benefit”) as of the first (1st) day of the month following the employee’s date of hire or promotion.  

26

(b)         Individual Agreements.  A Participant may be promised additional benefits under this Article in a separate employment agreement or other written arrangement.  This Article will take into account such promises, but in no event will any such promises (i) change the time and form of payment of the Supplemental Pension Benefit as provided under this Article 6 or (ii) constitute a “material modification” under Code Section 409A of amounts accrued and vested under the Plan as of December 31, 2004.
6.2        Retirement Benefit
(a)        Benefit.  Each Participant or Beneficiary who is entitled to a benefit under the Pension Plan shall be entitled to a Supplemental Pension Benefit equal to the amount payable from the Pension Plan as if the Participant had started receiving the Pension Plan benefit on the date of the Participant’s Retirement (the “Accrued Pension Benefit”) without regard to:  
(i)    With respect to Participants who were Participants in the Plan prior to January 1, 2014, the exclusion of Short-Term Incentive Award (or annual incentive), whether paid or deferred, from the definition of compensation in the Pension Plan; and
(ii)    Limitations imposed by Code Sections 401(a)(17) and 415 in the Pension Plan;
Less the amount set forth in subsection (b) below.
(b)        Subtraction.  The benefit described in subsection (a) shall be reduced by the Accrued Pension Benefit.
(c)        Adjustment.  The benefit described in subsection (a), taking in account the amount subtracted under subsection (b),  shall be adjusted under the same rules as used for distributions under the Pension Plan including early retirement factors.
(d)         Form of Payment.  Prior to the commencement of payments of the Supplemental Pension Benefit, a Participant shall select the form of payment from the following:
(i)        Single life annuity;
(ii)        100%, 75%, 50% or 25% joint and survivor annuity (or a modified joint and survivor annuity with a pop-up provision as permitted under the provisions of the Pension Plan at the time of commencement of payments of the Supplemental Pension Benefit);
(iii)        Life annuity with payments guaranteed for a period of sixty (60), one hundred twenty (120) or one hundred eighty (180) months.
(e)        Default Form of Payment.  In the absence of an election, the Supplemental Pension Benefit shall be paid as a single life annuity if the Participant is not married at the time payments are to commence, and in the form of a 50% joint and survivor annuity to a married Participant, with the Participant’s spouse as the joint annuitant unless the Participant has designated another joint annuitant.

27

(f)        Actuarial Equivalent.  All forms of payment shall be actuarially equivalent based on reasonable actuarial assumptions as of the date benefit payments are to commence. On such date, the same actuarial assumptions shall be used in valuing each annuity payment option.
(g)        Commencement of Payments.  Subject to Section 5.9(b), payment of the portion of the Supplemental Pension Benefit that is accrued or vested after December 31, 2004 shall commence as follows:  
(i)        If Separation from Service occurs prior to Retirement, payment of the Supplemental Pension Benefit shall commence on the first (1st) day of the month on or following the Participant’s attainment of age sixty (60).
(ii)        Upon Retirement, payment of the benefit shall commence on Retirement, but in no event earlier than the first (1st) day of the month on or following the Participant’s Retirement or no later than ninety (90) days following the Participant’s Retirement.
(h)        [Reserved].  
(i)          Pension Plan Reduction Factors.  Benefit reduction factors shall be applied in the same manner as and pursuant to provisions in the Pension Plan.
(j)        Grandfathered Election Right.  Solely with respect to the Supplemental Pension Benefit that was accrued and vested as of December 31, 2004, that would have been paid to the Participant if he or she had terminated or died on that date and commenced payment as soon as possible after termination or death, such Benefit shall be paid to the Participant at the same time and in the same manner as payments from the Pension Plan.  
6.3        Death Benefit
(a)        Benefit.  Each Beneficiary entitled to a pre-retirement survivor benefit under the Pension Plan shall be entitled to a death benefit under this Section 6.3 determined in the same manner as Retirement benefits under Sections 6.2(a), (b) and (c) this Plan as if the first (1st) day of the month following the Participant’s date of death was the later of (i) the Participant’s attainment of age fifty-five (55); or (ii) the date of the Participant’s Separation from Service.  Notwithstanding the foregoing, the amount of the Supplemental Pension Benefit that was accrued and vested as of December 31, 2004 will be determined in accordance with Section 6.2(j) of this Plan.
(b)        Form of Payment.  The Beneficiary shall receive the death benefit which shall be determined as if the Participant had retired immediately before his or her death and had elected payment of his or her retirement benefit in the form of a 100% joint and survivor annuity.
(c)        Commencement of Payments.  Solely with respect to amounts that accrue and/or vest after December 31, 2004:  
(i)        If a Participant dies prior to his or her Separation from Service and has less than ten (10) years but at least five (5) years of Eligibility Service as defined in the Pe

28

nsion Plan on such Participant’s date of death and, with respect to any Participant who attains at least ten (10) years of Eligibility Service as defined in the Pension Plan on or after January 1, 2009, if a Participant dies prior to his or her Separation from Service and has at least ten (10) years of Eligibility Service as defined in the Pension Plan on such Participant’s date of death, payments shall commence under this Section 6.3 on the later of:  
a)        The first day (1st) of the month following the date the Participant would have attained age fifty-five (55); or
b)        The Participant’s death, but in no event earlier than the first (1st) day of the month on or following the Participant’s death or no later than ninety (90) days following the Participant’s death. 
(ii)        Notwithstanding the foregoing, if a Participant dies prior to his or her Separation from Service and had at least ten (10) years of Eligibility Service as defined in the Pension Plan prior to January 1, 2009, then payments shall commence no earlier than the first (1st) day of the month on or following the Participant’s date of death or no later than ninety (90) days following the Participant’s date of death. 
(d)        Pension Plan Reduction Factors.  Benefit reduction factors, including early retirement and actuarial factors, shall be applied in the same manner as and pursuant to provisions in the Pension Plan.
(e)         Grandfathered Election Right.  Section 6.2(j) applies to amounts accrued and vested as of December 31, 2004 with respect to time and form of payment of those amounts.

ARTICLE 7—BENEFICIARY DESIGNATION

7.1        Beneficiary Designation
Each Participant shall have the right, at any time, to designate one (1) or more persons as the primary or contingent Beneficiary(ies) to whom benefits under Sections 5.2 and one (1) Beneficiary under Section 6.3 of this Plan shall be paid in the event of the Participant’s death prior to complete distribution to the Participant of the benefits due under the Plan. Unless stated otherwise in writing in the form provided by the Administrative Committee, payments hereunder shall be paid in equal shares to surviving Beneficiaries if more than one (1) Beneficiary has been designated. Each Beneficiary designation shall be in a written form prescribed by the Administrative Committee and shall be effective only when filed with the Administrative Committee during the Participant’s lifetime. If a Participant’s compensation is community property, any Beneficiary designation shall be valid or effective only as permitted under applicable law.

29

7.2        Amendments
Any Beneficiary designation may be changed by a Participant without the consent of any Beneficiary by the filing of a new Beneficiary designation with the Administrative Committee.

7.3        No Beneficiary Designation or Death of Beneficiary with respect to Deferred Compensation Benefit

(a)        Deferred Compensation Benefit Default Beneficiary Designation.  In the absence of an effective Beneficiary designation, or if all designated Beneficiaries predecease the Participant, the Participant’s Beneficiary shall be the person in the first (1st) of the following classes:
(i)        The surviving spouse;
(ii)        The Participant’s estate.
(b)        Deferred Compensation Benefit Lump-sum Distribution.  In the event of the death of a Beneficiary after payments commence but prior to the Beneficiary receiving all benefit payments under this Plan, in the remaining balance shall be paid in a lump sum to the estate of the Beneficiary.
7.4        Beneficiary Designation or Death of Beneficiary with respect to Supplemental Pension Benefit

With respect to a Participant’s Supplemental Pension Benefit, in the absence of an effective Beneficiary designation, or if all designated Beneficiaries predecease the Participant, the Participant’s Beneficiary shall follow the Participant’s beneficiary designation under the Pension Plan.

7.5         Effect of Payment
Payment to the Beneficiary or Beneficiaries including a Beneficiary under Section 7.3 or 7.4 shall completely discharge the Employers’ obligations under this Plan.

ARTICLE 8—ADMINISTRATION

8.1        Administrative Committee; Duties
This Plan shall be administered by an Administrative Committee consisting of three (3) or more members who are appointed by the Chief Executive Officer of the Company. Members of the Administrative Committee may be Participants in this Plan. However, no member of the Administrative Committee may participate in a review of his or her own claim under Article 9. The Administrative Committee shall administer the Plan and shall have the power and the duty to take all action and to make all decisions necessary or proper to carry out the Plan. The 

30

determination of the Administrative Committee as to any question involving the general administration and interpretation of the Plan shall be final, conclusive, and binding except as otherwise provided in Article 9.  A majority vote of the Administrative Committee members shall control any decision. Any discretionary actions to be taken under the Plan by the Administrative Committee with respect to the classification of employees, Participants, contributions or benefits shall be uniform in nature and applicable to all persons similarly situated. Without limiting the generality of the foregoing, the Administrative Committee shall have the following discretionary authority, powers and duties:

(a)        To require any person to furnish such information as it may request for the purpose of the proper administration of the Plan as a condition to receiving any benefit under the Plan;
(b)        To make and enforce such rules and regulations and prescribe the use of such forms as it deems necessary for the efficient administration of the Plan;
(c)        To interpret the Plan and to resolve ambiguities, inconsistencies and omissions;
(d)        To decide all questions concerning the Plan and any questions concerning the eligibility of any employee to participate in the Plan; and
(e)        To determine the amount of benefits which will be payable to any person in accordance with the provisions of the Plan.
Upon and after the occurrence of a Change in Control, the “Administrative Committee” shall be at least three (3) individuals selected by the individual who, immediately prior to the Change in Control, was the Company’s Chief Executive Officer or, if not so identified, the Company’s highest ranking officer (the “Ex-CEO”); provided, however, the Administrative Committee, as constituted immediately prior to a Change in Control, shall continue to act as the Administrative Committee for this Plan until the date on which the independent third parties selected by the Ex-CEO accept the responsibilities as members of the Administrative Committee under this Plan. Upon and after a Change in Control, the Administrative Committee shall have all discretionary authorities and powers granted the Administrative Committee under this Plan including the discretionary power to determine all questions arising in connection with the administration of the Plan and the interpretation of the Plan except benefit entitlement determinations upon appeal. Upon and after the occurrence of a Change in Control, the Company must: (1) pay all reasonable administrative expenses and fees of the Administrator; (2) indemnify the Administrator against any costs, expenses and liabilities including, without limitation, attorney’s fees and expenses arising in connection with the performance of the Administrator hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the Administrator or its employees or agents; and (3) supply full and timely information to the Administrator on all matters relating to the Plan, the Participants and their Beneficiaries, the Account balances of the Participants, the date and circumstances of the Retirement, Disability, death or Separation from Service of the Participants, and such other pertinent information as the Administrative Committee may reasonably require. Upon and after a 

31

Change in Control, a member of the Administrative Committee may only be removed (and a replacement may only be appointed) by the Ex-CEO.

8.2        Agents
In the administration of this Plan, the Administrative Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with counsel, who may be counsel to the Company.

8.3        Indemnity of Committees
The Company shall indemnify and hold harmless the members of the Administrative Committee, the Appeals Committee and the Compensation Committee against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to this Plan, except in the case of intentional misconduct.

8.4        Participating Employers
The Compensation Committee or the Chief Executive Officer of Company may permit Employers to participate in this Plan. Any Employer may, upon resolution of its Board of Directors, withdraw from participating in the Plan and shall notify the Company of such resolution. An Employer’s withdrawal from the Plan shall not adversely affect balances in any Participant’s Accounts which shall continue to accrue earnings as set forth herein, shall not adversely affect the accrued Supplemental Pension Benefit and shall not change any distribution elections.

ARTICLE 9—CLAIMS PROCEDURE

9.1        Claim
Any person claiming a benefit (“Claimant”) under the Plan shall present the request in writing to the Administrative Committee.

9.2        Initial Claim Review
In the case of a claims regarding Disability, the Administrative Committee will make a benefit determination within forty-five (45) days of its receipt of an application for benefits. This period may be extended up to an additional thirty (30) days, if the Administrative Committee provides the Claimant with a written notice of the extension within the initial forty-five (45)-day period. The extension notice will explain the reason for the extension and the date by which the Administrative Committee expects a decision will be made. The Administrative Committee may obtain a second thirty (30)-day extension by providing you written notice of such second extension within the thirty (30)-day extension. The second extension notice must include an explanation of the special circumstances necessitating the second extension and the date by which the Administrative Committee’s decision will be made. If the extension is necessary because additional information is needed to decide the claim, the extension notice will describe 

32

the required information. The Claimant will have forty-five (45) days after receiving the extension notice to provide the required information.

In the case of all other claims, the Administrative Committee will make a benefit determination within ninety (90) days of its receipt of an application for benefits. This period may be extended up to an additional ninety (90) days, if the Administrative Committee provides the Claimant with a written notice of the extension within the initial ninety (90)-day period. The extension notice will explain the reason for the extension and the date by which the Administrative Committee expects a decision will be made.

The Administrative Committee will notify the Claimant in writing, delivered in person or mailed by first-class mail to the Claimant’s last known address, if any part of a claim for benefits under the Plan has been denied. The notice of a denial of any claim will include:

(a)        the specific reason for the denial;
(b)        reference to specific provisions of the Plan upon which the denial is based;
(c)        a description of any internal rule, guidelines, protocol or similar criterion relied on in making the denial (or a statement that such internal criterion will be provided free of charge upon request);
(d)        a description of any additional material or information deemed necessary by the Administrative Committee for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and
(e)        an explanation of the claims review procedure under the Plan.
If the notice described above is not furnished and if the claim has not been granted within the time specified above for payment of the claim, the claim will be deemed denied and will be subject to review as set forth in Section 9.3.

9.3        Review of Claim
If a claim for benefits is denied, in whole or in part, the Claimant may request to have the claim reviewed. The Claimant will have one hundred eighty (180) days in which to request a review of a claim regarding Disability, and will have sixty (60) days in which to request a review of all other claims. The request must be in writing and delivered to the Compensation Committee. If no such review is requested, the initial decision of the Compensation Committee will be considered final and binding.

The request for review must specify the reason the Claimant believes the denial should be reversed. He or she may submit additional written comments, documents, records, and other information relating to and in support of the claim; all information submitted will be reviewed whether or not it was available for the initial review. The Claimant may request reasonable access to and copies of, all documents, records, and other information relevant to the Claimant’s 

33

claim for benefits. A member of the Compensation Committee may not participate in the review of his or her own claim. In addition, if the Claimant requests a review, a member who is a subordinate of the original decision maker shall not participate in the review of the claim. The review will not defer to the initial adverse determination. If the denial was based in whole or in part on a medical judgment, the Compensation Committee will consult with an appropriate health care professional who was not consulted in the initial determination of his or her claim and who is not the subordinate of someone consulted in the initial determination. Names of the health care professionals will be available on request.

Upon receipt of a request for review, the Compensation Committee may schedule a hearing within thirty (30) days of its receipt of such request, subject to availability of the Claimant and the availability of the Compensation Committee, at a time and place convenient for all parties at which time the Claimant may appear before the person or committee designated by the Compensation Committee to hear appeals for a full and fair review of the Administrative Committee’s initial decision. The Claimant may indicate in writing at the time the Compensation Committee attempts to schedule the hearing, that he or she wishes to waive the right to a hearing. If the Claimant does not waive his or her right to a hearing, he or she must notify the Compensation Committee in writing, at least fifteen (15) days in advance of the date established for such hearing, of his or her intention to appear at the appointed time and place. The Claimant must also specify any persons who will accompany him or her to the hearing, or such other persons will not be admitted to the hearing. If written notice is not timely provided, the hearing will be automatically canceled. The Claimant or the Claimant’s duly authorized representative may review all pertinent documents relating to the claim in preparation for the hearing and may submit issues, documents, affidavits, arguments, and comments in writing prior to or during the hearing.

The Compensation Committee will notify the Claimant of its decision following the reviews. In the case of a claim regarding Disability, the Compensation Committee will render its final decision within forty-five (45) days of receipt of an appeal or such shorter period as may be required by law. If the Compensation Committee determines that an extension of the time for processing the claim is needed, it will notify the Claimant of the reasons for the extension and the date by which the Compensation Committee expects a decision will be made. The extended date may not exceed ninety (90) days after the date of the filing of the appeal.

In the case of all other claims, the Compensation Committee will render its final decision within sixty (60) days of receipt of an appeal. If the Compensation Committee determines that an extension of the time for processing the claim is needed, it will notify the Claimant of the reasons for the extension and the date by which the Compensation Committee expects a decision will be made. The extended date may not exceed one hundred twenty (120) days after the date of the filing of the appeal

If after the review the claim continues to be denied, the Claimant will be provided a notice of the denial of the appeal which will contain the following information:

(a)        The specific reasons for the denial of the appeal;

34

(b)        A reference to the specific provisions of the Plan on which the denial was based;
(c)        A statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits;
(d)        A statement disclosing any internal rule, guidelines, protocol or similar criterion relied on in making the denial (or a statement that such information would be provided free of charge upon request); and
(e)        A statement describing the Claimant’s right to bring a civil suit under Federal law and a statement concerning other voluntary alternative dispute resolutions options.
9.4        Review of Claims on and after a Change in Control
Upon and after the occurrence of a Change in Control, the Compensation Committee, as constituted immediately prior to a Change in Control, shall be the Appeals Committee. In the event any member of the Appeals Committee resigns or is unable to perform the duties of a member of the Appeals Committee, successors to such members shall be selected by the Ex-CEO. Upon and after a Change in Control, the Appeals Committee shall have all discretionary authorities and powers granted the Compensation Committee under this Plan to review denied claims as provided in Section 9.3. A member of the Appeals Committee may not participate in the review of his or her own claim and may not participate in the review a claim if he or she is a subordinate of the original decision maker. Upon and after the occurrence of a Change in Control, the Company must: (1) pay all reasonable administrative expenses and fees of the Appeals Committee; (2) indemnify the Appeals Committee against any costs, expenses and liabilities including, without limitation, attorney’s fees and expenses arising in connection with the performance of the Appeals Committee hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the Appeals Committee or its employees or agents; and (3) supply full and timely information to the Appeals Committee on all matters relating to the Plan, the Participants and their Beneficiaries, the Account balances of the Participants, the date and circumstances of the Retirement, Disability, death or Separation from Service of the Participants, and such other pertinent information as the Appeals Committee may reasonably require. Upon and after a Change in Control, a member of the Appeals Committee may only be removed (and a replacement may only be appointed) by the Ex-CEO.

ARTICLE 10—AMENDMENT AND TERMINATION OF PLAN

10.1        Right to Amend
The Plan may be amended any time by action of the Board or the Compensation Committee or by a writing executed on behalf of the Board or Compensation Committee by the Company’s duly elected officers, except that:

35

(a)        No amendment shall be effective to decrease or restrict any Participant’s Account balance or Supplemental Pension Benefit accrued to that date, and
(b)        No amendment shall be effective to restrict the right of a Participant to elect to receive a lump-sum form of benefit payment of his or her Account upon Retirement, death, Disability or other separation of employment, and
(c)        No amendment to the method for calculating earnings on the portion of the Retirement Account allocated to the investment option described in Section 4.2(c)(i) of the Plan shall decrease the interest rate credited to the Retirement Account balance of any Participant below the Moody’s Average Long-Term Corporate Bond Yield Index less one (1) percentage point; otherwise the Retirement Account balance that is accrued and vested as of December 31, 2004 including earnings credited thereon after that date shall be paid to all Participants within sixty (60) days of the effective date of such amendment.
Such amendment shall be effective on the thirty-first (31st) day following the date on which the Company notifies the Participants that the Company has adopted the amendment.

10.2        Right to Terminate
The Board or the Compensation Committee may at any time terminate the Plan if, in its sole judgment, the tax, accounting or other effects of the continuance of the Plan or potential payments thereunder would not be in the best interests of the Company. Such termination shall not adversely affect any Plan Participant’s Account balance or accrued Supplemental Pension Benefit. Each Employer shall pay the balances of a Participant’s Accounts that were accrued and vested as of December 31, 2004 including earnings, gains and losses credited thereon after that date, and earned while employed by such Employer within sixty (60) days after the effective date of the Plan termination.

10.3        Distribution of Benefits on Plan Termination
In the event the Corporation elects to amend, modify or terminate the Plan as provided under Section 10.2 and solely with respect to Account balances that accrue and/or vest after December 31, 2004, including deemed earnings, gains and losses credited thereon after that date, no right to the immediate payment of benefits shall arise as a result of a Plan Termination;

(a)        The Company may, in its discretion, provide by amendment to the Plan a right to the payment of all such Account balances as a result of the liquidation and termination of the Plan where:
(i)        the termination and liquidation does not occur proximate to a downturn in the financial health of the Company and the participating Employers;
(ii)        the Plan and all arrangements required to be aggregated with the Plan under Code Section 409A are terminated and liquidated;

36

(iii)        no payments, other than those that would be payable under the terms of the Plan and the aggregated arrangements if the termination and liquidation had not occurred, are made within twelve (12) months of the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan;
(iv)        all payments are made within twenty-four (24) months of the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan; and
(v)        the Company and the Employers do not adopt a new arrangement that would be aggregated with any terminated arrangement under Code Section 409A, at any time within three (3) years following the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan.
(b)        Similarly, the Company may, in its discretion, provide by amendment to liquidate and terminate the Plan where the termination and liquidation occurs within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 United States Code § 503(b)(1)(A), provided that all amounts deferred under the Plan are included in the Participants’ gross incomes in the latest of the following years (or, if earlier, the taxable year in which the amount is actually or constructively received):
(i)        the calendar year in which the termination occurs;
(ii)        the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or
(iii)        the first calendar year in which the payment is administratively practicable.

ARTICLE 11—MISCELLANEOUS

11.1        Unfunded Plan
This Plan is intended to be an unfunded plan for federal income tax purposes and for purposes of ERISA, maintained primarily to provide deferred compensation benefits for a select group of management employees or highly compensated employees. This Plan is not intended to create an investment contract, but to provide tax planning opportunities and retirement benefits to eligible individuals who have elected to participate in the Plan. Eligible individuals are select members of management who, by virtue of their position with an Employer, have the ability to materially affect the Employer’s profitability and operations.

11.2        Liability for Benefits
Except as otherwise agreed in writing, liability for the payment of a Participant’s benefit under this Plan shall be borne solely by the participating Employer that employs the Participant 

37

and reports the Participant as being on its payroll during the accrual or increase in the benefit. No liability for the payment of any Deferred Compensation Benefit or any Supplemental Pension Benefit shall be incurred by reason of Plan sponsorship or participation except for benefits of a participating Employer’s own employees. Nothing in this Section shall be interpreted as prohibiting any participating Employer from expressly agreeing in writing to the assumption of liability or guarantee of payment of any benefit under this Plan.

11.3        Unsecured General Creditor
Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interest or claims in any property or assets of any Employer. Any and all assets of each Employer shall be, and remain, the general, unpledged, unrestricted assets of the Employer. An Employer’s obligations under the Plan shall be merely that of an unfunded and unsecured promise of the Employer to pay money in the future.

11.4        Obligations to Employer
If a Participant becomes entitled to the payment of a benefit under the Plan and the Participant has outstanding any debt, obligation, or other liability representing an amount owing to the Employer obligated to pay the benefit at the time of payment, then the Employer may offset such amount owing to it against the amount of benefits otherwise then distributable under this Plan to the Participant or Beneficiary. Such determination shall be made by the Administrative Committee.

11.5        Nonassignability
(a)        Except as stated in subsection (b) below, neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and nontransferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.
(b)        Domestic Relations Order.  Subject to the Company’s domestic relations procedures, as amended from time to time, an Employer may pay benefits to an alternate payee pursuant to a domestic relations order provided the Administrative Committee determines such order meets the requirements of a qualified domestic relations order pursuant to Code Section 414(p)(1)(A).  
11.6        Not a Contract of Employment
The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between any Employer and the Participant, and neither the Participant nor any Beneficiary shall have any rights against any Employer except as may otherwise be specifically 

38

provided herein. Moreover, nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of any Employer or to interfere with the right of any Employer to discipline or discharge such Participant at any time.

11.7        Protective Provisions
A Participant shall cooperate with each Employer by furnishing any and all information requested by any Employer in order to facilitate the payment of benefits under this Plan.

11.8        Captions
The captions of the articles, sections and subsection of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

11.9        Governing Law
The provisions of this Plan shall be construed, administered, and enforced according to and governed by the laws (other than conflict of law provisions) of the state of Ohio, except to the extent such laws are superseded by ERISA.

11.10        Validity
In case any provision of this Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal and invalid provision had never been inserted herein.

11.11        Notice
Any notice or filing required or permitted to be given to the Administrative Committee under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail to any member of the Administrative Committee, or to the statutory agent of Company. Notice to the Administrative Committee may be given to any member of the Administrative Committee and if mailed shall be addressed to the principal executive offices of Company. Notice mailed to the Participant shall be sent to the address set out in the Participant’s most recent Participation Agreement or such other address as is given to the Administrative Committee by notice. Notices shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark, or the receipt for registration or certification.

11.12        Successors
The provisions of this Plan shall bind and inure to the benefit of each Employer and its successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of an Employer, and successors of any such corporation or other business entity.

39

11.13        Code Section 409A
Notwithstanding anything to the contrary in the provisions of this Plan regarding the benefits payable hereunder and the time and form thereof, this Plan is intended to meet any applicable requirements of Code Section 409A and this Plan shall be construed and administered in accordance with Code Section 409A, Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date.  In the event that the Company determines that any provision of this Plan or the operation thereof may violate Code Section 409A and related Department of Treasury guidance, the Company may in its sole discretion adopt such amendments to this Plan and appropriate policies and procedures, including amendments and policies with retroactive effect, or take such other actions, as the Company determines necessary or appropriate to comply with the requirements of Code Section 409A.  Code Section 409A compliance amendments made after January 1, 2009 are intended to utilize applicable transition relief provided under Article XI of IRS Notice 2010-6 so the Plan is treated as having been correct on January 1, 2009.  

40

IN WITNESS WHEREOF, and pursuant to the direction and authority of the Board of Directors, the Company has caused this instrument to be executed as of the date set forth below by its duly authorized officer effective as of the date or dates set forth above.

	
			
	 
	FIRSTENERGY CORP

	 
	 
	 

	By:
	/s/ Charles E Jones

	 
	Charles E Jones

	 
	President and Chief Executive

	 
	Officer of FirstEnergy Corp.

	 
	 
	 

	Dated:
	July 20, 2015

	 
	 
	 

	 
	 
	 

APPENDIX A    
	
			
	1
Participating Employer
	2
Adoption Date
	 

	American Transmissions Systems, Inc.
	January 1, 2003
	 

	The Cleveland Electric Illuminating Company
	July 1, 1998
	 

	FirstEnergy Corp.
	January 1, 1998
	 

	FirstEnergy Generation, LLC.
	January 1, 2003
	 

	FirstEnergy Nuclear Operating Company
	January 1, 1999
	 

	FirstEnergy Service Company
	January 1, 1999
	 

	FirstEnergy Solutions Corp.
	January 1, 2003
	 

	Jersey Central Power and Light
	January 1, 2003
	 

	Metropolitan Edison
	January 1, 2003
	 

	Monongahela Power Company
	January 1, 2012
	 

	Ohio Edison Company
	January 1, 1983
	 

	Pennsylvania Electric
	January 1, 2003
	 

	Pennsylvania Power Company
	January 1, 1983
	 

	The Potomac Edison Company
	January 1, 2012
	 

	The Toledo Edison Company
	July 1, 1998
	 

	West Penn Power Company
	January 1, 2012
	 

A-1

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